Pros/cons for buying gold vs. saving money in an interest-based account?

Just because gold performed that well in the past does not mean it will perform that well in the future. I'm not saying you should or should not buy gold, but the mere fact that it went up a lot recently is not sufficient reason to buy it.

Also note that on the house, an investment that accrues continuous interest for 30 years at an annual rate of about 7.7% will multiply by a factor of 10 in 30 years. That rate is pretty high by today's standards, but it might have been more feasible in the past (I don't know historical interest rates very well). Yet again note that the fact that houses went up a lot over the last 30 years does not mean they will continue to do so.

There's too much here for one question. So no answer can possibly be comprehensive.

I think little of gold for the long term. I go to MoneyChimp and see what inflation did from 1974 till now. $1 to $4.74. So $200 inflates to $950 or so. Gold bested that, but hardly stayed ahead in a real way. The stock market blew that number away. And buying gold anytime around the 1980 runup would still leave you behind inflation.

As far as housing goes, I have a theory. Take median income, 25% of a month's pay each month. Input it as the payment at the going 30yr fixed rate mortgage. Income rises a bit faster than inflation over time, so that line is nicely curved slightly upward (give or take) but as interest rates vary, that same payment buys you far more or less mortgage. When you graph this, you find the bubble in User210's graph almost non-existent. At 12% (the rate in '85 or so) $1000/mo buys you $97K in mortgage, but at 5%, $186K. So over the 20 years from '85 to 2005, there's a gain created simply by the fact that money was cheaper. No mania, no bubble (not at the median, anyway) just the interest rate effect. Over the same period, inflation totaled 87%. So the same guy just keeping up with inflation in his pay could then afford a house that was 3.5X the price 20 years prior. I'm no rocket scientist, but I see few articles ever discussing housing from this angle. To close my post here, consider that homes have grown in size, 1.5%/yr on average. So the median new home quoted is actually 1/3 greater in size in 2005 than in '85. These factors all need to be normalized out of that crazy Schiller-type* graph. In the end, I believe the median home will always tightly correlate to the "one week income as payment."

*I refer here to the work of professor Robert Schiller partner of the Case-Schiller index of home prices which bears his name.

What you are seeing is the effects of inflation. As money becomes less valuable it takes more of it to buy physical things, be they commodities, shares in a company's stock, and peoples time (salaries).

Just about the only thing that doesn't track inflation to some degree is cash itself or money in an account since that is itself what is being devalued.

So the point of all this is, buying anything (a house, gold, stocks) that doesn't depreciate (a car) is something of a hedge against inflation. However, don't be tricked (as many are) into thinking that house just made you a tidy sum just because it went up in value so much over x years. Remember 1) All the other houses and things you'd spend the money on are a lot more expensive now too; and 2) You put a lot more money into a house than the mortgage payment (taxes, insurance, maintenance, etc.)

I'm with the others though. Don't get caught up in the gold bubble. Doing so now is just speculation and has a lot of risk associated with it.