Troy Ounce for your Thoughts?

5 Oct

I am getting a little tired of hearing the gold bugs statement that gold and silver are monetary assets. These same individuals assert that because gold is divisible, fungible and a historical store of value one can simply treat it as another monetary asset. However, I challenge them to exchange said monetary asset for goods and services anywhere in the developed world. My point is that there are many other hard assets which are divisible, fungible and can act as a store of value and do not necessarily make the claim that they may function as a quasi currency. If the investment objective is to diversify away from fiat currencies and into hard assets, what makes any one hard asset superior to any other given that we do function in a fiat currency system.  We much prefer productive hard assets which have attractive supply/demand fundamentals in spite of having no historical connection to monetary assets.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: