Aces High Bulletin Board
General Forums => The O' Club => Topic started by: MrCoffee on September 20, 2003, 03:11:19 PM
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That be GOLD.
http://www.geocities.com/s011023/coldwar9.htm
http://www.polyconomics.com/searchbase/01-08-99.html
http://www.gold-eagle.com/gold_digest/guru312.html
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I own 2 gold coins. When Armagedon comes, I'm set.
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I just want to remind that I am a neutral party in this.
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You seem to exhibit some of the symptoms of the same fetish miko has.
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Maverick: You seem to exhibit some of the symptoms of the same fetish miko has.
:) Actually, I have a fetish for books. A lot of usefull stuff can be found there among the piles of crap, of course.
Since the establishment of the Federal Reserve in 1913 the dollar lost 95% of it's purchasing power instead of increasing it four times as the previous trend caused by increase in productivity (meaning decrease of cost of goods) would warrant.
If one owned gold since 1913 (or since any earlier time), he would have preserved one's purchasing power about the same. That is of course if one hid it from unsconstitutional confiscation in 1934 and kept it illegally untill ban on owning it was repealed in 1975.
The same merchandise, say a good suit of clothes, cost the same ounce of gold all the way since the days of ancient Rome.
I'd say that people valuing dull pieces of paper backed by nothing the value of which is constantly dropping and controlled by a bunch of ignorants* have some kind of unhealthy fetish. (* Just recently Treasury Secretary John Snow in a bout of double idiocy accused China of artificially keeping its currency value too low and thus hurting us by providing us with goods that are too cheap. I guess when he shops in the store he insists on paying more rather than less... But that is only the first and minor idiocy. Even a brain-dead keynsian knows that when the country's currency is undervalued, it will have a positive trade balance. Of course everyone literate knows that China's trade balance with the world is negative! They buy more than they sell. They do have positive trade balance with US - like the world in general has had for many years - which means that it is dollar that is overvalued.)
How about that $600 bil. budget deficit for the forceeable future? Selling that much worth of new treasury bonds would raise interest rates and even if we did not have Gov. Bernanke promise, we would know that the Fed would never allow the raise in interest rates, especially in an election year. Don't we promote economy growth with increased low interest rates? So where does one get $600 billion without raising taxes, selling bonds or selling gold? Printing them, of course. Does anyone think the value of their existing dollars would stay the same with $600 billion of their newly-issued brothers dumped into circulation? With asian foreign-currency reserves stuffed so full of dollars already they have no vault space left?
Of course that much inflation in an attempt to keep interests low is bound to cause a raise in intermediate- and long-term interest rates, popping the housing bubble among other negative side-effects.
By the way, Mav, why did Franklin D. Roosevelt needed that gold so much as to confiscate it and outlaw it's posession by US citizens? Is there is a substance less harmfull to own than gold - an inert metal with no dangerous physical, chemical or biological properties?
You are a pathetic self-deluded serf, Maveric. You (or at least your parents' generation) were robbed of your posessions by your own government and you would rather pretend that you did not need what was stolen from you than face the ugly truth.
Oh, yeah - I forgot to add hypocritic. You and the rest of americans pay the same price for gold in your wife's jewelry as I would pay for it but somehow it's me who has a gold fetish.
An ounce of gold is worth about $380 now - basically recovered from a temporary artificial drop caused by massive governments' sale/lease of gold reserves in 1990s. Anyone does not believe that the price of gold will not be higher than now in 5, 10 or 15 years? In fact, I will be more specific:
During the next 10-15 years the price of gold in dollars and the value of Dow Jones Industrial Index will meet at the same number.
miko
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If one owned gold since 1913 (or since any earlier time), he would have preserved one's purchasing power about the same.
Miko, do you realise how unimpressive this statement is? I don't have a crystal ball like you do, so I can't read the future. But looking back, gold has mostly been a crappy investment. If someone had invested all his money in pennies in 1913, how much would it be worth today? Way more than the same investment in gold, I'll bet. Gold is a good hedge against financial apocolypse. But it is not a good investment, it is just an attractive metal with some industrial uses. Tools, guns, and land are probably better investments both as a hedge against disaster, and as pure investments.
ra
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Ra,
Don't try to argue economics with miko. He has this opinion that gold is the salvation of the worlds economy and cannot fathom that economics and value are all fictions. They are not based on real world objects or concepts as in the old barter system. They are legal fictions that allow for valuations to be based on what the customer will tollerate and what the host country can trade for internationally. Value is always based on the perceptions of both sides of a "barganing table". If both sides agree on a valuation, then business is done. If they do not, then the deal is broken no matter what the currency is.
He is welcome to his fetish, it does kind of remiind me of the character Scrooge in the Christmas Story. All this fascination with money particlarly hard currency as opposed to paper fiat that is the actual world standard.
miko you are welcome to put me on your ignore list. Your opinions, particularly of me, are of no real concern of mine. I have a sufficient opinion of you that needs no further modification irregardless of your pseudo-intellectual arguements. Have a nice day.
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The issues are interesting. I'm mystified by economics, and I welcome the discussion here. I've learned a lot.
Save your money!:D
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Originally posted by ra
I own 2 gold coins. When Armagedon comes, I'm set.
trust me...iron and steel will be worth more when armageddon's here...gold is very soft so its utterly useless
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What your saying here, and you are correct Miko, is that Gold has kept pace with inflation over the past century. All econimoc models use the variable of 3% for inflation, as this is the historic average. So gold has increased in value 3% per annum this century.
Meanwhile the average return of the S&P 500, or the purchase of "Worthless" paper stock certificates would have yields around 12% or the same timeframe. Even treasure bonds would have doubled your precious metals return at 6%.
Gold is an inflation hedge. It's not an investment. So while your buying a suit with your gold coins, an equity investor is buying a house with his worthless paper.
*shrugs*
I guess this it why there is no precious metals box on my 401(k) election form.
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I dont like the stuff miko is saying either. Disturbing actually but he does bring up some alarming points. What hes essentially saying is that you cant very well trust in the gold or trust in the dollar. Thats how Im reading it.
Maverick, your genie powers are amazing.
;)
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Originally posted by MrCoffee
Thats how Im reading it.
Nah, he is saying that you can trust gold more than then dollar, as history has apparently shown.
"Since the establishment of the Federal Reserve in 1913 the dollar lost 95% of it's purchasing power "
"The same merchandise, say a good suit of clothes, cost the same ounce of gold all the way since the days of ancient Rome. "
If you bought a suit for $5 in 1913, it would cost you around $100 bucks now.
If you bought a suit for 1/2 ounce of gold in 1913, it would cost you 1/2 ounce of gold now.
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Invest in sheep:
- you can eat
- you can wear em
- they provide endless hours of entertainment and companionship
Nothing beats a good flock.
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Originally posted by Vulcan
Nothing beats a good flock.
...oh my god.
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If gold is such a dead bang great investment, why do all these companies want to trade their gold for my dollars?
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Originally posted by vorticon
trust me...iron and steel will be worth more when armageddon's here...gold is very soft so its utterly useless
Ensure and Toilet paper will be far more valuable :lol
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If one bought a Colt single action army revolver in 1873 using a $20 gold piece.... the Colt would be worth more today than the $20 gold piece. just saying..
lazs
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Originally posted by lazs2
If one bought a Colt single action army revolver in 1873 using a $20 gold piece.... the Colt would be worth more today than the $20 gold piece. just saying..
lazs
... and the Colt would actually be useful after the apocalypse. Even if you didn't shoot with it, you could still threaten the bandits with it and even conk them on the head with it.
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a good supply of iron coal and a selting furnace are good to...
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Originally posted by lazs2
If one bought a Colt single action army revolver in 1873 using a $20 gold piece.... the Colt would be worth more today than the $20 gold piece. just saying..
lazs
lol..clever lazs..very clever. I you on this one.
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gold is like anything else, it's only worth what someone will pay for it.
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Originally posted by john9001
gold is like anything else, it's only worth what someone will pay for it.
Sure, but the point is that "someone" will pay the same value for gold now as they did in 1913.
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Originally posted by john9001
gold is like anything else, it's only worth what someone will pay for it.
You left out something here. What will they use to pay you for that gold?? Answer, paper money(unless you want to accept coins like pennies and quarters or such). Yep gold really showed up well there. :rolleyes:
What is gold really worth?? However much paper fiat of what ever governmental entity you are willing to accept. :rolleyes:
Way back when, I watched when the US govt. decided to loosen the ownership of gold. The price shot up to $1000.00. Then folks decided they wouldn't pay that much for it and the market in gold crashed down to about $300.00 or so. It still is worth only what someone will give in paper money for it, but only after both sides agree that the exchange is equitable.
Gold, like paper money has limited intrinsic value. It is only worth what you are willing to give or sacrifice for it. In the event of some devastating event that tears down the economies of the world the only thinkgs of value will be those things that will allow you to survive. Thinking that some kind of money will be worth anything is a pipedream as barter will be the rule of the day.
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Originally posted by Maverick
What is gold really worth?? However much paper fiat of what ever governmental entity you are willing to accept. :rolleyes:
Sure and if you bought $5(paper fiat (neat term)), and then sold gold today, you would get $100(paper fiat).
Where as the buying power of the $5(paper fiat) has lost 95% of its buying power today.
So the buying power of the gold has stayed the same. And the buying power of that $5 bucks from 1913 is worth about 25 cents, in adjusted dollars.
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Originally posted by Thrawn
Sure and if you bought $5(paper fiat (neat term)), and then sold gold today, you would get $100(paper fiat).
Where as the buying power of the $5(paper fiat) has lost 95% of its buying power today.
So the buying power of the gold has stayed the same. And the buying power of that $5 bucks from 1913 is worth about 25 cents, in adjusted dollars.
This would be a meaningful point if anyone had suggested that paper money is a good investment. No one has, in fact cash is by definition NOT an investment. Comparing 1913 dollars to 2003 dollars is meaningless. The actual value of gold must be measured in how long you would have to work to buy it. Today the average worker can buy more gold with one day's labor than a worker could in 1913. The medium of exchange they use is irrelevant.
Gold's main attraction as an investment is that it will always be worth something. Paper money and stocks can become worthless in the blink of an eye.
ra