MfA wrote:Doom wrote:Keep in mind, people have been saying that about precious metals for 10 straight years now. It's a stupid investment
For 7 of those years real estate was a far far better investment. Hell, during some of the recent QE fueled stock rallies stock were a better investment as well.
It's all about predicting the movements of retarded sheep, in government and in the market.
Certainly true, but it's funny when someone says "I'm buying real estate as an investment", people nod at the wisdom even though taxes and maintenance and natural disasters can destroy such an investment, in addition to the market.
But when someone says "I'm buying gold", there's always someone to stand up and say what a stupid idea that is...even though it, too, has the same market vulnerability as real estate (and is far more resistant to taxes and the other things).
That said, paper is not an investment, it is a
gamble. That's a pretty meaningless thing to say, of course, since all investments have risk, and thus are gambles. Allow me to elaborate: a paper bill does not grow or produce things like a company or even acquire history like a building or a table. An paper bill now is exactly the same as a paper bill yesterday or thirty years from now. You can't even eat it or do anything with it in the meantime. It just sits there.
The entire point of having paper bills is that at some point in the future you intend to sell it to someone else (i.e., trade it for something else, or 'buy' something else). That's it. And the way that works is that you trust your government to exchange your work for paper bills and then in the future you hope that other paper bills haven't been created out of thin air, so that your paper bills won't compete with the 'fake' paper bills. The only people who actually make money out of this equation are the folks that run the printing press, everyone else is just paying real work to play a rigged game where they place their faith and trust in the folks that have the printing presses not to screw them.
And keep in mind: whenever you join the game, the music may have already stopped. If you bought into Zimbabwe paper in 2007, your paper is worth less in nominal dollars than they were when you bought them, and will continue to be for the foreseeable future. Same for many paper currencies (basically all), eventually.
Anyone who tells you to "trust" paper currency has the same amount of reason and sense as someone who tells you to "invest" in their poke system, and I don't even know what a 'poke system' is.
Now, if you have money in a bank, paying essentially no interest (and, honest, 1% or less is basically no interest in human terms), you're basically holding paper. And considering how QE2 (3?) is going, maybe trusting the guys with the printing presses might not be the shrewdest thing to do.
Precious metals suck as an investment...everything else right now just sucks worse, is all. I've been telling people this since 2002 (I used to be a stockbroker and options principal, before I got into academia), and I really, honestly, hope to have something better at some point.
If you're expecting a real economic collapse invest in a farm in the middle of nowhere with access to water, a good machine shop, solar panels, vegetable oil extraction machines, a diesel generator, toilet paper and lots of lead. Or in other words somewhere you can be self sufficient.
Yowza...I just don't see it happening, or at least is any more likely than an alien invasion. A few years of disruption are possible, however.