Investors Flocking to Gold
This CNBC story explains that because of the stimulus hijinx and other skullduggery, fund managers are acquiring larger exposure to gold, often through ETFs such as GLD. The Exchange Traded Fund allows an investor to buy a stock (e.g. x shares of GLD) rather than buying physical gold bars and storing them somewhere. The people running GLD, in turn, go out and buy more bullion when more people pile into their ETF.
However, unless there are tax considerations–like if you are trying to shuffle around your 401k and need to buy shares of stuff to avoid withdrawal penalties–I don’t think you should put your money into a gold ETF. If the really horrendous inflation comes that I think is a real possibility, it would be perfectly consistent for the U.S. government to void all ETF shares and issue some paltry payment in dollar bills to the investors. They would give some bogus justification like “preventing a run on the dollar” or “battling the instability of hoarding.”
If you are concerned about massive price inflation and want to hedge yourself with gold and silver, I strongly recommend that you personally acquire the physical metals. And if you’re really paranoid, don’t put them in a bank.
