Gold is the constant...

Discussion in 'Economy' started by Missourian, Aug 31, 2011.

  1. Missourian
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    Missourian Gold Member

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    I had an epiphany today.

    Having been born long after the sunset of the gold standard backing currency, in my mind I think of the dollar as being the constant and gold value increasing...but in reality, gold is the constant.

    Consider golds value is always the same, but as the dollar is deminished, it takes more to buy the same amount of gold.

    Now this may be common knowledge to most of you, but to me it was a completely new and unsettling perspective of the devaluation of the dollar.
     
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    Last edited: Aug 31, 2011
  2. sparky
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    sparky VIP Member

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    well i suppose your head is gonna explode when it dawns on you inflation is the hidden tax then Missourian....
     
  3. expat_panama
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    expat_panama Silver Member

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    That approach is so childishly stupid that my first thought is to just yell for you kids to stop messing up my front lawn. My second thought is the fact that there are so many of y'all and that most are actually very nice people.

    Here's the thing, if you worship gold--[​IMG] then we need to change the second amendment. If you care about our having money that we can use to buy and sell things then we need to agree that money works only if it can buy today pretty much the same stuff it could buy yesterday. Wild inflation/deflation is bad, stable prices good.

    If make dollars buy the same gold day after day, then the prices for food, clothing, and shelter go wildly up and down. That's bad. We're better off with letting what we pay for gold go up and down like crazy so our food/clothes/housing prices are more workable.
     
  4. editec
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    editec Mr. Forgot-it-All

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    That's SORT of true. Certainly the dollar's loss of value in our lifetimes makes gold seem like a thing of true worth by comparison

    But gold doesn't really have a constant value, either, really.

    It's value changes against all other things (of intrinsic worth) depending on the state of the economy.

    But as a hedge against uncertainty, gold does have a shining history of retaining a fairly good relative value over time, that is certain.
     
  5. expat_panama
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    expat_panama Silver Member

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    What are you talking about? In real life the price of gold soars and plummets wildly and unpredictably.
     
  6. editec
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    editec Mr. Forgot-it-All

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    What am I talking about?

    What are you bitching about?

    I thought my post made it rather obvious.


    I am talking about its sustaining value "over time" just as I wrote, XPat.

    My post was not HALF of what I wrote, my post was ALL of what I wrote, Lad.

    Parcing out PART of it, to complain about it as though I'd not written the other part of it is rather intellectually dishonest, don't you think?
     
  7. expat_panama
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    expat_panama Silver Member

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    Ah, this must not be a good time. We can do this later.

    Cheers.
     
  8. 8537
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    8537 Senior Member

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    The value of gold is subjected to the same market forces that change the value of Twinkies, RAM, cell phones, beer....

    And its value changes quite dramatically at times. Just because the dollar was once pegged to it doesn't mean that its value remained constant. Just ask the Spanish circa the 1500's.
     
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  9. expat_panama
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    expat_panama Silver Member

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    Exactly. Money is product of consensus, and it gets pegged to what ever most of us think is important. A long time ago people thought gold was important, now that belief's for the backside of fringeland. Most of us have decided we care about food/clothes/shelter and that's what we're pegging our money to. The rest can either deal with it or go stick it.
     
  10. Big Fitz
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    Big Fitz User Quit *****

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    Yes, this is somewhat true. But compared to twinkies, RAM, taconite, bananas or silk, it's value is outstandingly stable because it is so rare and its production is well defined for the most part.

    But of course even a resource like that can be subject to collapse. Take the Amythest. Before the colonization of the new world and even far into it, this stone was considered rare and precious. Not quite like diamonds, but still up there with emeralds and rubies to some degree. Then came the discovery of Amythests in Canada. So many deposits were discovered it collapsed forever the global market and made the Amythest a semi-precious stone in only a few decades.

    Now till a deposit like that is discovered in the world for Gold, it is subjected only to the pressures of consumption (eating it, oy! or using it in other consumables) and discovery/processing (very tightly controlled). You can have local markets become saturated like Skagway and Klondike were during the Yukon Gold Rush. But that's local market pressures, not global. All this is why Missourian is fairly correct in his assessment of Gold being the constant... and the standard.
     
    Last edited: Sep 1, 2011

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