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theodorelogan
Emissary

Wed Apr 19, 2006 7:08 am

Have you guys been watching the charts?

Over the last year gold is up 45%
Over the last month it is up 13%

Some experts are predicting that gold will top it's old highs in the next couple years. Maybe people are finally getting wise to the scam that is fiat money. Problem is, if the dollar keeps dropping like this China and Japan are going to drop their dollars, and Americans that are holding dollars are going to be in for a world of hurt. Then again, I don't plan on holding those dollars Very Happy

How will stocks do if such a severe currency devaluation occurs? Will money fly out of all dollar denominated assets (like american stocks)? Or are those protected since they are "real" assets?

_________________
If government is the answer, it's a stupid question.

---

Voluntarists do it consensually

posts: 8160 | location: San Diego, Capital and Holy Site of Vincentia | joined: 21 Mar 2002

geojanes
Dignitary

Sat Apr 22, 2006 6:34 pm

What makes gold an asset? Because people pay money for it. They have faith that gold has value.

Don't try taking it to the grocery store, though.

posts: 1290 | location: New York, NY | joined: 01 Oct 2000 | medals: 2

geojanes
Dignitary

Sat Apr 22, 2006 6:36 pm

What makes gold an asset? Because people pay money for it. They have faith that gold has value.

Don't try taking it to the grocery store, though.

posts: 1290 | location: New York, NY | joined: 01 Oct 2000 | medals: 2

Amyrlin
Adjutant

Sat Apr 22, 2006 9:04 pm

Vince, I think you summed it up nicely in a prior post when you said something like "gold is an investment in the government screwing up - therefore, it is guaranteed to do well in the long run"

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Go Gators!

posts: 2224 | location: Winter Park, Florida | joined: 24 Sep 2002

l~t
Adjutant

Sun Apr 23, 2006 12:56 am

if the great collapse
ever comes
gold will be as worthless
as everything else
(maybe more)
i'd rather stock up on rice and beans

_________________
"I can't be held accountable for statements I make when it turns out later on I didn't know what I was talking about."

-- White House spokeswoman Dana Perino

posts: 544 | joined: 22 Dec 2005

Wil Owen
Emissary

Sun Apr 23, 2006 6:58 am

LT once again proves it is unnecessary to have good sentence construction and punctuation to make a good point.

Indeed, Gold is nearly worthless. It is less useful than, say, lead. If people start starving they will not accept gold in exchange for food any more than dollars!

_________________
'Light will be thrown on the origin of man and his history.'

--Charles Darwin

posts: 2590 | location: West of Liverpool somewhere... | joined: 23 Oct 2002 | medals: 2

theodorelogan
Emissary

Sun Apr 23, 2006 7:25 am

Gold is worthless?

Gold has a 5000 year history as money. It is reliable and stable.

Quote:

What makes gold an asset? Because people pay money for it. They have faith that gold has value.

THe same goes for any commodity GOld has a far longer history of success in holding value than any other. I don't invest in gold because I have faith. I do it because I have 5000 years of historical evidence that says people value gold.

Faith has nothing to do with it. In a financial collapse, one thing people will demand is a medium of exchange (having to return to a barter system would be far more devastating than any fiat collapse). And what do you think the best medium of exchange will be? People have been trading goods and services for gold for thousands of years, and have always fallen back on gold when fiat monies inevitably collapse.

Quote:

Indeed, Gold is nearly worthless. It is less useful than, say, lead. If people start starving they will not accept gold in exchange for food any more than dollars!

What do you mean "nearly worthless". For something nearly worthless, peopl have been willing to pay a lot of goods to get gold over the past few thousand years. Gold has immense value as a medium of exchange, a store of value, as an ornament, etc. YOU may not value it much. But it is silly to say "it has no value" when plenty of people do value it.

If peopel start starving than that surely means there is a shortage of food relative to money, and thus the gold price of food must rise. There are people starving in the world now but ostensily SOME people in those areas can buy food even now.

But eh. I see you guys are far too progressive investors to be interested in metal. Keep holding those dollars. The longer the run lasts the more time I have to get real money. During financial collapses, gold has time and time again saved those who held it.

posts: 8160 | location: San Diego, Capital and Holy Site of Vincentia | joined: 21 Mar 2002

Wil Owen
Emissary

Sun Apr 23, 2006 7:31 am

I mean that (unlike rice) it has no value in itself, only as a medium of exchange. The objections you have to paper money can be applied just as readily to gold... with the added disadvantage that gold is far more cumbersome.

posts: 2590 | location: West of Liverpool somewhere... | joined: 23 Oct 2002 | medals: 2

theodorelogan
Emissary

Sun Apr 23, 2006 7:38 am

Quote:

I mean that (unlike rice) it has no value in itself, only as a medium of exchange

That is a value in itself. Without a medium of exchange we return to the barter system. A medium of exchange is itself a tool that makes our lives easier.

Quote:

The objections you have to paper money can be applied just as readily to gold... with the added disadvantage that gold is far more cumbersome.

No they can't. My objection to paper money is that it's prinintg is controlled by a small group of men (11 on the Federal Reserve Board I believe), and that holders of fiat money are forever their hostages. Their actions are unpredicatable. The number of dollars can be increased a hundredfold overnight if that suits their purposes.

Another objection is that paper money is not a good store of value. In only a couple of generations it has lost 95% of it's value (dollars that is)

YEt another is that it is not divisible. You cannot tear up a dollar bill to buy something that costs fifty cents.

Dollars are also not very durable (being made of paper). Gold lasts for thousands of years as water and air do not corrode it.

None of the objections to paper money has anything to do with gold.

posts: 8160 | location: San Diego, Capital and Holy Site of Vincentia | joined: 21 Mar 2002

geojanes
Dignitary

Fri Apr 28, 2006 10:01 pm

Quote:

People have been trading goods and services for gold for thousands of years, and have always fallen back on gold when fiat monies inevitably collapse.

The important difference between between then and now is that gold WAS money for about 4900 of those 5000 years. It isn't money anymore. It's a commodity. A commodity that has little industrial value, though has been doing really well lately at least in part due to increased jewelry consumption in India. If you're buying gold based upon its value as a commodity, then great. But don't fool yourself. It's not money and hasn't been for a couple of generations.

But we all go through these phases. Mine was back in the late 80s/ early 90s. Massive deficts, war in Iraq, spiking oil prices, Bush in the white house, real uncertainty in the world, told me that gold was a haven. If you're reading those strangely similar signs the same way, believe me, I understand.

posts: 1290 | location: New York, NY | joined: 01 Oct 2000 | medals: 2

Amyrlin
Adjutant

Sat Apr 29, 2006 4:42 pm

Another notable property of gold as opposed to paper money is that, as a precious metal, the production of gold is a) relatively low, b) not subject to sudden and dramatic increase, and c) nearly insignificant in relation to the amount of gold that has already been produced. Paper (fiat) money can see levels of high production, sudden and dramatic increases in printing to cover debts or provide more money, and can be printed in amounts dwarfing the current supply of money.

While the US government has had one of the most successful monetary policies since the founding of the Federal Reserve, it doesn't mean that we aren't subject to the sorts of temptations and excesses that have plagued other countries' monetary systems.

posts: 2224 | location: Winter Park, Florida | joined: 24 Sep 2002

theodorelogan
Emissary

Sat Apr 29, 2006 5:17 pm

Quote:

The important difference between between then and now is that gold WAS money for about 4900 of those 5000 years. It isn't money anymore.

It isn't for us peons. But it is for people in the know.

posts: 8160 | location: San Diego, Capital and Holy Site of Vincentia | joined: 21 Mar 2002

geojanes
Dignitary

Mon May 01, 2006 6:22 am

Quote:

While the US government has had one of the most successful monetary policies since the founding of the Federal Reserve, it doesn't mean that we aren't subject to the sorts of temptations and excesses that have plagued other countries' monetary systems.

What would concern me more is that, because gold is not money--despite what our new conspiracy theorist states--is that people lose faith that gold has value. What makes gold valuable? Sure, it’s good for jewelry, but that’s not what makes it really valuable. It’s valuable because people like yourself think it’s valuable and keep its price up. It’s value is not set on a rational supply and demand market, like the other metals. It’s largely based on an emotional supply and demand market. A realization that gold has no significant value other than the faith that people have in its value would scare me much more than the worry of the US govt printing money. That is, if I worried about such things.

posts: 1290 | location: New York, NY | joined: 01 Oct 2000 | medals: 2

theodorelogan
Emissary

Mon May 01, 2006 7:29 am

Quote:

What would concern me more is that, because gold is not money--despite what our new conspiracy theorist states--is that people lose faith that gold has value

Right. So the metal that is still used all over the world and has been used for five thousand years has be replaced by a piece of paper for the last seventy?

Gold is money. That you don't accept it is no more damning than my rejection of FRN's. Both are money. The question is, which is the superior money? If you want a money that actually stores value, gold is better. If you want a money that is divisible, gold is better.

At any rate, gold does have value as jewelry and in industy to start with. That is why it will never die....peopel will always use it. What use will a piece of paper have after people "lose farith"? Kindling?

Whatever though. Keep buying my FRN's! The longer you do the better my position will be. Why do you think that gold is at $600 an ounce? Because people who know have faith in the paper? Why the threefold increase in the value of gold? It isn't because people want more jewelry. In fact people are melting down jewelry to make into coins. Why would people do that if they didn't think that it was worth anything?

posts: 8160 | location: San Diego, Capital and Holy Site of Vincentia | joined: 21 Mar 2002

theodorelogan
Emissary

Mon May 01, 2006 7:41 am

What The Price Of Gold Is Telling Us - by Rep. Ron Paul

It isn't telling us that paper is valuable.

Like I said, people who know...

I'm telling you right now. Dismiss metal and accept paper at your own risk.

posts: 8160 | location: San Diego, Capital and Holy Site of Vincentia | joined: 21 Mar 2002

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