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Gold and Financial Market Mythology, "If Gold keeps rising it may be worth a herd of Goats someday"!

Whether it be a Goose that lays Golden Eggs, Golden magical harps, or Black Beard the Pirate's Treasure, Gold has been a popular symbol in mythology throughout time. Maybe the reason is Gold doesn't tarnish, or decay, But is this reason enough for such a high value being placed on it? There is a lot of jewelry around the world made out of Gold, but at $1200 an ounce, all of the jewelry in the world would only make up a fraction of that price. So what determines most of the value? Psychology…emotion.  

Gold is the safety favorite of about 90% of the Investment Advisors I interact with.  These people are well-known, well-educated advisors. We’ve all read the articles, and seen the television commercials telling of Gold hitting $10,000 or even $20,000 an ounce! It has been warned for years by well-known advisors! What would the 'Algebraic equation' be, however, if Gold reached $10,000 an ounce? On one side of the "equal sign" you have $10,000, what would be on the other side? What would have to happen in our economy for Gold to ever hit $10,000 an ounce?

I’m going to risk an out lash from Gold enthusiasts here, but frankly, I am sick of hearing only 'one side of the “equation” on Gold. Gold can never be valued at $10,000 an ounce based on the value of today's dollar, unless of course, the US went back to the GOLD STANDARD, or some technological advancement used Gold for some miraculous device like Time Travel. I know something about Chemistry and Engineering; I don't see any likelihood of a Gold breakthrough technology any time soon.  If Gold went from the present $1200 an ounce to $10,000 an ounce within a shorter span than typical market inflation increases, the economic forces causing that dramatic rise would have already taken their toll on the economy and more importantly society. There would be no economy left, other than the barter of bullets, grain, and farm produce. The Mad Max movies would be a close facsimile. Facts are facts. Time travel yourself to a dark future where society and the economy has shattered to the point that made Gold rise to $10,000 an ounce in value. In this dark age wouldn't a herd of Cows, Sheep, or Goats still be worth more than an ounce of Gold?

So why don't the experts tell us to invest in a herd of goats rather than Gold for the coming economic collapse? 

Steve Casull, CEO Casull Financial Advisory

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Comment   |  4 years, 8 months ago from South Jordan, UT