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The article might be right in some respects, but Gold is not going to be de-regulated this time, so it's performance in the next 10-20 years is unlikely to match its performance from 1968 to 1981.

Yes, this is my major disagreement with the article.

Firstly, in spite of central bank attempts to inflate the money supply, the excessively high levels of debt portend deflation. This is what happened in the 1930's, it's what has been happening in Japan, and it's what will happen next in Europe and then finally here.

Secondly, gold is no longer money, it is simply a commodity. The bank runs of the 1930's were all about exchanging gold depository receipts (paper currency) for gold, because back then gold was conceptually and legally the basis of money. There was a well known, legally binding exchange rate between dollars and gold. That's not the case today at all. The dollar is now backed by the same thing that backs gold: the willingness of society to accept it as payment.

I do think gold would make a better monetary unit than any fiat currency. But that's a completely different issue.

It sounds like you are expecting a massive debt collapse. Since debt is monetized, it is used as money. Bad debts means expected income and therefore money, disappears. As debt disappears, material things become more valuable because they now will contain the perceived value that the debt once did but does no more. It could be said that monetized debt really monetizes the expectation of future income---which when that expectation is lost because the other party is insolvent, the money itself disappears with the possibility that the creditor will be repaid.

You said gold is no longer money. It is simply a commodity. For most people that may be true. But US gold coin is indeed legal tender in this country even with its silly face values. The Canadian Maple Leaf is legal tender in Canada and the Krugerrand is legal tender in South Africa. It is possible that very few people buy things with it in very specialized exchanges. But it has never ceased to be money.

You're statement "There was a well known, legally binding exchange rate between dollars and gold." reminds me of what used to be on old money. "This note is payable on demand to bearer, Twenty Dollars in Gold Coin." Never were ounces mentioned. There was really no exchange rate. The paper dollar note went from being a warehouse receipt, to being just debt-free paper money in the case of the united states notes in the '60s under JFK, to being unsecured debt instruments bearing interest, after LBJ.

You said, "The dollar is now backed by the same thing that backs gold: the willingness of society to accept it as payment." Willingness has nothing to do with it. Over thousands of years, cultures with markets have chosen gold as the preferred medium of exchange to take the market beyond barter---to money. The dollar is actually backed by aversion to having one's property confiscated for non-payment of property taxes. If we didn't hustle to get dollars, the government would come by and say pay the taxes or forfeit the house. That backs our money. The founders codified in the Constitution that we always use gold as money and not debts, not paper money, because they wanted contracts not to be paid of in depreciated paper, for that destroyed property rights.

Need to go. Will check back later to find out how wrong everyone thinks I am.