ebear

It looks like you are missing some key points. My reference to 100 years is the next 100 ,years. My views are based on my personal experience since 1970. Fiat money is an investment just as art, stocks, commodities & so on are investments. You can pick your poison. Have you paid your bills for groceries, taxes or utilities in Nth. America with gold or gold coins?

No, but I can convert gold to fiat currency at any gold dealer, or sell bullion shares such as CEF and write a check against my brokerage account. Gold is highly fungible.

During the past 37 years I remember 3 major bull mkts. in gold. For more than half of that time gold was a very poor investment. Best investment results have been obtained by timing.

From an investment (1) standpoint I would agree. Had I bought MSFT when it went public I'd be way ahead of gold. I wouldn't argue that gold as an investment has underperformed as often as outperformed, nor would I disagree on the issue of timing. My argument stands (or falls) on the definition of savings vs. investment. We can't all be market timers, or for that matter investors in the sense you and I use the word. My interest in gold is as a vehicle for savings. If you don't have a sound system of basic savings, if everyone spends everything that they earn, then capital formation grinds to a halt and you're left with what we have today: rapidly inflating fiat currency that eventually hits a wall.

I guess we can mark you down as a "gold bug" but that does not mean we must all play by your rules, guidelines & definitions. I think I will continue to be guided by my own experience. I'm happy as a clam in my own "fool's paradise".

To me, "goldbug" conjures up images of a cabin in Montana with a year's supply of food and ammunition...heh. I don't think I'm one of those. Like you, I look to buy the inflating asset, so in that sense you could call me a gold bug, an oil bug, even a water bug! In buying the inflating asset, I'm doing what any intelligent person does when faced with a depreciating currency. Trouble is, we can't all do it, and the process of inflation will eventually derail the economy (and limit the scope of future investment). You can see that happening now, in fact, that's largely what's behind the rise in gold. The basic unit of exchange - dollar, pound, whatever, is increasingly untenable as a store of value. That makes it unsuitable for savings, therefore people speculate while convincing themselves they are actually investing.

(1) This is a vast topic and probably not suited to this board, but let me make one final point. Much confusion arises over the use of terms which lack clear definitions. To me, Savings, Investment, and Speculation are three different things. Savings are what you put aside for a rainy day. You don't touch them, except in an emergency, or for their intended purpose, such as downpayment on a house. Investment is what we do in order to produce things that other people want, with the profits going to capital formation for further investment. Speculation is merely buying something because we think others will pay more for it down the road. We haven't produced anything, it is simply a strategy employed to gain a temporary advantage or to offset inflation. No capital is formed, since the end result is zero-sum. My gain is someone else's loss. By those terms, Gold can be savings OR speculation, depending on your view. It isn't an investment though, because it doesn't produce anything.

Anyway, that's my take on it, but like you say, no one has to follow my rules or definitions. We are all free to choose, at least to the degree we are aware of the choices.

cheers!

ebear