I was watching a video the other day by a famous YouTuber. He specializes in “modern homesteading” and I find some of his videos informative and entertaining.
However, he went off the rails with one of his comments.
He mentioned someone asked him if they should buy gold and he pointed out that you can’t eat gold.
I’m rather tired of this silly cliché. So I’ve decided to give this line of thinking a name.
Batteries are not edible. Please do not eat batteries.
The “Can I eat it?” School of Investing
The “Can I eat it?” school of investing is simple. People trained in this method rule out any investment or purchase they can’t eat.
For example, if someone were to ask, “Should I buy a car?”
Answer: “Well, you can’t eat a car, so what is the point?”
“Should I buy stock in Netflix?” “You can’t eat Netflix, so no.”
To be honest I‘ve never heard anyone make the “You can’t eat it” argument for any other investment or purchase decision. But for some reason when it comes to gold people think it is important to be able to eat it.
The notion that you have to be able to eat something in order to want to own it reminds me of small children at that developmental stage where they tend to stick everything in their mouth.
It seems like a fair number of people don’t understand the purpose of gold and so they revert to that childlike instinct of sticking in in their mouth.
I Buy some things knowing I Can’t Eat Them
As it turns out, there are many useful things that people might want to own that in fact can’t be eaten.
Some people have decided that it makes sense to allocate a portion of their savings to physical gold as a way to “store value” (Austrian economists: please don’t take that phrase too technically) and protect purchasing power against inflation and dollar devaluation.
Of course it only makes sense to own gold after you own a lot of other basic necessities.
But if you really must be able to eat an investment for you to be able to consider it–I give you the following dish which uses edible gold leaf as a garnish.