gold in AGE and the Gold Buffalo

Indeed. From a macro level a business plan that assumes profits from the conversion of pure refined gold into junk gold makes no sense.

 

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They take pure gold, and make value added chains, (jewlery) from it. You think at a macro level this business plan is flawed? They cannot take coin gold or any other types of impure product because their blended gold comes in many different colors/hardness/prices. The company I work for takes a pure commodity and converts it into a blended product. Our sales are about a third of a billion, and we are no where near the biggest in the industry. Is that a flawed business model as well?

I would say jewelry is probably the "highest" form of gold, (short of tiny amounts in electronics), because its the form most consumers will pay the most per ounce for, much higher than bullion coins. As a feed stock into the higher value added industry, the gold needs to be .99 at least, prefereably .999. Bullion and bullion coins, to me, is the lowest value added user of gold. What adds less value to gold than bullion?

 

What commodity? Without knowing this, you really don't have a point.

Gold, is not just a commodity, it is the defacto hedge against fiat currency. That alone makes comparisons to anything else very difficult

 

I think you have too much emotional commitment to the defense of the jewelry business to see the point. It makes no economic sense for a collector to sell AGEs and Krugerrands below their intrinsic value as an investment and inflation hedge. Nothing that the jeweler or refiner does after the transaction can make the initial sale a good deal for the seller. If someone is willing to sell a brand new Chevy for $1 to a refiner to provide the resource for another manufacturer to build a Mercedes, it is still a terrible deal for the seller of the Chevy.

 

I have never said sell AGE below their gold value, I was just saying that .999 gold should be, because it is more readily used in industrial uses, a higher value product. If I ever had a choice between the two, for the example I showed, I would buy the .999 product.

@fatima, since you assume gold is "special" and not a commodity, then I doubt we can really ever agree. I did not specify my industry because my point was trying to be broader, a point you will always refute because of your belief gold is "special" and nothing in the world is as important as gold. I showed how gold was just another commodity in my dealings with the chain industry, but evidently that doesn't count either.

 

What industrial processes uses pure gold?

If you can't specify your industry, then you are simply providing unverifiable anecdotal comments that can't considered in the context of this topic. I certainly don't want you to reveal your secrets. So fair enough, we will assume it has no meaning here then.

If gold is just another commodity, then why does the United States have an entire army base protecting the vast majorty of it's 8000 tons of gold reserves. In fact, why bother to have gold reserves at all. In the form that it is stored in, gold bars, it has no other use. (I'll note BTW these bars are .91 gold) Furthermore why does the NY Federal reserve sit on another 7000-8000 tons of gold in the basement of its NY Fed office? Why does the Federal Reserve list gold as a financial asset? An honest answer to that question would quickly yield the conclusion that we are not talking about bushels of corn or pork bellies.

 

they keep those gold reserves for the most dire of emergencies and hope they never have to use them, just like us.
not to crow about it when the price rises and croak and doomsday fantasies.

 

I am not sure if you were attempting to answer the question in the context of which it was asked, but your answer confirms exactly my point. It's either money or it's not. If not, then there is no emergency it can solve in the form of 100 ounce bars.

 

barrels of oil and bushels of wheat are also money. so what.

 

You can't put either of these in your pocket, so I disagree.

So What? The point was explained above. I recommend you re-read it.

 

and you can't run your car on gold or eat gold. so which is more valuable.

 

why do we have stores of corn,wheat, and other commodities?

I agree Gold is a commodity...commodities hold value...

also gold is just as consumable as corn and wheat...just they are used by different industries...


another note...you think there is an investment industry? I certainly do...

 

Someone with gold doesn't have to worry about buying gasoline or food. When in human history have people with gold been hungry? People often try to make this sort of comparison and yet always miss this fact.

 

I'm sure plenty of people have either had their gold stolen from them or have not been able to buy food. ever wonder how the swiss got all that gold in wwii? I like bullion, but i refuse to be as smug as you are about it.

 

Do you actually think anyone with gold really cares? If you don't buy it, there is more for the rest of us.

 

I've never "not" been able to buy gold. have you?

 

Yes I have.

 

While it may be true that the less pure coins are just as valuable due to numismatic value I am with you in that I prefer .9999 pure gold for a couple reasons. The first being that it looks a lot nicer. I was offered a choice between a Maple Leaf and Krugerand before and the Krugerand looked really ugly in comparison. The Maple Leaf is brilliant. The second being that if for whatever reason I did have to melt it I have the purest form. I don't like the idea of my metal being polluted, even if that is a harsh and undeserving way to put it. I used to also feel like the less pure gold was ripping people off, and getting less for your money, but Cloud debunked that one. =) Not to say that this is the best way to go, just the way I like to go.

 

I love gold maple leafs.

 

Ron Paul asked Ben Bernanke yesterday if he thought gold was money, and he said no (after a noticable hesitation). When asked why they have it, he said "Tradition". :bangg: