I’m constantly hearing investment firms hawking gold. Mostly I hear it on AM talk radio, bastion of conservative thought that it is. Apparently, distrust of The Man and fear of economic ruin are hallmarks of conservative investing. To hear these investment firms tell it, the economy is going to collapse any minute now, and everyone who doesn’t own gold is going to think that the Great Depression was the Good Old Days.
Anyway, I understand that an ounce of gold is currently worth less than what it costs to mine it, meaning that at current prices it’s a bargain. However, just because it’s a bargain doesn’t mean that it’s a good investment. I mean, gold could some day shoot up to $600 or so an ounce, but I’m not holding my breath. Those bamboo chopsticks that came with my meal at Sushi Yum-Yum today are worth less than what it cost to cut them, but that doesn’t mean that I’m going to shift all my investments into bamboo because some day it might be worth something.
Also, this business of the economy tanking: I remember back in the early or mid 80’s a man by the name of Larry Burkett had a book out entitled The Coming Economic Earthquake. In it, Mr. Burkett basically put forth the theory that by the year 2000 the world economies would collapse and people everywhere would be starving to death. However, in reality, for the U.S. economy to collapse a lot of things would have to go wrong at once, and aren’t there mechanisms in place to prevent that from happening?
So, long-story short:
[ul]
[li]Is gold worthless, relative to its cost?[/li][li]Is gold a good investment, all things considered?[/li][li]Why is hawking gold such a big deal on conservative talk radio (my theory about paranoia notwithstanding)?[/li][li]Is the economy going to tank?[/li][li]If the economy does tank, will those who own gold be able to ride it out?[/li][/ul]
TIA