Gold Bubble Bursts

[Simon_Jester]

As noted, part of the point of gold is to cushion a localized or partial collapse (which is historically precedented), not a total collapse (which isn't, not really).

Also, gold offers you some secure chance to transfer assets from the 'old economy' to the 'new economy.' Where other people may lose their entire life savings, you might only lose half or 3/4 of them, which is less bad.

[TheHammer]

In the case of a total global economic meltdown, no; gold won't have much value in the anarchy immediately following the collapse. But it likely will have more value than dollars in whatever economy rises from the ashes.

Also, if just the US economy collapses, it would easier to take your gold and emigrate to Germany, Canada, or Brazil than it would be to take your US dollars and do the same.

That being said; if I were the worrying wealthy type, I would still rather invest in land and manual farm equipment or herds of something out of personal preference.

If the US economy did collapse it would bring the rest of the world's economy with it. Same with Europe, and Asia. Its too interdependent. Just look at the panicked investor sheep at the prospect of Greece defaulting on its debts.

[/quote]

As noted, part of the point of gold is to cushion a localized or partial collapse (which is historically precedented), not a total collapse (which isn't, not really).

Also, gold offers you some secure chance to transfer assets from the 'old economy' to the 'new economy.' Where other people may lose their entire life savings, you might only lose half or 3/4 of them, which is less bad.

That's only if you have the physical gold in your actual possession. If you own it as a commodities stock I wouldn't count on it actually being there following an economic collapse. Besides that, I'd expect gold would lose 90% of its value in the event of such a collapse. It doesn't DO anything. You can't eat it, it doesn't make electricty, it doesn't power trucks, boats or trains. Who exactly would be clamoring for it? Its a supply and demand thing.

Hopefully, that theory never gets put to the test...

[Skgoa]

As noted, part of the point of gold is to cushion a localized or partial collapse (which is historically precedented), not a total collapse (which isn't, not really).

Also, gold offers you some secure chance to transfer assets from the 'old economy' to the 'new economy.' Where other people may lose their entire life savings, you might only lose half or 3/4 of them, which is less bad.

That's only if you have the physical gold in your actual possession. If you own it as a commodities stock I wouldn't count on it actually being there following an economic collapse.

That would be incredibly stupid. Investing in "paper gold" is an investment strategy and is as such subject to the same rules and problems that any other investment is. So yeah, buying gold to make a profit or as your retirement fund is a pretty bad idea right now.

Besides that, I'd expect gold would lose 90% of its value in the event of such a collapse. It doesn't DO anything. You can't eat it, it doesn't make electricty, it doesn't power trucks, boats or trains. Who exactly would be clamoring for it? Its a supply and demand thing.

But everything else would loose value as well. Nobody is saying gold is the ultimate way to stave off the apocalypse. But if you have some spare wealth that you want to invest in something very very secure... what would it be?

[TheHammer]

As noted, part of the point of gold is to cushion a localized or partial collapse (which is historically precedented), not a total collapse (which isn't, not really).

Also, gold offers you some secure chance to transfer assets from the 'old economy' to the 'new economy.' Where other people may lose their entire life savings, you might only lose half or 3/4 of them, which is less bad.

That's only if you have the physical gold in your actual possession. If you own it as a commodities stock I wouldn't count on it actually being there following an economic collapse.

That would be incredibly stupid. Investing in "paper gold" is an investment strategy and is as such subject to the same rules and problems that any other investment is. So yeah, buying gold to make a profit or as your retirement fund is a pretty bad idea right now.

Well with the gold bubble bursting obviously its not a good time to buy lol. The point I was trying to make is that unless you have physical gold in your possession, (buried in your back yard?) its not going to be there in the event of economic collapse. Of course that might not be the most prudent form of investment, and by its nature would be a target for thieves.

Besides that, I'd expect gold would lose 90% of its value in the event of such a collapse. It doesn't DO anything. You can't eat it, it doesn't make electricty, it doesn't power trucks, boats or trains. Who exactly would be clamoring for it? Its a supply and demand thing.

But everything else would loose value as well. Nobody is saying gold is the ultimate way to stave off the apocalypse. But if you have some spare wealth that you want to invest in something very very secure... what would it be?

Well the point I was making is that SOME people (people selling gold) actually were saying gold was one of the keys to staving off the apocolypse lol. If I get a chance later I'll see if I can find the commerical online somewhere where they specifically stated you should have guns, food, and GOLLLLD on hand in the event of a disaster.

As I said, I'd rather invest with the notion in mind that the economy isn't going to collapse. I'm not saying gold is a bad investment, but its value depends directly on a stable economy where people can afford to invest in luxuries.

At any rate, I think I'm done beating this dead horse

[loomer]

You blind fools! Don't you know that this is the elite jew bankers plan to crash the market so they can buy up all the gold and silver themselves?! Tomorrow prices will skyrocket again!

Sadly, that's the actual theory being pushed by a lot of gold-selling conspiracy nuts. Any time gold gets stronger or weaker, it's somehow proof that there are evil, invariably Jewish, bankers behind the world's problems.

[TheHammer]

As promised:


God Gold and Guns! I've seen other variants out there, but I trust this makes my point

[Block]

You blind fools! Don't you know that this is the elite jew bankers plan to crash the market so they can buy up all the gold and silver themselves?! Tomorrow prices will skyrocket again!

Sadly, that's the actual theory being pushed by a lot of gold-selling conspiracy nuts. Any time gold gets stronger or weaker, it's somehow proof that there are evil, invariably Jewish, bankers behind the world's problems.

Well, we do cause everything bad in the world to happen. It's just not for the reasons you think.

[Starglider]

Hedging relatively predictable risks such as the downside reaction to the postponement of QE3 (at a time when gold was technically overbought) is what futures are for. Or rather, it's how rational investors can and should use them, rather than spread betting silliness. Gold is doing better than commodities though; it hit major resistance at the trend line, wheras silver went almost to yearly lows and platinum, copper, palladium etc are still in freefall. Hopefully the later will continue, as I'd like to hold some platinum and it will look attractive if it returns to early 2009 prices.