Yesterday I posted a diary about gold and inflation and the bailouts.
It is a apparent from the comments that many feel that gold is in a bubble.
Well gold is not in a bubble.
There was one excellent comment in the diary which explains why.
Find me a way to PRESERVE 'wealth' (1+ / 0-)
Recommended by:dnpvd0111
some manner of preserving the buying power of what I have earned and saved...... we're not talking about a huge amount here - but the savings of a middle/upper middle class family wanting to send kids through college and preserv savings for retirement.
Bonds? - they will pay me back far less in buying power in the future than they cost me now
Equities? - pumped up artificially high at the moment - have been and will continue to be a hell of a roller coaster ride - with dividends far less than they should be for those who are profitable and sitting on tons of cash (the execs get rich now, not the stockholders)
Land, Housing? - THAT has lost value big time despite the 'they're not making more' meme. Farmland - with access to guaranteed water supplies - is of value but how practical is that for most people to own?
Foreign currency, bonds, equities - not easy to hold for the average US citizen and subject to the same issues affecting the 600 lb gorilla - the $US.
Under the current financial system I am GUARANTEED to lose any saved 'wealth' - to have LESS buying power in the future than I have now, no matter where I 'invest'.
AT best, gold and silver preserve buying power as the value of the currency used to purchase them falls in value......
The current situation sucks for the average person
by xrepub on Sat Aug 20, 2011 at 11:45:28 AM PDT
The government can squash the price of gold tomorrow. The Federal Reserve only needs to raise interest rates. If banks were paying interest on a savings account that at least matched the rate of inflation, the price of gold would drop like a rock from these levels.
But now we have the Federal Reserve guaranteeing zero % interest rates for at least two years. Gold is not in a bubble under these conditions.
How is it good for the middle class to be unable to save?