Gold is:
A.) A commodity
B.) A currency
C.) Formed into bricks and other materials that The Fly’s palace of gold is made of
D.) Both A. &B.
E.) All of the above
(Answer: D)
Gold is affected by two things:
1. Demand as a commodity: China and India are now the two largest consumers of gold. Much of this has to do with the mindset and culture that is prevalent in those countries. (”Wha hoppen to dorrah? Eet es fo Amelican flucktahds and peepo who roose home to folcrosha.”) People in “Chindia” will continue to buy more of the shiny yellow stuff as they become “middle-class affluent”.
2. Demand as a currency: You think the dollar will recover anytime soon? If so, I have some auction rate securities to sell you. The dollar will continue its slide into the “pit of death” and gold is a natural hedge against the involuntary confiscation of your paper stock certificates and dollar denominated assets. Forget about mining shares and rare coins (which, by the way, are for asshats and 13-year old geeks). Buy the bullion, which you can easily store in an underground vault along with 10,000 rounds of armor piercing bullets. If you don’t have a handy vault to store all that, then buy (GLD: 97.72 0.00%).
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Gold is my favorite currency.
Other interesting Facts About Gold
Disclaimer: If you buy GLD based on this post, a goldbug will take up residence in your underwear and “bugger” you in dark places, and your paper dollars could turn to dust.
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