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Just a quick reminder as to why gold is a great store of value & a cautionary tale for people who do not understand gold:

linkythingy

"There's no reason to invest in gold," said 'Betsy'

Jeff Clark

Casey's Gold & Resource Report

Aug 14, 2009

"There's no reason to invest in gold," said the finance editor of a major newspaper interviewing me. "If gold goes up because of inflation, then so does everything else, so why buy it? It's not really a good investment."

She was serious. Yes, she is a finance writer. And yes, it's a newspaper you've heard of.

I was so dumbfounded that I must have sounded like an infant struggling to form its first words when I attempted to counter this inane line of thinking. Tell me you're a deflationist, tell me the Fed will rescue us, tell me foreigners will keep buying our debt - but don't tell me that gold serves no purpose!

I tried to point out the exploding monetary base, the soaring debt, the failing economy - but it was readily apparent her mind was made up. The interview was over and she hung up.

It may sound vengeful, but I'm tempted to keep a list of people whom I could remind someday of their negative comments about gold. I'd put "Betsy" at the top. I probably would chicken out in the end, but right now it's a wonderful reminder of why we're not in a bull market mania yet. Besides, I think the odds are stacked in my favor that she'll someday be buying insanely inflated gold stocks from me. I'll have to thank her then.

But I can address Betsy's misunderstanding now, because part of what she said is correct: gold is not an investment. Gold's primary purpose is to preserve your purchasing power. Whether it be roaring inflation, or dollar debasement, or economic upheaval, or out-of-control government spending, it has been the absolute best form of protection throughout the history of mankind. And I can prove it.

Let's trace what an ounce of gold or silver - true money - has been able to purchase at various periods in history, and how it compares to today.

1979: Gold's average price that year was $306.68. This bought an average-priced full-size bed.

Today, 30 years later, $950 would still buy you a full-size bed.

1963: A gallon of gasoline in America sold for 31 cents. This meant that 3 silver dimes could buy a gallon of gasoline. The total weight of silver in 3 silver dimes is .217 of an ounce.

Today, 3 silver dimes would buy a gallon of gasoline anywhere in the U.S.

600 AD: In the Middle East, a chicken at the time of Mohammad would cost a family one silver Dirham (3 grams).

Today, 1,400 years later, a chicken in the Middle East would still cost a family one silver Dirham.

Time of Christ: Under the Roman Empire, an ounce of gold purchased a Roman citizen his toga (suit), a leather belt, and a pair of sandals.

Today, one ounce of gold will still buy a man a suit, a leather belt, and a pair of shoes.

400 BC: Some scholars report that during the reign of King Nebuchadnezzar, an ounce of gold bought 350 loaves of bread.

Today, an ounce of gold still buys about 350 loaves ($950 divided by 350 = $2.71/loaf).

1000 BC: King Solomon was known to have purchased many horses for his army. Historical records show he bought them in Egypt for 150 shekels of silver each. 150 shekels was about 55 troy ounces of silver.

Today, you can still buy a riding horse for 55 troy ounces of silver ($800).

Betsy, gold has characteristics no other matter on earth has...

Gold cannot be:

* Printed (ask a miner how long it takes to find it and dig it up)

* Counterfeited (you can try, but a scale will catch it every time)

* Deflated or inflated (it can't be reproduced)

Gold cannot be destroyed by:

* Fire (it takes 1945.4 degrees F to melt it)

* Water (won't rust or tarnish)

* Time (a gold coin remains recognizable after a thousand years)

Gold doesn't need:

* Feeding (like cattle)

* Fertilizer (like corn)

* Maintenance (like printing presses)

Gold has no:

* Time limit (most gold mined is still in existence)

* Counterparty risk (remember Bear Stearns?)

* Shelf life (it never expires)

Gold as metal is:

* Malleable (spreads instead of crushes)

* Ductile (stretches without breaking)

* Beautiful (just ask an Indian bride)

Gold as money is:

* Liquid (easily convertible to cash)

* Portable (you can hold $50,000 in one hand)

* Private (no mandatory reporting here)

Gold is internationally accepted, lasts for thousands of years, and best of all, they aren't making any more of it.

Now, Betsy, are you sure there's no reason to buy gold?

As the editors at Casey Research have been saying over and over again: Buy Gold, buy silver, buy sound gold-related investments. Have a look at our newest publication and learn all about these investments in Casey's Gold & Resource Report, Click here now to learn more.

Copyright © 1998-2009 by Casey Research, LLC.

###

Casey Archives

321gold Ltd"

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Little simplistic, GoM, isn't it?

You could draw a line on house prices and say that in 1988 a £200,000 would buy you a 4 bed detached, and in 2002, £200,000 would still buy you a 4 bed detached. This would seem to suggest that cash was a good store of purchasing power...

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Just a quick reminder as to why gold is a great store of value & a cautionary tale for people who do not understand gold:

linkythingy

"There's no reason to invest in gold," said 'Betsy'

Jeff Clark

Casey's Gold & Resource Report

Aug 14, 2009

"There's no reason to invest in gold," said the finance editor of a major newspaper interviewing me. "If gold goes up because of inflation, then so does everything else, so why buy it? It's not really a good investment."

She was serious. Yes, she is a finance writer. And yes, it's a newspaper you've heard of.

I was so dumbfounded that I must have sounded like an infant struggling to form its first words when I attempted to counter this inane line of thinking. Tell me you're a deflationist, tell me the Fed will rescue us, tell me foreigners will keep buying our debt - but don't tell me that gold serves no purpose!

I tried to point out the exploding monetary base, the soaring debt, the failing economy - but it was readily apparent her mind was made up. The interview was over and she hung up.

It may sound vengeful, but I'm tempted to keep a list of people whom I could remind someday of their negative comments about gold. I'd put "Betsy" at the top. I probably would chicken out in the end, but right now it's a wonderful reminder of why we're not in a bull market mania yet. Besides, I think the odds are stacked in my favor that she'll someday be buying insanely inflated gold stocks from me. I'll have to thank her then.

But I can address Betsy's misunderstanding now, because part of what she said is correct: gold is not an investment. Gold's primary purpose is to preserve your purchasing power. Whether it be roaring inflation, or dollar debasement, or economic upheaval, or out-of-control government spending, it has been the absolute best form of protection throughout the history of mankind. And I can prove it.

Let's trace what an ounce of gold or silver - true money - has been able to purchase at various periods in history, and how it compares to today.

1979: Gold's average price that year was $306.68. This bought an average-priced full-size bed.

Today, 30 years later, $950 would still buy you a full-size bed.

1963: A gallon of gasoline in America sold for 31 cents. This meant that 3 silver dimes could buy a gallon of gasoline. The total weight of silver in 3 silver dimes is .217 of an ounce.

Today, 3 silver dimes would buy a gallon of gasoline anywhere in the U.S.

600 AD: In the Middle East, a chicken at the time of Mohammad would cost a family one silver Dirham (3 grams).

Today, 1,400 years later, a chicken in the Middle East would still cost a family one silver Dirham.

Time of Christ: Under the Roman Empire, an ounce of gold purchased a Roman citizen his toga (suit), a leather belt, and a pair of sandals.

Today, one ounce of gold will still buy a man a suit, a leather belt, and a pair of shoes.

400 BC: Some scholars report that during the reign of King Nebuchadnezzar, an ounce of gold bought 350 loaves of bread.

Today, an ounce of gold still buys about 350 loaves ($950 divided by 350 = $2.71/loaf).

1000 BC: King Solomon was known to have purchased many horses for his army. Historical records show he bought them in Egypt for 150 shekels of silver each. 150 shekels was about 55 troy ounces of silver.

Today, you can still buy a riding horse for 55 troy ounces of silver ($800).

Betsy, gold has characteristics no other matter on earth has...

Gold cannot be:

* Printed (ask a miner how long it takes to find it and dig it up)

* Counterfeited (you can try, but a scale will catch it every time)

* Deflated or inflated (it can't be reproduced)

Gold cannot be destroyed by:

* Fire (it takes 1945.4 degrees F to melt it)

* Water (won't rust or tarnish)

* Time (a gold coin remains recognizable after a thousand years)

Gold doesn't need:

* Feeding (like cattle)

* Fertilizer (like corn)

* Maintenance (like printing presses)

Gold has no:

* Time limit (most gold mined is still in existence)

* Counterparty risk (remember Bear Stearns?)

* Shelf life (it never expires)

Gold as metal is:

* Malleable (spreads instead of crushes)

* Ductile (stretches without breaking)

* Beautiful (just ask an Indian bride)

Gold as money is:

* Liquid (easily convertible to cash)

* Portable (you can hold $50,000 in one hand)

* Private (no mandatory reporting here)

Gold is internationally accepted, lasts for thousands of years, and best of all, they aren't making any more of it.

Now, Betsy, are you sure there's no reason to buy gold?

As the editors at Casey Research have been saying over and over again: Buy Gold, buy silver, buy sound gold-related investments. Have a look at our newest publication and learn all about these investments in Casey's Gold & Resource Report, Click here now to learn more.

Copyright © 1998-2009 by Casey Research, LLC.

###

Casey Archives

321gold Ltd"

This may be so, but given that we are in the middle of the biggest commodities bubble in history, I think a house might be a better store of value than gold coins at the moment, and cash in a building society account will be better than both of those.

And don't forget, none of your statements apply to paper gold. That is being created, and there is counterparty risk. Remember AIG.

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This may be so, but given that we are in the middle of the biggest commodities bubble in history, I think a house might be a better store of value than gold coins at the moment, and cash in a building society account will be better than both of those.

:blink::blink:

my title is justified at post number 2.

And don't forget, none of your statements apply to paper gold. That is being created, and there is counterparty risk. Remember AIG.

I have never been an advocate of paper gold.

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What was the gold price in 1990 and how did it hold its value for the next 2, 5 ,10, 15 years. Can someone tell me please. All I know is that between 2002 and 2008 it went up in value by a factor of around 3.5. I am not tempted to buy at the top.

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:blink::blink:

my title is justified at post number 2.

Bring it on then GoM - your quote repeatedly draws straight lines between two points at various junctures over approximately 2,500 years. This represents a consistent store of value how exactly?

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What was the gold price in 1990 and how did it hold its value for the next 2, 5 ,10, 15 years. Can someone tell me please. All I know is that between 2002 and 2008 it went up in value by a factor of around 3.5. I am not tempted to buy at the top.

Unfortunately though, you have missed the bottom.

However, you still have a chance to buy at a time when people will actually hand you permanent ownership of a real piece of gold (that as GOM said has been able to buy you real stuff throughout history) in exchange for pieces of paper printed by the government or electronic digits.

Still not tempted?

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Bring it on then GoM - your quote repeatedly draws straight lines between two points at various junctures over approximately 2,500 years. This represents a consistent store of value how exactly?

+1

What a biased pile of nonsense that article is. Preserving purchasing power is exactly what gold doesn't do (unless you pick your dates and purchases selectively ;) ).

Take the peak (record in real terms) gold price in (I think 1980). If you had gold sufficient to buy a small house at that stage, then eight years later with the same (devalued) gold in weight and soaring house prices you could hardly buy a caravan. Perhaps GOM thinks a house and a caravan are comparable.

With gold - and I do have a very small tinfoil hatters stash - you can win or lose with the fluctuations in price through time, but preserve purchasing power - nah , in my mind that's the last thing it's about. A partial hedge against financial disaster, I'd go with that.

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Guest happy?
+1

The value of gold goes up and down like a whore's draws.

It's just another example of timing the market.

Presumably there are wins and losses....

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The value of gold does not change. The amount of fiat units required to purchase an ounce merely goes up and down.

Oh, and mods, please move this to the Gold forum.

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Storing value, like storing string, is for old people

We need to create some

Indeed. To do that we need to create a culture of saving and an economy based on real jobs - with people making things of value etc.

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Jsut to be controversial, anyone investing in gold doesn't really understand relational values.

Anyone investing in gold doesn't understand gold. Gold is not an investment.

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Gold holds its value best in times of doom, but then so does food and water. Property is static so you can't take it with you if riots happen, caravan is better but you need oil. Gold is traded globally unlike dollars soon, just like what happened to sterling and the denarii. Gold is an excellent store of value but that doesn't mean I would encourage it, for to do so brings the doom that isn't welcome. But as everyone's to busy looking out for their own interests to prevent it, including goldbugs, it remains a good idea for self preservationists.

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Guest DisposableHeroes
:lol:

Sh1te they were bleak times. Could have been quite exciting though, in a kind of masochistic way.

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Anyone investing in gold doesn't understand gold. Gold is not an investment.

No, its a legend or a myth! Like any other asset, depending on when you invest in it it gains or loses value. The only reason people claim it is a 'store' or value is that these people say it is. Might as well use bread, which over the last few hundred years has proved a remarkably resiliant measure of value.

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