Tighter modding please. Cant let may 2016s running around with their heads cut off.

qft

If you aren't valuing gold in dollars how are you valuing it?

Really? What goods can I buy with gold? I get irritated enough when a store doesn't accept credit cards/AMEX.

This Poker Junkie00 seems like the latest incarnation of mrmusicrecorder and silver_man2

Ratios between real assets. Like how currently gold and especially silver is WAY undervalued in comparison to extremely overvalued real estate.

The current silver to housing ratio for a median priced American home is roughly 8,000 ounces of silver.

You have to be in one funky fantasy paradigm for a run of the mill dinky American home costs the equivalent of 8,000 ounces of silver.

Imagine having 8000 ounces of silver in like 1910 or 1920... You could buy like 6 homes or something like that.

I'm not saying we have to pay for things in grams of gold. You can have paper... The paper just needs to be backed by real money. Otherwise you get a debt crisis like the one we have now, where our savings is inflated away because the dollar is not a safe store of value.

We've been conned into accepting unbacked fiat. A silver dime in 1964 bought you a gallon of gas, and it still buys you a gallon of gas if you exchange that dime at a coin shop. Take that silver dime to a gas station and you can't even buy a gumball in one of those vending machine. What's changed?

Fun little piece of information that I'm 100% sure none of you have seen. Go to usdebtclock.org and go all the way down to the bottom right corner.

Homework assignment:

How many median priced homes would 8000 ounces of silver have bought you in 1915.

I agree paper currency should be backed by gold, but that's not what we're discussing. You said gold is money. If we accept the definition/function of money from wikipedia, then it is clearly not money, i.e. it is not a medium of exchange, a measure of value or a standard of deferred payment. Whether it's a store of value is debatable.

of course gold is a store of value, what would be the point of backing currency with it if it wasn't? China, India, Russia, central banks and even investment banks are all accumulating gold like crazy. They aren't doing this because it's a hobby of theirs.

They are doing so because it is money and one of the things money has to be is a store of value.

Why would we accept Wikipedia's definition of money? So, gold has been universally accepted as money for thousands of years... In many languages the word for silver and money are the same........ But Wikipedia comes along 8 years ago and says otherwise?

who gives a ****?

A house has cash flow, silver pays no dividend and has storage costs.

What law of economics suggest that there should be some constant ratio between the price of a house and the price of a commodity?

Who cares if silver doesn't pay a dividend? Silver isn't a stock... It is money, it is real wealth.

The ratio doesn't have to be constant but there is a LOT of stealing and manipulation going on if 8,000 ounces of silver (money and a real asset) could buy you probably 8-10 homes 100 years ago, but today it can only buy you one average home in America. These asset values are way out of whack based on our fiat debt system, that overvalues everything in society in comparison to real money... Gold and silver.

“Gold gets dug out of the ground in Africa, or someplace. Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head.”

- WB

I'll give you that it's a store of value because it's liquid. But how well does it do its job as a store of value? Historically, not well:
http://www.macrotrends.net/1333/hist...100-year-chart

Stocks aren't money either, but the S&P did a much better job as a store of value.

And that's not Wikipedia's definition of money, no more than Black Scholes is Wikipedia's option pricing model. If you have a better definition, please forward it, otherwise, gold is not money.

"By this means (central bank and no gold standard) government may secretly and unobserved, confiscate the wealth of the people, and not one man in a million will detect the theft." -- British Lord John Maynard Keynes "THE ECONOMIC CONSEQUENCES OF THE PEACE" (1920).

From the horses mouth.



"In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value." - Alan Greenspan (obviously wanting on the record telling the truth after he was instrumental in screwing things up).


"Gold is money, everything else is just credit." - JP Morgan (testimony to congress 1912)




Buffet is full of it. Of course buffet wants you sticking your wealth in the stock market and not into gold.

See quotes above.

Your chart is meaningless. You are still valuing gold in dollars. If America was never born and the dollar never came to existence... Would gold have value today just like it had value 1400 years ago? Yup. The dollar didn't predate gold... Our founding fathers didn't link gold to the dollar they linked the dollar to gold.

Can anything technically be considered money? Sure...but gold has always been money because it is a store of value, rare, a unit of account, fungible, indestructible, medium of exchange. Gold is money because it holds all the characteristics of what money has to be. Golds inherit value comes from the fact that it is money.

Gold is constant. The dollar price of gold changing day to day just represent how unstable and speculative the dollar is and how it is not a store of value. If gold doubles in price tomorrow that just means the dollar is tanking further.

Future generations will look back in disbelief and mockery at the value our society currently places on gold and other "precious" metals.

"Gold is money" is such a prehistoric / simplistic view that to any logical mind makes little sense. We don't live in Westeros.

The way to "protect savings" against inflation in the safest way possible is easy - put it in a savings account. Sure, at the moment the return is next to nothing, but that is because inflation is also next to nothing.

When inflation rises, interest rates rise and you get a return that equals or beats inflation.

I mean this isn't difficult stuff.

In my country inflation is tracking at under 1% and a 12 month term-deposit pays 3.5%+.

HA! The dollar is way more worthless today that it was 50 years ago. And just because we don't have super high inflation now because we export our inflation doesn't mean it isn't going to come washing back onto American shores in a tidal wave. What? You think all those countries that have dollars are just going to hoard them forever and never spend them?

Not to mention... Bank insolvency is a very real possibility...and there is no FDIC insurance.

Also... Why in the world would you keep your wealth in the bank anyway even if the banks weren't in real risk of going insolvent? Don't you think it's pretty silly to loan your money to the bank for a 0% interest rate in return? When rates go negative are you still going to loan your money to the bank while they charge you for loaning it to them?

Actually it is debt that is barbaric. Gold is savings... Which by definition is civilized.

The world is swimming in debt and that is why central banks, China, Russia, India, and investment banks are all accumulating gold at a very fast pace.

Use some logic. There is inflation AND interest earned.

The real question should be - If I put $1 in a savings account 50 years ago and reinvested all interest earned along the way what would it be worth today?

(Genuinely interested in the answer if anybody knows)

I don't care about year 1400. I'm talking about today, i.e. post 1971. Is gold money? No. It only functions is a store of value, and does not serve as a means of exchange or unit of account. Nobody today transacts or quotes prices in ounces of gold.

And no, valuing gold in dollars in not meaningless. Since gold is not a medium of exchange, it must be converted to something that is, i.e. dollars. I could care less if gold came from Jesus's anus. If converting gold into dollars after holding it for the last five years buys me half the number of Wendy cheeseburgers, it's performing poorly as a store of value. There are assets that perform better as a store of value.

Except this isn't the case at all.

Bread is up about 120% in the last 10 years. If you bought an ounce of gold 10 years ago you will be able to buy roughly the same amount of bread today with that gold coin as you could buy with it 10 years ago. But you are paying twice as much in dollars for that bread.

Even the bible states how you could buy 350 loafs of bread for one ounce of gold in 600 BC. And today.... That same ounce of gold buys you roughly 350 loafs of bread.

I mean haven't you ever heard the gold ounce with relation to a nice suit?

How a nice suit cost 20$ Or an ounce of gold in 1920... And how that same ounce of gold today converted into $1,250 still buys you a nice suit.

You earn a silver dime in 1964... And that will buy you one gallon of gas. If you saved that 1964 silver dime for 50 years until today... You can still buy that same gallon of gas, granted you exchange the money for its fiat equivalent. But if you take that silver dime and use it to buy something... You can't even buy a gumball with it in a vending machine. What's changed? Not the silver coin which is real money... What's changed is that dollar has been decimated hence not a store of value.

If I had a crystal ball and it told me gold would drop 50% in the next 10 years the only reason I would sell is to accumulate twice as much gold in 10 years. If somehow I was forced to not sell, I wouldn't care one bit because the only reason gold would go down 50% is because the govt decided to stop printing spending and being reckless. Which means the dollar would become stronger and prices would drop. Meaning in real terms I wouldn't be losing on my gold at all. I could sell my gold in 10 years and buy the same amount of stuff that I could buy 10 years earlier when prices were twice as much. In fact, I would be happy if gold went down 50% in value because that would mean we wouldn't be on the verge of s currency crisis.

But if you invested 20$ in the S&P 500, you would have made almost 100x your money in 96 years. And that 20$ would be (adjusted for inflation) worth about 19k$ today. Which is 15x better than holding gold over that period.
https://dqydj.com/sp-500-return-calculator/

You could win literally almost any argument with gold bulls by just posting that S&P500 calculator link lol.

http://www.moneychimp.com/calculator...calculator.htm