It’s insurance against inflation and chaos. As it so happens, we have plenty of both lately; hence, the general rise in gold prices. Incidentally, there is only going to be more inflation and chaos over the next 2-3 years and, probably, beyond. We’re all sailing in uncharted waters.
Can you explain that statement to me?
I have been told by some on Free Republic that everybody needs to have gold for when the economy collapses...that it is “insurance” and for “wealth protection”...but I am not seeing it. If the economy would collapse in the U.S. I would think we would drag down the rest of the world with us along with the value of gold. If that would happen, then how would gold be valued...I would not think it would be valued in U.S. dollars...current price $1800...future price ????...
If value is driven be supply and demand, then if demand dries up...do to economic collapse...and supply remains the same...how does gold retain its value?
My original discussion on FR about gold happened when gold was trading around $1300 and I had the option to buy an ounce or a bred cow for the same price. I bought the cow and others could not understand why I would...since then gold has gone up to $1800 while my cow gave birth and raised her calf...she gave us so much milk that I decided to buy a bull calf (to drink some of that milk) to raise for meat (cost $10). So for my $1310 “investment” (plus feed around $500) I have now sold the cows calf, have a steer that will provide around 600 pounds of beef for the freezer, and fresh milk every day. If I go with conservative numbers that would mean for a cost of $1810 I have a return of...calf sold for $700 plus, 600 pounds of beef at around $3.00 per pound equals $1800, and around 250 gallons of milk at $2.50 a gallon (currently around $3.50 here) equals $625 for a total of...$3125. And I still have the original cow to start over with...or I could have an ounce of gold.
If the economy would collapse I can still feed my family with the things that the cow can provide...and barter with some of the things as well. Gold would only provide me with substance if I sold it...if I could find a buyer...and then it is gone.
Am I missing something about gold being “insurance”?