Hoarding gold

You may want to look at a thread on the topic from a year ago: Gold and precious metals outlook; also US dollar outlook | The TFP

In particular, my post here may answer some of your questions: Gold and precious metals outlook; also US dollar outlook | The TFP (post #16)

Once you've read that, come back and let us know if you have anything to follow up on.

 

Sorry. The links were under the secure protocol (https). I fixed it.

 

I think it's because you don't have permission to view Tilted Politics, warrrreagl. You have to request it, and some people don't.

 

I should probably state my opinions in response to your concerns/questions.

Knowing that you don't know is one of the cornerstones of wisdom. This is a good start.

I believe that this is a result of more than a fair share of paranoia and anxiety. You have the likes of Putin and Soros stockpiling the stuff. Why? I think the answer is tied to fiat money and the loss of faith these people have in it, mostly related to the American dollar. To drill down further: These folks perhaps have lost faith in America. Perhaps they are using it has a basic hedge against currency turmoil. Perhaps they are using it as an intermediary between one or two major possibilities: 1) returning to the gold standard, or 2) the Chinese yuan becoming the preeminent currency for international transactions and reserves.

The thing to realize, however, is that for either or both of these things to happen, a number of significant factors must unfold. In other words, it won't happen overnight. It will happen over months and years.

My reposted post above should help answer much of your concern. However, I will state that an economy just doesn't collapse. It takes a good number of mitigating factors for it to happen, and in many cases it's the "perfect storm" that does it. Consider the hyperinflation of Germany before WWII. That it happened was no accident. People should have seen it coming.

That said, today's economy is vastly different from the economy of the early 20th century. Heck, it's substantially different today than it was before the 1980s. National economies are now rigidly interdependent. That means if one economy weakens, it's not a disaster as it was in the past. What makes today's economy especially rickety is that a buildup of factors finally reared its multitude of heads. It was a kind of domino effect. In hindsight, it may be like Germany: We should have seen it coming.

What's going on now are the ups and downs that are the corrections for all the toxic assets and underregulated activities that are at the core of this mess. It's not peachy. The Eurozone is still reeling. America is lumbering along and hasn't done much to correct its problems. There has been reform, but it will take a while for it to have an impact. Where reform has lacked is leaving much open to the same risk factors that caused problems in the first place.

So these are more reasons why gold is appealing. It looks safe compared to all of this. It's difficult to deny that, but just going out loading up on gold with your liquid assets may not be the best idea.

Many advisors recommend against buying and storing the actual gold. Many would recommend gold stocks being one of the pillars of a balanced portfolio. The problem with dealing with actual gold is going out and buying actual stock, securing it over time, and, when it comes time, finding a dealer who will buy the amount you want to sell. Dealing with gold stocks is easier. The only difference is that you can't be too doom-and-gloom, or stocks will appear too wishy-washy. If you are seriously worried about economic collapse, stocks don't make sense.

The other problem with buying gold right now is the possibility of a bubble:

• Major Banks Are Calling For The Gold Bubble To Finally Burst | ETF DAILY NEWS
• FNArena
• Investment Adviser Warns of Possible Gold Bubble -- BETHESDA, Md., Dec. 11, 2012 /PRNewswire/ --

Gold corrections happen. We could be due for one.

Overall:

The worst-case scenario: Economies collapse and you had assets in cash, etc., that lost tons of value. You should have held gold.

A bad but more likely scenario: You liquidate most of your assets and hold gold. Gold goes through a correction while the global economy recovers and turns bullish. You miss out on investment opportunities because you don't want to eat your losses in holding gold.

My take? Build a robust and balanced portfolio. Don't buy into manias. Following the herd mentality is how people lose money.
--- merged: Dec 13, 2012 at 1:09 PM ---

Do you want access to Tilted Politics?

 

As I mentioned in the other thread, many advisors suggest that silver is the much better play over (a possibly overbloated) gold. It has more industrial uses, especially when you consider large-growth industrializing economies such as BRIC, which will have an increased demand for it.

 

This is why Canada will be the next Saudi Arabia. We're all oil and water up in here, folks.

When I retire, I will live off of a government pension like an amir.

 

You have failed the test.

The correct answer was:

"I nearly lost my mind because I wanted to post in response to someone being wrong on the Internet! It's too late; the time has passed, and my rage has simmered out into impotent reason."​

Permission denied.

(J/K Seriously, let me know.)

 

Oh, it's not so bad. Ten kilos is a small fortune and portable enough. You gotta do what you gotta do.

 

Cryptonomicon.