Quote:
Originally Posted by tucson
See3772
Wrong gold is a separate measure of wealth worldwide. The price of gold goes up when compared to paper money. Nations can not devalue gold but they play with what they print. Looking back in history gold has always had value even when nations were failing. The only thing governments can do with gold is restrict it's ownership. The USA for years held the price of gold at $32 an ounce but it no longer uses gold as a basis for the dollar. Now that gold can be legally held by US citizens you can bet your butt it will be squirreled away if Obama and his cronies want to take it away from us. When nations fail those with gold will have some thing to trade with. I hold the Krugerrands in my hand not a IOU.
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Tucson, what SEE3772 was referring to was not physical gold, but rather the exchange-traded fund with the ticker symbol GLD. It does own some gold bullion, but what it is essentially is a fund that seeks to replicate the price movement of gold bullion, which it can do in a variety of ways. In any event, that's very different from owning physical gold. You can't just call up the fund and tell them you'd like to exchange your shares for bullion.
Before 1971, there was a sort of "semi-gold standard", since the dollar was pegged to gold at $35/oz and fixed against a number of European and other currencies under Bretton Woods. That started breaking down in the late 1960s when a few large European banks began making noises about wanting settlement in gold, since U.S. monetary policy was beginning to lose credibility. Then Nixon closed the gold window in 1971 and allowed the dollar to float. At the time, U.S. citizens were not allowed to own gold bullion, but that prohibition was lifted a couple of years later. By 1980, gold had shot up to about $850/oz.
In recent years, central banks have started printing money and monetizing debt in previously unimaginable quantities, in efforts to stave off depressions. So people have naturally become attracted to the idea of preserving their wealth by owning hard assets such as commodities and precious metals.
