Wow, I never thought it would go this high. I found a gold pendant in the shape of a teddy bear at a water park in NY, and it was 10k. It's worth about $200, since the price of 10k gold is about $50 per gram. The reason that gold prices have skyrocketed is because the US dollar is slowly weakening and people are in anticipation of a recession, probably because of the tariffs that have been recently implemented.
It's disturbing that the dollar has lost 51% of its value in the past 12 months. The smart thing to do if you want to hedge is divide the amount of money you have by 100*4000 and buy that many gold futures. So if you have $400k in your broker account, then you get 1x /GC futures. That way if the value of your $400k USD goes down 15%, your future will give you $60k to replace it. If the value of gold goes down 15% then you'll have to pay $60k which isn't so bad because it means the value of your $400k went up 15% since we're assuming gold is inversely correlated to the US dollar. History is on my side. For thousands of years, gold has been used as the benchmark of benchmarks when it comes to measuring abstract value.
You only need about $16k of margin to own a gold futures contract. That can come from the stocks you're already holding, which act as collateral. In practice gold goes up a lot of the time because M3 goes up, which causes stocks to go up too. So there's potentially a lot of upside. At least in terms of USD. Especially if the dollar goes Weimar and Indian women end up owning the world.
The funny thing about gold is it actually loses about 2% of its value each year, due to more of it being mined. I think that's the 2% the fed is talking about when they claim inflation is that low. They're only talking about their own supply. Not the paper money they give you. So the fact that the USD, bolstered by the hard daily work of millions of people, has lost 50.1% of its value in 12 months compared to a falling rock dug out of the ground that doesn't do anything, just goes to show how bad things really are.
It's because the USD is no longer a means of exploiting American labor. It's a pension for a continental retirement home. The world is waking up to this fact. They thought they were gaining wealth by owning USD. Now they're scrambling to not lose it. It's why everyone is gaga for gold. At least for now, until a currency comes along that has a positive value proposition.
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[ 3.3 ms ] story [ 19.7 ms ] threadYou only need about $16k of margin to own a gold futures contract. That can come from the stocks you're already holding, which act as collateral. In practice gold goes up a lot of the time because M3 goes up, which causes stocks to go up too. So there's potentially a lot of upside. At least in terms of USD. Especially if the dollar goes Weimar and Indian women end up owning the world.
The funny thing about gold is it actually loses about 2% of its value each year, due to more of it being mined. I think that's the 2% the fed is talking about when they claim inflation is that low. They're only talking about their own supply. Not the paper money they give you. So the fact that the USD, bolstered by the hard daily work of millions of people, has lost 50.1% of its value in 12 months compared to a falling rock dug out of the ground that doesn't do anything, just goes to show how bad things really are.
It's because the USD is no longer a means of exploiting American labor. It's a pension for a continental retirement home. The world is waking up to this fact. They thought they were gaining wealth by owning USD. Now they're scrambling to not lose it. It's why everyone is gaga for gold. At least for now, until a currency comes along that has a positive value proposition.