8 Silly Reasons Not to Buy Gold – The Weekly Gold Forecast

Tuesday, 29 October 2013
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Published in Gold Investing
Gold mountain. Gold mountain. PhotoDune.

1. Stocks are more profitable in the long run.

Which stocks? General Motors, maybe? True, that's a stock that has performed nicely this year. But need we remind you GM went bankrupt as recently as three years ago? If you don’t mind looking over your shoulder at the competitive Japanese car market and the labor problems that dogged GM for a long time, go ahead — take your chances.

Or did you mean Blockbuster, Inc.? How’d that one work out for you? Why pick and choose among paper investments when you can buy an investment which individuals and nations have depended on for thousands of years?


2. Gold doesn’t pay interest. 

Well, yeah!  But bonds do. And the very same companies that issue stock float bonds. And while the bonds come with a guarantee (of sorts), the existence of the companies who float these bonds is not guaranteed.  

Well, what about treasuries, you ask? Have you been following current events? Bondholders were sweating the possible default on government debt (bonds) a little more than a week ago. No one ever defaulted on gold.

3. Gold is too risky to store.

It doesn’t have to be.  If you don’t like the idea of a home safe, you can pick a nearby depository at which to store your gold.

4. The US doesn’t have that much inflation right now.

Oh really? Don’t you just love those media reports? Have the people who write those stories been to a supermarket or a gas pump lately? According to The American Enterprise Institute, the government blithely trades off hamburger for steak in its inflation calculations. And it casually chooses to exclude food and energy from its index to Social Security payments.

5. Stocks are a more liquid investment than gold.

Not true.  Any reputable dealer will be happy to buy your gold at the current price.

6. The dollar is going to be alright.  The Fed’s got everything under control.

Now that’s rich.  Remember the former Fed Chairman, Alan Greenspan? You know — the one who missed calling the Wall Street crash of 1987? Here’s what he said just a few days ago on the Jon Stewart show about the Fed’s amazing insight:  “We really can't forecast all that well. We pretend that we can but we can't. And markets do really weird things sometimes because they react to the way people behave, and sometimes people are a little screwy.” Do you think it was this kind of market unpredictability that made Greenspan a very big believer in gold?

7. The great economist, John Maynard Keynes, once called gold “a barbarous relic.”

Well, Keynes was a brilliant man.  But then again he was the same man who insisted that laggard economies can be jumpstarted through massive amounts of government funding. Keynes is not around to answer for our current debt mess.  If he was a great economist, he might have been right for an age. As for Keynes’s notion that gold is “a barbarous relic,” modern central banks who regularly buy tons of the yellow metal aren’t subscribing to it.

8. I prefer an investment more suitable to an IRA.

Au contraire! Gold is a wonderful way to invest in your IRA (individual retirement account). It offers stability to a portfolio otherwise vulnerable because of a glut of paper investments. And it offers a protection against inflation for when you do decide to retire and take your IRA disbursement.  Check this out.

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Trevor Gerszt

Trevor Gerszt has been passionate about gold since childhood. Growing up in South Africa, the world’s second largest gold producer, Gerszt spent his youth collecting gold coins. Surrounded by a family of experienced coin collectors, he gained valuable insight about the precious metal.