GOLD AND VALUE

 

Gold has just closed at an all time high.  Yet all the financial headlines mention NVIDIA, Tesla and bitcoin.  Hamas, Primaries and law suits.  Wildfires, immigrants and street crime.

Okay, almost anything is better clickbait than gold.

In every top 10 investing ideas list you'll find on the interenet, not one will mention gold.

Then again, if you go back to 2000 the 5 biggest meme stocks before the AI craze, were CROX, Krispy Kreme Donoughts, Build a Bear, and Healey's (wheeled sneakers) and Barnes and Noble.  Since 2000 13,000 companies have gone bankrupt.  120 large cap stocks on the Dow and Nasdaq have been deslisted.

Right before 2002 there was the dot com bubble.  Remeber that can't miss period of investing?

Of course AI is different - it has real earnings.  After all One AI stock META, just bought about 17 billion dollars of chips from another AI company NVIDIA, so that they can build a metaverse, where you put on a helmet and pretend to do things in seconds that would take you years to learn to do in the real world.  Like play an instrument.  Or play a sport.  Or get a real job in some exciting field like the Navy Seals.  The thing is, you don't do any of those things.  You put on a helmet and pretend. I know that appeals to the chronically stupid and lazy.  And maybe there are a lot of those to sell to.  But how many have the cash to lay out thousands for the helmet and the support systems?  Just like how many people have $100,000 to buy an electric car that only goes 50 miles before you have to recharge it for hours and hours,  costs many thousands to repair if some tiny electric problem goes wrong on the dashboard, and has ZERO resale value, because it needs a new battery which costs nearly as much as a new car?

Not that you can't make money investing there.  But it's not investing.  It's a form of greater fools gambling.  Because you putting money into markets that sound as if they should develope, and over time they will, but the companies and products that are in first and get all the meme capital are not necessarily the ones  that survive.  Teslas are vastly inferior to BYD cars according to Charlie Munger who feels that BYD will survive and Tesla will not.  Maybe he's wrong.  But he's rarely been wrong.  And if he's right?  Boy that's a lot of capital that will be wiped out.  And what if those META helmets don't catch on?  Not only does META go down, so does NVIDIA - maybe not to Zero but a long long way.

Just ask some smart people who poured billions into Herbalife, Blockbuster, Nokia, Sears, or the penny stock boiler house fad in the 80's, or the dot com fad of the 2000's

Meanwhile, boring old GOLD which has survived and thrived as an investment for over 5000 years is now trading at an all time dollar high, while the dollar is still by far the strongest currency on earth and rates are rising - two conditions thought to be supremely negative for gold.  Yet nobody in the US has noticed.

Gold may never make you rich the way buying a 10 beanie babies for ten dollars and selling them for $100,000 dollars each at the top of the craze will.  

But it will continue to appreciate as all other currencies depreciate.  That is simple ineluctable math.

The thing that is so difficult is to measure a currency's depreciation.  Because they are measured against other depreciating currencies.  You can look at measure of inflation - but those only track short term rates of change - not the absolute loss of buying power that occurs over time.

But Gold notices over time and appreciates accordingly.

RIght now the levels of debt are so astronomical that the amount of currency needed to roll it over and service it is so vast that currencies are depreciating more quickly than ever - even if that's difficult to measure.  

Gold measures it.  Because the Central Bankers of the world are all hyper aware of this, and buying gold at furious rates to sure up their reserves against their depreciating currencies.

The general public is aware their purchasing power is eroding at an alarming rate.  But right now they are distracted from the obvious problem and busy blaming everything on their political enemies like socialists and immigrants - or the Chinese.

Eventually they'll realize the probelm is caused but  nothing other than  debt used to buy useles crap they don't need, (like meta helmets) and can't afford (like electric cars) or wasted by governments spending wildly on their own expansions - funded entirely by more and more debt - which is synonymous with debased currency.

But until they do, it's best to do what the central banks are doing and buy gold.