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To: Maurice Winn who wrote (70875)	12/28/2008 10:34:52 AM
From: smolejv@gmx.net	3 Recommendations Read Replies (1) \| Respond to of 74559

>>In my memory, gold has been $35 an ounce, up to $800 an ounce, down to $270 an ounce, up to $1000 an ounce, back down to $800 per ounce. It certainly doesn't have a stable value. << You mean USD, don´t you;P?

To: Maurice Winn who wrote (70875)	12/28/2008 11:42:06 AM
From: carranza2	11 Recommendations Read Replies (1) \| Respond to of 74559

The reason I'm not investing in digging up gold is that I don't think the rewards are worth it compared with other options. Bingo! Precisely! You get it! You have made a decision not to invest in gold based on whatever factors you consider important. In times of uncertainty and distress, and especially in times of inflation, the relatively fixed supply of gold has served as a store of value and as a means of preserving real value as currencies become worth less. When currencies were gold or backed by gold, the scarcity of gold precluded the inflationary rise of prices beyond that reflected by supply and demand. For over a century, when the USD was convertible into gold, prices in the US were quite stable. Think about it, no serious inflation, no serious rise in prices for over a century. We started our fight with inflation when the convertibility of the USD into gold was ended in 1971. It is also when gold began its own rise. In my view, we are headed for very substantial inflation for the very simple reason that the currency base has grown spectacularly in the last six months. It is as simple as that. If you believe that the fundamental economic picture is a good one, that your paper currency - and everything, including equities, denominated in paper - is a fine way for you to hold your wealth, then by all means hold on to paper and foreclose gold as an option. If, on the other hand, you believe, as I do, that the flooding of the global economic system with paper will make paper currency worth a lot less as a result of the simple operation of the laws of supply and demand on such currencies, then the only way to maintain the value of your capital is to have a substantial bit of it in gold. If you believe, as I do, that history repeats itself, gold is necessary because history has shown that once the printing press is unleashed, it is extremely difficult to shut down. Often, a catastrophe is required. Think France in the late 1700s, Brazil, Weimar Germany, Zimbabwe, Argentina, etc., and the nascent hyperinflation being concocted by the Fed in the US. I am sure there are others but they don't come immediately to mind. The problem, I think, is that the USD is so globally pre-eminent that the hyperinflation may very well be widespread. If you think these bugaboos are imaginary, by all means forget about gold. However, when I look at the Fed's figures for the monetary base, I am terrified. We have not had such spectacular increases in it in such a short time in our history. The increase is truly amazing. I like gold, energy, strong currencies, commodities, a bit of silver, i.e., stuff with inherent value attached to it because they are either absolutely necessary or because they have for centuries proven themselves to be stores of value against inflated paper currencies. The real problem is that, because paper currencies have been relatively well-managed for so long, our policy makers have forgotten the horrible downward spiral created by the over-printing of a currency. We have forgotten history and are quite possibly doomed to repeat it.