asleeper

Is It Time to Buy Gold?

No one knows what Monday holds, let alone the next month or year. Even analogies to the Depression do not hold. The amount of debt-liquidity being provided by the Fed to member banks is completely without precedent.

Market forces are not determining stock market and precious metals prices. Financial engineering is going on behind the scenes, hence the lack of transparency concerning where all the money under the "tarps" is going.

Precious metals bets in the paper markets are little better than chips on the craps table in Vegas; it is pure gambling, not investing because you do not know how the wheel is rigged or when the pit boss will push the button for "00", red, or black.

Buying the physical metal is different. It is not investing either in times like these; it is capital preservation. If you cannot predict how the dollar will be destroyed - it IS being destroyed by out-of-control deflation or by hyperinflation to come - your only recourse is to shelter some of your capital in the form of a physical asset such as gold, silver, platinum, or palladium.

In really bad deflation, when money is extremely hard to come by, precious metals are still money. In really bad inflation, when money is abundance but nearly worthless, precious metals still have value. You might not get rich, but whatever happens, the value of precious metals does not go to zero as the value of paper money can and has done repeatedly in the past.

So, the debate about when to "invest" in gold is misguided. Gold is a lifeboat should the economy really go down the tubes, not an RV.