|
Register | Sign In |
|
QuickSearch
Thread ▼ Details |
|
Thread Info
|
|
|
Author | Topic: The Giant Pool Of Money. Implications | |||||||||||||||||||||||||||||||
Phat Member Posts: 18345 From: Denver,Colorado USA Joined: Member Rating: 1.0 |
Gold has always been a medium of exchange with intrinsic value.
On the Intrinsic Value of Precious Metals quote: Makes perfect sense to me. Look at the track record. Gold has held its value by global consensus.
|
|||||||||||||||||||||||||||||||
jar Member (Idle past 422 days) Posts: 34026 From: Texas!! Joined: |
Where in your quote does it explain what the intrinsic value of gold is? We can see that it makes that claim, but where is the supporting evidence or explanation?
Anyone so limited that they can only spell a word one way is severely handicapped!
|
|||||||||||||||||||||||||||||||
Phat Member Posts: 18345 From: Denver,Colorado USA Joined: Member Rating: 1.0 |
jar writes: Good question. You DID read my link, by the way, didnt you?
Where in your quote does it explain what the intrinsic value of gold is? We can see that it makes that claim, but where is the supporting evidence or explanation? quote: In other words, because of its rarity, durability, malleability, and uniformity, gold has traditionally been the best substance for money. Money cant simply be created out of thin air. Why do you think that the central banks still own lots of gold even to this very day? What value does it have for them?
|
|||||||||||||||||||||||||||||||
jar Member (Idle past 422 days) Posts: 34026 From: Texas!! Joined: |
Phat writes: In other words, because of its rarity, durability, malleability, and uniformity, gold has traditionally been the best substance for money. Money cant simply be created out of thin air. Why do you think that the central banks still own lots of gold even to this very day? What value does it have for them? It is just ONE of many commodities, just as your link says. It is another commodity just like oil or wheat or lumber or pork bellies. The only difference is that because it is pretty dense and inert, it can be stored in a small area while other commodities can be most easily stored as paper certificates. But again, your link simply makes assertions. It does NOT explain why gold has some unique intrinsic value. One other thing? Have you noticed that all the folk talking about how gold has some intrinsic value are also trying to sell YOU their gold for YOUR paper money? Anyone so limited that they can only spell a word one way is severely handicapped!
|
|||||||||||||||||||||||||||||||
Phat Member Posts: 18345 From: Denver,Colorado USA Joined: Member Rating: 1.0 |
I realize that there are many hucksters who attempt to sell gold.
I will say, however, that it is advantageous for large sums of money to be represented by a rare and precious metal.
jar writes: Why do nations still have gold reserves? Why do many wealthy families own large amounts of gold? Gold has value because powerful entities need it to have value. Money cannot simply be an electronic blip that denotes human value, since there would be no concentration of rarity and exclusiveness with such a system.
But again, your link simply makes assertions. It does NOT explain why gold has some unique intrinsic value.
|
|||||||||||||||||||||||||||||||
Modulous Member Posts: 7801 From: Manchester, UK Joined: |
Money cant simply be created out of thin air. Nor can it be created by pulling arbitrary metals out of the ground. It's created by doing work in excess of your own needs and succesfully trading the excess fruit for other stuff you need that you couldn't get because you were specialising in your own thing. How we want to represent that it is up to you. But what happens if the people create more wealth than can be represented by pulling metal out of the ground? What happens if we pull too much metal out of the ground? What happens when the metal runs out? What happens if gold becomes useless or rather less useful (ie., alternative material that performs the same functions is developed). Edited by Modulous, : No reason given.
|
|||||||||||||||||||||||||||||||
Phat Member Posts: 18345 From: Denver,Colorado USA Joined: Member Rating: 1.0 |
We cant simply have wealth created by human value alone. China would become the wealthiest country, and the fortunes of generations would lose value since the support behind them would crumble. Gold is a way to keep the value of antiquity safely in the hands that held it.
|
|||||||||||||||||||||||||||||||
jar Member (Idle past 422 days) Posts: 34026 From: Texas!! Joined: |
Phat writes: I realize that there are many hucksters who attempt to sell gold. I will say, however, that it is advantageous for large sums of money to be represented by a rare and precious metal. Why? How? Which has more value, a dollars worth of gold or a dollars worth of lead?
Phat writes: Why do nations still have gold reserves? Why do many wealthy families own large amounts of gold? Gold has value because powerful entities need it to have value. Money cannot simply be an electronic blip that denotes human value, since there would be no concentration of rarity and exclusiveness with such a system. I explained that, gold is dense and so can be stored in small areas. But it is just ONE commodity that people or nations hold. Money is nothing but an accounting system. It is nothing but a notation period. Anyone so limited that they can only spell a word one way is severely handicapped!
|
|||||||||||||||||||||||||||||||
crashfrog Member (Idle past 1494 days) Posts: 19762 From: Silver Spring, MD Joined: |
Gold has held its value by global consensus. Right, and that's what I'm saying; gold has only consensus value.
So where do precious metals get their value? Their value derives from nothing less than their efficacy as a medium of exchange - as a money. Right, and that's my point - gold has no intrinsic value, it has value only as an accounting fiction - as money. Of course, as money it's not very effective, it's incredibly heavy and also quite rare, which means you're limited as to the number of money tokens you can have in circulation with it. Since it's viewed as having intrinisic monetary value, golden currency is vulnerable to inflation by coin-shaving. Any gold-based currency moves almost immediately away from actual exchange of gold, and to articles of paper or base coinage that represent some amount of gold stored safely away. Gold has actually very little "intrinsic value" as money. Paper is a much better material to make money out of.
I will say, however, that it is advantageous for large sums of money to be represented by a rare and precious metal. No, quite the opposite. It's actually an immense disadvantage, because of the weight and inconvenience of gold. Also, gold has some industrial applications - it doesn't tarnish, it's an excellent conductor, it's very ductile and malleable, it alloys easily, it's highly desired as a material for jewelry - and tying up all your gold in coinage means less gold is available to industry. If you want to move large sums of money around, the most advantageous vehicle for doing so is to write a check. One piece of paper! What could be more advantageous than that?
Money cant simply be created out of thin air. Sure it can. Governments print it.
|
|||||||||||||||||||||||||||||||
Phat Member Posts: 18345 From: Denver,Colorado USA Joined: Member Rating: 1.0 |
jar writes: I hear that the dollar is depreciating versus other currencies... Which has more value, a dollars worth of gold or a dollars worth of lead? what would happen if the dollar became essentially worthless? a dollars worth of anything would be essentially microcosmic
|
|||||||||||||||||||||||||||||||
Modulous Member Posts: 7801 From: Manchester, UK Joined: |
We cant simply have wealth created by human value alone. It isn't, it's generated by taking raw materials and creating something that is desired with them. Or by collecting the raw materials. It is generated by doing work. When two people trade their excesses - they can both profit. It's a nonzero situation, if the result is positive, wealth has been created.
Gold is a way to keep the value of antiquity safely in the hands that held it a) that's not necessarily a good thing.b) it's not necessarily true.
|
|||||||||||||||||||||||||||||||
Modulous Member Posts: 7801 From: Manchester, UK Joined: |
what would happen if the dollar became essentially worthless? It would mean that the USA thought they had generated lots of wealth when in fact they had not.
|
|||||||||||||||||||||||||||||||
AZPaul3 Member Posts: 8558 From: Phoenix Joined: Member Rating: 4.9 |
what would happen if the dollar became essentially worthless? It is called hyperinflation. See Germany 1923, Hungary 1946, Zimbabwe today. Can you imagine the Treasury issuing a 1 Trillion Dollar note? You could buy a loaf of bread with it this afternoon but you would need 5 of them to buy that same loaf this evening. What would happen is that other currencies of value, like the peso, would take the dollar's place along with chickens, chocolate bars and cans of tuna fish. And, of course, there would be war. Even though the government prints the money, in this country, they can only print what is ordered by the Federal Reserve Bank which is a quasi-governmental agency "separated" from the political whims that created the German/Hungarian/Zimbabwean scenarios. It is the FedBank that actually "issues" the currency into the economy not the government itself. Still you never know. Better stock up on tuna fish. Edited by AZPaul3, : No reason given.
|
|||||||||||||||||||||||||||||||
jar Member (Idle past 422 days) Posts: 34026 From: Texas!! Joined: |
That still does not address the question Phat.
Which has more value, a dollars worth of gold or a dollars worth of lead? Anyone so limited that they can only spell a word one way is severely handicapped!
|
|||||||||||||||||||||||||||||||
Minnemooseus Member Posts: 3945 From: Duluth, Minnesota, U.S. (West end of Lake Superior) Joined: Member Rating: 10.0 |
At current prices (gold being somewhere in the vicinity of $1300/oz.), I'd bet of lead for maintaining or increasing its long term value.
Gold prices may go up even more, but IMO ultimately the price will go down. To me, buying gold in an exercise in irrationality (or something like that) - It's a bet that the price will not go down before you can sell it. Sure, the wealthy can buy all the gold they want - The essentially have "money to burn". They can collect gold as a hobby. Moose Edited by Minnemooseus, : Add gold price link.
|
|
|
Do Nothing Button
Copyright 2001-2023 by EvC Forum, All Rights Reserved
Version 4.2
Innovative software from Qwixotic © 2024