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Steve Netwriter

A little project for all the goldbugs

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I've read nearly all the arguments for gold. I have no need for convincing of the soundness of holding gold.

 

But I thought it would be interesting to try and list all the reasons why gold is a bad idea.

 

First a list of the reasons (those all the anti-gold people repeat tirelessly). Then maybe we can test those assertions against reality.

So, no pro-gold comments please :D

I want all the reasons why it's madness to consider gold. You must be able to think of what others have said or come up with something.

 

Here's my first attempt:

 

1. Gold is in a bubble.

 

2. It's just speculation.

 

3. Gold doesn't pay interest.

 

4. x, y & z (whatever they wrote) are just gold rampers (so ignore everything they write).

 

5. You're only talking about gold because you want other mugs to buy it to push the price up so you will make a profit.

 

6. The gold market is manipulated so it will never go up.

 

7. The gold market isn't manipulated (I know, 6&7 are often used at the same time).

 

8. Gold is just a commodity (it's not money).

 

9. Oh I guess that also means: gold will go down with all other commodities due to deflation.

 

10. Gold demand has been falling steadily for x years.

 

11. Or: gold demand (excluding investment demand) has been falling for x years.

 

There must be more!

 

12. Other investments (like houses) are a better investment.

 

13. The central banks will sell gold and knock the price down.

 

14. Interest rates will be raised and gold will plummet.

 

Maybe there's a "green" aspect to anti-gold sentiment as well, so:

 

15. Buying gold just keeping energy intensive and polluting gold mines going.

 

More ?

 

Thank you bakachu :D

 

16. Gold will be made from lead soon (the Large Hadron Collider gains the ability to produce gold).

 

17. A large gold discovery would knock the price.

 

18. A world depression would knock the oil price and make mining gold much cheaper, and so knock the price.

 

19. There is no mechanism for gold to reach high prices. (I'm not sure what this would mean, but presumably: no on has any money, or no one would buy if the price went up, or some other reason why the price can't rise very much)

 

More ?

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The price of gold is based on the price of the futures. The margin requirements for futures could be increased limiting the ability of traders to trade in size. It has already happened once before. House prices are based on the availability of credit but so is gold.

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Storage is expensive.

 

You have to find somewhere to put your physical gold that is safe. It's easy to find somewhere safe to put your cash (i.e. a bank).

 

You can't buy a loaf of bread with a bar of gold.

 

It's unusual to hold gold therefore anything you want to do with it is not 'the norm' making everything that bit harder.

 

You can't dispose of (liquidate) it quickly.

 

It is easier for 'them' to confiscate it than cash.

 

(I feel dirty now)

 

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"Gold is tried by a touchstone, and men by gold."

 

Gold has a power over the mind. The gold bug may end up hoarding it, being unwilling to part with it, seeing it as an end in itself rather than a means to an end.

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You can't pay your taxes in gold. :lol:

 

Buying physical gold requires you to inform your home insurance company to ensure you have adequate insurance. :ph34r:

 

If you are made unemployed then you will have to sell your gold anyway! :huh:

 

 

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Storage is expensive.

Only if you rent a deposit box. A hole in the ground is cheap and so is hiding it in your house.

 

You have to find somewhere to put your physical gold that is safe. It's easy to find somewhere safe to put your cash (i.e. a bank).

As soon as you put your cash in a bank it is no longer yours, it is the banks, they have a debt that they have to pay you at some point in the future. It is no longer your money.

 

You can't buy a loaf of bread with a bar of gold.

That depends what country you are in and in a PM based currency you would buy bread with silver, gold would only be used for larger purchases such as bakeries.

 

It's unusual to hold gold therefore anything you want to do with it is not 'the norm' making everything that bit harder.

Only in Western countries, in other countries gold is a ’norm’

 

You can't dispose of (liquidate) it quickly.

Pop along to any independent jewellers and ask them if they want to buy it at spot minus spread and see what happens.

 

It is easier for 'them' to confiscate it than cash.

‘They’ can only confiscate what they know of, don’t tell them.

 

 

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...

Buying physical gold requires you to inform your home insurance company to ensure you have adequate insurance. :ph34r:

...

Why are you required to do so? They only want you to so they get more money. Opportunistic burglars will not be looking for it unless you brag about your stash in public. Professionals will always be able to get at a big enough stash if it is worth their while.

 

Putting it in a deposit box does not mean it is insured either, more than likely your bank will not insure the contents of the box that you rent. When I have used one before in order to get it insured I have had to disclose the contents of the box and have the contents independently valued. The insurance also costs extra.

 

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You guys are brilliant.

You've found loads I didn't think of (where's the clappy smilie?) :D :D

 

I wasn't expecting answers to the points, but they are welcome as well.

But please, don't be afraid to post any good OR SILLY reason not to buy gold you can think of.

 

 

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You guys are brilliant.

You've found loads I didn't think of (where's the clappy smilie?) :D :D

 

I wasn't expecting answers to the points, but they are welcome as well.

But please, don't be afraid to post any good OR SILLY reason not to buy gold you can think of.

Yellow doesn't go with your skin tone :D

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HOW DO YOU NOW IF TEH COINS YOU BROUGHT ARE REAL GOLD AND NOT BRAAS AND YOU PAID FAR TOO MUCH AND AND WITH A HIGH COMMISSION WHCICH YOU LOOSE WHEN YOU NEED TO SELL BACK YOU WEILL SELL AT THE BOTTOM BECAUSE YOU DONT KNOW WHAT YOUR DOING AND IF YOU THINK YOU HAVE GOLD IN A VOLT SOMWHERE ITS NOT THEIR THERE ALL JUST A FRAUD :lol::lol::lol: THE MEINRS LIE ABOUT THEIR RESERVE'S AND ALL COMPANY'S LIE ABOUT T5HERE PROFITS EVEN IF THEY ARE ALL INSOLVENT BUT YOU DONT KNOW JUST FROM LOOKING AT THE BOOKS A HOUSE CAN BE TOUCHED AND THEY DONT MAKE LAND ANY MORE YOU CANT LOOSE

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20. The deflation bogeyman will make the price of gold go down.

 

21. Gold bugs are nutters so buying gold must be nuts.

 

22. You can't eat gold (I know, I know).

 

23. You can't live in it (unless you're a wren with a small gold house).

 

24. Gold bugs are evil and want to be the plutocrats of the future.

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Why are you required to do so? They only want you to so they get more money. Opportunistic burglars will not be looking for it unless you brag about your stash in public. Professionals will always be able to get at a big enough stash if it is worth their while.

 

Putting it in a deposit box does not mean it is insured either, more than likely your bank will not insure the contents of the box that you rent. When I have used one before in order to get it insured I have had to disclose the contents of the box and have the contents independently valued. The insurance also costs extra.

 

I don't beleive this, it's just a counter argument that was given to me by a city banker type when I foolishly asked him his opinion on gold. When I told him I was getting interested in gold coins as a hobby, he started to rant on about insurance...

 

I thought we were trying to find ALL the reasons/arguments NOT to own gold?

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I don't beleive this, it's just a counter argument that was given to me by a city banker type when I foolishly asked him his opinion on gold. When I told him I was getting interested in gold coins as a hobby, he started to rant on about insurance...

 

I thought we were trying to find ALL the reasons/arguments NOT to own gold?

My apologies FWIW, It's me losing the plot and the reason for this thread, not you..

 

I think I need to go back home and stare out of our bedroom window a bit..I am having a mare of a day and Dr. B's window view is looking more inviting to jump out of :(

 

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My apologies FWIW, It's me losing the plot and the reason for this thread, not you..

 

I think I need to go back home and stare out of our bedroom window a bit..I am having a mare of a day and Dr. B's window view is looking more inviting to jump out of :(

 

No worries id5!!

 

Makes my head hurt too when thinking of why owning gold is a bad idea...does not really compute...but I like where Steve is going with this!

 

 

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Owning gold is socially irresponsible and down-right anti-social. If everyone hoarded gold and stopped spending money and supporting the economy where would we be. The system, to which we owe so much, would be in danger of collapsing with the most horrendous consequences ensuing. Furthermore, the consumer would no longer be able to pursue their own happiness in a life of blissful consumption.

 

No, money should be considered no more than the means of exchange, and the quicker we exchange it the better. Squirreling anything away for posterity is not only an anitquated idea, but a selfish and immoral one. Forget about time, the blurry past and an uncertain future, be here now! Eat drink and be merry, I say! :rolleyes:

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If you have it in a bank safety deposit box then your normal home insurance co should agree to cover it under their policy for a reasonably cheap sum. Will get more expensive if you want it insured during transit etc.

 

If you hold gold at home then your home insurer will most likely cover up to between £5K & £25K with nothing special security wise other than a requirement to fit and use decent door and window locks. Over £25k you will almost certainly need a safe.

 

 

Putting it in a deposit box does not mean it is insured either, more than likely your bank will not insure the contents of the box that you rent. When I have used one before in order to get it insured I have had to disclose the contents of the box and have the contents independently valued. The insurance also costs extra.

 

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+ 14 There is no way to measure the price of gold - other than its worth either what you will pay for it or what someone else will buy it for. Its not necessarily worth what you think someone else should pay you for it

 

+ 15 Owning gold - or elaborating on the reasons for owning gold might make one come accross as a right wing neocon nut. Right where did I leave my shotgun......

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1) Carrying gold bars in a bum-bag is dangerous.

 

The strap is not designed for such a load.

 

A broken strap can mean broken toes

 

 

2) A modified car kiddy-seat is not a suitable substitute for the proper gold restraint system.

 

3) Yes, I am a little drunk; but that red wine of my neighbours is heaven

 

 

 

 

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Newton the alchemist revealed in lost papers : (You and me...we're done man!) :wacko:

 

"The Transmutation of Oxygen/Water into GOLD"

 

Gold (pronounced /ˈɡoʊld/) is a chemical element with the symbol Au (Latin: aurum) and an atomic number of 79.

Water (H2O, HOH) is the most abundant molecule on Earth's surface.

Oxygen (pronounced /ˈɒksɨdʒɨn/, is the element with atomic number 8 and represented by the symbol O.

 

 

 

 

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12 Reasons to Short Gold

The infomercial factor. The best indicator of a turning point for any investment, in my experience, is infomercials. If an investment gets so popular it invades the pre-dawn hours with non-stop but-wait-there’s-more offers, it’s time to get out. And that’s exactly what’s happening now. So much so companies like Cash4Gold.com are invading primetime television. They even splurged for a Super Bowl ad spot. And they recruited washed-up celebrities Ed McMahon and M.C. Hammer to boot. In case you forgot, the Hammer filed bankruptcy in 1996. And Eddie boy almost lost his 7,000 square-foot, $6.5 million Beverly Hills pad to foreclosure. No offense, if you take investment cues from these two, you deserve to lose money.

 

Good grief this one drives me mad. When will these folks understand that the mania and the bubble starts when joe public is BUYING NOT SELLING! When the large corporations are on TV trying to sell you the stuff thats when to get out.

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If you have it in a bank safety deposit box then your normal home insurance co should agree to cover it under their policy for a reasonably cheap sum. Will get more expensive if you want it insured during transit etc.

...

I bet most people would have though it would be under the bank insurance though ;)

 

...

3) Yes, I am a little drunk; but that red wine of my neighbours is heaven

At 5:49 in the afternoon as well :o Unless of course you live to the East of the UK, or got up early which makes it really late your time, or you could use my favourite excuse of 'I only drink before sunset on days with a Y in them' :lol:

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I would like to work out how gold is NOT a good idea!

 

most of the people that hold it have absolutely no f****** use for it!

 

House prices are based on the availability of credit but so is gold.

 

:lol: :lol: :lol: :lol: :lol: have you not noticed the massive divergence between gold and house prices since the middle of the decade?

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Deadly Assumption #6: Gold Is a Barbarous Relic

Gary North

 

This assessment of gold's monetary role was made by the British economist, John Maynard Keynes ("canes"). He was referring to the gold standard. He was not referring to Rolex watches or jewelry.

 

Because a gold standard was always a government promise to pay gold on demand, there has been no gold standard. There has only been a government-guaranteed gold-plated standard. In every major war, banks have suspended gold redemption, meaning they broke contract with their depositors. Then the central bank stiffed the commercial banks by collecting all of "their" gold. The central banks wind up with the people's gold. All governments always allow this.

 

The barbarous relic died because of barbarous policies by commercial bankers, central bankers, politicians, and judges. The right of contract was abrogated retroactively.

 

Why? Because the gold standard restricted governments from borrowing bank money and spending it on war or anti-depression spending measures. Governments and bankers did not want the restriction imposed on them by the legal right of depositors to demand gold in exchange for deposits -- the promise that had persuaded them to turn in their gold in exchange for bank deposits.

 

What we need is a true gold standard that is the product of voluntary transactions. We need courts to enforce contracts. We need the predictability that contracts and courts provide.

 

We do not have such a system today. People trust fractional reserve banking. They trust it with their lives. The division of labor keeps most of us alive, and it rests on fractional reserve banking. If the banks ever ceased to function overnight, most urban dwellers would die. We don't like to think about the degree of our dependence on banking.

 

Will we ever get back to a gold standard? Probably not in my day. But as fiat money erodes in purchasing power, gold will become accepted as an inflation hedge.

 

Would gold do well in a deflationary environment? That would depend on people's confidence in the banks. If they truly distrust the banks, they would demand currency. There isn't enough currency to meet the needs of trade. Prices would fall, increasing the value of currency. I would rather have paper money than gold in a deflationary environment.

 

But will we get a deflationary environment? We have not seen this since 1933. That is a long time for one policy to dominate: inflation. Yet it has dominated.

 

The case for gold is mainly the case for inflation. I have read many deflationary cases for gold since 1974. Not one of them made much sense, and all of them were wrong in forecasting deflation.

 

The average person does not recognize gold coins. Gold therefore cannot function as money, except among central bankers. But the free market case for the gold standard is the case against central banking. It is the case for a system of currency based on individual decisions. Men have been outside of a gold- based monetary system for so long that it is difficult to imagine a scenario in which it would become the currency of choice.

 

The gold standard was a relic for sure because it was a government-guaranteed, government-enforced restriction on government. The traditional gold standard worked in peacetime. It never worked in wartime.

 

When a bank or a government agency promises to do something, no matter what, it is lying. Thus, the traditional gold standard was always fraudulent -- as fraudulent as fractional reserve banking.

 

This is not a case against gold. It is a case against trusting government and bankers.

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