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Gold Money

After thousands of years, gold is still money. Gold is STILL the store of value people use and flock to when worried. U.S. money and gold coinage is still the most popular and widely held. I admit that I have always been a gold bug, but come on, the facts and record are right there. In my view, the fiat money system the world uses only makes a better case for never forgetting gold as money and never dismissing it as a part of your long-term "investment portfolio." In short, it's hard to dispute the wisdom of keeping U.S. Gold coins in your overall mix. A good case can be made for silver too, which has been money much longer than gold, I believe. However I think most people would agree that Gold is King. I've studied the many forms of owning bullion over the years and it's hard to imagine a well-rounded portfolio not having U.S. Gold coins.

Discuss!

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Comments

  • MrKelsoMrKelso Posts: 2,909 ✭✭✭
    image

    No argument here.


    "The silver is mine and the gold is mine,' declares the LORD GOD Almighty."
  • Steve27Steve27 Posts: 13,275 ✭✭✭
    Gold, great stuff for making jewelry, but other than that it doesn't have much use/value in a technologically advanced society.
    "It's far easier to fight for principles, than to live up to them." Adlai Stevenson
  • BearBear Posts: 18,953 ✭✭✭
    Gold, as a store house or reletive real value

    exists, because people have confidence, that

    it serves that purpose.
    There once was a place called
    Camelotimage
  • StorkStork Posts: 5,206 ✭✭✭✭✭
    I saw Gold Money and thought you meant GoldMoney.com. Fiat bothers me. It never seems to end well.

  • 2bucks2bucks Posts: 636 ✭✭✭


    << <i>Gold, great stuff for making jewelry, but other than that it doesn't have much use/value in a technologically advanced society. >>




    We wouldn't have such an advanced society without gold. Gold is in every electronic device you own.
  • Hi Bear,

    "Gold, as a store house or reletive real value exists, because people have confidence"

    I don't know if I agree with this if you mean it exists just because people have confidence. I think gold as money/store of value has always existed for one larger reason, which is that it has intrinsic value.
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  • TWQGTWQG Posts: 3,145 ✭✭


    << <i>Gold is in every electronic device you own. >>



    paper/wood products are used in everything that you own.image
  • fcfc Posts: 12,793 ✭✭✭
    ask me, the whole jewelry thing is not as important to
    an average citizen when speaking about gold.

    it is all the other uses which makes it valueable. mostly
    due to its qualities like malleable, ductile, etc...
  • trozautrozau Posts: 3,455 ✭✭✭
    Come on guys, everyone knows that gold is nothing but a barbarous relic! image
    trozau (troy ounce gold)
  • fcfc Posts: 12,793 ✭✭✭
    like imagine using lousy old silver on connectors.
    darn things would be toned and corroded in a few months
    in bad conditions.

    but most excellent gold will not!
  • GeminiGemini Posts: 3,085
    I have a gold tooth silver in my fillings and a wrist held together with titanium. I love dem precious metals. image
    A thing of beauty is a joy for ever
  • MrKelsoMrKelso Posts: 2,909 ✭✭✭


    << <i>Come on guys, everyone knows that gold is nothing but a barbarous relic! image >>



    I agree, send all your old Gold over to me and i will get rid of that old relic for you image


    "The silver is mine and the gold is mine,' declares the LORD GOD Almighty."
  • PerryHallPerryHall Posts: 46,553 ✭✭✭✭✭


    << <i>

    << <i>Gold is in every electronic device you own. >>



    paper/wood products are used in everything that you own.image >>



    Ahhh, but gold is more resistant to termite attack.image


    Worry is the interest you pay on a debt you may not owe.
    "Paper money eventually returns to its intrinsic value---zero."----Voltaire
    "Everything you say should be true, but not everything true should be said."----Voltaire

  • roadrunnerroadrunner Posts: 28,313 ✭✭✭✭✭
    A one ounce gold coin came in handy to the oppressed in years past as they fled countries under turmoil. Having to lug a few cords of wood, 300 gallons of oil, or 300 lbs of meat as you tried to escape would have indeed been a feat. "Excuse me sir, let me give you 5 gallons of oil for this meal."

    roadrunner
    Barbarous Relic No More, LSCC -GoldSeek--shadow stats--SafeHaven--321gold
  • WillieBoyd2WillieBoyd2 Posts: 5,238 ✭✭✭✭✭
    I once saw a US Air Force space satellite before it was launched.
    It was covered in gold foil.
    I assume the foil stops some types of space radiation.
    https://www.brianrxm.com
    The Mysterious Egyptian Magic Coin
    Coins in Movies
    Coins on Television

  • Gold is beautiful and useful!
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  • cladkingcladking Posts: 28,702 ✭✭✭✭✭
    I hate to rain on your parade but gold is obsolete as money. It still serves a function as
    a store of value so long as people believe it has value. It is obsolete as money because the
    planet can not support 6 billion people without a great deal of interconnectiveness and gold
    money can cause this to break down.

    The most important characteristic of money when coins were first made in electrum (gold con-
    taminated with silver) was that it was percieved to have value so people would accept it in
    lieu of bushels of grain or other commodity. Today the most important attribute of money is
    that it is stable.

    Strictly fiat currencies have the weakness of being easily degraded by politicians who wish to
    buy votes but then, politicians always found a way to degrade currency when it was made of
    gold also. The best solution is currency which is defined as a share of the wealth of the issuing
    authority and is limited in its production by fiat.
    Tempus fugit.
  • fcfc Posts: 12,793 ✭✭✭
    cladking,

    you make a fine arguement, but i think you are wrong.
    why does gold have to be the only metal used as money?
    we have silver, copper, platinum, etc...

    we could coin and back a lot of money using a fractional
    technique. do we really need 5 billion oz of gold to cover
    5 billion dollars? nope. a fraction would do because everyone
    will not turn it in at once.

    i trust gold more than i trust my government. until then i will
    disagree.

    edited to add: i know your arguements are parroted by many
    other people. they acccept it as fact. yet fiat currency is a baby
    compared to honest gold.
  • roadrunnerroadrunner Posts: 28,313 ✭✭✭✭✭
    Pure US fiat is only 35 years old. Gold has been around for thousands of years. Derivatives are also a "great thing" too. They allow companies to spread out their risks. Unfortunately today derivatives are estimated at 3X or more the value of the entire world's wealth...and the majority of this is unregulated, non-transparent, and difficult or impossible to value consistently. But who cares when bankers love them. Derivatives (other than commodity futures) barely existed when we went off the gold standard in 1971. We are very early into both of these experiments.

    It's just a little premature to call both of these experiments a success story. The French Assignats, South Sea Bubble, and the John Law scam would tend to support otherwise.

    roadrunner
    Barbarous Relic No More, LSCC -GoldSeek--shadow stats--SafeHaven--321gold
  • BearBear Posts: 18,953 ✭✭✭
    Everything on the planet has intrinsic value. Diamons, golds, silver , Platinum

    are all used in industry, chemistry, electronics. However, as a storhouse of

    value gold seems to have historically taken the prime position. There are several

    reasons for this.

    1. Gold is natually found in combination with silver in a compount knwn as electrum.
    Such nuggets were standardized roughly and formed the early coinage systems.

    2. Like the other mentioned substances, gold is reletively rare.

    3. Gold is malliable, pretty to look at together with silver, is easy to work into objects
    of art or coinage.

    4. All of the above sustances could be used as a storehouse ofvalue, however diamonds
    are difficult to grade correctly, platinum is hard to work, silver is bulky. The one thing that makes
    gold stand out in 1st position is its ealy use as coinage, ease of storing and general acceptance
    by people and nation states as a source of currency backing , monitary restraining influence on the
    printing presses and as a storhouse of value
    There once was a place called
    Camelotimage
  • 2bucks2bucks Posts: 636 ✭✭✭


    << <i> cladking,

    you make a fine arguement, but i think you are wrong.
    why does gold have to be the only metal used as money?
    we have silver, copper, platinum, etc...

    we could coin and back a lot of money using a fractional
    technique. do we really need 5 billion oz of gold to cover
    5 billion dollars? nope. a fraction would do because everyone
    will not turn it in at once.

    i trust gold more than i trust my government. until then i will
    disagree.


    edited to add: i know your arguements are parroted by many
    other people. they acccept it as fact. yet fiat currency is a baby
    compared to honest gold. >>



    Enough said.
  • relayerrelayer Posts: 10,570
    To escape the law after stealing $1 million worth of gold bricks, a band of four gold thieves, led by scientist-mastermind Farwell (Oscar Beregi), hide in a secret cave in the desert. Farwell has designed suspended animation chambers and set them for 100 years, figuring that by 2061 nobody will remember the robbery and the gang will be in the clear. When they wake up, everything starts to go awry.

    One of the gang is already dead, a mere skeleton, because a rock had fallen and shattered his glass chamber. Greed soon begins consuming the others. DeCruz kills Brooks by running him over with the getaway truck, losing control of the vehicle and wrecking it. Consequently Farwell and DeCruz must walk through the desert in summertime, carrying as much gold as they can.

    Later, Farwell, who is older and somewhat obese, loses his canteen, and DeCruz forces him to ante up one gold bar for each sip of water. When the "fee" goes up to two bars, Farwell strikes DeCruz with the gold bricks, killing him. Farwell then continues to a highway, lugging the gold he refuses to abandon.

    Finally, weak and dehydrated, he collapses. A car drives up and Farwell offers his gold to the couple inside in exchange for water and a ride to the nearest town, but expires a few moments later. As the man gets back into his car to report Farwell's death to the police, he quizzically remarks to his wife, "Funny. He offered me this like it was really worth something." The wife vaguely recalls that it had, indeed been valuable sometime in the distant past. The husband replies, "Sure, until they found a way to manufacture it," and tosses the gold bar away.

    The Rip Van Winkle Caper
    image
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    since 8/1/6
  • BearBear Posts: 18,953 ✭✭✭
    2bucks, you disagree with what?
    There once was a place called
    Camelotimage
  • cladkingcladking Posts: 28,702 ✭✭✭✭✭
    The fact is that any commodity is subject to fluctuations in supply or percieved fluctuations
    in supply. Production is variable as is consumption. Either of these can change subtlely and
    the effects not noticed for many years at which time a currecy crisis would result. Large changes
    in supply for any reason would result in large changes in the value of currency. Gold is probably
    about the best commodity to use as currency because of the large stockpiles relative consumption,
    but still falls far short of being an ideal currency.

    Perhaps it would be possible to use grain stocks to back currency but ultimately it would look very
    much like fiat currency and still be at the whim of politicians who would change the definition of
    the value when he needed to fund his favorite project.
    Tempus fugit.
  • BearBear Posts: 18,953 ✭✭✭
    When faced with massive defecits as this Nation now is, a government

    will generally find it politally easier to inflate the money, then take the

    opposite bitter medicine of severly curtailing expensis. While the later

    may be the more beneficial method, it will generally cause immediate

    deflation of the economy, recession and general suffering of the citizens

    in general. Thus, Inflating currency and increasing deficits beyond a sustainable level

    will always lead to eventual collapse on a nations monetary system. When you debase

    National currency, economic and political disaster can not be infinately delayed.
    There once was a place called
    Camelotimage


  • << <i>The Rip Van Winkle Caper >>



    I loved that episode.
    image
    1969s WCLR-001 counterclash
  • BearBear Posts: 18,953 ✭✭✭
    Looks like Relayer could be a second apprentice

    to the Clankeye, Royal Bard.
    There once was a place called
    Camelotimage
  • There is already one of the world's biggest gold investors who has a website where people can pay bills and buy
    things with gold. INTERESTING!

    WATER WORLD.......I haven't seen that movie since it came out. I watched it last night and extremely
    interesting! All the polar regions' ice melted and flooded the earth swallowing up every square inch of land.
    Major cities included!

    THE KICKER?.....DIRT WAS THE MOST VALUABLE COMMODITY FOR TRADING!
    Among other cheap trinkets and plants and pure water. Most everyone had to
    recycle their own waste into water and drink it and use it to water whatever plant(s)
    they had. A sign of things to come? image
  • Ummmmm

    Can someone give me an example of fiat that has actually held its value or even lasted?

    image

    Forum AdministratorPSA & PSA/DNA ForumModerator@collectors.com | p 800.325.1121 | PSAcard.com

  • BearBear Posts: 18,953 ✭✭✭
    Real money must have one of three things about it:

    1. It has intrinsic Value

    2. It is reletively rare

    3. The money is backed to some
    degree by precious resources

    4.. This is , unfortunately, the most common
    thing. Money that while not backed to any significant
    degree by precious resources, it is printed in appropriate quantity
    in relationship to the GDP. Further a stable curretncy, will
    be accompanied by Government income in reasonable balance
    to expenditures.
    There once was a place called
    Camelotimage
  • StorkStork Posts: 5,206 ✭✭✭✭✭


    << <i>There is already one of the world's biggest gold investors who has a website where people can pay bills and buy things with gold. >>


    That is the one I linked earlier. GoldMoney.com, founded by James Turk.

    I wonder what tax implications there are once one makes a 'withdrawal', ie back to their usual bank account (as opposed to using it to buy something which might be a bit harder to track). Does anyone have an account there? Any thoughts about it?

    I notice they have added silver as an option as well.




    Cathy

  • rec78rec78 Posts: 5,770 ✭✭✭✭✭
    I dont think that gold is still money. Money is something that you can spend. There is no country in the world were gold (or silver for that matter) is coined to be used in commerce. True you can spend a gold coin if you like, but who would be that dumb? The fiat system is good only in the sense that it produces enough paper money for commerce. The bad part is that with no backing incredible inflation can result. Thus my theory on precious metals-buy them for stability. When you buy gold or silver or even copper coins with fiat (or fake IMHO)money you are getting something for nothing. Every time that the government increases the national debt, there is more money in circulation, thus decreasing its value. Unless the government once again freezes the price of gold the value of gold and silver will increase in relation to fiat-it has to. There is a limited supply of gold and silver on this planet but there is a neverending supply of fiat. A common $5 gold coin bought in 1971 has increased in value 2-3 times while if you kept a $5.00 bill from 1972 it is still only worth $5. Therefore it is my opinion that gold and silver coins will continue to rise in value. The rise may take time and there will be peaks and valleys but over a long time precious metals are headed UP. Bob
    image
  • rec78rec78 Posts: 5,770 ✭✭✭✭✭
    It still serves a function as a store of value so long as people believe it has value

    Funny-- this is my opinion of paper money.image
    image
  • BearBear Posts: 18,953 ✭✭✭
    When one says that gold coins go up it must be explained.

    Rare gold couins have three componants. Face value, metal value

    and collector rarity and condition value. Thus Collector grade Gold coinage

    is in a different classification then say bullion gold.

    Bullion gold is used not to make money , but to protect an absolute purchasing

    value. This in 1920 it took the same amount of gold to equal the purchase price of a new car

    as it takes today. In effect, you have not made money, you have only protected yourself against

    the errosion due to inflation. This is true in general, except for very limited times of unusual volitility

    in the value of gold, either up or down., and in periods of internationl price fixing and regulations against

    owning gold as was done in when FDR assumed the Presidency.
    There once was a place called
    Camelotimage
  • TorinoCobra71TorinoCobra71 Posts: 8,054 ✭✭✭


    << <i>I saw Gold Money and thought you meant GoldMoney.com. Fiat bothers me. It never seems to end well. >>



    Our current monetary system has been "fiat" for 40+ years now.....uh oh.....Here comes Iwog..... image

    TorinoCobra71

    image
  • BearBear Posts: 18,953 ✭✭✭
    That is generally true about fiat money. However, the currency

    up till the past 15 years has in fact been well supported by the industrial

    and commercial output of the Nation. The debt has long been understated.

    When we include the mandated benefits, Federal pensions

    Government oblivations such as the FDIC, Pension guarentee, Mortgage guarantee

    as well as the annual budgetary

    deficites, our degree of fiscal irresponsibility is of a magnitude that is criminal.
    There once was a place called
    Camelotimage
  • MrKelsoMrKelso Posts: 2,909 ✭✭✭
    Individual gold transactions in China brisk
    (People's Daily Online)
    Updated: 2006-06-03 13:11

    Due to the boom in gold market in the world this year, the individual transactions of gold in China are exceptionally prosperous.

    Insiders see two features of the gold price. Firstly, the price keeps soaring, from 500 to more than 700 US dollar per ounce. Secondly the prices fluctuates sharply. Sometimes it rose and fell by 20 US dollar overnight, which brings great chance for investors to make profit.

    It is estimated that the average return on investment on gold account with China Construction Bank has reached over 10 percent, and the transaction volume of this year will mount to beyond 10 tons.



    "The silver is mine and the gold is mine,' declares the LORD GOD Almighty."
  • roadrunnerroadrunner Posts: 28,313 ✭✭✭✭✭
    That $5 bill is NOT worth the same $5 it once was. With inflation considered, that $5 bill is now worth $1 or so.

    Gold is a base element so it can not be manufactured.
    It is highly corrosion resistant, maintains it's sheen and appearance quite well, it is useful in electronics, it is a great conductor of electricity, it is a concentrated (high density) and easily transportable form of wealth, it is malleable, it is rare. It has typically only increased its supply by 2-3% per year at most. It is not believed to be in unlimited supply anywhere......at least not yet. It is widely used in jewelry. It can buy things. It is used as a means of currency, esp in Asia and other foreign nations. Most of all it is desired by nations and Central Banks who store it, trade it, sell, or buy it.

    Considering that the Chinese are printing money at the rate of 18%+ per year (with many other nations on their heels), it's not a bad move to keep some of one's assets in PM's.

    roadrunner
    Barbarous Relic No More, LSCC -GoldSeek--shadow stats--SafeHaven--321gold
  • rec78rec78 Posts: 5,770 ✭✭✭✭✭
    That $5 bill is NOT worth the same $5 it once was. With inflation considered, that $5 bill is now worth $1 or so. That proves it even more.
    Of course-- but it still spends for $5.00 anywhere.image
    image
  • fishcookerfishcooker Posts: 3,446 ✭✭

    Since I've already bought my gold, I'd say YES! everyone should invest in gold now. They should buy and hold and believe that gold is an important part of diversification.


  • BECOKABECOKA Posts: 16,961 ✭✭✭


    << <i>like imagine using lousy old silver on connectors.
    darn things would be toned and corroded in a few months
    in bad conditions.

    but most excellent gold will not! >>



    image
  • MrKelsoMrKelso Posts: 2,909 ✭✭✭
    Russia leading global 'stealth demand' for gold
    By Ambrose Evans-Pritchard (Filed: 05/06/2006)



    The world's big money brigade is snapping up gold bullion at eight times the rate originally thought, according to a report by UBS, the world's biggest gold trader.

    The huge sums entering precious metals below the radar are likely to help to put a floor under the gold price after the dramatic fall of $112 an ounce in late May - the sharpest correction since the bull market began five years ago.

    The Swiss bank said information from its trading floor suggested that funds and investors were allocating 20pc of their commodity portfolios to precious metals.

    This is far more than the index tracking funds run by Goldman Sachs, Dow Jones-AIG, and others, typically taken to be a guide to overall investment flows.

    UBS said these indexes gave a deeply misleading impression, obscuring a silent shift of funds from oil into gold.

    The Goldman Sachs GSCI index, for example, has a gold and silver weighting of just 2.27pc, compared to 73pc for energy.

    "If our traders' experience is representative of trends in the wider market, this has very important implications for metals investment," said the bank's gold expert, John Reade.

    The UBS gold reports are watched closely by the markets. The Zurich bank is the world's leading gold trader and manages the biggest known stash of private client wealth, surpassing $1,000bn.

    The extra volume in gold buying has been channelled through the London Bullion Market Association, eclipsing the Comex futures market in New York usually monitored by speculators for clues.

    Gold recovered from lows of $618.50 an ounce last week to end at $637.30 after weak US jobs data renewed fears of a dollar slide.

    "The sort of money that is chasing this market higher is not hot money," Ross Norman, director of the BullionDesk.com.

    "It is slow steady investment by pension funds and long-term buyers. Anybody who thinks this market is about to head sharply lower is reading it badly," he said.

    Mr Norman said there was a chronic dearth of new mine supply across the world due to eco-regulations and a lack of discoveries.

    Output in South Africa, the world's biggest supplier, fell to 10.9pc in the first quarter of 2006 despite high prices. The country's production has reached its lowest level since 1923. "It's becoming very hard to get gold out of the ground," he said.

    Oil states armed with an estimated current account surplus of $480bn in 2006 are thought to be feeding the "stealth demand" for bullion, led by Russia.

    President Vladimir Putin, a frequent critic of dollar hegemony, has ordered the Russian central bank to raise the gold share of foreign reserves from 5pc to 10pc.

    Russia's reserves have surged to $237bn - the world's fourth biggest - after rising 61pc in 2004 and 40pc in 2005. With a current account surplus of 10pc of GDP, it must sweep up a big chunk of global gold output just to stop its bullion share of reserves from falling.

    In China, monetary committee member Yu Yongding last week issued the most explicit call to date for Beijing to diversify its $875bn reserves into gold to protect against a tumbling dollar. "We need to use some of the reserves to buy other assets such as gold and strategic resources such as oil," he said.

    UBS warned that gold may have further to fall, followed by a period of sideways trading before embarking on another powerful upward leg of the bull-market rally.

    Mr Reade said the immediate risk was a global economic downturn, dragging gold down in an avalanche sale of all commodities.

    But if the global economy turns nasty, gold will ultimately decouple from its base metal cousins and regain its usual role as a safe haven currency and defence against dollar disorder. "The bottom line is liquidation first, haven later," he said.



    "The silver is mine and the gold is mine,' declares the LORD GOD Almighty."

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