Gold catapults to new high

I really do not understand the comments such as "can you eat a piece of gold?" or "what am I supposed to do, put gold in the gas pump machine?".

Can you eat a dollar? No, of course not. The dollar is used as a currency to trade for goods. People investing in gold believe that the dollar will continue to be manipulated until it is eventually of no value and that citizens would turn to gold to use as a new currency. Why do they believe this? Because historically, gold has provided a safe haven for citizens when their country's fiat money system becomes completely broken. Gold's history as an alternative currency and the inability for it to be drastically manipulated by governments (gold cannot be endlessly printed) means that it is the next top contender for a currency and it is likely that people will grant gold its value, just like people choose to grant the dollar its (reduced) value right now. Gold tends to be what people look to in a time of financial crisis. And given how people are investing in gold right now, it is clear that there are people out who would be willing to grant gold value as the next viable currency. 

And no, if things were to get bad and gold began trading as a currency, you would not "throw a chunk of gold" into the gas pump. Businesses that even survived the huge economic plunge would have to quickly adapt. But really, things like gasoline would likely be the least of your worries. Most people would be unemployed, the dollar could be of almost no value, and many businesses would have gone bankrupt. Unless you were filthy rich, invested in gold before its value skyrocketed, or a farmer with a gun, you would be in trouble. But assuming the gas station received its shipment of gas, assuming that you did not already need to sell your car to stay afloat, and assuming you had enough dollars or gold to purchase gas, you would not be putting gold into the machine. I imagine that you would go inside, trade the gold, and a gas attendant would give you the gas.

Why would world banks and the banks of industrialized nations be stockpiling gold right now? They do it to protect themselves because if and when a fiat currency fails, and if citizens begin granting gold its value, the governments want to remain in power. Given the limited utility of gold, I cannot think of any other reason why a government or bank would be spending money right now to store this metal away other than to preserve wealth and power in a time of crisis.

Now, investing in emergency training and stockpiling certain food items, has great value as well. The loss of the U.S. dollar as the world currency would be devastating and things could certainly become unstable. There is a possibility that if the dollar were to fall, your food could have a high value until citizens and businesses started to adapt to a new currency. But, regardless of whether or not gold becomes a new currency, your food does not last forever. Unless you are growing it yourself, how would you obtain new food if you have no other items to barter and your dollars are now worthless? I often think that anybody unemployed would start having to offer manual labor to local farms in exchange for food.

The truth is, that nobody truly knows what is going to happen. If you invest in gold and there are major U.S. economic and foreign policy corrections, you could have a very poor investment on your hands. If we continue along the same path that we have been for a while now, people who have invested in gold will very likely be in a very safe place when things go sour. The bottom line is that you need to be prepared for the worst. Diversify your portfolio, bet with the dollar, bet against the dollar. Hold some gold. Hold some food. Don't be dumb.

Keynsian bobble heads better start learning Austrian economics quick like…Gold may be due a small correction but overall it's not going anywhere until monetary policy changes. Nothing can change with record low rates till 2013 and a print, print, print mind set...When we ditched our last link to the Gold standard in 1971 Nixion said "we're all Keynsians now". If you saved a dollar in 1971, it now has 15 cents of purchasing power. How's that philosophy working out? This could be the start of hyperinflation Gold being one of the 1st indicators...

Ludwig Von Mises is your friend : )

You Gold haters better wake up and pay attention to emerging markets and the amount Gold they are buying, it's not just the USA...we're broke. But I guess everyone else is dumb too right? LMAO!

Fiat currency always returns to it's intrinsic value of zero,...learn your history!

It's sounds like Gold makes people jealous!