Gold's True Value

guerilla, I guess I should have said that I don't think the American Dollar is a good standard either. I'm aware of all the Federal Reserve nonsense with it's flooding the market with currency, causing inflation, etc.

So don't get your panties in a bunch.

I'm just saying.. the best currency would be fully digital. Yes, oh yes, we can all get microchips installed on either our right hand or forehead. This chip can be used to purchase things and all money would be stored digitally and securely. Brilliant!

Anyway, I shouldn't try to sound so sure of myself in my gold=bullshit claim. I'm not an economist and have not even studied this stuff much. It just seems like bullshit to me in a common sense sort of way. It's value is just as arbitrary as USD or Wampum.
 


Simple. Gold limited supply (even if more is mined, the amount will always be limited) while fiat currency is limitless (run out of paper? how about electronic digits).

A limited "thing" will have more value than a limitless "thing".
 
WickedJoe said:
I'm just saying.. the best currency would be fully digital. Yes, oh yes, we can all get microchips installed on either our right hand or forehead. This chip can be used to purchase things and all money would be stored digitally and securely. Brilliant!
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How is this any different from putting a debit card on our forehead?
 
WickedJoe said:
It's value is just as arbitrary as USD or Wampum.
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All value is subjective. Even though public education teaches an implicit form of the labour theory of value, the marginal revolution of the late 19th century in economics, basically smashed the premise that goods have intrinsic objective value.

As stated up thread, diamonds are worthless compared to water if you are in a desert and thirsty.

So don't expect that anything has a fixed value. Even basics like water, shelter, clothing and food are valued differently by different people, under different circumstances. This is why macro economics is a lot of BS, because there is no way to statistically calculate aggregate demand given that demand is individual (and constantly fluctuating) to every actor in the economy.
 
I can't say i'm a huge fan on gold , however it DOES have value , in fact it has done very well through every single market crash in the past (Through history in fact).

It has had value , it will always have value, however it has a value as only we give it.

Personally, IMO gold is pretty pricey for my tastes , I personally like silver the most becuase I can actually go out and buy it , hold it in my hands ,ect (1/10th of an ouce of gold isn't much at all).

A diverse portfolio is key really, I don't think this market is done crashing yet , and am looking for a pretty major retraction in the next year or so, and in the mean time I've been buying durable goods, silver and copper coated lead (in 55 and 62 grain varieties).
 
Gold, and all other precious metals, still exist in the same quantity in which they were mined. Other commodities are mined and used entirely.
 
I'm buying silver like crazy. In terms of gold (and also USD) its extremely undervalued.
 
[ame=http://www.youtube.com/watch?v=QPwZ-wQFFu8]YouTube - A Gallon of Gas for a Quarter?[/ame]


[ame=http://www.youtube.com/watch?v=1w0LOtWmy_o&feature=video_response]YouTube - Jones on Gold and Silver[/ame]
 
Gold is a crappy long term investment it has consistently under performed the stock market since well before the great depression. Gold's only investment value is as a hedge against inflation and generally you shouldn't have more than 5-10% of your portfolio in gold simply because it will continue under perform the market over the long term. Personally I think we are going to see higher than normal levels of inflation over the next couple of years, the Fed is going to have a hard time soaking up the extra money they have poured into the US economy.

So maybe buy gold in the short term if you want to speculate, but I'ld stay away from it for long term investing.
 
schockergd said:
Where are you getting your silver from? I can't find it online for under $1000 per lot.
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apmex
goldeneaglecoin
ebay

i got some sunshine mint bars, american eagles, canadian maples, austrian philharmonics, , and some normal american coins for fun (quarters, kennedys, peace dollars). Been buying for the last 2 months. Most of my assets are in index funds and real estate, but sometimes its just nice having it in your hand.
 
mesam said:
Gold, and all other precious metals, still exist in the same quantity in which they were mined. Other commodities are mined and used entirely.
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Silver is actually not recyclable in most of its uses, and gets thrown away as waste. Gold is mostly recyclable though. So silver is depleting while gold isn't.
 
I was thinking the same thing, Why did they pick gold to be the almighty substance? How did they convince people that a piece of paper is worth something? Where did it start? I know that a dollar technically is a certificate transferable for gold (atleast use to be) but who was that almighty person who said, Gold is it?
 
Bevo Ryan said:
I was thinking the same thing, Why did they pick gold to be the almighty substance? How did they convince people that a piece of paper is worth something? Where did it start? I know that a dollar technically is a certificate transferable for gold (atleast use to be) but who was that almighty person who said, Gold is it?
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Read "The Creature From Jekyll Island" by G. Edward Griffin if you want to learn the history behind our current monetary system. Great book.
 
Gold has been used as currency for the past 6000+ years or so due to the fact it doesn't corrode ,has a low melting point (so it can be made into jewlery and trinkets) and can be very easily polished...the same goes for silver.
 
dably said:
Gold is a crappy long term investment it has consistently under performed the stock market since well before the great depression.
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That's not necessarily true. I think it was in 1980, one ounce of gold could buy an entire unit of the Dow, and at the height of the recent boom, it was 40 ounces to one unit of the Dow. Today it is what, 7 ounces again? Some people think the market is due for another big shit and gold to soar, which means 1:1 might happen again.

The market has soared since the Depression, when gold was taken out of the economy as currency by FDR. But in real terms (and I use gold as an alternate way to calculate real value, because the CPI is just another BLS lie), the market as an aggregate, is down around 6 times off its high, as measured in gold. Think about that.

No, gold is not an investment for all seasons. Neither is the market. In the long run, we're all dead. So you play one side up, and the other side down, and that is how the very smart, big time investors run their portfolios. Before the market is down, they are already in commodities.

Bevo Ryan said:
I was thinking the same thing, Why did they pick gold to be the almighty substance? How did they convince people that a piece of paper is worth something? Where did it start? I know that a dollar technically is a certificate transferable for gold (atleast use to be) but who was that almighty person who said, Gold is it?
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Gold was selected in the market place. It wasn't originally selected by an authority, just like no one told the world to use Google as a search engine. When something catches on, it becomes ubiquitous.

I already explained in this thread what purpose money serves, and what type of characteristics are necessary for a good to have, in order to be an effective money.
 
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