Watching USD in conjunction with gold price... If the gold price rises while USD tracks sideways... thats my signal to look for the uptrend to stay relevant.
Dr. Z, Would you be able to elaborate. I skimmed through the entire book at the bookstore. While I enjoy literature, I hate paying someone to make me depressed about life, so I did not give the book the time it deserves. What I did read was well written, but I don't recall anything about gold, gold bugs, fiat banking or the farce of the gold bug argument. Please advise. Regards, JP
It has nothing to do with Gold or Gold Bugs or anything like that. But it illustrates the horor of a post-apcolypic world. Gold Bugs and Gold hoarders like to live in the illusion that they're somehow safe from the fiat money changers of modern society. And that they are somehow outsmarting what they perceive to be evil central banks. My theme was that in a true nightmare of a world you'll need water, food, ammunition and survival skills. Gold is not gonna be high on the list. Gold has it's place to hedge off your USD risk in a functioning financial system. But the best way to do it is through the shares of the mining companies. Hoarding the actual is idiotic and inefficient. I've owned mining shares for years now but I'm starting to reel that trade in and be long USD again.
Unless and until there is anarchy or famine, the water, food and ammo won't be a great investment. The advantage of gold is that its a store of wealth that no congress or central bank can easily dilute with the stroke of a pen or push of a button, like the US dollar has become. IMO, There were good reasons why the founding fathers required the use of gold and silver as money in the Constitution. We just seem to have forgotten them, and as a result, we are condemned to repeat the mistakes they lived through.
Thanks Dr. Z. Good points. Thriftybob, You make excellent points as well. My conclusion is everything in moderation.
All you have to do is go to Kitco or GoldisMoney forums and see what kind of maniacs they are. I invest in gold because it is a hedge to the falling dollar. I don't get bars of gold and bury them in my backyard, sitting in my shelter with my tin foil hat on and the HAM radio (you know, the one with the crank instead of batteries) just in case emergency. If there's some sort of crisis, gold bugs think they can just go to the local supermarket and trade gold for foodstuffs. Like the market is set up to take it. And the truckers. And the farmers. An instant gold system overnight. Bartering will be more likely as a result of any economic hell on earth. People won't take gold. They'll barter for goods and services.
I agree, to a degree. I think the ones with gold will be able to barter, or sell their gold for a currency that has value. Those who don't will suffer with whatever dole the government gives or beg.
When the US dollar fails (not if but when) then gold <b>will</b> have to be incorporated into the new currency. Fiat currency has always eventually failed throughout history... give me one example to the contrary and I'll bite my tongue.
the Gold market is way too small to be of any consequence when fiat concurrencies fail. Yes Fiat currencies always fail eventually but the "store of value" that one chooses to offset that can be anything from bushels of wheat, to livestock to raw land to trinkets and chotckies. Anything that doesn't depreciate faster than you can trade it for something else is a good store of value. Gold has no preeminent stature in this regard.
I think its just that they've made the paper currency market so large.... Gold is real wealth. Paper is just promises.