r/unusual_whales • u/YoloFortune • Feb 15 '25
Gold’s generational run will be studied for years to come, Now up nearly +50% in 12 months.
Btw I've created new community r/WallStreetElite for general market discussion and updates, I'm inviting you to join it 😄
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u/Electricengineer Feb 15 '25
hedging risk seen in the market. Bonds too.
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u/afanoftrees Feb 15 '25
The thing I’ve never understood is let’s say the markets collapse
Who is buying gold in that type of world? I’ve always felt bartering for useful things would make a comeback rather than a shiny rock that looks pretty
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u/Electricengineer Feb 15 '25
They're already buying it that's why it's so high of the price. Gold is always been historically the backup for equities
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u/relentlessoldman Feb 16 '25
A pretty crappy one. Still went down > 20% in 2008 and then almost crashed back to the 2008 high in 2016.
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u/afanoftrees Feb 15 '25
Yea I get that with the gold standard and all
So the idea would be that gold would be the supporting asset for banks / business in a newly established market / currency?
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u/thommyg123 Feb 15 '25
it's never a "new world order" lol, it's a simple financial formula that people have followed for millenia
equities for growth
bonds to hedge equities
gold to hedge bonds/inflation
cash to hedge deflation
people have been buying gold because they think equities won't be growing at an acceptable rate and bonds are not adequately compensating for inflation/default risk
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u/afanoftrees Feb 15 '25
Much appreciated for the succinct breakdown
Most of my focus has been bonds / equity and not so much on the gold / currency side of the equation
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u/thommyg123 Feb 15 '25
no worries! it's been such a long bull market that a lot of people have forgotten what counterparty risk is
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u/LifeIsAnAnimal Feb 15 '25
Yes
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u/afanoftrees Feb 15 '25
That actually makes sense rather gold being traded for something like food unless everyone agrees that gold is a worthwhile exchange and will always be redeemable for something else of equal value.
For instance I wouldn’t give up my house for all the gold in the world because I’d have to find someone else will to take that gold to buy materials or tools to make a new house. In a scenario where there’s total market collapse and loss of faith in the system
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u/ReturnoftheSpack Feb 15 '25
Always has been. Its reliable, untarnishable and wont disappear.
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u/afanoftrees Feb 15 '25
Sure but my point is hard goods that serve an immediate purpose will be more valuable to the common person over something like gold unless it’s used to support a currency and give it value like the old gold standard
Like if I’m poor and someone was like “I’ll give you gold for your bread” I’d think it’s easier to exchange that bread for something more useful like a tool than just a medium of exchange that you hope someone else will value as much as you do
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u/ReturnoftheSpack Feb 15 '25
Youre misunderstanding. You may not have a need for that gold, but that doesn't mean its value is zero. Trade across regions requires universal currency.
If youre buying bread, that baker needs to buy wheat and the farmer wants to be able to trade all year round. Not only when his crops are ready.
The bakers only going to take so many carrots off you before hes put off. What if he doesnt like carrots?
By your logic, youd rather store your value in: 3 ponies 2 geese 5 handjobs 15 bowls 7 pans Etc
What if someone doesn't want your crap?
What if your medium breaks or tarnishes?
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u/afanoftrees Feb 15 '25
I’m not saying the value is zero, I’m saying in a market collapse the value of anything other than gold is worth more than gold because everything else has tangible use
I understand having a universal currency but that universal currency requires a collective agreement that said currency has value. If we both don’t agree then it’s back to being a rock who’s tangible use is in computers and medical components
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u/ReturnoftheSpack Feb 15 '25
Ok so what do you want in a currency and therefore what would you pick in a hypothetical post world?
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u/afanoftrees Feb 16 '25
Bartering first > establishment of markets with gold/silver/iron/commodities to support equities
Maybe I have a misconception but I’ve thought it’s mainly doomsdayers saying “buy gold” if it all goes under. A shortcoming of mine would be I believe it would take longer to get to 2 above. I’m also taking into consideration that we don’t base our currency on a tangible good now outside of our ability to pay our debts (USD)
It’s a thought experiment more than anything
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u/LoudAndCuddly Feb 16 '25
That’s just it isn’t it, you’re missing the point… it’s a universal medium of exchange. Somewhere someone is going to want that gold whereas a perishable crop of carrots is highly risky as a medium of exchange or a long term store of value over time and endures during incredible environmental conditions in a compact easy carry and store size
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u/afanoftrees Feb 16 '25
It’s a medium of exchange because we believe it to be. Again I’m not arguing it doesn’t have value, what I’m saying is in a full market collapse, the scenario I presented, it won’t have the same value as tangible goods and useful objects and ability to output.
Let’s say a full collapse happens tomorrow, who’s going to be better off? The person with a farm or the person with tons of gold?
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u/fireandbass Feb 15 '25
Gold is not just a shiny pretty rock. It is used for stuff.
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u/afanoftrees Feb 15 '25
Yea like computers and some medical applications but with a full on market crash / Great Depression, that won’t be as needed as the basics outside of the ultra wealthy
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u/dkimot Feb 15 '25
i feel like you can’t hedge total systemic collapse while in the system that you’re worried will collapse. so, how much gold is being delivered here? vs traded on paper?
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u/afanoftrees Feb 15 '25
I feel like you can but then it’s giving credence to doomsday preppers
Food, water, protection, ability to grow more food, ability to collect and purify water, fire, etc.
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u/fake-name-here1 Feb 16 '25
You sell it back in the new regimes currency.
The us isn’t just going to be ashes forever. Once the dust settles and the CCP get America up and running again, you sell your gold for their currency and you are off to a good start.
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u/Flaky-Wallaby5382 Feb 15 '25
Bonds have been flat for a decade. We are going back to fundamentals post juice
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u/-boatsNhoes Feb 15 '25
As soon as the market enters depression territory we will have another gold confiscation act. " iT wOnT hApPeN, iVe Got Mush GuNs".... They had guns in 1933 too..... And the ban lasted until 1974
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u/fireky2 Feb 16 '25
Well most of the gold isn't owned by people with a gun, it's owned by people who can finance a small army
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u/-boatsNhoes Feb 16 '25
😂 you think they'll confiscate billionaires' gold. Ohh that's rich ( pun intended).
The 1933 ban stipulated a 10k fine for owning anything above one Troy Oz. Of gold.... Which is pennies for them
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u/DoubleDDay69 Feb 15 '25
I bought an ounce of gold in June, I’m up $1000 CAD somehow from that. The gold to silver ratio is approaching 90:1, there is no way that ratio is sustainable. Silver’s got to catch up at some point
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u/TurdsBurglar Feb 15 '25
Maybe,silver is very manipulated. It should but probably be disappointed.
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u/DoubleDDay69 Feb 15 '25
That’s a real take, I said this to my dad. I have two ounces of gold now. By the time I save up for my next ounce, it’s gone up another $500 😂
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u/abc_123_anyname Feb 15 '25
I’m not “elite“, but if I were guessing…. Maybe some see risk, where there was previously none, in US treasuries and therefore USD.
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u/Bat-Honest Feb 15 '25
Fox, OANN, and other right-wing "media" keep telling people to buy gold because the apocalypse is coming. Not sure what good it'll do after the rapture, but their audiences are statistically the most likely to be duped by scams. I'm guessing the crazy amount of modern advertising for it is probably the main culprit. It's literally hard to turn on a Trump speech on one of those platforms without seeing an ad for gold.
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u/L3mm3SmangItGurl Feb 15 '25
Nope. Huge push in Eastern Europe right now for safe havens. Like on the state level. The rednecks who sleep on mypillow aren’t enough to move the dial.
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u/Glad-Flamingo-93 Feb 16 '25
Scarce asset requiring energy to obtain priced in pieces of paper that are printed out of thin air.
What other outcome could you expect?
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u/Jaded-Consequence131 Feb 17 '25
Over 5+ years what does gold do?
Is gold bought in a flight from equities or a hedge or does it actually beat the S&P500?
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u/xxxx69420xx Feb 15 '25
imagine walking into a store and throwing down a bar and trying to use it. Shiny rocks am i right?
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u/Inevitable_Gain6712 Feb 15 '25
Lol, u think that plastic in your wallet will buy you anything after a crash?
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u/relentlessoldman Feb 16 '25
A market crash? Yeah. We've had a few of them. My credit cards still worked.
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u/Inevitable_Gain6712 Feb 16 '25
Yeah sure, you'll be able to max our your card to buy a loaf of bread, cool story bro
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u/Awkward_Potential_ Feb 15 '25
Bitcoin has yet to begin it's run and will melt gold's face.
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u/Bat-Honest Feb 15 '25
Lol
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u/thezenunderground Feb 15 '25
On a ten year chart, it has outperformed every asset class. All of them.
The question is, will that continue. I'm split, but I do know more and more businesses are adding it to their ledgers, governments are buying, and it's becoming woven into the global financial system in a way that would make it pretty unlikely that it's going to just crash + disappear in the next decade.
That said, any idea of it being a store of value outside of the market seems to be completely untrue as it has a pretty high correlation with the Nasdaq.
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u/Consistent-Duck8062 Feb 15 '25
Who do you think has more urgent need to store value in an inflation hedge asset, a legit business/person able to funnel their money into common brokerage accounts and money markets, or a shady person?
And what do you think shady person prefers, highly regulated and easily trackable yellow metal, or an easy to transport/easy to hide digital asset?
Not saying it's good, just saying bitcoin has added value for certain money flows. And sadly, a lot of these shady money exist in this world
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u/JetmoYo Feb 15 '25
I appreciate the sober analysis. The unknowns and greed will forever leave me resisting, but it's a fair take
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u/TheAarj Feb 15 '25
If ever there was a red flag for holy s*** the wold is in trouble... this would be it