Gold's True Value

WickedJoe

WickedJoe

New member
Jul 7, 2008
1,467
24
0
Gold has been over 1k/ounce for a week or so.

Why do you think gold has worth?

Personally, I think it's a piece of shit yellow metal. I can't eat gold, I can't be sheltered by gold, and I cant fuck gold. It has no actual intrinsic value! And so in my opinion it's as worthless as fucking paper money. It's all symbolic worth.

So why in the hell do so many people think it's a good hedge against financial doom and government collapse?

I understand the history on how it's been a traditional great method for transportation of wealth. It's been a liquid asset, etc. But why? And more importantly why is it more important than any other bullshit thing we want to give artificial worth?

I think it's just tradition at this point. And I think societies have actually matured beyond this tradition but some people just don't realize it yet.

I'm gonna laugh when this gold bubble bursts. It might get very high until it does, but it will IMO. Because it's just as fiat as paper money.

If you want to hedge against government collapse/doom I'd put my money in foreign and domestic stocks of things with real intrinsic value (housing, oil, FOOD, lumber, etc).
 


its a precious metal, their is only so much of it on earth, paper money can be planted and made...see the difference

Gold will always have value, granted if theirs some ridiculously huge gold deposit found it wont have as much
 
WickedJoe said:
Gold has been over 1k/ounce for a week or so.


I'm gonna laugh when this gold bubble bursts. It might get very high until it does, but it will IMO. Because it's just as fiat as paper money.
Click to expand...

How long you been waiting on that laugh? 2-3 thousand years?
 
kaveman said:
its a precious metal, their is only so much of it on earth, paper money can be planted and made...see the difference

Gold will always have value, granted if theirs some ridiculously huge gold deposit found it wont have as much
Click to expand...

Ya but there are lots of things on this earth that have a limited supply. Also, there are very very few real industrial applications and uses for gold as compared to other things like Silver and tons of other stuff.

Not to mention that ya paper can be mass produced, but if you do it right it's likely much better regulated than Gold. Gold is continually being shoveled out of the ground. Counterfeit paper currency is very very hard to make.

Then you have gold's "shiny" factor. Ya sure some people like it for jewelry but my guess is that they actually like gold jewelery because of the artificial worth we've given it.. and so it's a sign of wealth and prestige. But regardless, in bad financial times jewelery sales actually go waaaay down. What's is making gold go up is people betting on the demise of the dollar.

Gold = Bullshit
 
thunderlips said:
How long you been waiting on that laugh? 2-3 thousand years?
Click to expand...

Well if i were watching gold values during the gigantic Gold Bubble of the 80's i prob would of laughed pretty hard.

But anyway of course I'm not an economist.. and there are obviously much smarter people than me saying gold is good. It's just been bothering me why that's the case.
 
How is gold fiat? Paper money can be printed with debt behind it, gold can't. There's not an unlimited supply
 
papajohn56 said:
How is gold fiat? Paper money can be printed with debt behind it, gold can't. There's not an unlimited supply
Click to expand...

I'm just saying it's fiat because of the artificial value we've given it. It's not worth as much as we say it is. It's symbolic worth. The dollar is symbolic worth. That's what it is to be fiat.

Gold has very little real applicable uses is what I'm saying. It's worth something because we've decided it is.
 
Bull markets don't last forever. But this one has some years left in it. Adjusted for inflation, gold is nowhere near its alltime high. In a few years when people start realizing how much inflation has been thrust upon them, the average household will start buying gold and that will be the time to sell it. It's got a long way to go up though.

For the longterm, silver's where it's at. Above ground stocks are depleting steadily and there isn't a hell of a lot left in the ground. And it's widely used in industry unlike gold.
 
WickedJoe said:
Why do you think gold has worth?

Personally, I think it's a piece of shit yellow metal. I can't eat gold, I can't be sheltered by gold, and I cant fuck gold. It has no actual intrinsic value! And so in my opinion it's as worthless as fucking paper money. It's all symbolic worth.

So why in the hell do so many people think it's a good hedge against financial doom and government collapse?

I understand the history on how it's been a traditional great method for transportation of wealth. It's been a liquid asset, etc. But why? And more importantly why is it more important than any other bullshit thing we want to give artificial worth?

I think it's just tradition at this point. And I think societies have actually matured beyond this tradition but some people just don't realize it yet.
Click to expand...

Well done! You're starting to figure out why the gold standard is crap and had to go.
 
Bombastic said:
For the longterm, silver's where it's at. Above ground stocks are depleting steadily and there isn't a hell of a lot left in the ground. And it's widely used in industry unlike gold.
Click to expand...

this is why i stock up on virgins. we are definitely running out of virgins.
wait...
 
Worth is always arbitrary. How much is a bottle of water worth to you? Less than a handful of diamonds? What if you're dying of thirst in the middle of a desert - now what's worth more?

Gold is worth what it is, for the same reason everything else is - the market determines it through supply and demand. Demand is obviously high enough to warrant the current value.
 
kaveman said:
its a precious metal, their is only so much of it on earth, paper money can be planted and made...see the difference

Gold will always have value, granted if theirs some ridiculously huge gold deposit found it wont have as much
Click to expand...
^^^^^^This.

And this, from here: Gold: How Products are Made


The Future

Because gold is a finite resource, its long-term future is limited. In the short term, however, it will continue to find widespread use in jewelry and in industrial applications, especially in the electronics field.
 
The amount of ignorance is staggering sometimes.

Why Gold?

First we have to ask, what is money? What purpose does it serve?

Money, is an intermediary good, arising in the marketplace, to solve problems in barter exchange. I have milk, and you have eggs, and we want to trade, we have a double coincidence of wants.

But if I have milk, and you have eggs, and you want peaches in return for your eggs (don't like milk) we can't barter. Without an intermediary good, either the peaches, or some other good you can trade to the peach producer.

So now back to the question. Why gold? In order to be a suitable money, there are certain characteristics we look for in our intermediary goods. Here are some examples.

It must be divisible. Gold can be broken down into fine grains or forged into larger denomination ingots.
It must be durable. Gold does not rust or degrade over time.
It must be scarce. Gold requires a substantial capital and labour investment to extract from the ground.

Does gold have to be the money? Of course not. Throughout history, different intermediary goods have risen. However, gold has been the most universally accepted good in the market, by the most people. This allows it to be suitable as a store of wealth in any country, under any form of economy.

Gold is recognized as a standard.

Now, what is the value of gold? That's the wrong question to ask. Gold has been relatively constant in purchasing power for hundreds of years. What has changed, is the value of gold denominated in dollars.

So what is changing, is not the amount of gold, but rather the amount of dollars. The traditional definition of inflation, was an increase in the money supply, not an increase in the price level. Prices are meant to fluctuate based on supply and demand. Prices are subjective, this is known as the subjective theory of value or STV. So while gold may fluctuate up or down in dollar denominated prices, its relative purchasing power to oil, corn, sugar etc should be relatively stable over long periods of time.

As far as paper money being hard to counterfeit, that's wrong. Paper money is counterfeit. It is an arbitrary intermediary good, NOT produced in the market, but produced under legal tender law. If legal tender laws were repealed, gold or silver might be money again within 20 years. People would not trust a printing press, but commodity goods that are scarce and have universal value.

The FED and all central banks, produce paper money at will, with the only restriction, being a concern that prices are rising too fast. Other than that, they inflate away, and when they do, they debase the value of currency already in circulation, effectively taxing everyone holding money, and raising prices on the middle class and poor (who receive new money last as it works through the system, and prices have already scaled up).

If you have more questions about money, ask.

But don't write stupid things like

Gold = Bullshit
Click to expand...
 
Unarmed Gunman said:
Worth is always arbitrary. How much is a bottle of water worth to you? Less than a handful of diamonds? What if you're dying of thirst in the middle of a desert - now what's worth more?

Gold is worth what it is, for the same reason everything else is - the market determines it through supply and demand. Demand is obviously high enough to warrant the current value.
Click to expand...

I agree worth is arbitrary. But people think they're buying money when they buy gold right now. Gold is worth what it is right now because people believe it's sort of a backup currency. Demand is up only because of a fictitious belief and nothing else.

When/if people wake up, Gold will fall big time. Unless inflation is so bad that gold will go up.. but if gold goes up because of inflation or dollar's demise then Oil, FOOD, Lumber, Houses, and other ACTUALLY useful commodities/assets would go up even more than gold!

Anyway, I know it's all arbitrary, but just sayin that I don't believe gold is as solid of a backup currency as some would have you believe - esp those who sell it.
 
WickedJoe said:
Oil, FOOD, Lumber, Houses, and other ACTUALLY useful commodities/assets would go up even more than gold!
Click to expand...
But not all of them are suitable as a store of value.

I don't know how long oil keeps, but food does not keep long. Lumber can't be stored indefinitely, or broken down into smaller denominations and houses require maintenance.

Homes are not assets. They are very expensive consumer goods, like cars. The exception being if you buy a house in order to rent it, then it is a capital good, but it still doesn't necessarily mean it is a good long term asset when you factor in taxes and upkeep.
 
You must log in or register to reply here.
Top Bottom