Gold at $1100

The pressures of projected inflation and the Chinese and Indian demand for gold as a stable store of wealth is culminating in the historical ‘gold bug’ fever, and prices are going through the roof. Today, one plain gold coin of one ounce will get you five and a half new ipod touches, one high performance desktop PC, or 354 gallons of milk (using $3.10 / gallon milk).

Following the gold surge will most likely come the oil and metal price surge, and then food and drink surge. Personally, I only value gold in it’s investment value as I think the metal is dull and boring and less desirable than steel, but investors around the world often rely on this ancient money when governments bombard them with tons and tons of freshly printed paper labeled ‘money’.

Investments in gold will yield limited profits though, as historically speaking investing in the stock market yields better results. Investing in today’s stock market is risky, but historically speaking if the companies you invest in today can survive and prosper tomorrow you will get a lot more returns than if you invest in gold or other precious metals. That being said, a moderate investment in gold (hopefully when it was below $800 / ounce) is not a bad idea ‘for the rainy day’, or you could invest in cultivating a garden or honing skills in what you do (be it engineering, craftsmanship, building, etc.) so that you can always have what the Chinese call a ‘tie fan wan’, or ‘iron rice bowl’, meaning a steady source of income.