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> In spite of the recession, US debt is still considered the safest asset in the world.

Precious metals are much safer than US debt.

Most tangible things (metals, real estate, income producing businesses) are safer than currencies that can be created out of thin air.



Ask the people that bought gold in the late 70s how safe their investments were. Gold prices crashed in 1981 and never rebounded until the gold bugs returned in the mid-2000s.


Commodities and currencies fluctuate against each other. Over longer terms, the value of currencies tends towards zero. Everything depends on the time frame you are looking at.


Exactly. I'm talking about the long, long view. When a currency goes to zero, an ounce of gold still buys you a good suit.


Sure, if you buy at the peak of a bubble, you're going to be underwater for a while.


Can you cite some statistics or research or data to support your claims? Otherwise they are just claims, not facts.


We're talking about what is a safer investment (for the future) so of course these are claims, or predictions.

Here is a historical chart of the price of gold (in dollars) since 1833.  

http://www.nma.org/pdf/gold/his_gold_prices.pdf

Dollars originally were redeemable in gold. But because of inflation of the money supply (i.e. creating more dollars) the US didn't have enough gold to pay their outstanding debt (i.e. the dollars out there being held by other countries).

So Nixon was forced to sever the dollar's tie with gold in 1971. At that point the dollar is a fully flexible (or fiat) currency.

Look at the price of gold in that chart since 1971.

That's not the value of gold going up. It's the value of the dollar going down.

Gold supply is relatively stable. It takes investment and time to mine new gold, so only a small amount is introduced into the economy each year.

New dollars are added to the economy at a terrifying rate. Every fiat currency in the history of mankind has always gone to zero.




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