As I've been saying, means of production beat passive investments, especially heading inot the crack-up that will happen later this year. One lesson we'll relearn is what is money:
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In the rest of the world and particularly Asia, people do not think like we do. As far as they're concerned, gold is the only long term asset worth holding. It is the family pension fund. I like quoting the typical situation in India. I first went to India in 1965 and the price of gold at that stage in rupees was around about 170 rupees an ounce. Today it's about 100,000 rupees an ounce. And when you think that the young man getting married at that time -- he'll be a grandfather now -- he would have got a dowry from his wife's family which would have been in gold. His presents would have been gold. Every time they had children there would have been gold. Every time there's a festival there would be gold. Gold is the family pension fund. What other investment has gone from 170 rupees to 100,000 rupees over that period of time? Absolutely nothing! There isn't even an alternative like sensible equities or anything like that for them to play. Gold is the only way they can escape the devaluation of the rupee. And so no wonder it's so popular. That's the story all over Asia, by the way.If I wanted savings, I'd keep it in gold. But in hard times, your gold will just be taken away. Whereas no one wants to take away your pizza oven, since it is no good to them without you. And they will trade something (a silver coin?) for a pizza.
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4 comments:
Hi John, how do you recommend holding gold? Jewelry is so marked up and may negate any potential gains. Coins, bars, etc? Thanks.
if you've decided you want your savings in money, gold or silver, then coins is a good way. but my advice is to invest it in your business, not leave it in savings...
Holding one's wealth in their means of production or independent, self-employed business is a very good thing, if not the best to do. But what about other types of investments? Country-specific and industry-specific ETF's for stocks are available (ishares.com). If you don't like the U.S. market, there are ETF's for China, Singapore, India, Germany, Switzerland, Taiwan, etc., and even specific industries (also foreign) such as gas and oil, commodities, healthcare, natural resources. Do you think these are good investment options?
You are not helping anybody or producing the good only you can produce if you invest in making others hopes and dreams come true.
Invest in yourself....
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