Well that's not a politically correct way of thinking (referring to the title of course). We were all told to not judge a book by its cover, not to decide on someone by the impact of first impressions, etc. Well in the financial markets, perception is valuable and the reality is discounted and swept under the proverbial rug. I have wanted to write a post on a certain shiny metal that really has no viable uses other than to outfit the showy with bling and now have a moment so I will. Now I know what you'll say, "but Ramblings, my cuff links / earrings / wedding ring / bracelet / whatever is my most prized and valuable possession". Really? Other than ornamental jewelry, what is a "useful" function of gold. "Well what about the gold plated connections on my $250 Monster HDMI cables? Isn't crystal clear TV reception worthy of gold (because of course I need to see every ripple of fabric on the latest American Idol contestants)" you might say. No gold plated connections are just a marketing gimmick that unfortunately, too many fall for. Gold, what's it good for. Well for one thing it has the perception of being valuable.
The perception of gold as value goes back thousands of years. Perception of value is all gold has going for it. Does it do anything like say, a barrel of oil, a bushel of wheat, a cow/pig/buffalo/horse/rabbit/etc., or an acre of land. No it doesn't. But what it does do, is captivate mens minds with the shiny glint of sunlight off the speck in the river. In an emergency would you rather have a bucket of wheat or a gold ring? Gold can buy the bucket o' wheat, but only as long as golds perception of value holds. This perception of value extends to all kinds of things including small rectangular pieces of paper with a picture of our first President located on the front.
Full Disclosure - I do have a small position in gold limited to what fits around me and my lovely wife's finger.
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