Gold Bug
Candlefocus EditorAt the heart of the argument of gold bugs is the belief that governments are not to be trusted and unable to manage their finances responsibly. They have no faith in the stability of paper money and fiat currencies, arguing that these are backed by nothing of intrinsic value and simply lose their value over time due to inflation and government manipulation. Gold, on the other hand, is seen as a hedge against inflation and currency devaluation because it has an intrinsic value, is scarce and cannot be manipulated by governments.
Gold bugs will often look back to history to defend their views. They point to how gold preserved its value when other forms of money were being destroyed by bouts of hyperinflation, poverty and war. Gold, they argue is seen as a safe haven and will always remain so, no matter what.
A gold bug also typically take a negative stance on central banks, believing them to be manipulating interest rates and the economy and putting the long-term value of paper currencies in jeopardy. They are often highly critical of the Federal Reserve, claiming it has to resort to quantitative easing to prop up the US economy, and that this leads to a devaluation of the US dollar.
Gold bugs are often among the first to respond when market conditions turn and investors become afraid of losing their money. They urge investors to abandon paper currencies for real money, gold, believing it will offer them safety when other forms of investments fail. They discuss the gold/dollar exchange rate and will warn other investors against possible devaluation and the possibility of governments eventually reverting back to a gold-backed currency.
Ultimately, it is important to remember that gold bugs, like all investors, have their own biases and preferred investments. While some may find the arguments of gold bugs compelling, others may be more drawn to other investments such as stocks and bonds. Ultimately, it is up to the individual to decide which asset class is best for their investment portfolios.