The reason gold is only worth "$1200" per ounce is because the bullion banks (primarily Goldman Sachs & JP Morgan) consistently beat it down to maintain the illusion of a strong dollar. The dollar is strong, when measured against the Euro. But it's not so much that the dollar is strong as that the Euro is failing.
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. . .Gold is volatile. It's hard to value. It generates no income.

Yes, it's a "hard asset," but so are lots of other things—like land, bags of rice, even bottled water.

It's a currency "substitute," but it's useless. In prison, at least, they use cigarettes: If all else fails, they can smoke them. Imagine a bunch of health nuts in a nonsmoking "facility" still trying to settle their debts with cigarettes. That's gold. It doesn't make sense.

As for being a "store of value," anyone who bought gold in the late 1970s and held on lost nearly all their purchasing power over the next 20 years. . . .
Gold is not a currency substitute, gold is money; the Federal Reserve Note is currency -- big difference. The US Treasury can't print gold.

Note that world-wide, many Central Banks (The Federal Reserve, Bank of England, et al) hold gold as an asset. Currency is considered a liability.
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. . .Many central banks are "banks" in the sense that they hold assets (foreign exchange, gold, and other financial assets) and liabilities. A central bank's primary liabilities are the currency outstanding, and these liabilities are backed by the assets the bank owns.. . .
"liabilities are backed by the assets" would seem to indicate that currency is only valid if it's backed by something. Since we're no longer on a gold standard, what is backing the dollar? Debt?

If you would like to read the other side of the argument, go to GATA (Gold Anti-trust Action Committee). Do a search at GATA on the term "naked short", good reading.

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"It's money of course but let's also call it a "commodity! Then we can place a "paper" value on it and denominate it in all forms of future contracts. It will lose it's true value as money in peoples minds and be priced in an unrealistic paper format." And here we are today! -- ANOTHER (THOUGHTS!)

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"Buy what you can when you can. Time and the indisputable half life of paper currency will do the rest." -- ConanTheLibertarian


$.02

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Better is the Enemy of Good Enough.
Okay, what’s your point??