5 reasons to buy gold again

"Gold is extremely portable; it has a value in every country and in every currency. Sure, the valuation changes, but the worth will never be zero; what other government or currency (yes, gold is traded as a currency on the world market) can make that claim for 5000 years and running?"

Gold isn't in coin form or electronic currency form at any meaningful level in the current global economic system. What are you talking about?

Gold, is currently traded the most and affected the most by financial instruments (i.e. not the actual physical gold). In that sense, it behaves similar to other commodities which have also been greatly impacted by futures markets (grain, oil, corn, copper, etc, etc). However, gold is even more affected than those because it doesn't have the same comodity importance.

Oil, will go down if demand moves against it strongly enough. Gold has suffered a 50% collapse of real physical demand in less than a year. If that happened to Oil, the price would plummet. Gold has barely moved down in the face of that.

QED, Gold is much more impacted by financial instrument demand. So, the whims of investors. Not actual buyers of the physical gold. (like consumers, the retail market is actually the biggest physical buyer).  

"Gold (physical) is sort of like guns, but unlike land or stocks. No one can take gold or guns away from you unless you give it to them (dead or alive). Think you 'own' land or stocks? Try not paying levied taxes on either and see how that works out..."

Uh.....yeah. In an apoctalyptic situation, you think gold has more value than saying you own land? That would be a no. The common folks didn't have gold 5,000 years ago, or in any significant quantity over the last 5,000 years. If you did, and you weren't wealthy and well connected, someone was going to take it from you.

"To denounce gold as one of the many viable financial vehicles is as ridiculous as many of the arguments used against it. Nothing is a 100% sure thing right now and never has been; if you don't want gold (or guns or stock) OK, but remember that in today's volatile world, a little diversification may not foolish . "

I don't think people denounce it. But gold bugs seem to think you can fill 100% of your portfolio with it. And that's nonsense. It is weak for precisely the reason that it truly carries no fundamental value other than that assigned to it by financial markets. Absent demand. Absent cash flow. Absent earnings growth. Absent actually making something.

Only one way gold goes up in the near term. Europe contains its mess for another year, Federal Reserve releases QE3, China starts releasing it's current account surplus into global markets. All of those, are purely financial market (*paper*) driven events.

I actually do think that more likely than just a few days ago. The jobs report today puts the Fed in position to do QE3. A) Inflation has been trending down as commodities have dropped against a stronger dollar B) The dollar is stronger therefor they have room to do this and C) Markets are getting upset and the Fed is their whipping boy currently

However, there's a huge 2008ish possibility for Europe. It's extremely difficult to tell whether it would have the same impacts here as 2008 did, or even be the same level for the Europeans as 2008 was for the US.  

In any event when European markets decline 25-50%, Gold will decline for a period. It may recover once the ECB does something stupid (like flood the financial system with more liquidity that never finds its way anywhere but to financial markets).

If you didn't buy gold four years ago, when it was 300 an ounce, don't buy it now. Those sitting on their tonnage need the price back up so they can dump it. Put your money in the market, it's doing great, isn't it? Oh well, guess the entire financial system created no longer functions. What's next? I can't wait to see.

Peace 

For the Rationalist:

Gold's rise is following a bubble pattern.  Inflation will not be the problem it will be deflation.  And that deflation will also effect gold prices back to 300-400 an ounce.

For the Doom and Gloomer:

And if you think the world will collapse financially to the stone age, buy property not gold. The masses do not have gold nor want gold if they're tummies are empty.  They will barder with things they have for things they want.  And if a currency or money of any kind is used they'll do it with some certified ration stamp from their local community. 

Bailouts were a necessary financial need. It helped save our auto industry...which employs 10's of thousands of Americans who really needed to keep their jobs. Bailing out some of our nations biggest banks was also a necessity.

I'm not anit-bank like the PIN HEAD below.

 I'm glad we have banks.....they helped me buy a home & a car.