Cap wrote:So, what will hold value better? Diamonds or Gold? Which is more abundant?
Diamonds aren't worth anything now. It's an elaborate marketing campaign. A diamond dealer pays 10% of retail. Go to a pawn shop and see what they'll give you for a $2000 diamond. If you have anything under a carat, he probably won't even want it. I am acquainted with a pawn shop owner and he says you can go to the New York importers and buy wholesale stones all day for a couple hundred bucks.
The reason is that diamonds are subjective. At what point does the color move from one level to another? Clarity? Who says one cut is better than another?
Gold has value for a number of reasons. To the point, the quality can be accurately determined by an assayer. You know for sure if it is 10K, 12K, 14K, etc.
And as long as it comes from a reputable source, Krugerrands or gold Eagles for example, then assaying isn't even a question. Everyone knows what they are. That's why coins from a known mint are more "acceptable" than say a 1oz bar from XYZ mint. If I don't know the reputation on XYZ mint, and I don't happen to have an assayer handy, how do I know that the bar is what it's marked?
It's also why counterfeiting is such a heinous crime because it destroys the reputation of a mint and makes all circulating coins suspect.
I have some physical silver(wish I had more) and some "paper" gold. Only because I have a 401k that I can't get out but can move where I want. I have a bunch of foreign stock, some gold, and some other stuff. I've done OK as the market disintegrated. I worry about the paper gold but if it gets too high, I'll jump out(hopefully) like a lot of people did before the real estate market collapsed.