Pascal's Gold

JulieW

JulieW

Well-Known Member
Silver Stacker
Mauldin Economics today discusses Pascal's Wager, so here's something to ponder with Armstrong et al versus Sinclair et al. in terms of hold or sell on rally.


________________________ YES_________________NO_
Economic Stress will cause gold
to resume safe refuge above $5000 per ounce: - 1. Very Large Gain - 2. Finite Loss

Economic Stress will cause gold
to stagnate/deflate to base commodity price: - 3. Very Large Loss - 4. Finite Gain


Who is betting which way?
Discuss.

(of course the same wager applies to IMF SDR, confiscation, etc)


p.s. Mauldin's conclusion:
"In general, there is more money to be made believing in things than not believing in things."
 
Both Armstrong and Sinclair are untrustworthy and unreliable figures to begin with. However...

Pascal's Wager is an interesting one.

The logic of the actual wager is inescapable, the only thing critics can do is to attack the actual tenets within the wager.

The logic is, obviously, it is far better to have gold as the loss is limited but the risk of not having it is overwhelming negative, the upside is 50%.

A basic summary would be something like - 50% YES (25% explosively yes - 25% good yes), 25% neutral, 25% somewhat negative.

I do not agree with how the wager here is framed either.

The majority of stackers have in all likelihood based their decision to accumulate PMs using this very logic. Pascal just worked out an eloquent way of making a decision making strategy "explicit" and used it in a controversial manner.

Here they are using Gold and rather than God.
 
Hence the post - God and Gold belief have a lot in common! LOL

The middle way is of course that gold doesn't move really and simply keeps up with inflation (over the long term), without an explosive fall or rise.

(p.s. my transfer of the wager into the gold issue btw)
 
My vote is for the 3rd option; "(Gold) simply keeps up with inflation (over the long term), without an explosive fall or rise." It will rise a bit and it will sink a bit but largely stay the course. If it does either of the other two options it'll mean something pretty terrible has happened and gold will be the least of my worries.
 
Considering other / general prices trends, and current gold owners relative to past ones, $900 gold looks like having a reasonable chance.
 
You must log in or register to reply here.
Back
Top