dailyfinance.com — Lots of gold bugs burrow into the precious metal because it's thought to be the ultimate hedge against inflation. So why is famous deflationist David Rosenberg so bullish on gold? It's all about the integrity of the global financial system.
Jun 4, 2010 View in Crawl 4
3denJun 5, 2010
So have animals: yes - but that only helps if you have a farm. You can't melt sheep down into a pocket-sized form.Seashells and beads: yes - in their small economic zones - and for similar reasons - they weren't something you could fake and they were fairly rare - therefore suitable as a token for use in trade, rather than having to stock up on sheep.I'm not a gold-bug - but gold has held relatively stable value for THOUSANDS of years.... so while I'm not going to go dump my life into gold - having some real gold around in case of total financial meltdown is probably a reasonable guess even in this day and age.(Incidentally, I recall reading an article, probably linked from Digg, where a guy from ARgentina during their last financial collapse said it was handier to have gold jewelry (10k, 14k) rather than pure gold because it was more immediately exchangeable in an urban setting during a financial meltdown. People had a better idea of what it was worth, wheras pure gold would probably end up causing you a huge loss - too much risk for the buyer. A bag of 10k gold jewelry from the pawn shop might be a better save-your-ass-and-get-out-of-town-becuase-of-the-holocaust hedge than a bag of .9999 Maple Leafs
ptoomeyJun 5, 2010
I'm just waiting to see what happens when this bubble pops, and it will. The current price can't be sustained any more than any other commodity bubble has been sustained. When the big boys decide to sell en-masse it's going to be a wild ride for the suckers that bought at the top.
altgeeky1Jun 6, 2010
Hmm. I would have thought everyone worldwide knew who Glenn Beck was, even if all they knew was a brief glimpse of the self-parody that he is.Good luck with your investment, really. You are trading in a bubble, and don't lose sight of that fact.If you're looking for a hedge against the collapse of society, it'd be better to own guns AND know how to build primitive ones from common metal scrap. A good book on medieval siege tactics would also come in handy. Lastly, learn to make good homebrew beer, because no matter how bad things get and how little food there could be... someone will always pay for a good beer.
joe8packJun 7, 2010
Every paper currency ever invented has failed at some point in the past, why do you think our current paper currency is invincible? I wouldn't put every cent I had into precious metals, but I certainly don't think 10 to 25 per cent asset allocation in PM's would be an imprudent gesture.Gold tends to shine in times of instabilities like wars or economic calamities, you know sort of like our current era. If you buy Gold or Silver as hedge against economic instabilities, currency revaluations, etc., it is best to take physical possession and have the proper storage setup at your home,office or other facility that you feel comfortable about people having limited access to. An underground bunker is cozy all year round and makes a great place to drink in private without the kids making a lot of racket and its a handy place to keep you porn, er I mean gold. Some folks want a cabin in the mountains, some folks prefer a bunker, its all about lifestyle and convenience. Remember the Golden Rule, "them thats got the gold, makes the rules."P.S. don't forget to keep plenty of snacks and beer in the bunker, you can't eat gold (but you can buy a s**t load of beer with it)
joe8packJun 7, 2010
You all strike me as the kind of people that are willing to work for pieces of paper with ink on them. You will certainly tell me how "money" has so much value, that you would be willing to take any of mine that I'm not using, no questions asked. But still they are just pieces of paper and a promise that they will be worth something tommorrow and someone else will exchange them for something you want/need/owe.Gold is the same thing, except gold has been used for thousands of years, and paper only for hundreds. Which would you trust more? The gold standard has only been gone from this nation for 40 years or so, but already people have forgotten what gold is. If I had a choice between someone giving me gold or paper, I'd take the gold. As you can see they are each convertible into the other, but gold has a much better history then paper. There is a reason that when something is very very very good, it is referred to as the "Gold Standard" and 1st place is always a Gold Medal, you rarely see anyone accepting a Paper Medal for 1st place. Think about it. Currency is merely paper and a promise, gold has a much stronger promise.
joe8packJun 7, 2010
I rarely take investment advice from someone who doesn't know the difference between loose and lose.
peters1023Jun 7, 2010
You couldn't have missed my point more. I simply said that the value of a currency is dependent upon the strength of the economy backing it. When did I mention ANYTHING about the current situation? And the value of gold will implode like the housing market the minute the current situation becomes more stable.
joe8packJun 15, 2010
You too stay classy my friend, peters1023. I like your rosy outlook. Perhaps the future will yet surprise us all. We are indeed fortunate to be living during interesting times.