James Ledbetter is the editor of Inc. Magazine and the author of a recently released book, “One Nation Under Gold.” On June 27, 2017 Ledbetter was the guest on the NPR show “Fresh Air.” In this book, Ledbetter shared America’s tumultuous relationship with the metal.
Currently, there are no countries in the world that use the gold standard for their currency. America last used the gold standard in 1971. America has used the gold standard for much of its history. But those “golden days” were by no means golden. Various “panics” from the 19th century occurred under the gold standard. And the Gold Rush of 1848 dislocated and drove crazy people and financial markets.
SO WHY DO AMERICANS TREAT THE METAL LIKE A SHIBOLLETH?
The current spot price of gold is 1252. The Author Rob has owned it a various times and trades options on Gold ETFs, i.e. GLD. And the Author’s have made a nice return in it. But what is the future for gold as an investment?
There is no magic in gold. Gold competes in the market with everything else. It has some intrinsic value because of its metallurgic properties. But most of its value is reflected in its perceived, not intrinsic, value. History has given it a vaunted economic position. And taken away much of that economic fascination has dissipated. But many Americans cling to gold. But then again, Americans cling to obsolescent motorcycles and are afraid their kids may hear the word Islam on TV.
Most mainstream investors to not hold lots of gold. Some may have a gold ETF as part of a diversification strategy. But then there are the gold nuts. (Or silver nuts.)
There are others, however, that see an apocalypse behind every closed door. They want something that they can hold on to. While touching your shibboleth might be fun for some, that tactile fascination defines the problem. Gold is heavy and hard to store. It is a honey pot for burglars and robbers. It is liquid, but only in places like jewelry stores and pawnshops. The Authors would rather leave their money in a brokerage account than have to hire a bodyguard for our booty.