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However, there is a problem with gold. It's heavy. People don't want to carry or trade it. We have electronic exchanges now, we can trade contracts based off t
by steveplace 17y ago
However, there is a problem with gold. It's heavy. People don't want to carry or trade it.
We have electronic exchanges now, we can trade contracts based off the underlying. We do the same thing with stocks, bonds, oil, etc.
We're probably going to see a little more irrational exuberance in gold, getting frothy and bubbly for the next few years. It's an asset class that is still in a bull market, and there are few of those left.
Full disclosure, i'm long some miners and gold.
- jeromec 17y agoIt's true that we can represent commodities with paper and digital bits (in fact some say silver prices are misrepresented by paper and would explode if the SHTF, and physical delivery was demanded), but that doesn't change the meaning of my statement much. Unlike oil, stock or bonds, gold just sits there, heavily, not doing much of anything. It's only attractive when people lose faith in the ability of un-backed paper currency to hold its value. When and if the U.S. can solidify that mentality gold will fall out of favor. I agree, though, with a long gold position.