Golden Dreams and Survivalist Fortresses
Two quick reflections on the time I just spent in America. First, never before have I heard so many people talking about arming themselves, stocking the larder, and moving to a survivalist fortress in the wilderness. Second, never before have I heard so many people talk about buying gold.
I take these sentiments as symptoms of high anxiety. (Some people charge by the minute for penetrating insight like that.) The anxiety is well-warranted. But to everyone who's taking comfort in their fantasy of a survivalist Fort Knox, let me interject a touch of reality into your dreams.
That survivalist fortress? I suspect you're confusing it with "going camping." Going camping is fun, until you scrape your toe and it gets infected and you need antibiotics. Primitive life is solitary, poor, nasty, brutal and short. It usually ends the way it did for the Donner Party and Christopher McCandless.
Gold? Has no one learned anything from recent experience about "speculative bubbles?" It has no inherent value beyond the psychological. You can't eat it, you can't power a turbine with it, you can't do anything with it but make necklaces. Yes, it has an important cultural and economic history and it's pretty. Same could be said of tulips.
You want to survive? Do the hard work of building civilization. Civilization is built of blood, toil, tears and sweat. The Gates of Gold and the Garden of Eden are on the other side, not here.
We need more silly Utopian fantasies now about like we need more thoughtful shrinks stroking their beards and observing that we all seem to be very anxious.
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Apr '11
Re: Golden Dreams and Survivalist Fortresses
The Hobbits are hard at work on that very project.
May '10
Re: Golden Dreams and Survivalist Fortresses
When people start to think that the currency is no longer being debauched the price of gold will level off or trend down.
As for the survivalist gear, it is a waste of money. People read too many novels. (Sorry, Mr, Klavan.)
Jul '11
Re: Golden Dreams and Survivalist Fortresses
Scott Adams comic strip Dilbert has my take on it. http://www.dilbert.com/strips/2011-07-31/
May '10
Re: Golden Dreams and Survivalist Fortresses
Also, my understanding is that the individual investor has little effect on the gold price. They are too small a part of the market. Is this really a bubble?
Feb '11
Re: Golden Dreams and Survivalist Fortresses
Let's consider gold as a mere barbarous relic and psychological commodity. As such it has a certain value. As the value of various fiat currencies including the US dollar decline the number of dollars required to purchase an ounce of gold will increase.
In other words, it will be a good investment - like many other commodities.
About those survivalist fantasies - yes, they're fantasies, but when I hear talk about them it's mostly as sort of a joke. People know it isn't going to be anything like camping.
Folks buy guns and stock the larder because they have no faith at all that the malignancy on the Potomac can manage to handle any sort of crisis with any sort of competence.
And living near Detroit I'm surprised at how much I've heard about the 1967 riots. Several people told me they went out and bought a rifle circa 2008-9 with the expectation that 1) they soon wouldn't be able to 2) they soon might need it.
Again, because they had no faith in the US government, recalling what they've heard of the riots.
Which bore no resemblance to utopian fantasies at all.
Dec '10
Re: Golden Dreams and Survivalist Fortresses
But...Gold has never been worth nothing, therefore it is worth $1400 (or whatever the current price).
Oct '10
Re: Golden Dreams and Survivalist Fortresses
Gold is the ultimate defence against rapacious governments bent on plundering the wealth of their subjects by debasing the currency and taxing citizens (and everything else they can grasp) into penury and serfdom. Thank goodness we don't have any worries about that these days!
As Foxman said above, the whole point about gold is that whatever its fluctuations, in forty centuries of human history it has never lost all its value, while every single paper currency has eventually gone to zero.
I can't fit the whole case for gold in 200 words, so I'll cite a piece I wrote in 2008 which makes the case for gold as the ultimate refuge.
Oct '10
Re: Golden Dreams and Survivalist Fortresses
People misunderstand hyperinflation. Hyperinflation happens when governments stop taxing their citizens, and fund their spending mostly through money creation. Money creation on the level the Fed has been doing will not do it (though it can produce a nasty inflationary decade if not reversed at the appropriate moment, like happened in the 1970s).
Dec '10
Re: Golden Dreams and Survivalist Fortresses
John Walker:As Foxman said above
. · Aug 1 at 5:03am
Umm... I was making fun of the "Buy Gold!" commercials.
Mar '11
Re: Golden Dreams and Survivalist Fortresses
Gold DOES have an underlying value - it is used in electronics and a range of other applications. Gem-quality diamonds, OTOH, don't.....
When Treasuries and the Dollar become bad investments (thanks to derating and inflation), money will flee from cash into investments like real estate and the stock market. Risk-free wealth preservation is impossible in the coming business climate - people will either lose their money playing it safe, or they can grow their money by taking risks.
Mar '11
Re: Golden Dreams and Survivalist Fortresses
Hyperinflation is the only way to make the national debt come down to manageable levels. It is coming.
People who have fixed-rate debt (cars and houses) will be sitting pretty, because their debt basically vanishes in real terms. People who hold bonds and cash will be VERY unhappy.
Nov '10
Re: Golden Dreams and Survivalist Fortresses
Gold isn't in a bubble; the dollar is in a vortex.
Neither the degree of speculative money in gold mining stocks, nor the proportion of gold in typical investment portfolios, suggest that gold is yet in a bubble.
Moreover, those economic commentators who now solemnly prognosticate the burst of the gold bubble would be far more persuasive had they earlier successfully prognosticated the burst of the housing bubble. And curiously, those who did prognosticate the bursting of the housing bubble, like Peter Schiff, currently claim that there is no bubble in gold (but that there are in U.S. bonds and third-level education).
But why believe anyone with a track record of being correct over other people with a track record of being clueless?
Indeed, the very fact that so many people in the mainstream are warning about gold being in a bubble also suggests that gold isn't in a bubble. It's all idle bubble babble.
True, paranoid Cassandras have often been goldbugs. But that doesn't mean that goldbugs must be paranoid Cassandras.
Edited on Aug 1, 2011 at 5:35amMay '10
Re: Golden Dreams and Survivalist Fortresses
I have no survivalist fantasies. But having a couple of months of food on hand is a cheap insurance policy against disaster for my family. Bad things can and do happen in this world, even to Americans. As for gold, I believe the conservative position would be to go with about 6000 years of human history which has shown having a bit of gold can come in quite handy if things are not going swimmingly. Can anyone please show me a time or place when one could not exchange a bit of gold for something else one is need of? I can show countless examples where having a gold piece or two saved entire families.
As a recent example I give you:
http://www.youtube.com/watch?v=7ubJp6rmUYM
Having bought what gold I have much cheaper then the current price, I'm sure that the worst that will happen is I can give my wife and daughter some really handsome jewelry.
But to those of you who feel more comfortable keeping all your assets in the progressive, modern assets of pure electrons and paper, feel free. Having such powerful faith in government has never harmed anyone, has it?
Nov '10
Re: Golden Dreams and Survivalist Fortresses
Also, one defining feature of a bubble is that people buy X solely because other people buy X, not because they want X themselves, or think that other people want X themselves (but rather because they think that other people also buying X because yet other people are buying X, and so on).
I don't think we're there yet with gold.
Nov '10
Re: Golden Dreams and Survivalist Fortresses
Does anything have any value beyond the psychological? If so, could someone please provide me with an example?
Mar '11
Re: Golden Dreams and Survivalist Fortresses
Huh? Anything that can be built with has value, does it not?
Is gasoline only a psychological good?
Sep '10
Re: Golden Dreams and Survivalist Fortresses
I'm amazed that Claire heard so much of that kind of talk in Seattle. I don't hear anyone talking about gold or preparing for doomsday, mostly I suspect, because most people I speak to love the prez and think he's gonna save everyone. (Me talking to my mother after the House passed the first debt ceiling bill before the weekend: Whatchawannabet now that the issue has been moved to the Senate where the Democrats reign that there will be much less anxious talk among the pundits about the end times being near ... I haven't said I told you so, yet ... ) What I see among those who do not believe in the Onicorn is stubborn insistence on proceeding apace, of living their lives; those who had so much hope in him, meanwhile, sound very very afraid; they think it's because the end is near, but really it's their fantasies falling into dust.
Dec '10
Re: Golden Dreams and Survivalist Fortresses
Food water shelter clothing
Dec '10
Re: Golden Dreams and Survivalist Fortresses
Hey, Joseph. Would you explain a little more and give examples?
Has there ever been a case like the US, which controls the world's reserve currency?
Do you know, of the 40% the government is deficit spending, what portion is made up of bonds sold to creditors and what portion is RumpleFEDkin spinning from straw?
Sep '10
Re: Golden Dreams and Survivalist Fortresses
Holding gold/silver might be viewed as prudent preparation for a possible bout of hyper-inflation and does not, the last I checked, preclude your other suggestions. Gold can be exchanged for dollars. I find it easier to make a case for holding gold than to make a case for holding dollars. A little food a little gold seems more reasonable to me than moving to Turkey and living with seven cats. To each his own!