Sure Jay, gold, like old cars, paintings, land, other metals and non-perishable stuff such as swamp wood, coal, fossils and any amount of other real, 3D objects, is a speculative store of value which can be stashed away for years until the owner wants to buy something else. Unlike coal, it can easily be taken away in the boot of your car when you move house. You could even hide it in your shoes [unless going through airport security].
But unlike coal, if the power supplies go out, you can't burn gold to keep warm. Hopefully, if you haven't been robbed, you can swap it for some coal.
Owning shares of companies in coal and gold mining, CDMA, software, corn, car, concrete and CDNA is the way to go, depending on the current value of those companies at the time you decide to buy and how you think they'll go in future. At the risk of repeating myself ad nauseum, gold seems to me to have too many crowds of people hanging around it hoping to get rich. There is a huge gold culture which has lasted for thousands of years. It reached a crescendo in 1979 after deregulation, oil mania, the old $35 an ounce standard being ditched, leaving the US$ to float away on a sea of hope and confidence. I'm automatically nervous about crowds of people hanging around something in the hopes of getting rich quick. Especially when I can't see the value myself.
If production costs really are $270 an ounce and that's the current value [more or less], I suppose it's reasonable to buy companies at that value rather than hold a US$ with no visible means of support other than the trust in Uncle Al to hold it steady.
Unfortunately, Uncle Al cannot live as long as the 30 year bond so somebody else is going to take over. I don't have confidence in anyone to manage to hold it stable and even if they hit the jackpot and get great management, they will still lose.
Cybercurrencies based on share values have so much going for them that I don't see how anything else can compete. People tend to look at things as they are and assume that's what I mean. No, I mean what can be, not what is now.
For the next couple of years or 5, there isn't going to be another currency to challenge the US$, so I suppose it's fair to look for a safe hideaway if the US$ is giving you vertigo. Gold is better than coal [since oil and gas and coal prices should tumble to somewhere approximating their production cost - which in the case of oil is more like $1 than the current $20 a barrel OPEC wants to charge].
Well, here we go into 2002. I suppose as always there will be some jaw-dropping things happen. Let's hope we are in the clear. The sudden things are usually bad. The good stuff is a long grind and we can see it coming [like CDMA and CDNA].
Mq |
