[misanthrope]

Should be such a simple concept. Not for most though.

[Pikachu_Dad]

Rubbish.

[bunkerhill7]

From 3500 BC to 2650 BC the price of gold rose from 7 rocks/oz to 35 clay tablets/oz

From 2650 BC to 1500 BC the price of gold rose from 35 clay bricks w/straw to 3500 sphinxes [Hebrews took it all]

From 1500 BC to 850 BC the price of gold rose from 3500 golden calves/oz to 7,000 babyls/oz

From 850 BC to 300 BC the price of gold rose from 7,000
Hams/oz to 14,000 olives/oz

From 300 BC to 300 AD the price of gold rose from 14,000 helmets/oz to 36,000 Gaulic wenches/oz

[fortheDeclaration]

Amen!

[zeestephen]

Hard to accept the idea of “gold as USA money.”

Seems more like a speculative investment.

From 1970-1980:

(1) USA gold prices increased 24 times.
(2) USA oil prices increased only 11 times.
(3) USA Consumer Price Index increased only 2.12 times.

And, as noted by another post, USA gold prices collapsed after 1980, but there was no corresponding USA deflation.

[Minn]

Seems the author's point could apply to just about any commodity, or any durable good. As currencies inflate and weaken, the things you buy with them grow relatively. You don't say?

But you have to be a complete nincompoop to not be concerned about any investment that becomes a fad. The best principal to follow is, if the kid that parks your car is buying something (or even talking about it) it's time to sell.

[Razzz42]

Read Martin Armstrong’s latest as he compares the past with current events...

http://www.scribd.com/doc/40437058/Show-Me-the-Money-10-15-2010

It’s not about paper money per se but how governments always debase their currency when debt gets out of control and/or overreach for socialist goals. Gold records the event. Happens all the time throughout history and damn if it’s not happening again.

[ExGeeEye]

One thing articles like this tell me: there are people who have—

—forgotten,

—disbelieve in,

—or leave unstated for various reasons

that Demand pushes up prices, and

that Demand can be artificially induced.

Yes, the actual value of gold is pretty stable. The price fluctuates, not only with the inflation/deflation of currencies used to purchase it, but with the demand of people outbidding each other in an effort to own it. Such people believe it to be undervalued in currency and are willing to bid higher and higher sums for what is mainly useful (other than as a store of “value”) as a form of decoration.

Like tulips, perhaps.

[Jeff Winston]

From this we can see immediately, that if gold doesn’t change in value – at least not very much – then it can never be in a “bubble.”

Absolutely. Since it's hard goods, it can never be in a bubble.

Just like tulip bulbs.

Just like silver.

[jiggyboy]

Goldbug ping

I have to disagree with his assertion that the run from $35 to $850 was not a bubble, and it was similar to the other instances mentioned. Those were true hyperinflation, post-war in some cases and post-bank-collapse in others. We had inflation in the U.S. in the 1970s but it wasn't hyperinflation like in the other cases. We used our paper money as money, not as firewood; we continued to pay mortgages rather than pay them off because it was cheaper than buying another stamp; etc.

And while that $35 starting point was artificially low, so some of the rise (to $200 or so?) was gold catching up to its "real" inflation-adjusted value, we certainly had bubble behavior at the end: gold necklaces being snatched in broad daylight, for example. Only gold and silver crashed in dollar terms after their very spikey tops; real estate for example was a better store of value from 1980-2000.

Mail me to get on or off the Free Republic Goldbug Ping List.

p.s. Hey folks if you have just a couple of seconds, could you "flag as spam/overpost" a couple of craigslist posts from a continuing, non-stop spammer (or two or three), it'd help my neighbor out.

[Walts Ice Pick]

If people can get carried away with and create a bubble in tulip bulbs (which they did), they can get carried away with and create a bubble in gold, or in anything else.

But, that's not to say that there is a bubble in gold prices. It always takes time (too long for those who take a bath) to discover if a rising price is just a bubble.

[GOPJ]

The rising dollar/euro/yen gold price is simply a reflection of the Keynesian “easy money” policies popular around the world today.

True - but what if the Chinese decide to artificially prop up the dollar...

[Atlas Sneezed]

I’ll let the charting wizards do it, but overlaying the 10 years prior to now, and the 10 years prior to the 1980s peak (it was a bubble), with the present and the peak adjusted to the same level, on a logarithmic scale, will make it clear that our current steady rise is nothing like the brief 1980 spike.