BUYMYPOD REVIEWS — FACTS TO CONSIDER BEFORE BUYING AND SELLING OF GOLDS

Here are things to consider about gold before buying or selling.

1. Gold is political

People talk about central banks and private online recyclers such as BuyMyPod, and sell gold as if it is some big deal. The question has to be asked as to why they hold gold at all. Banks can hold many other things to diversify their reserves, and most of these instruments don’t need a high-security vault that can cost 1% of the value of its contents a year.

So why do governments hold gold?

The government holds gold because, in a war, gold is what you end up paying for war materials with international trade. That is how the U.S. ended up with most of the world’s gold at the end of World War II. In war, paper promises significantly lose their attraction, and gold does become money. Gold fluctuates with uncertainty, which can be a double-edged sword. Although you won’t read much of it, the real world’s positive developments are adverse for the price of gold.

2. People are mad for gold.

People love gold. As such, it can bubble. History is littered with crazy bubbles. Asset valuation bubbles are part of the landscape, and gold’s crazy streak and atavistic attractions make it a strong candidate for a future bubble. Risk equals reward, and there is little as risky as a metal that can make grown men shake.

3. Gold is the anti-dollar

Gold is the inverse of the dollar. It is not the only dollar hedge, but it is a pretty basic one. While gold isn’t the immutable store of value, it is cracked up to be; it’s 2% yearly production is only inflating it as a valued quasi-currency. Money has no value, even golden money; it is just a means of exchange. Or so they say. Yet as a means of exchange, gold is a good proxy for a mirror image of the U.S. dollar. However, in the long run, as the value of money falls, so the nominal value of gold rises. As always, it’s the long term that pays off.

4. You can’t eat gold

Some people think that gold is the only backstop to have to protect from a significant — read cataclysmic — crisis. This doesn’t seem right. If you can’t help being millennial about the future, you need to think harder. In genuinely extreme times, gold loses its value. In war, people give up their gold watches for cigarettes, soap, and chocolate. Gold is excellent for bad times but not awful times. It’s silly to talk in these terms, of course, but let’s face it. People buying gold coins aren’t doing it as a straight financial investment, and they are doing it because gold feels like some insurance against the vast withering unknown of the future. For that anxiety, there is nothing better than gold.

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