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The Truth about Gold Investing

Written By Jeff Siegel

Posted July 21, 2015

golddI’m not a gold bug.

That’s not to say I don’t respect gold as an investment, but I don’t typically get overexcited when it comes to the yellow metal.

Sure, I own some. And yes, I took full advantage of the big run on gold from 2000 to 2011.

But for the most part, I tend to sit on the sidelines until I see an opportunity to pounce. Which these days, is a tough call.

Although I wasn’t convinced gold had bottomed out yet, I was surprised after reading that an estimated 33 tones of gold was dumped in just two minutes yesterday.

As reported by Reuters, the sudden bout of selling in Shanghai and New York occurred during illiquid trading hours, with a wave of orders placed during a one-minute period shortly after the Shanghai Gold Exchange opened on Monday.

Nah, that doesn’t sound shady at all.

Reuters noted that within a further minute, the deals had been completed, sending the most-active U.S. gold futures contract down $48 to as low as $1,080 per ounce, its weakest since February 2010.


Better than Gold?

I’d be lying if I said I wasn’t interested in buying gold again once I feel it’s bottomed. But this is purely for investment reasons. In other words, I’m not convinced that gold is this great currency that we’ll be able to openly trade anywhere after the dollar collapses and tales of wheelbarrows full of cash become reality.

No, when the proverbial poop hits the fan, I’m less concerned about owning gold and more concerned about being self sufficient. That’s why, as gold investors continue to try and figure out this market, waiting impatiently to jump back in, I’m investing in all the stuff that’ll keep me safe, warm and fed in the event of an economic collapse.

What are those things?

  • Solar with a battery backup. Life’s no fun without electricity, and I need my computer to work so I can watch cat videos on YouTube.
  • Land, where I can grow crops and let my chickens, goats and rabbits graze in harmony with nature. Not being reliant upon imported feed is a blessing and a hedge against price increases and supply restraints.
  • Firearms, because you can’t throw gold at intruders.
  • Access to plenty of clean drinking water, because gold can’t keep me hydrated.
  • An electric car, which I can “fuel” from my solar panels, because God only knows what a gallon of 87 octane’s going to go for in the future.
  • Plenty of soap and toothpaste, because even when the economy is crumbling beneath our feet, I still want to smell nice.

All jokes aside, while I don’t trivialize the importance of gold, I see no reason to treat it as anything more than a smart investment – when the timing is right.

And when will that be?

No one really knows. And if someone claims differently, that person is either lying or delusional.