LT, you lost much of your credibility on this thread, sad to say, when you admitted to being a goldbug. The main property of gold is its utter lack of investment payback. The holder receives neither dividends, interest, rents or profits. If you own gold, you are excluded from the fruits of the productive, expanding economy. Gold is a sterile asset (in the sense of being unproductive) and as an investment is suited only for the inventories of industrial users.
The usual argument is that gold keeps pace with inflation. To many, this argument looks ridiculous considering that the current price is merely one half what it was 2 decades ago. Even if we grant that gold long term is an inflation hedge, it's still a poor investment. Under this most favorable scenario for gold, the best that will happen is that you keep pace with inflation. In other words your wealth doesn't grow, it merely doesn't erode due to inflation. For anyone whose outlook is long term, gold is a self-defeating choice. |
