What do Rising Gold Prices Mean?

http://www.house.gov/paul/\ ^ | 12/05/05 | Rep. Ron Paul

[Proud_texan]

Yeah, and once upon a time people instinctively knew that the world was flat and the sun rotated around the earth.

What makes it wealth other than, like paper money, people think it has value? If the world ends I'd rather have something usable to survive.

I guess I just don't get it, I see it as tulip bulbs. Just ask those poor souls that bought it at $850 in 1980. Don't think they'll ever get their "wealth" back.

At least you could eat a tulip bulb.

[dennisw]

You're dead ass wrong but I won't waste time trying to disabuse you of your notions. Gold has been recognized in nearly all cultures across time as having great value. Paper is recent, plastic more recent. Now electronic blips equal money. Gold endures.

[Proud_texan]

I may be dead ass wrong but my investement in the S&P500 has done a wee bit better in the last 25 years that the "gold value" investor that bought gold at $750 an ounce 25 years ago. That dead ass right fellow is still under water and, well, I'm not. By a long shot.

That is one weird ass definition of dead ass wrong but if that's being wrong I don't wanna be right.

And I have it on good authority that tulip bulbs are far tastier than gold but then it may be a matter of the spices used.

[dennisw]

Heh - It ain't about you and your stock portfolio. We were discussing gold's intrinsic value.

[simon says what]

Gold has beat the S&P 500 price performance by 4.2% this year. Gold is green in this chart and the S&P 500 is blue.

How about 2 years ? Gold has beat the S&P 500 price performance by 6%.

How about 4 years ? hmmm.... gold has beat the S&P 500 price performance by 75%.

How about 8 years ? Gold has beat the S&P 500 price performance by 47%.

[cobaltblu]

Every time I am in the car there is a commercial for gold on the radio.

[palmer]

Silly goldbugs, talking up the value of gold so that they can dump their shares higher.

Does Ron Paul own gold shares? Or is he just a useful idiot?

[mikeybaby]

I think I'll trust PIMCO rather than Mr. Paul.

[redgolum]

Hmm.
Wish I had the cash to get into gold right now. Because I think gold is showing how much inflation we really have.

[Appalled but Not Surprised]

If you don't like those green rectangles, email me privately and I'll give you an address you can send them to.

[Proud_texan]

I define intrinsic value as "The value of an asset based on an underlying perception of the value."

Perception of value is assigned by humans. Given that gold has less industrial value than say copper or oil I believe it to be more vunerable to the whims of cultural perception than other commodities.

[Proud_texan]

Great charts, thanks. Might I ask what symbol/input you used for gold? It's not that I'm doubting you at all, I find them interesting and would like to experiment but I don't know how to create that comparsion on bigcharts other than to use their default for Gold & Silver which is XAU.

[Christopher Lincoln]

Easily as much fun as fishing, imo, but you can't eat what you catch.

As somebody pointed out (I forget who) you probably could eat paper money with enough seasoning (and it would be about as nutritious as some of the things we do eat).

[simon says what]

Great charts, thanks. Might I ask what symbol/input you used for gold? It's not that I'm doubting you at all, I find them interesting and would like to experiment but I don't know how to create that comparsion on bigcharts other than to use their default for Gold & Silver which is XAU.

No problem at all. The gold morning spot price is 38099901. The gold afternoon spot price is 38099902. Also, the silver spot price is 82799W01.

[Christopher Lincoln]

I think that's very unlikely.

[dennisw]

Perception of value is assigned by humans. Given that gold has less industrial value than say copper or oil I believe it to be more vunerable to the whims of cultural perception than other commodities.

I will not deny this. But gold is not a fad or a tulip in a Dutch tulip mania. I'd have to strain to find exceptions to the rule that it's a universal store of value. It's universally viewed as valuable and worth having whether it be in coins, ingots or jewelry. That you can acquire items in trade for your gold

[Smokin' Joe]

Throw away the burger, eat the wrapper. Fewer carbs and all the trans fat. (probably more flavor, too)...

At least if paper money becomes completely worthless, you can use it for tinder to start the fire, and to wipe with....

But I must admit, I like gold, too.

[Barney59]

...That Mom and Dad can finally get some money for that gold they bought in 1988.

[wolfcreek]

I thought about investing in gold but, it's just too heavy to carry.

[Proud_texan]

Nor do I deny that gold has a very long history as a store of value. I should also tell you that I have a modest 2.7% of my investments in gold (in the form of paper that says that I own bullion which might not count for anything depending on the circumstances) as I am priority one bent on increasing wealth. But I am fuzzy on how well that universal store of value will hold up under extreme circumstances.

And perhaps I have (very much) unfairly lumped you with the "when civilization ends gold will be the only thing worth something" which I strongly disagree with. Were that to occur those with the ability to take what they needed/wanted wouldn't worry about gold. (And no, I don't think the world is going to end).

But then maybe I've read too much science fiction (grin).