willthrill81 wrote: ↑Thu Jan 17, 2019 5:59 pm
1: Venezuelans buy food with gold today. They sell their gold for the local currency and then immediately buy the food with the local currency. They don't trade gold for the local currency until they're ready to buy food due to the hyperinflation occurring there now.
2: And it doesn't even have to get that bad for gold to be useful. It was useful in 1977-1981 when stocks were losing to inflation and bonds were getting decimated.
3: It was useful throughout the financial crisis and has even had a higher real return than TBM since 2007. And for what it's worth, the tangency portfolio (i.e. most efficient portfolio) given TSM, ITT, and gold from 1972-2018 included a 10% allocation to gold.
Quoting part of your quote. I added numbers to your quote.
1: I have been to Aruba, where I could see Venezuela from the beach. I don't live in Venezuela, so this doesn't apply to me.
2: Choosing time periods to prove a point only shows that there exist time periods that prove a point. From 2014 to today, silver actually lost me money. Had I gone back to 1970, I'd have done better.
3: In the US, it was not legal to own gold in 1972. You'd have had to wait until the beginning of 1975 to own it in the US. The biggest rise was after it became legal to own. Now, in 1972, something that I actually did was look through the coins in the cash register at Burger Chef, where I worked in high school. I'd pull silver out of circulation. I remember at the time, it was worth about 3X face. Certainly worth trading new coins for and sticking in a box. I cashed them all in during the early 80's as I was paying my own way through college.
If you want to hold gold, that's absolutely fine. I get it. I still have some silver coins. Down to only dollars and halves with some random orphan junk. They're cool to take out and look at.
Stepping way back, the fact that you have extra money to buy gold or generators or stocks means you're doing it right. Saving money. Spending less than you earn. For that, I have no arguments about.
Should we talk about BMW 2002's and square tail lights vs round?