Posted on 06/28/2002 3:00:46 PM PDT by Lazamataz
Well, 'the new spoosman' and many like him have told me for months that the 'fiat' currency is worthless, and gold is the only valuable currency out there. Disregarding for a second the fact that these gold bugs are so ready to part with their gold for those 'worthless fiat notes', I would like to point out that since the height of their caterwalling, Jun 01 2002, gold is down from 326$ an ounce to 314$ an ounce today. That is a 4 percent drop in less than a month.
The 'fiat currency' people are out to lunch. I don't expect gold to do any better than index with inflation in the long run, and today managed to show a savage loss of $5 an ounce.
Not the gold-in-handers. Gold is gold, whether from a bank or a little shop on the corner. Cash-n-carry.
But they are losing far less than those who are holding currency or whose investments are performing at less than the rate of inflation (real probably 15-17% or so). The only way to "invest" in gold, to aim to increase your capital by gold investment is to buy gold mining stocks because they ctend to rise much faster than does the nominal price of gold in an infflation.
Yes, gold mining paper is good for investing now, but it is paper and paper will fail like the rest of the fiat currencies in a catastrophy. For survival, several ounces stashed here and there will be the way to go.
My grandmother had crippling arthritis since she was in her 20s and my grandparents spent 50 years trying every cureall that came down the road. I well remember cases of alfalfa capsules... Actually gold shots were the only one of those quack cures that accomplished anything and they did giver noticeable relief for a year or so.
The amount of gold used thusly is miniscule, of course. --------------------------------------------------------------------------------
It is certainly that and is, indeed, the same as IBM or Frantic.com and its use is subject to similar risks, primarily as to whether the government continues to inflate, or as to whether you can judge the point at which the government will cease to inflate.
Copyright (c) 1965.
It still cost you .5-3% to buy and will cost you the same to sell.
The price of a good quality suit that does not suffer from inflated designers' labels has not changed in a century in terms of gold. About aan ounce of gold will get you a nice suit. When the gold price is rising the dollar price of that suit will lag a bit(gold is at abt $320) until the general price level starts jumping then that suit will begin to outpace the price of gold for a bit.
So, once again: Even the price of Gold is "fiat." Man, you guys have yourselves an easy out for every eventuality, don't you?
BTW, if my new NFL team the Houston Texans don't go undefeated this year, it's because the referees cheated.
You heard it here first.
First, what is money?
Second, what is value?
And last, what specifically does money measure? Especially the total amount of money in circulation, not just the individual dollar bill. How much total money is the right amount?
The answers to these questions will separate the economists from the pretenders...
Illbay is on my side.
This is a sure indicator that I am on the wrong side of this, or any other, argument. I am now willing to consider that gold might be a good investment and that stocks may not recover after all.
Call it the 'Illbay Factor' -- if he agrees with you, you are probably wrong.
But only for survival.
Gold is now an industrial product.
Modern mining/refining techniques can produce any amount you need for about $300/oz. When gold is cheap mines and leach fields shut down. When gold is expensive they turn nice profits. Unless the gold producers price structure changes it will be hard to maintain a price much above the $300 inflation adjusted price (obviously the inflation adjusted cost of mining and refining the gold).
Gold mining companies might be a good investment at some times. Guns might be a better investment for the only scenarios were gold looks good to me.
One more step along the road to proclaiming "Go Pat Go!!!"
You have not been paying attention. Governments can set the value of their money on whim. They just produce more of it or less of it. They cannot change the value of an ounce of gold in relation to goods and commodities. An ounce of gold would buy a good suit in 1914. An ounce of gold will buy you the equivalent suit in 2002. Gold does not change in value because there are no great increases in quantity due to new methods of synthesisor new fertilizers and there are no substitutes. Gold cannot be counterfeited because the alloy necessary to mimic the color and weight of gold would actualy be worth more than the same amount of gold (gold is heavier than lead, Palladium, etc. are more costly than gold. Gold mining has produced a very steady increase in the amount of gold in the world with 2 minor exceptions. There was actually a gold inflation due to the quantities of the stuff dumped into the system by Spain from the Americas in the 17th century and there was a much smaller inflation due to the California gold rush. But even those events evened out and gold was very little changed in value from say, 1500, to 1900.
Richard W.
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