Gold and Silver
Gold and silver are popular investments, but why? Consider that a chunk of gold generates no income, because it's not doing anything for anyone. The only time a piece of gold does something is when it hangs from your girlfriend's nose or ear, or you stick a circlet of it on your finger. If you have a chunk of gold, you need to lock it away so no one will steal it. Gold chains around your neck can get you killed. Nevertheless, people think gold has intrinsic value.
The really good thing about gold or silver is it's hard to spend. You need to go to a precious metals shop and cash it into paper dollars. So gold tends to get locked away and saved. When you pull it out, it's usually worth at least what you paid for it, and maybe more. But what makes it go down or up? Not increasing demand, because worldwide gold demand isn't increasing very quickly, although it is growing somewhat.
No, what drives gold and silver prices is psychology, pure and simple. People have a nostalgia for hard goods, and there is a mystique and mythology built up around the possession of precious metals. There are philosophical implications. The Philosopher's Stone was supposed to be capable of transmuting base metals into gold. There are myths from childhood. King Midas turned everything he touched into gold. There is a tremendous amount of marketing and association of gold with wealth.
Gold is primarily used these days as a “hedge” against a weak currency. This means that, again because of the psychological factors, that people tend to buy gold when inflation begins to eat into the value of paper money. This “flight to hard assets” is fed by a great deal of propaganda proliferated by gold bugs. But that doesn't mean I'm philosophicaly opposed to owning gold. Quite the contrary. Since the market for gold is driven by psychology, however, when investing in gold, you must keep your eyes on people more than anything else.
I do think it's rather silly to try and own a lot of hard gold, though. Really, the risk of theft is high, especially if you show off your holdings to the wrong people. It induces jealousy and greed if you display it, and that can actually imperil your life.
I also think investing in gold mining companies is not very earth-wise. While some mining companies claim to be environmentally conscious, that's really a stretch. Research gold mining, or any kind of mining, and you'll find it's uglier than the fast food business, associated historically with slavery, child labor, environmental destruction, and fraud.
Nope, if you want to get into gold or silver, I'd advise looking at Exchange Traded Funds. That way you can participate in rising valuations in the price of precious metals without the hassles of storing the hard stuff, or the bad vibes of owning shares in a toxic hole in the ground where people suffer and die hauling bright stones out of the earth.
Go to>> Mutual Funds
The really good thing about gold or silver is it's hard to spend. You need to go to a precious metals shop and cash it into paper dollars. So gold tends to get locked away and saved. When you pull it out, it's usually worth at least what you paid for it, and maybe more. But what makes it go down or up? Not increasing demand, because worldwide gold demand isn't increasing very quickly, although it is growing somewhat.
No, what drives gold and silver prices is psychology, pure and simple. People have a nostalgia for hard goods, and there is a mystique and mythology built up around the possession of precious metals. There are philosophical implications. The Philosopher's Stone was supposed to be capable of transmuting base metals into gold. There are myths from childhood. King Midas turned everything he touched into gold. There is a tremendous amount of marketing and association of gold with wealth.
Gold is primarily used these days as a “hedge” against a weak currency. This means that, again because of the psychological factors, that people tend to buy gold when inflation begins to eat into the value of paper money. This “flight to hard assets” is fed by a great deal of propaganda proliferated by gold bugs. But that doesn't mean I'm philosophicaly opposed to owning gold. Quite the contrary. Since the market for gold is driven by psychology, however, when investing in gold, you must keep your eyes on people more than anything else.
I do think it's rather silly to try and own a lot of hard gold, though. Really, the risk of theft is high, especially if you show off your holdings to the wrong people. It induces jealousy and greed if you display it, and that can actually imperil your life.
I also think investing in gold mining companies is not very earth-wise. While some mining companies claim to be environmentally conscious, that's really a stretch. Research gold mining, or any kind of mining, and you'll find it's uglier than the fast food business, associated historically with slavery, child labor, environmental destruction, and fraud.
Nope, if you want to get into gold or silver, I'd advise looking at Exchange Traded Funds. That way you can participate in rising valuations in the price of precious metals without the hassles of storing the hard stuff, or the bad vibes of owning shares in a toxic hole in the ground where people suffer and die hauling bright stones out of the earth.
Go to>> Mutual Funds