I have been thinking about something our friend
@trent3727 said about Gold being a hedge against inflation but not having any use in a falling market. (or words to that effect)
This is when I realised he has a very limited idea about the function and value of Gold.
What he fails to realise is that Gold is a protection against market variations in that it maintains it purchasing power regardless of fiat dollar value. What I mean by this is that even in a scenario of financial collapse and potentially massive devaluation of all assets, it is possible that the dollar value of Gold could drop. However its drop as measured against fiat would still mean that it could purchase the same amount of goods as previously. That is the value of gold.
In reality though, it is highly unlikely that Gold would fall in a financial collapse because it is the "go to" in case of financial uncertainty. The rush to safe haven would preclude a price drop and added demand would tend to push the price higher. If Gold has no value why is it especially in demand when times are tough? Because it always is and always has been an asset of value, coveted, stable and worthwhile.
Trent my boy, just watch the future unfold over the next few months. I am sure that even you can see the tempestuous times ahead and that is when you will see Gold show its true value.
US inflation is at 2.5% and growing (that really crept up
) Powell is gona have to start hiking thats bearish gold and with a crowded gold trade to the long side gold will get obliterated never mind 800 how about 3 or 400 an ounce and it will be a flight to the dollar just as it was in the 80s recession.
