Posted on 10/01/2018 6:57:57 PM PDT by NRx
Gold has gotten a bad rap.
Long seen as the investment choice of the cranky and the fearful, the metal yields nothing; as Warren Buffett has said, it just “looks at you.”
This year has been especially lackluster for gold. Its price has slumped 8%, to about $1,200 an ounce, and is off more than 35% from its high of $1,900 in 2011. Adding insult to injury, Vanguard will soon rechristen the largest gold-oriented U.S. mutual fund and shift its focus away from the metal.
But this out-of-favor asset class now deserves a place in investment portfolios.
Compared with stocks and other financial assets, gold looks inexpensive. More important, inflation is starting to pick up in the U.S. and in much of the world as central banks shrink their enormous balance sheets. And gold has represented a good defense against inflation eroding the value of a stock or bond portfolio. Over time, it has held its value against the dollar. Gold was $20.67 an ounce 100 years ago and that bought a good men’s suit. At $1,200 an ounce, the same is true today.
“Gold is rare, and it’s hard to rapidly increase the supply of it,” says Keith Trauner, co-portfolio manager of the GoodHaven (ticker: GOODX) mutual fund, which holds Barrick Gold (ABX), a leading mining company. “People have historically viewed it as a hedge against government depreciation of local currency...”
“...Virtually every government in the world is trying to promote inflation partly because there is so much sovereign debt,” Trauner says. When there is so much debt, he contends, governments have three choices: default, restructure, or inflate the currency. “Politicians, when given the chance, will choose the latter.”
(Excerpt) Read more at barrons.com ...
Just my 2¢. Do your own due diligence... caveat emptor.
Gold is how you buy large property (Not just land, but big-ticket items) in just about all trading economies.
Silver is how you buy food and gas in all trading economies. It’s just as important to not have a pocket full of gold as it is to have empty pockets in a crash.
That said, Did this place turn into SHTFplan.com while I wasn’t looking ? The lucrative “prepper industry” has been telling us the dollar is collapsing in 24 hours for the past literally 18 years.
I think a lot of people go broke speculating on silver, and I think gold as well.
A 21 trillion dollar debt pretty much assures eventual inflation.
I like “junk” silver. 1921 Morgan dollars have been reasonable lately. Or pre ‘65 Roosevelt dimes
I can’t eat either one of those.
The commodities I do have will serve me well.
Silver is better. Down 2/3 from it’s peak, and much more practical for most people use to buy, sell and trade.
Growth does not create systemic inflation. You will see spot inflation until supply catches up with demand; which it will. Inflation comes from money for nothing.
A little bit of each is good as hedge. Speculation is gambling.
This year has been especially lackluster for gold. Its price has slumped 8%, to about $1,200 an ounce, and is off more than 35% from its high of $1,900 in 2011.
...
That big move to $1900 was fueled by gold’s safe haven status.
In SHTF time, neither precious metal is of much use. The metal of choice then is lead and brass, in any caliber. A handful of cartridges should fetch a meal or some fuel at least. Just make sure you trade metal is different than your protection metal.
A 21 trillion dollar debt pretty much assures eventual inflation.
...
What if there was a 2100 trillion dollar economy?
There is a lot more silver in the ground than gold. The stockpiles are huge.
Not that I would invest in either.
Been a while since I’ve seen anyone hyping gold.
I was a gold bug - 40 years ago.
Rule No. 1 for investing in gold - if you can’t touch it, you don’t own it. At most you might own a piece of paper. And Office Depot sells paper cheaper.
Just remember the inflation we had in the 70s which was attributed to printing money to pay down the national debt. It could happen again.
Is the US a 2.1 quadrillion economy?
This is not a prepper doom porn. This is Barrons. And they are not predicting the end of the dollar. Nor are they telling people to put all their money in gold. They are however, warning that inflation is likely coming as a result of our out of control debt and that gold is at an attractive price right now. They are suggesting it has a place in a well diversified portfolio.
“The lucrative “prepper industry” has been telling us the dollar is collapsing in 24 hours for the past literally 18 years.”
++++++++++++++++++++++++++++++++
Actually, they’ve been telling us that since at least 1965 that I can remember and probably earlier. They just have a really big megaphone known as the internet now.
How? Neither gold nor silver have ever nor can ever... go to zero. If you are buying on margin, which is a type of financial russian roulette, then yeah. But gold and silver are just a form of cash that politicians and central banks can’t print. It’s an insurance policy.
Seems like only yesterday that we had FReepers extolling the virtues of gold as an investment, why it always tracks the price of a good men’s suit. Or something.
Guess they moved on to Bitcoin.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.