6) Gold is Inherently Worthless
Gold has been deemed by most civilizations as a superior form of money for thousands of years. Aristotle outlined the four key criteria for money (in shorthand: durable, portable, divisible, and intrinsically valuable) with gold holding superior advantages in all categories. In writing about gold, the Journal doesn’t exactly say that gold is “worthless,” but they did write: “No one knows how to value gold…gold doesn’t generate cash flows. That makes the shiny stuff worth only what the next investor will pay for it.” That’s a negative way of expressing gold’s chief asset value: Gold does not rely on another person’s promises. In other words, gold has no counterparty risk. With stocks or bonds, investors must evaluate if the underlying company can meet its debt payments (or scheduled dividend), or whether the company might even declare bankruptcy, while gold remains gold.