Chris Cookley

Investing in gold? You’d have better luck catching a leprechaun

Gold has historically been thought of as the ultimate currency. It’s considered stable, reliable, and desirable by a majority of people. There was even a time when every single United States dollar was backed by an equivalent amount of gold, the “Gold Standard.”

But those days are behind us, or, they should be. Gold has proven, over the last 50 years at least, to be a terrible vehicle for investment, and a lousy hedge against inflation.

Companies will sell you gold bars or gold bullion and make it seem as though you are making a smart purchase. They’ll say you’re putting your money in something substantial and historical. The reality is that when we adjust for inflation, gold was worth more in 1980 than it is today. I don’t invest in things that lose money over 40 years.

What about as a reserve if the economy collapses? When the dollar is worth nothing, at least you could have gold, right? Come on. The impracticality of gold in that situation is astounding. Are you going to trade your 1oz gold bar, worth up to $2,000 today, for a loaf of bread and some milk? If not, are you a goldsmith, ready and able to melt and recast your gold into appropriately sized pieces?

In that sort of end of the world economy, will anyone who has food even value gold? I don’t own gold in any capacity beyond jewelry, and I don’t think you should either. And if you think it’s a good investment, well… read the title.

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