The Attraction of Gold

I wanted to say a few things about people who invest in gold. There are some people, not all, who are quite simply unreasonably attracted to gold. They make Goldfinger look like an amateur.

Maybe one day some cognitive scientist will find a connection between our brains and gold. For whatever reason, gold has dazzled men for millennia.

For example, gold NEVER rusts. I mean never! You can take the gold out of an Egyptian pyramid and stick it in your cavity (though you might want to clean it first). It’s also non-toxic which helps.

Gold is incredibly soft. One ounce can be stretched for 50 miles. It can be pounded down to a few MILLIONTHS of an inch thickness.

Gold is very heavy. Despite what you see in the Treasure of the Sierra Madre (“Badges? We ain’t got no badges!”), gold dust wouldn’t have blown away.

Gold has been found on every continent on earth. Gold has also had strong religious connections. It’s mentioned in the Bible more than 400 times. Marx writes of commodity fetishism, which is meant to have a religious connotation. And I won’t even get into Freud’s talk of the psychological connection of gold to feces (no, I’m not making this up).

When Moses came down from Sinai with the Ten Suggestions, the Jews were making a golden calf to worship. God instructed Moses to overlay a sanctuary for him in pure gold. In other words, gold had its bases covered—it was on both sides!

Plato mentions the gold/silver ratio to be 12. Recent historical evidence suggests that Isaac Newton was mainly an alchemist. The other stuff he did was just playing around on the side, and was probably an offshoot of his efforts to makes gold. Pieces of his hair have traces of lead and mercury.

Newton was also Master of the Mint and inadvertently put England in the gold standard. This means that one of the greatest geniuses in human history was also a civil servant who made economic policy based on a forecast. A forecast that was dead wrong.

There’s more gold at the New York Fed, waaaay below 33 Liberty Street, than in Fort Knox. Gold is also a really good conductor. So despite its high prices, it’s used in many electronics.

Earlier I mentioned Goldfinger. The Ian Fleming book was published in 1959. The plot (made into a classic 1964 movie) featured a crazy idea -– to blow up all of the U.S. gold at Fort Knox, making it radioactive and worthless. That would make Auric Goldfinger’s gold worth more. But here’s the odd part — he didn’t need to stage all that drama to make money. If he had just held on to his gold for 20 years, it would have been worth 25 times as much.

I highly recommend Peter Bernstein’s The Power of Gold: The History of an Obsession

Posted by on April 16th, 2013 at 9:25 pm

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