re: #32 _RememberTonyC

Buying gold seems like a really dumb idea to me. If the markets collapse, the economy totally tanks, and you are holding gold bullion as your hedge against economic disaster, who do you expect will have enough cash to buy it from you?

Buying gold at today’s prices is probably a bad idea. But gold has a good track record as a store of value. It doesn’t spoil, it’s compact enough that you can hold it without needing a warehouse, it’s portable, and it’s impossible to counterfeit.

So let’s say we have another Jimmy Carter style inflation, but prolonged. Money loses 15 to 20% of its purchasing power a year. You might invest in stocks, or collectible comic books, but gold is likely to hold up fairly well. As to who will have the cash to buy your gold, the problem would be that everybody is flush with cash but unfortunately it doesn’t seem to go as far as it used to.

This kind of inflation is bad for the economy. It leads to misdirected efforts and waste. But those who hold gold get hurt less than those who hold dollars in a bank account.

Who can say whether that’s what’s in store? If fiat money holds up in value, paper money and bank accounts will be a better way to save than buying gold when you have spare cash, selling it when you lack cash.