Gold Can Make You Poor! (This Guy Is Serious)

So this morning I had the pleasure of reading one of the worst articles written about how Gold can make you poor. He speaks of buying at the peak of the Gold price and being poor for the next 20 years. Earth to Ian McGugan: you lose money when you buy at tops, and especially at artificially created tops. You might want to research Nelson Bunker Hunt, and you might want to consider an artificially strong dollar tends to do that to commodities.

The problem with Ian McGugan's myopic post is that he approaches the subject like he is a Wall Street Investor, he prices everything in dollars. The problem is that most precious metal volatility is due to currency swings. Why is Gold setting records all the time? Because our currency continues falling in value! Gold isn't supposed to "make" you money in the long run, it can in the short run, but in the long run it is supposed to give you an inflation adjusted equivalent.

But Ian, you can have your paper. The chart below indicates that 77% of fiat currencies have failed in history, but Gold is still here. And the stock market that you champion so much is back to the same levels it was at in the late 1990's. So you'd still be waiting 10 years, or we can play your favorite game and say that if you bought at 14,000 you'd have lost a ton of money now!

Just remember Ian McGugan, many commodities follow a similar pricing pattern, and it is no secret that commodities have had it rough because of the Dollar's strength. If you can't see value priced beyond Dollars then I agree, you should stay as far away from commodities as possible because you will likely lose your butt. Here is a little something to think about, I bet all of the people who invested in Enron would have gladly taken half of their holdings in Gold, the same with Bear Stearns, Lehman's Brothers, Linens n Things, Circuit City, Bernard Maddoff, and hundreds of other companies that have failed in the last two years.

No one, in HISTORY has ever lost 100% of their money buying real, physical Gold. So, on that note I declare:

PAPER CAN MAKE YOU COMPLETELY, 100% POOR!

http://www.financialpost.com/story.html?id=2245143