how precious are precious medals ? (looking for some help/opinions)

joebb21

I decided to write a report for my term paper on this subject.

While I do have alot of opinions and thougths, as well as quotes and statements from larger investors, I wanted to start this thread and here what people ahve to say about the subject in a pm forum (located in a coin collector society).

Say I started my paper (with a concept) like this.....(ignore all grammar on my part and flow of the sentence. Im just trying to ask the forum the question)

You can't eat it. You can't live in it. It doesnt keep you warm. Why invest in them?

If the dollar drops, the metal goes up.
If the dollar gains, the metal goes up
if the dollar dies, and there is no value to the dollar, what good are pm's?

once again they are just shiny metals, so whats the real investment in them?

at least with real estate people places to live.
With foods clothing and oil we need them to survive (well not really oil but for sure food...)

so really if the world came down to an apocolypse... how precious are precious metals?

(I hope I was clear in my question. please reply freely and not bash the question if you differ in opinion, just politely explain your views.)
thank you
joe

rgCoinGuy

Gold and Silver have been "Money" for way longer than Dollars have been "money."

In the worst case scenario, if the world ends, nothing matters.

However, if TSHTF Scenario happens, most would expect a new society to eventually rise up.

Eventually, that hoard of gold/silver (which would be the only "MONEY" left with potential worth) would become money again.

Of course, you would have bartering for foods/ammo/shelter, etc. But to be able to come out the other side with "money", PM's would be your best bet, besides of course, stashing the bartering/living items.

Gold, it outlasts civilizations. Old Gold

JMO, of course.

gsa1fan

PM's = store of wealth.

Gold = recognized as money world wide.

Weiss

Gold and silver are international money. If the dollar fails, if the pound fails, the euro, the yen.

Money replaced barter because it's infinitely better. You can exchange a dozen eggs for a pair of jeans. But what if the jeans guy doesn't want eggs? But the person who wants eggs doesn't want jeans, but they want a hammer. And the hammer guy wants a saw and some whiskey.

But they'll each trade their product for an ounce of silver.

dac076

<< <i>Gold and silver are international money. If the dollar fails, if the pound fails, the euro, the yen.

Money replaced barter because it's infinitely better. You can exchange a dozen eggs for a pair of jeans. But what if the jeans guy doesn't want eggs? But the person who wants eggs doesn't want jeans, but they want a hammer. And the hammer guy wants a saw and some whiskey.

But they'll each trade their product for an ounce of silver. >>



That would be true only if they can take the ounce of silver and buy what they really need with it. So in that scenario, the silver (or gold) would still just be a medium of exchange, no better or worse than dollars, euros or yen.

Weiss

<< <i>

That would be true only if they can take the ounce of silver and buy what they really need with it. So in that scenario, the silver (or gold) would still just be a medium of exchange, no better or worse than dollars, euros or yen. >>



Correct. In addition to being a portable, globally understood and accepted store of wealth, gold and silver are a medium of exchange. We (us here on this forum and others around the globe for thousands of years) don't own precious metals because we think they are worse than or equal to paper currency. We have them because we think they are superior.

Are you asking why they're superior?

Kameo

<< <i>You can't eat it. You can't live in it. It doesnt keep you warm.

Why invest in them?once again they are just shiny metals, so whats the real investment in them? >>




Same applies to fiat money.




<< <i>at least with real estate people places to live.
With foods clothing and oil we need them to survive (well not really oil but for sure food...) >>




If the shtf, people dealing in cloths, oil , food and real estate are not going to simply give their assets away. They will most likely use PMs and other assets as the new barter of trade.

joebb21

thanks for the replies so far
more please!

cohodk

I think if you were to expand your research to incorporate the philosophies of religion, then you would get an A+.

cladking

Everything is worth what people collectively believe it is. Phychology
drives markets to the exclusion of almost everything else. Of course
in the here and now things are valued by supply and demand but even
supply has a large component of psychology. For instance it's natural
for orange juice to take a large jump if there's a big freeze in Florida
because this will impact supply. But exactly how much OJ does the world
need? There is no simple answer because many people simply won't buy
it if the price gets too high. You have to model your price expectations on
what happened in other shortages to make a prediction on price but hu-
man behavior is not predictable especially over the longer term.

These same considerations apply to PM's. Gold has almost no value
other than for jewelry and this is likely to remain true as long as people
like shiny and heavy things. It is also percieved to have value as money
to many people so that means it does have value as money. This value
con fluctuate wildly but historically has not. Silver is consumed and has
little value as money. Platinum would have great value if it weren't so rare
that the best uses are impractical.

But it's perception that imparts value. Inertia is the leading cause of the
value of things. But there is a sort of generational "friction" which will elim-
inate or increase value as things become obsolate or more important over
the long term.

Gold is a terrible value most of the time. Gold becomes of great value as
currency is inflating or the value of currency comes into question. Gold re-
tains some value all the time despite the movement of everything else.
During such times gold will usually overcompensate as more astute investors
buy and as people jump on the bandwagon. The trick is always to jump off
before the music stops and the sellers outnumber the buyers.

konsole

True the metals usually go in the opposite direction to the dollar but I think they tend to move faster then the dollar moves. So a 25% move in the dollar probably translates to a larger then 25% move in the metals in the other direction. The metals are rare and hard to get and are used in many applications and also have great physical properties. They have been used and can be used as money because they are common enough to be used by people around the globe and can be divided easily enough for smaller or larger transactions. We only accept paper money because we know that we can give them to somebody else but paper money is just a little ink and paper were as metals are in finite supply.

OnlyGoldIsMoney

<< <i>

<< <i>Gold and silver are international money. If the dollar fails, if the pound fails, the euro, the yen.

Money replaced barter because it's infinitely better. You can exchange a dozen eggs for a pair of jeans. But what if the jeans guy doesn't want eggs? But the person who wants eggs doesn't want jeans, but they want a hammer. And the hammer guy wants a saw and some whiskey.

But they'll each trade their product for an ounce of silver. >>



That would be true only if they can take the ounce of silver and buy what they really need with it. So in that scenario, the silver (or gold) would still just be a medium of exchange, no better or worse than dollars, euros or yen. >>





I cannot agree that precious metals are just being another medium of exchange. You cannot print gold.

cladking

<< <i>



I cannot agree that precious metals are just being another medium of exchange. You cannot print gold. >>





Money is what people think is money. Its value is derived from
how much they believe it is worth. There is no such thing as
"intrinsic value" for money unless we started using perishables
as a medium of exchange. There could be a lot of benefits to
just such a system but it would probably be restrictive to wealth
development.

The best currency is a fiat currency that isn't allowed to increase
faster than the total economy. It should pay a small dividend to
increase its percieved value. Of course this would require people
who don't vote for politicians who spend more money and cut the
taxes.

Gold doesn't really make good money except that politicians can't
print it. Money needs to be stable and perceptions of the worth
of gold backed currency can change much faster than perceptions
of the worth of fiat systems.

dac076

<< <i>

<< <i>

<< <i>Gold and silver are international money. If the dollar fails, if the pound fails, the euro, the yen.

Money replaced barter because it's infinitely better. You can exchange a dozen eggs for a pair of jeans. But what if the jeans guy doesn't want eggs? But the person who wants eggs doesn't want jeans, but they want a hammer. And the hammer guy wants a saw and some whiskey.

But they'll each trade their product for an ounce of silver. >>



That would be true only if they can take the ounce of silver and buy what they really need with it. So in that scenario, the silver (or gold) would still just be a medium of exchange, no better or worse than dollars, euros or yen. >>





I cannot agree that precious metals are just being another medium of exchange. You cannot print gold. >>




True, but as Roadrunner said, "perception imparts value". So my point is that you will not trade your hammer for silver unless you KNOW that the silver will be accepted to buy a saw and some whiskey. Assuming it is acceptable, it is a valid medium of exchange like dollars or yen. If the whiskey and saw guy wants dollars and won't take silver, the silver is worthless for that transaction.