Topic: Gold - is it really safe investment? - page 2. (Read 2320 times)

Historically gold has increased in value during tough times, particularly economic collapse.

Personally it makes me nervous that it might get stolen. I am slowly trading my silver and gold for bitcoins. It is difficult to trade because once again I am worried about it getting stolen.


It certainly can. I often use gold and silver as a direct medium of exchange, and there are 6000 years of history of it being used directly for trade.

When fiat based currencies fail it will be the paper that cannot be exchanged, the metal will be in high demand.

Gold will be the first to spike, as that is what governments will move to, to back the new currency when the dollar/euro/pound collapse. After the initial spike as governments hoard, the new currency will be pegged to gold. At that point, gold will stop floating... this is the point where you should GTFO of gold, and move to silver. Ride the silver wave up as hoarding shifts.

Gold is relatively safe until the cost of manipulating matter at will is cheaper than the value of gold - give it 40 years I'd say.

If there is a global economic collapse currencies will inflate/deflate extremely I guess. People will get scared that they lose most of their savings in the long term and will try to invest into something 'real'. Some will invest in real estates others in commodities like gold. My guess is that the gold price would go up in this case.

Gold (and silver) exists in many physical forms. For example as small coins. There is no need to sell these for other currencies during an economic collapse, because they can be used directly by itself for trading against goods and services.



The same point, the question then is, why do you think people cannot or will not trade goods and services for gold coins directly?

True, there is no industrial demand for bitcoin, but there is "economical" one - its simply demanded because its needed for people to exchane it for goods and services.
Gold on the other hand cant be directly exchanged into goods and services, so there is no such demand for it. Only source of demand is the industrial and speculative - wich are dubtful in my opinion

there doesn't have to be industrial demand for something to be valuable (*points at bitcoin*)

I think gold is safe, but maybe not a good investment.

Consider silver or bitcoin, for a collapse: water, food, cigarettes, gas,...

So I'd like to share some taughts... or more like doubts about keeping wealth stored in gold.

There are 3 major sources of demand for gold:
- goldsmith industry
- investitions/speculation
- electronic industry
- few other, marginal

Now imagine case of severe global economic collapse, that will force many people to spend their savings for basic needs. It can be assumed, that large amount of gold will be sold for curriences that allow buying goods and services.

Now wich of these industries is capable of absorbing large amount of gold?

I belive the answer is: Neither one.
- As luxury goods industies are drasticallly shrinking during crysis, you cant count on high jewelerry production, do you?
- Cost of gold is really small part of cost of a final electronic product, therefore you cant count that due to large gold supply increase, production of computers rises considerably.
- Only one that left is speculative/investive demand, and I dont think, that it can guarantee stable prices. Rather bubbles instead.

Of course this would be completly different if gold standard would be still in use - as it quite well guaranteed demand for gold in the same way that economy guarantees (more or less) the value of every mean of exchange. Im afraid that further or later price of gold may correct itself to value of shiny, useless metal that it has become since gold standard abondance.

Sry for english - not my native language, and not my brightest day either.