In the interest of non bias disucssion, allow me to be devil's advocate.
- Gold is a currency with no liabilities attached. True. It has no liabilities. It also has no notional asset value.
- Gold is competition to paper currency. True. Only in so much that you can exchange it for paper currency equivalent. It has not been legal tender for a while now.
- Gold is not a commodity. True. It certainly is NOT a commodity. Industrial use only accounts for 46% of global gold demand. The other 56% is funneled into ETFs and futures contracts. It's traded as a commodity, but it should not be, as you are 100% correct...it isn't one.
- Gold is a barometer of fear. True. Again it is a measure of fear by virtue of the fact that everyone assumes and understands the pre-conceived logic of buying gold in times of fear and unknown, stirring long buried emotions of wars, genocide and government unrest, devaluation of currencies and so on. That everyone assumes the correlation, does not necessarily make it fact.
- Gold is a barometer of confidence in Government. True. Since Gold is measured by currency movements all the time (you have to exchange gold for legal tender, otherwise it just sits there looking good), and since a Government's confidence level is usually measured by their currency (and more recently in CDSes) I would agree with you.
- Gold is insurance. False. First you have to define insurance against what. If you are referring to global meltdown and the destruction of the monetary system, then yes (but only if EVERYONE agrees to it). If everyone agrees to value matchsticks instead, gold becomes worthless.
- Insurance is not something to trade. False. Insurance is traded all the time. There's insurance, reinsurance, re-reinsurance and insurance on re-reinsurance.
- Gold is money when money fails. True. But money has yet to fail, and when it does perhaps it will be, especially if our stomachs suddenly develop gold consumption qualities by evolution. Otherwise, perhaps food, lodging, arms and reproduction of the three may be paramount. Only just.
- Hyperinflation is a currency event, not an economic event. False. Currency flow and valuation changes with perception of economic events. The act of printing money does not generate inflation, unless the money is dispersed into the system, OR used to collateralise other assets. In fact, considering that 50% of demand in gold worldwide is related to market speculation, you could argue that GOLD itself is considered to be included in the hyperinflation argument of collateralised debt.
- Hyperinflation is a currency event described as a loss of confidence in the currency. False. Hyperinflation is an economic event that describes the devaluation of a countries' medium of transaction. It could be that Nauru, which counts fertilizer as its primary and only source of income, will undergo hyperinflation as the price of fertilizer collapses.
- Gold in your hand eliminates counter-party risk. False. Counter party risk is prevalent for as long as you need to exchange your gold bars with something else in order to realise value. Gold itself has no bearing on net assets, without a market price (which ironically is priced in USD)
- Gold is the high ground when the global tsunami hits. I don't even know what that statement means.
- Gold removes financial agents between you and your assets False. Again, if you require the transfer of your gold bars to purchase assets for survival, investment or livelihood, you will be engaging an intermediary financial instrument, which will most definately involve a financial agent of some sort.
As long as people actually place a monetary, indexed or numerical value on gold, it will always be traded, exchanged and transacted through a myriad of parties WITH COUNTERPARTY RISK, in return for a perceived decline or appreciation of return, in order to use those returns (or lack of) to purchase core economic needs - food, lodging, security.
Until such a time where gold is DIRECTLY exchangable for the above 3 needs, gold bugs are in dreamland.
(20min delay)