Steve Green reminds the MSM about this pesky little thing called inflation:

Oooooh, it must be time to panic:

The price of gold rose above 500 dollars an ounce for the first time for 18 years, propelled by strong buying from investment funds.

Gold hit 502.30 US dollars in overnight Asian trade before staging a retreat during European trading hours. The price was the highest since December 14, 1987 when it had touched 502.97 dollars.

Well, not really. Adjusted for inflation, gold today would have to cost over $830 an ounce, in order to match 1987 prices.

But remember: Just because the story is fake, doesn't mean it isn't accurate. A 60% difference is practically a rounding error to most people, right?

I don't have a problem with folks who like to keep a small portion of their portfolio in a gold fund for diversity sake. But serious gold bugs are in a perpetual Chicken Little mode.

Either that, or they've bought into the talk radio cliche that it's always a good time to buy gold. As James Lileks once wrote:

I’ve been listening to talk radio for 15 years, and I can now tell you the sum total of what I’ve learned:

This is an excellent time to buy gold.

Market’s up? An excellent time to buy gold. Market’s down? An excellent time to buy gold. Mars Rover discovers that the red planet is composed mostly of gold? A wonderful time to buy gold.

Well, it rounds out your stable long term conservative slow growth investment in home heating oil futures, another talk radio favorite.