Is gold useless? A POLL.
roadrunner
Posts: 28,303 ✭✭✭✭✭
Poll only. The debate (or arguments and rants) are in other threads. Not meant to change anyone's opinion but to gauge what the majority of this forum thinks. This should be interesting, especially after 3-1/2 years into this commodities bear market.
1. Useless in all respects. Like the definition below.
2. Effectively useless, having only very minor utility or value in today's world.
3. Useful in today's world, having a number of significant uses without suitable or ready replacements.
Definition of Useless...there are others if you like'd to look them up. This seemed as good as any.
Being or having no beneficial use; ineffective.
Having no purpose or reason; pointless; to no avail.
Incapable of acting or functioning effectively; ineffectual or inept.
1. Useless in all respects. Like the definition below.
2. Effectively useless, having only very minor utility or value in today's world.
3. Useful in today's world, having a number of significant uses without suitable or ready replacements.
Definition of Useless...there are others if you like'd to look them up. This seemed as good as any.
Being or having no beneficial use; ineffective.
Having no purpose or reason; pointless; to no avail.
Incapable of acting or functioning effectively; ineffectual or inept.
0
Comments
It is a good electrical conductor, and extremely corrosion resistant, and there are applications where that is more important than the cost. It also makes nice jewelry and such (i.e. medals). Would make good ballast too. Not much more than that though.
<< <i>Effectively useless...
It is a good electrical conductor, and extremely corrosion resistant, and there are applications where that is more important than the cost. It also makes nice jewelry and such (i.e. medals). Would make good ballast too. Not much more than that though. >>
Industrial uses of gold
That link includes some additional items. However, it's certainly debatable whether those applications are of any "effective" use in today's world. And even if they are, are there suitable substitutes or replacements readily available?
<< <i>. Gold's PRIMARY and INTENDED purpose (or "use") by those who mine it, buy it, own it is to let it sit there and do NOTHING. >>
That is true of the $1000, $10,000 and $100,000 bills.
<< <i>Once again, if you lost every spec of gold on earth, mankind would move on just fine immediately afterward. There might be some slight disturbances here and there but absolutely no "shock" to society in any effective way. That is effective useless as useless can get. Gold's PRIMARY and INTENDED purpose (or "use") by those who mine it, buy it, own it is to let it sit there and do NOTHING. That is PREDOMINANTLY the INTENDED and ACCEPTED and DESIRED "use". And you really want to debate and take "polls" about such an obvious fact??? >>
This topic has been debated around here for over 10 years. I'll let the poll determine what's factual and what isn't. Pretty simple if you ask me.
The majority of gold in the world is probably in jewelry form, suggesting it is worn. How much is worn in any one day, week, month or year is certainly debatable. But, I would suspect that most gold jewelry gets worn at least once per year. For those who mine gold, there intention is to SELL it. They don't give a hoot whether you bury it or wear it. You'll have to POLL all the gold jewelry owners of the world to determine what the true facts are. What are the intended uses of all the baseballs, baseball bats, and baseball gloves in the world? Answer: to sit there and do nothing the vast majority of the year. So what does that prove? How often does your car sit each day? How about your home? Your pet? Your computer? Your wardrobe of clothes? What you've provided above is an opinion, nothing else.
Considering that of the world's above ground gold: 52 percent gets used for jewelry, 18 percent constitute official holdings (as in central banks of nations), 16 percent take the form of investments, 12 percent find industrial uses, and 2 percent unaccounted.....jewelry is the driving force. And jewelry is meant to be worn. And worn it is. It's not worn all the time, but neither are all the clothes you own either. Looks to me like 64% of the gold does something other than just sit there doing nothing.
Facts
<< <i>Roadrunner, I have repeatedly acknowledged the "ornamental" aspect of it, which means jewelry. But even when worn, all it does it sit there. It doesn't provide an actual function other than showing off bling. >>
What doesn't just 'sit there', in your eyes? Your silly argument can be said for just about anything outside of maybe food.
<< <i>What's that going to proof? Posting it to a biased PM forum? I would hope that at least 80% would indicate "useful" ... Post the same question in a tool forum and I suspect that the opposite would prevail. >>
It's going to prove what those having a well rounded idea of the collectibles and PM market place think about gold's function, if any, in the world. Nothing more, nothing less. You are free to conduct a similar POLL in the coin forum. In fact, I encourage that you do so as you apparently have strong feelings on this. And if you are member of a tool forum, please post it there and get back to us soon. You might be surprised on what you find.
Based on the rants seen over the weekend I wouldn't be expecting an 80% "useful" vote in the PM forum. Honestly, I don't. That's why I included an "effectively useless" option. Most of the food in my house sits for days at a time (fruits, veggies, grains, canned goods, bottled water, etc.). Many woman have as many pairs of shoes than jewelry. Both sit for considerable amounts of time doing nothing. But they all eventually get worn. Can't see how a pair of shoes in useless even if they only get worn a couple times a year.
It's a POLL. What's so hard to understand? Don't like it. Make another POLL.
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<< <i>Gold is valuable because it is rare and a way to back paper currency to give it 'perceived' value. Without a true form of wealth backing paper, it's nothing more than something to wipe with. >>
Valuable is not the question of the poll. And for those who constantly talk about "backing" paper currency with gold, just exactly how would that even work? >>
Sorry, board policeman; GOLD IS USEFUL because it is rare and a way to back paper currency to give it 'perceived' value. Without a true form of wealth backing paper, it's nothing more than something to wipe with.
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<< <i>Gold is valuable because it is rare and a way to back paper currency to give it 'perceived' value. Without a true form of wealth backing paper, it's nothing more than something to wipe with. >>
Valuable is not the question of the poll. And for those who constantly talk about "backing" paper currency with gold, just exactly how would that even work? >>
Sorry, board policeman; GOLD IS USEFUL because it is rare and a way to back paper currency to give it 'perceived' value. Without a true form of wealth backing paper, it's nothing more than something to wipe with. >>
So explain to us oh sagacious one just how you would "back paper currency" using gold. >>
Study history, genius, and what happens when the paper is deemed worthless by society because it's backed by nothing.
<< <i>Poll only......right. >>
Well, it would have been until Baseball showed up and wanted his ball back. It's like shouting fire in a crowded theater. "Play Ball...........Let's Fight."
<< <i>Poll only......right. >>
You know what AgentJim.....my only mistake was NOT going to the TOOL FORUM and POLLING those people.
There aren't 3 rules. Just one. Highest percentage in the POLL wins.
Stocks are worthless pieces of paper.
I give away money. I collect money.
I don’t love money . I do love the Lord God.
<< <i>What about adding to the poll the other half of the debate between Baseball and STMM which essentially was:
Stocks are worthless pieces of paper. >>
Too complicated. That's their battle. But, anyone is welcome to do a POLL on stocks. My first experience with stocks was from 1965-1987. I saw the stocks I owned crash into 1973-1978 and eventually bottom in 1982. I was wondering how could an "investment" do nothing for 16 years? These were blue chips like oil and life insurance stocks. A little glimmer of hope from 1983-1987 and they crashed again in 1987. That was 22 years of stock ownership that basically stunk. So unlike those who have only owned stocks in great times, my initial experiences were quite the opposite. In fact, during the years of 1966-1989 only rare coins made sense to me. And obviously the same 20 yr periods don't usually repeat.
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<< <i>What about adding to the poll the other half of the debate between Baseball and STMM which essentially was:
Stocks are worthless pieces of paper. >>
Too complicated. That's their battle. But, anyone is welcome to do a POLL on stocks. My first experience with stocks was from 1965-1987. I saw the stocks I owned crash into 1973-1978 and eventually bottom in 1982. I was wondering how could an "investment" do nothing for 16 years? These were blue chips like oil and life insurance stocks. A little glimmer of hope from 1983-1987 and they crashed again in 1987. That was 22 years of stock ownership that basically stunk. So unlike those who have only owned stocks in great times, my initial experiences were quite the opposite. In fact, during the years of 1966-1989 only rare coins made sense to me. And obviously the same 20 yr periods don't usually repeat. >>
I have owned stocks them from 1981 to 2014 and have done just fine. Fwiw I voted gold is useful.
I give away money. I collect money.
I don’t love money . I do love the Lord God.
<< <i>What about adding to the poll the other half of the debate between Baseball and STMM which essentially was:
Stocks are worthless pieces of paper. >>
Facebook is......$222,000,000,000 worth of hot air.
<< <i>Once again, if you lost every spec of gold on earth, mankind would move on just fine immediately afterward. There might be some slight disturbances here and there but absolutely no "shock" to society in any effective way. That is effective useless as useless can get..........And you really want to debate and take "polls" about such an obvious fact??? >>
I have serious doubts that the world's financial and monetary system would receive no effective "shock" from the disappearance of all gold tomorrow. That's a $6.5 TRILL haircut on the world's posted liquid wealth. This isn't derivatives or currency swaps, but something physical, most of it held by ordinary citizens. I think it would have a huge shock to the leading Asian nations as much of their privately stored wealth and retirement money would be gone...a billion or more people affected. Their retirements could be mostly all gold. What if the retirement money of all US citizens was effectively gone tomorrow? No problems right?
The major currencies whose central banks vault gold (USA, GER, UK, FR, Italy, China, Japan, Russia, etc.) would probably see more than a hiccup. There are $1.3 TRILL in federal reserve notes around the world. If we included all the world's leading currencies it would probably be around that same $6.5 TRILL in gold. In 2008 the world's total currency in circulation was around $4 TRILL with the US and Euro being 20-22% of that each. So $6 TRILL today is a decent estimate. It could be a bit more. It would seem to me that erasing all the world's currency tomorrow would cause some havoc. Just erasing a single currency such as the USA, Euro, China or Japan would be huge. So you don't see erasing $6.5 TRILL in gold holdings world-wide (most of it in Asian/European hands) as a problem? The effect could be like declaring a currency valueless overnight....in this case about the same value as ALL paper notes combined. Half of the world's liquid money or money alternatives gone tomorrow. No problem?
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
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<< <i>What about adding to the poll the other half of the debate between Baseball and STMM which essentially was:
Stocks are worthless pieces of paper. >>
Facebook is......$222,000,000,000 worth of hot air. >>
Mebbe so, but when the time comes I bet I won't have have any trouble selling mine. Or my gold either.
Text
""SS Central America, known as the Ship of Gold, was a 280-foot (85 m) sidewheel steamer that operated between Central America and the eastern coast of the United States during the 1850s. It was originally named the SS George Law, after Mr. George Law of New York. The ship sank in a hurricane in September 1857, along with more than 550 passengers and crew and 30,000 pounds (14,000 kg) of gold, contributing to the Panic of 1857."""
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<< <i>Here ya go Baseball! Please take a moment and read this.
Text >>
Look we are all acquainted with the story. What's your point? >>
Less than one minute.....you must have aced Evelyn Woods.
You have stated that all the worlds gold could disappear with little real effect. This loss of this gold led to a depression deeper than 1929.
<< <i>.....As has been repeatedly answered, they "know" that the weak minded masses (for some unfathomable reason) can be controlled by these useless rocks. That's all they need to know and all they really care about. Just what is it that you think these governments are going to do with their hoard of gold? They're going to let it sit there and that's all folks. >>
Countries with a high % of their foreign reserves in gold: Netherlands 54%, France 66%, Italy 67%, Germany 68%, USA 71%. So no effect here? Tell you what, I'd hate to be the finance (or war) minister in any of those European nations the day after gold disappears. Yup just a little blip on the radar. Would appear that it's the govt of these nations that want the gold, not weak minded masses of people. The Swiss voted down their gold referendum 78-22%. The people there certainly aren't in love with gold. It would appear to the be those in control that continue to desire these large quantities to be kept. Weak minded people are better controlled by "bread and circus" as the Romans learned long ago. Today it's Major League Baseball, NFL, the Red Carpet, and Reality TV. We've diversified a bit.
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<< <i>Question for those who say it's useless---Why do the governments of the large industrial countries hoard gold? Could they know something that you don't know? >>
As has been repeatedly answered, they "know" that the weak minded masses (for some unfathomable reason) can be controlled by these useless rocks. That's all they need to know and all they really care about. Just what is it that you think these governments are going to do with their hoard of gold? They're going to let it sit there and that's all folks. >>
Exactly how does the government control the masses with gold when they just let it sit there?
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
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<< <i>. Gold's PRIMARY and INTENDED purpose (or "use") by those who mine it, buy it, own it is to let it sit there and do NOTHING. >>
That is true of the $1000, $10,000 and $100,000 bills. >>
And those haven't been printed in how long? Were any of us even alive when they stop making them? >>
It doesn't matter when they stopped making them. But, rather when they stopped actively circulating for all intents and purposes. It was July 1969 when the govt said they would no longer circulate large bills, supposedly to stop organized crime. We know how well that worked out. I was 15 then and certainly alive. $500 and $1,000 bills are still legal tender if you are foolish enough to spend one. The $1,000 and higher notes were definitely intended to just sit there and do "nothing." I suppose they were "useless" too.
Exactly how does the government control the masses with gold when they just let it sit there?
Vulcan mind meld?
Actually, Baseball just inadvertently provided a significant "use" for gold (ie controlling the mindless masses...or at least controlling something). Oops, better change that.
<< <i>Countries with a high % of their foreign reserves in gold: Netherlands 54%, France 66%, Italy 67%, Germany 68%, USA 71%. So no effect here? Tell you what, I'd hate to be the finance (or war) minister in any of those European nations the day after gold disappears. Yup just a little blip on the radar. Would appear that it's the govt of these nations that want the gold, not weak minded masses of people. The Swiss voted down their gold referendum 78-22%. The people there certainly aren't in love with gold. It would appear to the be those in control that continue to desire these large quantities to be kept. Weak minded people are better controlled by "bread and circus" as the Romans learned long ago. Today it's MLB, NFL, the Red Carpet, and Reality TV. We've diversified a bit. >>
And what is it that they are going to do with that gold but let it sit there?
I don't know. That's not my problem. That's your problem stating that it does nothing. I'm responding to your thesis that those nations above would experience no effective shock to their financial/economic systems if gold disappeared overnight. I've stated otherwise. So what does happen with those 4 major Euro nations when 54-67% of their foreign reserves go to zero overnight? It used to sit there and do nothing. Now it's gone and really doing nothing. And what happens when the "mindless masses" find out that 2/3 of their nation's foreign reserves just disappeared. Those nations are on the Euro and just can't print new money reserves like the old USA. I think its a BIG problem for them.
<< <i>Because it will provide for potential flexibility in the advent of hyperinflation or currency wars, or debt issuances or a litany of other possible things that rest largely on the perception of the masses and other governments. Perception is much of what life is. And gold is perceived to have value, whether that is rational or not. Governments understand that to be the case for the here and now as well as the foreseeable future. Part of the perpetuation of that perception are the governments themselves thru media selling that and folks like us buying into it..... >>
Oh. So now you're saying gold has a MAJOR function. From what I read above that's not some minor, ineffective use. The term "other governments" is key. I think they just ejected you from "Fight Club."
<< <i>....So by you're own reckoning, it did "nothing" before and will obviously do "nothing" after. >>
Certainly not. The fact that the gold is there as 2/3 of foreign reserves is insurance and a symbol to the mindless masses, especially in the EURO system. Insurance does nothing until the day comes when it is forced to function as insurance. When you declare all gold gone from the world you've sent a dagger into the financial system of those 4 Euro nations, effectively cutting their insurance by 67%. So when the next catastrophe hits they will be unprotected until those reserves can be regained. So you're statement above is completely wrong and totally at odds with the one below it where you said gold had a major use as insurance between governments. Now you're taking that back again? We're talking about governments here, not me, you, or the people. The govt's keep this gold. They could just as easily sell it. Sorry, not buying into this new "mind freak" thing you just came up with today. It's a little far fetched. The Swiss have already debunked that theory 78-22%. In the US that kind of vote would probably run 95-5% at best and 99-1% at worst....hardly mind control at work.
My auto insurance has been nothing but a total waste of money for me....until 2008 when an accident totaled one of our cars. Good thing as I would have had to cover $8K in expenses. And it's back to doing nothing once again, just like it does most of the time. I've had homeowner's insurance for a long time. And never filed a claim. What a waste of NOTHING that has been.
Gold was a widespread medium of exchange up to 1971 when Nixon closed our gold window. It was such a good medium of exchange that the G7 nations ran the London Gold Pool from 1961-1968 to manage the price of gold in international trade. DeGaulle was obsessed with getting gold that he raided the US coffers for years in trade settlements. That ultimately forced Nixon's hand to keep what gold the US had remaining. Funny, if it was so worthless, why didn't he just let the world keep taking our gold reserves? We had been off a public gold standard for nearly 40 yrs. So why did Nixon value "useless" gold so much to not sell an ounce more? Very strange behavior indeed since we owned the world's reserve currency. And once the Bretton Woods agreement ended for good by 1973 we still kept all the remaining gold. Again, why do that if it had no longer had any bearing on our monetary system...and was "just sitting there." Rainy day insurance is why. And last I checked, there were no slaves in the US or France in 1970. The pure fiat money experiment is only 43 years old. That's still recent history.
I'll be happy to receive any of your
"Useless" metals. I'll even pay for
the postage !!!
<< <i>Yes I have stated just that about TODAY. You're talking about a time when gold WAS effectively THE currency, thus it's VERY USEFUL function is society in acting as a widespread medium of exchange. That was A LONG TIME ago. Slavery was legal at the time. Get into the 21st century. >>
....and that is why folks with a sense of history are concerned about basing economic well being on a worthless, unbacked form of currency that is being produced exponentially by those with little regard or benevolence for those that they have sworn to serve have grave concerns about inflation, default and economic meltdown.
Russia had a relatively decent economy a year ago. Today the Rubble is in free fall and inflation, particularly on imported goods is spiraling out of control.
Oh but that can't happen here. Things are different here, I can hear you say. Laws of economics though respect no borders.
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<< <i>What about adding to the poll the other half of the debate between Baseball and STMM which essentially was:
Stocks are worthless pieces of paper. >>
Facebook is......$222,000,000,000 worth of hot air. >>
I made a ton a money on that hot air.......not to mention my family members and friends post there all the time.
I do not.
I give away money. I collect money.
I don’t love money . I do love the Lord God.
I give away money. I collect money.
I don’t love money . I do love the Lord God.
The U.S. (the most power nation and leading gold hoarder) was so "obsessed" with gold in the 1970s that just a few years after 1971, they were on the verge of selling EVERY BIT of it. One stroke of a pen steered history in a different direction. And let's face it, 1971 may not seem like that long ago to YOU. But it seems like a LONG time ago to me as I wasn't even born at the time and undoubtedly ancient history for Millennials and those that come after. The world has changed in SO MANY ways. And with each passing year's, gold's relevance as any form of currency continues its nonexistence, never to be summoned again.
Gold has no special meaning to me. I don't deal in symbols, laws or regulations. It's governments that find it the most useful after you get past the jewelry thing. Please provide the link where the US govt was legitimately interested in selling all their gold. I think France and others would have been happy to take them up on that by sending more dollars back in exchange. You provided a 19th century reference - I merely countered with one only about 40 years old. The fiat world is not all that old and certainly yet to be fully tested/stressed. If gold's relevance is so much different than 1971, why do the central banks have every bit as much gold as they did then? There's also a lot more gold above ground since then in jewelry, etc. Someone is buying this 2800 tonnes/yr that keeps on coming out of the ground. So it would appear it's relevance is essentially unchanged in 40 yrs. In fact, it's price rise from 2000-2011 would suggest it was quite relevant to world economics (ie sniffing out currency weaknesses and/or inflation).
When Asians dump their gold jewelry, and central banks dishoard their 32,000 tonnes, then I'll buy into the irrelevance of gold in today's world. The world has changed in many ways since 1971....yet gold doesn't appear to be one of those. Not yet at least. The IMF and others have been on the verge of selling their ounces numerous times....most all of it bluster. The US was a key part of the 1961-1968 London Gold Pool. Those guys sold about 3,000 tonnes of gold and then gave up trying to manipulate the market because they ran out of other people's gold to sell. If the US was really interested in selling EVERY BIT of their gold in 1971, they should have been just as interested in doing that in 1968 when there were ready buyers. I don't get the difference. China would be happy to take our 8,133 tonnes right now. They could sell off $300 BILL in TBonds and be done with it. It would be a fairly small fraction of their total reserves. So why doesn't that happen?
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<< <i>What about adding to the poll the other half of the debate between Baseball and STMM which essentially was:
Stocks are worthless pieces of paper. >>
Facebook is......$222,000,000,000 worth of hot air. >>
I made a ton a money on that hot air.......not to mention my family members and friends post there all the time.
I do not.
A lot of folks have made money on similar stocks. When the dust settles there really is not much to the company. Not a quarter trillion dollars worth.
<< <i>Once again, just how do you or anyone foresee the notion of backing currency with gold? I'm genuinely curious how that would work.
Here's my problem with gold as a "currency" in this day and age. For the longest time throughout history, the population was relatively stable and the economy was more or less a zero sum game until the industrial revolution took that on an exponential growth ride. Today, there are BILLIONS of people. Even if we carve up all the gold and argue that one ounce is worth $10,000 and that is a given person's monthly pay, there isn't anywhere NEAR enough of it to keep paying that person one ounce per month as populations increase, let alone productivity increases in the economy that require substantially more. So 10 years from now, because of population alone, that person might only get 20 grams, and in 30 years 5 grams. The metal itself is INHERENTLY inflation prone as I see it and HYPERINFLATIONARY in a matter of few decades the way the math works. Maybe I'm not viewing this correctly. I realize that scrips would trade and probably not the metal itself but at the foundation of it, that really doesn't make a difference. >>
If you're interested in how that really worked then read some articles on gold standards by Dr. Fekete. The 19th century growth in the US was NEVER a zero sum gain. When the bankers needed more money to build more rail roads and other things they just printed more national bank notes (or US bills when in effect) to fund loans. Those guys cheated on the gold standard (or any other standard) whenever they felt it was needed. During the war of 1812 the southern banks ignored the gold standard and just printed money causing strong inflation in the south for about 10 years. During WW1 all nations ignored the gold standard and printed money. No wonder inflation ran high in those years. There's a pattern here (ie a gold standard that is blamed as the cause for banks losing control).
Look into real bills (ie gold payment promises). That's how daily, weekly, and monthly transactions were handled prior to 1913. There was no need to have a carved up piece of gold available for every transaction. Merchants never could have survived like that. Inflationary booms or busts of the 19th century were caused by bankers printing too much money against a gold standard, or gold reserves in their banks. At times they'd sell the gold reserves and get into more trouble. Paper ruled the booms and busts of the 19th century, not gold. Cheating bankers is whats hyper-inflationary. Show me a 19th or 20th century nation that rigorously followed a gold standard with "real gold bills" and subsequently visited hyperinflation. The amount of gold and gold as legal tender in the US in the 19th century drew immigrants here. It makes a huge difference on whether real bills actually circulate. Real bills were purposely not used in the return to the 1920 gold standard and it was one reason why Germany couldn't protect itself economically....among others. The last true gold standard went bye bye in 1914. And you can say that a number of the gold standards in play during the 19th century weren't true gold standards either. Banks were off the standard probably as often as they were on it. The last 100 yrs (on the FED) have been effectively off a gold standard....hence >95% loss in the purchasing power of the USDollar. The last sniff of a partial gold standard left in 1971-1973.
I agree with the US govt and most everyone here that a gold standard didn't work in the 19th century and wouldn't any better today when bankers cheat on it. They would cheat on whatever standard you put into effect. It still comes down to ethics and a moral society. But I also agree it's a good idea to keep those 8,133 tonnes in the US vaults as a symbolic measure as well as $300 BILL in catastrophe insurance that ANY major nation in the world would be happy to exchange for. Until the rules and perceptions change again, that's the way it will be.
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<< <i>What about adding to the poll the other half of the debate between Baseball and STMM which essentially was:
Stocks are worthless pieces of paper. >>
Facebook is......$222,000,000,000 worth of hot air. >>
I made a ton a money on that hot air.......not to mention my family members and friends post there all the time.
I do not.
A lot of folks have made money on similar stocks. When the dust settles there really is not much to the company. Not a quarter trillion dollars worth. >>
The dust already settled when it went to the low 20"s !
I give away money. I collect money.
I don’t love money . I do love the Lord God.
<< <i>“There was a big debate during Gerald Ford’s administration about whether to sell ALL of the U.S. gold. In 1976, Treasury Secretary William Simon and Fed Chairman Arthur Burns met with me and President Gerald Ford to discuss Simon’s plan to sell off all 275 million ounces of gold and invest the proceeds in interest-bearing assets. Simon (with help from Milton Friedman) said gold serves no useful monetary purpose, but Burns and I carried the day with the argument that gold is a necessary ultimate crisis backstop to the dollar.”
Link >>
A discussion between treasury and FED officials is hardly coming within a whisker of selling off the US gold. Wouldn't such a thing have to get some sort of approval from the US Senate/Congress? That same Arthur Burns also regretted not taking "measures" to push gold back down in the 1970's. Why they didn't form a 1970's London Gold Pool (1972-1980) is beyond me. It figures those guys would have that discussion just as gold was bottoming in price in 1975-1976. I'm sure there's a big debate every few years to dump all the gold. Yet, it's still there 43 years after the gold window was closed. Even if they sold the gold off, they still had the reserve currency to print up more money and go out and buy it back again. The Swiss had a national referendum on whether to increase their gold reserves to 20%. I would hope the US would have at least a similar national debate of sorts before selling off the current 8,133 tonnes. Greenspan was a gold bug in 1966 and wrote a paper on it. But when he assumed his treasury positions he was forced to recant all that. Now that's he a private figure again, he's saying much the same thing he did in 1966.
There's no requirement to back an entire economic output or the entire national debt to gold. A simple ratio is sufficient. Could be as low as 3-5%. That at least produces some controls on spending and debt. Currently we have none. As I've said already, I don't support a new gold standard as you have it planned out. The banks have already cheated on the current monetary standards with $300 TRILL in otc derivatives. Having a gold standard wouldn't stop that. The bankers came up with their own derivative's currency in 1999-2001 when the banking laws from 1933 were revoked. Derivatives act somewhat like money and give those guys a nice return every year. And doing so they work outside all regulations and around the congress. No gold standard would have stopped that or the 2008 financial crisis.....or the next one that is coming either. So keep the 8,133 tonnes as critical insurance and leave it at that. Dodd-Frank was another attempt to assign standards to bankers but nearly all that bill related to derivative's has been gutted.
The dust already settled when it went to the low 20"s !"""
Bidask let's look at the numbers.
Facebook is claiming 1 billion plus users. That is 1/6th of the worlds population. If everyone on Earth began using the site at similar revenue and profit number per capita, the PE of 80 would drop to a manageable 13.5.
Problem is, that assumes no drop off of current users and advertisers willing to pay advertising rates in poverty stricken markets that are competitive to the first world rates.
Good luck going forward. This is a classic pump and dump that enriches the insiders and pisses on the late comers.
At that time US gold reserves were worth about $150 BILL. Realistically, what could you really fix permanently in the US with $150 BILL? Today that's about a month of govt expenses. How would you know where that money really went? I'd vote to keep it as insurance just like Greenspan and Burns suggested in the 1970's. $150 BILL is chump change for national monetary insurance. The govt paid out $TRILLIONs in slush money following the 2008 crisis. Since that article was written gold is about 2X higher. So the insurance paid for itself. You can bet if they had that money in 2007 it would have been ear-marked for "projects to nowhere." JFK was pushing hard to get the US govt to take over monetary issuance from the FED in the early 1960's (ie print US govt notes vs. FRNs). That didn't happen despite the discussions and president's obvious approval.
Gold is physical insurance that lives outside the un-backed digital money system. I'll concede that a FRN is something scarce with only only $1.3 TRILL in existence. But, what isn't scarce are digi-dollars in computers, derivatives valued as assets/money, currency swaps, and every other form of distorted "debt money" that exists in the tens of $TRILLIONs. People can forget about a gold standard all they want. The fact that gold is still perceived to have value is what counts....and makes it a standard of sorts to each and every person. As long as there is gold jewelry and gold wedding rings, gold will not be forgotten. It's role as insurance is currently independent of a digital monetary system. When Bit Coins have become the world's only real/reserve currency and the only gold mining taking place is on the internet for bit coins, then gold will take a step down. At the moment, I'm not sure what could be insurance from cheating bankers in the future. The system is only as honest as the people running it.
Some of the proceeds from the gold reserve sales could also be used as incentives for finding better and cleaner ways to power our economy. As an example, monetary incentives could be set up that would pay anyone who figured out how to make a car run without using fossil fuels and did not pollute the atmosphere. Five million dollar awards to anyone who can build such a car and meet all the set requirements. You would be surprised how many people would take a crack at such an award and who knows what someone out there would figure out with such a large carrot sitting there waiting as incentive.
With "brilliant" ideas like from the same author on how to spend the $150 BILL in gold reserves........we're lucky we kept it.
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<< <i>Here's a guy in 2007 saying we should sell off the gold reserves
At that time US gold reserves were worth about $150 BILL. Realistically, what could you really fix permanently in the US with $150 BILL? Today that's about a month of govt expenses. How would you know where that money really went. I'd vote to keep it as insurance just like Greenspan and Burns suggested in the 1970's. $150 BILL is chump change for national monetary insurance. The govt paid out $TRILLIONs in slush money following the 2008 crisis. Since that article was written gold is about 2X higher. So the insurance paid for itself. You can bet if they had that money in 2007 it would have been ear-marked for "projects to nowhere." >>
No one is suggesting they should have sold at any point. And for my part, I'm glad they didn't. It's been sitting there, let it sit some more. There's not much point to selling so why bother. >>
Glad to see you come around baseball.
Merry Christmas!!
I knew it would happen.
Yet the rejoinder from others--historically and contemporaneously--likely has to do with 'utility" drawn from other points of view: gold's glittering beauty, its multifold symbolism, its vast tradition, its history (since history has been passed on) as the hallmark of power, the booty of conquerors, the payment of tribute, the associations with divinity, royalty, the timelessness....
Here's a warning parable for coin collectors...
<< <i>"A lot of folks have made money on similar stocks. When the dust settles there really is not much to the company. Not a quarter trillion dollars worth. >>
The dust already settled when it went to the low 20"s !"""
Bidask let's look at the numbers.
Facebook is claiming 1 billion plus users. That is 1/6th of the worlds population. If everyone on Earth began using the site at similar revenue and profit number per capita, the PE of 80 would drop to a manageable 13.5.
Problem is, that assumes no drop off of current users and advertisers willing to pay advertising rates in poverty stricken markets that are competitive to the first world rates.
Good luck going forward. This is a classic pump and dump that enriches the insiders and pisses on the late comers. >>
Who pumped and dumped? Did the latecomers who bought FB in the 20's, 30, 40's, 50's, 60's and hold the stock feel like they have been pissed on? Don't even answer the question or you will expose yourself as an insider !
I give away money. I collect money.
I don’t love money . I do love the Lord God.
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<< <i>What about adding to the poll the other half of the debate between Baseball and STMM which essentially was:
Stocks are worthless pieces of paper. >>
Facebook is......$222,000,000,000 worth of hot air. >>
I made a ton a money on that hot air.......not to mention my family members and friends post there all the time.
I do not.
A lot of folks have made money on similar stocks. When the dust settles there really is not much to the company. Not a quarter trillion dollars worth. >>
I suppose you've never been bullish on Google either, then?
Collecting 1970s Topps baseball wax, rack and cello packs, as well as PCGS graded Half Cents, Large Cents, Two Cent pieces and Three Cent Silver pieces.
Knowledge is the enemy of fear
<< <i>Once again, if you lost every spec of gold on earth, mankind would move on just fine immediately afterward. There might be some slight disturbances here and there but absolutely no "shock" to society in any effective way. That is effective useless as useless can get. Gold's PRIMARY and INTENDED purpose (or "use") by those who mine it, buy it, own it is to let it sit there and do NOTHING. That is PREDOMINANTLY the INTENDED and ACCEPTED and DESIRED "use". And you really want to debate and take "polls" about such an obvious fact??? >>
Gold is a symbol and store of wealth the world over. I would call that very useful. Jewelry made of gold counters your argument that those who buy it, "let it sit there and do nothing".
It may not contribute to the manufacture of some consumable widget in the practical, utilitarian way you seem to imply, but then again, most of what humans really cherish and value lacks the same utilitarian blandness of the consumable widget.
Tyler
1) Medium of exchange;
2) Store of value;
3) Unit of account.
That is money defined.
Over short periods of time gold is a commodity like copper, soybeans, or oil.
"Well, its certainly been a store of loss over the last several years for a lot of people. A bank account and a mixed portfolio or a stack of 100's can be and more readily a symbol and store of wealth too. Even on the Gold Rush show on TV, the first thing they do when they get gold is unload it for cash or convert it and put it in the bank. Its funny they have all that gold, but their most valuable asset is a good dirt mover.
The US dollar is a symbol used all over the world. People know and understand its denominations and value. Gold has a limited audience. The common person doesn't even know its value or how to use it if they had to (or most governments for that matter because they have over diluted its delusional value).
Jewelry is an instant lose of value (not that a ridiculously 1000% overprice gold item has any real value except being a dramatic loss). I'd rather have a .999 bar sitting.
For me, gold is a part of my ever changing portfolio. Its purchase, use, storage, and redemption is different for everyone. I'd change the statement to
"Gold implies a mysterious and glamorous symbol of wealth, riches, myth and lore. - But if you're not careful, it can also symbolize your bankruptcy."
<< <i>Gold is a symbol and store of wealth the world over. I would call that very useful. Jewelry made of gold counters your argument that those who buy it, "let it sit there and do nothing".
It may not contribute to the manufacture of some consumable widget in the practical, utilitarian way you seem to imply, but then again, most of what humans really cherish and value lacks the same utilitarian blandness of the consumable widget.
Tyler >>