Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
Covid-19 Pandemic Current State for UK, US, Europe, Brazil Vaccinations vs Lockdown's Third Wave - 12th Apr 21
Why These Stock Market Indicators Should Grab Your Full Attention - 12th Apr 21
Rising Debt Means a Weaker US Dollar - 12th Apr 21
Another Gold Stocks Upleg - 12th Apr 21
AMD The ZEN Tech Stock - 12th Apr 21
Overclockers UK Build Quality - Why Glue Fan to CPU Heat sink Instead of Using Supplied Clips? - 12th Apr 21 -
What are the Key Capabilities You Should Look for in Fleet Management Software? - 12th Apr 21
What Is Bitcoin Gold? - 12th Apr 21
UK Covd-19 FREE Lateral Flow Self Testing Kits How Use for the First Time at Home - 10th Apr 21
NVIDIA Stock ARMED and Dangeorus! - 10th Apr 21
The History of Bitcoin Hard Forks - 10th Apr 21
Gold Mining Stocks: A House Built on Shaky Ground - 9th Apr 21
Stock Market On the Verge of a Pullback - 9th Apr 21
What Is Bitcoin Unlimited? - 9th Apr 21
Most Money Managers Gamble With Your Money - 9th Apr 21
Top 5 Evolving Trends For Mobile Casinos - 9th Apr 21
Top 5 AI Tech Stocks Investing 2021 Analysis - 8th Apr 21
Dow Stock Market Trend Forecast 2021 - Crash or Continuing Bull Run? - 8th Apr 21
Don’t Be Fooled by the Stock Market Rally - 8th Apr 21
Gold and Latin: Twin Pillars of Western Rejuvenation - 8th Apr 21
Stronger US Dollar Reacts To Global Market Concerns – Which ETFs Will Benefit? Part II - 8th Apr 21
You're invited: Spot the Next BIG Move in Oil, Gas, Energy ETFs - 8th Apr 21
Ladies and Gentlemen, Mr US Dollar is Back - 8th Apr 21
Stock Market New S&P 500 Highs or Metals Rising? - 8th Apr 21
Microsoft AI Azure Cloud Computing Driving Tech Giant Profits - 7th Apr 21
Amazon Tech Stock PRIMEDAY SALE- 7th Apr 21
The US has Metals Problem - Lithium, Graphite, Copper, Nickel Supplies - 7th Apr 21
Yes, the Fed Will Cover Biden’s $4 Trillion Deficit - 7th Apr 21
S&P 500 Fireworks and Gold Going Stronger - 7th Apr 21
Stock Market Perceived Vs. Actual Risks: The Key To Success - 7th Apr 21
Investing in Google Deep Mind AI 2021 (Alphabet) - 6th Apr 21
Which ETFs Will Benefit As A Stronger US Dollar Reacts To Global Market Concerns - 6th Apr 21
Staying Out of the Red: Financial Tips for Kent Homeowners - 6th Apr 21
Stock Market Pushing Higher - 6th Apr 21
Inflation Fears Rise on Biden’s $3.9 TRILLION in Deficit Spending - 6th Apr 21
Editing and Rendering Videos Whilst Background Crypto Mining Bitcoins with NiceHash, Davinci Resolve - 5th Apr 21
Why the Financial Gurus Are WRONG About Gold - 5th Apr 21
Will Biden’s Infrastructure Plan Rebuild Gold? - 5th Apr 21
Stocks All Time Highs and Gold Double Bottom - 5th Apr 21
All Tech Stocks Revolve Around This Disruptor - 5th Apr 21
Silver $100 Price Ahead - 4th Apr 21
Is Astra Zeneca Vaccine Safe? Risk of Blood Clots and What Side Effects During 8 Days After Jab - 4th Apr 21
Are Premium Bonds A Good Investment in 2021 vs Savings, AI Stocks and Housing Alternatives - 4th Apr 21
Penny Stocks Hit $2 Trillion - The Real Story Behind This "Road to Riches" Scheme - 4th Apr 21
Should Stock Markets Fear Inflation or Deflation? - 4th Apr 21
Dow Stock Market Trend Forecast 2021 - 3rd Apr 21
Gold Price Just Can’t Seem to Breakout - 3rd Apr 21
Stocks, Gold and the Troubling Yields - 3rd Apr 21
What can you buy with cryptocurrencies?- 3rd Apr 21
What a Long and Not so Strange Trip it’s Been for the Gold Mining Stocks - 2nd Apr 21
WD My Book DUO 28tb Unboxing - What Drives Inside the Enclosure, Reds or Blues Review - 2nd Apr 21
Markets, Mayhem and Elliott Waves - 2nd Apr 21
Gold And US Dollar Hegemony - 2nd Apr 21
What Biden’s Big Infrastructure Push Means for Silver Price - 2nd Apr 21
Stock Market Support Near $14,358 On Transportation Index Suggests Rally Will Continue - 2nd Apr 21
Crypto Mine Bitcoin With Your Gaming PC - How Much Profit after 3 Weeks with NiceHash, RTX 3080 GPU - 2nd Apr 21
UK Lockdowns Ending As Europe Continues to Die, Sweet Child O' Mine 2021 Post Pandemic Hope - 2nd Apr 21
A Climbing USDX Means Gold Investors Should Care - 1st Apr 21
How To Spot Market Boom and Bust Cycles - 1st Apr 21
What Could Slay the Stock & Gold Bulls - 1st Apr 21
Precious Metals Mining Stocks Setting Up For A Breakout Rally – Wait For Confirmation - 1st Apr 21
Fed: “We’re Not Going to Take This Punchbowl Away” - 1st Apr 21
Mining Bitcoin On My Desktop PC For 3 Weeks - How Much Crypto Profit Using RTX 3080 on NiceHash - 31st Mar 21
INFLATION - Wage Slaves vs Gold Owners - 31st Mar 21
Why It‘s Reasonable to Be Bullish Stocks and Gold - 31st Mar 21
How To Be Eligible For An E-Transfer Payday Loan? - 31st Mar 21
eXcentral Review – Trade CFDs with a Customer-Centric Broker - 31st Mar 21

Market Oracle FREE Newsletter

FIRST ACCESS to Nadeem Walayat’s Analysis and Trend Forecasts

Why the Financial Gurus Are WRONG About Gold

Commodities / Gold and Silver 2021 Apr 05, 2021 - 03:27 PM GMT

By: MoneyMetals

Commodities

Longtime gold bashers are gloating over the precious metal’s recent price slump. Gold prices have declined more than 10% in the first quarter of 2021.

But the perma-bears shouldn’t feel vindicated. After all, anyone who heeded their advice missed out on gold’s record run in 2020 – and on many years of outperformance since 2001.

While gold bugs are often accused of having an unhealthy obsession with the metal, the “anti-gold” bugs reveal a deep-seated bias that can only be explained as irrational or dishonest.


Financial Advisers Don’t Get Fees Recommending Physical Gold

It’s no mystery why many who work in the financial industry hate gold. They are in the business of pushing paper assets, and physical precious metals held outside of bank and brokerage accounts generate no fees for them.

Financial professionals concoct various rationalizations for why gold is a bad investment.

They can certainly point to periods when stocks and bonds have outperformed.

Of course, no one particular asset class can be counted on to generate strong returns every single year.

The whole point of diversification into alternative asset classes including precious metals is to mitigate the risks inherent in an all-paper portfolio. These include inflation risk, interest rate risk, credit risk, counterparty risk, and even political risk.

It’s not just the opinion of bullion dealers that precious metals play a valuable role in investment asset allocation.

It’s the opinion of the respected firm Ibbotson Associates (now part of investment analytic giant Morningstar). Ibbotson found that investors who put 7.1% to 15.7% of their portfolios in precious metals enjoy superior risk-adjusted returns.

Gold shows virtually no correlation to stocks and bonds, meaning it can rise when paper assets fall. Yet the average investor has nowhere near even the bare minimum suggested by Ibbotson Associates to hedge against risks in financial assets.

Meanwhile, investors are bombarded with misinformation about gold from Big Finance and popular personal finance gurus.

Millions of people have turned to Dave Ramsey for financial guidance.

He recently stirred legal controversy by firing several employees for having premarital sex.

Clearly, he sets high standards for others. What about for his own advice?

Unfortunately, while some of his tips about managing household finances responsibly may be sound, he doesn’t seem to have a clue about sound money itself.

In a conversation posted to YouTube last year with a caller who inquired about gold, Ramsey said, “It is a golden colored rock. It has no intrinsic value except for the fact that two people are fighting over it. And that’s the only thing that gives it value – the same exact thing that gives a green piece of paper with a president’s face on it value.”

While he’s essentially correct when it comes to unbacked Federal Reserve Notes, Ramsey would have you believe that gold’s value is just as fleeting.

In fact, gold is unlike any fiat currency in that it does have intrinsic value.

Regardless of whether an ounce of gold is minted into a coin and has an arbitrary face value stamped on it, that ounce of gold possesses – and will always possess – valuable properties as a scarce, highly dense, highly conductive, highly ductile, aesthetically pleasing metal.

Gold historically has retained its purchasing power better than any paper currency ever invented. Yet Ramsey claims, “It has a crummy track record as an investment.”

He has a crummy grasp of recent history.

From 2000-2010, gold gained a cumulative 280%. But for the stock market, it was a lost decade. The S&P 500 actually fell 24% over that same period.

Incredibly, Dave Ramsey asserts on his web site, “Since the dollar isn’t backed by gold anymore, investing in this precious metal won’t help you if inflation hits.”

That statement is so nonsensical, it seems Ramsey experienced some sort of mental glitch when writing it.

The whole point of gold as investment thesis is that it serves as a hedge against an unbacked dollar! And yes, precious metals will help you over periods of rising inflation pressures.

During the decade of the 1970s, as paper assets got clobbered by inflation, gold delivered average annual returns of 30.7%. The S&P 500 barely eked out nominal gains of 1.6% per year – which were far too puny to keep pace with an inflation rate that surged into the double digits by the end of the decade.

Looking longer term, gold has risen almost 10,000% – from $20 to nearly $2,000 per ounce – since 1930, priced in America’s depreciating fiat money.

Gold Haters: Those “Living in the Past” Play with “Shiny Poo”

Despite gold’s proven track record of boosting investment returns during trying times for paper assets, the naysayers can’t seem to let go of their anti-gold animus.

Gold is tantamount to “shiny poo,” according to Big Finance.

Meanwhile, some of the “digital” bugs who are promoting Bitcoin and other cryptocurrencies also feel compelled to bash gold.

Grayscale Investments, which operates an exchange-traded Bitcoin product, went so far as to launch a “drop gold” campaign. It produced an anti-gold TV commercial than has aired frequently on CNBC. The ad portrays gold buyers as “living in the past” and out of step with the “digital world.”

Cryptocurrency enthusiast James Altucher claimed in an interview, “Gold is just a rock. Bitcoin has real value.”

There is no denying that Bitcoin has gained tremendous market value in recent years. It recently surpassed $1 trillion in total capitalization.

But barely ten years old, cryptocurrencies are much more volatile than gold and have nowhere near its historical track record of maintaining value. Bitcoin could conceivably be worthless in a few years’ time if new technologies supplant it.

Gold, on the other hand, is a basic element that can’t be digitally replicated or replaced. And it still functions without a computer or when the power goes out.

Gold has been valued and used as money for thousands of years. And central banks today are steadily accumulating gold.

Unlike a fiat currency, gold’s value can never be hyperinflated away. Unlike a bond, it can never default. And unlike a publicly traded company, it can never go bankrupt.

That’s why gold has real value.

Stefan Gleason is President of Money Metals Exchange, the national precious metals company named 2015 "Dealer of the Year" in the United States by an independent global ratings group. A graduate of the University of Florida, Gleason is a seasoned business leader, investor, political strategist, and grassroots activist. Gleason has frequently appeared on national television networks such as CNN, FoxNews, and CNBC, and his writings have appeared in hundreds of publications such as the Wall Street Journal, Detroit News, Washington Times, and National Review.

© 2021 Stefan Gleason - All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules