Robert Sczech

Is Black Gold Worth More than Real Gold?

If you value oil, you should hold gold. The hidden assumption behind the thesis of Mike Conion is that we will always be able to buy oil with Dollars. That is an assumption which may be proven wrong one day. Gold on the other hand, is always accepted as payment for oil (Alan Greenspan).

The main difference between gold and oil is that oil is a depleting asset, while gold is not being used, gold is being accumulated. While the total amount of oil in the ground is decreasing every day, the above ground accumulated gold is increasing every day (more than 160,000 tons of gold are presently above ground). If no replacement for oil is found, this means that oil will outperform gold during the next 50 years.

If oil starts getting scarce, food will become scarce as well. For that reason, the recommendation is, start accumulating food. Storing large amounts of food on your property is not as dangerous as storing large amounts of oil in your backyard.

Like food, oil can not be stored indefinitely. It will eventually evaporate and change its chemical composition.