Nate’s take on metals

In which he addresses the nervous Goldie-come-latelies:

You’re seeing lots of
leveraged folks being forced to sell. This is literally a forced
collapse. When this sort of thing is happening… you’re near the
bottom. It may not be the actual bottom… but you’re near it. When it
turns… we’ll be on a long term bull market in gold that is going all
the way to 3500 or so around 2015… and that’s assuming my
hyper-inflation prediction does not hold. That’s just the technicals.
If you start looking at actual claims on gold verses actual inventory…
its a much different picture… which could literally result in 1oz
coins being worth about 100k each in today’s dollars.

This is why I have repeatedly warned people not to look at metals as an “investment”.  If you’re paying attention to the daily, or even monthly, gold price, you might as well be day-trading equities. Gold, like land, is about inter-generational wealth, not short-term money making. It will be around when the most stable extant bank finally fails.  It will be valuable when the last of the current political entities collapses into barbarism and chaos. It is not an investment, it is insurance.

Those who bought in at $500 or less are simply looking at the dramatic price action and shrugging.  Perhaps it will drop to $1k next, or leap up to $5k. If you’re not leveraged and you’re not trading, it doesn’t matter which happens to come next. It’s rather like being an owner of Apple stock in the 1980s and fretting over where its price is today.  If you want to make money, then do something productive and earn it; buying X rather than Y and hoping the price goes up isn’t being productive.

Don’t put your faith in gold.  It won’t save you from anything except perhaps abject poverty. Don’t put your trust in it; it is a mindless substance. But it is more substantial and lasting than either credit money or fiat money.  And it will hold its core value in periods of inflation and deflation alike, regardless of how it is presently priced in the currency du jour.