Is gold investing a scam?
I know people out there who have invested a lot in gold under the belief that in the event of like complete societal collapse or hyperinflation, they could use it for purchasing. I have the hunch it’s a scam, but I haven’t learned enough monetary theory, business, or economics to understand why.
If you don’t hold it, you don’t own it.
Investing in gold someone else holds is silly. Having a few ounces stashed away is just illiquid asset that should be a hedge against inflation.
Executive Order 6102
If it can be taken from you with the stroke of a pen, then it isn’t yours. Gold financial products are useful speculative assets but not for calamity insurance.
I think what they’re saying is that in a hyperinflation scenario, it is an option for the government to seize the physical gold backing the financial products people hold in order to continue paying to run the government now that fiat is worthless and they are having trouble with that.
Gold you have buried in your basement, they will have to work a little harder to get.
I understand but inflation is actually good for the debt of governments since there’s a surplus of money (they pay on the nominal value) so it’s unlikely they’d have to scrap personal gold in order to function.
Anyway that’s just my two cents and I may be totally wrong. I’m not an economist
I looked up some stuff about Argentina’s financial crisis since you mentioned it before, and it looks like they actually did something a bit like what I’m talking about, directly appropriating the valuable assets they could in an effort to keep being able to function:
In addition to the corralito, the Ministry of Economy dictated the pesificación; all bank accounts denominated in dollars would be converted to pesos at an official rate. Deposits would be converted at 1.40 ARS per dollar and debt was converted on 1 to 1 basis.[69]
There’s some indication that this also applied to financial products:
As noted above, a number of U.S. investors have filed ICSID arbitration claims against the government of Argentina. Most of these investors consider the January 2002 pesification of dollar-denominated contracts, and/or the ex post facto prohibition on contracts linked to foreign inflation indices, to be an effective expropriation of their investments
I can’t specifically confirm this included gold held on paper, but I think it probably would have.
As for the plausibility of this sort of thing happening in the US, in addition to the actions of Roosevelt mentioned by @[email protected], the main trigger for Nixon abandoning the gold convertibility of US dollars was France attempting to physically withdraw the gold they had stored in US banks, which they didn’t want to allow.
Complete societal collapse, hard to say what, beyond the basics, would be useful as a medium of barter.
But, in a society facing major issues, e.g., hyper inflation, or say, a US government default, yeah, gold is a pretty decent hedge bet.
The traditional safe haven has been government debt but that’s been seen as an increasingly risky bet where you could lose a lot of money to inflation or worse, government default/intervention.
So, while not ideal, gold at least seems a better bet than most other “safe” places to put one’s money.
Yeah, it really depends on the nature of the societal collapse.
I can imagine situations in which being able to press a gold necklace into the right palm might get you out of a tricky situation.
On the other hand it’s hard to imagine a situation where a horde of gold bullion in your safe at home would be very helpful.
When the world collapses, nobody’s going to care about gold.
Stock up on bottlecaps instead.
It’s almost certainly a joke but bottlecaps in a post civilization society would make a pretty decent currency, more so than gold.
They’re light, easy to carry, hard to reproduce and therefore scarce. They’re also useless for anything else. So if you happened to have a lot of caps laying around they might find their way to becoming a currency.
Gold is heavy, requires a lot of work to make it useful as a standard, and has other practical uses. Caps are actually better.
And that would be doable, realistically. Though there’s a bit of plastic on the bottom that would be quite difficult to replicate.
The point is they’re only useful as a currency. And really only to a society that can’t really make much. If society advances again to the point where a used bottlecap can be replicated, other systems will already have been established to make it less attractive.
Depends on what you want to achieve.
It’s a hedge against inflation. So in times of high inflation and economic uncertainty it will do well.
Keeping a small amount in a safe in case the world goes to shit, well only after you have a pile of guns, ammunution and canned food.
It’s not a productive asset. If you buy stocks you’ll probably be better off in the long run.
That being said your investment portfolio should not be only one kind of investment and gold should probably be a part of it eventually.
So zoidberg made out like a bandit!
Also sandwiches are a terrible tasty way to store value.
Yes and no. If you order your “gold kit” off of an ad aimed at boomers worried about losing their houses, it is probably scammy.
If you’re very rich and worried, you could stash away a bit of bullion at your home. You’ll have other things of value you could trade on the black market of total societal collapse before you’d need to tap into that resource. If you’re not very rich, a gold bar is not going to do you much good because it’s a big chunk of change tied up in one item. You’re more likely to need smaller denominations, like coins or rings, to pay for stuff in the apocalypse. Or you need to learn to smelt metal. The scam of it all is that people with a financial interest will advertize gold as the safe resource in times of high perceived crisis when the price of gold is already high or rising. It makes much more sense financially to watch the market and buy when it’s down.
Gold is also something that needs the economy to come back before you ran out of other stuff to barter with. If our apocalyptical total collapse lasts a long time, gold will not be as valuable as drinking water, food, or shelter. Smokes (incl. vape juice) and booze might be more useful for a longer time.
I’m not rich and I’d sooner go down the prepper route than buying gold.
“this rock I found is special” “why?” “it’s shiny and heavy”
And some poor dumbass was like “fuck yeah gimme that shit”. Same with jewelery…
So gold is inflation-proof?
Yes, but only to the extent that you can store it, defend it and find a buyer when needed.
Gold loses value at exactly the rate of the cost of the armed guards you are paying to keep it from being stolen.
Pay too little, and it takes its value to someone else who is better armed or sneakier.
And if someone set aside gold for you that you have never seen, no they didn’t.
macrotrends.net/…/historical-gold-prices-100-year…
In August 1976, gold was $35/oz, close to its historical level. By October 1979, it was $380/oz, over 10× increase — peaking (for the 20th c.) in January 1980 at $668/oz.
20× return in 3.5 years.
Gold doubled again in value by December 2010, and again by January 2025 — to $2800/oz.
The all-time high, 20 October 2025, $4377.58/oz.
125× return in under 40 years.
I’ve seen it said: it’s not that gold has gotten more expensive. Its that the USD is debased as a currency against the dollar. The gold standard for USD ended in August 1971.
Interactive chart of historical data for real (inflation-adjusted) gold prices per ounce back to 1915. The series is deflated using the headline Consumer Price Index (CPI) with the most recent month as the base. The current month is updated on an hourly basis with today's latest value.
Depends on your threat model. During speculative bubbles capital flows towards gainers no matter how crazy (NFTs anyone?). During corrections capital flows back towards commodities, and gold is … er…the gold standard. It has a lot of industrial uses blah blah blah. Copper is also good for these purposes and is an interesting contrast.
Nobody says “if you can’t touch it, you don’t own it” for copper or oil or pork bellies. That’s because that advice isn’t about using gold as an inflation hedge or safe harbour in a bear market. That advice is predicated on compete monetary collapse and the use of gold as currency. If you don’t live in a space where you can grow some of your own food, and have access to potable water from your own well I wouldn’t worry to much about it. You will starve to death or die in the food riots so gold won’t help anyways.
I think the “don’t hold it don’t own it” advice does make sense for a small amount of portable gold if you’re considering a scenario like a fascist government taking over and needing to flee the country with any wealth you can, predicated on the assumption that other countries are still relatively stable.
There are also a lot of silly people who hoard pounds of gold for apocalyptic currency which you’ve pegged.
A lot of people in this thread calling it a scam but there is some economic basis for it but at the end of the day, it’s just an investment. It largely depends on how they are investing in it. Gold is a commodity just like lumber, gas, cotton, or livestock. You can invest in them like you would a stock or a mutual fund. Just like those other investments, the price will change daily based on the market. Gold is a weird one because everyone knows it was valuable historically and many people have physical versions of it. People use gold in their investment portfolios to hedge against some of their risk because typically the value of gold would go up when stocks would go down but our money was also tied to gold 50+years ago. The physical versions will change price too but they change differently.
Some (many? most? IDK) gold sellers are scammers. They will sell you overvalued stuff and insist it’s extra-valuable because of some feature they made up. They are the ones being loud on the web and making you hear about it all the time. So, if you hear an ad, and buy gold, you’ve probably fallen for a scam.
But investing in gold by itself is just like any other commodity. And just to say, the rule on that last phrase is valid for almost everything (it’s absolutely valid for stocks and investment funds).
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