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%.
Posted on 12/06/2005 11:25:43 PM PST by Capitalism2003
December 5, 2005
The market price for an ounce of gold rose to over $500 last week, a significant milestone for economists watching precious metals and commodities markets. The last time gold topped $500 was December 1987, in the wake of the “Black Monday” stock market collapse earlier that fall.
Gold prices historically rise when faith in paper currencies erodes, as investors seek the intrinsic value of gold to protect themselves from inflation. It’s interesting to note that while the U.S. dollar has regained some of its value relative to other paper currencies like the Euro, it continues to lose value relative to gold and other hard assets. This shows the folly of using one fiat currency to value another.
Gold is history’s oldest and most stable currency. Central bankers and politicians don’t want a gold-backed currency system, because it denies them the power to create money out of thin air. Governments by their very nature want to expand, whether to finance military intervention abroad or a welfare state at home. Expansion costs money, and politicians don’t want spending limited to the amounts they can tax or borrow. This is precisely why central banks now manage all of the world’s major currencies.
Yet while politicians favor central bank control of money, history and the laws of economics are on the side of gold. Even though central banks try to mask their inflationary policies and suppress the price of gold by surreptitiously selling it, the gold markets always cut through the smokescreen eventually. Rising gold prices like we see today historically signify trouble for paper currencies, and the dollar is no exception.
President Nixon finally severed the last tenuous links between the dollar and gold in 1971. Since 1971, the Federal Reserve and U.S. Treasury have employed a pure fiat money system, meaning government can create money whenever it decrees simply by printing more dollars. The "value" of each newly minted dollar is determined by the faith of the public, the money supply, and the financial markets. In other words, fiat dollars have no intrinsic value.
What does this mean for you and your family? Since your dollars have no intrinsic value, they are subject to currency market fluctuations and ruinous government policies, especially Fed inflationary policies. Every time new dollars are printed and the money supply increases, your income and savings are worth less. Even as you save for retirement, the Fed is working against you. Inflation is nothing more than government counterfeiting by the Fed printing presses.
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.
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.
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.
Heh - It ain't about you and your stock portfolio. We were discussing gold's intrinsic value.
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%.
Every time I am in the car there is a commercial for gold on the radio.
Does Ron Paul own gold shares? Or is he just a useful idiot?
I think I'll trust PIMCO rather than Mr. Paul.
Hmm.
Wish I had the cash to get into gold right now. Because I think gold is showing how much inflation we really have.
If you don't like those green rectangles, email me privately and I'll give you an address you can send them to.
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.
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.
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).
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.
I think that's very unlikely.
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.
I thought about investing in gold but, it's just too heavy to carry.
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).
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