Jeremy Grantham: Gold Is A "Faith-Based" Investment, And There Are Better Places To Put Your Money

Jeremy Grantham

OK, so we’re not the only ones who think that gold can be characterised as a religion.

From Jeremy Grantham of GMO’s latest:

Everyone asks about gold. This is the irony: just as Jim Grant tells us (correctly) that we all have faith-based paper currencies backed by nothing, it is equally fair to say that gold is a faith-based metal. It pays no dividend, cannot be eaten, and is mostly used for nothing more useful than jewelry. I would say that anything of which 75% sits idly and expensively in bank vaults is, as a measure of value, only one step up from the Polynesian islands that attached value to certain well-known large rocks that were traded. But only one step up. I own some personally, but really more for amusement and speculation than for serious investing. It may well work and it may not. In the longer run, I believe that resources in the ground, forestry, agriculture, common stocks, and even real estate are more certain to resist any inflation or paper currency crisis than is gold.

Click here for our 9 reasons that gold is a religion masquerading as an asset class >

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