[bandrami]

I don't fear it; I'm amused by people who tell me that fiat currency is going to collapse any day now unlike super-safe gold, but that they will nonetheless be happy to exchange some of their super-safe gold for my soon-to-be-worthless fiat currency. Out of the goodness of their hearts or something.

[adventured]

The dollar has lost roughly 97% of its value (per the Fed's own assessment) since the Federal Reserve was created. And that's a good outcome, we could talk about the ruble, or the real, or the bolivar.

Gold has not lost any value in the last century by comparison.

Gold has plenty of issues, confidence as a store of value is not one of them. By comparison, the global economy is filled constantly with stories, from one country or another, of fiat being demolished through constant inflation / aggressive devaluation.

Countries can drown their citizens via all sorts of schemes involving debt (ala Japan and the Yen), that then become currency devaluation schemes (QE) to debase that debt and chop down the standard of living of its citizens as a stealth move to pay for that debt. Such a thing inherently can't happen with gold.

The Euro zone for example is in the middle of seeing its citizens standards of living chopped down via QE, to debase the vast debt that has been choking off the growth potential of much of Europe since 2007 (the European economy has seen zero net GDP growth since roughly 2007). How many Euro zone citizens understand what the ECB is doing to them exactly? Do they realize that what they're about to suffer, is what Americans went through from 2002 to 2014 as the Fed debased the dollar to try to avoid multiple recessions, leading to a substantial decline in the US standard of living?

If the ECB drops the value of the Euro by 1/3 via QE, that substantially reduces in real terms the standard of living of anyone living on that currency. Gold shields against that abuse.

[notahacker]

Trouble is, that for all your dire warnings about the horrible things the ECB might do, the one store of value that actually has dropped in value by a third in recent years is gold (it lost nearly a third between mid 2012 and mid 2013, and its a little lower than that now)

Sure, in the long run, gold holds its value, though it doesn't perform nearly as well as stock markets, or real estate. In the long run, a predictable 2% annual inflation erodes the value of savings, which is why people participating in the dollar economy tend to put their money in bank accounts paying interest rather than burying their cash in vaults,

But it's economically illiterate to pretend that gold price crashes haven't been a far more serious wealth destroyer over the last couple of years than the relatively stable and predictable inflation in developed countries, despite all the predictions that QE was going to make the sky fall in.

[bildung]

> Gold has not lost any value in the last century by comparison.

Not in that artificial timeframe, but surly in many other periods:

* it lost over 65% of its value between 1933 and 1970.

* it lost over 82% of its value between 1980 and 2000.

* it lost about 29% of its value the last two years.

(http://www.macrotrends.net/1333/historical-gold-prices-100-y...)

Gold is a highly speculative asset.

[icebraining]

Well, that's the price of gold in USD. Saying that gold has "lost" or "gained" value only works if you hold USD as the frame of reference.

Alternatively, you could invert the graph to say that USD is a highly speculative asset - relative to gold :)

[lmm]

You can't eat gold. I'd be more interested to see their value measured in loaves of bread, apartments, or hours of human labour - the kind of thing I'm actually going to want to buy with my store of value.

[bildung]

I see where you are coming from, but as these numbers are inflation adjusted the USD isn't really the frame of reference, the purchasing power is - as a result of adjusting for inflation the purchasing power represented by one USD stays constant, so USD can be cancelled out on both sides of the equation.

[RockyMcNuts]

not if the dollar is more stable than gold vs. a broad basket of consumer and other traded goods and services.

[srdev]

The 97% loss in value of the dollar is brought up again and again as if it's some shocking fact. But that drop happened over a century, and fiat money is not expected to be s long term store of value. So really, that "shocking"drop is a non-issue unless your retirement savings account was a bed mattress.