Buy Gold, Investing & Its Value

Have you heard those commercials that hawk the availability of gold and how it is an urgent need of any investor in today’s market? If not, you must have been living under a rock as they are everywhere and you can’t get away from them even by listening to the radio or reading the Internet. It’s almost like scabies, something you catch, yet can’t seem to determine where it came from or how to get rid of. Unfortunately, advertising is part of our world and it will always be that way, but for any investor a word of caution, investing in gold is one of those things that simply aren’t possible. You can own gold or sell gold, but you can never invest in it. Gold has no ability to expand or contract, grow or shrink, it simply is and unlike a company that can grow, the best use of gold is that of a pretty necklace or as part of an expensive watch that you can flash before your friends. Yet, though all of those gold commercials, one aspect strikes me as particularly funny. It’s the quote where they say, “gold has never been worth nothing”.

Think about that statement for a moment. Is it really true that gold has never been worth nothing? I find that statement to be rather hard to believe, for almost anything is possible though highly improbable. So can gold always retain value or is it one of those things, that we disillusion ourselves about in order to feel good. Much like we do when we say that the United States will never default upon its debts or the US Dollar is still the best currency to hold. Ten years ago, I might have believe that, 20 years ago, I would have been convinced, but today I know that the possibility of the United States government defaulting upon its debt is a very strong possibility and the only value the US Dollar holds is that of the inertia it has from being the default currency of the world. Once the world finds a new currency that it feels has better value or stronger legs, we will see just how strong it is. If you don’t believe me, ask someone about the Roman Denarius. A currency that was once dominant in the world and is no longer considered having value in the world today.

Yet that doesn’t answer the question of gold always having value no matter what. In truth, nothing is absolute in the world today and if the US Dollar became defunct, then something would replace it. Would it be gold? Maybe, but in all likelihood gold would have little value if any at all. For example, if you were on the verge of starving but had enough, would you trade it for a bit of gold? Would the gold keep you safe from thieves in the night? While you were running for your lives from the cannibals in the night? I really doubt gold would retain its value under those circumstances. With gold, the best we can hope for is a partial meltdown that allows us to use the gold we have stashed to improve our circumstances while things get better. In most cases, having gold would simply get you killed or worse, so I doubt “gold has never been worth nothing”.

Enjoy!