RealEconTV

No doubt you've heard the phrase "gold standard."

But what exactly is it?

Jim Grant, one of the most articulate proponents of it, defines terms on an CNBS segment that's surprisingly intelligent.

The chimpanzees at CNBS actually make some good points questioning the need and/or virtue of the standard which I don't think Grant deals with very well.

First, is it really a credible claim that the gold standard was the basis of America's spectacular historic growth and prosperity?

Didn't things like massive population growth, vast untapped natural resources, technology breakthroughs and successful marketing of US products worldwide help a little?

Second, flawed as the current system is, it has the virtue of being the one that "works" just as the world "works" currently by running on oil.

The system may suck - just as running the world on oil and centralized power plants sucks - but the sad reality is there is no replacement sitting on the sidelines ready to go in and take over the game.

Anyway, the real issue is should individuals be buying gold?

I said "YES!" in 1999-2002. I'm a lot less enthusiastic at this price, a lot less enthusiastic. And now that CNBS is starting to cheerlead for gold, I smell a painful correction coming up (posted 9-3-11)

That being said, when gold is priced right, I believe it's good to buy and hold.

How will you now it's priced right?

When the world is talking about what a dog it is. Read "commentary" on gold ownership from 1999-2002. According the the pundits, only the Village Idiot would stock up on gold.

Yeah, uh, right.