Quote:
Originally Posted by macker
The law of diminishing returns says the more you do something the less good it does you. The law of marginal utility tells you that when you get more and more of something, each additional unit has less value than the one that came before it. The record is pretty clear as the Fed's money has been losing ground against natures money for the last ten years. Over this time Gold has gained five times the purchasing power vs the US dollar. Again....nothing new here.....from 1944-1971 Bretton Woods : the dollar was pegged to Gold and all the other currencies were pegged to the dollar so indirectly they were pegged to Gold...the US abused this privilege by printing too much money and running too large deficits and are trying to debase the dollar to the point where people don't trust it....US has gone from Victim to Villian in the currency wars in a very short period of time....I am only a mild gold bug though....I agree that the outlook for potatoes, sugar, wheat and most any commodity is great and likely even better vs Gold as they will have great value going forward. This is one of the effects of QE2 that the Fed can't control and this is the real impact of what is happening. The question is if consumers are going to accept these prices when they get passed down and this is something Bernanke didn't factor in with his QE2 cure all plan...
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This comparison is completely wrong, gold is in an investment not a currency, so it need to be compared to other investments.
"From 1802 to 2001 a dollar invested would have grown to: (Amounts have been adjusted for inflation.)
- Stocks: $599,605
- Bonds: $952
- Bills: $304
- Gold: $0.9"
Even with the past few years massive slides in the market stocks are a better bet than gold. Yes there have been periods of time in the last century where gold has outperformed stocks, but in other times it has been the opposite.
http://money.cnn.com/2010/10/18/pf/i...tune/index.htm