I have to side with Traditional Farmer. If gold is just a commodity, why do central banks the world over hold tonnes of it in vaults as "reserves"? Thousands of years and countless transactions have determined that gold and silver (silver has been used as money more than gold) were the best items to hold and preserve ones wealth until they decided to use it to obtain something. All paper currencies ever used in history have eventually collapsed, and the dollar will too. Paper has never been determined to be a store of value. In every instance, it was used as a receipt for gold or silver stored in a warehouse(bank), and eventually had the gold backing removed from it. At that point, the currency is eventually going to fail. Our dollar was backed at least partially by gold until 1971. We've been running on empty since then, and it's starting to show. If you don't think gold is money, answer these questions:
What did the egyptians bury their kings with? What did the three wise men bring as gifts to the child Jesus? What did Spain, England and other European countries haul back from the new world in armadas of ships? What caused the huge population rush westward in 1849, and also to Alaska? It wasn't paper, or the promise of a government. It was gold.
The big sell off the other day was in paper gold (ETFs). As we speak there are beginning to appear holes in the physical supply. Those that know are buying pyhsical gold and holding on to it, because they know how bad the entire western world is at financially.
Paper currencies, bonds, stocks, whatever, are investments in debt. If you're okay with that then go for it. I changed my mind several years back, and now I try to keep the wealth I have in physical metals.
If you think paper currencies are great, think about this: In 1998 gas was $1.47 and silver was around $4.50 an ounce. That means you could buy 2 1/2 gallons of gas with an ounce of silver. Today the exact same ounce of silver will buy you (gas at $3.43 here right now), even with the recent drop, about 6.7 gallons, while your paper dollar will buy less than 1/3 of a gallon.
Call me a gold bug if you want, but I'm in the hard metal camp.
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Today's Featured Article - Third Brush Generators - by Chris Pratt. While I love straightening sheet metal, cleaning, and painting old tractors, I use every excuse to avoid working on the on the electrics. I find the whole process sheer mystery. I have picked up and attempted to read every auto and farm electrics book with no improvement in the situation. They all seem to start with a chapter entitled "Theory of Electricity". After a few paragraphs I usually close the book and go back to banging out dents. A good friend and I were recently discussing our tractor electrical systems when he stated "I figure it all comes back to applying Ohms Law". At this point
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