Posted on 10/08/2008 5:41:58 PM PDT by TigerLikesRooster
What is an ADV?
Avg. Daily Vol.
That reveals precisely my question. Why should anyone trust silver or gold? Because thousands of years of human culture have irrationally placed value on these two very "ordinary" elements? They are shiny, and rare. They have remarkable properties, to be sure, but the Egyptians were not informed of these properties 4,000 years ago when they valued them.
What is the intrinsic (economic) value of gold in a world economy that no longer prices it relative to other economic instruments? It strikes me that gold's value is strictly dependent on an economic system that has afforded it value as a traded commodity. Gold is currently worth $900; OK then. What happens if the dollar doesn't exist? Doesn't the prospective value of gold depend on a continued reliance on the way the world works right now?
I would be careful on that. The Dollar and Gold both rising at the same time indicates different strategies.
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