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The Alchemist

1,740 Posts.

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19/01/20

14:47

Post #: 42458519
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Originally posted by Crom Valen: ↑

Instead of prepping for Armageddon, why not use a more balance strategy of diversity.? Some in gold of any kind, some in equity of different sectors and some in cash and other fix assets like property etc. A 100% equity exposed bull is no different to a goldbug conceptually speaking. Both camps are perceived to know the truth.

The use of the word Armegeddon most commonly comes from the anti-Goldbug brigade, as a way of poo-pooing or ridiculing.

The anti-Goldbug simply does not like being presented with facts. When told that fiat currencies invariably run their course and fall over, their heads explode. They can’t deal with it. “This time is different” they say. Sestertii and denarii are gone, but Gold endures. And we aren’t living in a ‘Mad Max’ post-apocalyptic wasteland despite the inevitable failures of fiat currencies.

I see a Goldbug simply as anyone optimistic that Gold will continue to move in a positive price direction in the long term. Moreover, that it is a worthwhile asset and a special kind of insurance policy. A Goldbug might have some Gold and PM bullion, some Gold stocks, some cash - and they will probably own a variety of other assets.

The anti-Goldbugs like to style a Goldbug as someone who building a bunker in the backyard as part of a doomsday prep, and owns 100% Gold bars.
It’s actually a laughable and inaccurate stereotype, just put about to ridicule and demean anyone who has a positive outlook on Gold.

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If the future is a ‘Mad Max’ style collapse, it will be due to the abandonment of capitalism in favour of the systemic looting and ‘too big to fail’ ethos we have seen post-GFC. In capitalism, failing businesses fall over and markets function. Now central banks create and prop-up stock and property bubbles and prop-up failing zombie businesses. Money has become so cheap that malinvestment is rife. Central bankers like Draghi pronouncing they will do “whatever it takes” have everyone thinking that they can take on any level of risk they like - central bankers will bail them out.

The system is geared towards increasing the wealth of the wealthy, and pulling the ladder up for everyone else. And it isn’t capitalism, it’s a stuffed centralised rort being perpetuated by central banks and governments.

The inequality and distortions that have been created by the skewed post-GFC system is what is endangering the future of capitalism.

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It appears that the USA and Australia and germany (with a little"G" now that it's in trouble) will lower interest rates going forward. This should raise the gold price. If there is a slump in the stockmarket, then money will flow into gold and real estate (a small lag there). But if it is a big recession coming, one should be aware that from October 1928 to 1934, gold stocks in the USA went up 8-fold.
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0 Great analysis

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