$2509.65 All Time High Gold Price As Of Friday August 16th, 2024

I'll stick to my old advice when I was in the investment business: don't hold more than 5% of your wealth in non income-producing assets.

In the past I think financial advisors have recommended a 5%-10% allocation of investments in gold/silver. Gold/silver don't pay interest or dividends. But to me gold/silver are to preserve wealth in case of long stock market crashes like the great depression and high inflation where the value of the dollar shrinks. Those who have been buying gold the last ten years or more have seen it's spot price rise significantly. Silver hasn't done as well but it's spot price has gradually risen since it's brief all time highs. I think silver spot price is manipulated by the big bank traders, driving spot prices up/down for profit. J P Morgan was fined hundreds of millions several years ago, several of it's traders went to jail for spoofing the silver market.

I'm partially repeating myself from my prior post....most stock market crashes have rebounded nicely and didn't take too long. It took stocks about 25 years to rebound after the 1929 crash. That and the unsustainable national debt, shrinking dollar has motivated some to increase their gold/silver holdings above 10%. In the past when banks failed the Fed bailed them out. But the Dodd-Frank law allows the Fed the option to do a bail-in which means people might not get their savings back, but would be issued a share of what's left of bank assets. It's complicated, I don't understand it very well. The FDIC has only about $125 billion covering $10 trillion in deposits. If there's a major recession or run on the banks in my opinion the Fed would still do bailouts, just borrow more money to cover losses. This would cause more inflation making the purchasing power of dollars even less. The last few years the world Central Banks have been buying a lot of gold. Maybe it's not such a bad idea for people to buy some too.

There may be some YouTube channels, doom/gloom, saying sell all your investments, put it all in gold/silver. This is foolish, the old "don't put all your eggs in one basket" applies.

I will play devil's advocate. While it may be a good time to sell gold based on the all-time high, let me ask you this - do central banks and governments buy collectible coins or do they acquire physical gold? Another question - if in a pinch what's easier to liquidate - gold/silver as a commodity or collectible coins that don't have the same ease of liquidation? It depends on each person's individual situations, but I would rather have something that is relatively easy to liquidate in an emergency (or could potentially be used in a bartering situation if SHTF happens).

If you are genuinely worried about a SHTF scenario, then your insurance policy should be fungible skills and self-sufficient farmland, and your preferred investment metals should be steel, brass, and lead.

The Great Depression didn't have full fiat currency. The current banking system might be $10T, but our present National Debt is multiple tens of trillions. Another $10T on the imaginary pile isn't going to break the world. Frankly, if a meltdown happened and people switched to gold, silver, Bitcoin, whatever, then the government could simply nationalize those assets.

The best rule I heard for investment gains is that when you double an asset, take half off the table and invest that in a balancing asset. So if a stock doubles, liquidate half the position and buy bonds. If a commodity doubles, buy equities or bonds with the gains. And so forth. Otherwise you have temporary lopsided paper gains which you eventually lose in market shifts.

My top two comments in this topic.

This gold/dollar reset is the fondest hope of gold bugs but it can never happen. Some calculation that there is X amount of dollar debt, and Y amount of gold so gold should instantly be reset to $X/Y per ounce. This can never happen because no one can defend some arbitrarily set price of gold, and take on all buyer and sellers 24/7.