Does it make sense to buy gold as a COVID hedge?

bowlhead99

coachman12 said:

BTW, gold is legal tender in Switzerland ( you'll have to google to try and understand the whole story of gold and the nuances that you have no idea about at present ).

Which gold coins are still legal tender in Switzerland? As far as I'm aware, no gold coins are currently minted there with the status of 'regular issue' such that they would need to be accepted by a Swiss company or individual in payment of a debt, and no law compels a shopkeeper to accept a sliver of gold in payment of an invoice.

Do you simply mean that if you had a 20 franc debt to the government, a federal cash office would be bound to accept a hundred year old Swiss minted bullion coin with 20F nominal value (albeit over 300F in market value of the gold content and collector value) to pay it off?  That doesn't seem a particularly useful or practical interpretation of 'gold is legal tender in Switzerland'. Perhaps that feature is useful to reduce potential Swiss wealth taxes, though such taxes don't tend to have relevance for UK resident MSE-ers.

blue_max_3

If gold was an absolute store of wealth, the value would only go one way. As we have seen a pull back, one can assume it is merely a commodity like any other.
And there's always the (thankfully remote) possibility that the state could confiscate it at some point.
And if the economy did tank, who would be buying gold and with what? I don't have any, but I think it would be quite nice to hold a coin or two. 

EdGasketTheSecond

It looks a pretty good store of value to me:

When the financial reset comes, which it will, then currency will once again have to be backed by gold either fully or fractionally at which point gold will be $10K USD +

bowlhead99

EdGasketTheSecond said:

bowlhead99 said:

EdGasketTheSecond said:

 Gold is near an all-time high but only when measured in debased fiat currency; by any other measure it is cheap and the best asset class to own now.

Yes, gold only looks expensive when you measure it in the things you use to buy goods, services and investments (i.e. money) or other investments, and not by 'any other measures' (i.e. youtube conspiracy videos produced by bullion merchants). 

You don't know what real money is; try again.

EdGasketTheSecond said:

It looks a pretty good store of value to me:

When the financial reset comes, which it will, then currency will once again have to be backed by gold either fully or fractionally at which point gold will be $10K USD 

Why? What property does gold have that means that all currency 'has' to be backed by it, rather than by something else? 

I don't need another half hour video from bullion dealer Mike Maloney, just a simple answer would be fine.

EdGasketTheSecond

bowlhead99 said:

EdGasketTheSecond said:

bowlhead99 said:

EdGasketTheSecond said:

 Gold is near an all-time high but only when measured in debased fiat currency; by any other measure it is cheap and the best asset class to own now.

Yes, gold only looks expensive when you measure it in the things you use to buy goods, services and investments (i.e. money) or other investments, and not by 'any other measures' (i.e. youtube conspiracy videos produced by bullion merchants). 

You don't know what real money is; try again.

EdGasketTheSecond said:

It looks a pretty good store of value to me:

When the financial reset comes, which it will, then currency will once again have to be backed by gold either fully or fractionally at which point gold will be $10K USD 

Why? What property does gold have that means that all currency 'has' to be backed by it, rather than by something else? 

I don't need another half hour video from bullion dealer Mike Maloney, just a simple answer would be fine.

Proper money (not currency) has to be a store of value. Gold has met that criteria and all the other criteria of real money for thousands of years. Fiat currency is not a store of value.

DiggerUK

What needs pointing out with regards the fantasy pipe dream of a gold backed currency, is what it historically meant in reality. 

Countries could 'amend' or even 'delete' the amount of gold backing their fiat it was never fixed on a 'one for one' basis. During the Napoleonic wars the relevant acts of parliament were simply suspended, and at the time of the gold confiscation in the USA only 40% was required.

Some believe in fairies, some just like fairy stories, but a gold standard hasn't really existed since it was first invented, it's a legend of history..._

EdGasketTheSecond

Well i disagree. When the financial system pops,what else will anyone trust? Not an alternative fiat; not a FED digitally-backed currency, nor a Chinese one. It will have to be something that is recognised and trusted internationally and can't be 'created' by governments. Fractional reserves can change up to a point but gold and silver-backed currency has been around a lot longer than fiat.

DiggerUK

Fiat  currencies are always trusted to a level that makes them acceptable, always have been.  On the eve of WW1 there was a mother of a global economic crisis, being able to get specie from a bank was suspended and pound notes were introduced by the british government. Gold specie just disappeared. Even when an attempt to restore the gold standard was made after WW1 you could only demand 400 Troy ounce bars for your fiat. Have you ever considered why a ten bob note was issued?

Any new fiat could indeed be digital, but it would be used even if not trusted or liked, what alternative would there be? Digger Mansions would still have to sell its gold for fiat, global crash or not. 

Actually, we quite like fiat, but prefer plastic and I'm sure we would get the hang of digital fiat........If I can bank on my mobile I'm sure I'd master how to navigate the introduction of a Boris Coin..._

markj113

coachman12 said:

I can see why you don't understand, so why opine with such force ? 
Each time I come back from Zurich, I leave behind a number of gold bars ( including my best 400 ounce pristine bar ) as well as coins such as KrugerRands and other articles of value. What did you say about a pension ?? BTW, gold is legal tender in Switzerland ( you'll have to google to try and understand the whole story of gold and the nuances that you have no idea about at present ).
And forgive me if I don't take up your suggestion, in another one of your posts, that I should hold reserves of water and diesel----------I'll stick to gold.
But thank you for all your interesting & knowledgeable comments which show MSE at its very best.

1) You cant even spell krugerrand.

2) 400oz bars or "Good delivery bars" usually remain in the system to retain provernance rather than wondering around with them  through airports with 12.5kg bars.

bowlhead99

markj113 said:

coachman12 said:

I can see why you don't understand, so why opine with such force ? 
Each time I come back from Zurich, I leave behind a number of gold bars ( including my best 400 ounce pristine bar ) as well as coins such as KrugerRands and other articles of value. 

1) You cant even spell krugerrand.

2) 400oz bars or "Good delivery bars" usually remain in the system to retain provernance rather than wondering around with them  through airports with 12.5kg bars.

For (1), it seemed he used the exact same correct spelling as you, though ambitiously capitalised both the Kruger and Rand elements of the word; this seems unnecessary as it is a single word and only the K should be in upper case, but the text on the coin is minted in all caps of course. As you incorrectly used a lower case K and forgot to include an apostrophe in your damning critique - "cant even spell"(sic) - you hardly have the moral high ground. 

For (2) perhaps the issue of wishing to "retain provernance (sic) rather than wondering (sic) around with them" is the reason he chooses to leave his best 400oz bar at the bank vault in Zurich together with his bullion coins, rather than following the lead of earlier poster d_u_v and bringing a load of precious metal coins and bars back to the UK.

We can but speculate