Gold prices and silver, 50 years?

I saw a "continental" from Maryland at the coin show last Sunday, and it was worth around $600, so I guess it is worth something in the end.

 

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Figured it out???? Or delcared it to have value. I think the later as in Fiat. For most things of true value, you don't need to "figure it" Do you need to figure out wheat has value? Do you need to figure out the land you grow the wheat on has value? Do you need to fugure out oil has value? Except fo the small utilitarian aspect of Gold, it only has value because people say so. That is it. Nothing inherent to it at all. No magical properties.

This difference is important to grasp, since if Gold prices get to high, people can just say, I won't buy any, I don't need it anyway. Can people say that about foods and fuel. No, as food and fuel rises people are forcwed to pay the higher prices because these commodities have true value and folks need them Gold does not have true value, and nobody needs it. GOLD IS FIAT. I know that is a bitter pill for a stacker to swallow, but it is true.

 

My only comment would be they didn't "figure out" gold was valuable, they learned Europeans valued it and would trade very valuable items for it. Most of the world has been "taught" gold has value, I do not view gold being valued as an inherent human desire. Its been more of a taught behavior.

 

Pretty much useless http://www.usfunds.com/slideshows/the-many-uses-of-gold/

 

It's not fiat because there is a limited quantity of it on earth and there is a substantial cost in procuring it, it is a raw material, its value is not declared by a govt. but decided in a market like other goods. It is a commodity. Overvalued based on its real technical use maybe but still valued by a market, not declared by an entity. People don't need cotton, they can walk around naked. Is cotton fiat?

 

We are more in agreement than not, I usually say Gold is Fiat, once removed, and the point is just as you say "overvalued based on its real technical use" and that is the fiat like component. I do not believe Gold is fiat in its strictest sense.

It is a lot closer to fiat than you might believe though. As you said, the market determines its value, well that is the exactly true for the fiat dollar. The USD trades on the open market, just as Gold does and goes up and down as the market dictates. The VALUE is not determined by the GOV. The government simply declared it as curreny. The market decides its value.

So is Gold really that different just because it wasn't a "government" that decided it has value beyond its utilitarian use?

 

I think that gold has value because it is impossible to create out of thin air. We are trying, but it takes a lot of energy to create it out of the ore we have nowadays. Gold is power, especially for nations. What is the ultimate currency? Gold. It is the one thing that, if it's real, has indisputable value. They are giving all sorts of paper currency to the masses. The Chinese did the same thing. The commoners had the bronze coins to trade, while the emperor kept the gold. The Romans had the denarius, which became more and more devalued, while the plutocrats used the solidus, which was gold and didn't lose value since they were made out of gold.

I am not a gold bug, but I can see why it is so revered. I am more of a silver bug, and like the fact that silver was what was used for commerce. Gold is a store of wealth, and has been since King Croesus. I don't see it losing it's role any time soon. I could be wrong, and maybe bitcoin is the thing to have...

 

http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2014/02/20140210_LT1.png

 

No that is not correct. For every one thing that you can name that cannot be created out of thin air and is valuable, I can name 10 things that cannot be created out of thin air that have little or no value. The point is irrelavant. Value comes from demand There are also many things that can be created from little or nothing and be valuable. How about apples? (the fruit not the computers)

Really? The US has around $130 Billion in Gold (I think ) in a $17 TRILLION dollar ecomony, a mere drop in the bucket. How much financial power could that Gold really hold. Almost nothing... The financial strength of the US comes from its Industry and service, not from what really comes down to a few pennies in the ground.

The ultimate currency??? It is not even a curency at all in any nation of the planet. Has not been for quite some time.

Are saying Gold is the one and only thing that has indisputable value? Obviously this is not true

The modern day Emperors of today, like the Walton's and Buffets of the World seem to have a different view. They prefer assets that grow and build wealth. I don't believe Buffet has any Gold at all. Things change. It is not good strategy to own Gold because an Emperor 2000 years Gold had some. Makes no sense

Ok, so you are saying Fiat currency deflates and Gold does not. This is not a News Flash Every one on this board has agreed with this. No one on this board has every recommneded storing wealth in Fiat Currency. There are many other choices to store wealth.

 

Since I am one of the few posters who will likely be alive in or around 2050, I will go out on a limb to make a prediction on the price of gold in 2050. Most likely, this forum will no longer be around, but perhaps it will be archived for me to check my prediction then. I believe gold will have reached $50,000 an ounce by then.

 

Well, not impossible, it is only 10.7 % gain per year. To put that into perpective, the S&P 500 has an average gain of 9.77 % since the beginning of its existence (1926) .

Now if we are still working under the assumption that Gold will roughly follow inflation which it has since the beginning of time, what you are calling for is 35 years of very high inflation, but NOT hyperinflation. So it seems to me that if we could substain that rate we would not be in a collapse situation. With that said, I would conclude that Equities would still be able to outperform Gold, as is is always has done in the long term, under the conditions you are setting. So even though the number sounds huge, and you are correct, buying Gold may still not be the best option if you are looking to maximize returns.

 

I agree with Mike. Sure, this could come to pass Jolumoga, but what will this mean? Nothing unless you know something further. Maybe the same amount of stocks would be worth $400,000, maybe $10,000. Maybe $50,000 in 2050 is only worth $100 in today's money, maybe its worth $5,000. Its all relative worth, relative performance, that counts. People get fixated on numbers, when the numbers really are meaningless. So, I could even sit here today and say I 100% agree, but we STILL do not know if gold is worth buying today or not, unfortunately.

I really do wish it was that easy. I would truly LOVE to be a true believer and just "know" pm will be the best alternative to put my money for the future. I sure would sleep better.

Btw, "one of the few to be alive in 2050"? How old do you think most of us are? I would have to pass away more than a decade younger than my grandfather to not see 2050.

 

Let's not make this an either/or proposition. When I say gold will hit $50,000, I am not saying that it will necessarily outperform equities, fine art, real estate or any other kind of investment -- though I think we have seen an anomaly in the stock market based on credit expansion in the last few decades, and that we will follow Japan's trajectory. I suspect, once the moonshot occurs, there will be a subsequent crash in PMs. Where I differ from most here is that I don't believe the bull market is over: I believe we are headed multiples higher before that time. I believe, at minimum, gold and silver will track inflation, and may actually beat inflation, depending on whether or not global currencies become backed by gold.

 

I suspect the average age here is between 50 and 60.

 

I am 55 but still planning on being here in 2050. I am in good heath with longevity on both sides of my family. My Parents are both still kickin' and the Grand P's all lived long lives, one lived to be 103. So I have a shot

 

Hmm, I would have never guessed you had a decade on me Mike. You must type "young".

 

LOL, Not sure how to take that I actually say I was born a little too late, I really just caught the tail end of the hippies...... I would have made a great hippie

 

Seriously, you too? I was way too young to be a proper hippy, but had hair down my back in high school, listening to Beatles, Stones, and Joplin in the 80's instead of that stupid big hair garbage.

 

Nothing was missed. A former mentor of mine told me it was crowded and filthy at Woodstock. Plus, there are jam festivals like Bonnaroo where people can get intoxicated and... commit other sins. Bonnaroo was great -- except for the bad trip.