I read a lot of recommendations of Austrian economists to put at least 10% of your holdings in gold.
I can understand this would make sense in a hyperinflation scenario. But couldn’t you also buy stock?
But what if we end up with a deflationary scenario? (like we have seen in Japan) Wouldn’t the price of gold drop along with the money supply under such a scenario?
Also in case we would go back to the gold standard, wouldn’t the price of gold be fixed and possibly at a level that is not necessarily advantageous?
Thanks for you replies.
Personaly, though I have neither gold nor investments of any sort, I would keep a portion of my saved assets in gold; however, now may not be the best time to do so since gold may very well be a bubble. The entire point is to get a form of wealth that is independent from currency, esspecially now from the dollar and pound. However, like all investments, one is trying to forsee future circumstances so there is always the possibility for failure.
http://mises.org/books/monetarysystem.pdf <---- hence many Austrians, though they certainly prefer gold to a fiat dollar, argue for a privatized currency.