Is there a connection between gold and property?

Many people recently asked my opinion on gold. To me it is as important as property to have in a portfolio, but let me begin at the beginning. I will talk about “property gold” first and then about refined gold and how they belong together.

You’ve probably heard the saying that land is like gold. I’m sure many of you know that it’s true; and although I agree wholeheartedly, I think land is actually worth more than gold. The simple reason that I think so is because we already know exactly how much land there is on this earth. The planet is not getting any bigger. In fact, I was reading that the planet is now a few centimetres smaller after the massive earthquake in Japan. One tectonic plate apparently shifted in under another one and still hasn’t moved out again!

Gold, on the other hand, is still being mined and the mining will probably still continue for many centuries. There is also plenty of gold hidden away in safes and so on. We know exactly how much land there is on the planet, but we don’t know how much gold there is. So we don’t know what the gold stock or supply is – and if we don’t know that, then we can’t know whether the demand is greater than the supply or not. With houses, it’s easy to compare supply and demand.

Due to growing demand, fixed property is the only commodity in the world that has steadily increased in value century after century – and that’s the reason that property is my first choice when it comes to long-term investment. As far as I am concerned, houses are the best type of fixed property you can invest in, because they are one of man’s basic needs and will always be in demand.

Of course, gold is not one of man’s basic needs, but it is the best basic currency that has ever existed on earth. In the days when our money was still linked to gold, it was still worth something. For many years now it’s been linked to paper – and sometimes it’s not even worth the paper it’s printed on. Zimbabwe is a typical example of what inflation does to paper money. The Zimbabweans prefer to use US dollars as currency now, but guess what? The US dollar is also just paper. When the Americans need more money, they simply print more dollars. The same goes for all currencies, even the ZAR too. How long can it continue like this? I think it’s just a matter of time before the house of cards comes tumbling down.

I would like it if my money was linked to gold. If our government doesn’t want to do it, then I’ll do it myself. Money in a savings account .........................

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