Since I am in a mining  part of the world today, via Visual Economics, the single biggest gold infographic you will see:

 

 

click for complete graphic

 

 

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gold investment super IG

Category: Digital Media, Gold & Precious Metals

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

16 Responses to “Gold: Good Investment or Waste of Time?”

  1. That was a good one! Nonetheless, if bloggers like FOFOA are right the price of gold can go much higher than many expect.

  2. CSF says:

    I view gold as a long-term hedge against the continued devaluation of major paper currencies, including the U.S. dollar. I use it for investment diversification, not speculation.

  3. rd says:

    Gold isn’t an investment other than the way bank notes are an investment. It doesn’t even pay interest like a money market account used to.

    Gold is an alternative currency that happens to have a much longer history than any of the world’s government issued currencies for many cultures, but not all. An important lesson about gold was the Columbian experience where most native Americans did not view it a particularly critical material while the Europeans had centuries of tradition of using it as their primary medium of exchange.

    In many of the Eastern developing countries, gold jewelry is the primary way that women can have a store of wealth to call their own, unlike land etc. It helps that they can store it in their bedroom and on their person. As a result, those cultures historically have a large demand for gold jewelry as their population grows.

    Gold’s proper place in a portfolio is the way Harry Dent used it in the Permanent Portfolio. It is a hedge against devaluation of your currency. Often if gold is doing well, then other things will be suffering greatly and vice versa. The past 35 years have demonstrated this a couple of times.

  4. Braden says:

    Typo in the header (“apopular”).
    Also, how can they put a number on the “undiscovered” gold resources in the United States? As long as we’re making it up, why stop at 18 tons?

  5. ToNYC says:

    If you are the creative type, you still can’t have your cake and eat it too. Gold takes up time to get it pure and capital for useful tools and gets in the way, so you bury it and lose flex. I’ll trade life in the cave for the meadows and woods without the gold chains and guns.

  6. Petey Wheatstraw says:

    There is as much disagreement/bias over gold as there is over guns and gun control. The debate gets emotional, and that’s never a good thing.

    That said, I’ll reiterate (or is that rererereiterate?), my standard stance on the yellow shiny stuff:

    I will stop owning gold when the central banks/nations haul theirs out to their dumpsters because it’s not worth the cost of holding it.

    Factoid from Wikipedia:

    “The Federal Reserve Bank of New York maintains a vault that lies 80 feet (24 m) below street level and 50 feet (15 m) below sea level,[8] resting on Manhattan bedrock. By 1927, the vault contained 10% of the world’s official gold reserves.[6] Currently, it is reputedly the largest gold repository in the world (though this cannot be confirmed as Swiss banks do not report their gold stocks) and holds approximately 7,000 tonnes (7,700 short tons) of gold bullion ($415 billion as of October 2011), more than Fort Knox. Nearly 98% of the gold at the Federal Reserve Bank of New York is owned by the central banks of foreign nations.”

    To the naysayers, I will ask: Why should the old axiom “don’t fight the Fed,” not apply to their gold holdings?

    More recently, I understand that central banks/nations have been “repatriating” their holdings, as well as increasing the amounts they hold.

    As with anything, one has to ask one’s self WHY they would be doing that.

    As for the cost of holding gold, it’s very small. Lots of value in a very compact form is not so difficult or expensive to hold/protect.

  7. 4X says:

    GOLD UP 659% IN ABOUT 10 YEARS !!!………………
    As early as March 2013, the IMF will include the Australian Dollar in its quarterly survey of central banks’ foreign exchange reserves. Just like gold, a more popular reserve holding, the Australian dollar (AUD) has gone up substantially in value against the US Dollar (USD) in the 10 year period between 2001 and 2011.
    http://www.youtube.com/watch?v=bKQT_VY1e20

  8. gordo365 says:

    @Branden I agree with your logic. If they know how much undiscovered gold there is – can they tell me where I lost my car keys? That would be really helpful.

  9. louis says:

    For the small potatoes investor I would say that Gold is a very wise investment, as long as one condition exists, which is that their must be a self inflicted credit bubble which requires massive intervention. So going forward I think Gold will have it’s ups and downs.

    http://www.youtube.com/watch?v=tMlR55Dr4RU

  10. VennData says:

    Macho guys own pretty jewelry.

    The fact that it’s up… uh ” 659% IN ABOUT 10 YEARS !!!………………” means it will do that again.

    Buy all the gold you possibly can and tell everyone you’re doing it, wear a shirt, a hat, and put a bumper sticker on your beater. “DON’T BLAME ME, I OWN GOLD.”

    You will laugh your head off at all those egg heads when they are poor and you are rich. Start working on your laugh now.

  11. jmsvett says:

    I think so.

    M1 appears to go up 9% each year as far as i can look back
    Parabolic deficits
    100 trillion in unfunded liabilities.
    Companies are holding government bonds in a significant number chasing yield
    5 years of bailouts
    Bad demographics

    Yeah, i think gold should be in a portfolio.

  12. ConscienceofaConservative says:

    with Central Bankers active buyers of government bonds regardless of maturity we can’t expect the bond market to provide it’s normal signals. Bond vigilantes have been contained by central bankers. At some point paper currency has to lose out considering every central bank is doing the same thing..attempting to depreciate it’s countries currency. This plays into Gold.

  13. ottnott says:

    I hate most infographics, but this one is particularly crappy. And, it is crappy right from the start.

    The circles showing amount of “US gold resources” is not consistent in scale either by area or by diameter. It looks like they used relative diameter, which is misleading, for 1, 15, and 18 tons and then ran out of space to make the 33 tons to the same scale. Because they scaled by diameter, the 15-ton circle is 225 times the size of the 1-ton circle.

    The use of the terms “resources” and “undiscovered” strongly suggests that they are talking about gold still in the ground, but the graphic later tells us that annual “US mining production” is about 230 tons, roughly an order of magnitude higher than the number given for “US gold resources”. Oh, and you won’t find 2009 on the production graphic, because it is shown as 2008.

    The last figure on the page is introduced with the statement that “Gold has outperformed other assets over the last few years”, but the bar graph is quarter over quarter change, not change over a few years, and there is no date given on the graph.

    Those are the only parts of the infographic I bothered to look at. I suspect that the quality is just as “good” on the parts I didn’t examine.

    Overall, it is very far from worthy of space on The Big Picture. I find that most infographics are similarly flawed or useless, unless they come from reliable sources like NY Times, etc.

  14. BigBlueCrab says:

    I’ll have to reread, but how can we talk about the actual metal, and not talk about the leverage? Gold, and more importantly silver is leveraged 10′s of multiples. I think I read 50x more silver was traded in paper than all the physical above ground (?)…If that’s the case if/when this is ever unwound the price quoted will be many times above what we are talking about. I remember talking to Realtors about how the housing market was sound, and getting into shouting matches about the logic of making loans of $750k to strawberry pickers..

  15. RW says:

    Gold is a commodity, I trade it sometimes. It is no longer money but enough people think it is to make it a trade there too and enough appear to be sufficiently serious to make it an investment if you understand the importance of position size. I keep a couple hundred gold coins and a bag of silver in one of my bank vaults because I’m nostalgic — AKA an old fogy who can afford to act stupidly when it suits him — other than that I don’t think it means spit.

  16. DeDude says:

    I can understand Gold as a diversification since it does appear to have somewhat of a “life of its own”. But the currency hedge thing seems a little strange to me. In the past 18 months money has presumably been printed like crazy, yet Gold has been flat. Is the connection between money debasement and the value of gold actually real or just the result of enough people thinking it is real and after they are tabbed out and have filled up their “fear vaults” the correlation breaks.