Bubbles!
For the last couple of years of being inundated with ads for gold I’ve wondered about gold as a hedge against inflation. It really made no historic sense, since gold has done very poorly relative to inflation over the last 30 years. Sure, some people claim to be doing well with gold as speculation drives up its price. But how did that last bit of rampant speculation go for you? Did you time the tech bubble right? Or the Housing bubble? So will you bail on the gold bubble in time?
When the gold hawkers run an ad begging you to buy gold from them, maybe you should ask why, if it is such a good investment, they don’t keep it?
Investment gold seems something only sophisticated full-time players should get into.
Now, if you are into gold not as a hedge against inflation, but against Armageddon, I’d ask what you would really want after the collapse – food, ammo, water, or gold?
December 26th, 2009 at 10:10 pm
“if it is such a good investment, they don’t keep it?” Different people invest over different time frames for different strategies. Traders, for example, profit on the short-term variations in price, gold traders included; their selling says nothing about the long range prospects for someone intending to hedge against a large inflation or other catastrophe. The same thing applies to other commodities and securities.
If we descend to a world of “food, ammo, water, or gold” all bets are off on winners, losers, and survivors in the jungle. Skills developed for an industrial society will not help much in the jungle of all-against-all. We can plan to survive in inflation or deflation, but it is a fantasy game to plan to survive in the jungle.
December 27th, 2009 at 8:46 am
“The Jungle”, Upton Sinclair, 1906. Is his analogy about corrupt capitalism just as true about corrupt socialism? It looks like it is in Chicago, but unsanitary beef spreads disease while unsanitary votes spread death to American values.
December 27th, 2009 at 9:27 am
Unsanitary beef has specific definition and measurable parameters; “unsanitary votes” and “American values” are defined only in the opinion of the observer. And since our 200 million voting age observers have widely varying opinions, we vote to choose our self-government.
December 27th, 2009 at 4:28 pm
#2… you can’t win with #3 because everything is RELATIVE in his view. No right, no wrong. Just observational opinion.
December 28th, 2009 at 10:50 am
The last time we had a recession this bad and a left wing extremist in charge they BANNED gold. By executive order, no less. No congressional review, no oversight, just insta-banned.
“Unsanitary votes” and “American Values” do tend to be relative terms, but the analogy is interesting.
As far as “surviving in the jungle” with food, ammo and guns: one day this country is going to turn into a crapfest. No government lasts forever, no nation stands forever and no amount of American arrogance is going to change the basic facts of history. God Forbid that happens tomorrow but when the dollar is useless and interstate commerce breaks down, will you be one of the people burning cash to stay warm? Or will you have enough food and the means to defend it long enough for the world to calm down and basic services to resume? Rural areas will be hit the least, urban centers could, in worst case, be nothing but a vicious fight for survival. Look at New Orleans.
This crisis, if mismanaged only slightly worse (or better from a leftist perspective) than it is right now could create those circumstances. That is one of the contributing factors to the massive increase in firearms and ammunition prices from November ’08 to June or so of last year.
Don’t sink your life savings into guns, but have one and a few weeks of food. And a few Gold or Silver coins to barter with when the dollar evaporates can’t hurt either.
March 13th, 2011 at 10:40 am
Do you remember that today is the anniversary of Sinclair ZX81 appeared to the market? It is thirty years now. Thus began the era of home computers. The heart of the computer was a Zilog Z80 microprocessor clocked at 3.25 Mhz. The basic version of the computer had one kilobyte of memory (two million times smaller than a modern laptop to 2GB of memory). Programs were loaded with cassette tapes connected via an ordinary tape recorder. The screen had a resolution of 64 to 44 pixels. It was produced for 3 years, until 1984. Sold over half a million copies. Great times don’t you think?