Yeah, yeah… gold is a hedge against inflation. Ok, I got that part. But over the past few years, it has risen in price dramatically and these days, pretty much everyone (from your neighbor to your local TV show host and so on) recommends it as an investment.
I don’t know about you guys but if there’s one thing life taught me, it’s that you should think twice before investing in something that is recommended by everyone.
Everyone is printing money like there’s no tomorrow and you do need a hedge against inflation in such an environment but in my opinion, gold will not be a lifesaver for people who invest at this point.
Thoughts?
December 3rd, 2011 at 1:20 pm
The word GOLD brought me here…
It’s among the Top 100 requests I get for
research / discoveries…
Look forward to others comments on the topic…
~Patricia Kaehler – Ohio USA – DomainBELL
December 3rd, 2011 at 1:39 pm
Gold is good short investment if you want to buy it and sell it after few months making good profit but the price in long term will go down at some point but the thing is that no one know when this point will come.
The gold is not widely used in manufacturing and if earth runs out of it it won’t affect society like if we would run out of fuel.
And remember that people in crowds behave just like sheep
December 3rd, 2011 at 2:05 pm
Gold hasn’t really risen in price. More like the US Dollar has declined in value.
Gold is finite in quality, cannot be made without costing more than what it is worth (in the lab), is globally valued.
I worry way more about the future of the US dollar and economy than about the value of gold…
December 3rd, 2011 at 2:21 pm
@Andrei: we had a $252.8 low in 1999 and a high of $1,889.7 in 2011 so far if I’m not mistaken. That’s pretty dramatic. Now I agree that the dollar has declined in value but it hasn’t declined *that* much, not by a long shot.
I’m worried about the US economy as well but let me ask you something. Let’s assume you invest everything you have in gold right now and that someone else keeps everything in dollars. Who do you think will be better of two years from now? What about let’s say 10 years from now?
I’m 100% sure that the dollar will go down in value and I’m convinced most domainers agree. I’m also 100% sure that trying to find a hedge against inflation is a very good idea but in my opinion, gold isn’t a great candidate at this point.
December 3rd, 2011 at 3:12 pm
Gold isn’t rising because of inflation; gold is rising because of global financial problems. It’s not going to fall (significantly) until those global financial problems are resolved. Global financial problems are getting worse, not better, so golds is going to do well for quite some time.
December 3rd, 2011 at 3:18 pm
@Jeff: I agree that the world’s financial problems are a variable in the equation but are we really in *that* much trouble?
A rise from $252.8 in 1999 to a $1,889.7 high in 2011 is impressive to say the least. So impressive, in fact, that I cannot find a reasonable explanation for an increase of this magnitude that doesn’t bring us back to the “bubble” scenario.
December 3rd, 2011 at 4:01 pm
@Tony….you say gold is “finite”. Yes, that is true, including all of it still in the ground. The more gold goes up the more digging, destroying land, rivers, etc… gets done to bring more to the market, so really it’s not finite in the investment sense.
Regarding the economy, yes, I think we are in THAT bad of a situation. If Globalization had not taken a hold like it has things would be much better, but with Globalization having it’s roots everywhere now one little hiccup screws up the world, hence Greece, and now Portugal, etc…
Globalization is brand new to the world. The world has not every operated on this model and nobody knows for sure what will happen, but it’s obvious most of the public can’t appreciate what the collapse of a little country like Greece can do to the entire world. That one little event can bring down countries like the USA and China. When Greece falls, it will cause a domino effect in other countries causing citizens to pull money from banks for fear of insolvency of their own governments.
The world almost got a taste of collapse in the 90’s with the Asian Contagion.
This is one of the very few times you’ll see in your life where what everyone is saying hold water : Buy gold!
However, I prefer silver. Silver ingots can be spent easier, silver is used in manufacturing, and silver has potential IMO to go up many more fold than gold.
December 3rd, 2011 at 5:14 pm
gold will rise as long as real interest rates are negative.
if real interest rates ever become positive the debt burden will crush the western world. fine kettle of fish.
we’ll tell our wives we’ve gone to the convention… they’ll be none the wisr.
December 3rd, 2011 at 6:27 pm
gold may be overpriced now, but it may still go up thanks to the EU recent bailout. One thing for sure…when it pops, it will make the real estate bubble look minimal.
December 3rd, 2011 at 11:54 pm
I don’t really think ‘everyone’ is talking about it. It’s had a good run for sure but I don’t really think it qualifies as a bubble yet.
And yeah, I do think we’re in ‘that’ much trouble…
December 4th, 2011 at 1:12 pm
Having gold in recession time is like dream come true.As price are going hire,gold becoming best investment field for all.You can get good money with it.