Left And Right Agree: Buy Gold!

goldWhen the New York Times runs a front page story suggesting that now is the time to buy gold and they quote Peter Schiff saying that paper money may become useless, is it time to buy, or a classic signal that the hype exceeds reality? Personally I think buying land, livestock and seeds might be a better bet…

It is the resurgent passion of the doomsday crowd, a bet that everything will go wrong. No matter what has you worried, they say, the answer is gold.

Inflation, deflation, government borrowing or the plunging euro — you name it — the specter of these concerns has set off a dash to gold, driving the precious metal to new highs and illustrating how fears of economic turmoil have moved from the fringe to the mainstream.

And gold bugs, often dismissed as crackpots who hoard gold bars in the basement, are finally having their day.

“I just think you’re in a world where a lot of chickens are coming home to roost,” said John Hathaway, manager of the Tocqueville Gold fund. “Gold is an escape hatch.”

The most visible new gold enthusiasts range from the Fox News commentator Glenn Beck on the right to the financier George Soros on the left, with even some sober-minded Wall Street types developing a case of gold fever. While their language may differ, they share a fundamental view that the age-old refuge of gold is relevant again, especially as other assets like stocks and national currencies show signs of weakness.

Now, individual investors are following their example around the world. The United States Mint is running short of gold coins, and the South African mint increased Krugerrand production by 50 percent late last month, to its highest level in 25 years, on brisk European demand.

The debt crisis in Europe and the ensuing drop in the value of the euro are the most recent catalysts for gold’s spike last week to $1,254 an ounce, a record before adjusting for inflation, but the deeper concern is that even in the United States, government borrowing is unsustainable and the day of reckoning is at hand. Sales of American Eagle one-ounce gold coins tripled in May from the month before.

If governments print more money to pay off their debts, the logic goes, inflation will destroy the value of the dollar, the euro and other paper currencies — thus enhancing the value of gold. What is more, with tax increases unlikely and with Europe on the brink, the unthinkable — a sovereign debt default or the collapse of the credit system — has suddenly become thinkable…

[continues in the New York Times]

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  • Synapse

    Yes, Gold is sooooo valuable. Except that it, like everything else, doesn't continue growing forever. The gold suppliers know this and they will happily take your hard earned cash. The same people were around in 1980 pushing gold gold gold… then in 1981 the gold prices collapsed and surprise, all the people who thought gold was an eternal safe investment were shown the error of their ways.

  • http://twitter.com/Adigam John Bonanno

    If everything goes to hell and you have gold and you are buying things with it, word will get around and you will become a target of brigands. Bad people steal gold. It is difficult to hide. It is dangerous to keep. Land and food are probably a better investment if you really think our civilization is about to collapse. But there is no security in life. No one here gets out alive.

  • Urza9814

    Yes, because if the economy collapses completely, who needs food or water or land or firearms…you'll be fine if you just have gold! Gold can solve everything!

    …morons…

  • GoodDoktorBad

    Almost as useless as paper…..

  • vicwiz

    Gold is only good if its for an investment in an functioning economy where the money game is still hip (not our case). I agree with the other posters. Land, food, firearms, and paying careful caring attention to the people around because they are an extension of ones self is the way to go. I was going to buy gold because it is used by tech companies and when the supply starts running out the price is going to go up but that wont happen if everything is going to …..

  • Erebhir

    The more articles like this that I see, the more hucksters offer to unload all the gold in their inventory for my paper dollars, the more certain I become that gold is due for a major crash and the dollar's going to be just fine.

  • http://fontofliberty.blogspot.com/ Rarian Rakista

    Buy slaves!

  • tonyviner

    It is hard to trust something advertised by both Alex Jones and Glenn Beck. Nearly one and the same if you ask me.

  • radiac

    way too mainstream at this point. i think the smart money is getting out…

  • Cerebralcaustic

    While gold can have impressive short-term gains, the long-term returns are slightly below inflation … that is to say, you're likely to lose value over the decades. You're more likely to get a better return keeping cash in a mason jar buried in the back yard. As economist Thomas Sowell (Harvard, UCLA, etc.) wrote:

    “a dollar invested in bonds in 1801 would be worth nearly a thousand dollars by 1998, a dollar invested in stocks that same year would be worth more than half a million dollars. All this is in real terms, taking
    inflation into account. Meanwhile, a dollar invested in gold in 1801 would by 1998, be worth just 78 cents. The phrase, “as good as gold” can be misleading as the phrase “money in the bank”, when talking about the long run.”

    http://www.altfeldinc.com/pdfs/BASICECONOMICS.pdf

    • Ambassador

      A dollar in 1801 was actually gold or silver coin and therefore using such an analogy is ridiculous.  A dollar is a certain amount of gold or silver.  A Federal Reserve Note is a promissory note to pay a specified amount (expressed in dollars).  Therefore, a FRN can be seen as a promise to pay an amount of gold or silver.  Currently, the U.S. Mints makes American Silver Eagles with a face value of one dollar.  The silver eagle is a real dollar.  The last published price that I am aware of to purchase the dollar with FRNs was $26.95.  The price is currently pending for the 9/29/11 release.  The economist you quote obviously lacks a proper understanding of what dollar is compared to a promissory note that promises to pay a dollar amount (FRN). 

  • Cerebralcaustic

    While gold can have impressive short-term gains, the long-term returns are slightly below inflation … that is to say, you're likely to lose value over the decades. You're more likely to get a better return keeping cash in a mason jar buried in the back yard. As economist Thomas Sowell (Harvard, UCLA, etc.) wrote:

    “a dollar invested in bonds in 1801 would be worth nearly a thousand dollars by 1998, a dollar invested in stocks that same year would be worth more than half a million dollars. All this is in real terms, taking
    inflation into account. Meanwhile, a dollar invested in gold in 1801 would by 1998, be worth just 78 cents. The phrase, “as good as gold” can be misleading as the phrase “money in the bank”, when talking about the long run.”

    http://www.altfeldinc.com/pdfs/BASICECONOMICS.pdf

  • Linping6565

    Support your point of view
    http://www.newgoing.com

  • Ambassador

    A dollar in 1801 was actually gold or silver coin and therefore using such an analogy is ridiculous.  A dollar is a certain amount of gold or silver.  A Federal Reserve Note is a promissory note to pay a specified amount (expressed in dollars).  Therefore, a FRN can be seen as a promise to pay an amount of gold or silver.  Currently, the U.S. Mints makes American Silver Eagles with a face value of one dollar.  The silver eagle is a real dollar.  The last published price that I am aware of to purchase the dollar with FRNs was $26.95.  The price is currently pending for the 9/29/11 release.  The economist you quote obviously lacks a proper understanding of what dollar is compared to a promissory note that promises to pay a dollar amount (FRN). 

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