Earlier today, I had the pleasure of discussing gold, equity valuations, bond bubbles, and inflation with Greg Hunter at USA Watchdog.
In the interview, I mentioned the nearly “everything bubble” and stated a belief that gold was one thing that was not in a bubble.
Following the interview, Hunter asked me to put my thoughts on gold and the “nearly” everything bubble in writing. Specifically, Hunter asked: “How Much Gold Should the Common Man Own?”
My answer follows. First, please consider my USA Watchdog interview: The Everything Bubble – Mike “Mish” Shedlock
How Much Gold?
There is no one correct percentage, but this rule applies: If you have trouble sleeping at night or are constantly worried about the price, then you likely have too much. If you are worried about a price drop of a few hundred dollars, or the equivalent percent in stock or bonds, you probably should not be investing in anything.
It’s curious that people are worried about gold but not the obvious bubbles that surround them. Media contributes to the ignorance by demonizing gold while praising bubbles.
It should be clear to any rational thinker that the Fed (central banks in general) blew amazing asset bubbles in equities and junk bonds in their response to the “Great Recession”. In their misguided quest to produce inflation, which they do not even know how to measure, central banks even re-blew the housing bubble.
In general, 10% to 25% in physical gold and silver seems like a reasonable amount. At major lows, miners offer tremendous opportunities. They were practically giving away miners in late 2015 and early 2016.
Outside of precious metals and miners, good investment opportunities are scarce. High cash allocations are likely to be wise. To be fair, I have been saying this for several years. This only proves that bubbles can always get bigger, until they don’t.
Inflation, Where Is It?
Central banks cannot see inflation because they are totally clueless how to measure it. For discussion, please see: Central Banks Puzzled as Global Inflation Hits Lowest Level Since 2009: Solving the Puzzle
Economic Challenge to Keynesians
Of all the widely believed but patently false economic beliefs is the absurd notion that falling consumer prices are bad for the economy and something must be done about them.
I have commented on this many times and have been vindicated not only by sound economic theory but also by actual historical examples.
- My article Deflation Bonanza! (And the Fool’s Mission to Stop It) has a good synopsis.
- My Challenge to Keynesians “Prove Rising Prices Provide an Overall Economic Benefit” has gone unanswered.
There is no answer because history and logic both show that concerns over consumer price deflation are seriously misplaced.
BIS Deflation Study
The BIS did a historical study and found routine deflation was not any problem at all.
“Deflation may actually boost output. Lower prices increase real incomes and wealth. And they may also make export goods more competitive,” stated the study.
It’s asset bubble deflation that is damaging. When asset bubbles burst, debt deflation results.
Central banks’ seriously misguided attempts to defeat routine consumer price deflation is what fuels the destructive asset bubbles that eventually collapse.
For a discussion of the BIS study, please see Historical Perspective on CPI Deflations: How Damaging are They?
Understanding Bubbles
If you wish to understand the nature of the bubbles we are in, a few recent articles of mine will help.
- Bubblicious Debate: Greenspan Says “Bond Bubble About to Break”, No Stock Market Bubble
- Median Price-to-Revenue Ratio Higher in All Deciles vs 2007, 90% vs Dot-Com Bubble: THE Choice
- Debunking MMT, Keynesianism, Monetarism: Reader asks “What theories do you believe?” Mish Reading List
Trends in Sentiment, Asset Bubble, Gold
Finally, please consider my 38 slide powerpoint Venture Alliance Presentation on trends in sentiment, asset bubbles, and gold.
Thanks to Greg Hunter for having me on his show. I hope to be back on where we can go over some more of these points in detail.
Mike “Mish” Shedlock
https://mishtalk.com/
Pingback: The Everything Bubble – Mike "Mish" Shedlock | Greg Hunter's USAWatchdog
Pingback: The Everything Bubble – Mike “Mish” Shedlock | GLA NEWS | Latest News
Nice to see you connecting with Greg Hunter. He needs guests who have a solid financial footing, as some guests are way out on the periphery.
LikeLike
I totally agree. I like Greg as an interviewer, but some of his guests seem extremely odd–and that’s the nicest way I can put it.
LikeLike
Mish you stated that if you are worried about volatility then you shouldn’t be “invested” in anything. With those kinds of comments you perpetuate that gold is an “investment”. IT’S NOT. The dollar is the speculative investment, not gold. Gold is money, everything else is not. Gold is savings. Volatility in the dollar price of gold is volatility in the dollar, not in gold. Gold miners? Yes, speculation. But physical in your hand gold is not speculation at all of any kind. The fact that so few understand this right now does not change the fact. The massive con job that paper currency is the real thing and that gold is the risky thing is beyond ridiculous and is in fact a new social idea in the last 100 years. It could go on for another 100 years for all I know but it will not change the fact that the paper currency (currency that is unbacked by anything and that which trades only based on confidence in the issuing authority) is the speculation/investment and gold is the money.
LikeLike
This gets into a philosophical debate about savings, and the identity savings=investment.
Bernanke says there is “excess savings” but he is nuts. I wrote a paper on this, very politely debunking Bernanke, Summers, etc, but it was turned down everywhere: NYT, WSJ, FT, etc. So sad. I never posted it on my blog but will do so.
LikeLiked by 1 person
Isn’t “excess savings” what used to be called capital?
LikeLike
There is no such thing as “excess savings”. Such talk comes loaded with charges of hoarding.
… Damn, he’s hoarding gold. Let’s take it.
Mish
LikeLike
I also don’t believe that everyone who perpetuates ideas like “excess savings” or “the paradox of thrift” is either stupid or nuts. They are just talking up their book, pushing their agenda which is the way of the con man; they are con men, not stupid or nuts. They just love it when people call them these kind of names instead of labeling them properly as fraudsters and con men.
I know you love to quote Occam’s razor but what is really more believable and simple, that Ben Bernanke and Alan Greenspan and all these other hyper educated, well connected people are crazy/stupid or that that they know exactly what they are saying and why? I mean, look at what Greenspan wrote about gold and property ownership and freedom as well as how fake money is the tool of the welfare state BEFORE he got a job at the fed and now how he loves gold after retiring from the fed.
Look at all the bureaucrats in the EU who let Nigel Farage unload in their faces with the most withering verbal attacks ever witnessed in public yet they just sit there and take it with a straight face. These people know he is right but they also know that if they argue and debate him then he will just go on and on and gain more followers. So they quietly and politely let him drop bombs on them so that he will be quiet as soon as possible and they can get back to their scammery. It even gains them supporters because they can appear as if they are tolerant of the crazy guy (Farage). Those people are not stupid or crazy either. They know they are parasites and they know how to play the game so that the masses don’t figure it out.
LikeLike
Hi captain, yes, they are talking their book, but I do not believe it is for con-man purposes. There are lots of people who genuinely believe in Keynesianism, not because they are con men, but because they are economic fools. Neither you nor I can be 100% sure what they believe, but Occam’s Razor suggests they are fools. Call them brainwashed fools if you prefer. One has to be taught these things. And of course, someone had to initially dream the ideas up. MMT is the latest.
LikeLike
Occam’s butterknife suggests they are thieves.
LikeLike
ANY amount would be better than what I’ve got. Or it could be that I have a trunk-full buried in my back yard……in EITHER case, one should not be discussing exactly what they have on ANY forum.
But as to a %age…..I’m all ears……
LikeLike
Define a common man first.
LikeLike
The average typical person
It really doesn’t matter
But if you like, exclude the bottom 10% who cannot afford anything
LikeLiked by 1 person
Bottom 10%? From what I understand, over 40% don’t have anything put aside except possibly a 401-k with a loan against it.
LikeLike
I thought it was a discussion of what one ought to have. The top 90% are likely walking around with 500$ cell phones, so..
LikeLike
I have a 401k with a loan against it. lol actually I am buying precious metals with it. I want something to show for all my work.
LikeLike
Good Luck
LikeLike
Well, the common man in Venezuela is quite a bit different today than a common man in the USA. I sure would hate to be the guy in Venezuela who’s kids talk about the gold that dad has hidden in the house… or in the US too for that matter. You could pay to store it, but then the gubberment will know in case they decide to confiscate it. Paper gold is one thing I’ve done several times, the real stuff is quite another. I’ll stick with the lead and brass for the worst case scenario, and common old US silver coinage for lesser situations.
LikeLike
If someone can talk about it it isn’t hidden.
LikeLiked by 1 person
Lead and brass is ok as a warning and defense where random or speculative attempts are made against you, but they are no match for organised ones. Have to accept the fact. Either way, in everyday life, people are usually tricked into ‘compromise’ then submission, without the need to draw arms…basically the psychology is that we have already lost, and that works until enough people stand up that cannot be dealt with in that way. Otherwise it is just fringe conflicts that get contained by change of method, or tighter control, neither of which tend to be positive in terms of wider freedoms. If defending yourself by armed means is a high value of someone I have nothing against that at all. One reason many read this blog I think is to get a better idea of who/what/how is organizing against values many hold strong, which is a better point to tackle the whole from.
LikeLike
If you pay someone to store your gold then it will not be the government who steals from you but rather the person who you allowed to get between you and your gold. They will loan it out with fractional reserve and then just declare BK when it all goes to $hit. This is all 100% legal and so they say there is no problem doing it.
Anyone who does not understand why the world is turned on its head need look no further than the adoption of fake money. Money makes the world go ’round and fake money makes it go around backwards. Hillary, Obama, and Bush are heroes while Ron Paul is a nut bag. Sexual deviance is the new norm and religious values are stupid. Saving and thrift are paradoxical and being neck deep in debt means you are participating in a meaningful way in the economy.
Debt money is Mammon Money.
LikeLike
It’s estimated that all above ground gold in the world totals less than 6 billion ounces, which is less than 1 ounce per person…..Get yours today!
LikeLike
I mentioned before that I go metal detecting as an interest/sport. If you have the time and perseverance it is well worthwhile, not to get rich but for what you learn and where it takes you – outdoor sites you would never visit, geology, history etc. … sort of an excuse if you are twiddling your thumbs. So now I know I can go pickup five dollars of change in an hour or two within a few miles of any town, or some older coins worth more if I choose in that time, or a couple grams of gold in half a day…but it is tedious and work too, so perseverance is really necessary, it gets rewarded eventually in its own way. Keeps you fit too… I look at a container of maybe a thousand worthless rusty clad cents found and try to figure myself digging each one, and can’t… the first gold rings I found I felt really guilty over, someone’s personal objects, so I search on the web for registry of weddings to try to return to owners, no good. Supposed to hand in and if unclaimed after two years they are ‘yours’ , but valuables dissapear from the storage shelves so I store them myself, most are unmarked anyway … I don’t wear jewellery but now have a couple of ounces of gold rings, diamond, necklace and bracelets. What to do.
Just anecdotes to the theme.
Here are a couple of links that describe gold depositis, panning, geology etc. for lay readers, but in detail, for those interested… not something I have been involved in but it catches my curiosity:
http://nevada-outback-gems.com/prospect/chris_prospect.htm
http://nevada-outback-gems.com/placer_gold/gold_gravels_us.htm
LikeLike
I think even the bottom 10% can find room in their budget for an ounce of silver each week. Just cut out: Starbucks, soda, tobacco, lottery tickets, or dining out.
LikeLiked by 1 person
Each Pharo’s gold held its purchasing value as the Egyptian empire collapsed. Gold held by Europeans in Swiss vaults held purchasing value through the ravages of WW1 and WW2…
unfortunately, the people who owned said gold did not fair as well as their investments.
Who cares if your gold hoard doubles in value, if you are dead? If you are lucky, your distant heirs might benefit (if they are alive and can establish a claim – neither guaranteed). Just as likely, Indiana Jones and his team will dig up your prudent investment.
And to emphasize the point @bookdoc makes … after 8yrs of Obama “recovery”, most Americans (the “common man”?) don’t have $100 in a savings account. A disturbing number are living paycheck to paycheck (in the 7th or 8th year of a “recovery” / debt binge!!).
The common man should invest in a garden. Maybe in one’s backyard. Maybe a container garden. Maybe one of those hydroponic things (I know nothing about these, but maybe they might work?). The common man needs to eat today, stay warm today — hoarding gold for one’s heirs is kind of silly
The common man might invest in a chicken coop — if you are “allowed to” with all the freedom your corrupt government can muster against you. Eggs will keep your family alive, gold will weigh you down and make it tough to run to safety.
LikeLike
Agree 100%. A self-sufficient homestead is worth more than its weight in gold.
LikeLike
Hardly. As people are finding out in Cook County, the government can tax away your property in no time. When you can’t pay the taxes, the government can and does seize it and auction it off…Whereas gold has anonymity…
LikeLiked by 1 person
It makes sense to have a chicken coop and a plot of tomatoes and cucumbers…..but NOT available to the vast majority of folks…..
Survivalist plans for hiking your family into the backwoods with your ‘bug-out’ backpacks to get away from marauding bands makes for good movies….
Gotta get real here, folks, for the 99.99 % of us who don’t fit into one of those categories… Thx.
LikeLike
If you don’t fit into those categories ( and you would find it amazing how the average person actually does when circumstance dictates) then the other option is to stay ahead of local/regional events, live on edge a bit, and try to help society/politics maintain the kind of sanity you would hope for. Strong community of your own kind of view is vital also.
LikeLike
I never said anything about building a bomb shelter…. and your comment that Cook County will steal your gold AND your garden was hopelessly incomplete.
If you think the world is coming to an end, gold isn’t going to help you anymore than a garden full of dead plants. They are both useless.
But if there is really high inflation — the garden will easily outperform a gold hoard. Its not even a contest.
As a “teacher” (aka government mule), I would expect you to give the public bad advice and overcharge for it. Yours USED TO BE a noble profession before unions got to it.
LikeLike
Agree but you miss the point. Gold is not instead of food. Gold is for storing EXCESS labor, not just something to hoard while you starve and your kids need shoes. Why do people not understand this? You can’t eat gold, true, but why do you never hear that you can’t eat paper money, coins made of pot metal, stock certificates,bond notes, baseball trading cards, diamonds or artwork? None of these things do you buy if you want for food, shelter, clothing for you and your family. If I were living hand to mouth then i would have no need of gold because I would have no excess labor to store in a fungible format for the excess labor of others.
LikeLike
Exactly.
Also build a small hidden room if possible, say 50 sqft or over, with food and water for a week or two, preferably more.
Experience has taught that you never know who will turn on who, when, or why. Personally have witnessed from war (we escaped, friends lived in air conditioning ducts till captured), through to persecution by local authority (who were ‘sposed to be on our side), an unstable neighbour. All this in western/ized countries.
Also help cultivate a community with like-minded, but without losing own independence.
And sure, some money or gold tucked away, a couple of weeks expenses at minimum to buy some time if you have to run… so always good to have an idea of where you would go if you had to.
The variables are endless but the general idea is along these lines, the change in thinking is the hardest to accept, the rest need not be expensive or difficult or time consuming or paranoid , just small sensible contingencies to whatever level anyone prefers… get one right and you will thank yourself a thousand times, and if they are never necessary then you still get to walk around with more confidence, to know that you are a step ahead, where you have time to meditate an answer instead of folding.
LikeLike
While there are still some WW2 era Americans alive today, they are dwindling in number. If you talk to them, you will learn some interesting facts that academia doesn’t write about in the history books:
1) the US government came dangerously close to bankruptcy. The war bond effort got really really desperate on several occasions (there is a reference to the problem in Clint Eastwood’s Iwo Jima film, but there were actually several close calls).
2) During the war, EVERYTHING was being rationed. You could have a barn filled with gold coins, but you were severely restricted what you were allowed to buy. Even the Rockefeller clan was limited (they probably pulled some strings, but they still faced restrictions).
Everyone “on the home front” had a garden. FDR, socialist that he was, constantly recommended home gardens. Chicken coops were everywhere. That is how most of the country was able to eat.
When the &*() hits the fan, gold can’t buy what doesn’t exist.
LikeLike
I agree, but apart from barter people will use something as money, and gold is the most reliable in that sense. So just seems prudent to have something you can trade out easily for whatever purpose.
LikeLike
I was only a little kid during the war. But the picture you’re painting is distorted. Not everything was rationed. The most common gas stamp only allowed, I think, three gallons a week. But nobody lived in the suburbs then and public transportation was much better (and it took people where they actually wanted to go).
NOBODY in our neighborhood had a garden and the idea that people kept chickens is just preposterous. I grew up in a medium sized city in the northeast. Maybe it was different elsewhere.
As an adult I have read a lot about the war and that time period. I have never once read that the country was on the brink of bankruptcy. People were making more money than they had ever made in their lives and their were no big ticket items available to buy. Many of them were unsophisticated about money and investing so they bought war bonds. The government was aggressively pushing them. Hell, even cartoon characters in the movies were hawking war bonds.
LikeLike
My grandparents lived just outside Hartford CT in an upper middle class suburb. EVERYONE had a garden. 75% of the population had chicken coops.
The other grandparents lived 25 miles away from Hartford, in what was then farm country, but that grandfather built machinery parts for Pratt Whitney (he was less well off). He had turned his entire back yard into a vegetable garden, as had most of his neighbors.
And before you tell us how well off you were, please take the time to read up on FDR’s fireside chats — including him frequently telling Americans to create vegetable gardens for their families.
Was FDR lying? Are the radio broadcasts FDR fake? Or did you fabricate your story?
I’m guessing you weren’t really there, or your memories have been edited for ego purposes. Everyone now likes to brag how they descended from royalty or came over on the Mayflower. Chances are: your family history has been improved upon over the years to something you can brag about at cocktail parties
LikeLike
Gold would be a burden in times of economic or social chaos. You’d have to guard it like a dog guards his bone. And word would get around fast that you got it. Everybody in the neighborhood would turn into your best friend. The movie The Treasure of Sierra Madre comes to mind. It’s darn heavy and you can’t eat it. Invest in a plot of land way outside the city with fertile soil. Buy a few pigs and chickens. Hang low until the storm passes. Gold would only get you in trouble.
LikeLike
Americans who had home gardens and a few small farm animals (chicken coops, etc) lived fairly well during the rationing period of WW2.
Americans who depended on buying their food at the local grocery store faced severe rationing and many had nutrition shortages.
Not something they put in history books, but something the children of the great depression remember vividly. Too bad US schools censor such a critical period in US history
LikeLike
Yep.
I recall my adult relatives telling me as a kid that during the Great Depression a couple pieces of bread covered in gravy was a gourmet delicacy.
People are blind to the real possibility that we could easily revisit those times.
LikeLike
Too many social safety nets now for that to happen. But as Greenspan stated entitlement spending will cut strongly into growth.
LikeLike
Some say the Great Depression was mainly caused by WW1, e.g.
“The primary cause of the Great Depression,” reads the first sentence of President Herbert Hoover’s Memoirs, “was the war of 1914–1918.”
https://www.gilderlehrman.org/history-by-era/essays/great-depression-and-world-war-ii-1929-1945
though it is not a topic I have greatly studied.
But safety nets are not a reason for optimism, Venezuelan politics… even rationing, are safety net principles.
I could reel off several events that could semd us back to the dark ages, some less likely, others much more so.
The only reason we have any guarantee is that agriculture has become very organised and efficient, as has the supply chain.
I don’t expect that to change under ‘sort of normal’ circumstance, but there are events, such as war, that could basically destroy the existing structure and ability.
Lest we forget.
LikeLike
Just to note the article I used as a quote is very biased towards a “progressive” view of that time – but good, it brings in factors sometimes ignored, as well as highlighting to those with some knowledge how modern propaganda continues along old lines.
LikeLike
Many baby boomers and those in the younger generations take safety nets for granted. We think they’ll always be there without giving a second thought to what’s needed to sustain a safety net: human capital and government revenue maintained by our taxes. We’ve never experienced a severe economic depression in our lifetimes. People will not work for free. Farmers will not grow food or raise livestock for nothing. Doctors will not devote their practices to treating charity patients. If unemployment surges to 40-50% income taxes would slow to a trickle and people wouldn’t be able to pay their basic taxes. Where exactly will the money come from to support all the safety net programs?
A disease epidemic, a devastating natural disaster, a war, dirty bombs exploded by terrorists, or a collapse of the economy are just a few examples of events that could throw our economic system into complete turmoil.
We’ve been very lucky for the past 80 years. But luck has a tendency to eventually run out.
LikeLike
Even the highly edited and revised versions of the great depression show thousands of middle class Americans lined up outside soup kitchens
About half the highway infrastructure in the US was built by FDRs “make work” programs, and there were lines of people to take the jobs even after learning about unsafe working conditions. I don’t remember how many workers were killed while constructing the Hoover dam, but it was a lot.
If you can’t feed yourself at least a little, then you have to accept whatever the politicians decide to give you (or not give you). If they find out you have been hoarding THEIR gold from them, guess how much your family gets to eat? Arguing semantics about whether you erroneously think it was your gold isn’t going to feed your children.
LikeLike
Gold in the form of bullion, may very well mark you as a “rich guy” once the slightest hint of you having it, surfaces. Having your gold in the form of a wedding band (or 50…….) or a watch (or 50…) and your silver as silverware, is preferred in many more traditional societies for that reason. Poor old you having to sell your wedding band to feed your kids and such…. And the next time your kids need food, you’ll just have to sell another one of them in a different part of town……
LikeLike
C rations and guns are still cheap Mish. At Camp Pendleton out there in California. 1968 training to go to Nam. In the mountains we had combat rations -food in cans all the time. Lots of patriotic places on the web to order these long lasting food supplies. Then come to Texas buy your guns ,ammo have sent back home. Down at the base camp headquarters we got off at 4:30 go to enlisted mans club drink beer play pool, When I first got there from boot camp. I could not believe that on the camp music station the disc jockey out of LA was Wolfman Jack! I listened to him way back in the 50’s way down in Del Rio Texas. The first song I heard was tiptoe through the tulips by Tiny Tim! Small world!
LikeLike
Mish: Slightly off topic, but given your chat with another trucker, I thought you might be interested in this book:
LikeLike
Mish:
You may like this book:
LikeLike
Would that be owning physical gold or owning a claim to same given by an institution that solemnly represents that it itself has physical gold it could deliver if asked, no really it certainly could, if ever it was called upon, oh yes, for sure?
LikeLike
That is what sovereign currency was supposed to be… read my lips and kiss my WMD: those promises are only kept when and if convenient
LikeLike
Yes, there certainly are bubbles right now, but they have been created over the last 10 years. My question is, who says they can’t continue to grow for 10 more years?
LikeLike
Great interview! Seems there must be something in the human genome that compels us to ignore clear dangers & embrace the ‘herd’.
LikeLike
True value is in Mother earth not glittering metal. You cannot plant seeds in hard metal. This fascination with false wealth is destroying the base that sustains life.
LikeLike
Zero. You cannot eat Gold. When societies collapse, food is king, not gold.
LikeLike
If your net worth is a hundred bucks I suppose, what if it’s a couple million? That’s a lot of food!
LikeLike
How about the common woman?
LikeLike
Get back on your dildo, “Roger”.
LikeLike
“Man” originally inculdes both genders, male/female were separate words. Hence “man” is common, males dropped their distinctive label and assumed the mundane “man” as title, females kept their distinctive label and added it to “man” to become “woman”.
Women are welcome to go back to being called “man” as well, but something tells me they won’t.
The answer to your question though is likely to be ; slightly more.
Does that make women more sensible?
LikeLike
Other than for a trader or investor who is interested in changing back and forth between gold and cash, the proper way to think about gold is as insurance. Everybody may have a different view as to how much insurance they need, but my view is that 5% up to 10% is in the ballpark. Remember, you are putting a portion of your wealth in a non-income producing asset.
If your net worth is $100K this means $5000 in gold or 4 one-ounce coins. But if you have say $1 million in a 401K as a lot of people do, that would be 40 coins.
When I say gold is insurance, insurance against what? Against your other assets going to zero. Stocks can go to zero. Cash can go to zero (see Venezuela/Zimbabwe…) Gold will go down in a crisis, but it won’t go, and never has gone, to zero. It gives you the means to rebuild.
LikeLike
How many people in Venezuela / Zimbabwe have the ability to keep their gold coins secure from constant government raids and street gangs?
If you have a few gold coins in your IRA, what makes you think the next FDR socialist won’t seize them like FDR did? In your IRA, they are easily located and easily seized.
Chances are, your wife’s jewelry collection includes some gold, silver, etc — and in a crisis that is probably the maximum you can both conceal and also carry if you have to flee
If you don’t flee, your gold can’t buy products that are being rationed (because everyone will know about your gold stash the minute you use one coin), and it can’t buy products that aren’t being produced.
Gold might never go to zero, but there is no guarantee that the current owner of said gold will still be alive when it recovers.
LikeLike
All good points. However, perhaps you missed my final sentence: “It gives you the means to rebuild.” That statement implies a lot of things: that you didn’t have to spend them to survive, that you have access to them outside your IRA, that the govt doesn’t know about them and confiscate them “for the greater good”, etc Besides, you might be surprised at how much gold could be found in the poor barrios or outlying areas of Venezuela. In the 1980s as the Soviet Union was circling the drain, Russians were buying gold with their dollars at a price of around $2500 the ounce.
I like the other commenter who suggested having 50 wedding rings…
Personally, I found that the usual advice to stuff every penny you can into retirement accounts to be flawed. As I entered my mid- to late-50s I had lots of kids’ college expenses to pay for but no access to my IRA without heavy penalty. I think most people would be better off building up savings (including gold) outside of an IRA even if it means cutting back on the IRA. Remember withdrawals from non-Roth IRAs are taxed as ordinary income even if the investment inside the account was held for years, whereas qualified dividends and long-term capital gains are taxed at 15%, or zero if your income is low enough.
LikeLike
Interesting comment there, clarity. Consider,,,why not use .gov’s generosity to bet against it, by putting the max into a gold “based” Roth? Woah, Hoss,,,tax free returns on a dollar devaluation hedge. Nice!
LikeLike
Mish – please define “BIS” – I can only dredge up ‘British Interplanetary Society’ from memory (shows where my head is at). Thanks!
LikeLike
Bank of International Settlements
I provided a link to one of their articles
LikeLike
Confucius say, the best way to avoid trouble is to leave. Much easier to travel with a couple pockets lined with gold coins, than carting chicken coops, garden tools and real estate.
As for brass and lead,,,, don’t forget to pin the bullseye on your back before you set out. .Gov troops, and Banditos alike, enjoy a chance to target practice in line with their professions.
Way I look at it, Au is basically a bridge with which to maintain wealth when getting to the “other” side. Like an insurance policy, kind of. One hopes not to need it, but when one does, it sure beats a sharp stick in the eye.
As for how much coverage one thinks he might need, well,,,what can you live with?
LikeLike
I think for the average person your percentages are good but if I were American my percentages for precious metals would be significantly higher. You guys are on a hiding to nothing, in terms of your dollar, in the very long run.
LikeLike
Dion: I have spoken to Mish. He writes interesting articles, mostly on the economy. He started doing something new: he is now including links to lots of his articles, etc. Link: https://mishtalk.com/2017/08/08/how-much-gold-should-the-common-man-own/ See what you think. BD
LikeLike