Phillip H. rightfully pointed out that gold was a horrible "store of value" if you bought it at $850 an ounce in 1980, as it lost value for almost two decades as it dropped to $250/ounce in 1998, as well as losing an additional 50% due to inflation.

Timing is everything. If you had purchased gold in 1980 at the peak of $850, it would have to almost triple from present levels before T-bill investors will stop laughing all the way to the bank. (See CPI calculator courtesy of the Bureau of Labor Statistics.)

Adding insult to injury to those who invested in gold at the peak, interest on Treasuries rose to 16%; "smart money" could have locked in those high returns for years, yields which became especially juicy as inflation abated in the late 80s and 1990s.

Readers of the November 6 entry should note that Harun did not predict what would happen to gold or any currency; in a followup email he observed:

Holding physical Gold is not without risk. If desperate governments decide to steal gold as did FDR (in the 1930s confiscation of privately owned gold), people will be wiped out.

In the present governmental risk is the risk that concerns me the most (how many laws have been disregarded to save the "system"?). Government intervention can turn a big winner into a ruinous loser. Government currency revaluations can wipe out savings overnight.

As you say there is no easy answer. Therefore, perhaps the best we can do is to have a multi-faceted plan and maintain a fluid mindset.

As one of my favorite aphorisms puts it: "There is no security on this earth; there is only opportunity." (Douglas MacArthur)

Some readers only read entries with charts, others find charts tiresome; I consciously try to provide both well-documented chart-filled entries and chartless analyses of profoundly metric-less ideas and trends.

Longtime correspondent David V. provides just such an analysis:

It strikes me today as you talk about currency to store value, gold to store value, someplace/anyplace to store value. That most of the people see value as a "thing" to be stored and saved. Whereas I see value stored in the memories of thrilling life experiences, What is called, "A life worth living". A life of daring adventure. Maybe people should spend more time living, and less time hording illusions of value.

Why do people read books about other peoples life of adventure, while themself living a life of desperation, trying to protect their little pile of gold, and devise tricks to snooker others out of their little pile of stored value.

In a sense, can one lose that which did not exist. If you lost billions of dollars (The dollars are an illusion) on a investment vehicle (That is a fabricated illusion) which is bundled up mortage backed securties (Another illusion) backed by the private exclusive ownership of a chunk of the Earth (Yet another illusion). Is it not the nature of things that one can not store value.

In the end we all die. Perhaps the root of the problem is that death is not really real, in the way it was real a hundred years ago, when bodies were set on the street to be picked up, when old family members died in the home. If we were more aware of death in a very real sense, would we not be so obsessed with money and wealth and the loss thereof. Only in modern times is everyone wealthy. Everyone worries about his stored value. When I grew up we worried about staying alive, not our wealth.

Water treatment plants and pressurized public water supplies are also stores of value; many "stores of value" we take for granted are publicly owned, and the stewardship of these assets is a public, shared responsibility. A private hoard of gold is not a replacement for clean water or a democratically operated stewardship of shared assets.

"This guy is THE leading visionary on reality. He routinely discusses things which no one else has talked about, yet, turn out to be quite relevant months later."
--An anonymous comment about CHS posted on another blog.

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