A Good Way to Get Poor
I know I shouldn't succumb, but I can't resist replying to this blogpost at LewRockwell.com which nicely sums up what is wrong with goldbugs...
Neocons like Frum-Yglesias also love the Fed and its counterfeiting presses, and the perpetual wars they make possible. What a surprise.
Rockwell then links to a brace of posts by Matt Yglesias and myself.
Now hear this: Making investment decisions because you "love" or "hate" the underlying asset is a very good way to get poor. I love bread - that does not mean I must always go long on wheat. I love Apple computers. Doesn't mean I want the stock at any price. I hate driving. But I still think there's opportunity in oil stocks right now.
Gold is nice. It makes attractive cufflinks. But at $1070, it's a dangerous place for a small investor to be. Even more dangerous because so many of those marketing it treat it like an object of religious veneration or a symbol of political protest, rather than one of many commodity metals traded in highly volatile markets. Gold is currently trading at record highs. In my lexicon, "record high" is almost always a "sell" signal. Maybe you think differently. Fine! That's what markets are for. But a caution. I have no position in gold. But many of the people touting the stuff do. Be careful.