More bellicose tripe from the gold-haters. Their own chart disproves their putrid thesis. If gold lacks inherent value, why does it cost so much per ounce? You can make beautiful objects from gold. What can you make from paper currency? What were GM bondholders left with, when the Obaminestas took over that company? To their specious claim regarding market-timing, the same is true of all investments. Anyone buy tech stocks in 2000 and ride that pony over the cliff in 2001? How long did it take to recover? There is a reason Saint Ayn made gold the monetary currency of the Gulch.

It's still a more valuable medium of exchange than paper money and that is what all the gold rhetoric is about in reality.
Of course there are those looking for short gain profits in selling gold as well and using our debt/fiat currency to their advantage.

Gold is NOT an "investment." Gold is MONEY. Comparing gold to stocks and bonds is like comparing cash to stocks and bonds. Neither one will give you a return. Compare gold to cash, and you'll be onto something.

As an inflation hedge, gold is so-so at best. Now...as a hyperinflation hedge...now we're talking. Might we experience hyperinflation?

Gold does not generate wealth, and in times of dire straits and shortages, its perceived value plummets. While it sounds like a joke to all except the WTSHTF folks, lead (in the form of the most common types of ammunition) is a much more valuable medium of exchange.

Short of an apocalyptic event, real estate still remains a strong investment target. Technology can be an explosive growth investment, if done with an educated eye. Robotics, in all its forms, will be very strong, pushed by blind union favoritism and bloated minimum wages.

I'm not unhappy with the price increase of the eighty Mexican 50 Pesos I got in 1969 for $55 each.

People often forget that gold is a commodity and as such is subject to the rise and falls experienced by and such thing. The reason people keep gold is the belief that if the world's economies fail and paper monies become worthless, gold and silver will be the medium of exchange until the world economies rebound. But then, if the economies crash to the point where paper money is worth less than newsprint, what will you be able to buy with it? Such a drastic fall of money value would cause production to grind to a halt. Barter might work for a while, but until production gets back, gold will be even more useless than many other commodities. You cannot eat gold, clothe yourself in it, or shelter yourself with it. Let us just hope that sanity prevails and it doesn't come to that.

Those "believers" include the framers of the Constitution. The following excerpt is from Ron Paul's "The Case for Gold". This is public domain. For background:

http://www.cato.org/case-for-gold

The excerpt:

Legal Tender Laws

As we have seen, the Constitution forbids the states to make anything but gold and silver coin a tender in payment of debt, nor does it permit the federal government to make anything a legal tender. One of the most important pieces of
legislation that could be enacted would be the repeal of all federal legal tender laws. Such laws, which have the effect of forcing creditors to accept something in payment for the debts due them that they do not wish to accept, are
one of the most tyrannical devices of the present monetary authorities.
Not only does the Federal Reserve have a coercive monopoly in issuing "money," but every American is forced to accept it. Each Federal Reserve note bears the words, "This note is legal tender for all debts, public and private." The
freedom to conduct business in something else—such as gold and silver coin—cannot exist so long as the government forces everyone to accept its paper notes. Monetary freedom ends where legal tender laws begin.
The United States had no such laws until 1862, when the Congress—in violation of the Constitution—enacted them in order to ensure the acceptance of the Lincoln greenbacks, the paper notes printed by the U.S. Treasury during the wartime emergency. That "emergency" has now lasted for 120 years; it is time that this unconstitutional action by the Congress be repealed. Freedom of contract—and the right to have such contracts enforced, not abrogated, by the government—is one or the fundamental pillars of a free society.

Defining the Dollar

A second major reform needed is a legal definition of the term "dollar." The Constitution uses the word "dollar" at least twice, and it is quite clear that by it the framers meant the Spanish-milled dollar of 371% grains of silver. Since 1968, however, there has been no domestic definition of "dollar," for in that year redemption of silver certificates and delivery of silver in exchange for the notes ended, and silver coins were removed from circulation.

In 1971, the international definition of the "dollar" as %2 of an ounce of gold was also dropped. The Treasury and Federal Reserve still value gold at $42.22 per ounce, but that is a mere accounting device. In addition, IMF rules now prohibit any member country from externally defining its currency in terms of gold. The word "dollar," quite literally, is legally meaningless, and it has been meaningless for the past decade. Federal Reserve notes are not
"dollars"; they are notes denominated in "dollars." But what a "dollar" is, no one knows.
This absurdity at the basis of our monetary system must be corrected. It is of secondary importance whether we define a "dollar" as a weight of gold or as a weight of silver. What is important is that it be defined. The current
situation permits the Federal Reserve—and the Internal Revenue Service for that matter—to use the word any way they please, just like the Red Queen in Alice in Wonderland.

No rational economic activity can be conducted when the unit of account is undefined. The use of the meaningless term "dollar" has all but wrecked the capital markets of this country. If the "dollar" changes in meaning from day-to
day, even hour-to-hour, long-term contracts denominated in "dollars" become traps that all wish to avoid. The breakdown of long-term financing and planning in the past decade is a result of the absurd nature of the "dollar." There is very little long term planning occurring at the present. The only way to restore rationality to the system is to restore a definition for the term "dollar." We suggest defining a "dollar" as a weight of gold of a certain fineness, .999 fine. Such a fixed definition is the only way to restore confidence in the markets and in the "dollar." Capitalism cannot survive the type of irrationality that lies at the basis of our present monetary arrangements.

The correct interpretation from looking at the plot of gold value is that gold prices are generally flat when relatively fiscal conservatives are in presidential office (Reagan, Bush I?, Clinton), and when spendthrifts like Carter, Bush II, and Obama get into office, hitch your ride on the gold train. I applied that wisdom on the day after Obama got elected, and my Au is worth $1230/oz. now vs. $880 then. That is only a 5% return on investment, but compared to everything else in this era of no reward for risk taken, that's not bad.

Yes, Au prices did go down over the last several years. This was the result of a very clear, stated interference by the Federal Reserve to attempt to keep Au prices at $1200/oz. One thing that any investor should learn is that fighting the Fed is a losing battle.

finally a positive article stating why one should not invest in gold, said much better than I have stated in the past.

More from Ron Paul's "The Case for Gold"

Sorry for the length, but it is important.

The Moral Argument for Gold
A monetary standard based on sound moral principles is one in which the monetary unit is precisely defined in something of real value such as a precious metal. Money that obtains its status from government decree alone is
arbitrary, undefinable, and is destined to fail, for it will eventually be rejected by the people. Since today's paper money achieves its status by government declaration and not by its value in itself, eventually total power over the
economy must be granted to the monopolists who manage the monetary system. Even with men of good will, this power is immoral, for men make mistakes, and mistakes should never have such awesome consequences as they do
when made in the management of money. Through the well-intentioned mismanagement of money, inflation and depression are created. Political control of a monetary system is a power bad men should not have and good men
would not want.
Inflation, being the increase in the supply of money and credit, can only be brought about in an irredeemable paper system by money managers who create money through fractional reserve banking, computer entries, or the printing
press. Inflation bestows no benefits on society, makes no new wealth, and creates great harm; and the instigators, whether acting deliberately or not, perform an immoral act. The general welfare of the nation is not promoted by
inflation, and great suffering results.
Gold is honest money because it is impossible for governments to create it. New money can only come about by productive effort and not by political and financial chicanery. Inflation is theft and literally steals wealth from one group for the benefit of another.
Gold is wealth; it is not just exchangeable for wealth. Today's notes are not wealth. They are claims on wealth that the owners of wealth must accept as payment. No wealth is created by paper money creation; only shifts of wealth occur, and these shifts, although significant and
anticipated by some, cannot always be foreseen. They are tantamount to theft in that the assets gained are unearned. The victims of inflation suffer through no fault of their own.
Legally increasing the money supply is just as immoral as the counterfeiter who illegally prints money. The new paper money has value only because it steals its "value" from the existing stock of paper money. (This is not true of
gold, however. New issues of paper money are necessarily parasitic; they depend on their similarity to existing money for their worth. But gold does not. It carries its own credentials.) Inflation of paper money is one way wealth
can be taken against another's wishes without an obvious confrontation; it is a form of embezzlement. After a while, the theft will be reflected in the depreciation of money and the higher prices that must be paid. The guilty are difficult to identify due to the cleverness of the theft. They are never punished because of the legality of their actions.
Eventually, though, as the paper money becomes more and more worthless, the "legalized counterfeiting" becomes
obvious to everyone. Anger and frustration over the theft results and is justified, but it is frequently misdirected and may even lead to a further aggrandizement of governmental power.
Neither the government nor private issuers of money can be permitted to defraud the people by
depreciating the currency. The honesty and integrity of the money should be based on a contract; the government's only role should be to see that violators of the contract are punished. Depreciating the currency by increasing the supply and diluting its value is comparable to the farmer who dilutes his milk with water yet sells it for whole milk. We prosecute the farmer, but not the Federal Reserve Open Market Committee. Those who must pay the high prices from the inflation are like those who must drink the diluted milk and suffer from its "debased" content.

Gold money is always rejected by those who advocate significant government intervention in the economy. Gold holds in check the government's tendency to accumulate power over the economy.
John Locke argued for the gold standard the same way he argued for the moral right to own property. To him the right to own and exchange gold was a civil liberty equal in importance to the liberty to speak, write, and practice one's own religion.
It is not surprising, then, given this background, that the Congress of 1792 imposed the death penalty on anyone convicted of debasing the coinage. Debasement, depreciation, devaluation, inflation—all stand condemned by then moral law. The present economic crisis we face is a direct consequence of our violations of that law.

Take your paper money to Venezuela, where it costs more to print their currency than it is worth.

Gold has no more intrinsic value, or marginal utility than tulip bulbs and is subject to the same market forces.

As I see it, there are four gold markets: 1. The short term speculator, 2. The long term hedgers, 3. Industrial users, 4. The SHTF crowd. With 1 and 2 it all depends on how good your crystal ball is. You can make, or lose a lot of money. The industrial users probably don't affect the market as much as the speculators who trade mass amounts of gold on paper. The industrial users are going to use what they will use to fill demand for their products. The SHTF crowd are the ones who really need to change their thinking. They buy it as a future medium of exchange. However, in an SHTF situation gold's utility is not high. If you believe in SHTF, it would be much better to invest in productive land, old fashioned farm implements, long term food storage, lead and powder, etc. In an SHTF situation, if you are hungry and have a pound of gold and I have guns, ammo and a pallet load of poptarts I think I will probably come out better in the negotiation.

$5Au never claimed gold was the "best" investment. However, as part of a DIVERSIFIED portfolio, it has a place. You can purchase it easily through an exchange traded fund such as GLD or IAU. You can also buy shares in gold mining stocks, some of which pay a dividend, if you like. Some people prefer to buy gold coins. Or hunt for it yourself. $5Au has spent pleasant hours panning for it, but quite honestly, more as recreation than as a money maker. $5Au generally keeps 5 to 10 percent of his portfolio in various forms of this beautiful metal.

very interesting. . Thank You! -- j
.

Gold is also used in electronics. If gold is down it also means electronic manufacturing is down.

the value in gold (coinage) is for preppers after the collapse...or to tie politicians to prevent the devaluation of a paper currency...

Thus speaks those that favor not prosecuting the LIBOR conspirators.