Why invest in gold? It’s a durable, tangible, hard asset that can be stored as a hedge and possibly offset losses due to inflation, currency debasement, or bearish times afflicting the stock market, for example.
The beauty industry has always been touted as the one industry that’s recession-proof. And you know what? That makes sense from the most basic of human psychology. When things are bad and you can’t do anything about it, you turn to the one thing you can control, yourself.
SINCE THE DAYS OF THE ancients, gold has been a symbol of wealth. Kings, queens, emperors, rulers, and celebrities continue to use gold as a symbol of fortune and glamor. Perhaps it is this precise use that’s turning people away from gold investments. Even while billionaires, the latest of which is Buffett, show their faith in gold, many are still doubting it.
Gold is used as a hedge against inflation. Even Warren Buffett, one of the biggest gold haters, sold his interests in some banks and shifted to gold recently but many are still arguing that the uncertain times could push the policy makers to make critical changes in Government’s fiscal policies and gold is the most vulnerable.
Many gold detractors claim that gold is worth what someone else is willing to pay for it. While most investments generate an income stream that can be measured as a percentage of cost, gold produces no earnings or income.
Several years ago, Apple discovered a way to make tens of millions of dollars off of old, broken, unwanted iPhones. They started accepting old iphones, macs, iPads and other products for trade in. What they got is $40 million worth of gold.
We’ve been in recession since February apparently, ending the longest economic expansion in American history. The economy collapsed so rapidly that the National Bureau of Economic Research wasted no time in announcing a recession, a stark contrast to previous downturns when the body took upwards of a year to declare what most people already knew.
Warren Buffett has long been critical of gold as an investment. He once said it “has no utility” and that the “magical metal” is no match for “American mettle.” He also said, “Anyone watching from Mars would be scratching their head”, over how we value gold, but he just acquired nearly 21 million shares of Barrick Gold worth $563 million.
Times are tough. People are losing their jobs. Businesses are closing down and that’s precisely the reason you shouldn’t pull your money from your retirement accounts. Pulling out your money early might mean a penalty.
Can the digital Chinese yuan destabilize the U.S. dollar? China’s rollout of the digital yuan has set the global finance community abuzz.