from Wealth Cycles:
Despite the tradition of stock pushers and mainstream media to deride gold as an investment, the American public persists in holding gold in high esteem, according to an April Gallup poll. According to Gallup, Americans believe gold is a better long-term investment (28% of those polled) than real estate (20%), stocks (19%), savings accounts or Certificates of Deposit (19%), or bonds (8%). This faith in gold persists despite the public statements of investment gurus such as Berkshire Hathaway CEO Warren Buffett or economists such as Federal Reserve Chairman Ben Bernanke that scorn gold on the basis that “it doesn’t produce anything” or does not yield a return.
What gold does do is provide a store of value that offers hope for future prosperity to those who otherwise despair of watching the value of their paper currency erode with each new round of central bank printing, for those who once burned fear the fire of the stock markets, and for those who see the bond markets for the debt-burdened sinking pyramid that they are. Real estate? Despite a slight warming in some parts of the country, with banks continuing to slowly dole out foreclosures and short sales for fear of swamping the market, with governments continuing to buy up bad mortgages, it’s far from certain that real estate has yet found a bottom; in some parts of the world (Canada, Australia) looming real estate crashes have still to play themselves out. But here’s the most important thing to understand about gold—it is not merely another investment vehicle. In fact, gold is and has been for all of human history, money.