Warren Buffett sold his silver back when it was in the single digits and has entirely missed out on the quintupling in gold over the past decade. Just because a guy is smart about value investing in businesses doesn't mean he is smart about everything else.
I think some of you are missing something. The point of holding gold as a commodity as it is a commodity, is that currency will not be worth anything soon. That is explained in the article. I wonder how many people here have commented without reading the article it may change your view. Please read it.
TLDR, maybe if there were a comic version I could read. People are way overestimating decline of dollar. Even if it does collapse, it only affects the price of goods I buy from overseas. It doesn't affect healthcare, education, housing, which are the big three. Even domestic energy production won't be much affected. The gas in my car, some consumer goods, that's about it. It's true that if the interest on the debt skyrockets, that'll be a problem, but we can always cut government spending, and the marginal dollar of government spending generates zero value, so no loss there. Domestic inflation is no problem either. Inflation is not a monetary problem, not any longer. Inflation in the 70s was a demographic phenomenon, and today the deflation is a demographic phenomenon. Too many people chasing not enough stuff. Today we have the opposite, see Japan for a classic case of this. The real mistake we're making now is not earning enough seigneurage off our currency. That's how we'll solve the debt problem.
I'm sure it has nothing to do with the explosion of labor productivity and real wage rates after the Industrial Revolution. Look at how many hours of labor it took people to buy X amount of oil in the late 19th century. Now look at it today. As production, real rates, and living standards exploded everything got cheaper priced in labor. Besides, for most of American history the monetary system was stable, bordering on deflationary. It's kind of silly to look at gold as an investment pre-1971 as it was linked to the dollar; it was basically money. That's like comparing a current checking account to almost anything else. Most people don't stick cash under their matress and expect it to outperform. During the ~ 200 yr U.S. boom investement (financial and economic) outperformed savings, for obvious reasons. Up until 1971 (33'-'34' for U.S. residents) holding gold was saving, not investment (in the financial sense.) I'm not saying gold is a good or bad longterm store of value but if you want to analyze it take the return in dollar terms over the last 40 years and compare it to other commodities, equities, compounded treasuries, compounded CDs, et. al. That's the best you can do. You can't compare gold as a de jure monetary metal to gold as an investment asset in the modern system of (mostly) free-floating, fiat currencies; apples and oranges. I do agree that gold is not the inflation hedge many make it out to be. I think it's more a type of counter-party-free, maturity-less CDS option on the issuer of the reserve currency, that prices real default rather than nominal default, paid in a basket of non-reserve currencies . Therefore it tends to get bid in times of uncertainty - geopolitical or monetary.
There is no doubt Gold has passed the test of ages to come to be the universal form of MONEY. However, this is just a metal just like any other. It is virtually useless. Iron, copper, many other minerals are essential to our standard of living. We could do just fine without gold & silver. ANYTHING SCARSE & DEMANDED BY A MAJORITY QUALIFIES TO BE MONEY. Throughout history many products/things/commodities have been used as money just as gold has been. For years SALT was worth 2 or 3 times more as gold. Instead of buying gold to protect your finances against a possible financial Armageddon; buy a gun with lots of bullets.
If we start having the CPI increasing wildly like the gold bulls predict, the fed will raise rates, thereby decreasing the price of Gold. The Gold bubble got crushed in the early 80's when the fed raised rates.
Can the fed realistically raise rates. The consequences to home owners and business is damaging to the economy. Perhaps more so than inflation. I don't think they could effectivley do it. Also gold isn't about simply offsetting inflation but an alternative currency in itself.