A subscriber recently sent me link to an article in the Wall Street Journal by Brett Arends titled "Why I Don't Trust Gold". This is the second part of a three part series, but as I write this, the third installment has not yet been published.
Although I agree with most of what he says, I would of course put it in different terms – for instance Mr. Arends says, "Gold is volatile. It's hard to value." and I would say, "The US Dollar is volatile. It's hard to value." Both statements are equivalent, depending only on whether you are valuing gold in terms of dollars, or dollars in terms of gold.
But the question is, which viewpoint will history record as the "right" one? On this score, I am completely convinced that he is wrong. There is NO example of ANY fiat money system EVER, in all of human history, that has not self-destructed. So in spite of his claim (in part one) that "It (gold) has a 'This time is different' story line", he is the one who is arguing that "it is different this time", not those who see gold as real money.
Of course the dollar can rally in value, even for decades at a time. But in the end, it will disappear like all the other attempts at a centrally planned and controlled currency, for the same reasons that centrally planned economies fail. When people are free to use anything they want for money, gold always seems to prevail. I don't think this time will be any different.