LIVE Gold Prices $  | E-Mail Subscriptions | Update GoldSeek | GoldSeek Radio 

Commentary : Gold Review : Markets : News Wire : Quotes : Silver : Stocks - Main Page 

 GoldSeek.com >> News >> Story  Disclaimer 
 
Latest Headlines

GoldSeek.com to Launch New Website
By: GoldSeek.com

Is Gold Price Action Warning Of Imminent Monetary Collapse Part 2?
By: Hubert Moolman

Gold and Silver Are Just Getting Started
By: Frank Holmes, US Funds

Silver Makes High Wave Candle at Target – Here’s What to Expect…
By: Clive Maund

Gold Blows Through Upside Resistance - The Chase Is On
By: Avi Gilburt

U.S. Mint To Reduce Gold & Silver Eagle Production Over The Next 12-18 Months
By: Steve St. Angelo, SRSrocco Report

Gold's sharp rise throws Financial Times into an erroneous sulk
By: Chris Powell, GATA

Precious Metals Update Video: Gold's unusual strength
By: Ira Epstein

Asian Metals Market Update: July-29-2020
By: Chintan Karnani, Insignia Consultants

Gold's rise is a 'mystery' because journalism always fails to pursue it
By: Chris Powell, GATA

 
Search

GoldSeek Web

 
Yes, Gold “Just Sits There” and That’s Quite a Feat


 -- Published: Tuesday, 22 October 2019 | Print  | Disqus 

Clint Siegner

The Wall Street Journal’s Jason Zweig famously referred to gold as a “Pet Rock” in 2015. He was blasted by people who understand that gold is no passing fad, and it serves some very important roles in an investment portfolio.

Store Gold/Silver in Home Safe

The valuable roles played by gold have been well covered here. It’s a hedge against both inflation and deflation, it represents true diversification for portfolios stuffed with conventional securities, and it is a way of protecting wealth during tumultuous times.

But Jason Zweig, Warren Buffett and other notable gold critics who complain about the metal “just sitting there” fail to understand the flaw in their basic assertion.

What they believe to be a potent argument against gold is, itself, one of its great attributes. An asset which can “just sit there” forever, largely impervious to outside political and economic forces, is extraordinary.

A gold coin or bar never degrades, is always valuable and is uniquely insulated from risk. What other asset can deliver such assurances over the next 100 years?

Not Stocks...

Warren Buffet and Jason Zweig are big proponents of stocks. However, they will have a lot of trouble choosing a company today that will still have value 100 years from now.

Precious Metals Volatility

Most of the top publicly traded companies from a century ago are gone and forgotten.

In order to grow an equity portfolio, investors have to take on significant risk. They must actively manage which shares are held or buy an index fund. While an index seems like the safer bet, there is no certainty that that an index purchased today will still be functioning well into the next century.

Over that time scale it isn’t even clear whether the current financial system, laws, and property rights will persist uninterrupted. Meanwhile, a privately held gold coin can sit there hidden away, independent of all these risks.

Not Real Estate...

Land is tangible and its supply is limited, two important characteristics which it shares with gold. However, it is not private, portable, or liquid. Taxing authorities can, and probably will, continue taking full advantage of the fact that property owners can neither hide nor escape their purview.

Landowners who intend to hold for the next hundred years must also accept geopolitical risk. There is no telling when, or if, the nation might succumb to the forces of socialism and property rights disappear.

Investment real estate might be a winner during normal times, but, over the next ten decades, that is by no means a given.

Not Bitcoin...

Cryptocurrency offers some promise, and there are many reasons to hope it succeeds. There is nothing the world needs more than honest money, and crypto has that potential.

However, Bitcoin and other tokens should be viewed as technology start-ups. The amount of risk in picking a “coin” and holding it over the long haul is exceptionally high.

Bitcoins vs Gold

There are major hurdles for the technology to leap in terms of scaling. And there are lots of tokens competing for adoption. Some may well succeed. Many, if not most, are likely to fail in just the next few years.

Picking long-term winners and losers will be very hard to do, particularly given the entire technology landscape continues to evolve.

Many proponents insist that Bitcoin is already a great store of value. That is a gross mischaracterization. There is far too much risk for that to be true. It may never be true.

Not Dollars, Not Bonds...

Gold, which “just sits there” retaining value over time, looks even more compelling if the alternative is holding cash which is guaranteed to depreciate. It looks downright irresistible compared to something like government bonds redeemable in the fiat currency of some insolvent government.

Nations such as Austria, Argentina, and Mexico have begun issuing “ultra-long” 100-year bonds. Officials at the U.S. Treasury Department are thinking about it. We doubt investors buying these instruments have any intention of sitting on them for the next hundred years.

They would have to be crazy. The only asset worth wagering on over that time scale is gold.

Clint Siegner is a Director at Money Metals Exchange, a precious metals dealer recently named "Best in the USA" by an independent global ratings group. A graduate of Linfield College in Oregon, Siegner puts his experience in business management along with his passion for personal liberty, limited government, and honest money into the development of Money Metals' brand and reach. This includes writing extensively on the bullion markets and their intersection with policy and world affairs.


| Digg This Article
 -- Published: Tuesday, 22 October 2019 | E-Mail  | Print  | Source: GoldSeek.com

comments powered by Disqus



 



Increase Text SizeDecrease Text SizeE-mail Link of Current PagePrinter Friendly PageReturn to GoldSeek.com

 news.goldseek.com >> Story

E-mail Page  | Print  | Disclaimer 


© 1995 - 2019



GoldSeek.com Supports Kiva.org

© GoldSeek.com, Gold Seek LLC

The content on this site is protected by U.S. and international copyright laws and is the property of GoldSeek.com and/or the providers of the content under license. By "content" we mean any information, mode of expression, or other materials and services found on GoldSeek.com. This includes editorials, news, our writings, graphics, and any and all other features found on the site. Please contact us for any further information.

Live GoldSeek Visitor Map | Disclaimer


Map

The views contained here may not represent the views of GoldSeek.com, Gold Seek LLC, its affiliates or advertisers. GoldSeek.com, Gold Seek LLC makes no representation, warranty or guarantee as to the accuracy or completeness of the information (including news, editorials, prices, statistics, analyses and the like) provided through its service. Any copying, reproduction and/or redistribution of any of the documents, data, content or materials contained on or within this website, without the express written consent of GoldSeek.com, Gold Seek LLC, is strictly prohibited. In no event shall GoldSeek.com, Gold Seek LLC or its affiliates be liable to any person for any decision made or action taken in reliance upon the information provided herein.