Gold within a hair of new record high in $s (Metal of Kings)

I never stated that the proper use of silver coins or bars was to melt them. Why would you melt something just to turn it back into the same thing it already was? I am just stating that the potential of such an invest being held for the length of time as grandma's tea service isn't as great. To become grandma's tea service this silver investment had to be held in tact and control passed through 3 generations.

 

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Inflexion makes great points about history. Fatima, going back to only 1971 is way too short a time frame to be judging this. If you go back 100 years and index gold to inflation you will see gold today is about the same as it has always been. The major changes was government getting involved, and further government intervention in the 80's and 90's in the form of gold sales. Absent those actions, I find gold following inflation pretty well, and today's price is in line with the price in 1933 before government intervention.

There are major problems with comparing gold to any stock basket like the Dow, since you have issues like survivorship bias and the like. You also have survivorship bias with comparing gold with the dollar, so in those terms, comparing gold to a basket of currencies, I would agree gold was the best investment in terms of retaining purchasing value. By gold I am meaning the metal itself and similar easily storable like items.

Edit: One thing about gold being the highest price ever. Absent any other activity, gold should reach its highest price ever EVERY DAY, so should other commodities. Every day your dollar in nominal terms is worth less, right?

 

Yep and this is a huge deal and I hope everyone truly realizes that it will go higher!! Go gold!!!

 

http://www.nationalreview.com/corner/242731/did-tarp-money-really-get-paid-back-kevin-d-williamson

...a little dated but shows some of the games being played to make TARP look better than it really is.

 

No, because this is jumping to a completely different topic. That would be gold as a store of wealth. Gold is the hedge against the current Federal Reserve Note because it is a store of wealth and this certainly isn't disputed by me. 100 years ago, when the $ was defined as a number of grams of PM, everything was essentially valued against gold. The $ was nothing but a convenient assay of a certain amount of gold (or silver). The concept is completely different now as everything is now valued in numbers of Federal Reserve $s.

Therefore those facts, not disputed by me, are irrelevant to this topic. This topic is about the value of gold to the current $, the Federal Reserve Note. This is why comparisons prior to 1971 are irrelevant and don't provide any guidance to the value of gold relative to the currency simply because the Federal Reserve and fiat currency didn't exist at the time.

It's important to understand the difference.

 

Without a rationale behind this, the idea is nonsense and I've already posted above why gold isn't a simple commodity. You don't dispute (or can't) dispute the reasons I gave for this. Therefore simply repeating over and over that gold is a commodity isn't going to fly with me.

 

The Federal Reserve was started in 1913. The US has been using fiat money essentially since 1933, when the domestic gold standard was repealed and the face value of silver coins was greater than their silver content (up until the early 1960s). The Bretton Woods Agreement of 1944 instituted a type of gold standard for international payments, which was ended by Richard Nixon in 1971.

 

Can't? I dispute with every post, and you are the one who has not convinced me or others why it is "more" than a commodity except for your fascination with it.

From Wikipedia:

"A commodity is a good for which there is demand, but which is supplied without qualitative differentiation across a market.[1] A commodity has full or partial fungibility; that is, the market treats it as equivalent or nearly so no matter who produces it. Examples are petroleum and copper."

Also:

"Well-established physical commodities have actively traded spot and derivative markets. Generally, these are basic resources and agricultural products such as iron ore, crude oil, coal, salt, sugar, coffee beans, soybeans, aluminium, copper, rice, wheat, GOLD, silver, palladium, and platinum."

I know wikipedia has faults, but I believe you will find identical passages in any encyclopedia or dictionary.

You in your own mind have stated gold is "above" the petty term commodity. Pretty much the rest of the world accepts the fact that it is in fact a commodity. Nothing in this thread has changed that fact, as much as you try.

Fatima, sorry but I am now done with this thread. Your tone on any reply is petty, derisive, and twists any and all posts I make. You always take one sentence out to ridicule while ignoring the majority of the post, as I am sure you will do with this one. Your tone here is not conducive to discussion, as any disagreement with your point of view is treated condescendingly as if the other person is either stupid or simply not intellectually capable of understanding your "truth". I am sorry, but investment is not religion, and anyone who religiously believes in an asset usually are disappointed at some point.

Chris

 

I gave specific reasons why Gold isn't just a commodity in regards to money, and I didn't quote a non-definitive Wikipedia article. If you can effectively argue why they don't matter I will consider it. But you are simply ignoring those facts and reasoning and continuing to insist that gold is a simple commodity.

It takes just a few seconds to find other links on Wikipedia that refer to gold as a monetary standard and the reasons that central banks still hold it.

At the end of 2004, central banks and investment funds held 19% of all above-ground gold as bank reserve assets.[1]​

See Gold_reserve Hence Gold is not just a commodity. Using your logic I just proved your point wrong. This is why I don't do battle of the web links.

You are free to feel as you like. I don't seek to change your opinions of gold as that would be folly for me to do so. However keep in mind that opinion doesn't mean fact. If you are willing to actually discuss the points I made, then I will be glad to do so, but since you are ignoring them, and simply repeating yourself, I don't feel that I need to respond any deeper than this.

Just a reminder, the point of this topic is Gold as a hedge to currency.

(This is why I don't respond to link posts)

 

Actually the USA was on a domestic silver standard as the $ was defined as number of grains of silver until redemptions of silver $ certificates were halted 1968. (first default of the $) What changed in 1933, aside from making gold based transactions impossible, was that the Federal Reserve Note was forced into the general economy and traded along side the silver dollar at parity. (I'll except the US Bank Note for simplicity) The problem that came to a head in the 1960s wasn't the value of silver. It never changed. What did change was the printing of the unbacked Federal Reserve $. Since these $s were being created at ever increasing rates to pay for Vietnam, Cold War, etc, and FRNs could be exchanged for Silver dollars and Certificates, they had to remove silver from the currency. They did this first by removing it from the coinage, and then halting redemptions of silver certificates in 1968. Nixon broke the final link by refusing to redeem $s for gold, because they were emptying out Ft. Knox to settle the currency imbalance with Europe.

 

The government holds vast amounts of plutonium, some of which it bought from Russia as part of nuclear weapons' reduction treaties. Plutonium is worth over $5000 a gram.

Does that make plutonium a "hedge to currency"?

 

No. Plutonium has no worth because it can't be legally bought or sold. Furthermore the holding costs far exceed it's worth unless you are building nuclear reactors or fission bombs. It's highly radioactive and if that wasn't bad enough, it's the most biologically poisonousness material known. Basically a gram of it will kill you, everyone in your family, and anyone else nearby.

Maybe you also didn't realize that unlike Gold, Plutonium does not occur in nature. It's created as a byproduct of nuclear fission of uranium.

 

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http://www.nrc.gov/reading-rm/doc-collections/fact-sheets/plutonium.html

Actually, being a strong alpha emitter, it does pose radioactivity danger, but the biological toxicity has been over stated. The worse seems to be by wound contamination, but its high water insolubility as an oxide and molecular weight makes it very difficult to be absorbed through ingestion. Not arguing that is is harmless, far from it, but being alpha emitter, shielding is rather easy compared to gamma or other radiation.

 

My statement said it was the most toxic, it didn't state how toxic. What substances are more toxic than Plutonium?

In any case, it's really irrelevant to the point being made for this topic. That is, Plutonium is not a monetary asset. It's intrinsic properties make it completely unsuitable as a currency or a store of value.

 

breathing in particles poses a danger http://leroymoore.wordpress.com/201...-plutonium-in-the-environment-at-rocky-flats/

 

I am pretty sure that they lose money on that- it is a net lose.

 

Your statement said

And yes, it isn't a topic, but your statement was in error. Even Botulism toxin which is used in diluted form as Botox, is more toxic than the biological effects of plutonium, but I am stopping now on this.

 

what killed that Russian spy a few years ago? it was just like a molecule of what they called a "hot particle". found it- Polonium-210

 

Back to the topic at hand.

While gold closed above $1600 for the first time today the rise of gold in Euro/Oz is fascinating. It's at a record as well, but the increase on a percentage basis is much higher than on the $ scale.

 

This is pretty much what I would expect from save haven demand generated by European contagion fears which are growing regularly. Some of that demand is going into the dollar, but a lot more of it is going into gold and silver which far outweighs the dollar demand generated so the price still goes up in terms of the dollar. There is a lot of focus on gold at it's all time high, but the percentage gains in silver over the recent run have blown gold away, just as it always does when the price goes up, as well as the opposite direction when it goes down. I attribute this to the fact that more people want into gold (and silver) than can afford gold, and when there is a drop silver's volatility scares people out a lot more easily than gold.