Great post TU, and funny point on the BWoods default by Nixon he reneged on convertibility - but according to a guy who worked for "Charlie" that I spoke to a few years back the USD is still backed by the gold. Go figure.
The chart in that article on USD to Au - who would assume gold will not continue to rise in price against this asset given the continued dilution of paper currency? Well mostly electronic currency...
We have to be careful when discussing money or currency against gold and what it is. Money is not currency by the definition provided earlier. When I say gold is not money I meant currency.
Just as an aside you get a strong reaction when you place a piece of gold in somebody's hand, sort of awe and respect of something very precious. They know it is special. Throw a 5kg bar of silver on the table and people say so what I would be impressed if it was gold but they still ask is it real and state I did not realize I could buy that.
Gold is valuable and special and in more recent times than silver or at least a greater degree. Silver will outperform gold so I love it - beautiful stuff, lovely to hold - and far more practical uses than gold.
A very wealthy investor I know just stated that people will buy gold in a crisis - and that he buys it because others will run to it. Is it rational? Maybe not however people will do the same thing we are predictable - they will take push button A because they always have. So buy button A because that is where people will rush to. That is where I want to be.
Thanks Andy and to others that contribute. Bear trap phase indeed I tend to agree, but feet on the ground no proof so stay alert always.
