Interesting Article About Gold!

Ok, How about 36 years? Interesting that you picked 30 years, because that is the point in which I agreed in this thread that purchasing gold would have resulted in a loss. How about 27 years? or 33 years?

I was hoping someone might bring that up. Sure, we can factor inflation into the equation. However, if we apply that principle, gold has a loooooooong way to go before it is breaking any records. Therefore, buying gold now would not be considered buying during "record highs" or anywhere close to it if the record high is $2,189.

In my opinion, gold is gold. A $20 gold piece can buy pretty much the same thing now is at could in the late 19th and early 20th century. There have been certain things that manipulated the market in one way or another over the years, but overall it is seen as a hedge against inflation. I don't see it as an investment, but a store of value.

Investment, no. Hedge, yes. I never stated that gold was an investment, and I agree with you that it's not. The average annual rate of inflation from 1913 to 2010 is 3.39% per year. So, though there are variances in the market( bull and bear runs)throughout this time period, gold is still doing it's job as an inflation hedge.

Indeed it was. The reason gold was flat was because it was government regulated. Once they let the free market take over, the price adjusted appropriately.

I do understand what you're saying, and agree to some extent. I think your numbers are a bit off though. According to the graph Nod posted, gold broke out of it's "stangnancy" in 1973(not 1979), and it held strong until the mid 80s(way past 1980). Also, even in the late 90s/early 2000s "slump", gold still had around the same purchasing power as it did in 1913-1933 when it was still used as money. Was the purchasing power change drastically from 1900-1913?

From what I've read, the value of gold in 1900 is worth approximately $525 today. the only time period when gold had actually less value(unregulated) than this period was between 1997 and 2003. From 1973-1997 and then 2003 on, gold had more purchasing power than in 1900. So if this is true, than I'm wrong and an ounce of gold can buy two suits today.

Anyways, we are probably going to go back and forth forever...a lot of it depends on how the data is interpretted. I do see what you're saying that gold doesn't retain the same overall "value" in correlation to inflation, though I believe inflation is a heavy influence. It does tend to go up or down based on how high or low the annual inflation percentage is.

So it does have a solid correlation with inflation, though there are many other factors that determine the price of gold. Maybe we can agree on this?

Errrr....you're on a completely different topic. We aren't talking about doom and gloom, nuclear holistic end of the world anarchy here. If the economy tanks, you will still have resources other than "beeny weenies". Honestly though, in the "end of the world" scenario, your best "investment" will be guns and ammo imho. That way you can protect your food and home, hunt for food, or rob other people of their food if all else fails. Regardless, it's wise to have additional food, gasoline, and other useful resources just because; but in this topic we are talking about gold in response to inflation.

Don't forget the Hannibal Lector cookbook for those end of the world scenarios.

Gemtlemen, I mean that in all sincerity. It is a pleasure, listening to all the various comments, and opinions, the pro's and cons. I had my 2-cents worth a couple pages back, and jusrt finished reading the latest. I still believe my theory that gold will never go below the "dollars/oz ratio to the extent it will be worthless. No way that can happen. The numbers are actuall ridiculous, when we take into consideration that the "value' of gols, in dollars is only as valid as is the purchasing power of the dollar. An example; Not that many years ago the Dodge pickup was selling for $1700.00, here in CA. It is not at least ten times that for the same vehicle. Albeit, it has been "enhanced' a bit, but basically, it is the same pickup, it oly costs ten times as much. That said, the thrth is the dollar has gone down in purchasing power. Gole is something that will always sought after, in good times, as in bad. the difference is in the number of people who are going to do whatever it takes to get the "gold', to feed their families. Some will go out and prospect, (hopefully in areas known to produce), and doing so will help make ends meet. There are others, but only those with no scruples will go a different route.. If things get so bad, that they decide FDR had a good idea, why not do it again? We lost the gold in coinage, and the right to posess it, in '32, or '33. why should it make any difference that the coins (don't circulate), but are still gold? The bars, or
'dound stock' is still gold, and it is vulnerable. tjhey can confiscate it just as easy. If you have "foreign coinage, it is NOT safe either. Gold is gold, no matter what shape, or form it is in.
I didn't iontend to make more than a short comment, but you know me. Once started,,it ios hard to stop!
Someone commented that americans are renouncing their citizenship, in droves, and going to other countries to live. They have good ideas,and I would join then but for one thing: I live off my Navy pension,. ans Social Security. I could take the SS with me, (I think,. maybe not), but I would lose my pension, id I did that. I can, and have lived in other countries, but especially in Mexico, and would have no qualms about douing it again. I know the country, the people, it's customme and traditions, as well as the language. in a word, I would be back "home"
Under the "sic, "leadership, and guidance we have now, we may be forced to make that move. If one has no job, and no source of income, then one is up the proverbial creek without a paddle!
An alternate to the gold as a hedge, I recommend silver. It is not as volitle as gold, and is easily obtained, for the present. Comnsider this; China, and India among others, are using silver in huge ammounts in their industries,and and will continue, which means that the limited sup[ply of silver, (which is becoming very scarce, )maybe there is silver on the moon).Bur silver, will eventually rise in valus, and could easily surpass gols. think about it....
Dick