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Why gold is better than cash

- Alasdair Macleod - FinanceandEconomics

Papli, with regard trading, i would urge caution. There are a number of things to consider before deciding if doing so is right for you. Myself, i used to trade, but no more. Now i only accumulate when i can. i had some winning trades, but there were also some that went the other way. In the short term, as you observed, who knows if gold will next go up to $1,800 or down to $1,600. It matters a great deal if you are trading, but not whatsoever if you merely hold gold and operate with the firm conviction that in the long run, it will be worth far more than it is today. Before i used to get bothered when my trading position had a bad day. Now i am happy when gold corrects, for it offers me an opportunity to buy at a discount.

Another consideration might be where you live. Above you noted that the purchasing power of gold may not increase, though its paper price could escalate dramaticly. My own thought is that might be so in those countries that are likely to experience a collapse of confidence in their currencies. i am here thinking of those nations using the euro, yen and yankee doodle; the pound sterling quite possibly as well. However, if you are fortunate enough not to be located in the danger zone, there may well be a 3 month to 5 year window during which your gold will buy you a lot more "stuff" than it will today. However, if you live in the danger zone, you may find that your gold does not buy you quite as much fresh water, rice or gasoline as it currently does, but 10 times more fine art and antiques.

There are other factors to consider also, such as just how much exposure to risk can you safely afford to take? And do you want to do your own buying and selling through a pool, or do you want to go a different route, hoping that you are not placing your funds with the next Jon Corzine?
The former will require more of your time; the latter more of your trust. However, should you decide to just buy and forget about it, you will have more time for some of the more enjoyable things life has to offer and you will never need wonder about the safety of your investment.

Good luck with whatever you decide.

Commented 4171 days ago

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Beginning of the headline :The question most often asked of gold bulls is, “At what price will you take your profits?” It is a question that betrays a lack of understanding about why anyone should own gold. Nevertheless, the simple answer must be, “When paper money stops losing its value”. This response should alert anyone who asks this question to the idea that owning fiat cash is the speculative position, not ownership of precious metals... Read More

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