fxtrader07

Gold’s 'Grand' Illusion

you have a point, actually you raise a couple of valid points, certainly. However, you fail to see what makes gold so unique. Gold is not seen as the ultimate store of wealth because some moron at some idle day declared it to be. It's scarce enough that it cannot be found easily in the park, it's almost undestroyable, at least by natural forces (don't throw it into a volcano or bath it in some very aggressive acid, of course) - so it cannot be created at will nor will it disappear on a rainy day. And make no mistake: all things carry value only because opf people's imaginations that they are valuable! A bushel of wheat, for instance, will be worthless the moment people get convinced that it is hazardous to one's health to eat it.

You cannot eat gold, that's true, but you will have a hard time trading your stored grains in a time of complete turmoil. chances are, you need your own little army to simply defend your castle not to speak of driving through the countyside with a car full of wheat. and of course, you better hope that these hard times last not too long before all you wheat has rotten. the point is: regardless what govts say and do, you will alway need a reliable means of exchange and gold and silver are the closest matches. I would never keep more thann 20% of my little wealth in physical gold and silver , as these metals will likely appreciate below inflation all the time - unless the full crisis hits and then they go vertical - in a digital-like move from x to several times x. IT's an insurance- and who expects his insurance to appreciate? If the big meltdown doesn't come for another 50 or 60 years (I don't see, though, what could prevent it from happening much earlier than that) then gold as investment will do pretty bad (silver might do quite well due to its commodity status and many industrial uses). So you better had not put more than a certain fraction of you wealth into physical gold and silver. However, when the day of reckoning arrives you will be glad you had that 10 or 20% of your wealth stored in bullion.