Gold Porn and Instant Gratification

ATM for the new gold rush

Yes, it is something of a gimmick and, yes, you will pay a premium of 20 percent-plus over the spot price of gold, adjusted every 10 minutes, for the pleasure of being able to buy instant gold.

The "pleasure" of being able to buy instant gold is now worth a 20%+ premium over spot price? Seriously?

Some experts are already referring to the new gold machines as vending machines, suggesting it will be as easy soon to buy gold as to go out late at night for a soda or fresh packet of condoms.

For just a 4% premium you can instantly lock in a price at online gold dealers and they will mail the gold to you at their expense. That's not good enough? Investors will pay an additional 16% for instant gratification?

To put this in perspective, the profits off of my gold and silver investment from 2004 to 2006 have funded all my living expenses since I first bought them. I consider myself fortunate. Counter to my stagflationary expectations at the time, hindsight shows inflation (as seen in the CPI) has actually run at a modest 2.4% annual rate over the past 6 years.

This is why I bring it up. The profits on the gold portion were just over $200 an ounce on my initial $425 per ounce purchase. The belief in gold is now so strong that those buying a similar amount of gold (as measured in ounces) from vending machines today are willing to spend roughly the same amount ($1350 * 16% = $216) per ounce on an instant gratification premium. Why not? We're told gold only goes up in price. It's a "sure thing". It cannot lose. What's an extra 16% when it climbs that much each and every year?

Will these same investors also be willing to spend another 20% as they sell it back to vending machines someday? I should mention that the vending machines are only a one way trip though, much like every other vending machine in existence. They only sell. They do not buy.

I'm told there is no gold bubble though. I think it is possible that history would/will show that no good investment has ever come out of a vending machine but maybe it is different this time.

Vending Machines in Japan

There even appears to be a sort of franchise setup... several of the spots with these machines look exactly the same -- a separate alcove of machines -- as if one company is running them. Sorry, but... porn sells!

Warning: That particular machine does not sell gold... yet.

Should You Invest in Gold?

Gold just sits there. If you buy actual coins and bars you can spend your evenings fondling it, but most investors today do not even get to do that.

Gold

Gold is the most malleable and ductile of all metals...

It is also apparently the most fondleable of all metals. How else can anyone possibly explain the "desire" to pay 20%+ over spot price as an instant gratification premium?