FD value also goes up in the long run with compounded interest. Somemore it is guaranteed.

I waited 24 years before, it never went up. 24 years consider long term or not?

Not only gold, a lot of hard asset can also, properties, silver, copper etc.

FD is not a joke for 24 years compared head to head with gold, it won with miles ahead from 1980~2004.
While if one invested in properties in Japan earlier like 1980's or US during 2006-2007, FD still won miles ahead.

Cash is not as bad as many think (yes keep cash forever is bad), cash let you to pounce and invest asset in bad time, or the asset price at distress time, capture opportunity, which can make your decent profit afterwards.

1gm physical is meaningless or not any economical and investment wise, if one want to invest in gold.
No offence.

Fiat system is going to stay very long time.
There is no better alternative even if the system has flaws. (at least at the moment)

Live in fiat system, then play the fiat system game. Adapting is the survivor skill.

Gold pricing at USD1770, or RM173/g also a fiat system game only.

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Added on February 28, 2012, 2:31 pmThe fear on inflation, the interest rate is at historical low at that period of time, (after dotcom bubble burst), and inflation start to spike, everything rise at the period of time, oil also spike from USD 10~20 to USD>100
The low interest rate has fueled the inflation, with inflation fear, people start to look for hard asset, and gold particularly as traditional believe.

Financial system is just a money game around, as long as liquidity is injected, and confidence being restored, the fiat system party continue again.

This post has been edited by cherroy: Feb 28 2012, 02:31 PM

We are in fiat system since first day we are born.
Whether one own gold, hard asset, stocks, all just a parcel of fiat system.

Gold doesn't have a value without money, at current system.
Gold has a value become the existence of money.

Genuine gold investment doesn't give you interest nor dividend one.
Please get the first basic right on gold.

Gold cannot grow, cannot yield, cannot give you interest, cannot give you dividend.

The concept of gold investment is buy gold and own it. End of story.

Gold is not MLM.

Gold is about buy RM173/g today, and if future price is RM200, you earn the money from it.
As simple as that.

Gold is not stock market or company, unless one invests in gold company shares, gold is not yielding any interest or dividend one.

USD just removed gold backed policy during 70's.
It has nothing to do with fiat.
And none of other currency being gold backed before, only USD did.
Gold backed just means, people can exchange the USD to equivalent of gold amount.
Which indirectly means, you limit the currency that can be printed only by the amount of gold you have. Nothing to do with fiat system, it is more like self control mechanism and instill confidence on your money.

Fiat system already exist before the gold backed removing.

Money has no intrinsic value, so does properties, and gold.
Any value we given, like
RM 1 is RM1,
1 gram of gold is Rm175,
1 house worth RM500k

is given and perception by human kind in the fiat system.

Rm1 is just a paper printed RM1 that we have confidence people willing to exchange goods with us.
Gold is value, because people perceive it has a value by human kind due to scarcity of the metal. If not, it is an AU yellow metal and good conductor metal.
Properties, is cement, rock, sand that make a space for human to live in.

Whatever value a gold, a property, a paper money, is given by us. Itself has no value, until everyone agree so.

Just like 2000, people agreed gold not worth much, only USD300, so gold value at USD 300 and can exchange goods equivalent to USD300.

Until one day, gold is constantly value like 1kg will forever let one to exchange a property or 100 tons of rice, or something like that, then may be it has some intrinsic value. But we know, it never happened before.

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Added on February 28, 2012, 9:38 pmYou may not old enough to know gold lose its value in the loss decades of gold from 1980 to 2002.
So there is no such thing of intrinsic value, the value changed due to people perception all the time.

Yes, one may not lose entirely like fiat money (if defaulted or devalue) with gold. But gold can lose its value as well. Last time you can buy a bowl of mee with 0.01 g, but now you cannot buy the same bowl of mee with 0.01g now. So gold lose the value until now, (at least until now, after 25 years or so). In the future, it may gain you, I don't know, but this is a reality and facts, that whatever value is constant changing due to people perception.

This post has been edited by cherroy: Feb 28 2012, 09:43 PM

Nothing.
Value is always given by mankind and mass perception.

The removal of gold standard only let the Fiat system more freely.
It is not the start of Fiat system. It exist way before.
Just last time, economy is rather smaller, and has abundant of gold to used by US to back the currency.
But soon after WWII ended, economy expand rapidly, and way exceed gold production and available gold, gold backed become non-viable mechanism only.

And only USD has gold backed, none of other currency has gold backed before.
The gold backed only about USD, not related to GBP, RM, or the rest, so they are not Fiat

Just like GoldChan said, resources like oil and water is more valuable than gold. Gold is little use Au metal apart of its super conductivity which is rather niche market and application.
Gold is just medium of exchange. Itself only value when we perceive it is value.

There is no contradiction.

GBP, RM, or whatever currency in the world never being backed by gold.
Since when I said they are not fiat currency?

Only USD was gold backed, and you claimed fiat currency only exist after the removing of USD gold backed. This is not true at all.
Fiat currency already exist way before USD gold backed.

Oil and water is more valuable, means they are useful. Gold is not.

Valuable /= intrinsic value. My definition of intrinsic value means they have a fixed value.

I claimed or my definition of no intrinsic value, means they do not store a fixed value. Value is constantly changing all the time, it can be more value, it can become less value.
Gold today value at RM175, 1980's time was RM30, future may be RM300.
So after lecturing to your kids that gold has intrinsic value,
Kids: what is the gold intrinsic value?
You : 1980's time, the answer is RM30, now RM175, future RM300 (the kid asked in 3 different time.
Kids : (Recall back the answer), you told me gold has an intrinsic value, how come you give me 3 answer?
You : ???

Fiat currency means you can print the money out of thin air, and define what is the value of it, aka print the note that write RM1, and become legal tender for RM1 equivalent of goods.

Even when USD being backed by gold time, they can print as their wish, as long as there is enough gold, which enable (if) someone want to exchange the USD to gold. Gold is just mechanism to self control on the creation of money.

Gold backed has a big flaw and cannot co-exist with modern banking system, as gold is scarce in the first place which hinder the economy growth, money growth. Just you bank cannot loan you money and charge you interest, as your "gold" is not digged out or enough yet to pay the interest. Money cannot become more due to gold scarcity.
Yes, it will prevent inflation to happen in the process.

Inflation spike because of money growth, yes removing gold backed give freedom to print more money, no doubt it somehow contribute to inflation. But from 1970's onwards, we have economy booming around the world, new tech, new stuff created. For the last 20-30 years, the world economy has changed so much, size of economy become larger, the amount of money circulating become more.

I also wish inflation being tamed.
Fiat currency if self controlled properly is the key. Gold backed just instill the self controlled mechanism. But gold backed has major flaw as it can hinder growth of economy, as you need to dig more gold before someone has extra money.

Unless we change to gold as medium of trade/exchange.
Yes, I agree with you an ounce of gold is an ounce.

But
kid : Father what is the use of an ounce of gold? Can I use it to buy sweet, toy, Ipad?
Father : No, they don't accept gold as payment.
kid : Then what is the use of an ounce of gold? Can I chew them?
Father : Gold is valuable, you can buy toy, Ipad by selling the gold to get the fiat money the pat for it.
kid : Oic, cannot buy with an ounce of gold, but can only buy with fiat money. Gold never to convert to fiat money term/value before can buy.

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Added on February 29, 2012, 9:37 pmYes, it is true, but my bowl of mee on 1980's still missing half a bowl.

This post has been edited by cherroy: Feb 29 2012, 09:37 PM

You need to take into account of USD-RM exchange rate as well.

Gold price rise, but USD-RM exchange rate fall then you won't see much increment in term of gold price in RM. Yesterday, USD-RM once fell below Rm3.00.

Not actually.

Gold react towards QE, and cheap interest rate, loosely monetory policy.
Share market is not the one influence the gold generally.
Share market money generally or mostly don't go into gold one, if people scared about share market and sell, majority of those money flocked to treasuries and gov bond one, not primary into gold.
Gold market is way smaller than stock market and bond market.

When economy is doing badly, everything drop, see how gold price dropped during 2008 crisis time.
It is after Fed adopted loosely monetory policy and massive QE, then gold rose back up again.

DJ was dropping yesterday, when gold has one of biggest plunge that we see in recent years.
Both stock market and gold are performing quite well for the last 2 years or so.

When Fed or central banks said want to print money or QE, then you see gold shoot up like rocket.
When said economy is good and don't need QE and want to hike interest rate time, gold price is going nowhere or dropping. This is what happened yesterday.

Couple of years?

I need to wait 2 decade!

I wait for 2 decades and yet the value is not the same yet.

Yesterday DJ plunged 200 points.

Yes, I agreed.
But please give us real example that bank can close at anytime, instead spreading this kind of fear (I knew this risk does exist, but this kind of word can be deem as irresponsible comment aka bank can close down anytime)
We have hundred and thousand banks around the globe, even Malaysia has 10+ banks around (after many merger round), please tell us which bank has closed down simply.

Physical safer?
The chance of getting being robbed or stolen is less than banks close down? I first time knew it.
I only knew land and house cannot be stolen, buy physical gold can.

Value preserved? I did it 30 years ago, it never preserve, who lie to me?

Bingo, central banks and gov would rather print money for bail out the banks and financial system instead let the banks failed that could have catastrophic consequence to the economy.
So the risk of banks unfolding or so called "close shop at anytime" is minimal, (I never say never or won't )

I would worry about inflation instead of worry "banks can close shop anytime"

Bro, we are talking banks fail or not in the previous statement.
Whether technically the bank has failed or not, doesn't matter for ordinary folks that invested in paper gold with the bank.
The ultimate question is the bank still open?
Yes.
The bank fulfill the the gold price according the Comex futures gold pricing/movement?
Yes.

End of story.

I am simple person, I am not sophisticated as you.
I only know everyday I go to bank for the last 40 years, all banks open, never fail.
I only banks fulfill their promise every cent and my paper gold is according to gold market price.

One day? Which day?
I cannot even know next month or next week event.
One day? Never mind, as I may no longer exist already.

Rm1 become 30 cent?
I experienced before RM2.50 USD within months become RM4.30.
I experienced how a bowl of mee come from RM0.20 to now RM4.00.

I taught previously said print money can bail out already, why now said banks failed again?
I am really confused now.