Hello, Zack P. Thanks much for your response and interest in my stories on gold.
As I state toward the end of both articles, I already acknowledge that gold, as an asset, may serve portfolio diversification purposes, its historical performance often being poorly correlated with that of stocks and bonds. However, not in any large amount (research indicates a solid allocation to be somewhere between 2–5%).
I am not “against a gold big time [sic]”. I am not for or against it, per se, just taking a position based on my experience with, and research and understanding of, the precious metals markets.
At one time I specialized in Canadian mining stocks. I see you live in Canada. It’s a small world.
Nobody is comparing precious metals with fiat currencies. But I do beg to differ that precious metals have intrinsic value beyond what humans attribute to them. There were indigenous cultures in history that did not value precious metals the same way the conquistadors valued it, for instance.
Other things have been valued more highly than precious metals at times throughout history, as well. You have the case of the Dutch and the tulip craze, where tulips were of most value. Other cultures have valued spices more at times. Others, opium. Take your pick. Every civilization in every corner of earth did not value gold and silver more than anything else. Many history texts describe this reality.
As for inflation, as I have said elsewhere, it is indeed a monetary phenomenon. Therefore, even silver coins are subject to it. All “money” is subject to it, as all forms of money are fungible. Besides, precious metals are valued in dollars or euros on the spot market. If they were not valued in dollars, they would have to be valued in terms of something else of value. Number of loaves of bread it could buy one, for instance. Over time, the value of that “money” would still change. Very few things in life hold value over time.
With yet another currency crisis on the books and the horrendous inflation you mentioned, I’ll bet Argentinians would love some dollars or euros even more than gold or silver right about now.
The collapse of national economies and currencies in LATAM can’t be solved by the existence and utilization somehow of precious metals. Real solutions must be sought elsewhere, including addressing the willingness of international organizations to lend money to distressed countries in US dollar terms, effectively bailing out corrupt administrations for short periods of time over and over again.
As for the narrative of precious metals manipulation by the likes of JP Morgan, this type of claptrap serves the doomsayers well and keeps the price per ounce from really cratering. It’s an infowar, an war of ideas, a psychological battle to convince and persuade and market precious metals, and a disingenuous one at that. That tired story of precious metals markets manipulation is so old. Those who’ve really amassed a large amount of precious metals or who run businesses that profit from higher prices in precious metals have a vested interest in saying whatever they must to maintain the appeal of the precious metals complex, including descriptions (and the supposedly inevitable unwinding) of said manipulation.
I get the feeling that all fans of precious metals would like to dance off to the end of the rainbow to be with their savior pots of gold, but while they may be enamored with them and their dazzle, those pots, full as they might be, won’t save them from the collapse of a system characterized by fiat currencies and debt. At that point, you’re probably talking about the collapse of modern society and, in that case, you’ll need real survival knowhow, not bits of shiny (but ultimately impractical and hence, probably worthless) metal. As has already been said, you can’t eat gold. Better to know how to defend yourself, form communities, hunt and gather, identify plants, build/find shelter, and so on.
All that gold! Have fun storing it, securing it, carrying it, trading it, or paying for anything with it.
Best of luck, Zack.