Pay off credit cards or buy gold, considering the current state of our nation/economy?

A friend (I know, yeah ';A friend'; riiight....) asked me this and I thought I'd see if the Yahoo community agrees with me or not. It might make interesting discussion.





He is finally at the point where he has have an extra $1000 a month. Should he now tackle his $12,000 in credit card debt OR buy precious metal?





I told him that I used to think ';GET OUT OF DEBT, PAY OFF THOSE CARDS NOW!!!'; However, I now think inflation is going to go crazy, making those balances seem trivial. And hell, we may even see a bailout on credit card debt before this is all over. I think he should make the minimums on the credit cards and stock up on gold. I didn't mention it to him, because I am just now thinking about it, but he may even want to just stash some cash too in case he is one of the coming layoffs. But would stashing cash be wise, or are we back to stashing precious metal since cash may become of less value.





Thoughts? Disagree with me or agree? Let's hear it!!!Pay off credit cards or buy gold, considering the current state of our nation/economy?
I still think paying off all debt first is the best way to go.Pay off credit cards or buy gold, considering the current state of our nation/economy?
That argument might work with cheap debt, e.g. mortgages, but with the high cost of credit card borrowing you'd need such a severe movement to make it worthwhile (e.g. 15-20%), it doesn't make sense.





Also, if you're running a credit card debt (one of the most expensive forms of debt), you really shouldn't be speculating in precious metals. Only speculate what you can reasonably afford to lose.
Gold is a horrible investment. Sorry but all those advertisements trying to get you to buy gold are not there to help you make wise choices, they are there to make a profit for people who are selling gold.





Pay off your debts first period. He is probably paying 15%-25% interest on those credit cards, there's no way he's going to make that kind of return by purchasing gold.





Please don't fool yourself into thinking that gold will somehow be the only thing that retains its value if the economy crashes entirely. In New Orleans after Katrina, nobody was running around trading gold, people were looking for essential goods like gasoline, potable water, and food. If you seriously want to have something of value in case the economy collapses, then buy a tanker truck full of gasoline and park it in your back yard next to a shed full of non-perishable food and bottled water. I guarantee you if we see another grapes of wrath type depression people will flock from near and far to trade with you. Plus, when you buy gold futures you don't actually get gold, you get a certificate saying you'll get some gold at some future time. If the economy collapses before that time, then the person who owes you the gold isn't going to come through and your peice of paper will be worthless.





Gold? Come on, its a horrible investment and even if it was a good investment its not worth staying in credit card debt to buy into it.