Nov 20, 2009

Burying Gold in the Back Yard

Folks are nervous, I would go as far as saying that they are freaking out. I don't think a week goes by without someone asking if they should sell everything, and buy gold and a shovel. Here are a few charts that I found that I thought were telling:


Source: Reuters



Source: The Big Picture

The charts are a reminder that it is all relative, but it doesn't change the fact that folks have major concerns.

Burying gold in the backyard is probably not the best response to the current economy. It would be best to determine what your concerns are. Some buy gold to hedge against inflation, some are afraid the world is coming to and end, others are just trying to time the market. I would suggest that in any case, there would be better ways to protect. For inflation, perhaps a more balanced approach including TIPS, precious metals, currency hedging... The folks expecting the end of the world are already diversifying, buying Gold and lead. I went into the local sporting goods store to buy shells the other day and they were sold out...SOLD OUT OF BULLETS. If you are one of the folks trying to time the market, good luck. They say that you know you are a seasoned market timer when you have lost everything.

As Americans, it is healthy that we get a bit concerned. We should be concerned over our debt and spending. If you haven't seen it, check out this article: Desperate Times Call For Conventional Measures.
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