Is Investing in Gold Biblical?

[sbbqb7n16]

Why would you inquire of men "If any man lacks wisdom let him ask of the Lord who gives with holding nothing" Every good and perfect gift comes from the Lord.
Manifold wisdom "Wisdom is found in a multitude of counsel" But ultimately it is the Lord that gives the ability to obtain wealth

Oil and perfume make the heart glad,
So a man's counsel is sweet to his friend.
-Proverbs 27:9

The way of a fool is right in his own eyes,
But a wise man is he who listens to counsel.
-Proverbs 12:15

The thoughts of the righteous are just,
But the counsels of the wicked are deceitful
-Proverbs 12:5

Since God cannot provide wicked counsel, it must mean that Solomon was occasionally recommending counsel from other humans (see Prov 27:9).

Nikki is doing a very intelligent thing by seeking out advice in her personal finances. Much like you would go to a doctor if you were really sick - even though God heals you.

 

[MacFall]

>it is the best defensive investment around during a deflationary recession. It also preserves purchasing power during hyper-inflation - which is just around the corner.

Please explain how it can be both?

Because it is stable. Even when it fluctuates in terms of dollars, its real value stays pretty much the same, and has done for at least the last 3000 years (actually it has increased during that time, since it buys the same commodities per ounce as it did in 1000 BC, but those commodities are of a higher quality than they were in 1000 BC).

Even though a recession is the necessary cleansing of bad debt and malinvestment accumulated during an inflationary period, the government, fearing the political consequences of the recession, will attempt to "stimulate" the economy. They do this by increasing the money supply and lowering the interest rate, which leads banks to release their monetary holdings.

The result is: more inflation! Which will eventually have to be cleaned out by a recession, which the government will prematurely end with... more inflation! Repeat process until total collapse finally happens, or until someone has the guts to let the recession take its natural course.

Anyone holding dollars suffers from this, because the purchasing power of their money fluctuates in a gradually-increasing cycle. The cycle eventually leads to hyperinflation when the inevitable recession is so deep that they just can't expand fast enough to keep prices high and employment up. The end of hyperinflation is the collapse of the currency, and the obliteration of any savings held in that currency.

Thus, the more of your assets are held in commodities whose real values do not change when the value of the currency does, the less you have to worry about the effects of the boom/bust cycle on your savings and investments. Gold and silver, being durable and portable, just happen to be among the best stores of value, but other things such as non-perishable foods, wine/liquor and tobacco (whose values increase with age under proper storage), and other durable goods are wise to hold.

And why all the sheister gold salesmen would rather have my money than their gold?

For the same reason all the "sheister" farmers would rather have your money than their food, even though food is universally demanded.

Money is a medium of exchange, and because of reasons for which the government is entirely at fault (taxes and other penalties on their use as money plus legal tender laws), it is too difficult to use commodities for every day exchange. So a holder of gold cannot easily trade it for food, clothing, housing, car repair, etc. But he can trade it for money, which can then be traded for those things.

 

[ulu]

There's nothing biblical for or against gold investing. When the whole economy crashes within the next decade and the dollar becomes almost valueless it might payoff to have some gold. Like every other investment, it's just a gamble.

 

[MacFall]

It's only a gamble if one expects a collapse so complete that nothing that can't be worn, eaten, or burned for heat is valued by anyone. Otherwise, we can expect gold to slowly appreciate, as it has done for the last 3000 or so years through all kinds of economic disaster.

 

[whereisthetruth]

Securities match inflation AND get you at least 8% in the long run.

Yeah, like the long run down it has been subject to over the last 2 years. Securities aren't magic, and neither is any 'asset'. Their value is determined by the real fundamentals 'in the long run'. If shares derive their value from their demand caused by easy cash availability, rather than from their income producing ability, they can easily be overvalued, and this can be the case for as many years as monetary policies and bank lending standards continue to loosen to 'prop up' their aparent value.

I have been told all my life that property is the best investment 'in the long run'. This is totally false. Property itself is not an investment. Any value that property derives is it's ability to produce an income, and that is all. And this can change over time just as any income producing entity can. Just because lots of people can get access to easy cash and 'bid up' the price, doesn't mean that property increases in REAL value. Same with shares.

 

[whereisthetruth]

It's only a gamble if one expects a collapse so complete that nothing that can't be worn, eaten, or burned for heat is valued by anyone. Otherwise, we can expect gold to slowly appreciate, as it has done for the last 3000 or so years through all kinds of economic disaster.

This is a vast oversimplification. there have been times and places where gold was seen as virtually worthless. (Study the Spanish depression of the 16th Century for example), and other times when it was extremely valuable. Anything has a value that is determined by PERCEPTION and COMPARISON. If you are dying of thirst, a glass of water might be more valuable to you than your house! This is an economic truth often overlooked, but is a very important factor in discussions on economics.

So, while it can be said that OVERALL, gold is at least as good as most other investments, like any other investments, it can fluctuate WILDLY, and cause people to become either wealthy or poor. THERE IS NO SET-AND-FORGET INVESTMENT, PERIOD!

 

[MacFall]

I am well aware of the subjective theory of value, and that is the theory that I accept. But what I said is still basically true: it takes a collapse far worse than the Great Depression to cause people to stop valuing rare metals highly.

 

[whereisthetruth]

I am well aware of the subjective theory of value, and that is the theory that I accept. But what I said is still basically true: it takes a collapse far worse than the Great Depression to cause people to stop valuing rare metals highly.

That is right. And that is exactly what I believe is happening. At the moment people are looking to invest defensively - putting their money into 'storehouses' for their wealth. However when things get really bad, it will dawn on people that even gold can't be eaten, used for heating, or for shelter. Then the things that become valuable are the 'real' commodities themselves, not the symbolic representations that currencies (any type of currency) are. Even some commodities that today are considered 'essential' will become worthless. For example, oil may be considered valuable now, but with a destroyed industrial economy, oil will drop in demand to the point of being very cheap again.

It has happened before, and it will happen again. (By the way, I was a little off with my point about the Spanish depression of the 16th century, it was the 18th century).

Gold as a 'store of wealth' is only as good as the willingness of people to accept it in exchange 'real stuff'. Not only this. When things get really bad, governments will simply steal the gold from the people. This happened in the great depression, and it could easily happen again. Then it will not matter how much gold one has, it is virtually useless as a means of purchasing anything.

So, while yes, at the moment gold might be one of the best places to put otherwise depreciating 'fiat money', it is not an absolute safe haven. And for those that think that gold always retains it's value, consider that in the mid 1970's gold was worth only about $35 an ounce - hardly enough to buy a 'good quality man's suit' as some claim.

For now gold will continue to rise against currencies, but you can be assured that once the bottom truly falls out of the economy, gold will drop in value like a rock, like every other asset class. This will be because it will not be able to be purchased with any amount of worthless paper.

The only truly valuable and lasting investment is into knowing God and learning to listen to Him and be guided by His Spirit. Knowing Christ is much more valuable than anything that can be bought with any earthly commodity, no matter how 'valuable'.

 

[MacFall]

That is right. And that is exactly what I believe is happening. At the moment people are looking to invest defensively - putting their money into 'storehouses' for their wealth. However when things get really bad, it will dawn on people that even gold can't be eaten, used for heating, or for shelter. Then the things that become valuable are the 'real' commodities themselves, not the symbolic representations that currencies (any type of currency) are.

That will only be true for a short period of time. People need a medium of exchange in order to have trade, and trade is essential to human life beyond the subsistence level. Rare metals have all the qualities of a good money - scarcity, durability, homogeneity, portability - and that is why they are valued as money; not because of "good faith" valuations.

The key is to start trading in gold and silver now, before the crisis, so that when the crisis comes people understand why they should value rare metals and continue to do so even though they can't be consumed to satisfy immediate wants. You can't eat rope either, but a wise person will know that you can use it to make a net for catching more fish. Likewise, people should know that you can use rare metals for indirect trade, without which starvation is much more likely.

It is, of course, also wise to have other goods which have a higher consumption-value than rare metals. Salt, liquor, canned food, medical supplies, ammunition, and other things that have been mentioned here are all good ideas.