Giants, Wizards and one Old Man!

My conversation at the local bullion shop

Gold is like a sword, made of the best metal, that can slice dragons, forged by the ancient giants. Bitcoin is like the strongest enchantment spell ever invented by the ancient wizards. Having both, is like having the best sword, enchanted with the best spell. Swooof swooof. – anonymous online comment

I’ve gone over this before, tackling it from many different angles (hyperlinks below). However, due to a recent Q&A exchange I witnessed at the local bullion dealer…

I want to throw out this thought-experiment your way:

Let’s say you own a 1-ounce gold bar.

Removing the virtue of any potential increases in the spot PRICE of Gold….

What is the VALUE to you of holding onto that shiny bar?

> Is it the potential for future earnings of the bar? Nope, that can’t be it. That bar doesn’t produce or sell anything; therefore, it’s not going to spit out revenue and/or earnings growth.

> Is it future cash dividends? Nah, that can’t be it either. 

> Is it monetary liquidity? Last I checked, royalty, residual and rent payments don’t come flying into your bank account via gold.

> Is it to maintain a store of value? Well, probably… over the long haul. But, certaintly, not during any hypothetical SHTF scenario. When societal shit starts flying, things like canned foods, freeze dried meals, salt, sugar, honey, solar panels, batteries, fuel, water filters, bullets, candy, alcohol, etc. They are the items that people are all going to value more than analog (gold) or digital (BTC) money… money that they can't consume.

So, if I’m a betting man — oh, and yes I am at times — the value to you of that gold bar has a lot more to do with preserving wealth, during a stable society, instead of seeing it as a legit buy and hold “investment?”

Let me explain…