The case against gold .

[Ross]

The case against gold as a safe haven .


Currently TAE are showing an article which strongly argues against
gold as a safe haven . From which I have extracted and posted some of the more pithy comments .

My point is that if, make that when, we see true price discovery across the board of all assets, gold will suffer exactly because it still holds some value, while many other "assets" do not, think euro bonds, MBS, ETF. Gold will, must, be used, through selling it, to cover the losses on other "assets".

Gold will regain its status, but that will take years. Meanwhile, only the very rich will be able to wait out that period. Everyone else will need to sell whatever they have at whatever price they can get. That's the thing people don't get; they don't want to.

I think gold bugs must really like to be in large crowds. Dare I say herds?. Me, they make me queasy.

I think our longstanding argument that gold prices will come under relentless pressure from those needing to sell it to cover losses is standing taller than ever before as deleveraging continues just as relentlessly.

But I also quite simply see so many gold bugs out there on a daily basis that just their numbers make me nervous. If so many people agree, it's time to ask very serious questions.

Always. Where's that lemming over there going in such a hurry?

Does gold increasing in purchasing power in one currency translate into it increasing in every currency? (no)

Those who hold gold based on a 'currency collapse' thesis must keep in mind that in such an event, there is a high probability that the market value of one's holdings will only be realized on the 'black market'. It is an insurance policy rather than a trade, as US Dollars have already been eschewed. I will hazard a guess that the US will issue a new dollar, effectively devaluing by 25-30%, but only under extreme duress. By this time (2015-6?), taxes on physical gold/silver/PM holdings may become prohibitively high so as to discourage domestic dollar flight. Those who hold gold as an insurance policy are better off overall if gold does not hit $3,000+ oz, because the implications of such an event are profoundly negative.

[MaxTheKnife]

How do you like your gold? Fried, boiled, roasted or sauteed?

[jane333]

As this authors implies, if gold hits a huge high, we will have MUCH bigger problems than protecting our dollar wealth.

[Ross]

I am in to gold ( via gold mines ) and will remain so until I see something
better . I initiated this thread because I am interested in exploring the
arguments , not because of personal opposition to gold as an investment .



.

[sandyd]

I'd figure if someone is 'all in gold' they are nutz....cuz all in to any ONE thing can be deadly...but having some % as part of your investment...well, odds are metals may lose one day but so what? They won't go to nothing. It's not so much getting a higher number back than you put into an investment...it will be what can you do with what you get back when you sell? If it saves your life or your loved ones....it was worth it.