Shocking Headline of the Day (or not) (Goldbug Edition)
Steven L. Taylor
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Tuesday, March 12, 2013
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8 comments
About Steven L. Taylor
Steven L. Taylor is a Professor of Political Science and a College of Arts and Sciences Dean. His main areas of expertise include parties, elections, and the institutional design of democracies. His most recent book is the co-authored
A Different Democracy: American Government in a 31-Country Perspective. He earned his Ph.D. from the University of Texas and his BA from the University of California, Irvine. He has been blogging since 2003 (originally at the now defunct Poliblog).
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But, but…those Swiss America ads assured me gold would protect my wealth against the cartoon versions of Obama and Bernanke:
http://www.youtube.com/watch?v=GU2iFJu31ik
Who’da thunk it. Buying gold when it is at record highs is not a sound investment strategy. Getting people to do so however, is the height of hucksterism.
Not a gold bug by any stretch, but that’s a ridiculous headline and this is a ridiculous blog post.
Back in the late-1990’s gold was trading around $265 per ounce. And plenty of us back then were saying that people needed to be in gold. Same for oil, which at that time also was out of favor on Wall St. Then gold doubled. Then it doubled again. Then it increased by over half again. Within a decade.
So, yeah, obviously, like anything else, gold will not increase in a beeline to infinity. And it will underperform other assets at times. Like anything else. But from $265 to $1,800 in 10 years ain’t too shabby.
Over the long haul if you don’t have at least a material (~10% or more) portion of your assets in gold you’re as naive as a babe in the woods. Gold is the ultimate long-term inflation hedge. It’s also the most direct hedge against a debasement of the U.S. Dollar. The debasement of our currency and inflation are foregone conclusions. Hence the need for gold as part of any diversified asset allocation. Other key assets are income producing commercial real estate (purchased at high cap rates), oil, selected foreign currencies (Francs, Loonies), other hard assets (pipelines, timber), and baskets of commodities.
@OzarkHillbilly:
Grifters gonna grift.
@Tsar Nicholas: For people who will buy and hold assets, gold has been a good long-term component for a portfolio. Unfortunately, the market is not a haven for long-term investors, it’s a casino where the
patronsrubes change their bets, sometimes on an hourly basis. For these “investors,” the headline and the article make some sense.If you were a stock, I’d dump.
@Just ‘nutha ig’rant cracker: If he were a stock, he’d have been delisted years ago.
Comrad Tsar’s investment talk is right out of the 1980’s. That cat’s prob still calling a “investment house” to clear his trades. Man, are you using a Tandy computer to type that crapola.
“Back in my day a sodie pop use’ta cost a nickle and you can see a moving picture show for two bees and a straw penny. oh buddy those were the days.” Ol’ Timey Tsar.
Get bake in bed grandpa before you break yer hip!
@Just ‘nutha ig’rant cracker: Gold’s rather neat to look at, but if you want to do a play on precious metals, better to go for the platinum and palladium group of metals, which at least get used in catalysts. I’ve got a few platinum stocks but otherwise, gold ain’t all that useful. It’s definitely the bigger fool grifter schtick.