I’m a Libertarian, but not a pure “gold-bug.” The house of cards could last quite a while. There are few signs that the big crash is coming any time soon except some chirping from the current credit crunch “Chicken Littles.” Such signs or risks come and go. But I still advocate the gold standard. The risk of what damage the cards falling could do are still there. They don’t change. And they are huge.

And something universally regarded as valuable, durable and quite divisible should be used as hard money (not necessarily just the two main precious metals), and certificates guaranteed convertible to the hard money. The artificial reserve system should be abandoned where banks can lend out more than hard money held in reserve. Get the government out of money and create institutions that independently certify the means of tender. You could have just a little occasional inflation balance with corresponding minor deflationary periods: resulting in a more smoothly growing economy.

Personal position: Regardless of a possible crash I believe in diversification or asset balancing. So I invest in real estate and stocks in addition to precious metals. The value of all of these will fluctuate. Chart yourself a good long series of gold prices at http://www.kitco.com/scripts/hist_charts/yearly_graphs.plx. If “trading” is your gig, you could add some moving averages, and could determine roughly when to get in and when to get out. It has to be looked at in the long term, over at least 20 years.

Converting to hard money is up against the banking system and other political problems. We would need more leaders espousing the gold standard, who are not as timid as Greenspan.

Peter