It’s hard to find a group of investors more passionate about their trade than diehard ‘gold bugs’. They absolutely love their investment and have any number of fanciful Armageddon theories to account for why gold prices will keep going up.
Equally, the gold bugs are vociferous in silencing the dissenters: anyone who has a contrarian opinion about gold or suggests that gold prices are in bubble territory gets hectored and shouted down, with the choicest epithets being hurled at them.
The fact that gold prices have rocketed in recent months and years may appear to validate the gold bugs’ claims and hypotheses. But in fact, while gold bugs have been right about the surge in gold prices, they’ve been completely wrong about the reasons for gold’s golden run.
For instance, in just the past three years, when gold prices have shot up exponentially, gold bugs have come up many alarmist theories to explain the price appreciation and to reason that the trend will continue even going forward.
They have, for instance, argued that the “endless money printing” in the US will trigger hyperinflation, leading to complete and utter loss of faith in the US dollar. That loss of faith in the dollar is, in their estimation, will ensure that gold prices will keep going up, since, they claim, gold is the only hedge against inflation.