Gold benefits at “end of the world”
Every article I have ever read about gold, negative or positive, never discusses exactly how gold will be used to buy survival items when our economy has been devastated. Gold bullion in a bank vault; mutual funds; gold securities; mining shares: how would the average person be able to convert these investments into currency for buying essentials if suppliers are not accepting ordinary currency? Does the purchaser of a loaf of bread have to pay $1,200 because the owner of that bread does not have change for a one ounce coin? If the bank is closed or the exchange cannot deliver the gold, how can gold be considered an “end of the world currency”?
Terry Says
Aha! that was exactly the point of my column. In my speeches I always point out that no one will exchange their last loaf of bread or gallon of water for a gold coin if the “end of the world” scenario comes true! (I used to point out that if you wanted to “hoard” you needed canned soup and an old fashioned, non-electric can opener — but now soup cans have pop tops!)
Seriously, the idea of gold is as a hedge against paper currency. The U.S. dollar has been considered “good as gold” — but if we continue borrowing and overspending the value of the dollar could be called into question. Then, what assets do you want: stocks? real estate? Euros? Yen? or GOLD?
