Guest Post by Jesse
“Gold has worked down from Alexander’s time… When something holds good for two thousand years I do not believe it can be so because of prejudice or mistaken theory.”
Bernard Baruch
Gold has moved in price from $250 in the year 2000 to $1,350 today.
And given the structure of global supply and demand it is likely to go much higher, unless it becomes a fixed asset in a global monetary system once again and its price becomes set by fiat. More likely it will be a floating asset.
Don’t buy any, don’t like it. Laugh at the rest of the world who is buying it. It doesn’t matter.
The flaws in this paper are obvious. A very broad sweep of data over time without sufficient attention to the character and elements of the contexts of the various situations described within can easily be misleading, or be used to ‘prove’ something.
Most assets will smooth out over a long period of time, unless they are artificial constructs,like stock indices which are altered by throwing losers out and putting winners in to achieve a semblance of growth.
There is an ebb and flow in everything.
It takes someone with the time and ability and most importantly the open, inquisitive mind not bound by some school of thought or orthodoxy to go into the various situations where something has happened, and happened with a particular cause and effect that was widely acknowledged, in order to really understand the mechanisms and nature of a thing.
Keep believing then. Believe in memes and quaint canards like the ‘efficient market theory’ and ‘printing money endlessly doesn’t matter.’
So called experts have their noses stuck so deeply into ‘what everyone knows’ that they can fail to see the forest for the trees. They miss the big changes, the ‘sea-changes.’
In 2006, the central banks of the world became net buyers of gold bullion for the first time in 30 years, and are continuing to do so in a very big way. Gold has been moving en masse to the emerging economies of Asia, the biggest beneficiaries of ‘globalisation.’
And there is a reason for this, that is not based in some quirk or personal idiosyncrasy.
Money talks. The real economy has a message to tell. You do not have to listen.
There will be those who will continue to say, ‘this is not happening’ even while a tsunami of change rolls over them.
The time for warnings was then. This is now.
And events are underway that will have something like the character of a force of nature.
GOLD HAS NEVER BEEN A GREAT HEDGE AGAINST BAD ECONOMIC TIMES: Evidence from decades of US and global data
Gold has not served very well as a hedge against bad macroeconomic and stock market outcomes. That is the central conclusion of research by Professors Robert Barro and Sanjay Misra, published in the August 2016 issue of the Economic Journal. Their study draws on evidence from long-term US data on gold returns, as well as gold returns during some of the worst macroeconomic disasters experienced across the world.
Gold has historically played a prominent role in transactions among financial institutions even in modern systems that rely on paper money. What’s more, many observers think that gold provides a hedge against major macroeconomic declines. But after assessing long-term US data on gold returns, the new research finds that gold has not served consistently as a hedge against large declines in real GDP or real stock prices.
From 1836 to 2011, gold delivered low average real price appreciation and experienced high average volatility. The mean real rate of price change was 1.1% per year, close to the 1% average real rate of return on three-month US Treasury Bills and comparable assets. The standard deviation of annual gold returns was 13.7%, almost as high as the 16.7% on the US stock market…
Royal Economic Society, Gold Has Never Been a Great Hedge Against Bad Economic Times
“GOLD HAS NEVER BEEN A GREAT HEDGE AGAINST BAD ECONOMIC TIMES: “?
GOLD HAS EVER BEEN A GREAT HEDGE AGAINST BAD ECONOMIC TIMES.
There. Fixed.
Gold is property, also. It’s portable property.
The value of gold varies with its market. Said market has ups and downs, no doubt. Right now said market is rigged, generally; Shanghai Gold Exchange is starting to change that. Given that the supply of gold is limited by actual mining activity less demand by savers (not investors, savers) while the supply of paper fiat is unlimited, which do you think will be more valuable over time?
Most financial advisers with a brain say 10 – 15% of your net worth should be in gold, as insurance against hyperinflation / ordinary inflation. It’s up to you; be “all-in” in a paper asset unbacked by anything reliable, or put some aside in something that is independent of government whims.
Gold is wealth preservation….. There have been so many articles and opinions for the last 10 years on this issue that it has start to become noise. You either see the moving tide and the stealing of purchasing power by Central Banks or you don’t…. gold is for the other side of a great crisis. This only works if you can be strong hands and don’t have to sell before or during the crisis. I always remember, though, the game is rigged…. absolutely against us. Whether gold will truly help…. is still a best guess.
i would rather have a warehouse of food
larry
You better have some firearms and ammo to defend it from the hungry zombie hordes. In the end you will lose.
The problem with a warehouse of food is it all expires over time. I just threw out a bunch of canned goods today that I bought in case of tough times. I used to think it was good insurance but now I just buy gold and silver so I can buy or trade when the time comes.
Chris p.
Canned goods last forever (30yrs+) when properly stored. As long as they’re not rusty or bulging, they’re fine.
Stacking pms is always a good idea too. Do both. Bartering may or may not be an immediate option.
yeah been there done that – the shit goes bad so throw that shit away
Larry m.
Freeze dried?
Question? Who here on the TBP have enough fiat to cover their portion of all the debt owed by ALL levels of government as well as their own debts they promised to pay? Didn’t think so…. So who’s gonna pay all these trillions of dollars of debt then? Your kids? Their kids?
Nobody wants to pay these “debts” (even if they could) so we either have to default, or place future generations to a servitude of never ending debt.
Governments DO NOT want a gold standard!! They will fight tooth and nail (as they are now doing) to stop that from happening. It will force constraints on them, that they simply cannot bear.
In the end, it will happen (gold standard) but it won’t be without a collapse of the current monetary system, followed by those countries that have gold reserves taking over hegemony. Best be prepared…….
Whatever it is worth to you is what it’s worth. It can’t be eaten is true, but it will always have value. Diversify, have land, guns and ammo and supplies for living. Most important, have a belief in yourself that you can handle hard times. The normalcy bias of most Americans will lead to their demise. Buy gold but cultivate common sense and preparedness!
well…I can’t really afford gold, except as a splurge, punch a hole
in it and wear it as a bauble. I prefer a few silver coins (junk)
in case I need to buy some something and have nothing to trade.
Also an 0paque jar of coins makes a great doorstop. Gold is for
the rich to preserve wealth to pass on to #1 son, etc. Silver and
some beans and bullets will do okay I think.
While I agree gold is good, I think silver is better because you can, in fact, eat silver as an antibiotic and its value is low enough to use in regular transactions. Gold is too valuable to be useful in a local economy other than to buy land (or your local politician).
OK Jesse, Gold is crap. Just tell me how much crap you want to sell and we can arrange a secured transfer of my Fed fiat for all the crap you want to sell at $1365.10 per ounce. I hope it’s a lot!
Gold will always have value and I have to take issue with those who say it is only for rich people.
The population of India owns more gold than the USA, EU, Russia and the IMF combined. These wise people have learned over millennia not to trust currency and store their wealth in gold (mostly jewelry-22k- 24K). Their women wear the wealth of the family around their neck, wrist or as earrings. Currency is used only to pay what is due and to run the household. The Chinese are almost as savvy and have little or no trust in banks and paper money.
This will be a hard lesson for Merikans to learn not storing wealth in gold as they trust the crooked banksters above all. Gold is timeless while paper reverts back to zero.
It is just as important for Joe Sixpack to own gold as it is for any of the elite.
When I see images of them shitting, pissing, bathing, and brushing their teeth in the Ganges River as human corpses float by, I wonder how it is you reached the conclusion that these are wise people.
The DOW six day losing streak is still in progress.
DOW down -149 this afternoon.
Gold up $13.50 per oz. today
“Only after the last tree has been cut down, Only after the last river has been poisoned, Only after the last fish has been caught, Only then will you find that money cannot be eaten.”
Cree Prophecy
Wise old sage you are Roy, that is so true. Better have some food to go along with your gold.
Actually we don’t have money, we have “Legal Tender”. Remember Greenspan’s precinct quote, “We can guarantee the currency to meet all obligations, we cannot guarantee what it will buy.” Note he said “currency” not “money”.
Money is incompatible with Government on the basis of a store of value. If I produce 100 loaves of perishable bread and sell my excess production (99) I should be able to buy 99 loaves with the proceeds of the sale. This can only happen without Government (anarchy).
With Government involvement I will probably be able to buy 50 or so loaves after taxes, fees, regularity compliance etc. and other non-productive entities find ways to get a piece of the action.
Originally banking’s function was clearing, insuring the seller was paid and the buyer paid. Look at what it has become with 40% of Wall Streets profits coming from “Financial Services” which produce nothing of value but transfer wealth to the top x%.
Businesses do not pay taxes, they collect taxes from people. Only people pay taxes.
Now do any of you understand why the big “money” is so vehemently defending the Status Quo?
Roy,
I’ve known that since 1862 (so to speak).
If you were totally alert you would realize it’s been true since 1789.
Why don’t you just say the’89 Political Coup and be done with it?
In times of turbulence, I believe asset preservation outweighs the need for growth. And in today’s financial markets, when it comes to choosing between fiat and metals, I’ll take the metals for $10,000 please Alex.
And Alex says….: “The answer is…. GOLD! Because….”:
______________
“The paper standard is self-destructive.”
“No other commodity enjoys as much universal acceptability and marketability as gold.”
“For more than two thousand years gold’s natural qualities made it man’s universal medium of exchange. In contrast to political money, gold is honest money that survived the ages and will live on long after the political fiats of today have gone the way of all paper.”
— Hans F. Sennholz –
Hey you knuckleheads , you can eat food in cans left over from World War two if you want.If it is air tight IT will keep for decades.
One more thing knuckleheads , you can drink water in plastic bottles for at least 8 years after being put in the bottles.I found some old bottles of water in my mom’s basement from Wal-Mart. I opened and took a drink .Still ok I guess. I’m not dead I don’t think.
Air tight.
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Just so you know bb, those cans from WWII that bulge a little are full of extra goodness and nutrition. You should eat those first.
I have it on good A tharty that drinking old Walmart bottled water causes dain bramage. It will make you sofa king retarded, but you won’t die from it right away. That happens later when you cross the street by yourself.
Years ago on Wall Street Week with Louis Rukeyser, he had his Dad on as a guest. Mr. Rukeyser Sr. said (words to this effect) “Gold will buy you a ticket on the last rain out of town. Gold will buy you the meal you need to have the strength to get away. Gold will bribe the man you need to get by to get out. Everyone should have some gold.”
Not a lot of gold (define “a lot” yourself), but enough to secrete on your person and freely exchange for a shot at salvation when everything else has gone bad. That is what the average person needs gold for. Not as an investment, but as insurance, or a shot at another chance.
Gold can be confiscated, stolen and, today, be taxed as a collectible instead of as an investment. It is also portable and concealable store of wealth. While 10 kilos of gold of gold bars might not be so liquid or portable 10 or 20 one ounce coins are. Need some gasoline, food or medicine in a troubled world 1 ounce gold coins will buy what currency cannot.
Then there is numismastic value. An antique gold coin is a wonder to behold. A stella is rare well beyond its gold content. There is something compelling about ‘old coins’ that makes people want to own them. They are little time capsules to an earlier era. Don’t even have to be gold. A half penny, a large cent and flying eagle penny has an intrinsic people recognize. They are rare and tradeable far beyond their face value. Silver dollars with mint marks appeal to people in a way that a silver replicas just don’t. I keep a maple leafs for ‘gold’ content and old coins to enjoy.
472,
Numismatic value is for good times only. It won’t mean squat in a SHTF scenario. Also there are many common mint marked silver dollars worth melt, and a few really rare philadelphias worth a boatload…just saying.
Buster, one of the co authors quoted in the post is Indian. Professor Sanjay Misra might have started out as one of those at the Ganges, or at least his parents probably, they tend to work their way up. Thats why they become the most wealthy group in the US, Asians ahead of whites and Indians topping all asians, and topping test scores. They at the Ganges dont have a lot of choice, unlike getting fat, tattoed, taking drugs, debt and gender studies like so many in the exceptional.
From wiki:
By ancestry
Indian American : $101,591[2]
Taiwanese American : $85,566[2]
Filipino American : $82,389[2]
Australian American : $76,095[3]
Latvian American : $76,040[3]
British American : $75,788[3]
European American : $75,341[3]
Russian American : $75,305[3]
Lithuanian American : $73,678[3]
Austrian American : $72,284[3]
Scandinavian American : $72,075[3]
Serbian American : $71,394[3]
Croatian American : $71,047[3]
Japanese American : $70,261[2]
Swiss American : $69,941[3]
Slovene American : $69,842[3]
Bulgarian American : $69,758[3]
Romanian American : $69,598[3]
Chinese American: $69,586[2]
(including Taiwanese American)
Lebanese American : $69,514[3]
Belgian American : $68,767[3]
Chinese American: $68,672[2]
(excluding Taiwanese American)
Greek American : $68,627[3]
Italian American : $67,866[3]
Ukrainian American : $66,957[3]
Polish American : $66,948[3]
Scottish American : $66,899[3]
Welsh American : $66,531[3]
Israeli American : $66,355[3]
Slovak American : $66,296[3]
Iranian American : $66,186[3]
Danish American : $66,166[3]
Swedish American : $66,119[3]
Norwegian American : $66,041[3]
Czechslovakian American : $65,807[3]
Slavic American : $65,363[3]
Czech American : $64,779[3]
Hungarian American : $64,622[3]
Turkish American : $64,617[3]
Portuguese American : $64,002[3]
Palestinian American : $63,864[3]
French Canadian American : $63,847[3]
Canadian American : $63,521[3]
German American : $63,105[3]
Pakistani American : $62,848[2]
English American : $62,573[3]
Irish American : $62,141[3]
Finnish American : $61,980[3]
Indonesian American : $61,943[2]
Scotch-Irish American : $61,334[3]
Nigerian American : $61,289[3]
Syrian American : $61,151[3]
Egyptian American : $60,543[3]
Armenian American : $60,363[3]
Guyanese American : $60,234[3]
Vietnamese American : $59,405[2]
Yugoslavian American : $59,336[3]
Dutch American : $59,089[3]
French American : $58,783[3]
Korean American : $58,573[2]
Ghanaian American : $57,029[3]
Albanian American : $56,509[3]
British West Indian American : $56,444[3]
Barbadian American : $56,078[3]
Brazilian American : $54,675[3]
Laotian American : $53,655[2]
Thai American : $53,468[2]
Cambodian American : $53,359[2]
Cajun American : $52,886[3]
West Indian American : $52,876[3]
Jordanian American : $52,191[3]
Arab American : $52,096[3]
Trinidadian and Tobagonian American : $51,670[3]
Jamaican American : $50,302[3]
American American : $49,605[3]
Afghan American : $48,750[3]
Hmong American : $48,149[2]
Pennsylvania German American : $47,397[3]
Moroccan American : $45,004[3]
Nepali American : $44,677[2]
Bangladeshi American : $44,512[2]
Cape Verdean American : $44,394[3]
Haitian American : $42,942[3]
Assyrian/Chaldean/Syriac American : $42,755[3]
Subsaharan African American : $41,787[3]
Ethiopian American : $41,236[3]
African American : $38,675[3]
Burmese American : $35,016[2]
Iraqi American : $30,855[3]
Somali American : $18,756[3]
https://en.m.wikipedia.org/wiki/List_of_ethnic_groups_in_the_United_States_by_household_income