Gold may be a wonderful inflation hedge through the years and the centuries of civilization, but average people need to get through their day-to-day lives and find their next meal when they are hungry.
An all-gold investor might find this approach to be deficient in certain circumstances.
Some cash is also is required, that is if experiences of the Greek financial crisis are any guide. This cash is in the form of fiat euro bank notes.
Stories in the financial news media in the last few days are very instructive.
When the Greek banks were closed earlier this week, the processing of credit card payments apparently closed with them and tourists used to living fully in the electronic age suddenly found themselves needing cash to pay bills.
Some went from empty ATM machine to empty ATM machine in search of one that would give them bank notes.
These tourists could have traveled with gold.
What would that get them?
Haggling with strangers in a foreign land who know that you are desperate is not likely to lead to getting a fair price.
What if you are Greek with gold?
You might have a buddy who is a local jeweler who might have the cash to buy your gold at a fair price. Then again, how many people with gold have buddies who have the cash to pay them in a crisis?
The odds are the buddy will be scrambling to find his next meal, too, and won’t have the cash to pay a fair price even if he was inclined to.
What if you are hungry and desiring to buy food from a grocer or a restaurant owner?
They might know what gold is. They might think it a good idea to take it, but then what will they do with it?
The suppliers of grocery stores and restaurants want cash – fiat paper.
This chain of interdependence means that average people, no matter how well fixed they might be for the next decade or half century because of their gold investments might find themselves in situations where they are trying to get through the next half day.
Worse, you would probably be marked as a guy who has gold to the general population that is also experiencing the crisis and looking for their next meal.
Gold is not ideal for these short-term circumstances.
Whatever you might think of the long term-future of fiat paper money, there are situations that can arise where in the short term it is the only game in town and you had better be sure to have some.
With the cash to get through the short term, a long-term gold holding can do its job.
Buzz blogger Dave Harper is winner of the 2014 Numismatic Literary Guild Award for Best Blog and is editor of the weekly newspaper "Numismatic News."