gold or money?why?

Answer 1

Obviously, there are people who are clueless about history. For instance, you've got LongArm saying that since 1980, gold hasn't made anything. Then answer this LongArm, what was the stock market doing between 1971 to 1980 when gold went from $35/oz. to $850/oz? The stock market was in one of the worst bear markets in history (actually from 1966 to 1982). During the 70's, a $1000 investment in gold would have returned $24,285.70. True, from 1980 to 2002, gold was in a secular bear market, but you seem to forget that from 1966 to 1982, equities were in a secular bear market. If you actually studied history, you'd know that, and any investor with 2 brains cells to rub together would know that you shift your investments to where the money is being made during the time. In the 70's it was in gold. In the 80's to 2000, it was in equities.


And Karmen, gold isn't needed in this topsy-turvy world, it's just pretty and glitters? Then tell me why just prior to the crash of '29, why people like J.P. Morgan, Andrew Carnegie, Rockafellar, Harriman, Paul Warburg (the wealthiest people in the U.S. at the time) bought up gold like crazy? During the German hyperinflation of the Post WW1 Wiemar Republic, people would not accept Reichmarks, but they accepted gold and silver as payment. How many currencies have come and gone, but yet gold has be considered money for over 4000 years. If gold is "just pretty", why then is China looking to diversify some of it's $700 billion in dollar reserves into gold. During economic hard times, the smart money horde's gold, like I mentioned above, Morgan, Harriman, Rockafellar and Carnegie (an FYI, Carneige's net worth was estimated to be in excess of $160 billion). So, let's see, do I take the advice of Karmen L. or look at what the billionaires of the past did? I'll take the billionaires.


And then you've got ACE with his comparison to the stock market. First of all ACE, any comparison of gold to equities or any other asset class prior to 1971 is useless because prior to Nixon closing the gold window, gold was fixed at $35/oz., it was not allowed to float. So, how then can you compare equities, which were allowed to grow, to gold which was not allowed to until just 36 years ago. So, let's take a closer look at the stock market. Yes, from 1982 to today, the Dow is up 11,882 points (taking the bottom of the bear in Aug. 1982 at 772 points to the end of trading today at 12,654) and equities were the place to be. That's a 1,539% increase in 24 years. But that pales in comparison to the surge in gold prices after Nixon closed the gold window in 1971. Remember, prior to that, gold was fixed at $35/oz. After the gold window was closed, gold shot up to a high of $850/oz. -- a 2,328% return IN ONLY 9 YEARS. From 1980 to 2002, gold was in a 22 year secular bear market. But, from 1966 to 1982, equities were in a 16 year secular bear market.

Okay, let's come to present day. If we look at the stock market from 2000 to today, the Dow is up a whopping 8% in 6 years - or 1.33% per year. Big sh*t. Yet, from 2000 to today, gold is up 138% - or 23% per year. If we take the stock market bottom in 2002 to today, the Dow is up 76%, yet during that same time frame, gold is up 115%.

So, ACE, where is your precious stock market returns when you look at the hard data? Gold has been beating the snot out of equities.

Gee whiz people, stop watching Desperate Housewives and read a book once in a while.

To answer your question, gold has an instrinsic value, but all money is is just a piece of paper that people accept as having value. I mean, take out a $1 bill and look at it. All it is is a cotton fiber with ink on it and the only reason we accept it as having value is because 1) the government says it is and 2) we accept it. All money is is a median of exchange that people have accepted as having value and the only reason it has value is because we have faith in it. If a people lose faith in a currency, it becomes worthless. That's why the Deutschemark replaced the Reichmark because the currency had become so worthless, that people didn't want it.

Take a look at it this way, since 1913, the dollar has lost over 90% of it's purchasing power. For example, in 1913 if it took $1 to buy a widget, it would take $19.11 in 2005 to buy the same widget - that's a 95% loss in purchasing power. Let's take another example; in 1970 (while gold was fixed at $35/oz.) the average median home price in the U.S. was $24,000, which means it took 685 oz. of gold to buy a home. In 2006, the average median home price in the U.S. was around $240,000 and the average price of gold in 2006 was $603, which means it took 398 oz. of gold to buy a home. While the the dollar was losing purchasing power, gold gained in purchasing power.

What one must realize is that inflation is not an increase in prices, but a decrease in the value of the currency, thus you need more currency to buy the same thing. Let's see if I can explain. You've heard people say that the dollar is now worth 3 cents? What that means is that $1 has the purchasing power of 3 cents. So, let says we go back in time to when $1 was worth $1. If you wanted to buy a widget and the price was $1 and a dollar was worth a dollar, then you'd just need $1 to buy that widget. Now, let's come back to today with the dollar being worth 3 cents. You want to buy that widget, which is worth $1, but the dollar is only worth 3 cents, so in order to get a dollars worth of purchasing power, you'd need $33 to have $1 in purchasing power. Do you see what just happened? The widget is still worth $1, but since the dollar is only worth 3 cents, you needed 33 of them to get the purchasing power of 1 full dollar.

In the past 6 years, the dollar has dropped over 30% against the Euro. In the beginning of this millenium, the U.S. dollar index was at 120, today, it's just above 84. The 80 levels is considered the Maginot Line for the dollar and if the dollar breaks below that level, it's going to trigger a dollar crisis and people will dump dollars. Right now, the current pattern forming in the dollar index projects a downside target of 40 as a major bottom. At that level, the dollar will cease to be the world's reserve currency.

Voltaire said, "Paper money eventually returns to its intrinsic value -- zero". The only reason paper money is accepted is because people believe it has value. I mean think about it, if the gov't took toilet paper, put ink on it and said it was money, what's the difference between that and what we have now?

Think about it, for a period of over 700 years, England used Tally Sticks as currency - a piece of carved wood. And the people accepted it as money because the government said it would accept tally sticks as payment for taxes.

Yet, gold for thousands of years has endured. It is rare and precious. In the last 4,000 years, all the gold mined in the world would fit into an area of 55 cubic feet.

Gold or money? Answer this question - how many currencies have come and gone in history? Yet, gold is been around and survived and been store of value and been money since the dawn of human civilization.

The other posters need to really go back to school and get re-educated. They must have been sleeping during those years.

Answer 2

Gold the best investment? If you bought gold way back in 1980, you STILL wouldn't have a gain. Call me weird, but that doesn't sound like a great investment to me.

Edit: 4XTrader: Don't pretend to be so intelligent as to be able to read more into what I said than what I actually said. I never said that the stock market doesn't have it's OWN bear markets too. But over the long haul, stocks spend more time going up than down, and gold is just the OPPOSITE. And stocks have never come CLOSE to going 26 years without a gain. That said, I think a LITTLE bit of gold added to the portfolio is a good diversifier, because as you pointed out, stocks and gold often move in different directions. However, your suggestion that any trader with a brain should be switching back and forth between stocks and gold as the market climate dictates is a silly notion for most people. Most investors are looking to buy and hold for the long term, not engage in market timing. And that's the way it SHOULD be for most. Maybe not for those with (cough! hack!) superior intelligence like yourself.

Answer 3

Gold is the historic storehouse of wealth. over the long term, an ounce of gold has the same purchasing power in the future as it did in the past.

Money is paper, it is accepted for trade under the ussumption that it is worth something, but governments are constantly printing more money and this dilutes the value of the money already in supply (inflation)
so over time the money has less purchasing power today, than it did in the past. In Germany at one time there was hyper inflation and to get a loaf of bread cost a wheelbarrow full of cash.

So your question is ambiguous..I told you what both are, but money is necessary to buy things today, gold is necessary to protect your savings into the future

Answer 4

Gold is a commodity & way of investment like any other , U just cant compare gold with the stock makert , I hope the wise agree with me .
If some of the folks think gold has earnend them enough then have a look at history of the stock maket , that glitter is not visible at all .
Well folks its not a way to compare at all but end matters for me is the return .

Answer 5

Both but i would like to have money in cash because today in advanced world people worth money more than gold .

Answer 6

Money because gold isn't needed to survive in our topsy-turvy world. Sure gold is pretty and shiny but you need money to buy food ans water and shelter. Gold just sits there looking pretty. Unless of course you sell it for money.

Answer 7

It would depend on who's currency you are comparing to gold. There are some currencies that I would buy over gold at this time and some that I wouldn't.

Answer 8

Gold is attractive. Money is money.

Answer 9

Gold .. always the best investment and more likely to appreciate

Answer 10

gold is better value loss more in currency

Answer 11

gold is to design ur atractive ness money fullfill ur dreams