Gold is Not an Investment Unless...

English: 1 oz (Troy ounce) of fine gold Deutsch: Eine Unze Feingold mit Zertifikat (Photo credit: Wikipedia)

Gonzalo Lira runs down some common arguments for not investing in gold, and then makes it clear why it's worth putting some money into gold.

Ritholz is absolutely right: Gold does not have cash flow, earnings, coupons, or yields. Unlike, say, a factory, or a piece of land, gold cannot produce anything; gold just sits there, inert. Though it has a handful of industrial applications, and of course can be used for decoration, gold has no practical use. You can’t eat gold. You get caught in the middle of the Sahara with a ton of gold and not a drop of water? You’ll be the richest corpse in no time. 

So just like Ritholz says, gold is not an investment—unless.

So, you can't eat gold, or your iPad or iPhone (for a light snack). So, why bother? Well, gold isn't an investment...unless...

Unless what? Unless the fiat currency itself becomes worthless. 

You could choose to ignore gold, calculating that the possibility of a monetary crisis is remote.

But, that probably isn't a wise choice.

But this is not an ordinary recession: This is a balance-sheet depression which is being exacerbated by Federal government debt monetization (otherwise known as Quantitative Easing).

Which, ultimately will lead to a monetary crisis.

 Now? Gold is the absolute best and only bet against currency collapse—which is coming, courtesy of central bank irresponsibility. 

In normal times gold might not be an investment. However, these are not normal times.

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