If you're an avid reader of this blog or any other radical libertarian outlet, you know that the short answer to the question posed by the title above is "not much."
The price of gold has surged to $1,230 per ounce, up almost $150 per ounce since my wife and I made our first purchase of gold (and silver) about a month ago. At the time of our purchase we were buying fairly high at about $1,150 per ounce, but because our primary intent is to hedge against inflation, I'm not really following the price fluctuations every day like a daily trader would. However, that hasn't stopped my broker from calling twice within the past week to let me know that the price is going up and up and, most likely, up again.
I don't know enough about the gold market and investing in general to make even an educated guess as to how high the price of gold will climb, but I do know that as the global economy continues to falter, where fiat currencies become less and less valuable, commodities like gold, silver, and oil will only become more valuable.
If I had hundreds of thousands invested in gold currently, you can bet your lunch money that I'd be on the phone right now with my broker trying to pick the best price at which to sell so I could make a few bucks or add even more to my collection once the current spike in buying settles down a bit. But since my goal is to protect my wealth over the long term, my outlook is that you buy gold at any price that's comfortable to you at the moment and just sit on it, continually adding to your stash of precious metals whenever you can.
While prices undoubtedly fluctuate over the short term, there can be little doubt that the price of gold will only trend upward until governments stop debasing their fiat currencies by issuing easy credit, printing paper money, and engaging in limitless deficit spending. Gold and silver would be a good investment even in a stable economy; it's downright crucial in an unstable one.
At the time the Fed was established in 1913, the price of gold was less than $21 per ounce. Today, as we've just seen, it's trading at $1,230. That means that the Fed has devalued the U.S. dollar roughly 98 percent since its advent. I'm no mathematician, but it sounds to me like the dollar only needs to lose another 2 percent of its value before it's literally worthless. A gold coin still buys whatever it bought 70 years ago; it's the dollar amount that changes (and in our history, increases) over time.
Here's some perspective. My wife and I purchased 20 ounces of gold a month ago. That's 20 pure gold coins, and yes, they're beautiful. When I picked them up at the post office, they came in a tiny little box. Picture two Kodak film containers filled with 10 coins each. Those two small containers cost us -- are you ready for this? -- $25,000. Twenty-five thousand dollars for two little containers of gold coins.
In 1913 they would've cost us about 420 bucks.
You might say I'm crazy to spend that kind of money on coins. I'd reply by telling you you're crazy not to.