. . . and I don't know any of them!
From time to time I read something written by a person who does not believe gold is money or has value. A couple comments lately struck me as particularly funny. One writer said if gold was so valuable, why would anyone sell it? Why wouldn't they just keep the gold to begin with?
I read it and I thought, "you don't get it, people are keeping it - that's why the price is going up." Why do you think gold has gone from $270 an ounce 10 years ago to $1500 plus an ounce today? People acquired it and don't want to sell it until they can get a meaningful number of dollars for it.
What do I mean by "meaningful?" Meaningful could be that gold is now worth so many dollars that one can cash in gold to pay off a house bought 10 years ago. It just so happens most homes, after a decade of greed-driven lending practices and a housing crash are, once again, worth just what they were 10 years ago. But, since some homeowners were diligent and put extra money in gold over the years, their gold is now worth many times the dollars originally paid. Lord knows when you adjust for inflation, stocks have probably gone down in value and so have bonds. Not gold, though. And now those who sell only sell because they held out long enough to do something meaningful with the dollars they get in return.
Another comment I read stated that the only real money is food and if you want to prepare for some kind of crisis, you should have food, personal hygiene products and essential paper products. Yes, I think it is prudent to have some emergency supplies, in case Yellowstone erupts, but how many band aids and rolls of toilet paper can one get in even a large safety deposit box. And, how much of our savings and retirement should be kept in rolls of Bounty and Dial soap.
This particular writer was also good at math saying that today a $1500 ounce of gold would buy 500 chickens and that if there was a food shortage, those chickens could produce 500 eggs a day. Wouldn't my neighbors in suburbia love that. You just buy them as little chicks and pretty soon they are chickens laying eggs. They don't eat, they don't stink nor do they get eaten by the circling owls, eagles and prowling foxes. You just buy them and then they grow up and lay an egg. Something that writer was good at.
Finally, perhaps the comment I hear most often is that gold is so hard to store and costly to ship. While I don't really recommend it, the cost of postage for a one ounce letter is 44 cents. What weighs more - an ounce of gold or a one ounce letter? And, as far as storage? Well, you can fit about $200,000 worth of gold in a soup can. In fact, did you know one cubic foot of gold weighs about 1200 pounds? At a cool $25 million or so, I think you could find one cubic foot of space to store your gold.
Funny, I always looked at gold as portable wealth. An ounce of gold in your pocket is like carrying around 15 barrels of oil. Try and store that until you retire. The same goes for food. Of course we need to eat and you can't eat gold, but you can't store a lifetime's worth of wheat, apples and corn flakes in your IRA either.
For 5000 years gold has been an effective store of wealth and right now gold demand is such that anyone who does own gold does not want to sell. Central banks are buyers, governments are buyers, as well as the most prominent investors of the world. Why else would the gold price be on the verge of breaking through $1600 an ounce?
Finally, to all of those who know the 101 reasons not to own gold, I have one question. Are they the same reasons you decided not to own gold 10 years ago?