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Originally Posted by TucoRamirez
I think the bold is where we disagree. I think it's almost inevitable that inflation will be a big problem at some point in the future. Probably way before 40 years. And gold is certainly one of the best (the best?) hedges against inflation. We need Ron Paul!
yeah ron paul is great but I still don't by your argument. assuming you think some country is going to sweep in and take up the void in the global economy left by the collapse of the US system (and the subsequent loss in value of the dollar) it seems that foreign markets would be a better bet for your investments than gold. FWIW I do invest in emerging and established foreign markets as part of a rounded portfolio, and it will be interesting to see if it's suggested that those investments become a greater portion of my IRA over time.
also it's pretty easy to make the same argument about gold that you're making about the dollar. That it's value is essentially based on a system that overvalues it's worth as well as various people tinkering with the supply and demand. In real life gold has little to no actual value to most people. Whereas investing in companies that produce necessary or beneficial goods and services will always have value as long as a capitalist society exists in some form on the planet. And if it doesn't then guns and food are certainly going to be more valuable than gold or stocks.
Certainly the inability to simply manufacture more gold prevents the kind of inflation you're talking about relating to the dollar. But investments in stocks are really an investment in individuals work and ingenuity. If you believe those are things that will have value in the future I think you can also believe that they will exist or survive past any collapse in the dollar. I guess by the same token you could say that as long as there is some form of advanced global economy people will always desire gold and thus it's a safe investment. But again the downsides are I don't get tax deductions for buying gold, I have to keep a large portion of my net worth in something that it's actually very possible to have physically stolen, and I have to trust that human desire for something shiny will hold value for the rest of my life. I'm just not sure the EV of that gamble is really so much great than putting money in my IRA.
but again I'm no expert and this is all simply conjecture.