Gold's allure is still strong in America

All that is golden is not so good for America.

We’re becoming ever-more fixated on the precious yellow metal.

It has its own cable TV reality show. People are throwing gold parties to sell off old jewelry to buyers who will melt it down into ingots. Last month, it became legal tender in Utah.

A shopping mall in Florida had an ATM that spits out tiny gold bars. Next up might be still tinier bars, a half-gram sliver, embedded in clear plastic cards from a bank in Germany.

Olathe businessman Erik Olson put his name on a list at showing he’d accept these KB Gold bullion cards once they make it to America.

“Would I rather have gold than cash? Sure. It’s where we’re going,” he said.

The price of gold has been setting records for two years, and buyers seem poised to push it to $1,600 an ounce for the first time.

Gold grabs this kind of attention when we don’t like what we see around us: economic insecurity, political uncertainty, overseas unrest.

So our growing gold frenzy could bode ill for better times ahead.

If gold prices keep rising, it most likely will be driven by a bout of inflation — more inflation than anyone living on a paycheck, or trying to live without one, will want to see.

Many gold buyers expect inflation will eat away at the value of their dollars. They hope to store that value in gold, whose price would increase as dollars buy less and less of everything.

Inflation has ticked up only slightly so far, and gold prices may not climb this week or this month. But the sentiment is that over the next four or five years, gold seems destined to cost more.

Adjusting for inflation, gold would have to rise above $1,885 to eclipse the all-time record set around 30 years ago.

As chief investment officer of ETF Portfolio Partners Inc. in Leawood, Bill Koehler is among those predicting higher gold prices.

He’s also mindful of the frenzy, and his firm took gold off its “should-own” list a couple of months ago.

Blame that reality TV show, “Gold Rush Alaska” on the Discovery Channel.

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