September 23rd 2009 Google hit $500 a share and Gold hit $1,00 an ounce and we asked the question:
“What you think is a better investment right now, Google at $500 a share or Gold at $1,000 an ounce.”
We put up a poll for a week and the results were split right down the middle, 50% picking Google, 50% picking Gold.
So we sit exactly two years later.
Google is trading at $520 a share up 4% over 2 years.
$10,000 invested in Google two years ago would be worth just $10,400.
Over the last 52 weeks Google has traded as low as $473 and as high as $643
Gold on the other hand closed at $1,755 up 75% from two years ago
$10,000 invested in Gold would be worth $17,555 2 years later.
Over the last 52 weeks Gold has been as low as $1,314 and as high as $1,907
So the worst you could have done at any point in the last year with gold is selling it for over 30% higher than two years ago, while Google you could have actually lost money with if you sold at the low of $473.
We will see where we are at next year.
Have to say, gold bubble is popping. Dollar strength ahead, inflation risk off the table, deflationary expectations back on big time. Massive deleveraging forthcoming, margin reduction, and cash raising. Commodities will go bust, gold included, oil will get slammed.
I will say after being in Bali for well over a year, today was the first day I saw on all the money changer signs on the street that the USD is actually ahead of the AUD. I hope that it keeps up. At least that is in relation to Indonesian Rupiah.
@3d
Inflation risk off? How did you come to that conclusion?
We are still cycling through the 700+ Billion from the last stimulus package. Now we raised the debt ceiling to 110% GDP (with that last 2.4 Trillion dollar raise).
We went from 9 Trillion dollars in debt in 2008 to 14.5 Trillion dollars in debt in 2011 (nearly doubling the debt in 3 years). Now we are at 40% of ever dollar that the federal government takes in go to pay off the INTEREST on the debt.
I don’t see how you think that inflation risk is over. The Government is artificially holding interest rates at near 0% just to keep the economy moving.
I just don’t see how you can have nearly 1 Trillion dollars (Trillion = a million millions) poured into the economy and now have more money chasing the same amount of good and services and not expect to see inflation.
That just goes against the laws of economics.
Please site your source on how you came to that conclusion?
Cheers
I am still keeping my gold….for now.
Love to see the gold rays when the Sun shines on my GOLD every morning.
If somone had bought a google shares 15 days back he would have lost 25 dollars while someone invested in gold would have lost close to 220 dollars in the same time. So no point in comparing apples with oranges.
It will be a good thing to compare a Google vs Apple share.
The problem with hardcore bugs is that a lot of them operate without brakes. Zero exit plan.
When gold is low, they say buy.
When gold is up, they reference their gains and say buy more.
When gold is through the roof, we’re in new normal, get in before its too late!
When gold drops, haha! Another buying opportunity!
When gold falls hard, now’s your chance!
When gold bottoms out, it can only go up from here!
The face-ripping gld and slv saw in the past couple days is very interesting. Metals ate shit in the last few downswings when people needed to meet liquidity demands, but then shot right back up, and up, and up… Mixed signals about EU recapping banks, which is a gigantic inflationary signal.
Gold @ 2K is like the old Oil @ 40. If it breaks that, forget it.
Interesting times, we live in.
curiously (or not) both GoogleGold.com and GoldGoogle.com have been already registered by someone
do you earn interest on gold?
how many people use gold as currency?
maybe gold is like real estate.
it’s worth 0 until you sell.
an ounce today might buy only a fraction of the food an ounce buys tomorrow, or vice versa.
how many days can you go without food?
Commodities (such as gold) are the true world reserve currency. You can take an ounce of gold to any country and exchange (sell) it for its worth for its weight in that currency.
Gold is also the hedge against inflation. If the value of the dollar drops (maybe because you have a trillion extra dollars injected into the system and now you have more dollars chasing after the same amount of goods) commodities are the things that fair best in unstable times.
Gold is a commodity and is pretty much an asset class not a currency but like I said before, it is the only true asset that is accepted world wide.
If the dollar drops out and is worth nothing (think hyper inflation Weimar Republic Germany in the 1920’s where a loaf of bread went from a 1 mark bank note to over 10 million marks nearly over night) commodities are what will get you through that. Gold and precious metals will skyrocket. Its a hedge against such inflation.
Just a thought.
“Gold is a commodity…, it is the only true asset that is accepted world wide.”
Gold and domain names.
many thanks jack for the thoughts. gold has such a long history. it goes back further than today’s geopolitical borders and governments. it’s embedded in human psychology. i recall reading about the history of the federal reserve and a story about france in the 1800’s wanting to be repaid by the u.s. in gold rather than u.s. currency (the standard for which which was changing at the time). however an enormous quantity of the world’s gold was being kept in the subterranean federal reserve storage vault in n.y.c. so the u.s. officials did something like simply putting a sign next to a portion of it saying “this belongs to france”. and france was happy with that. no idea if this is a true story.
not sure how much food one could exchange some gold for in any country at any given time (since gold’s value fluctuates), but seems like given a choice between a goverment issued currency and gold, gold is more liquid. gold is always going to be worth _something_. it’s embedded in human psychology as being valuable. whereas government currency can be rendered almost worthless simply by “policy”.
“…curiously (or not) both GoogleGold.com and GoldGoogle.com have been already registered by someone…”
Google is a trademark…you in trouble…
@Tony
Domains are great places to put your money in times of a decent economy but, in the end they are not tangible. Worst case scenario, in a time of hyper inflation it will be commodities that will be sought after.
Even though domain names have an intrinsic value now, if it ever came to a real disaster all bets are off. Paper stock values will plummet. Non-commodity goods prices will also fall. Commodities will skyrocket, Gas, food, Water, coffee… all the things that you need to live. The one currency that will be accepted (outside of barter of other commodities) will be precious metals. If crisis hits… we will go back to the simple way of doing business. No credit, IOUs will be out the window. It will be if you have a good or service that I need we may be able to barter out a deal. Currencies will be out the window since (especially the dollar) is backed by NOTHING. Easy to default when you dont have skin in the game.
Just my thoughts.
Cheers
No chance of hyperinflation, I repeat, no chance of hyperinflation. The Fed has been fighting the prospects of a deflationary spiral as asset values were wiped out in the financial crisis and deleveraging continues to take place. It will be quite some time until that process is completed and now with the very real prospect of the collapse of the European financial system this will push us into another a recession, this one potentially much deeper and more prolonged since there is no ability for governments to provide fiscal stimulus.
Commodities and in particular gold will plummet. It will be a monumental wipeout as money floods into US Treasuries. You’ll see absurdly low yields on the 10 year. The dollar will surge.
Jack
Rob Monster and I don’t agree with you about domain names being worthless post hyperinflation. Domains have worth outside the US and in other currencies just like gold does.
Just appraised some of my gold and they are worth about $20Kusd….
Will keep them…
Thank YOU mother and father for the gifts!!!