Gold is heavy. Gold isn't mobile. Gold is extremely limited and the supply sporadically changes. Paper currency is light. Paper currency is mobile. Paper currency is abundant, limited only by the federal reserve to maintain value. Its a matter of convenience and the fact that paper currency is so easy to stabilize compared to gold. As far as utility gold isn't valuable. Just like paper currency if everyone agrees that the material has monetary value, then it will have monetary value.
Coffee is the nectar of the gods and doesn't abide by the same rules as terrestrial commodities. Investing in coffee is a no-lose situation. If the market goes down here, you'll get your reward in heaven.
There is no "gold standard", it is simply using gold as money, or not. And after 5,000 years, it is not so easy as just "dropping it". I mean, we certainly have for a few decades compared to a few millennia, but the consequences will not be something you can just brush off. Gold's value is not in its industrial uses(although it does have that too). It is in its intrinsic use as MONEY. What we've used it for since recorded history. Because we have gone away from that for 40 years, out of 5,000, it is suddenly useless? That is laughable, especially considering every other example of when man deviated from gold as money, he failed miserably. Gold is a vehicle for saving because it is MONEY. It is the only thing that fits all the properties of money: Durable Divisible Portable PRESERVER OF VALUE Nothing else comes close. Least of all the paper in your wallets. In theory this is true. In practice, left unchecked, governments- a reflection of man himself, is corrupted by greed and arrogance. It is our nature. When left unchecked, our actions are predictable and so are the results. We borrow and spend beyond our means until bankrupt. Every. Single. Time. Gold as money is our check and balance. It is a worthy dream to have nations and currencies based in the work and value that they produce. But one look at Helicopter Ben's printing presses run amuck should tell you how naive and infantile that dream really is.
Various quotes from Warren Buffett about gold. “Gold gets dug out of the ground in Africa, or someplace. Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head.” “The problem with commodities is that you are betting on what someone else would pay for them in six months. The commodity itself isn’t going to do anything for you….it is an entirely different game to buy a lump of something and hope that somebody else pays you more for that lump two years from now than it is to buy something that you expect to produce income for you over time.” “Gold is a way of going long on fear, and it has been a pretty good way of going long on fear from time to time. But you really have to hope people become more afraid in a year or two years than they are now. And if they become more afraid you make money, if they become less afraid you lose money, but the gold itself doesn’t produce anything." “I will say this about gold. If you took all the gold in the world, it would roughly make a cube 67 feet on a side…Now for that same cube of gold, it would be worth at today’s market prices about $7 trillion – that’s probably about a third of the value of all the stocks in the United States…For $7 trillion…you could have all the farmland in the United States, you could have about seven Exxon Mobils (NYSE:XOM) and you could have a trillion dollars of walking-around money…And if you offered me the choice of looking at some 67 foot cube of gold and looking at it all day, and you know me touching it and fondling it occasionally…Call me crazy, but I’ll take the farmland and the Exxon Mobils.” “The major asset in this category is gold, currently a huge favorite of investors who fear almost all other assets, especially paper money (of whose value, as noted, they are right to be fearful). Gold, however, has two significant shortcomings, being neither of much use nor procreative. True, gold has some industrial and decorative utility, but the demand for these purposes is both limited and incapable of soaking up new production. Meanwhile, if you own one ounce of gold for an eternity, you will still own one ounce at its end.” “What motivates most gold purchasers is their belief that the ranks of the fearful will grow. During the past decade that belief has proved correct. Beyond that, the rising price has on its own generated additional buying enthusiasm, attracting purchasers who see the rise as validating an investment thesis. As 'bandwagon' investors join any party, they create their own truth — for a while." “I have no views as to where it will be, but the one thing I can tell you is it won’t do anything between now and then except look at you. Whereas, you know, Coca-Cola (NYSE:KO) will be making money, and I think Wells Fargo (NYSE:WFC) will be making a lot of money and there will be a lot — and it’s a lot — it’s a lot better to have a goose that keeps laying eggs than a goose that just sits there and eats insurance and storage and a few things like that." Lifted from http://www.minyanville.com/trading-...ng-investing/10/3/2012/id/44617#ixzz2ccZL05mi
I am no expert on investments, but I've long endorsed competition in currency. Just take away the USD's monopoly status and let's see what happens. I have a feeling that we would see crypto-currencies and gold "receipts" be used frequently and that people would in time abandon the USD. If the paper money/central bank set up is indeed better, then there's nothing to lose by legalizing competition in currencies.
Paper currency is so easy to stabilize that every single one of them eventually stabilized at the same price. Zero. Gold has been valuable since mankind first learned the definition of value. Yet because in your generation(and mine) we were taught otherwise, it magically makes it so? How are we so arrogant? Again, just as an aspirin has no industrial value as it is medicine. A cheeseburger has no industrial as it is food. Watching a Rockets game has no industrial value as it is entertainment. Gold has little to no industrial value. Because its utility and value is MONEY.
Why not diamonds? Why not rubies or emeralds? They've always been considered valuable as well for the same reasons as gold. For someone who is a frequent poster in the Stocks thread, you sure seem to be missing the point of fiat currency in the first place.
they are all unique and must be assayed by an expert for each stone in order to determine value. whereas gold is just a simple element that can be easily swapped
Contestant #1: Alex I'll take 'Tradable Tandems' for $1000 Trebek: The answer is.... Gold and fringe NBA small forwards. Contestant #2: What are things CXbby loves? Trebek: Correct! And you have control of the board...
No where do I encourage or endorse gold as an investment. In fact it does not make any sense to invest in gold, as Buffet correctly stated, since it is not productive. You should invest in businesses. But, save in MONEY. This is what Buffet fails to understand about gold. It has nothing to do with betting on fear. That is just a trade fanned by speculators. In the past 100 years, America has been the greatest and most successful nation the world has seen. Yet if I saved my wealth 100 years ago in gold, its value would still be retained today. It is certainly not betting on the country to fail, since we've had a spectacular run during that time. Mind you, there have been plenty of other asset classes you could have put your wealth in and produced greater gains, such as stock and businesses. As you should expect, since those are productive industries. But you also took on a risk of total loss with those INVESTMENTS, and rewarded with higher returns(if they survived). Gold is not an investment, it is money, a vehicle for saving.
the land itself could be a natural resource. Then there's the whole other lot of unlimited things land can do. It produces. Like Buffett said gold doesn't produce anything But it'll always capture the human imagination and association with wealth. It's not useless
Gold minted in the US, or in Canada, or in Austria or in China are interchangeable. Diamonds are individually valued. It also is not divisible, where as a 1 ounce gold coin's value is divisible into 1/4, 1/2, 1/10. I understand full well the point of fiat. The world has long forgotten its point, though.
There are a lot of things that are more valuable than gold. No one is arguing that. However, gold is money. You should save a portion of your wealth in money, as well as investing in productive businesses. Land is not money.
Ok put your money in gold. I don't care. It's been a better INVESTMENT than holding dollars. If you don't want your dollars to lose value over time then you should invest them into gold, land, stocks, preferred stock, bonds, business, etc. Just buy at reasonable prices, reinvest dividends, and you will be fine. And Buffett understands precious metals just fine. You do know he invested in silver at one point, right? Lastly, you do recognize that gold has a strong tendency to underperform for years and years after huge price spikes? It doesn't just store wealth. If you bought gold after the last price spike in the 80's then you lost money for a couple decades.
