You cannot run to the corner store and buy a gallon of milk with a gold coin. Nonetheless, gold has a unique feature that no other currency on earth can claim: it can protect your wealth. It is the substance of choice of many for long-term investment. During the last several years it has out-performed all other currencies and the stock market.

The price of gold smashed through the roof when inflation raised its ugly head back in the 1970s. Since that time the common wisdom is that gold is an excellent hedge against inflation. That is why there is so much interest in the yellow metal. The best way to protect yourself during financial turmoil has been and always will be gold.

A recent posting on Jay Nordlinger’s blog (National Review Online, March 29, 2010) was in response to a query as to whether or not there were still “gold bugs.” One reader responded in the affirmative.

He wrote, “Those [gold bugs] who’ve been around for a while (and I’m only 48) are recognizable because we have no debt, we own our homes, we suffered no losses with the 2008 financial collapse, we have very small bank accounts but lots of gold, and we’ve made piles of money on the exploding dollar worth of gold!”

David Einhorn, who is a major player in the hedge fund biz, said in a speech (as cited in the National Review Online blog of Stephen Spruill, May 21, 2010) that the “stimulus” bailout of Wall Street was like a black hole in the outer reaches of space. He thought “about our short-termism and lack of fiscal discipline and political will…” When considering the above his instinct was, “…to short the dollar. But then I look at the other major currencies. The Euro, the Yen and the British Pound might be worse. So, I concluded that picking one [of] these currencies is like choosing my favorite dental procedure. And I decide holding gold is better than holding cash, where both earn no yield.”

A report by Claudia Assis in Market Watch WEEKEND INVESTOR (July 23, 2010) discusses the gold dealer Manfra, Tordella & Brooks (MTB) in New York City. The only form of advertising the firm employs is a phone book listing. Nonetheless, each day MTB is swamped with customers.

Assis writes, “Every day, people find their way to the Manhattan store with one thing in mind: getting their hands on gold bullion coins, as soon as possible and as much as possible, before the financial Armageddon they fear renders the dollars in their pockets worthless.”

Bullion coin investors want physical possession -- they want gold in their hands -- and consider anything less as inferior. MTB also saw strong interest from European coin dealers: “They couldn’t find enough coins in Europe so they were buying from us.”

The precious metals research firm GFMS estimates that 229 metric tons of gold coins were sold in 2009, which is 22 percent higher than the 187 metric tons of 2008, and 70 percent higher than the 135 metric tons that were purchased in 2007.

“It looks as though we are going to surpass 2009,” said Phillip Newman, research director of GFMS.

For many buyers, getting the gold in their hands carries an emotional appeal. If customers are investing a big chunk of their money, says one of MTB’s owners, Michael Kramer, “they want to see what they are getting. They don’t want to see a piece of paper.”