ArtsAutosBooksBusinessEducationEntertainmentFamilyFashionFoodGamesGenderHealthHolidaysHomeHubPagesPersonal FinancePetsPoliticsReligionSportsTechnologyTravel
  • »
  • Personal Finance»
  • Understanding Finance

Surviving A Global Depression – Is Gold The Right Hedge?

Updated on January 25, 2009

There seems to be one investment that has integral and virtually eternal luster. From the times of the earliest civilizations, people all over the world have been transfixed by the apparently magical properties of gold. Egyptian pharaohs were buried in heavily gilded tombs. In later times, much of the exploration of the New World was driven by the desire to find El Dorado, the mythical city built of solid gold.

Investment opportunities for gold include buying equities in gold mining companies, or mutual funds that invest across a spectrum of gold stocks. However, many people prefer to be able to touch their gold (and keep it nice and safe under their mattress), therefore gold bullion and coins are very popular. We have to clearly keep in mind at this point that we have to foresee a time when there is a general breakdown in the very essence of the structure of our society. In these cases, a paper document stating that you have the right to something, whether it be a plot of land, a government bond, or a chunk of gold can be effectively meaningless and utterly worthless. The actual possession of a particular object is the only true determination of its ownership, thus investing in some mining company that grants you a tiny fraction of one percent of the gold deposits in some mine in South Africa or China or Australia is completely pointless at a time of global turmoil. Sure, you own that part of the gold, but are you going to go to South Africa and go dig it out of the ground yourself?

These days, gold seems to retain its value, regardless of political or economic uncertainty, and in some cases outperforms any other investment. Gold’s value tends to rise whenever confidence in the economy is shaken and a depression will likely trigger a rise in gold at first. At the time of writing, gold had shot up to almost $900 an ounce. Indeed, if the depression remains in the Low scenario range, then gold may be an excellent investment. It is not outlandish to expect that by the end of a Low depression season, gold would have exceeded its all-time highs. The problem with gold is that it has abstract value. Nothing much of indispensable value can be done with gold. It is primarily an adornment and indicator of value rather than being a value in itself. In other words, during a Low scenario, $900 could buy me an ounce of gold or 2,000 cans of tinned beans. Those cans of beans would keep my family alive for a year, but what good would the gold do us? If the time comes when survival is of primary interest, you may not be able to trade your ounce of gold for 2,000 cans of beans. You may not even be able to trade it for a single can. The value of anything is simply what you can trade for it, and when it comes down to a choice between a lovely metal and a filling meal, you can be assured that most of us will opt for the latter.

Next: Surviving A Global Depression – Real Estate: From Collapse To Black Hole

Start At The Beginning Again

Comments

    0 of 8192 characters used
    Post Comment

    • Hal Licino profile image
      Author

      Hal Licino 9 years ago from Toronto

      Because currency can be devalued to the worth of its paper (Weimar Republic, Zimbabwe, etc.) and you can't eat gold. Right now I think that the single greatest "disaster-safe" investment is CANNED FOOD! People will always have to eat! Make sure you have can openers too! :)

    • bgamall profile image

      Gary Anderson 9 years ago from Las Vegas, Nevada

      I would think that in a full blow depression cash would be king because there would be fewer dollars. In an inflation gold is king. So since we don't know which way this will go why not both?

    working

    This website uses cookies

    As a user in the EEA, your approval is needed on a few things. To provide a better website experience, hubpages.com uses cookies (and other similar technologies) and may collect, process, and share personal data. Please choose which areas of our service you consent to our doing so.

    For more information on managing or withdrawing consents and how we handle data, visit our Privacy Policy at: "https://hubpages.com/privacy-policy#gdpr"

    Show Details
    Necessary
    HubPages Device IDThis is used to identify particular browsers or devices when the access the service, and is used for security reasons.
    LoginThis is necessary to sign in to the HubPages Service.
    Google RecaptchaThis is used to prevent bots and spam. (Privacy Policy)
    AkismetThis is used to detect comment spam. (Privacy Policy)
    HubPages Google AnalyticsThis is used to provide data on traffic to our website, all personally identifyable data is anonymized. (Privacy Policy)
    HubPages Traffic PixelThis is used to collect data on traffic to articles and other pages on our site. Unless you are signed in to a HubPages account, all personally identifiable information is anonymized.
    Amazon Web ServicesThis is a cloud services platform that we used to host our service. (Privacy Policy)
    CloudflareThis is a cloud CDN service that we use to efficiently deliver files required for our service to operate such as javascript, cascading style sheets, images, and videos. (Privacy Policy)
    Google Hosted LibrariesJavascript software libraries such as jQuery are loaded at endpoints on the googleapis.com or gstatic.com domains, for performance and efficiency reasons. (Privacy Policy)
    Features
    Google Custom SearchThis is feature allows you to search the site. (Privacy Policy)
    Google MapsSome articles have Google Maps embedded in them. (Privacy Policy)
    Google ChartsThis is used to display charts and graphs on articles and the author center. (Privacy Policy)
    Google AdSense Host APIThis service allows you to sign up for or associate a Google AdSense account with HubPages, so that you can earn money from ads on your articles. No data is shared unless you engage with this feature. (Privacy Policy)
    Google YouTubeSome articles have YouTube videos embedded in them. (Privacy Policy)
    VimeoSome articles have Vimeo videos embedded in them. (Privacy Policy)
    PaypalThis is used for a registered author who enrolls in the HubPages Earnings program and requests to be paid via PayPal. No data is shared with Paypal unless you engage with this feature. (Privacy Policy)
    Facebook LoginYou can use this to streamline signing up for, or signing in to your Hubpages account. No data is shared with Facebook unless you engage with this feature. (Privacy Policy)
    MavenThis supports the Maven widget and search functionality. (Privacy Policy)
    Marketing
    Google AdSenseThis is an ad network. (Privacy Policy)
    Google DoubleClickGoogle provides ad serving technology and runs an ad network. (Privacy Policy)
    Index ExchangeThis is an ad network. (Privacy Policy)
    SovrnThis is an ad network. (Privacy Policy)
    Facebook AdsThis is an ad network. (Privacy Policy)
    Amazon Unified Ad MarketplaceThis is an ad network. (Privacy Policy)
    AppNexusThis is an ad network. (Privacy Policy)
    OpenxThis is an ad network. (Privacy Policy)
    Rubicon ProjectThis is an ad network. (Privacy Policy)
    TripleLiftThis is an ad network. (Privacy Policy)
    Say MediaWe partner with Say Media to deliver ad campaigns on our sites. (Privacy Policy)
    Remarketing PixelsWe may use remarketing pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to advertise the HubPages Service to people that have visited our sites.
    Conversion Tracking PixelsWe may use conversion tracking pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to identify when an advertisement has successfully resulted in the desired action, such as signing up for the HubPages Service or publishing an article on the HubPages Service.
    Statistics
    Author Google AnalyticsThis is used to provide traffic data and reports to the authors of articles on the HubPages Service. (Privacy Policy)
    ComscoreComScore is a media measurement and analytics company providing marketing data and analytics to enterprises, media and advertising agencies, and publishers. Non-consent will result in ComScore only processing obfuscated personal data. (Privacy Policy)
    Amazon Tracking PixelSome articles display amazon products as part of the Amazon Affiliate program, this pixel provides traffic statistics for those products (Privacy Policy)