[Oshkalaboomboom]

So you buy gold as a hedge against worthless dollars but until they get to a point where you can go to the store and trade clothes for gold the only thing you can do with your gold is trade it for worthless dollars.

[Kozak]

Or exchange it for goods. Or exchange it for silver or other commodities. Kind of like what people have been doing for oh 5000 years.

[WAW]

I understand the idea that gold is a ‘dead money’ investment....

But I look at it not simply as a medium of exchange, but as a store of wealth also - the second quality that makes money, money.

If you want to store wealth for the long haul very few things can be compared to gold.

I think of it like a savings account and I am saving to create generational wealth...It’s not a trade. It’s a long, long term investment.

To each his own, right...

[Huck]

So you buy gold as a hedge against worthless dollars but until they get to a point where you can go to the store and trade clothes for gold the only thing you can do with your gold is trade it for worthless dollars.

Yeah, it makes no sense. Now, if you bought your gold during the EQUITIES boom, when it was 200-400 oz, then you'd be doing what with it now? Buying more? Methinks not. Methinks you'd be SELLING it. Then you'd have successfully hedged.

The inflation fear that is driving this gold bubble is in full swing. It's too late to hedge. Anyone who buys now is merely speculating. I was just reading Deutsche saying it's not a bubble yet. When it gets to 1450, they say, it'll be extreme. OK, so that means there's 150 bucks left of gains before it becomes risky? For a 1300 investment? Equities are doing as well as that, if not better, plus dividends.

The people who smartly hedged against inflation with gold did it 10 years ago. Now they are cashing in.

[agere_contra]

Here's an example which I hope is helpful

Person A buys gold with 1300 dollars now, and then he gets to sell it again for 5000 dollars in 2012.

Person B hangs on to his 1300 dollars.

In 2012 Person A has retained his 2010 buying power, which is now three or four times the buying power of Person B.

This shows that Gold is a lifeboat for your wealth. It doesn't get you more buying power - it preserves your buying power.

Which is way better than losing ~ 2/3 of it.

If someone wants to increase his buying power by investing in Gold, I suggest buying shares in Canadian Mining companies.

But to hang onto what you've got, get the hell out of cash and bonds. Put your money into the usual domestic commodities FReepers love, and invest at least 25% in Gold (bullion) and other hard assets.

[bkepley]

So you buy gold as a hedge against worthless dollars but until they get to a point where you can go to the store and trade clothes for gold the only thing you can do with your gold is trade it for worthless dollars.

I don't get the point. It's the same with any investment decision and all investments are a hedge against inflation.