Of course, I'm a gold bug! You can't talk to friends, family or colleagues about gold without them wondering if you're a terrorist or off your meds. This is the exact reason to be a gold bug. The average American has so little understanding of finance and money that they actually think it's weird to believe in real money that has a proven track record of a few thousand years. They would rather believe in the promises of bankstas and apparatchiks, because history has shown how reliable the promises of the likes of Bush, Bernanke and Obama are!
I am proud to be a gold bug because it shows an understanding of sound money, which is required to have a sound democracy. To think that gold is a relic is to think that freedom and honesty are relics. Gold will retain its value much longer than the current promises made by human animals, who I might add, will die quite soon relative to the life of a gold coin or bar.
A fiat monetary system is based on trust and/or force, not intrinsic value or cooperation. On the intrinsic value, mutually acceptable form of money thing? Yeah, gold already won that contest multiple times in hundreds of societies over the past few thousand years. The Dow to Gold ratio chart tells us all we need to know about where we are in the trust cycle, which is what this chart speaks to us about. Once this ratio gets back to one, then I'll think about selling gold for real estate, stocks or some other asset class.
The latest update of the Dow to Gold ratio chart shows it performing and trending exactly as anticipated:
Will I be a gold bug forever? As a citizen of the world yes, but as an investor, HELL NO! Look people, this is about preserving and enhancing what money you've got and will make in the future. To all the people that want to bury their heads in the sand, put money in a shitty 401(k) and stick with stocks for the long haul, I really do wish you the best even though I know that you're fucked. Anyone interested in investing generally wants to be invested in something and there are a finite number of options, so any comparison has to be relative to what else is out there.
Gold is the easy, no brainer way to preserve and enhance wealth until the Dow to Gold ratio reaches one. Why do people hate gold so much? I can only assume mass hypnosis has worked and our fiat system has corrupted our society exactly as predicted by our founding fathers. Why do people think gold will do poorly during deflation? I can only assume ignorance of history, as gold has preserved wealth best during deflations (and currency crises). Why give all your money to a banker or broker so that they can lose it gambling and then potentially refuse to give it back to you when the shit hits the fan? 'Cuz everyone else is doing it and there's safety in numbers, I would guess.
If the argument one is going on is that stocks do better than gold over the long haul, I have two comments: first, the Dow to gold ratio is a roughly 10-20 year cycle and there will be plenty of time to switch back to stocks when they are ready to start delivering reasonable gains for the risk they entail (gold will trounce stocks until the ratio reverts to one again). Second, check back this summer or fall after the market has tanked again and gold has retained its value and I believe this will no longer be true using a full century of data!
If it's a choice between cash/cash equivalent investments and gold, then we at least have a reasonable argument/discussion on our hands. Why not hedge your bets against a currency crisis with some of that cash, since you're not likely to be earning more than 1-3% on your cash anyway? If it's gold versus real estate, stocks, corporate bonds, or foreign currencies, gold is a much better choice (unique investment situations, short-term trading and shorting aside).
So, yes, I am a gold bug and until at least 50% of the population sees that it is only rational to want sound money and market-set interest rates, I will remain a gold bug, bitches. Then I'll probably become the fiat lizard king just to be a contrarian...
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