Msrpaul

Is Gold A Sucker's Bet?

Bankers hate gold Governments hate gold. They hate it because it is and always has been money. In good times, it's the rich mans idolatry. But in times of insecurity, it's everymans agreed form of real money, for one simple reason. Unlike FIAT currency, it can't be printed, it has to be mined, at considerable cost. It has been money culturally for thousands of years. The only difference is how many pieces of paper you're willing to trade it for.

You predict gold will fall, and it may. But your prediction is correlation to other commodities, which have industrial or consumptive value, that of course are tradeable for those pieces of paper, and in hard times, supply exceeds demand. Every governments response to such circumstance is the same. Print more paper to make people feel wealthy so they borrow and spend. But human behavior is different than that. In deflationary times, people avoid debt, consume less, and spend more time with family. Good for humanity, bad for economy.

The problem is, over time, the public grows to mistrust governments everywhere who use the printing press as a solution to bail out the corrupt. Gold is the one thing that equalizes the equation of citizens against their government. That's why it was illegal to own in the free USA for so many years.

Yes, governments through their central banks, because they know that as nation to nation, just as citizen to government, gold is money. It's why the Nazi's robbed very central bank in WW2. DO you think the Swiss were going to make tanks and ship them to Germany for marks?

Nope. Only gold shines in hard times.

There are times when I may choose not to go long gold, but I would NEVER short it. (neither would I short energy or food). Step aside if you think it is overvalued. But shorting any of these 3 is Russian roulette. It gold falls to 800, I'm bying. I'll buy more at 750. At 650, I'll gladly trade all my dollars in for gold. Because the government always responds to deflation the same way. print print print print