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

thegentleway

EdGasketTheSecond said:

DiggerUK said:

Your reference to the medieval Chinese fiat is wrong, that paper was convertible to gold and silver, it's how it became accepted.

You are the one who is wrong again:

"The Song Dynasty in China was the first to issue paper money, jiaozi, about the 10th century AD. Although the notes were valued at a certain exchange rate for gold, silver, or silk, conversion was never allowed in practice."

https://en.wikipedia.org/wiki/Fiat_money.

Yeah bowlhead99 lets just keep printing free money and have a party; all good until one day it isn't.

Printing too much money and the resulting hyperinflation would ruin the party but do you realise that printing money doesn’t always cause inflation (let alone hyperinflation)? In a recession, with periods of deflation, it is possible to increase the money supply without causing inflation...

DiggerUK

EdGasketTheSecond said:

DiggerUK said:

Your reference to the medieval Chinese fiat is wrong, that paper was convertible to gold and silver, it's how it became accepted.

You are the one who is wrong again:

"The Song Dynasty in China was the first to issue paper money, jiaozi, about the 10th century AD. Although the notes were valued at a certain exchange rate for gold, silver, or silk, conversion was never allowed in practice."

https://en.wikipedia.org/wiki/Fiat_money.

Ed, just so that we don't set off on the wrong foot, let me say from the start that I love you to pieces.
That being said might I suggest that you broaden your reading diet a touch. Citing Wikipedia as often as you do makes it obvious that you don't quite realise it is the most manipulated reference source on the planet. Use it as a starting point by all means, but then branch out.
If you get the chance might I suggest you read the travel journals of Marco Polo and Ibn Batutah. They gave first hand accounts of their time in China at the end of the 13th and beginning of the 14th century. Fiat amazed them both, they saw that it worked. 

It is even claimed that Marco Polos' reporting back on this  gave the inspiration for Italy to be the starting point of fiat development, but I have found nothing to support the claim.

In the modern world gold would be a terrible choice for a medium of exchange, how exactly would you give change for a half Sovereign if all  you need is a bag of fish and chips and a pickled onion. Sorry my old sweetheart, fiat performs a valuable function, but just like Digger Mansions charabanc, it will eventually need replacing, changing, or updating..._

csgohan4

Can you buy popcorn with krugerands?

DiggerUK

csgohan4 said:

Can you buy popcorn with krugerands?

Yes, but you have to accept a trailer load of Pik 'n Mix as change..._

bowlhead99

DiggerUK said

It is even claimed that Marco Polos' reporting back on this  gave the inspiration for Italy to be the starting point of fiat development, but I have found nothing to support the claim.

If you're ever in doubt about whether to put faith in that Italian starting point of fiat development, shiny yellow metal, or perhaps the S&P 500, then my oh my do I have an investment opportunity for you....

Yellow FIAT 500:


Asking price is less than three 1oz Britannias

csgohan4

I prefer , much more classy, comes with a case of Krugerands in the boot too

bowlhead99

csgohan4 said:

I prefer , much more classy, comes with a case of Krugerands in the boot too

Hmm, quite attractive -
she doesn't really look like she could fit a whole case up there, but her friend with the jacket over his shoulder will probably have a good go at it later.

dunstonh

IdleComper said:

My son is trying to convince me that the market is going to crash and I should buy gold. Does anyone have a good source for reading up on this or some useful info? Thank you

Is your son stuck in a time loop?
Gold is a fear asset.  When people are fearful they tend to move to gold and it shoves the price up.   When the fear has passed, they move out of the fear asset and the price goes down.
Gold has already gone up because of Covid. So, buying it now means buying it at the higher price and putting you at higher risk of suffering the fall when the fear moves away.  
Gold rose as countries around the world went into lockdown.  However, it fell over August as the economies started moving again.
Gold is not a safe asset.   For example, it nearly halved once the fear from the credit crunch dropped away.   The current level is higher than what it was in the credit crunch.  So, when the fear of Covid has gone, expected it to drop away again (just as the up and down happens in most fear events)

EdGasketTheSecond

csgohan4 said:

Can you buy popcorn with krugerands?

The point is that you'd buy popcorn or anything else in a currency backed or partially backed by something the world trusts as a store of value and which governments can't create out of thin air i.e. gold or silver, or possibly, just possibly, some new world digital currency where,like Bitcoin, supply is strictly limited and cannot be created at governmemt whim.

thegentleway

EdGasketTheSecond said:

csgohan4 said:

Can you buy popcorn with krugerands?

The point is that you'd buy popcorn or anything else in a currency backed or partially backed by something the world trusts as a store of value and which governments can't create out of thin air i.e. gold or silver, or possibly, just possibly, some new world digital currency where,like Bitcoin, supply is strictly limited and cannot be created at governmemt whim.

Currency doesn't need to be a store of value or backed by anything. Until HMRC starts accepting commodities, bitcoin, cheese, etc... you will need to get hold of British Pounds to pay your taxes...