$5,000 gold, page-188

Morn'n Skol,

Thanks for your thoughts today.

I agree with you on some points.

How do you value Gold? - I know I have spent a lot of time on this over the last year and half and I have no definitive answer - only my best guess, based on trying to interpret events that repeat in history.

Of course - anything is only ever worth what someone is willing to pay for it, at the time when you need to sell it. With Gold it is all about portable wealth outside the system and it increases in value at times of currency risk. Lots of humans, not a lot of gold, but the distribution of that Gold is extremely un-even, otherwise it would be worth a lot more. Then there is the whole paper issue.

I like the idea of having Gold or Silver stashed away, where it is untraceable. In future peoples retirement pensions and social security payments may well be means tested. - so having stashes of metal or jewellery stashed away is not a bad idea. Could use cash of course, but then we come back to the same circular arguments about which is more likely to loose value over time. I don't own any physical, because at the moment I am seeking growth through mining and dividend stocks rather than preservation. If I had enough cash-flow to retire, I would start to save part of additional surplus in physical.

If you are going to ask how do you value gold - you must also ask, "how do you value alternate currencies and means of wealth storage?

Everything has risk - including great dividend playing companies. People whom are lucky enough, spread that risk. I think it is valid, based on historic events to have a portion of their wealth in PM vehicles, especially physical.

"Smooth talkers have made goldbugs out of many normally sensible, well balanced people, something that will inevitably result in a financial undoing for many of them."

Totally agree with this, the Gold Media is fed with a constant stream of noise from those who will benefit by selling bullion and ETF's

There is always a price to having strong beliefs about things that are "un-knowable". That price is the inability to access new information effectively.
You too seam to have strong beliefs. (As do all of us who are not actively removing them)

If Gold and USD were both starting out equal from now - which supply is going to increase faster? Trouble is we can not know the true starting point beyond staring at a chart, but I am still betting on Gold being the more tangible asset that is hardest to increase relative to demand.

It is only a suspicion though, and I know full well I could be wrong, or I could be right and something new changes everything.

I honor your position of trying to keep people "awake" to the dangers of believing the froth of the Gold media.

You would have greater effect if you could value the pertinent points in favour of a rising POG. It is far from impossible that POG will continue to rise for very real reasons.