Warning. Gold is a bubble

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This is a general warning. I'm hoping someone somewhere will heed this warning and not invest in gold. If you have Gold, sell it, all of it. I'd like to give you guys a quick history of Gold, where we started, and where we are now, and what the future is likely to be. http://www.nma.org/pdf/gold/his_gold_prices.pdf This is a quick history of gold prices. As many know, from the US creation of currency, the gold standard kept prices stable, at just under $19 an ounce. In 1918, the price jumped to just under $21 where it remained until 1934, where it jumped to just under $35. Now, why did the price change even during a gold standard? This is key to understand for those who believe returning to a gold standard will fix everything. The theory of the Gold standard is that you only have enough money printed, to equal the amount of Gold you actually have in stock. Thus if the government only has 10 ounces of gold, and the standard is $20 per ounce. How many dollars can you print? Obviously $200. But do governments always stay in the rules? No, they do not. So the governments routinely printed more dollars than they had gold to cover. So how do you fix that situation? You inflate the currency. Make the conversion $21 per ounce, or $35 per ounce. Then you can cover all the notes you shouldn't have printed. So to make my point, going to a gold standard, will not solve all our problems. A more responsible government will. The bubble Starting in 1972, the price of Gold was released. Meaning that the value of Gold was no longer determined by the government, but floated in value. In 1977, with the election of the brilliant Jimmy Carter, the price of gold started a climb. After succeeding in crashing the American economy with the policy driven energy crisis, Gold drastically in value until 1980 when it reached $600 per ounce. After Carter lost the election in 1981, the bubble crashed, down to the mid $300 per ounce. The steady decline From the crash of the early 80s, to 2001, the price of gold remained fairly stable year over year, with a slight decline to about $270 in 2001. Now there were a few hiccups during this time. The recession in 1987, caused a short lived spike in prices. Then again in 1992, a even shorter recession caused a spike that was even shorter. So much so, it doesn't show on this chart. But ever since free floating gold prices, there have always been a consistent spike in gold price any time the economy hiccups. But over the long run, the price of Gold declines. What is the intrinsic value? If you have a gold coin, take it out and put it on the table in front of you. For the rest, imagine it there. What do you have in front of you? What is it? It's a gold coin.... which is? A rock. Gold is a rock. A shiny rock, but a rock nonetheless. What value does gold have? Gold has the same intrinsic value that all commodities have. The value is what you can do with it. Take oil. The value of oil is you can power a car, or burn it for heat, or use it to make other chemicals for other uses. Gold is the same. So what can you do with Gold? You can forge it into jewelry. You can make electronic components out of it. That's the utility value of Gold. The reason why the price of gold was slowly dropping, was because more and more jewelry was being made out of other metals, because gold is expensive. So back to economic basics... demand goes down, supply is relatively the same. Price declines, right? The real market price of Gold has declined consistently over the 20 years prior to 2001. Where are we now? As I mentioned before, the price of gold consistently spikes during recessions and economic instability. Right now, there's still many economic problems throughout Europe, and the Americas. This instability has driven people to buy gold in mass, creating a bubble, just like the property bubble that crashed in 2008. Ironically people prior were saying the same thing about property, as they are about Gold right now. Oh property values are climbing, and you should buy some and make some easy money, and property is a safe investment. What do they say about Gold? Gold is climbing in value, and it's safe! It has intrinsic value! The value of Gold never goes down, even though it has many times in the past, just like property never goes down in value even though it has many times in the past before 2008. Gold is a bubble, just like the Oil price bubble of 2008 crash, the property market crashed. Bubbles will eventually crash. It will happen, now or later.