Which investment will most likely kill gold?
- Thread starter Buzzed
- Start date
If the government stops spending more than they take in and starts paying off its debt....THAT will kill gold.
What are the odds of that happening though? America is like the trophy wife...she aint going to give up her credit card until you are broke.
What are the odds of that happening though? America is like the trophy wife...she aint going to give up her credit card until you are broke.
If by "broke" you mean broke and maxed out on all your lines of credit. It used to be broke meant just having no money left, not being so over-leveraged you can't even make the minimum payment on one credit card by drawing on the other.
I was going to ask a similar question about gold, though: It was easy just putting all my long term investments in precious metals over the past 20 years, and when the "We Buy Gold" signs started showing up at every corner, that didn't worry me too much. Recently, however, I saw an ad trying to entice consumers to invest in precious metals. It was basically a clone of the "informational material" used to hype stocks in 2000 and real estate in 2005. So now I would like to learn about a better investment than gold if there is one. That's a big "if" though: Stocks are not likely to appreciate in real terms when hyperinflation kicks in at full force, and real estate is always in danger of being taken away by governments who blame capitalists or specs or any random group (other than the true engineers of these cycles, who just so happen to be the hand that feeds them [bribes, weapons, and idiologies]) for the collapse. So what to do?
The only advice I have is, Don't forget about the other precious metals. It's easier to ban just gold than to ban all of them.
The traditional gold slayer is high *real* interest rates. But right now the Fed is still worried about keeping interest rates low. Also, I have much doubt that the Fed will be able to raise interest rates very much when it decides that the time has come to do so. The reason is that higher interest will result in insupportable debt service for the federal government. The U.S. is stuck in a debt trap and gold buyers know it.
When the world's central banks start hiking rates aggressively to stop inflation running away, stop their competitive devaluations, that will kill gold, although it may ignore it for the last few months of a crazy bubble rally, just like dot.coms did in early 2000.