Originally Posted by MacLorry
I posted the graph on gold prices to show individuals the risk they take in purchasing gold at current prices. The graph shows that historically gold has been a poor investment, not even keeping up with 2% inflation for 30 year periods. The spike in gold princes represents fear over the current financial and debt crises. As I pointed out with TIPS, there are safer ways to protect your assets from any level of inflation short of an all out collapse of the U.S. economy, and if that happens you would be better off if you had invested your money in 25-year shelf-life food.

Bottom line, you're taking a lot of risk buying gold at current prices with little chance of substantial gain. Think about this; if the world economies started to unravel and the price of gold went to $5,000 an oz, would you sell your gold for fiat money when it looks like that money is going to fail? If not, then you gain nothing from the high price. If fiat money does fail, food will be in short supply for the reasons I gave and because food is an immediate necessity, it will be far more valuable than gold in the chaos of an economic collapse.

Only under a narrow set of conditions will buying gold at current prices prove to be a good investment, such as selling your gold when the fear generated price is even greater than it currently is. Are you really going to do that? However, under a broad set of conditions gold bought at current prices will be a bad investment, such as the economy recovers and investors sell off gold as they move back to stocks (the move may have already started).


Mac � that�s the most compelling argument I�ve seen to avoid being swindled by gold hucksters. Not the most popular position to take round here.