Good as GOLD. Some thoughts to ponder...

The day that ship went down as I said,

"""I got a good laugh when you said "there was a day when gold was worth nothing, and scattered around like trash". Really? When was this?"""

The day that ship went down as I said already - everthing is relative, during that night gold was not worth anything whatsoever as I said they were throwing it all over the deck of the ship - it mean't nothing at all.
Also if you had to flee on foot gold (much over an oz.) or so would mean
nothing. If in a place that does not need gold, (they may need food or fuel more) gold means nothing. If in a country of dangerous criminals gold means nothing, (they will just kill you and take it all)! If dying of thirst (at that very moment) gold means nothing.
It's value perceived or otherwise is in our mind and values - in the big scheme of things it ain't that big a deal.

 

Log in or Sign up to hide this ad.

I think that is self evident, I believe one of our other posters, Marrotta (sp?) said that early americans used cacao as money, and they would actually have counterfeiters of it. Golds use has been traced to western anatolia, what a great improvement it must have been to have a common medium of exchange, as our wealth in the world has grown, gold is not common enough to any longer be used as the common medium of exchange.

 

..

 

In those instances, this is true but it does not prove much. Of course if you are starving anything other than food is useless! I get that.

But, in a supposed civilized society, SOMETHING that is universally recognizable as being rare and desirable, which also withstands wear from daily use over long periods of time, is needed as a way to store and exchange wealth. You cannot carry around a barrel of oil on your back. You cannot carry around eggs. They will spoil or break. And, the majority of people you run into may not want those things. Basically, there is no possible way for you to own or carry around all the possible things that people you want to trade with would want or need.

The majority would want PM as a form of real money to be easily exchanged and carried. Which, they could in turn use to acquire something they want that the other person would not wish to barter for. That is why it would be desired and needed.
That's why it was used for thousands of years. People always want PMs, no matter their age, for whatever reason. Electronics, clothes, cars, etc.. devalue with age and some can hardly be given away after 5 years. This does not apply to PMs.

 

That may be. But if that is so, then that tells us what gold there is should be worth many, many more times what it was back then because there are so many more people with less product. Maybe it should be much more valuable than it is now?

Perhaps there is enough silver and it could be the next gold? If not, than something else would have to be explored. Maybe copper could fit the bill? I personally don't care what it would take.

If a system of currency is to work long term, it has to represent something. If not only to keep the supply down. To represent nothing long term is a recipe for inevitable failure as supposed wealth can be created out of thin air to infinity. Does anyone disagree with this point? And which of these two scenarios are playing out day after day, year after year? Which brings me back to my first post here. Why do people wish to ignore this?

 

Great points all!!! I'm really enjoying this topic a lot!!!

Great points all!!! I'm really enjoying this topic a lot!!!

 

President Lincoln wrote that wealth is the product of labor, precious metals represent the labor taken to mine them, without labor there is no wealth, the industrialist, the tycoon all rely on the working men and women to build their wealth. Fiat currency also represents labor in a way, tho it takes much less labor to print a bill, then it does to mine gold, it also takes much less labor today to drill a barrel of oil, or grow a bushel of soybeans.

People use the word inflation much as they use the word protectionism, sort of a knee jerk socially conditioned response.

 

The greatest value of any outdated technology is that it's a stepping stone to the next newer technology. Newer technology employs people (R&D,Marketing,Manufacturing) and creates new markets. As this process has been repeated through the centuries in many categories, it's resulted in longer life spans, easier ways of growing food, more leisure time and more choices for how people work and play.

Over this time period, gold has remained what it is..which is to say it can be praised for being consistent in appearance and value, but in terms of its contributions to humanity over the centuries, it has contributed very little with the exception of it's use in art and jewelry.

Gold never eradicated smallpox, drilled a water well or taught a child to read.

 

For a workable standard you would include silver, copper and nickel along with gold, to have a reasonable, quantifiable supply of metal to back paper currency. Oil might be considered as well.

When the Morgan dollar came out, it was used far more in the "Wild West" than the East. Paper currency was more convenient to carry and store. The U.S. Treasury was constantly looking for space to store Morgans, and most sat in bags for years.

As for the principle of fiat currency (no gold standard a la Bretton-Woods) I think the idea definitely has advantages, especially in terms of flexibility to deal with the ups and downs of business cycles. I think what is missing in the present equation is the responsible use of the fiat currency concept.

Some of this irresponsibility is due to poor executive and legislative leadership, but some of the malaise is clearly the fault of voters who ask government for more than it is able to provide.

In such a scenario, voters will generally elect officials who will "promise them the moon" rather than the candidate who will only offer the "tough love" of spending cuts, higher taxes and a lower standard of living to cure the present cycle of deficit spending.

 

I've been collecting the "freebie" soap bars from hotels/motels for years.
I was not aware that due to this habit, I am prepared for Armageddon...

 

The labor theory of value is a completely discredited economic theory that was disproven long ago. Abe was wrong on that one.

 

Thanks for the update cloudsweeper, care to share why labor has no relation to wealth? It seems to me common sense cannot be annulled by a vote.

 

I think bhp3rd has made a lot of sense.

Not every culture holds gold in high esteem. The Fulani of West Africa used cowrie shells as currency. The Tuareg of the Sahara traded salt for gold on their caravan routes from Timbuktu to Agadez. In their world, salt was a key to survival.

The Bedouin of the Arabian peninsula and the ranchers of the Old West fought pitched battles over water rights. Many livestock cultures of the world in Andorra, Africa and Asia valued their sheep, cows, donkey and goats as their most valuable asset.

In our modern world, we are still warring over the ownership of important oil fields.

As for wood, the 14 year old Liberian Civil War that recently ended prominently involved timberlands that factions were fighting over. Timber comprises 30% of the Liberian National budget.

 

In short, the labor theory of value was one of the basic tenants of Marxism. They believed like you in the "common sense" notion that only the amount of labor that went into the production of anything determined the value. They didn't believe that supply and demand set the price, or that the amount of capital or cost of capital should impact the price. So if there was $200 of labor involved in producing something, then $200 would be the price -- even if nobody wanted it or even if people would be willing to pay much more for it. Naturally, the result was shortages in some goods and a glut of other items that nobody wanted. But without a working price mechanism, they had no way to know this. So despite all of their "common sense," the Marxists were wrong.

 

Did not Lincoln predate Marx? And I tend to think that there were probably some differences between how Honest Abe viewed the question and how carl marx viewed it?

I am not talking about Marxes view, but the theory stated by Lincoln that wealth is produced by labor, now I can see how a Rembrandt painting may have taken less labor and time to produce than somebody elses matchstick castle, and how the market would assign relative values to them, but Lincolns assertion that labor is prior to capital still stands as self evident, for even if someone inherits a great fortune, there was still labor involved in producing that fortune.

 

Stock,s and Gold, The question is how long do you wait to sell!! would
Be curious to know some stratageis, You could be holding on to it
For a very long time!!

 

Well said!! If you think about it, the fiat currency system could have worked for a very long time. It would have required integrity from public officials, responsible spending, not giving away billions to foreign countries, not engaging in useless wars followed by nation building, cutting out lobbyists and special interests 100%, running the govt like a business, not promising people what we couldn't pay, not letting the private banks run the show and investing everything back into our own country. Who knows how long it could have sustained? Maybe even thrived. Then people's expectations would have been tempered and reasonable.

Now.....lol! Now it's so far gone and so unreasonable that there is no turning it around. We're past the point where anything could actually be paid back for any amount of time, while continuing on with day to day business into the future.

Even if they could cure the 'present cycle of deficit spending', there is no answer for the damage that has already been done, the interest that is accruing on that damage and this country's future obligations. I have heard and read from several sources, that in the next 30 years, at some point, the tax revenue collected will be enough to pay for social security and medicare and nothing else!

You want a source? Here's a 9 min. video from 2008 that I found very interesting. An interview with comptroller general David Walker, the head of accounting for the U.S. govt., who served under the last several administrations. Very enlightening.
http://www.youtube.com/watch?v=PnAU...354A117C&playnext=1&playnext_from=PL&index=25


This was able to happen because there are no controls. What can be produced is limitless. So the question is, how can anything in limitless supply have or retain value? Or even continue to function as money? I admit, I don't have the answer either.
I don't know what exactly should have been done or should be done now. I do think it would be a long and ugly process before a civilized barter system would work (if it even could work), because so many have so little to begin with. There are no guarantees.

If they had to eradicate social security alone, I believe there would be martial law.
Good luck to us all going forward.

 

A good question..and here's my point of view. First, I don't think we will arrive at a point in history where I will have to worry about "Armageddon, End of Times" or whatever name one chooses to call it. So, I have not thought seriously about radical ways to safeguard my various forms of wealth since I do not believe it will be necessary.

As an alternative to doomsday preparations such as digging holes, caching goods, buying guns (have never owned one BTW), I would simply explore the possibility of becoming a Canadian citizen, due to many reasons, not the least of which is I would feel safer among a citizenry that for the most part doesn't feel the need to own a personal arsenal. A change of citizenship would require a large up front tax payment..but hey even peace has a price! Ideally, I would be making this change before all hell broke loose in the U.S., I am not that
far from the Canadian border.

I don't think it will ever come to this..in the meantime however, I'm careful about who I count as friends, what we do and where we go.

You won't ever see me at a shooting range...

 

It is definitely not too late. There are examples of countries that had bad national deficits who are now fiscally healthy. Canada was able to turn a bad situation around in the recent past through the hard nosed discipline of reduced spending & higher taxes. We can do the same. It will require a lot of political guts by our elected officials and the faith of the voters that they're getting a fair shake if they are being asked to pay more taxes, get fewer services and possibly endure a somewhat lower standard of living to get the country back on track. Right now, with all of the bickering, partisanship and finger-pointing, it doesn't look too good. As the situation gets more dire however, I think it will be apparent that the time is full for action and we will somehow muddle through it. Americans seem to do their best when crisis is at their front door.

 

The day gold was worthless and thrown around like trash never came. You can't take one person/situation and think it applies to the world. If a void were to open up in the ocean and lead to anyones table "that day" every hand in the world would go up with people saying "my table...let that void lead to my table." So, the day gold was worthless never happened.

Also, there is enough gold to go around to everyone. Saying wealth has increased to the point gold can't cover it all is wrong. If you had a pure gold coin that weighed an ounce, and somebody came around and said, not enough gold ounces to go around to cover everything, they would start making half gold ounces. But, everyone who had a whole gold ounce wouldn't have lost any of the value of the full gold ounce. If the state of things becames that you needed to make a 1% gold coin the size of a Roosevelt dime, there would still be enough to go around. Its just that the amount would be less. But, the guy who still had his one ounce 100% gold coin would still have all of the one ounce 100% gold coin value. Of course, it would be harder to "pull the wool over your eyes" as the money debases itself. Not so with computer generated money or money made of paper.