I know there are those who have a fascination with gold. I also know there are those who trust gold as money. I however, do not have much faith in the value of gold. So be forewarned, I'm writing here to dispel what I see as myths that have been recently hyped into common knowledge for any number of profit-related and prediction-boasting reasons.

I also realize Michael Rivero has at least one gold oriented advertiser prominently displaying an ad on his site. If Michael chooses to delete this comment post, I will not think anything less of either him, or What Really Happened upon which I heavily rely for news.

Money is money, and I doubt even Michael's gold advertisers pay him in gold.

Gold on the other hand is a commodity.

No one can take gold down to their local 7-11 and buy anything.

Gold, like any commodity, has a price that varies with supply and demand.

The last time I checked, a dollar still costs, one dollar.

Gold, again, like any commodity, also sells at a discount in volume. I do not have unlimited funds, but it would be my best guess that regardless of the number of dollars I might be willing to purchase, the price would remain, one dollar for every dollar I sought to purchase.

I do not have any particular expertise in deciphering the value of gold as a commodity. I could shoot reckless shots at the targets, and hit some and no doubt miss others. So I do not invest in gold. But then, I'm not just Scottish by ancestry, I'm also proudly reputed far and wide to be a pretty cheap old skin flint too.

But, I can tell everyone here gold does not outpace paper money in value simply because gold has a greater pecuniary value than does paper currency. And, I can also tell everyone, just about anything outpaces paper money at certain times, even manure.

But for the right now, cash is king.

It is interesting to me that no one is hyping any other commodity quite like gold and silver are being hyped.

I think this is the best way to describe the value of gold, that it is dependent upon hype. But here is a story that may help some sort it out.

Imagine if you will that some Maine farmer stubbed his big toe on a rock in his potato field. Imagine he stubbed his toe so bad, he vowed to get rid of that rock. Also imagine him using his tractor to dig out the rock upon which he had stubbed his toe, finding the rock to be quite large, and pure gold. Imagine further, that as this determined farmer dug ever deeper it became clear this large rock was more than the typical Maine boulder and had to be the tip of a piece of golden ledge that assayed and weighed in with an estimate of very nearly one million tons. Imagine, if you can, one million tons of pure gold coming out of this lucky farmer's Maine potato field.

Was the farmer any richer?

Certainly he was. He was richer exactly by the number of dollars for which he could sell the gold he found.

Was the town he lived in any richer?

Only in that amount it could collect from the farmer in fees and taxes.

Was the State of Maine any richer?

Certainly. The State of Maine has one of the highest income tax rates in the country, but it would be no richer than the amount of taxes and fees it could assess and collect from the farmer.

Would the United States of America be any richer?

Yes. The U.S. collects a worrisome income tax, just as it has some control over interstate commerce through which there would be other fees that would accrue due to having to cart so much gold around the countryside.

Now, here comes the telling question. Would the world be any richer?

The answer here would be that the world would only be richer by that amount that this new found gold would provide for the gold needs of the world.

And this is my problem with the value of gold especially as a hedge against inflation.

Gold has very few industrial uses.

As the price of gold goes up, it has even fewer industrial uses.

Gold also can be mined. And as the price of gold goes up, more mines become cost effective to operate all the while adding to the supply of gold on the market.

Similarly, individuals will sell their gold when the price goes up. Companies that use gold in the production of their products can quite often shift their use of gold to another material. (Gold electrical contacts were commonly used in digital electronics before the price of gold soared making it too expensive for that use.)

My story of the farmer's sore but golden toe should adequately explain to the reader that the value of gold has no steady or guaranteed positive role in relationship to any currency. And for anyone to assert that gold is a good hedge against inflation, they would have to qualify their statement with so many ifs, ands, ors and buts, only a fool would not come away jaded.

Historically, gold right now is very high even at a little over $800 an ounce. Gold was not too long ago over a $1000 an ounce. Since that time when gold was over a $1000 an ounce, it has not been a good hedge against inflation. Gold has been instead an over-priced commodity that has taken a pretty steep decline as gold investors took a stiff bludgeoning in the supply and demand driven marketplace when gold fell almost overnight.

All commodity prices drop much faster than they rise. This is the golden rule of commodity investing.

It is difficult to say where gold is headed in this economy. It could go up, or it could go down.

But I do know this. Not a lot of people have a lot of money to spend buying gold to hoard.

With gasoline still hovering over $3.00, my instinct tells me people are even cutting back on beer money.

But you should do your own due diligence.