Gold. 4% return over the last 50 years. Most of it the last 7 years. Yes I'm repeating it from a talking head...

There is a time to get in, and a time to get out.

A good thing to keep in mind is that, historically, a one ounce piece of gold typically buys a good suit. In the current situation, it will become a question of who loses the least.

I think an international gold standard will certainly work again. The point of a gold standard, and gold and silver backed currency, is not to stabilize prices per se, but to stabilize interest rates. I also think it needs to be considered that gold and silver being volatile right now has to do with the fact that the currency and stock markets are volatile. Much of the volatility would go away if it were the anchor, (tremendous events like the gold rush of 1849 notwithstanding).

Central bankers hate a gold standard because it does not allow them to manipulate everything (interest rates, money supply, etc). With a gold standard, things could be simpler again. It would make currency markets obsolete, as one example. That is another reason why it is so vehemently abhorred - because it takes away the opportunity for the stereotypical "Wall Street Fat Cats" to make obscene profits and decimate little investors with "arbitrage opportunities", because they rarely exist. Anybody who thinks a little inflation is ok, or, necessary (!) should really read up on Austrian school economics. Consider the source: The Federal Reserve (which is neither Federal, nor a reserve bank) says through their Bernanke mouthpiece that a little inflation is desired. Why? Just ask why! Is it because they loan money to the government (and all member banks, trickling down to all consumers eventually)? They charge interest on the money they create from air, and without inflation, there would be no friggin way that whom they loan to could every really pay it back, that is, unless, the system perpetuates itself by constantly inflating dollars, thereby allowing all borrowers to repay the debt, by extension they would continue to borrow more money. Consider the source, consider the source, consider the source.

I Hate Ferrari (sorry, I'm already in this and I forgot to look up your name), I think you'd be very interested in the youtube link I posted, if you haven't seen it already.

Taurean Bull:
You talk like someone who would like what Ron Paul has to say, and I have seen both Zeitgeist and The Money Changers, both of them are excellent films.

RE: Diamonds, oil, etc. is that they represent finite quantities. This is why gold and silver work (or any other non-fiat system), why the original Continental Scrip worked (it was originally backed by land), and various other currencies. The market sets the interest rate, and thus the availability of money. They are capable of supporting large economies by varying the quantity of substance (gold, silver, diamonds, etc.) that is represented by a note.

EDIT:
The volatility in gold, silver, etc. is due to the volatility of the currencies which they are priced (dollars).

__________________
If one's going to live, live well.


*Looking Forward to my first Lamborghini, whenever I shall have her!*

It might be best to look at 1971 when Nixon oficially took us off the GS.

Gold price then: $40.80
Gold price now: ~$878.50
37 year compounded annual return: 8.6432%

If invested in the DJIA
Price then: $910
Price today: $10,850.66
37 year compounded annual return: 6.9282%!!!!!!!!!!!!

I am not making this up. Someone else please break out and dust off their old TVM calculator and double check me.


Luke,
I think Ron Paul is great! Might I write his name in my ballot to be a pain in the butt? Maybe. . .

P.S. Your edit reflects my sentiments exactly!