Gold Bulls Vs Gold Bears

The gold hype is largely US driven.
Is there any point in golding gold in UK terms?
It's meant to be an inflation beater in case of moey printing. The debt in the UK is, I believe, £11k per person - small compared to something like the US.

Barren, cash also has limited uses, but many investors move to cash and wait for prices to fall when they perceive them to be too high. Here is a chart of the US market with gold as its price unit, rather than dollars.
http://home.earthlink.net/~intelligentbear/com-dow-au.htm

There are times when investing in economic activity is just not economic.

Gold is not used in industrial processes simply because it is is so scarce, eg it is an excellent conductor of electricity but why would you use it if there are so many cheaper more abundant alternatives. I am heartened by the fact that there are still many investors who "just don't get it". I am an out and out gold bull, there is no western currency that I trust, gold is the purest form of money, the Euro is done for, sterling the same and watch out for the dollar, the flight to safety that has pushed it up to 4 year highs is over, it is the next one to topple, when it does, investors may finally "get" gold

I first got into the yellow stuff in late 2004. I saw a rising trend and jumped aboard. As time has gone on I still see the underlying trend intact.That it will all end in tears I have no doubt but I shall be dancing by the door by then, When the music stops I shall be out of the door "like a rat out out of an aqueduct."

On another level I simply see gold as a currency. Nothing more or less. Consider. If you went on a world tour without travelers' cheques but a big bag of Sovereigns or Krugerrands, you could turn them into the local currency anywhere in the world. If that is not the ultimate form of money could someone please tell me what is.

In the last three years every paper currency has fallen against gold. Eventually the process will reverse but in the meantime why not just accept the world as it is rather than stand on one's dignity pontificating about how it should be.

Money is supposed to be a store of value, divisible and and a medium of exchange. Gold fulfills all these requirements and better than any paper currency AT THE PRESENT TIME. That is enough for me.

"If you went on a world tour without travelers' cheques but a big bag of Sovereigns or Krugerrands, you could turn them into the local currency anywhere in the world"

Could you not do the same with tea, oil or most other commodities though?

First, gold as money:

Animals could function as money. They can be accepted as part of a trade by someone who does not want the animal but expects that someone else will accept it in return for something useful. However, the animal will require food and shelter and it could die. This means it loses value in between the 2 transactions and could end up worthless. To be more useful as money the animal would have to indestructible and divisible. Small animal shells could do the job, and have done in some places.

Gold has these required properties of money but so do other metals. Gold wins because its density means that it is rare in terms of both weight and volume, so a large amount of value can be stored in a small purse. It also has a high stock:flow ratio because it has few industrial uses, unlike silver. You could use oil or sugar as a currency hedge but it's not easy to store a lot of value. You can use an ETF but you will not own the commodity, you will own a contract for delivery of that commodity. So your wealth will depend on someone else fulfilling their promise. And because the value of those commodities is derived from their usefulness in the economy, your wealth will be doubly leveraged to the performance of the economy (and vulnerable to technological or behavioural changes). Ideally, money's value should derive only from the expected level of trade within the economy - if there is more to buy, prices fall.

Gold's and currencies' value now and in the future:

A gold coin exists in reality, not only as a promise, so there is no "counterparty risk" associated with it. Cash is issued as debt so its value depends on peoples' willingness and ability to repay the debt. It also requires legal tender laws and relies on the government not printing large amounts, unless there is an equivalent amount of debt taken on which people believe can be repaid. The problem in Western economies is that there is no confidence that the debt can be repaid, other than by printing money which does not have any associated debt. Doing that will devalue the currency. Because the debt cannot be repaid the currency is already devalued, but like the banks using a "mark to imagination" model for their assets, people still put too high a value on their cash. It might take a while for people to accept the real value of their money, and also the real value of the economy, is considerably less than what it appears to be.

Whilst the adjustment takes place, gold remains constant. Well, nearly constant. Because the amount of trade (in the West at least, but the East and South may be affected by the West's decline) is likely to fall, the demand for money will fall so gold will lose value. But there is nothing to compare it with which is not losing value faster, so you will not be able to gauge the decline in value. There will be companies, regions and sectors which flourish but in general as we experience either deflation from debt-default or inflation from government money printing, wealth will be destroyed. The price of everything, even cash, will fall relative to gold. As the chart I linked to above shows, the process may stop when the Dow Jones is valued between 3 and 1 ounces of gold. And UK houses may be worth 70 ounces at the bottom of the market:
http://gold.approximity.com/HP_UK_in_gold_1930.PNG

Another way to look at gold's possible price it is to imagine that the US were still on the gold standard and the amount of borrowing it has done from foreign countries is equal to its claimed gold reserves. Under the Gold Standard it would have shipped its reserves abroad but instead it issued debt. To repay the debt by selling gold, the price would have to be sky high.
http://gold.approximity.com/gold_price_models_sinclair.html

some good fundamental points here, I am concerned about beating inflation and that's why I chose gold but I haven't a clue when to sell..... my other target was packets of cigarettes in uk..... I am confident they will beat inflation over next 5 years but, it is against the law and, secondly, it is immoral

William Davies, one time editor of Punch magazine, experienced currency collapse in Germany. He observed that when the chips are really down no one is interested in gold. What is used for currency is whiskey and cigarettes. So if you think that the end of the financial world is coming, then these are the commodities that you should be investing in.

I believe we are in a deflationary period in which prices are kept high by the enforced devaluation of the currency. JP Morgan explains that gold and silver may do well in this environment but other commodities do not.

http://www.businessinsider.com/jpmorgan-explains-why-gold-is-a-great-bet-during-deflation-2010-6

@matthewgeek2
You make a key point which many 'gold' commentators have not touched upon. That being 'you won't sell your gold - you'll spend it.'
Gold is money! And now there is a way to purchase gold is small amounts that will combat the issue of gold 'being worth too much'.

A company in Germany/Swiss is producing the first world currency in gold, which one can purchase in amounts of 0.5g, 1g, 2.5g and 5g, providing flexibility and mobility! The way they have put the product together is very interesting and their vision is long term.

Ultimately,the currencies are going to crash and as stated by some of the commentators here, it is then that those who don't 'get gold' will finally 'get it' and want to purchase it in real terms (not etf) and exchangeable manner.