Gold

#51
#51
refinery.jpg
 
#52
#52
n_huffhines said:
A quarter from 1950 would buy about a gallon of gas. That quarter was made of silver. Today that quarter (if you melted it down) I believe would buy about 5 gallons of gas. Do you have any justification for your statement, because reality seems to be loudly contradicting you. Precious metals are a great way to hedge as long as they don't get as inflated as the housing market.
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Could you miss the point any more than this?

Impossible.
 
#53
#53
lawgator1 said:
Could you miss the point any more than this?

Impossible.
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Could you avoid backing up your point any more than this?

Every investment comes with risk. I agree gold can be inflated, but show me where people have invested in gold and lost their shirt like people do in the housing market and the stock exchange.

This is the reason why people see it as a good hedge.
 
#54
#54
lawgator1 said:
No, no. They are just part of this fabricated agreement over time that gold has some sort of special value that makes it a hedge, as others say, against inflation or other bad economic times.

Why?

There is no reason for that, other than that everyone has bought into the fabrication.
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All value is fabricated.

Going in gold's favor as opposed to an individual currency is that it is a defined entity with specific properties that can be verified. It has been deemed a universal currency of sorts and as such is more immune to individual currency fluctuations.

It is not some sham perpetrated by gold miners, brokers, etc. It is a collective decision globally.
 
#55
#55
n_huffhines said:
I don't think anything really has "intrinsic" value. If you and I are in a desert and I have just enough water for myself, there's no amount of gold you can give me for the water.
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Precisely.

n_huffhines said:
Gold has been able to maintain value over time because it's pretty, it's relatively rare, and its functionality allows it to be a good currency (melt it down, shave some off, etc.) I think those are the reason why people put value on it initially.
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Currency being the operative word. Different than money.

n_huffhines said:
It has value today because it's always been valued.
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Boom. There you have.

n_huffhines said:
Because it is rare, people see it as a safe store of value*.
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There are other much more rare things.
 
#57
#57
volinbham said:
All value is fabricated.

Going in gold's favor as opposed to an individual currency is that it is a defined entity with specific properties that can be verified. It has been deemed a universal currency of sorts and as such is more immune to individual currency fluctuations.

It is not some sham perpetrated by gold miners, brokers, etc. It is a collective decision globally.
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We aren't that far apart on what we are saying. I am not claiming there is some grand, knowing, conspiracy out there to artificially value gold above its "true" value. The market says it is worth what its worth.

At the same time, you refer to it as a "collective decision," as though there was some sort of sit down and a "this is how it's going to be" resolution to the issue. I think it more accurate to say that, over time, gold has taken on an inexplicable and unique place in our institutions, and in the investment community.

As a result:

Gold is a hedge against inflation, solely because it has arbitrarily been set as such. It could have just as easily been decided upon as tree bark, or pencil erasers, or green M & Ms.
 
#58
#58
PKT_VOL said:
There are other much more rare things.
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But it's not necessarily just about being rare. I misspoke. It's rare enough that people put value on it, but common enough that everybody can get their hands on some. Plus it's functionality distinguishes it from other rare gems and metals. It's not feasible to use diamonds since you can't melt diamonds together in a brick.

It's not so much about the rarity, but the fact that it can't be created out of thin air. I am a gold standard guy, but I'm not hellbent on a gold standard. We could use the dollar and I'd be totally content if we froze the money supply.
 
#59
#59
n_huffhines said:
I agree gold can be inflated, but show me where people have invested in gold and lost their shirt like people do in the housing market and the stock exchange.
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Well if you bought it in 1980 you had 25+ years to admire your pretty shirt while people in the stock market were faring differently.

gold_inflation_adjusted_1.png
 
#60
#60
Velo Vol said:
Well if you bought it in 1980 you had 25+ years to admire your pretty shirt while people in the stock market were faring differently.

gold_inflation_adjusted_1.png
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Yeah, but if you bought in 1980, and are holding today then you are at about 60-70% of what you initially invested. That's a big loss, but people often lose a lot more than just 30% investing in the housing market, businesses, and other investments. I know several people who lost absolutely everything in the housing bubble.
 
#61
#61
If you invested in the housing market in 1980 you'd have a hell of a lot more than 70% of your initial investment today.
 
#62
#62
lawgator1 said:
We aren't that far apart on what we are saying. I am not claiming there is some grand, knowing, conspiracy out there to artificially value gold above its "true" value. The market says it is worth what its worth.

At the same time, you refer to it as a "collective decision," as though there was some sort of sit down and a "this is how it's going to be" resolution to the issue. I think it more accurate to say that, over time, gold has taken on an inexplicable and unique place in our institutions, and in the investment community.

As a result:

Gold is a hedge against inflation, solely because it has arbitrarily been set as such. It could have just as easily been decided upon as tree bark, or pencil erasers, or green M & Ms.
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That is not at all what I'm saying - in fact I'm suggesting the opposite and that is how markets/humanity works as opposed to some structured "this is how it's going to be" - for gold, oil, currency, stock value etc. Above all, value is determined by millions of repeated transactions - not by brokers, speculators, gold mine interests, etc.
 
#63
#63
n_huffhines said:
But it's not necessarily just about being rare. I misspoke. It's rare enough that people put value on it, but common enough that everybody can get their hands on some. Plus it's functionality distinguishes it from other rare gems and metals. It's not feasible to use diamonds since you can't melt diamonds together in a brick.

It's not so much about the rarity, but the fact that it can't be created out of thin air. I am a gold standard guy, but I'm not hellbent on a gold standard. We could use the dollar and I'd be totally content if we froze the money supply.
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Listen to yourself.

Let's say you are travelling through space. You stubble upon another intelligent civilization.

They have a metal "X". It is somewhat rare. It can be melted down easily and has a very low reactivity thus making it durable. It is malleable so people make it into jewelry. It has very little real world applications and crazy people hoard it although they do not use it because there is basically no use for it. It has absolutely no bearing on how they stay alive, feed or raise their kids, do their jobs, educate themselves, power (energy for) their civilization, etc.

Does that not sound like a sham? It is only when we insert "gold" for X and insert "humans" for 'another intelligent civilization" that such a scenario even begins to make sense to us.
 
#64
#64
PKT_VOL said:
Listen to yourself.

Let's say you are travelling through space. You stubble upon another intelligent civilization.

They have a metal "X". It is somewhat rare. It can be melted down easily and has a very low reactivity thus making it durable. It is malleable so people make it into jewelry. It has very little real world applications and crazy people hoard it although they do not use it because there is basically no use for it. It has absolutely no bearing on how they stay alive, feed or raise their kids, do their jobs, educate themselves, power (energy for) their civilization, etc.

Does that not sound like a sham? It is only when we insert "gold" for X and insert "humans" for 'another intelligent civilization" that such a scenario even begins to make sense to us.
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I suppose you think US currency is a sham as well?
 
#65
#65
Velo Vol said:
Well if you bought it in 1980 you had 25+ years to admire your pretty shirt while people in the stock market were faring differently.

gold_inflation_adjusted_1.png
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buying at the high end of a bunch of inflation hedging is absolutely destined to kill the investor.
 
#69
#69
PKT_VOL said:
Listen to yourself.

Let's say you are travelling through space. You stubble upon another intelligent civilization.

They have a metal "X". It is somewhat rare. It can be melted down easily and has a very low reactivity thus making it durable. It is malleable so people make it into jewelry. It has very little real world applications and crazy people hoard it although they do not use it because there is basically no use for it. It has absolutely no bearing on how they stay alive, feed or raise their kids, do their jobs, educate themselves, power (energy for) their civilization, etc.

Does that not sound like a sham? It is only when we insert "gold" for X and insert "humans" for 'another intelligent civilization" that such a scenario even begins to make sense to us.
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What you are missing here is that civilization needs a "gold" as a value marker. I don't doubt that any human civilization would have a gold equivalent and it would make sense that they do.
 
#71
#71
BigPapaVol said:
then anything driven by subjective value is a Ponzi scheme.
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All things are valued subjectively.

My point re: gold is that the only reason to attach to it the label of being a hedge against inflation is that its been that way for awhile. Really, other than that, there is no reason that gold actually becomes more precious, better, etc., when inflation goes up or the economy otherwise does poorly.
 
#72
#72
lawgator1 said:
All things are valued subjectively.

My point re: gold is that the only reason to attach to it the label of being a hedge against inflation is that its been that way for awhile. Really, other than that, there is no reason that gold actually becomes more precious, better, etc., when inflation goes up or the economy otherwise does poorly.
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of course there isn't, so the argument that it has some intrinsic value that makes the gold standard better than arbitrarily valuing currency has issues.

The value of anything to the holder is truly the value that the next purchaser pays for it. Otherwise, any value placed on it his in the eyes of the beerholder.
 
#73
#73
n_huffhines said:
Yeah, but if you bought in 1980, and are holding today then you are at about 60-70% of what you initially invested. That's a big loss, but people often lose a lot more than just 30% investing in the housing market, businesses, and other investments. I know several people who lost absolutely everything in the housing bubble.
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Why did the price of gold spike in 1980?

Because of Jimmy Carter's economic policies that were destroying the dollar.

Why is the price of gold shooting up today?

Same answer, substitute Barack Hussein Obama for James Earl Carter.

Food for thought:

Jacob Rothschild, John Paulson And George Soros Are All Betting That Financial Disaster Is Coming

Michael Snyder
August 20,2012

Are you willing to bet against three of the wealthiest men in the entire world? Jacob Rothschild recently bet approximately 200 million dollars that the euro will go down. Billionaire hedge fund manager John Paulson made somewhere around 20 billion dollars betting against the U.S. housing market during the last financial crisis, and now he has made huge bets that the euro will go down and that the price of gold will go up. And as I wrote about in my last article, George Soros put approximately 130 million more dollars into gold last quarter. So will the euro plummet like a rock? Will the price of gold absolutely soar?

Well, if a massive financial disaster does occur both of those two things are likely to happen.
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And the central banks of the world are certainly buying gold at an unprecedented rate as well. According to the World Gold Council, the central banks of the world added 157.5 metric tons of gold last quarter. That was the biggest move into gold by the central banks of the globe that we have seen in modern financial history.
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Within the gold market, there is unconfirmed speculation that China plans to buy up to at least 5,000 to 6,000 metric tons of gold and that it will start to buy during this year, according to Kevin Kerr, president of Kerr Trading International.
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Here is an interesting chart;

washington-fredgraph.png


Ya think?
 
#74
#74
n_huffhines said:
I am a gold standard guy, but I'm not hellbent on a gold standard. We could use the dollar and I'd be totally content if we froze the money supply.
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The population is growing. If we freeze the money supply, the economy goes into terminal decline.
 
#75
#75
n_huffhines said:
But it's not necessarily just about being rare. I misspoke. It's rare enough that people put value on it, but common enough that everybody can get their hands on some. Plus it's functionality distinguishes it from other rare gems and metals. It's not feasible to use diamonds since you can't melt diamonds together in a brick.

It's not so much about the rarity, but the fact that it can't be created out of thin air. I am a gold standard guy, but I'm not hellbent on a gold standard. We could use the dollar and I'd be totally content if we froze the money supply.
Click to expand...

why fix the money supply?
 
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