Investing in Oil instead of T-Bills

Discussion in 'Economy' started by shekib82, Aug 14, 2011.

  1. shekib82
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    shekib82 Rookie

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    Today on the CNN show GPS with Farid Zakaria, the anchor had a segment about China's complaint regarding the US bond downgrade. He has said that the Chinese are angry at their government for investing in US securities and that they see themselves as doing America a favor. He went on to counter this last statement by saying that China has no alternative then to invest in US securities as the EURO is on shaky ground and Swiss Francs and the Pound sterling can't provide enough currency for china's growing government reserve.

    This got me thinking: it is true that as a currency there seems to be no alternative to US securities, furthermore the value of Gold is very speculative so it no longer makes sense for government to invest in it. But this said what about another commodity that is being traded, that can be stored safely and easily and that will always have value: Oil.

    Indeed, if china wanted to store its wealth in something, Oil would be the best solution. Another would be iron, or copper or really any other materials used for industry or that can provide energy. I think in trying to find a future global reserve currency the governments of the world should seriously consider one that is values in real world commodities that are used and will continue to be used for energy and industry.

    Now of course if china were to try to buy a lot of oil immediately it would raise the price, but it could do it gradually. Same could be done for any other commodity.
     
  2. ABikerSailor
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    ABikerSailor Platinum Member

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    Hey STUPID........wanna talk about the fact that gold has gone UP while oil has gone DOWN?

    Fuck.......just last week, oil was under 80 bucks/barrel. It used to be around 110 buck/barrel.

    Gold has gone from 300 bucks per ounce (In 1998) to over 1600 (and at one time it was over 1700) bucks per ounce.

    Don't watch the markets closely, do ya?
     
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  3. KissMy
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    KissMy Free Breast Exam

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    Exactly - It cost a lot of money to store oil. It cost next to nothing to store gold.
     
  4. konradv
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    konradv Gold Member

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    But that's just a bubble. Gold has very little intrinsic value beyond jewelry and some manufacturing applications. It's all in the minds of the buyers and, when their minds change, the last ones in are going to find their gold woth half of what they bought it for.
     
  5. ABikerSailor
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    ABikerSailor Platinum Member

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    Wrong. Every nation throughout history has used gold as a currency, with many of them basing their economy on how much they have of it.
     
  6. MaggieMae
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    MaggieMae Reality bits

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    Oh but they already are. Never underestimate the Chinese capability to recognize potential long-term problems and invest immediately in short- and long-term solutions. It has become a forward thinking country, unlike the USA which once led the world in critical strategies. Sad, really.

    China
     

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