My thoughts on Gold

Gold: It's Useless

There are a lot of things in the world I do not understand, like 401Ks,  interest, and mortgage. But the most interesting thing I don't understand is gold. I don’t understand why gold is so valuable, when the only thing you can do with it is craft it into jewelry. Personally, I think gold is a useless substance, that can be easily replaced by gold colored steel, or anything that is colored gold.

Though gold can be crafted into jewelry, it can be easily replaced. If you spray paint a copper, bronze, or steel ring with a gold color, no one would know the difference, unless they put the ring under a microscope. But when you to a party, no one would take a microscope and look at your necklace or ring.

Gold cannot be used to craft much, and is only purpose is for fashion or decoration. The only great thing about gold is its name. When someone says the word gold, The first thing that comes to mind is “Wow, you must be rich!” Maybe if steel was called gold, then people would put their money invested in a useful material. The process in making gold is to melt it down, and pour it into a cast. Gold can only be poured into a small cast, because it is a weak metal and will break easily. On the other hand, steel has the same process, except it can be used to make larger and more useful metal creations. Have you ever seen a large plate of gold used for boats. NO, but you probably have seen a steel boat.

Gold has no cash value system. Especially, if mass production stops, or another great depression, Gold would be rendered useless. Gold would have no cash value, because everyone is struggling for hard cash or food. If there really is a collapse of the money supply, it is difficult to believe that a locker full of shiny coins will really get you anything.

Even if there is no breakdown of the government, inflation is growing extremely slowly, usually at 2.1%. If you buy a $100 gold reserve, by the end of the year, you will get about $2.10 back. Thirty years after you buy that gold deposit, you would have only got about $63 back. Assuming the inflation rate goes a little higher, at most, at the end of thirty years, you would get at most, $1000, at least $300. Although this gets you more money, you have to wait 30 years. By that time, mass production might have stopped, and gold would be just a useless pile of junk sitting in your bank locker. A better investment would be in either real estate or stocks. In stocks, you know when you want to sell them, when the companies stock revenues are high. Stocks are not based on the measly inflation rate, but more so on the productivity of the companies, which, again, are not based inflation, but product selling. In real estate, the cash flow is based on the persons renting the house. It is not based on inflation.

Though the outside look is very inviting and comforting to know that you have such a shiny material, gold will always be useless unless a huge inflation growth changes the measly 2.1% to 50%.