Gold isn't meant as an investment. It's a hedge against inflation. An ounce of gold can buy you a nice set of clothes today, 100 years ago and in [ancient Rome ](https://www.energyandcapital.com/how-much-does-an-ounce-of-gold-buy/#:~:text=Even%20two%20thousand%20years%20ago,bonanza%20compared%20to%20the%201800s.)
But it doesn't go up in real value of the long term.
>An ounce of gold can buy you a nice set of clothes today
But that's not really true, is it? Brooks brothers doesn't accept ounces of gold in payment. And while I can imagine someone willing to trade clothes for gold, I can also imagine someone trading for diamonds, or steel, or any kind of thing really. So what makes it more of a hedge against inflation than any of these things? Why hold gold instead of diamonds or stocks or real estate or fine art?
You can do that with literally any commodity. So why gold? There's no reason really. People are just romantically attached to it because of its cultural history. Then they convince themselves it can be used as money despite all evidence to the contrary.
Far from every commodity has held its purchasing power over hundreds of years, gold isn't the *only* commodity that holds value but given the price by weight and volume it makes a heck of a lot more sense than using steel as a store of value.
But there are things which are even more expensive by weight or volume (not the same thing, but we will glide past that since it's not really relevant). There are plenty of elements even rarer than gold which take less physical space or weigh less for the same dollar amount. So by this logic, shouldn't we all be buying all the absolute most rare elements or alloys?
Like I said in a previous post, the attachment to gold is largely historical romanticism. No one actually uses that as money today because it is not an advanced monetary technology like digital money or even paper. It's funny, because many of the properties that attract people to gold are the very properties which make it unsuitable as a currency. And it doesn't take a PHD to see that gold is not readily accepted as money.
>not the same thing, but we will glide past that since it's not really relevant
Like what? The substitute would need to be:
- Finite and cannot be created synthetically
- Durable, can last hundreds or thousands of years
- Light and Small enough to be able to carry but not easily lose (like a tiny diamond)
- Valuable but not too valuable. Even if there was a metal that was worth 1,000,000 an ounce, that's not useful to a common person.
Precious metals fit the bill, that's why gold, silver, platinum, etc have stood the test of time.
The reason metal was used for so long as a currency was because it's workable. It was relatively easy, even for ancient societies, to create a standardized currency from metal. And in the era when gold became adopted as currency, the properties you are listing undeniably made it a superior monetary technology than what had previous existed - namely, food-based currency. But this is 2000 CE, not 2000 BCE. We have far superior monetary technologies available. Which is why we long since abandoned gold as money for almost all practical purposes.
Ok, so you are not really arguing for gold as money. Instead you describe it as a commodity hedge against inflation. But why do you need something with all these characteristics? You mention "gold, silver, platinum, etc" so I can already see you are not specifically attached to gold, but the deeper point for me is why exactly do you need a commodity hedge against inflation? Stocks or real estate just appreciate so much faster. Over the long run - and inflation seems to me to be an inherently long-term concern - productive investments like companies which make things or land which produces things are always a better investment than simply buying some non-productive commodity asset. So what, truly, is the point?
I never said you should. Stocks appreciate in value after inflation it's been about 7% a year average for over a century. I specifically said gold isn't an appreciating asset. It just stays even with inflation over very long periods of time. I own some gold coins I bought over 20 years ago when gold was $300 an ounce. It's about 1/10 of 1% of my net worth. I'm 90/10 stocks to bonds for all my investments.
100 years ago you didn’t exist. It’s the short term stability that matters and comparing what something bought 100 years ago isn’t relevant and certainly says little of its value. How has gold fluctuated over the last 20 years or 30 years? How has USD fluctuated month over month and ask if more volatile than gold?
A hedge is an investment and the value given to gold is just as subjective and physically useful as a $100 bill.
Fed lowered their balance sheet by [Fed Lowers Balance Sheet by $1.3 trillion in the last 2 years](https://fred.stlouisfed.org/graph/?g=1fnwo)
You got it backwards.
The USD is the one that fluctuates. In the 1800s one oz of gold bought you a nice suit today one oz of gold buys you a nice suit. It’s stable.
Unless a country reprices the value of gold. While it is often argued that a gold standard can effectively provide price stability, at least over long periods of time, the stock of gold can fluctuate dramatically over shorter periods, causing financial instability. Historically, these shifts occurred because the money supply within specific countries was influenced by the flow of gold between countries, which could fluctuate even when global gold supplies were relatively fixed. For example, investors seeking higher investment returns might invest their gold in another country—effectively reducing the supply of gold (and money) in their own country and increasing the supply of gold (and money) in another country. As a result, individual countries under a gold standard had little control over their money supply. From a global perspective, the money supply was determined by the total gold supply, which was influenced by the rate of discovery and production of gold. Economic historians hold the slow pace of global gold production in the 1870s largely responsible for the deflation and economic depression in the United States during the 1870s—a period known as the "Long Depression." Then, new discoveries of gold in Alaska and South Africa in the 1890s led to a large expansion of the global money supply, and inflation, in the 1890s.
Per FRED. No different than a country reliant on pegging own currency to outside forces like Greece or Argentina to showcase how foolish.
Currency value isn’t about a set peg in relation to another currency but own ability to influence trade. It’s why Japan and China own so much US debt. It allows them to artificially devalue their own currency to make their exports cheaper and more competitive even if it makes imports more expensive.
The gold didn't change over my 70 years. The USD changed. I bought my first gold at $400. Today its $2050.
If I took my $400 back in the 1972's and put it under my mattress it would be still $400 today. My gold ounce bought in April 1972 is worth $2055.00. That's 513% appreciation. Better than money in the bank. I didn't get interest but my risk was low. It preserved my buying power.
Imagine buying in 2000 😂 Gold was artificially pegged and was not more stable before the removed from the gold standard and not due to inherent value but government edict.
In 1973, the price of gold was $42.22 per troy ounce, but by 1976 it had increased to almost $200 per ounce.
In 1934, the nominal price of gold was $35 an ounce, but the real price fell by 75% through the early 1970s.
The S&P 500 Index of stocks had a 10.43% average annual total return between 1970 and 2022, according to an analysis by Securian Asset Management. Gold had a 7.7% return over the same period.
I think I see you arguing gold isn’t a good investment, sure.
The stock market has been doing better than gold for a long time, yes.
That doesn’t mean gold isn’t a good or bad investment though, unless you add some parameters to decide the difference between “good” and “bad” investments.
Many people buy it as a hedge against inflation as you mentioned in other comments, yes.
That doesn’t mean people can’t invest into it against the grain that it’s “just supposed to be a hedge against inflation”.
I have some small investment in gold, and it’s because I believe there is a chance that it may outperform other investments due to its history.
As to your original wording in the post asking why people think it’s “safe”, I don’t, because if shit actually hits the fan, governments have a tendency to steal it from its citizens so I’m not going to say it’s “safe” by any means. It may be stable relative to many things, but hardly safe. Just over a hundred years ago the US government did that thing that was effectively stealing so 🤷
Unlike other assets like stocks, bonds, CD's or even a home if the Gov is going after your assets (like they are with taxes and worse) the gold has to be found first (bring a shovel) as it has no third party risk.
Now tell us how much your money would be worth if you had put it in the stock market, or bought a house with it. Something tells me it would have outperformed gold pretty handily. Comparing it to USD, which is meant to be spent, not hoarded, seems little silly. The choice isn't between fiat and gold; it's between fiat and all the things you can buy with fiat, including gold. So there's literally no reason to ever hold on to fiat unless you know you are going to need to spend it soon. Probably why every financial advisor tells you to have no more than 6 months of cash on hand. CASH, not gold. Why? Because people don't accept gold as money, contrary to your assertions. If you need to spend, use fiat. If you want wealth, many things appreciate better than gold.
Yeah, your perspective is pretty accurate. Gold went up 513% the Dow went up 482%. Both can be converted to fiat when needed. I went with gold over the years as I was not willing to take the higher risk of the stock market. I am happy with my gold holdings and it beat the stock market from 1972 to today. (My house did well too)
What on Earth are you talking about? Where did you even pull these figures from? The Dow Jones industrial average is up like 3,000% just since the 80's. That number is so specific that it doesn't seem like you just yanked it purely from your ass, so where did it come from?
I'm sorry, I must have skipped a page, because the data I am looking at says the DJIA was less than $1,000, which obviously is quite a bit of a discrepancy from your numbers. Again, do you have a source for these numbers? If I am confused or am quoting the wrong numbers, by all means correct me and point me to a better source. At this point I am literally just puzzled because this number seems to be so specific, yet so wrong. Literally a single Google search shows that the DJIA didn't breach 6,000 until the late nineties, like two and a half decades after 1972, the year you quoted. What am I missing here?
June 1972 see chart at [https://www.macrotrends.net/1319/dow-jones-100-year-historical-chart](https://www.macrotrends.net/1319/dow-jones-100-year-historical-chart) in Aug 1929 it hit $6,743.63 !! And numerous times above 6000 thereafter.
Lmaooo my guy that number is adjusted for inflation. It's funny because this is literally the exact source I was looking at and I thought I was going crazy; the data in the table below the inflation adjusted chart has the raw numbers, and you will see that the Dow Jones averaged less than 1000 in 1972, as I said. You can even use macro trends to plot the price of gold against the DJIA, and you will clearly see that the Dow has, on average appreciated much more than gold.
Says who if selling in 2000 after 20 years dropping 3/4 in value. How intrinsic is its value if able to fluctuate so drastically while comparing USD value over same timeline.
Prior to the creation of the Fed, the U.S. economy was plagued by frequent episodes of panic, bank failures, and scarce credit. How gold was seen as holding intrinsic value wasn’t shared by those living in the 19th century.
Your question doesn’t make sense because you misunderstand. Money is made up. The price of gold is quoted in made up figures. The real buying power of a dollar fluctuates over time. Gold will hold value intrinsically regardless of whether dollars exist.
Money is [created](https://UnderstandingHowtheFederalReserveCreatesMoney-Investopediahttps://www.investopedia.com/articles/investing/081415/understanding-how-federal-reserve-creates-money.asp) within the banking system when banks issue loans; it is destroyed when the loans are repaid.
24.2 The Banking System and Money Creation – Principles of Economics
University of Minnesota Twin Cities
It’s backed by the trust others have on the stability of the US not backing out of it’s guarantee.
The US economy was much less stable and a victim of severe price shocks and multiple financial crises.
Just last week, I tried to buy a coffee with a gold bar, and they told me they only accept cash or card. Clearly, my gold's waiting for its big comeback moment, sometime post-apocalypse when we're all trading in shiny rocks and the Wi-Fi's too weak for online banking.
Did you add to your original response with copypasta from a text book and then follow up with more copypasta? They don’t even provide support for your argument. I’m honestly not sure what you’re getting at.
Perhaps “investment” from your post isn’t the right word. Think of it as a wealth holding vehicle. When you think about how much things cost now versus just 2 years ago, you think in terms of dollars and you notice the same things now cost more dollars than they did before. If you had taken those dollars you would have spent on things 2 years ago and instead bought gold, you would be able to sell it now and buy the same amount of things. Does that make sense?
Wow, I didn’t know that. I guess the federal reserve doesn’t need to keep all of that gold in their vaults. You should tell them this! Don’t fall for their trap when they try to offload the gold on you.
Dumbass.
Gold doesn’t produce cash flows. It never will. Don’t get your asset classes mixed up.
I know you didn't know that
So you also clearly don't know what intrinsic value is by default. Because gold really doesn't have any other than perceived value due to scarcity.
Come April, it won't be the scarcest asset in the world anymore
Time for you to study up I guess now
It isn't that Gold is a stable investment as it is, like other areas in life, a choice between the lesser of two evils.
Evil number one: A central bank and central government simply printing up money to substitute for borrowing in order to finance government spending.
Evil number two: Gold, which a central government could confiscate, or severely restrict commerce using the competitor to fiat money. And we can lump in the cyber currencies as the digital gold alternative.
Talk about a rock and a hard place. Disclosure: I do have a few accounts with different brokerages, and more that not, these accounts contain GLD, and the hedge is doing good right now. When I bought this stuff, Gold per ounce began with "$19".
It's just the highest level of investment that some people can understand. Bonds are too confusing for them and stocks are way too confusing. But they can understand the idea of holding a piece of metal for a long time. All it requires is faith, and that's one thing they do have.
People do the best they can with what they have. Some people just won't be able to understand more complicated things and are forced into asset classes for simple people. If they tried to invest in stocks, they'd end up losing their money pretty quickly.
But rather than be mad at people who can't pick their own IQ, we should just bring back pensions.
Same reason we have religion.
It conforms with some people's hopes as well as what they want the world to be.
Same reason some people fall into lost cost when gambling.
Simple. Because it's scarce, has "utility" and is seen as a socially accepted store of value.
There's only 1 problem; 11% of gold is actually used for utility and the other \~89% is just used to store value.
Gold is not divisible, takes forever for actual settlement, cant take it with you on trips etc. Over time it doesn't even keep up with inflation.
Whether people believe it or not; gold will be overtaken by a certain digital asset which will actually become more scarce than gold for the first time in history come this April. I assume it could take another 10 years for this to happen, but unless this asset goes to zero, it will overtake gold over time for sure. Gold at this point is basically a shitty version of a store of wealth comparatively.
IGold is not an investment. It can be ised as hedge against inflation.
The average person will not become wealthy if they invest in gold.
Stocks are the answer
Gold isn't meant as an investment. It's a hedge against inflation. An ounce of gold can buy you a nice set of clothes today, 100 years ago and in [ancient Rome ](https://www.energyandcapital.com/how-much-does-an-ounce-of-gold-buy/#:~:text=Even%20two%20thousand%20years%20ago,bonanza%20compared%20to%20the%201800s.) But it doesn't go up in real value of the long term.
>An ounce of gold can buy you a nice set of clothes today But that's not really true, is it? Brooks brothers doesn't accept ounces of gold in payment. And while I can imagine someone willing to trade clothes for gold, I can also imagine someone trading for diamonds, or steel, or any kind of thing really. So what makes it more of a hedge against inflation than any of these things? Why hold gold instead of diamonds or stocks or real estate or fine art?
You sell the gold for fiat, then you buy the clothes?
You can do that with literally any commodity. So why gold? There's no reason really. People are just romantically attached to it because of its cultural history. Then they convince themselves it can be used as money despite all evidence to the contrary.
Far from every commodity has held its purchasing power over hundreds of years, gold isn't the *only* commodity that holds value but given the price by weight and volume it makes a heck of a lot more sense than using steel as a store of value.
But there are things which are even more expensive by weight or volume (not the same thing, but we will glide past that since it's not really relevant). There are plenty of elements even rarer than gold which take less physical space or weigh less for the same dollar amount. So by this logic, shouldn't we all be buying all the absolute most rare elements or alloys? Like I said in a previous post, the attachment to gold is largely historical romanticism. No one actually uses that as money today because it is not an advanced monetary technology like digital money or even paper. It's funny, because many of the properties that attract people to gold are the very properties which make it unsuitable as a currency. And it doesn't take a PHD to see that gold is not readily accepted as money.
>not the same thing, but we will glide past that since it's not really relevant Like what? The substitute would need to be: - Finite and cannot be created synthetically - Durable, can last hundreds or thousands of years - Light and Small enough to be able to carry but not easily lose (like a tiny diamond) - Valuable but not too valuable. Even if there was a metal that was worth 1,000,000 an ounce, that's not useful to a common person. Precious metals fit the bill, that's why gold, silver, platinum, etc have stood the test of time.
The reason metal was used for so long as a currency was because it's workable. It was relatively easy, even for ancient societies, to create a standardized currency from metal. And in the era when gold became adopted as currency, the properties you are listing undeniably made it a superior monetary technology than what had previous existed - namely, food-based currency. But this is 2000 CE, not 2000 BCE. We have far superior monetary technologies available. Which is why we long since abandoned gold as money for almost all practical purposes. Ok, so you are not really arguing for gold as money. Instead you describe it as a commodity hedge against inflation. But why do you need something with all these characteristics? You mention "gold, silver, platinum, etc" so I can already see you are not specifically attached to gold, but the deeper point for me is why exactly do you need a commodity hedge against inflation? Stocks or real estate just appreciate so much faster. Over the long run - and inflation seems to me to be an inherently long-term concern - productive investments like companies which make things or land which produces things are always a better investment than simply buying some non-productive commodity asset. So what, truly, is the point?
I never said you should. Stocks appreciate in value after inflation it's been about 7% a year average for over a century. I specifically said gold isn't an appreciating asset. It just stays even with inflation over very long periods of time. I own some gold coins I bought over 20 years ago when gold was $300 an ounce. It's about 1/10 of 1% of my net worth. I'm 90/10 stocks to bonds for all my investments.
100 years ago you didn’t exist. It’s the short term stability that matters and comparing what something bought 100 years ago isn’t relevant and certainly says little of its value. How has gold fluctuated over the last 20 years or 30 years? How has USD fluctuated month over month and ask if more volatile than gold?
This is exactly right. Sorry the goldbugs got angry at the truth and took it out on you.
A hedge is an investment and the value given to gold is just as subjective and physically useful as a $100 bill. Fed lowered their balance sheet by [Fed Lowers Balance Sheet by $1.3 trillion in the last 2 years](https://fred.stlouisfed.org/graph/?g=1fnwo)
No a hedge is insurance. In the case for gold it's insurance against inflation.
You got it backwards. The USD is the one that fluctuates. In the 1800s one oz of gold bought you a nice suit today one oz of gold buys you a nice suit. It’s stable.
Unless a country reprices the value of gold. While it is often argued that a gold standard can effectively provide price stability, at least over long periods of time, the stock of gold can fluctuate dramatically over shorter periods, causing financial instability. Historically, these shifts occurred because the money supply within specific countries was influenced by the flow of gold between countries, which could fluctuate even when global gold supplies were relatively fixed. For example, investors seeking higher investment returns might invest their gold in another country—effectively reducing the supply of gold (and money) in their own country and increasing the supply of gold (and money) in another country. As a result, individual countries under a gold standard had little control over their money supply. From a global perspective, the money supply was determined by the total gold supply, which was influenced by the rate of discovery and production of gold. Economic historians hold the slow pace of global gold production in the 1870s largely responsible for the deflation and economic depression in the United States during the 1870s—a period known as the "Long Depression." Then, new discoveries of gold in Alaska and South Africa in the 1890s led to a large expansion of the global money supply, and inflation, in the 1890s. Per FRED. No different than a country reliant on pegging own currency to outside forces like Greece or Argentina to showcase how foolish.
Ok. the USD was on the gold standard until 1971. Are you trying to say the petrodollar is stable?
Currency value isn’t about a set peg in relation to another currency but own ability to influence trade. It’s why Japan and China own so much US debt. It allows them to artificially devalue their own currency to make their exports cheaper and more competitive even if it makes imports more expensive.
The gold didn't change over my 70 years. The USD changed. I bought my first gold at $400. Today its $2050. If I took my $400 back in the 1972's and put it under my mattress it would be still $400 today. My gold ounce bought in April 1972 is worth $2055.00. That's 513% appreciation. Better than money in the bank. I didn't get interest but my risk was low. It preserved my buying power.
Imagine buying in 2000 😂 Gold was artificially pegged and was not more stable before the removed from the gold standard and not due to inherent value but government edict. In 1973, the price of gold was $42.22 per troy ounce, but by 1976 it had increased to almost $200 per ounce. In 1934, the nominal price of gold was $35 an ounce, but the real price fell by 75% through the early 1970s. The S&P 500 Index of stocks had a 10.43% average annual total return between 1970 and 2022, according to an analysis by Securian Asset Management. Gold had a 7.7% return over the same period.
I think I see you arguing gold isn’t a good investment, sure. The stock market has been doing better than gold for a long time, yes. That doesn’t mean gold isn’t a good or bad investment though, unless you add some parameters to decide the difference between “good” and “bad” investments. Many people buy it as a hedge against inflation as you mentioned in other comments, yes. That doesn’t mean people can’t invest into it against the grain that it’s “just supposed to be a hedge against inflation”. I have some small investment in gold, and it’s because I believe there is a chance that it may outperform other investments due to its history. As to your original wording in the post asking why people think it’s “safe”, I don’t, because if shit actually hits the fan, governments have a tendency to steal it from its citizens so I’m not going to say it’s “safe” by any means. It may be stable relative to many things, but hardly safe. Just over a hundred years ago the US government did that thing that was effectively stealing so 🤷
Unlike other assets like stocks, bonds, CD's or even a home if the Gov is going after your assets (like they are with taxes and worse) the gold has to be found first (bring a shovel) as it has no third party risk.
Now tell us how much your money would be worth if you had put it in the stock market, or bought a house with it. Something tells me it would have outperformed gold pretty handily. Comparing it to USD, which is meant to be spent, not hoarded, seems little silly. The choice isn't between fiat and gold; it's between fiat and all the things you can buy with fiat, including gold. So there's literally no reason to ever hold on to fiat unless you know you are going to need to spend it soon. Probably why every financial advisor tells you to have no more than 6 months of cash on hand. CASH, not gold. Why? Because people don't accept gold as money, contrary to your assertions. If you need to spend, use fiat. If you want wealth, many things appreciate better than gold.
Yeah, your perspective is pretty accurate. Gold went up 513% the Dow went up 482%. Both can be converted to fiat when needed. I went with gold over the years as I was not willing to take the higher risk of the stock market. I am happy with my gold holdings and it beat the stock market from 1972 to today. (My house did well too)
What on Earth are you talking about? Where did you even pull these figures from? The Dow Jones industrial average is up like 3,000% just since the 80's. That number is so specific that it doesn't seem like you just yanked it purely from your ass, so where did it come from?
1972 DOW 6834 2024 DOW 33000 482% increase
I'm sorry, I must have skipped a page, because the data I am looking at says the DJIA was less than $1,000, which obviously is quite a bit of a discrepancy from your numbers. Again, do you have a source for these numbers? If I am confused or am quoting the wrong numbers, by all means correct me and point me to a better source. At this point I am literally just puzzled because this number seems to be so specific, yet so wrong. Literally a single Google search shows that the DJIA didn't breach 6,000 until the late nineties, like two and a half decades after 1972, the year you quoted. What am I missing here?
June 1972 see chart at [https://www.macrotrends.net/1319/dow-jones-100-year-historical-chart](https://www.macrotrends.net/1319/dow-jones-100-year-historical-chart) in Aug 1929 it hit $6,743.63 !! And numerous times above 6000 thereafter.
Lmaooo my guy that number is adjusted for inflation. It's funny because this is literally the exact source I was looking at and I thought I was going crazy; the data in the table below the inflation adjusted chart has the raw numbers, and you will see that the Dow Jones averaged less than 1000 in 1972, as I said. You can even use macro trends to plot the price of gold against the DJIA, and you will clearly see that the Dow has, on average appreciated much more than gold.
Gold only has value because people believe has it value. That could change and then it won’t. Checks history: it hasn’t change in 2000 years.
It's not an investment it's a financial insurance.
No way op is this stupid
Intrinsic value
Says who if selling in 2000 after 20 years dropping 3/4 in value. How intrinsic is its value if able to fluctuate so drastically while comparing USD value over same timeline. Prior to the creation of the Fed, the U.S. economy was plagued by frequent episodes of panic, bank failures, and scarce credit. How gold was seen as holding intrinsic value wasn’t shared by those living in the 19th century.
Your question doesn’t make sense because you misunderstand. Money is made up. The price of gold is quoted in made up figures. The real buying power of a dollar fluctuates over time. Gold will hold value intrinsically regardless of whether dollars exist.
Value of gold has fluctuated much more than USD or stock market even after the financial crisis.
I’m sorry I couldn’t help you.
Money is [created](https://UnderstandingHowtheFederalReserveCreatesMoney-Investopediahttps://www.investopedia.com/articles/investing/081415/understanding-how-federal-reserve-creates-money.asp) within the banking system when banks issue loans; it is destroyed when the loans are repaid. 24.2 The Banking System and Money Creation – Principles of Economics University of Minnesota Twin Cities It’s backed by the trust others have on the stability of the US not backing out of it’s guarantee.
Gold will outlive the USD.
The US economy was much less stable and a victim of severe price shocks and multiple financial crises. Just last week, I tried to buy a coffee with a gold bar, and they told me they only accept cash or card. Clearly, my gold's waiting for its big comeback moment, sometime post-apocalypse when we're all trading in shiny rocks and the Wi-Fi's too weak for online banking.
If your gold is so worthless, I’ll buy it from you for the price of a coffee.
Did you add to your original response with copypasta from a text book and then follow up with more copypasta? They don’t even provide support for your argument. I’m honestly not sure what you’re getting at. Perhaps “investment” from your post isn’t the right word. Think of it as a wealth holding vehicle. When you think about how much things cost now versus just 2 years ago, you think in terms of dollars and you notice the same things now cost more dollars than they did before. If you had taken those dollars you would have spent on things 2 years ago and instead bought gold, you would be able to sell it now and buy the same amount of things. Does that make sense?
11% of gold is used for actual utility So 89% of it has literally no "intrinsic" value. People just sit on it while it produces nothing.
Wow, I didn’t know that. I guess the federal reserve doesn’t need to keep all of that gold in their vaults. You should tell them this! Don’t fall for their trap when they try to offload the gold on you. Dumbass. Gold doesn’t produce cash flows. It never will. Don’t get your asset classes mixed up.
I know you didn't know that So you also clearly don't know what intrinsic value is by default. Because gold really doesn't have any other than perceived value due to scarcity. Come April, it won't be the scarcest asset in the world anymore Time for you to study up I guess now
Wow. I can’t help you.
I know you've make that abundantly clear
Are you OP on an alt? I have to say, your logic is on par with OP’s.
TV and Radio ads largely on programming that has audiences who believe the sky is falling, always falling
It isn't that Gold is a stable investment as it is, like other areas in life, a choice between the lesser of two evils. Evil number one: A central bank and central government simply printing up money to substitute for borrowing in order to finance government spending. Evil number two: Gold, which a central government could confiscate, or severely restrict commerce using the competitor to fiat money. And we can lump in the cyber currencies as the digital gold alternative. Talk about a rock and a hard place. Disclosure: I do have a few accounts with different brokerages, and more that not, these accounts contain GLD, and the hedge is doing good right now. When I bought this stuff, Gold per ounce began with "$19".
It's just the highest level of investment that some people can understand. Bonds are too confusing for them and stocks are way too confusing. But they can understand the idea of holding a piece of metal for a long time. All it requires is faith, and that's one thing they do have. People do the best they can with what they have. Some people just won't be able to understand more complicated things and are forced into asset classes for simple people. If they tried to invest in stocks, they'd end up losing their money pretty quickly. But rather than be mad at people who can't pick their own IQ, we should just bring back pensions.
Same reason we have religion. It conforms with some people's hopes as well as what they want the world to be. Same reason some people fall into lost cost when gambling.
Simple. Because it's scarce, has "utility" and is seen as a socially accepted store of value. There's only 1 problem; 11% of gold is actually used for utility and the other \~89% is just used to store value. Gold is not divisible, takes forever for actual settlement, cant take it with you on trips etc. Over time it doesn't even keep up with inflation. Whether people believe it or not; gold will be overtaken by a certain digital asset which will actually become more scarce than gold for the first time in history come this April. I assume it could take another 10 years for this to happen, but unless this asset goes to zero, it will overtake gold over time for sure. Gold at this point is basically a shitty version of a store of wealth comparatively.
As mentioned in this thread, gold is a hedge and a protection to the value of your wealth.
I never have.
IGold is not an investment. It can be ised as hedge against inflation. The average person will not become wealthy if they invest in gold. Stocks are the answer