Is Owning Gold Worth It?

I recently received an interesting question or three from a very worried reader leading me to ask all readers if owning gold in 2012 is really worth the trouble. Most of us understand the natural progression to protect begins monetarily but at least one reader questions gold’s worthiness during what history will write as the economic correction of the century. I believe gold is relevant but, more importantly, what do you think? Here is the question with all its raw honesty.

Question:  Okay, I bought gold bullion many years ago preparing myself financially and emotionally for a day I see as imminent. By doing so I made great sacrifices at my family’s expense that includes living on a narrow budget, taking few vacations and lots of worry. At times my family viewed my decision (to own gold) as overreacting but has slowly come around to the same conclusions that led me to precious metals. The problem is lately I’ve doubted my decision to own gold and here is why.

I see the entire world facing long odds of economic recovery in my lifetime. I see severe social unrest and I see more totalitarian governmental control that only compounds problems by stealing more wealth from those making deep personal sacrifices. To be honest….what good is a boatload of precious metal if a government steals it through taxation someday? I question the benefit of owning silver, gold, or any other storage of wealth in such an age.

TPS Answer: First let me say I do appreciate your honesty and candor. This site receives many gold related questions but few as honest as the ones you’re asking. Most folks are miles away from your prudence and just now looking for ways to preserve what wealth is left in 2012. You on the other hand have accomplished what few will ever realize but still question such prudence, I understand. To be honest, I too have asked myself similar questions and this is why I would rather live in a world with $500 an ounce gold than $10k (quality of life is more important than individual gain).

You are realizing growing gold values come with a price far beyond growing wealth. The downside to expensive gold (gold appreciation is on its second decade) is the pain and suffering as those unprepared realize dollar dominated wealth is an illusion all while gold grows out of reach. “Yes” overreaching governments will take wealth unprotected and exposed. “Yes” social and civil unrest worldwide is happening and will probably expand as the economy corrects.

But all these things you mention will happen if you own gold or not. Those holding wealth have choices other don’t and this means more options for someone like you and your family. The option to relocate, the option to serve others, the option of better health care and the option of growing wealth. But another option is rarely mentioned and one I want to make most clear. A great option of wealth is the ability to protect it, let me explain.

I’ve owned small private businesses my entire adult life and can honestly say nothing can protect wealth more than a compatible team of professionals committed to protecting what you have worked hard for. This is why big corporations pay little in taxes while the middleclass continues to see inflation tax away any real chance of a prosperous future. Your storage of gold – hopefully silver too – provides the ability to pay those with the professional capacity to protect wealth, even from an overreaching government. Now is a good time to take your wealth to the next level, the protection level of metal ownership.

In the meantime, try to enjoy what you’ve been blessed with and appreciate what most can only dream of owning. Thanks for the questions and honesty.

Question:  Do you feel comfortable putting a number to year end gold prices? I’m sitting on the sidelines waiting to buy more gold while hoping gold dips at year end exactly as last year.

TPS Answer:  Great question and thanks for asking. I’m assuming you’re asking in terms of dollars? If so, any year end gold prediction would only be a guess. Gold could drop over short term but no one with a simple understanding of economic sins believes gold will do anything but substantially rise over the longer term (rising deficits equal dollar devaluation which in return equals rising gold prices). I don’t have a problem with waiting since you sound as if you already own gold and looking to add more. If I’m misreading, and you don’t own gold, then don’t wait since marginal gold inventories could leave new buyers outside looking in.