This guy doesn't like precious metals.

And its not like there aren't consequences to over evaluating a nations wealth and worth. Even on the gold standard a country might over extend. fractional reserve banking certainly is a completely different story though

 

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I cant tell by your blurb on it what your stance is on frb but it is the ONLY reason we arent serfs in a king's mulch garden

 

Of course not...that would be silly. Everyone knows you'll always win on black :devil:

 

I have watched silver go from $5 an ounce to where it is now. Up and down, but basically up. It is a store of value when the price of the things we have to buy every day has quadrupled. It seems like we're going to be watching the value of a dollar continue to erode, and there are very few things an average person can do about it. Buying a little silver is one of them. So far it's way better than money in the bank. Of course that's what a lot of people thought in 1982, but it doesn't seem to be going up like it did then.

 

Seashells are not fungible, divisible, or durable. Gold is not special because it's rare. It's special because it fulfills the 4 rules of a unit of account (portability being the 4th). Nothing except for metals meets these 4 requirements. That is why they have value. If it were only because they were shiny they would lose half of their value as soon as you bought them, as with gemstones, but with metals you will only lose at most 5% on the entire spread if you immediately sold after purchase. That's the difference between intrinsic and perceived value.

 

All I can say with certainty is that your stance here is dualistic, and that your agenda is not clear to me. I was leaning more toward having a vested interest in the financial system remaining as is for your livelihood which precious metals threaten. You cling to owning metal as a reason for being in support of them, of course we know it is a smart play, yet at most every turn you steer people away from them which I can only speculate is because you know the threat they pose. Either way, I am clear about my agenda. It would be nice if everyone else could be, but I know that's not realistic. It's not my intent to go after your character, but the split personality thing gets under my skin. I don't care if you want to be about whatever you are about, but don't try to play both sides.

 

If something is finite you can't make any more of it. Cotton is not in finite supply because you can grow more. If the day comes where cotton doesn't grow then it will be a finite resource. Yes there is a particular amount of cotton available, but that can ebb and flow based on crop planning. Gold was deposited in our planet when our sun was formed and ejected whatever stardust (elements) were in the nebula that formed it. We're not getting any more gold out of the ground than whatever has been there since the planet was formed. There is a reason people say money doesn't grow on trees.

 

I don't believe this is correct...there are plenty of things that fit these four requirements you have set for something with no practical value to instead be HIGHLY valuable. You can use stones of many types...for instance soap stone or turquoise...almost anything is fungible, plenty of stones are divisible and certainly durable and portable...heck...plastic fits your requirement as does leather, hard wood, and if I want to waste enough time I have no doubt one could make a long list of things that could fit these requirements. To be honest some would be far more resistant to decay and corrosion, and more durable than copper and silver and not near as dense thus more portable than gold. Indeed the value is perceived and not intrinsic...especially today.

I have no doubt modern science could easily develop some substance tailor made to fit all 4 criteria and I seriously
doubt that this would change your mind as to the value of gold (or the lack of). I think the reason for this would be:

"I am clear about my agenda."

Because you have an agenda concerning gold and continuing the perception that gold is inherently valuable. I can honestly say I don't care (unless someone tries to put us back on the gold standard) what people chose to spend their money on and horde away or what they think is precious. Certainly people have wondered why I would spend money to buy old money. It make no difference to me. At one time I thought gold was the way to go both the gold standard for our currency and to horde for is intrisic value. Nobody made me change my mind, it was just my own research into gold and monetary systems that made me see things differently. But...as long as people continue to hold the perception that it is highly valuable...it is...so investing in it is not foolish by any means.

 

I steer people away from putting ALL of their money in PM. Sue me if you believe that is wrong. How many freaking times have I said having 10-20% of you total assets in PM is a prudent move, but apparently that doesn't count for anything.

Also, I try to steer people away from believing ONLY pm is money, or somehow PM is "magical", or "its different this time" or whatever.

My "agenda" is to educate people about the real value of having a sizable amount of PM in your overall holdings, but to not have all of your assets be PM. I also would like to educate people that just because PM has gone up a lot in a decade does NOT make it a "surefire" short term investment.

 

This is all true, but it's only half the story. I'm not going to dissect any further but suffice it to say if this was all there was to it we would not be debating so much, because I completely agree with everything you've said here.

 

Most of these things are not fungible. Fungible means that anything of that type is the same value as anything else of that type as long as the weight is the same. The ones that are fungible are not durable.

You can't cut a gemstone in half and expect the two halves to be worth what it was before you cut it, not divisible, and also not fungible because it depends on the quality of the cut even from the get go. Hardwood depends on the type of wood for the value, and is not durable (burns), fungible, or very feasible for portability. Leather depends on the quality to some degree, but is not durable, nor is plastic, or soap, as they all fall victim to fire and/or time. Fiat currency is good for everything except for durability (even digital currency is at the mercy of hardware, electricity, computer systems management, and central planning), so it does make a nice currency when properly managed. However, only metals fit all 4 requirements of a unit of account. This is fact and is not disputable.

Also, I have not set these things. They were set throughout the course of human history out of necessity, which is the mother of all invention. These things are the way they are not because anybody wants them to be (though many of us may be in that boat), but because they are the best fit.

 

"This is fact and is not disputable."

Well then...you say it can't be disputed so no need for further conversation.

In fact all that I listed are are fungible as they can be cut in exact and varied sizes and valued no differently than gold and certainly stones don't burn to ash.... but in reality these 4 requirements are simply not what gives gold its perceived value or why it was chosen to play the role it has played.

The value of gold was indeed set by man long before money...and before gold was ever used as it is now. I would continue to maintain that there are numerous other things that could be used as a unit of value and I assume with your posts you accept that gold has had no other real use for most of the history of mankind thus you accept its relative uselessness in a practical sense save for the fact it fits a few requirements to make it more ideal for us to say 'it is wealth and highly valuable'. Those who made this choice chose gold for several reasons. Already a luxury item and a sign of wealth long before the coin was invented, resistant to corrosion, they control the land, the means of extraction and production, it must be mined, refined and formed, so it is almost unobtainable in any significant amount by the common man thus controllable, and of course there is no other use for the stuff.

This is not to say that gold, like most metals, doesn't have properties that would make it a useful commodity...the problem is the inflated valuation that makes its use cost prohibitive.

 

Excuse my long winded posts but I think I can sum up my point more succinctly.

Let us accept that the natural properties of precious metals makes them ideal to be used as a measure of wealth. This simply means they are a good choice to serve as a medium of exchange, an object we can place perceived value upon, no different than a piece of paper but just much more durable. People are not buying and selling gold for the same reasons they buy and sell oil and other resources. In essence its value is fiat, like a dollar bill, just more durable. I would agree that silver is durable and paper can be burned and ripped but the real worth of a piece of paper with the right stamp on it is not that its physical properties make it ideal for printing any more than gold and silver derive their high value simply because their physical properties make them hard to destroy.

I do not have an agenda but I am offering to dispose of all that worthless gold for you.

 

These may be the qualities YOU like money to have, but they are neither mandatory nor universal. Seashells were money, possibly for longer than gold was.

 

You are using the rules of the very system we are debating as proof for the system. Why cant we cut a gemstone in half and retain equal value? Because of the stone itself? No its because we simply decided and agreed that bigger stones were worth more. There is no innate reason a 5 karat stone is worth more than 5 1 karat stones other than people have the luxury, because they do not lack other neccesities, to pursue the larger more rare stones. But its not simply the stone that makes it so. Now if stones were money some day instead of jewelry, the 5 smaller units might make for better bartering items and as such might overtake the larger stone in value.

As for your cotton argument, our technology has made it "not finite" for any given point relative to our needs. This does not make something infinite, which is the only opposite of finite. So you cannot argue my point that cotton is finite unless you are saying it is infinite. I cant imagine that you are saying that as you seem fairly intelligent. In any case the same technological advances has increased the available gold that is mineable. So no maybe we cant just grow gold the way we can cotton. But the same way our technology allowes us to grow cotton, it is improving our ability to find gold. Gold was once "mined" by finding large rocks of mostly gold and that was what "finding gold" was and that was all the gold that was mineable. Today we extract gold at miniscule ratios from rocks that are 99% some other material. We may one day be able to mine gold on other planets or asteroids, and as such it is arbituary to call it rare at any time and place. I can assure you by then, unless we have similar finds, water will be more rare and more neccesary than gold.

 

This is why I think it's better to have a bunch of different denominations of silver. If you have to barter and you only have dollars, then you can pay in dimes. I imagine a time when you barter, and then the seller pulls out a little scale or a magnet, tests your silver and then accepts it.

 

There is one basic problem with your gemstone analogy. The larger the stone the more rare it is and hence more valuable than a number of smaller stones with the same cumulative weight. Hence, while five OZT of gold is "worth the same" regardless of its form factor, 5-1ct stones are not valued nearly as much as 1-5ct stone all other attributes being equal.

 

Here's another reason to like silver. It may save your life:
http://dollarcollapse.com/silver/the-stealth-hoodie-another-reason-to-like-silver/

 

But either way its a red herring argument. Who here has ever whacked a half dollar in half if they only wanted to spend a quarter's amount of silver? Who has cut in two ANY piece of PM?

I thought so. If we don't do it now with PM, why is the ability to whack it in half material?

 

Consistency I would think...whether its 5 or 10 or 100, it can be divided and by weight purity it will be the same value at the same weight...but you are right in that simply because it is a good candidate for what it is being used for doesn't mean its properties are what is giving gold and silver its value. The 4 properties argument stating that its properties are what make it valuable because they pm's a more ideal choice for this use just means it is better to place fiat value onto because its durable and divisible (the durability is all gold has over paper and many other candidates to be honest)...The funny part about Gold is that it DOES have viable modern practical uses but is often not considered simply because its so cost prohibitive because of its perceived value.