Amen, brother! The beginning of wisdom is understanding that gold is just a less convenient fiat currency.

You'll always be able to exchange gold for food, clothing,shelter. Antime, any place.

You'll always be able to exchange gold for food, clothing,shelter. Anytime, any place.

There's nothing wrong with keeping about 10% of your pile in gold if you are seriously concerned about future inflation. But you should always remember that gold hit $800/oz in 1973.

Just one word.. Beanie Babies.

OK 2 words.

Gold like any other commodity fluctuates based on supply and demand. Same can be said about Dollars, as you can witness by the performance of Dollars relative to Euros the last three years.

That was later, around '79 during the wonderful Carter years, around the same time that the Hunt brothers drove the price of silver up to $50. They found out the hard way that the best way to make a resource/commodity less scare was to drive the price up.

Bart

1980

Buy low, sell high. Great hedge against falling $.

Tom:

Not if we ever need to. At the point where order has broken down so completely food will be worth something, not gold.

Raoul, H-man

Thank you. I stand corrected. I thought it happened during the first great spike in oil prices.

For years, gold, silver and oil commodities traders would always shill their products in newspapers and on radio by using the latter years of the Carter administration as their baseline and attempt to convince unsuspecting buyers that Jimmy's incompetence combined with the speculation of the period created prices that could be considered "normal" instead of rare aborrations.

They do less of that now, since you can only live in 1980 for so long, but I think the greatest black mark against conservative talk radio is how many of them -- after saying how great things are economically in the U.S. right now -- are willing to do commercial pitches for gold as a sound long-term investment.

Tom: I'll always be able to trade greenbacks for food, clothing, shelter, any time, any place, right up until I need to trade lead for them.

I think I'd have a hard time trading gold for food right here, right now in Cambridge Mass. - much less in a time of crisis.

When I'm asked whether I own gold, I wince authoritatively and say: "Of course not". Then I quickly disappear before they start asking about any other kinds of assets.

David,

I was't trying to imply that you would not be able to. There have been times and places where gold was the only acceptable money. Will it happen here, nah. It's still a good hedge or portfolio component, just remember, buy low, sell high. What's wrong with making a buck on other's paranoia?

David,

BTW, I don't mean the physical stuff but the miners, index or etf.

"Gold like any other commodity fluctuates based on supply and demand. Same can be said about Dollars, as you can witness by the performance of Dollars relative to Euros the last three years."

The difference is that you can print dollars but you can't print gold. Gold is a good investment from a supply/demand standpoint right now. Due to the gold bear market since 1980, investments in exploration and new mine development have dried up. So demand now outstrips supply. As it takes 5 years or so to go from an indicated resource to full mine production, the supply won't grow anytime soon.

All you sophisticated investors may be dissing gold as a speculative play as you wait for the next tech boom to get underway, but the rest of the world still thinks of gold as money, and are busy exchanging their dollars for gold in places like India and China. It also serves as an industrial metal. India does a huge business in gold jewelry - people turn in jewelry for scrap when the prices are high, and buy jewelry when they aren't.

You guys could have gotten into a good buy with Wheaton River Minerals (WHT) 2 years ago when I told you about it, around $1.00/share. Its at $3.60/share now.

Robert,

Russia has mountains of gold ready for easy sale in the marketplace should it choose to. But as I said earlier, ownership of some as a hedge against inflation is not a terrible idea. Although, if you have a significant bankroll, you might want to buy a few thousand acres of prime Dakota wheat land instead.

Bart,
Central banks have been selling off their gold during the bear market, there is a lot less of it in central bank hands than there was 24 years ago. The sale by Russia would be a one time event, it wouldn't impact the bull market long. The question is, if we are in a bull market for gold, why would they sell it now?

America has mountains more of paper and electronic dollars that it can call into existence at the drop of a hat. Russia is selling dollars now for Euros.

Wheat land would be a good investment right now, as well as most commodities. When the dollar gets cheap, real stuff will get expensive.

"They do less of that now, since you can only live in 1980 for so long, but I think the greatest black mark against conservative talk radio is how many of them -- after saying how great things are economically in the U.S. right now -- are willing to do commercial pitches for gold as a sound long-term investment."

Makes you wonder how great the economy really is.

Yeh, you gonna blieve in a $11 trillion dollar economy or the price of a commodity?

Robert

I most definitely am not dissing gold as an investment. Matter of fact the quote you lifted from my post regarding the poor return from investment in Dollars or even Dollar denominated investments relative to another currency (the Euro over the last four years) is precisely the point you are making.

Key point though is as follows. There was a Bear Market in Gold extending from 1980 to 1999, hence the only conclusion one can come to is like I said "Gold like any other commodity fluctuates based on supply and demand" Now that we have straighten out the last four years, what about next week?

Agreed H-man. If "Gold-Bug" means someone who is bullish on gold no matter the condition of the markets, then I am not a gold-bug. It was foolish to buy gold in 1980 and hold it until 2002, just as it was foolish to buy Yahoo in January 2000 and hold it until now.

But the fundamentals are all in favor of gold right now. You don't even have to answer the question of whether it is a currency or a commodity, there is a measurable gap in supply versus demand that will not be filled anytime soon. That spells bull market to me.

Yes, but it is 1980, not 2002, the end not the beginning of a war.

It's 1972. Behind us is the deficit spending from the Vietnam war. Ahead of us is the stagflation that resulted from that deficit spending. But now we're all in hock up to our ears, not just the Federal government.

$44 Trillion in net worth not counting human capital.

Orrin, when did you have your conversion experience?

When I first tuned in, you declared yourself to be a gold bug.

Had the Ohio vote gone 140,000 in the other direction and the heirs to James Earl Carter taken over control of government, I would be a lot more enamoured of gold as an investment now. But as is, if you have some disposable income to hedge and are wary of Bush's economic policies based on his first term spending and/or the global terror threat, go for the gold. Otherwise it's a bad bet to keep up with even today's minimal inflation rates.

Well it makes sense to buy it and other commodities if only because it;s a non-correlated asset,

Harry:

I'd have kept the dollar tied to gold, but only because deflationary. The Fed can do the same thing without gold.

Ali is correct. Gold (not the physical stuff) has a place in a portfolio, both long and shorIt'srelationship toother asset classes is the key.

The fed has had little to do with the deflationary aspects of today's economy. Globalization, technology and fresh markets have kept pressure on pricing power. They're still fighting yesterday's battles. If the purpose of the Federal Reserve has been price stability, their record has been a disaster.