The yellow metal, writes Jack Hough for Smart Money, “absent neurotic fear, is a lousy investment.” Hough makes no mention that central banks are creating lots of paper (or digital) money and so holding what Murray Rothbard called “the people’s money” might be a good idea.
“Now anyone scared by a chalkboard diagram of a conspiracy among Soros, Obama and Marx (Karl, not Groucho) can simply call their broker,” writes Hough. But of course a GLD certificate may not get a person out of a jam like an actual Krugerrand might. But writing something like that puts me in Hough’s “tinfoil underpants crowd” for sure.
Gold just doesn’t have any practical use, like say oil, writes Hough. The black stuff is useful for sure, but tough to carry. It might be marketable, recognizable, and divisible, but not portable, stable in value, or durable. Hough says America isn’t going bust and Obama, “might turn out to be a decent man rather than a saboteur and Tea Party tantrums might win serious spending cuts.”
Gold generates no cash flow, Hough writes. It does nothing but shine. However, he thinks Tea Party/tinfoil types might run the price of gold to $2,400 an oz. before the market falls apart.
Meanwhile Terry Coxon mentioned in his column for The Casey Report, that the money supply has been increased 40% since the financial meltdown in 2007.
My tinfoil feels just fine.
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Can Hough follow up with an article explaining why countries keep tons of it in reserve?
Either Hough keeps krugerrands in his basement, meaning he’s a hypocrite…or he missed out when gold was cheap, which makes him bitter.
Probably the second one.
We know the answer to that – Ben told us it is because of “tradition”
if obama’s no saboteur, there are plenty in academia who are. harvard, no less.
http://www.washingtontimes.com/news/2002/sep/04/20020904-084657-6385r/
What Hough calls “neurotic fear” is nothing more than the simple acknowledgment that people must maintain cash balances in money that has lasting value because the future is always to some degree uncertain. If mankind was omniscient, we could all avoid what is so distastefully called “hoarding” in some circles. But we live in the real world, even if Hough think’s we’re neurotic for acknowledging through our actions our own and our government’s finite knowledge.
Mr. Hough should have researched industrial uses of gold before he demonstrated his ignorance.
Wow! I never knew the tinfoil underpants crowd has so much power!
Try going through TSA security wearing tinfoil underwear! Will your junk show up on the scan?
Probably not. But theres always the possibility of the tinfoil turning it into some kind of microwave oven.
okay so its not much of a possibility but I still wouldnt do it.
Hey, Jack Hough, way to put things in perspective. I feel sorry for any neurotic, tinfoil-underpants-wearing fool in Zimbabwe, Argentina, Weimar Germany, postwar France, Germany, UK or Japan who got stuck holding a pile of that useless, yellow anachronism after their government got into severe debt problems wiped out the value of their currency.
Er, no, wait a minute …
People in Zimbabwe are still panning for gold – they can exchange nuggets for food! Someone should tell them that gold is a useless metal so that they can all suffer from malnutrition as well as from malinvestment.
Thought you guys might like this paper. It satisfyingly provides a specific date for the end of the “gold bubble” – July 27 2011. Using this great formula
p(t)=1978.2-734.8(2011.573-t)0.36{1+0.024 cos[16.5 ln(2011.573-t)-36.3]}, (1lb)
where p(t) is the gold price at the moment t. notice the quasingularity moment (tC) here equals 2011,573 which corresponds to July 27 and suggest the gold bubble should start collapsing before this date anyway.
They also claim to have predicted the “silver bubble” on May 1st, if you call that a bubble bursting…
http://arxiv.org/abs/1107.0480
I forgot to add, LOL
Gold doesn’t carry any practical use?
Huh?!? Who is this Jack Hough numbskull?
http://en.wikipedia.org/wiki/Gold
In a brilliant follow-up article, Hough explains why it’s idiotic to keep an account of Federal Reserve Notes at a bank, since FRNs generate no cash flow, and why it’s foolish to keep them in your wallet, since gray pictures of dead politicians have no utility other than looking interesting.
I’m curious about the money supply comment. In December of 2009 Ron Paul stated the money supply had doubled in the last year or so. I’m guessing he’s talking about M2 or M3 and Terry Coxon is talking about M1?
My Old Man often said, “An ounce of gold buys a very good man’s suit.” I buy mine from JC Penny but if http://www.askmen.com/fashion/fashiontip/34_fashion_advice.html is close then the price of gold is lagging.
“Step 2: Choose Your Fabric
Once you’ve chosen a highly regarded tailor, the next step is to settle on a suitable fabric. The suit’s fabric will make the difference between a $1,500 suit and a $6,000 one. That’s why many popular designers use fabrics with a grade of 100s or 110s (quality of fabric) to cut costs and increase markups.”
Back when gold was $800 to maybe $1200, there were a couple of guys who kept showing upon in the comments on every Mises blog post pertaining to gold, who would announce that gold was way overpriced and angrily accuse the author of the post of shilling for the “gold dealers,” who meanwhile were unloading their gold on the gullible public at those inflated prices. Haven’t hear nary a word out of any of ‘em since gold pierced $1300.
A local news station executive did a commentary a while back claiming gold was irrationally over priced and would soon drop. The price of gold promptly jumped to a new record high and hasn’t stopped yet. I hope he makes more public service announcements about gold.
T. Ralph Kays
The author of this article is not border line retarded, although you would think so…he’s just another terd.
“Hough says Obama might turn out to be a decent man. . . ” Would this be a transformation of character or a change in perspective?
What do you think the Gold price per ounce will be in January 2012?
Hough misses the point that the paper money on which all trade is based is not backed by anything more than a promise by the government that it will make good. When the government can no longer find somebody to buy the debt created by unrestrained printing of money then the music will stop and only those holding gold (not EFTs) or other metals will be left with a chair
Is it fact that someone to say gold price will up when we found the bad news.
I agree with “However, he thinks Tea Party/tinfoil types might run the price of gold to $2,400 an oz. before the market falls apart.”
James Rickards in his “Currency Wars” book, lays out the case for much higher gold prices, perhaps in excess of $7,000 per ounce, due to inter-governmental currency competition to seek trade advantages by inflating relative to their trade partners, leading to retaliation in the form of tit-for-tat inflating or increased tariffs. The only thing he sees stabilizing the situation is the institution of a gold standard.
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