Bloomberg declares Goldbug vindication

pmbug

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It seems a bit premature to me.
For years, gold bugs were relegated to the fringes of financial markets. Often viewed by mainstream investors as tinfoil-hat conspiracists with basements full of beans and bottled water, their warnings sounded apocalyptic: a coming collapse in financial assets, widespread devaluation of paper money and global disasters that erode civil liberties.

Welcome to 2020.

As the coronavirus brings economies around the world to a standstill, gold is rivaling Treasuries and the dollar as the best-performing major asset this year. The metal proved its haven status with a 6% rally as almost $16 trillion was wiped off global stock markets and oil plunged.

There’s also been a scramble for physical metal as investors in exchange-traded funds build the biggest stockpile in history and dealers say they’re struggling to find gold to sell.
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There’s echoes of many of the typical gold bug predictions in today’s crisis. Besides the obvious economic and financial-market upheaval, social interaction has become taboo and in some places soldiers are telling people not to leave their homes.

Even the so-called paper market for gold is showing cracks and a squeeze last month on New York’s Comex, the largest gold futures exchange, added fuel to another of the prophecies: that when the crisis came, there wouldn’t be enough gold to go around.
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https://www.bloomberg.com/news/arti...lly-see-their-predictions-of-doom-coming-true
 

rblong2us

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I'm not proud so I will accept

A friend who has mocked me for years tells me her stockbroker has been rebalancing her portfolio in recent weeks and now some of it is in gold.

And I am telling her to get right out right now, with prices as at only a few months ago and apparently willing dip buyers.

Aint gonna happen. However she might still remain broadly on the same number in fiat valuation terms, just might not buy so much. A chance for us both to be 'right' ?
 

pmbug

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A stockbroker handling a portfolio isn't likely helping your friend to own physical gold - the kind with zero counterparty risk (MFGlobal holla!). If TSHTF (and I'm not convinced yet that this is it, but the risk is very high), owning some physical gold would be very smart.

As for a short term investment vehicle, I think your friend will probably do just fine with some paper gold in her portfolio. The economic consequences of the oil war and Covid19 economic shutdowns are just getting started. Gold is just getting started. I think it's going a lot higher before things get back to normal.
 

rblong2us

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I agree Bug

And with the central banks effectively backstopping everything ( apart from the small business that is the foundation of any economy ) there is probably no more risk in paper gold than there is in stocks.

I can finally however, casually point out the recent gains in physical gold, that it is most acceptable and a very reassuring place to hold ones savings.
 

lefty

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I am a conspiracy theorist with a basement full of dry beans and bottled water. Hate to see folks in general investing in shiny!
 

pmbug

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“It seems we’re all gold bugs now,” announces the op-ed piece in the New York Times. It says that gold is “one of the best performing assets in the world this year.” Of gold, the Times writes: “Its price just topped $2,000 an ounce for the first time.” It concludes by warning that unless “central banks stop printing money frantically and real interest rates start rising again, it is difficult not to be a gold bug now.”
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I don't know that "we're all gold bugs now". But I think the smart money definitely is. ;)
 
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