Comments on: Gold: The Glenn Beck indicator http://blogs.reuters.com/felix-salmon/2009/12/07/gold-the-glenn-beck-indicator/ A slice of lime in the soda Sun, 26 Oct 2014 19:05:02 +0000 hourly 1 http://wordpress.org/?v=4.2.5 By: dWj http://blogs.reuters.com/felix-salmon/2009/12/07/gold-the-glenn-beck-indicator/comment-page-1/#comment-9654 Mon, 07 Dec 2009 19:22:45 +0000 http://blogs.reuters.com/felix-salmon/2009/12/07/gold-the-glenn-beck-indicator/#comment-9654 Many of these folks are also complaining about Al Gore’s environmental investments, and love to note that every time he advocates some anti-carbon policy he’s “talking his book”; I think it’s more true of both Gore and these conservative gold bugs that they’ve put their money where their mouths are. Not that one needs cliches to describe this; they have long-standing beliefs that influence both their advocacy and their investments, and that’s not necessarily a bad thing.

As for the feelings of gold vertigo expressed in the last paragraph, I have to concur there. These things do always seem to run farther and longer than I expect them to, though.

GLD is a play on tail risk, to some extent, and physical gold — most reasonably in bullion form, but even to some degree in overpriced forms — is a play on far worse tail risk — if you really think there’s a meaningful probability that our new communist overlords are going to confiscate anything you can’t hide in the woods, durable precious goods that you can hide in the woods become a hedge on that. You can’t eat gold, though; in some ways, this is the same hyper risk aversion that you’ve criticized from two and three years ago, and while it’s prudent to look out for tail risk, it’s also prudent to recognize that you’re simply never going to get rid of all of it. If 1% of the US population is moving to physical gold, then hundreds of people with gold buried in their back yards are going to be killed in car accidents in the next few years.

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