[quote=peterb]Gold’s been used as money for a long time throughout history, around the world. When fiats fail, they tend to come back to gold. There’s a lot documentation on this. Sure, there are times when there’s some other asset that’s out performing gold. But when the economic climate starts getting sketchy, it’s relative strength is increased. Everything has some kind of purchasing power. So measuring items against a similar group may be a more useful method of determining value. Gold/CRB is one way to calculate it’s real value.
My point about venetian bonds and silk is that they were at sometime in the past an outperforming asset to gold. But today we speak of gold. And we have for many centuries, off and on. Eventhough all kinds of things have come and gone from percieved value.[/quote]
Peter: I don’t have any issues with gold. What I have an issue with is an asset class being bid up bullishly without any supporting facts (stop me if you’ve heard this one) by supposed “experts” who are using fear to push their product.
Your use of “perceived value” is the key. Gold, throughout history, has simply been one of many things that served as a placeholder for value. Sometimes it was greater than other things, sometimes less.
In terms of investment value, ask anyone that fell into the gold trap that ended in either 1980 or 1982 (I forget which). I was a teenager at the time and my uncle was in investment banking with Merrill Lynch. Gold had emerged as a market beater and people were piling in enthusiastically. Gold went nearly to $900 and then back down into the $200s, where it remained for years upon years. He had been telling clients to be careful, but his advice was ignored.
You hear people on this board and in other investment blogs touting gold and offering “expert” advice that gold will break $2,000 an ounce. Well, I’m wary of experts, especially those who sell fear as a commodity. We’ve all seen how that works out.
