The hard truth told, Gold in a crisis is useless. After all the hype and fears are worn out; it has to be sold for necessities. The clarion call will sound and this bubble will pop.
Food, water, guns, bullets.
Gold is not an investment.
Gold is savings.
Or ammunition.
Yes.
Buffet misses the point. We are at a stage of history when everything we thought constituted an investment is about to be wiped out. It started with the dotcom bubble. It continued with the housing bubble. We know the resultant paper and physical losses that followed. Now, we have this ridiculous debt bubble that is a worldwide scandal. When the other shoe drops, we'll finally know where we stand (only we won't be standing). In that scenario, all investment bets are off; except one.
The point not to be missed about gold is not that it's an investment, but that it will withstand the worst case scenario.
Dave Ramsey told a caller once that he’d be better off with a can of soup and a gun, if it hit the fan.
Free market. period.
And this is for one simple reason: At some levels, gold, as an investment, is absolutely ridiculous”
What’s ridiculous is the notion that any and all fiat currencies will end up with any value other than totally, flat as a pancake worthless. Gold is a store of value and it has filled that role admirably for much, much longer than any fiat has ever approached. The $ only looks good because it’s being valued against a basket of even more worthless fiats.
There’s a race to the bottom that has accelerated dramatically over the past few years that will result in most financial assets being wiped out. Late 08 and early 09 was a foretaste. You don’t solve debt issues by creating more debt which is all we’ve done.
We are not in a gold bubble, one has to only look at the valuation being attached to the mining stocks along with silver’s relative value wrt gold to clearly see that truth. Gold has much further to run in a world where it’s being valued in rapidly depreciating currencies.
Goldbug ping
Well let’s count how many ways this is trite old rehash:
- no dividend, check
- you can’t eat it, check
- what if you bought it at the tippy tippy top, before you were born?, check
Then he waves his hands about how much “surplus” gold there is, using as the absolutely worst mental image possible, how many bullion coins the Mint could make with it. Does anybody remember exactly how many times in 2008 and 2009 the Mint stopped accepting orders because they couldn’t get material? Four, five, more?
And people are buying gold and hanging on to it, that’s why the price is high, because there’s less of it out there?
His first installment of this series came out on May 25, the very day of gold options expiration, notorious and easily proven for almost every month of the last year to be as the time when gold hits its monthly bottom.
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Gold is a hedge, not an investment. It has no more or less value than what people give it, just like any other asset.
Why I don’t trust gold?
Because what can go violently UP, can come violently DOWN!
What goes up must come down.
Rice is a hard asset until the meal worms or moths show up. There might be gold bugs, but they don't eat your gold.
“Warren Buffett put it well. ‘Gold gets dug out of the ground in Africa, or someplace,’ he said. ‘Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head.’”
Warren Buffett is being facetious, I’m sure. It has enormous utility. It is the greatest medium of exchange yet discovered by mankind. That fact is so plain and simple that a child can understand it, and I’m sure if we could find a way to communicate with sentient Martians, they’d get it, too. Though apparently (but not really), it’s beyond the delicate “genius” of Buffett.
“Yes, it’s a ‘hard asset,’ but so are lots of other things—like land, bags of rice, even bottled water.”
It hardly needs to be pointed out that land is only as valuable as the market dictates, and that the shelf life of rice and water is drastically shorter than that of gold.
That's my issue with gold as well...except there always seems to be someone willing to pay for it.
“Imagine a bunch of health nuts in a nonsmoking ‘facility’ still trying to settle their debts with cigarettes. That’s gold. It doesn’t make sense.”
What if the nuts knew that no matter whether anyone wanted to smoke them they would still be valuable? Because that is gold. It’s always valuable. Mystification at the power of gold ought to disqualify one from writing about it. That’s just the way it is. It’s shiny and pretty and people everywhere know they can use it to get other stuff.
By the way, prisoners aren’t locked into using smokes as currency. They can also use, you know, currency. Which still has value behind bars, though you can’t smoke it. Actually, you can smoke the paper variety, but not without adding something.
Oh, NOW he doesn’t trust gold. If a person has a middling amount to invest, he is a moron to buy into a heated-up market. Buying gold now is for people with money to lose or time to monitor the price like a hawk and the resources get out in minutes. Gold fund, maybe... real gold, not so easy.
If gold scared one of the original Democrat communists so much that he banned gold coins and ordered them melted down, then that tells me I should have some gold in my savings.