3Settimana·

Why I will never buy gold, why you shouldn't either and why the "safe haven" is an illusion. ⚓️🔥

Hey dear Getquiners, honest question: Do you think gold is crisis-proof?

In this post, I explain why I think gold is one of the worst assets of all and why the "scarcity" on the market is often a lie - because all that glitters is not gold 😉

1. the asset in a deep sleep 😴

Anyone who bought gold at the high in 1980 had to 26 years to get back to zero in nominal terms. Adjusted for inflation, this was a financial disaster. Is an asset really "stable in value" if it takes half a working lifetime to make up for mere losses? After the 2011 high, it also took approx. 9 years (until 2020) until the price broke out sustainably.

2. the gold that wasn't actually there. 👻

Gold is sold as a "limited resource". It has to be painstakingly mined, is physically limited and cannot be conjured up. But what if it is possible on paper?

The Morgan Stanley scandal: In 2007, it came to light that Morgan Stanley had not physically bought or stored gold for many clients at all. The bank only held "paper positions", but still collected the fees for the (non-existent) vault storage. The clients were not holding hard assets, just hot air.

The Bre-X scandal (1997): The company Bre-X Minerals claimed to have discovered the largest gold deposit in the world. Geologists "salted" the drill samples with gold dust (even from their own jewelry!) to keep up appearances. The shares shot up to a value of over 6 billion dollars before everything collapsed.

This begs the question: is the price of gold really linked to physical scarcity, or is it often just a hype chart created by expert opinions and blind bank confidence?

3. the volatility lie: 10% crash in 28 minutes? ⏱️📉

It is often said that gold is so great because it is less volatile. But is that true? Let's jump to January 30, 2026: On this day, gold lost almost 28 minutes almost 7 % of its value in just 28 minutes. Over the entire day, it was around 14 %. Don't even get me started on silver (30% fluctuation... cough).

Another example is the April 12, 2013At that time, sell orders for over 400 tons of gold were placed on the Comex in New York within a very short space of time (approx. 15% of annual global production). Gold plunged in two days by 15,5 % in two days. The absurdity: Not a gram of physical gold was moved. They were pure "paper promises". Someone pressed the sell button without ever having owned the metal.

My conclusion: For me, gold is neither stable nor crisis-proof. It is highly volatile and - most importantly - not protected by financial constructs. not infinitely limited. It can be "printed" on paper as much as you like. That's why it no longer has any real value for me.

What do you think? Would you still buy or hold gold after these facts? Let me know your opinion in the comments and leave a follow for more posts like this. Next, I'll write a post on the biggest gold scandals and show you what I think are the better alternatives! 🚀

Feel free to leave feedback, criticism is also welcome, because that's the only way to learn! 😉

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43 Commenti

HoldTheMike@HoldTheMike

3Settimana

I've been holding gold for 17 years and I'm still convinced. You could just as easily have written an article entitled "Why I will always buy gold, why you should too and why the "safe haven" is not an illusion.". Some swear by it, others consider it "one of the worst assets."
I belong to the former.

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Philip@Philipwdr

3Settimana

@HoldTheMike First of all, respect for your discipline over 17 years! But let me ask you a purely factual question: what exactly is it that convinces you? Is it the return or the mere feeling of security? Why do you "swear by it"?

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TradingHase@TradingHase

2Settimana

@HoldTheMike How was the performance over the 17 years?

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Soprano@Soprano

3Settimana

I don't think gold is good because it has no productive value, see Warren Buffet. However, your arguments are wrong or rather speak in favor of gold.

1. gold has historically been an asset that yielded +-0 for a very long time and even that was enough for people and was "safe". But the price has increased tenfold in the last 20 years and there is a reason for this: the demand for gold is rising and, even more importantly, the Modern Monetary Theory. Inflation is unmanageably high. Money is only printed and backed by nothing but nuclear bombs and brute force. Government debt is constantly being increased globally according to the motto "If I have to pay, then make me pay". As a result, the value of real assets inevitably continues to rise at the same time as the level of debt.

2. you refer to the fact that gold can also be artificially created as a "danger", but this is actually the opposite. If the supply is actually much lower, the price would have to be much higher. What if it turns out that only a fraction of the securitized gold actually exists? If it is confirmed that a large proportion of the gold reserves held by the USA and Germany on paper have not been in the vaults for decades? The result would not be a crash but a rise in the price of gold to infinity.

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Philip@Philipwdr

2Settimana

Hey @Soprano, Exciting points! I absolutely agree with you on the analysis of the monetary system and MMT. We need real assets, no question. But I see the danger precisely in your arguments:

To be clear: For me, certificate gold and physical gold are directly related. You buy your gold in euros or dollars - so you are inevitably dependent on the market price. This determines your profit or loss. If you only hold it to buy bread rolls when the world ends, that's a completely different (pension) issue, but not an investment case.

Re 1: Where does the assumption that demand is rising healthily come from? Countries like China claim to be buying more gold than ever, but behind the scenes they are the second largest Bitcoin mining nation in the world - despite the ban! 😉 Anyone can claim to have gold without proving it. In my view, the price increase is not due to real scarcity, but to the claim of scarcity and the hype that the institutions are fueling.

Re 2: You say the price should rise to infinity if the lie is exposed. In theory, yes. But in practice, that means the market will collapse. If it turns out that your paper gold doesn't even exist, why would the certificate still be worth anything? It would be a worthless promise, while the price stands in a vacuum, but nobody trades anymore.

Anyone who holds gold in their portfolio ultimately trusts that the institutions are playing the game fairly - and according to your own MMT analysis, that is precisely what they are not doing. Who can guarantee you that they won't keep the price artificially low for another 50 years?

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Soprano@Soprano

2Settimana

@Philipwdr That's a lot of points now. For example, I don't understand the contradiction between gold and Bitcoin for the Chinese. And why you still doubt the scarcity of money in 1. and say in 2. that most gold is just made up - so what?

I think that gold is already scarce. So the supply is low, but tends to increase. Theoretically, gold itself has minimal inflation. The fact that there is more of it rather than less is also the most important reason why it should go sideways under normal circumstances.

The fact that the price has risen so sharply has nothing to do with the (official) supply, but only with demand. Gold is in greater demand than ever before because confidence in the system and in the leading currencies is at its lowest for 100 years. As long as there is a trend towards more distrust in politics, the gold trend will continue.

And of course it makes no sense to buy paper gold if you buy gold because you distrust the system. After all, we are talking about gold that really exists, the price of which would rise if it turned out that the actual quantity was less than the specified quantity.

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market_genius_awvfj@market_genius_awvfj

2Settimana

@Soprano printing money without a wealthiest households tax, guaranteed labor, and other liquidity retraction strategies is not MMT, it’s just printing money and trying to solve it by raising interest rates, which is widely demostrated that feed backs the inflation by raising debt costs and results in a poorer society (non financial conmpanies and households). I mean a QE is not considered MMT and it brings inflation. And btw it’s also widely demostrated that the biggest inflation pressures have been supply chain issues and energy supply issues as those povoked by wars (Ucraine, Iran, Yom Kippur and so on), pandemics (also related to supply chain halts), climate change (as droughts or floads in agricultural areas), among others and not creating money by itself only. Ortodox economic theory is pretty bad predicting and solving enonomic phenomena.

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Soprano@Soprano

2Settimana

@market_genius_awvfj Oh well, they do a lot do absorb liquidity after printing money. The whole idea of "subscription economy" and "you'll own nothing and be happy" is to take property away from people so every money the gov prints or pays out flows right back into their own pocket without causing inflation. Currency still stays valuable when most people don't have any after paying their bills and taxes.

An economy does neither need to be top-down nor bottom-up. You can just do it top-only when you found enough ways to keep the masses occupied and quiet.

Your observation that the biggest economic shocks are entirely artificial and man-made events such as a wars and COVID doesn't make it any less concerning, does it?

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market_genius_awvfj@market_genius_awvfj

2Settimana

@Soprano sure, they are moving wealth from the poorest 99% to the richest 1% it is true but that is not what MMT says or what MMT is suposed to do.

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Philip@Philipwdr

2Settimana

@Soprano Let me try to untie the knots:

1. the China contradiction: states like China officially buy gold for their reserves (geopolitical hedging). At the same time, however, China is a giant in Bitcoin mining. I think big players like China, for example, are saying they are buying gold to unsettle everyone else, even though they are going "full Bitcoin". You shouldn't just look at what they say, but what they do.

2. scarcity vs 'invented' gold: this is not a contradiction, but the core problem. Physical gold is scarce, yes. But many times the amount of gold that actually exists is traded on the exchanges in the form of certificates. The problem is that the price you pay for your real bar is determined by this 'paper gold'. For me, physical gold is inextricably linked to 'paper gold'!

If 100 people think they own an ounce, but there is only one ounce in the vault, the price is manipulated. If the system is exposed, the high price of your physical gold will be of no use to you because the market will collapse - then it will simply no longer be possible to determine the price of physical gold.

3. demand through mistrust:
I absolutely agree with you there! The price of gold is rising due to dwindling confidence in politics. But this is precisely my argument: if you distrust the system so much, why do you rely on a system of paper derivatives and centralized exchanges to price your asset?

Gold is a bet on the failure of politics. For me, Bitcoin is the technological way out of the system that makes these policies possible in the first place.

In the end, the question remains: do you want an asset whose quantity we can only estimate (gold) or one whose quantity we know mathematically exactly (Bitcoin)?

All I can say is that I don't think we'll come to the same conclusion - but that's not a bad thing. I really appreciate being able to discuss this topic with someone at eye level.

Best regards Philip 😄

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Soprano@Soprano

2Settimana

@market_genius_awvfj The fundamental principle MMT is that increasing quantity of money doesn’t cause any inflation (as was expected before) but under the condition that access to money is restricted.

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Soprano@Soprano

2Settimana

@Philipwdr Dear Philipp, I think you are concentrating too much on this paper gold. I completely agree with you on that point.

But now let's get specific. What if I REALLY buy a gold bar that I can touch and put in my own vault at home - and everyone else just buys this paper gold?

I then get my gold bar extremely cheaply because everyone believes that there is, for example, 200 tons of gold. People are prepared to pay €130 for one gram of it.

If it now turns out that there are only 20 tons, that means that one gram should be worth €1300 ...

Unfortunately, Bitcoin has even more serious risks than gold. There are really many conceivable scenarios in which Bitcoin falls to 0. You can debate whether each of them is very likely or not, but they are definitely mathematically realistic and no more disprovable than that the entire gold system is a complete scam.

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market_genius_awvfj@market_genius_awvfj

2Settimana

@Soprano actually not, MMT says you can print money as long as there are hands available to work (and the state guarantees jobs in public companies and strategic sectors) and resources you can extract if you make that money flow into a miner company for instance to put more copper in the market, MMT doesn’t support increasing quantity of money in a full employment scenario or in a non productive economy. The problem is that if your industrial network is nothing, the money goes to banks and banks put that money in the market no matter how, then inflation raises, IR raises then the banks get paid more and banks, FED and government fall into an infinite loop. A QE where the ECB or FED buys lomg term bonds back from BoFA and Blackrock by printing money is not an MMT measure, it’s a bubble pump.

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Soprano@Soprano

2Settimana

@market_genius_awvfj So why is it called the Modern Monetary Theory if it uses the concept of employment from the 1800s? Full employment is no longer desirable for the following reasons: a) Robotics and AI are doing more and more jobs better than humans do b) Millennials and GenZ don’t even want to do the jobs they already have full-time. c) All people that are unemployed either do not possess the skills required by the market or they do not want to work or both. You can not simply have a person who can’t spell their own name work as a doctor just because you printed money to pay their salaries.

There is a reason why no politician even promises to create full employment because it sounds suspiciously like forced labor. And the whole reason why we let prisoners watch TV all day instead of making them do work is that they wouldn’t create economic value anyway. There just isn’t any use case for hundred thousands of people shoveling dirt anymore.

So what do you mean? Is full employment a “benefit” of the MMT? Or is full enslaved workforce a prequisite just so we can have MMT?

And I guess I don’t even have to explain that extraction of resources isn’t an option either Europe simply doesn’t have the resources we need otherwise we wouldn’t have economic problems in the first place.

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Visualizza tutti 2 ulteriori risposte

D.S.@Crash-Propheteus

3Settimana

Let's be honest: I've rarely read such garbage, even here. But typically at the weekend, when there's no real news, either the stock market crash is predicted or garbage like this is produced......🙈

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Dividendenopi👴@Dividendenopi

3Settimana

I bought gold before these "facts" and I still have it; despite these "facts" I have already bought and sold "paper gold". I will continue to buy physical gold when it suits me. But I'm definitely looking forward to your next post and what alternatives you can offer me then. Then we can continue the discussion. Until then 🤗

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Musikerie@Musikerie

3Settimana

Normally I would aim for a maximum of 10% but at the moment I still have almost 40% mining stocks in my portfolio and have the rebalancing on hold. One of my oldest positions is a gold fund and it currently stands at +943% / 22.48 p.a. ... I don't see any underperformance 😁

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NichtRelevant@NichtRelevant

3Settimana

Hm. Historically, all currencies have ceased to exist at some point. Gold, on the other hand, is still around. 😏

For me, gold is not a classic investment because it is not a company and therefore has no operational business model that generates profit. There is therefore only a speculative and value-preserving function here (despite admittedly existing fluctuations). And a function for catastrophic crises in which traditional currencies could collapse or depreciate sharply.

I therefore think it is very sensible to have a small proportion of your own assets in gold.

The argument with the papers or certificates on gold and the 'multipliability' mentioned in this way is also used in other areas. I would therefore always hold physical gold myself as a crisis hedge (!).
Any securitized promises are just paper and gold is gold. 🪙

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Philip@Philipwdr

2Settimana

@NichtRelevant Interesting point! If you see gold purely as insurance, then physical ownership is logical. But for me, the comparison is flawed:

Firstly, the value of your bullion is still determined daily by the 'paper gold system' on the stock exchange - so you remain on the drip of the system you want to hedge in terms of price.

Secondly, if the scenario occurs where currencies are completely worthless and the system collapses, gold is probably the least of my problems. In a real 'Mad Max' world, water, medicine or tools are the real currency, not a heavy lump of metal you can't eat.

That's why I forgo this expensive insurance (in the form of lost returns) and prefer to focus on other assets. 😉 If the system collapses, my portfolio will only be of secondary interest to me.

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NichtRelevant@NichtRelevant

2Settimana

@Philipwdr That is another approach. Some people who take crisis precautions buy gold and silver so that they can exchange these assets for something edible and a flight to South America if necessary. Others buy a water filter, canned food and a rifle with sufficient ammunition. Still others don't care about crisis prevention and assume that an existential crisis won't occur or is so big that humanity won't survive it anyway 🙂

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CRDonkey@DonkeyInvestor

3Settimana

Best post about gold on getquin. Apart from mine. Love 🥰

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aminemeskni@Aminmeskini

3Settimana

I see it the same way ❤️

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Philip@Philipwdr

3Settimana

@Aminmeskini Hey, very nice to find like-minded people here. 😄

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yieldhunter@randomdude

3Settimana

I am completely agnostic about the various asset classes. Gold, for example, has helped GTAA outperform the stock market wonderfully over the last year.

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Walter S.@Roots

3Settimana

Gold is the only real currency.

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CRDonkey@DonkeyInvestor

3Settimana

@Roots Nope. I don't know of a single store where I can pay for goods with gold.

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Walter S.@Roots

3Settimana

you describe that gold is not a common means of payment....more not...
gold serves as a real equivalent value for money...

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CRDonkey@DonkeyInvestor

3Settimana

@Roots You write that gold is a currency. What constitutes a currency?

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capital_captain_2693@capital_captain_2693

3Settimana

@DonkeyInvestor I know a few people in the area who accept it like cash. But the exchange rate is often worse 😉

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Philip@Philipwdr

2Settimana

@Roots That was absolutely true historically, but today gold is more a derivative of the fiat system than a currency in its own right.

Why is that? Because today you measure the value of your gold in euros or dollars. As long as the price on the stock exchange is determined by 'paper gold', your physical holdings are completely dependent on the system in terms of price.

Try paying your rent with a gold bar or buying a bread roll at the bakery with some gold dust. For me, gold is an object of speculation that is traded in dollars.

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Walter S.@Roots

2Settimana

@Philipwdr is absolutely right... all good...
My comment referred to the original post...

nonetheless...if I had to choose whether to put 1000 dollars, 1000 euros or the equivalent in gold in my safe, then I would definitely take gold... nobody can reprint that

Regards

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ThomasHH@ThomasHH

2Settimana

Ultimately, everyone has to decide for themselves. Years ago, I made a portfolio addition of around 15% in physical precious metals. These are currently up 210%.
Precious metals are definitely a safe haven. Everything else is just paper with a value proposition.

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Olli@Olli68

3Settimana

Gold always has the same value. Gold has maintained a constant purchasing power for centuries, so its rising price primarily reflects the gradual devaluation of fiat currencies. This real currency devaluation often significantly exceeds the official inflation rates, as government statistics usually only inadequately reflect the actual loss of purchasing power compared to hard assets. Gold therefore acts as a more honest measure of value, revealing the discrepancy between reported inflation and actual currency devaluation.

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Uwe@SchlaubiSchlumpf

3Settimana

@Olli68 an ounce of gold is always worth an ounce of gold

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yieldhunter@randomdude

2Settimana

Gold fixes it.

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Serkan@CashflowPrince

3Settimana

I also think that an admixture is not wrong in the long term, for diversification.

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Gehebeltes-EFH@Gehebeltes-EFH

2Settimana

Rage Bait

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SP@spellwan

2Settimana

Read the title and decided not to read any further. Thank you very much!

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Paketknecht@Paketknecht

2Settimana

"Gold is taken out of the ground in Africa or somewhere else. Then we melt it down, dig another hole, bury it again and pay people to stand around and guard it. It has no use." - Warren Buffett

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ashish J.@JaqenH

2Settimana

Depends on individual circumstances. If you hold physical gold , the 2.5 out of 3 reason you gave are already gone.

Plus think about it, can't I say the same thing for USD ? The absurdity: only one person has the printer and we need to believe him. " It's huge. Very huge".

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money_master_peprr@money_master_peprr

2Settimana

Apparently silver is the one to get into now...

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