Posted on 09/28/2009 3:30:09 PM PDT by maclogo
Many gold companies use this ending line in their advertisements: "Gold has Never been worth Zero."
Is that really the best ending sales pitch they could come up with?
.
I'd bet it'd get you killed most likely.
What, you think the baker doesn't have a sawed off 12 gauge under the register?
I aim to be long on coffee and toilet paper in case of emergency. I think those commodities would be good for bargaining :-)
The question you pose becomes problematic even with NO inflation. Just secular increase in production causes it to become significant since the rate of increase in the world supply of precious metals is too low, <1.2% per yr since 1500, to match the economic growth rate of around 3%. It is worth noting that the 1.2% rate includes the tremendous hoards taken from the New World by the Spanish something never to be repeated.
Thus, a gold standard leds to permanent bias to slow growth and wars over money supply. These are among the principle reasons we will never see metal based money supplies barring a Mad Max world of the future.
Value is not necessarily tied to scarcity.
If you can’t do something useful with a commodity, what is it really worth?
You can’t eat Gold.
If there is no one to trade with it is worthless for the time.
I do own both Gold and silver, but only in small easily traded denominations.
Per previous posts regarding trading rounds for food ... I wonder what I could trade a 30-30 round for ....
Zimbabwe - gold for breadMDC activist Sam Chakaipa returns to his village in rural Zimbabwe to find his friends and neighbours starving to death, reduced to panning gold powder from the rivers to exchange for food at an exorbitant rate ...
How it works is, they pan in the rivers for gold. Their currency is worthless. They use the gold to buy food, but get a rather bad deal, because of the collapse of the market and law and order in Zim. However, they do get some food - a dozen loaves of bread for a tiny little spec of gold.
Those that kept their money in cash, get nothing. Those that kept their money in gold, get to trade it as a currency.
These few people are fortunate and are exploiting a niche market where gold can be traded.
Can I take my 1 Oz. Mapleleaf down to the local Krogers to buy a pound of hamburger and some Buns? No.
Should the Starving Hoards from L.A. descend upon the American River in hopes of getting a few grains of dust?
Probably not a good Idea right now.
The Trade in gold dust is and has been mostly confined to Frontier Settlements.
If things get Really Bad, There is a possibility that Gold and Silver may be traded for goods, Until then it is a Hedge.
I think they are working the inference to something lime Enron or AIG or GM. Companies that were worth something once, but are not worth anything now.
It sounds like you have a functioning brain. Therefore, the pitch doesn’t work.
Gold is not an investment. Its a hedge against inflation. The stock market works the devaluation of the currency in as well—just not as directly. The stock market goes up, gold goes up and it takes more dollars to buy a commodity. If you own gold, in the end the “value” of the gold doesn’t change.
When you think something can't go higher, it does. When you think something cannot go lower..it does.
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