David Goldman: "wrong time" for Gold (!?)

[Alexis]

[Mr. Perfect]

People struggle so hard to understand gold. Alexis, you have a good bit of it right.

A commodity is a commodity. It is riskier than other investments because there is no cash flow from which you can derive an intrinsic value. "Sterile asset" is a useless characterization.

As far as SHTF investing, gold is hardly necessary/your only option so if it puzzles you don't worry about it and find some other stuff. Short selling RE is a good SHTF investment, still.

[Milo]

One day I'll meet a gold bug that does not have an apocalypse fetish but I'm not holding my breath.

[amos]

[Tinker]

[Alexis]

[Alexis]

[~]

...sorta related to amos' point:

Isn't the value (demand) of gold largely as much of a construct as "fiat currency"?

Sure, it has unique physical/chemical properties useful in industry and elsewhere, but last I heard, industrial uses only accounted for a small fraction of demand (value), the rest being mostly jewelry and currency.


Am I just naive?

[Alexis]

[Mr. Perfect]

Nobody knows the amount in the price that is due to risk hedging.

It doesn't matter that much because any commodity that would "replace" fiat currency in a SHTF environment would be bid up similarly, ie much higher prices/values than when it was a commodity with an end use only.

[Alexis]

[Alexis]

[~]

Thanks Alexis. Your points about "Probability of inflation" makes things clearer for me.
I did think the age of the construct and it's discrete origins are traceable to it's elemental properties and comparative rarity, but I hadn't considered that they were also somewhat intrinsic to gold's value as a currency backer.

Thanks again for the primer! I feel like I've gained some understanding.

[Alexis]

[Mr. Perfect]

Alexis, you need to think a little more outside the box. Right now you can use any commodity as an inflation hedge, if you want to.

Remember, currency serves 3 purposes; store of value, medium of exchange, and it measures relative values.

So just about any commodity can achieve all but medium of exchange very effectively. In fact, this is what inflation is, people "dumping dollars" to own commodities, this is why inflation is defined as the rise in the price of commodities across a wide range. You can also measure relative values with your commodity.

Medium of exchange is another matter. The finely divisible and numismatic properties of metals make them the first choice, and the relative quantities of gold and silver make them the first choice of metals, and have made them the first choice when available for thousands of years.

So nothing new there. Just be aware there are lots and lots of hedges out there.

[Milo]

[Alexis]

[Colonel Sun]

[Mr. Perfect]

Ehh, that's like a 4 month chart.

[Colonel Sun]

[Alexis]

[Alexis]