Released: October 26, 2008

Even gold isn’t a sure bet

Source: Jane Bryant Quinn [Washington Post] (Free Registration)

Gold is for rich guys - buying physical gold, that is. The metal’s highest and best investment use is as an insurance policy against a currency collapse. For that purpose, you need a lot of it, stored around the world. Owning 20 or 30 coins is nice but won’t protect your standard of living in a world where dollars are dust.

Gold isn’t even a reliable hedge against inflation. It reached $850 an ounce in January 1980, a price not seen again until January 2008. During those intervening 28 years, gold plunged and reared but lost more than half its purchasing power. For a 1980 investor to break even after inflation, gold would have to reach $2,200.

It might, but how long did you plan to wait?

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