Last week, I sent out this tweet:
In case you are not acquainted with this fact, there is no religion more zealous than Gold Kooks. These people are unhinged. They might even be worse than HODLers. The fact is that “precious” metals have been sucking infected donkey dong for one solid year, and yet the Kooks just keep cheering. So, naturally, my tweet got all kinds of crap:
Uh-huh. Hahaha indeed. Here’s an updated chart:
In a matter of hours, gold has lost a full 10% of its value. Ten percent! Can you IMAGINE the Dow Jones Industrial Average going down 3,500 points in a matter of hours? Can you imagine the kind of freaking out that would take place if such a thing transpired?
I would add, as an aside, that there is another well-known commodity I think is in for a major drubbing, and it rhymes with “rude boil.”
Crude Oil Chart
I’d like to re-state what I wrote a few years ago about the “stackers;” it is as true now as it was then, and given the rotten experience I had putting my toe into the precious metals waters, I am a more fierce anti-precious metals person than I ever was before. The stuff is a paper weight. Here’s what I wrote before:
I would like to make my own modest effort to put to rest a trite little phrase that gets trotted out every time silver and gold are getting trashed (which has been the case for years now). “I just checked, and my pile hasn’t gotten any smaller.”
These precious metals kooks–sometimes called “stackers” (since they stack up coins, as well as losses)–somehow make the point that since their physical asset hasn’t changed shape or amount, it hasn’t really dropped in value. Not in a real sense. Honest Injun!
I don’t think I’ve ever used this word before on this site, but here we go: bullshit.
If I bought a house for $5,000,000 (which poor saps are doing in my fair city right now) and a few years later it is worth $2,500,000, I have lost $2,500,000. Period. End of story.
The analogous retort: “My house isn’t any smaller!“
Ummm, yeah, that’s right, you pinheaded moron. But you’ve still had a severe diminishment in asset value by the metrics we here on Earth like to use. Your house still has utility (which is far more than one can say of a bunch of shiny coins and bars), but you’ve had your ass handed to you anyway. You HAVE IN FACT lost $2,500,000, your house’s consistent dimensions notwithstanding.
And I don’t say this as a person pointing and laughing at precious metals kooks. I am one of them, as I accumulated a meaningful horde of silver and gold, largely prompted by the lunatic rantings (albeit very convincing rantings) of gold bugs over the past few years.
If the fabled “things will go wrong someday” ever does come, and precious metals soar in value versus meaningless fiat, well, great, then the kooks will have, in the end, been right.
But that day may never, ever come, and owners of metals should recognize that their beloved stacks are indeed the same height, width, and depth. But these people (and I) would have been a hell of a lot better off buying Amazon (NASDAQ:AMZN) and Starbucks (NASDAQ:SBUX) in the first place.