Gold's return to its historical role as the premier global money. Too many investors have not made the move to Gold, and remain to be convinced. Some are still hoping that paper assets will return to the great days of 1929 and 2000. However, hope has never fed anyone. Others remain overexposed to debt backed by their homes, believing the silly notion that one can never lose money in real estate. Time will crush that view. However, what many do not realize is that over the past 34 years Gold has been a better investment than housing. Home prices are simply a money illusion. See both graphs.

In the second graph are plotted the indexed values for quarterly Gold prices and home price in the U.S. Gold prices are the triangles and home prices are the solid line. For U.S. home prices the Freddie Mac Conventional Mortgage Home Price Index is used. This measure is published quarterly by Freddie Mac. This index is superior to other measures due to the large data base of the company. They are able to capture repeat trades, or repeat sales of the same property. In measuring stock prices, we use the change in the price of IBM stock, for example, over time. The widely followed median price measures compare, for example, trades in IBM with trades in MSFT, which tends to distort the data.

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