Gold has "Very Little Intrinsic Value" says senior analyst
dragon
Posts: 4,548 ✭✭
Part of an interview with Joe Magyer from The Motley Fool....
<<< Magyer also doesn't see gold as a hot prospect.
"I kind of think about gold the same way I think about stamps or art, or baseball cards. It has very little intrinsic value to it – it's basically just a really shiny, malleable metal – unlike say oil, which has a lot of industrial purpose," Magyer said.
"Sure, gold has some (value), but the reality is, most of the value in there is just driven by speculation and fear, unlike oil, natural gas, et cetera, that people actually buy and use for industrial application." >>>
<<< Magyer also doesn't see gold as a hot prospect.
"I kind of think about gold the same way I think about stamps or art, or baseball cards. It has very little intrinsic value to it – it's basically just a really shiny, malleable metal – unlike say oil, which has a lot of industrial purpose," Magyer said.
"Sure, gold has some (value), but the reality is, most of the value in there is just driven by speculation and fear, unlike oil, natural gas, et cetera, that people actually buy and use for industrial application." >>>
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My other problem is his suggestion that art, stamps, etc. also have no real value. Is he really arguing that? Holding aside the artistic aspect, many, many artworks have sold in the tens of millions of dollars range. Clearly, they have a great deal of value to a lot of people.
Believe it or not, things can actually have value regardless of whether they can be melted down and used in industrial applications.
By most historical objective measures, Gold is overvalued vs most commodities now, including strategic metals like platinum and silver.
heads like many other items. Rare art is a good example.
it is not a necessity like food, clean water, energy to heat your home
during winter, etc... which is in demand and has value for totally different reasons then gold.
Also things that had value once upon a time have fallen out of favor
and become worthless more or less. It just appears gold has the
most longevity in this case.
It is all rather hard to discuss rationally due to the human emotions
involved with it.
<< <i>My first problem with Magyer is that he doesn't seem to understand what the word "intrinsic" means. If gold is just a shiny metal with no real purpose, as he claims, then actually all of its value is intrinsic.
My other problem is his suggestion that art, stamps, etc. also have no real value. Is he really arguing that? Holding aside the artistic aspect, many, many artworks have sold in the tens of millions of dollars range. Clearly, they have a great deal of value to a lot of people.
Believe it or not, things can actually have value regardless of whether they can be melted down and used in industrial applications. >>
I think he used the word correctly based on his view. Stamps or baseball cards are just worthless paper which itself has no intrinsic value. The value is ascribed by buyers due to rarity, condition etc. So it's the desirability of gold that gives it value, rather than the utility.
<< <i> I think he used the word correctly based on his view. >>
Let me get this straight. Magyer says oil has "intrinsic" value because it's used for industrial applications. That doesn't make any sense. Imagine we had a new green energy source could replace all need for oil starting in 2010. Oil's price would collapse to zero. That suggests oil doesn't have any "intrinsic" value. No one values it for its own sake. Oil's value is entirely extrinsic -- it's value is driven by how much it is used and needed an an input in other industrial processes.
Gold is completely different. With limited exceptions, it is not used as an input in any industrial processes. It's value is mostly derived simply from that fact that it exists and that humans find it appealing and want to own it and look at it and wear it, in many shapes and forms. Similar to art or rare stamps. That, to me, is the definition of "intrinsic value." It's value is "innate." It has a value that independent of what it is used for and independent of any industrial process.
<< <i>My first problem with Magyer is that he doesn't seem to understand what the word "intrinsic" means. If gold is just a shiny metal with no real purpose, as he claims, then actually all of its value is intrinsic.
My other problem is his suggestion that art, stamps, etc. also have no real value. Is he really arguing that? Holding aside the artistic aspect, many, many artworks have sold in the tens of millions of dollars range. Clearly, they have a great deal of value to a lot of people.
Believe it or not, things can actually have value regardless of whether they can be melted down and used in industrial applications. >>
What you said........
he is thinking with his recession cap on.
roadrunner
I knew it would happen.
edited for spelling
https://www.pcgs.com/setregistry/gold/liberty-head-2-1-gold-major-sets/liberty-head-2-1-gold-basic-set-circulation-strikes-1840-1907-cac/alltimeset/268163
<< <i>Good ole Econ 101, and the Diamond/Water paradox .. >>
HUH??? :-)
They also come and go every 15-25 years in commodity boom cycles as equities falter. This has been the case ever since unbacked paper money first came to be. It has only gotten worse since gold was officially tossed out so bankers could run their schemes unchecked. One could say gold is one of the few things with lasting intrinsic value. Don't count on the lead or seawater to gold conversion machine any time in the near future.
roadrunner
It would never work, crude can't be burnished and there's no place to put a "W" mintmark!
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