Posted on 12/07/2005 10:10:37 AM PST by DebtAndDelusion
The price of gold passed $500 an ounce last week, its highest level since the late 1980s. This is either an ominous development—or it isn't...
If you'd lived a century ago, gold would have been the basis of your money. Great Britain dominated the global gold standard; its currency, the pound, was freely convertible into gold...
On April 5, 1933, President Franklin D. Roosevelt ordered Americans to surrender their gold coin; the country effectively went on a paper-money standard...
Higher demand collides with constricted supplies; wham, prices rise...
Gold is an unending mystery, because its value lies less in what it does for us (it is not like sugar, copper or oil) and more in what it symbolizes. It is almost as unfathomable as the human drama itself.
(Excerpt) Read more at msnbc.msn.com ...
Within that range gold holds a store of value -- insuring wealth -- unlike any other. The west seems to continue selling gold, while China, Asia and Islamic entities buy it. True, there are some pretty wild conspiracy theories floating around out there about the price manipulation of gold -- but that is always the case when uncertainty arises and people can't get straight answers from those in charge.
M-3 in March for example. No more reporting, no elected leaders mentioning it.
The uninitiated think those holding gold like seeing the price go up. Heck, that just makes it more expensive to acquire more gold.
Then again if the price of gold rises slower than the fall of the dollar I guess it still makes it cheaper. Gold is going to the moon.
HG
And since you just registered the other day, I'll bet that you are selling it, too.
"M-3 in March for example. No more reporting, no elected leaders mentioning it."
Agreed. An important development. There goes the last published statistic covering "money market" activity.
What is most interesting about the current "money and credit" situation is that it seems as if all the central bankers are in collusion. This is the first time all of the world's currencies have lost value concurrently and equally to my knowledge.
Customary here for those starting a thread to stick around and respond to the posts.
All I need to know about Newsweek's expertise in gold market sentiment was in their July 19, 1999 issue: "Gold Is Losing Its Glitter". They were tsk-tsking that "last week...gold hit $256, its lowest mark in more than 20 years." They rang the Sell bell at the bottom of a twenty-year bear market almost to the day and dollar.
Thanks for the tip. This cyber age and Internet posting all a bit new to this old timer. A lot of etiquette to acquire.
For the Blood gentleman, heck no I'm not selling gold. Gotta save that for the day the dollar goes into the tank in a big way. This run-up is disturbing because the ounce of gold I could buy for 460 a few months ago costs a lot more today.
Don't know your age or your situation and frankly it's none of my business. But a lot of older folks, retired and on a pension, live on a fixed amount of dollars each month.
When the value of those dollars fall it hurts.
Thank you again Iris, I can see this Internet is going to be a lot of fun.
HG
"the evidence of increasing inflation is thin. True, oil temporarily made it worse. But excluding erratic food and energy prices, inflation has remained at about 2.5 percent since early 2004. Perhaps gold buyers glimpse dangers not apparent in the statistics."
LOL, this passes for economic analysis at Newsweak. If you don't eat, heat or drive there is no inflation. Plus M3 going stealth in March '06. Maybe Gold buyers aren't so dumb after all.
LOL. His only other post here on FR was ... you guessed it... about gold.
gold bug ping, lol
Gold has no more inherent value than anything else -- the laws of supply and demand apply to it as much as they do to currency.
If you'd kept that ounce of gold since 1900, you'd have lost a lot of money. (1) You'd have had zero positive return on your investment. (2) You'd have lost money in storage, transaction and authenticating fees, and you'd have had capital tied down in gold that you could have spent on better investments (securities, real estate, etc.).
Maybe if they're in a bank account, but not if they're invested in securities -- stocks are inherently inflation resistant. Moreover, if you're on a fixed income, by definition you need an income -- something securities can provide. Gold has zero yield.
Gold is not held for returns, it's for protecting what you have. It's insurance against currency debasement by disreputable governments like the U.S. since FDR.
Except over the long term, you always lose money in gold.
It's insurance against currency debasement by disreputable governments like the U.S. since FDR.
Stocks are better insurance in an inflationary climate, plus they actually yield returns.
Don't worry about anti-gold posters. They are simply bitter that they didn't buy in 1999. And, boy, do they hate to be reminded of the price of gold now. ;-)
The reason, IMO that it is rising in price now is the "feeding frenzy".....a speculation driven price rise. Maybe it continue, maybe not. There is no increased industrial demand that I know of that would drive gold prices higher.
If I had a bunch of gold right now, I would take my money and run.
I think there are going to be a lot of sorry people who "get in" at the top.
Silver is another story...governments all over the world are moving to practically ban the use of lead in solder. Guess what takes the place of some of the lead...yyyyeeeessssss.....silver.
"over the long term, you always lose money in gold"
Please explain exalted wise one.
Now Mr Kaker you say if you had held that ounce of gold since 1900 you would have lost a lot of money. I don't know how I've made it all these years but I know you are wrong on that account.
As you know 1900 was the year the US went on the gold standard until FDR made his thievery in 1933. That year they would have given you a nice 20 dollar gold certificate for your ounce of gold - and vice versa. You could trade the certificate for gold at the bank -- it was redeemable.
Now today that 20 dollar gold certifacte has some collector value -- I guess. I mean surely people collect such things. (I know in my youth there were still a bunch of the old timers holding the Confederate war bonds as souveniers.) But that ounce of gold goes for about 517 today.
And probably more tomorrow. In 1900 the right decision might have been to keep that ounce of gold and let the government keep their piece of paper.
When I was young a lot of people talked about gold. They just didn't have an Internet and do it with a computer.
I imagine sooner or later we will see what happens. Always turns out that way.
HG
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