Gold is not meant to be profitable, nor is it ever profitable. And it is useless to compare it to other asset classes because gold/silver are the only assets of its kind: money. For example, when gold went from $35 to $1,300 the past 40 years, it did not increase in value, nor did you profit any from being in it. It was the value of the US dollar that depreciated by 98% and as a result you see the nominal increase in the price of gold. You did not get any richer by owning gold. Why should you? It is a piece of unproductive metal. One ounce of gold still bought roughly the same number of barrels of oil since then. One ounce of gold still bought roughly the same number of bushels of wheat. Roughly the same sq feet of houses, and same acres of land. Again, you did not get richer. However, you did stop the slow bleed that is the inherent property of fiat currencies. So you didn't get any poorer either. That is the purpose of gold, or money, a preservation of wealth. Comparing Money to risk assets such as equities or debt like bonds is apples to oranges. You could say that they have a higher return over time, or that they are less "volatile", but you are ignoring the other side of the coin to risk assets: the risk. Total loss is inherent in all risk assets. The likelihood of that coming to fruition is determined by the specific asset, but no risk asset is risk free. Gold/money has no risk of total loss. 1 ounce will always be 1 ounce. Its value in dollar terms may fluctuate in the short term. But its value in real terms is one of the least volatile and the only true safe asset in the world, as seen by generally consistent gold: oil, gold:wheat, gold:realthings ratios across decades, centuries and millennia.
As I said in my previous post, gold has the potential to be completely worthless one day. But the value of Chocolate will never drop, and it will sky-rocket in an apocalypse beyond your wildest speculations.
On the day humans are eating other humans for food, I agree, gold will be worthless. Then again, your chocolates will be worthless as well, since now that I know this, the first person I am eating will be you, and having your chocolates for dessert. Anything between that point and now though, gold will retain its value as Money, and when needed, a unit of exchange. Gold's purpose really has nothing to do with these dooms day scenarios. The couple of American Eagles the kooks buy are irrelevant. The real owners of gold are Nations, because it is a measure of sovereignty. And also, individuals of real wealth, who are unconcerned with a return on their wealth, just a return of their wealth.
Come at me bro! I'm stashing more than Chocolates and Silk stockings. I've got 1000s of cigarettes and lighters....**** matches. We haven't progressed this far to where we regress back to using matches and sticks for fire. I'm also stocking hair gel and relaxers for my blackhairmedia army! Don't underestimate a sista army. Imagine a legion of Michonnes with good hair! With my stockpile of physical commodities that never drop in value vs a shiny rock, you don't think I can command an army before you find me.
Incorrect once again. While it is true that you are stocking physical commodities as well, which means you are already ahead of the paper asset bagholders, an allocation in true money still has its inherent advantages. Case in point, for your stash of hair gel, cigarettes and matches, no, lighters, to retain any value whatsoever, you would be required a proportional supply of smokers and this guy: http://bbs.clutchfans.net/showthread.php?t=189712 Anything short of that, your assets would be wholly illiquid and unmovable. On the other hand, this is where gold:money's value as an unit of exchange truly shines, so to speak. I get to buy as much chocolate as I want for myself from the guy who just wanted silk stockings in exchange from a third party, who had no interest in chocolate but rather in hair gel. Through a common medium of of exchange, gold:money, all three parties with diverse interests are satisfied.
To the OP, the real world scenarios currently being discussed is further application of the difference between physical money: real gold, and paper: internet GLD shares. Ask yourself, will anyone ever even consider exchanging their hair gel for your GLD shares? HA!
Even if you are right that gold will still be valuable to a commodity trader in a post-apocalyptic world (Mad Max says gasoline will be more valuable, btw), who will you be buying the chocolate and Victoria's Secret undies from??? Me! Make no mistake...Sex is the timeless commodity that predates everything. The guy who is set up with commodities to please women will rule the world. Chocolate Victoria Secrets undies, and Hair gel and relaxers for the blackhairmedia sistas Dude...I've thought this through. call it: heypartner's secret
You are still looking at this the wrong way. I am not denying the feasibility of your asset allocation. Where you are confused is when you say things like gasoline is more valuable than gold, or chocolate is more valuable than gold. No. Those things are not more valuable than gold, nor is gold more valuable than them. Gold is gold. It is the measure of all things and all value. It is universal. So your gasoline will be worth X amount of gold. Your chocolate will be worth Y amount of gold. Your hair gel will be worth Z amount of gold. Sex will be worth XYZ amount of gold. So on and so forth. All things will be measured in gold, which is the point of money, and because gold IS money. Anyways, it seems we are no longer disagreeing. Our points of view are not mutually exclusive.
Sex predates gold as a commodity of exchange. Come to me when you need some sex from a beautiful woman with clean hair, wearing fresh sexy panties. Bring something I can use, though. I don't want your gold. Hell, bring a bottle opener. I might need that.
If you show up at the right time at one of my post-apocalyptic parties, when we can't find our bottle opener, then yeah...one of my girls might let you smell her once-worn panties from yesterday, in exchange for your bottle opener. But we will probably already have enough shiny rock door stops around the castle.
You guys stockpile chocolate, gold, silver, women and bottle openers. I'll stockpile guns and take your chocolate, gold, silver, women and bottle openers.
Yeah, not only am I stockpiling gold and silver, but I also am amassing stores of tea, coffee beans, and spices. All things that I could barter with. I'm going to need another cart and mule to haul my stuff down to the market at this rate. I've got fat sacks yo.
No you won't. That's naive. Who said anything about a trader not being able to build an army. My blackhairmedia sistas army of a 1,000 Michones with good hair will take you down, before you even get a mile away from me. What you will be is a one man army against all the other one man gun guys stockpiling guns. Your guns will have major competition...to the point of killing yourselfs before you even see me. At some point you will have to organize around someone like Gus Fring or Damon Pope who get their protection through commodities vs blasting their way to the top. Dudes I've thought this through. Control access to women, and you control everything.
Okay, if you want to go down that road, then lets examine whether your commodity of exchange passes the required characteristics of money. 1. Durability. There is no way to store your commodity, and the vehicle of your commodity is delicate both physically and emotionally. Also not only are they perishable, worse still, their value and quality depreciates through time. FAIL. 2. Divisibility. You may have a unit of account, but since you cannot divide further down from 1, this cheapens your overall commodity. ie. If you merely wanted a bottle opener: cost you 1 secks. FAIL. 3. Portability. Highly inconvenient to carry around. Certainly not in great numbers. Although I have heard of certain buses designed for this explicit feature, even in modern times. DIFFICULT. 4. Fungible. The quality and value of each unique secks is highly irregular. Impossible for any sort of uniformity. FAIL. 5. Sufficiently Rare. 6. Un-consumable. Not only is your commodity immediately consumed, there is no real way to quantify how much secks is left, since it is a repeatable act. FAIL. FAIL. FAIL. Overall, your unit of exchange fails on nearly all accounts, not passing a single criterion requisite for true qualified Money. It is no contest compared to the one true king of monetary exchange.
^^^ Dude, say what you want, but Women and Sex ruled the World before your shiny rock. And they will again. We call them a commodity, but they just allow us to say that. Welcome to the world of women. They will win the apocalypse. Mark my words. And they won't be impressed with shiny things on their fingers anymore, because they will know they own the future on womankid
Dollars in and of themmselves aren't important. Wealth is. Think very carefully about your devaluation argument. Because you are, in essence arguing that people were30 times richer back when the fed was established as opposed to today just because their dollars were worth more.
