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Gold is a metal whose value is entirely based on human emotion.

Mark Levitt
By Mark Levitt

This article appeared originally in the August 2015 Levitt Letter.

Dear Mark,
Should I roll my modest 401K plan over to a gold or precious metals IRA? Is this practical considering the weakening dollar and vulnerability of the stock market?

Dear Reader,
Wall Street Journal columnist Joe Queenan recently wrote “My Gold Rush — Away From the Metal,” excerpted below. His pearls of wisdom offer modern-day practical insights to biblical imperatives:

Zeph.1:18. “Neither their silver nor their gold shall be able to deliver them in the day of the Lord’s wrath” Matt. 6:19. “Lay not up for yourselves treasures upon earth, where moth and rust doth corrupt, and where thieves break in and steal.”

All good news is bad for gold. Gold is a lustrous, highly malleable version of the Grinch. Gold is the world’s stupidest and most annoying metal. It has been disappointing people or getting them killed since the dawn of history. Gold is always experiencing stratospheric rises and then collapsing overnight, because it is a metal whose value is entirely based on human emotion.

The value of gold is never linked to sales or revenue or the market. It is always linked to bad news. Just as nature abhors a vacuum, gold abhors good times. When gold is rising in value, trouble is abrewing. Obsession with gold has led to murder and oppression. Gold has been at the heart of many historical misfortunes.

Whenever people start looking for gold, other people end up dead. Gold has long fascinated mankind because it is considered a safe metal, something to fall back on in times of economic uncertainty. But it is not a safe metal at all; its value gyrates spasmodically. Moreover, gold cannot experience the kind of stupendous growth that shares of Amazon or Apple or Google can because gold doesn’t split shares or reinvest profits; it’s one-dimensional. As I said, gold is stupid.

Those gold bugs on TV are harbingers of doom who are always warning you to have lots of gold salted away. Helium is a more intelligent investment than gold. So is jade. Or onyx. Way more intelligent. If I had a nickel for every time I invested wisely in gold, I’d have less than a nickel.

Investment columnist Scott Burns advises, “If you really get into the ‘financial collapse’ thing, buy lead, not gold.” Lead bullets inserted into a good handgun, he explains, can be turned into gold very quickly. Substantiating his assertion that “Gold probably will be useless in Armageddon,” Burns observes, “The reality is that in a true crisis, the only stuff that will have value are things we like to buy with money.”

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