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Getting Gold Into Perspective

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"A gloomy bunch, the Goldbugs buy gold and hold it as insurance against corporate stupidity, a real-estate crash, a stock-market meltdown, or the collapse of the US dollar, not to mention worldwide financial chaos. Disturbed by visions of their children living in a future shantytown in a deserted area once known as Wall Street, the Goldbugs' solution iS to buy more gold at any price. Following an obsession is not the best investment philosophy.

 

THEN

 

"I own some gold ... But other commodities will do much better in this bull market ... History shows that gold has not always been the best investment ... No wise investor should buy gold only in anticipation of the Apocalypse. Own some perhaps as an insurance policy. The world might panic and turn to gold as a desperate last resort. In the meantime, there are too many other more attractive opportunities in the commodities arena."

 

Jim Rogers - HOT COMMODITIES.

 

Perhaps JR is right. Some of us, expecially myself, might have got too gold obsessed. But then, given what the net six months might have in store, perhaps we are right to be.

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Read this:

 

"A gloomy bunch, the Goldbugs buy gold and hold it as insurance against corporate stupidity, a real-estate crash, a stock-market meltdown, or the collapse of the US dollar, not to mention worldwide financial chaos. Disturbed by visions of their children living in a future shantytown in a deserted area once known as Wall Street, the Goldbugs' solution iS to buy more gold at any price. Following an obsession is not the best investment philosophy.

 

THEN

 

"I own some gold ... But other commodities will do much better in this bull market ... History shows that gold has not always been the best investment ... No wise investor should buy gold only in anticipation of the Apocalypse. Own some perhaps as an insurance policy. The world might panic and turn to gold as a desperate last resort. In the meantime, there are too many other more attractive opportunities in the commodities arena."

 

Jim Rogers - HOT COMMODITIES.

 

Perhaps JR is right. Some of us, expecially myself, might have got too gold obsessed. But then, given what the net six months might have in store, perhaps we are right to be.

 

The problem that I have with gold is that its main plus appears to be as an insurance policy against bad news. It largely does well on bad news. Good news is not the friend of the Goldbug. And unless you feel that eventually we will return to a gold standard, even in times of crisis, the ultimate crisis - economic collapse, gold can be confiscated (as can anything else the Government takes a fancy to). Ultimately, most Goldbugs will cash in their gold for, yes you have guessed, good old fashioned fiat paper money. They are just hoping that by then it will be worth $10,000, $20,000 or £30,000 an once. So, while it should play a part in any balanced investment portfolio, like any investment it is possible to fall too much in love with it and see it as the holy grail when it isn't.

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