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<p>[QUOTE=&quot;Blaubart, post: 1962047, member: 37498&quot;]If only it were that simple, and if only I were able to see five years into the future.</p><p><br /></p><p>For example, inflation could quite realistically average 3% annually, and if so, then $1,350 in paper money would still have about $1,160 in purchasing power when measured in today&#039;s dollars.&nbsp; It isn&#039;t unrealistic that gold could fall below $1,000/oz in the next five years.&nbsp; If that is what is going to happen, then give me $1,350 in paper dollars today.</p><p><br /></p><p>Of course we could experience double digit inflation and gold could go to $2,000/oz.&nbsp; If that is what is going to happen, then I&#039;ll take the 1 oz of gold.</p><p><br /></p><p>Which is more likely?&nbsp; Who knows...&nbsp; We&#039;ll have to revisit this thread in five years to find out.&nbsp; Assuming of course that the apocalypse hasn&#039;t arrived and we still have an Internet.</p><p><br /></p><p>If you asked a similar question three years ago, with a three year outlook, it would look pretty bad for gold.&nbsp; The &quot;official&quot; inflation numbers show we&#039;ve averaged 2.11% over the past three years, but nobody believes them so let&#039;s just call it 3%.&nbsp; One ounce of gold in Aug 2011 was $1,848.&nbsp; $1,848 in paper money today would still have $1,586 in purchasing power measured in 2011 dollars, whereas 1 ounce of gold is worth only $1,288 today.</p><p><br /></p><p>Either way, I&#039;m not the kind of person to stuff cash in a mattress.&nbsp; I&#039;d invest it in something that should either earn a return, or appreciate in value.&nbsp; If I&#039;d invested that $1,848 in an S&amp;P 500 index fund, I&#039;d have $3,189 today.&nbsp; I could sell those shares and purchase almost 2.5 ounces of gold.&nbsp; The capability to turn 1 ounce of gold into 2.5 ounces of gold by investing in the market is a net benefit of 1.5 ounces of gold, regardless of anyone&#039;s opinion on real inflation numbers or the strength of the dollar or how deep in debt we are.</p><p><br /></p><p>I own PM because I enjoy the benefits of owning it, but I recognize that my PM isn&#039;t earning a return, so more than 90% of our investment capital is in the market and doing quite well.[/QUOTE]</p><p><br /></p>

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