Federal Reserve wont let Germany see all its gold...lolol

[El Diablo Blanco]

I snicker with contempt every time someone calls gold an investment.

That's what they are taught to believe.  Who even knows how much gold there actually is.  It's such a secret and always hidden so you just have to take the word of your gubnint that they actually have what they claim.

Funny how they parade around cash like it's nothing, but you can't fucking see our gold.

[Tedim]

That's what they are taught to believe.  Who even knows how much gold there actually is.  It's such a secret and always hidden so you just have to take the word of your gubnint that they actually have what they claim.

Funny how they parade around cash like it's nothing, but you can't fucking see our gold.

I have a business partner, who after years of having to suffer through my contrarian diatribes stated with some pride that he bought gold, then proceeded to tell me about his ETF. 

[King Shizzo]

Anytime you would like to compare earthly possessions,  looks, build, jobs...let me know you fat  Jobless monkey. I am superior to you in every measurable aspect.... hahahaaaaa  

Groink, you are a smart man. You are posting some racist shit lately.

[arce1988]

 

[syntaxmachine]

Sometimes, you have to make investments for the "maybes" in life.

1. Unlike farmers' hedging with commodity futures or some such, P(USD hyperinflation) is either retardedly low -- if all factual evidence currently available is any indication -- or otherwise utterly opaque (the probabilities facing farmers are uncertain as well, but a wealth of experience at least indicates rough estimates of crop failures and the like). In either instance it's hard to see how hedging against it is any more rational than hedging against a meteor strike, i.e., it is hard to see how it is rational at all.

2. Even if P(USD hyperinflation) were 100%, it isn't clear that shiny hunks of metal would be of much use. Contrary to crackpot opinion, gold has never been a good inflation hedge (vhttp://papers.ssrn.com/sol3/papers.cfm?abstract_id=2078535); why would it suddenly start functioning as such?

So, P(USD hyperinflation) is retardedly low or otherwise opaque and gold has never been a good inflation hedge, yet is rather expensive (way above historical average) to buy into, incurring significant opportunity costs. I'm confident that this outweighs doomsday prescriptions from crackpots and googly-eyed kneegars (see the Industry board) trying to profit from gold bug ignorance.

[Nomad]

Im retarded?
Lets run with your analogy then.
Paper money only has value because people put "faith" in it.
So what gives gold its value if its not "faith" of people?

Here you go.

http://en.wikipedia.org/wiki/Gold_standard#Theory

Commodity money is inconvenient to store and transport. Furthermore, it does not allow a government to manipulate or restrict the flow of commerce within its dominion with the same ease that a fiat currency does. As such, commodity money gave way to representative money, and gold and other specie were retained as its backing.

Gold was a common form of money due to its rarity, durability, divisibility, fungibility, and ease of identification,[10] often in conjunction with silver. Silver was typically the main circulating medium, with gold as the metal of monetary reserve. Another great advantage is its anonymity, as although most ingots bear a serial number, re-melting and/or re-refining can eliminate all traces of its source. An excellent example of the effectiveness of gold in allowing wealth to cross borders occurred after the fall of Vietnam, when many refugees carried their wealth to the West in gold.

Gold is hard to fake, easy to identify, easy to mold into necessary shapes and the resulting new shape is very durable.

[ukjeff]

Here you go.

http://en.wikipedia.org/wiki/Gold_standard#Theory

Gold is hard to fake, easy to identify, easy to mold into necessary shapes and the resulting new shape is very durable.

Why do you keep missing the point?

Stop concentrating on the "thing" as opposed to the "belief" and you might just get it.

[Nomad]

Why do you keep missing the point?

Stop concentrating on the "thing" as opposed to the "belief" and you might just get it.

You asked this question:

So what gives gold its value if its not "faith" of people?

I provided you with a specific answer as well as a link with more scholarly approved justifications. If you can't "figure it out" then well, the problem is not on my end but yours.

[Wiggs]

USA is so fucking corrupt. Ponzi scheme.

Yes Arce, this is the biggest Ponzi Scheme in the history of Ponzi Schemes.

[calfzilla]

I miss the old wiggs before the conspiracies, black Hebrew BS, Christianity, and such. Still a good dude but you just can't beat the original. Oh how I long for stories of unemployment, white women and thc usage.

[Kim Jong Bob]

I miss the old wiggs before the conspiracies, black Hebrew BS, Christianity, and such. Still a good dude but you just can't beat the original. Oh how I long for stories of unemployment, white women and thc usage.

he was one of the funniest posters back then.

[ukjeff]

You asked this question:

I provided you with a specific answer as well as a link with more scholarly approved justifications. If you can't "figure it out" then well, the problem is not on my end but yours.

We will leave it then, we are not going to convince the other either way. 
No worries.
You keep your gold I will keep my cash.

[Voice of Doom]

If gold has no intrinsic value and isnt important in economic theory anymore why are central banks around the world buying it like crazy?

[ukjeff]

If gold has no intrinsic value and isnt important in economic theory anymore why are central banks around the world buying it like crazy?

Because they know people have a belief that its valuable and they all share that belief.
If the people didn't believe the gold was valuable then it wouldn't be.

[Mr.1derful]

Because they know people have a belief that its valuable and they all share that belief.
If the people didn't believe the gold was valuable then it wouldn't be.

So you admit gold is valuable, which is what matters, regardless of your perceived rationale.  When your dollars continue to fall, watch what gold and silver do, then you might begin to comprehend their true value. 

[Voice of Doom]

Because they know people have a belief that its valuable and they all share that belief.
If the people didn't believe the gold was valuable then it wouldn't be.

All human civilization is based upon shared "beliefs" genius.  

fun fact: The US Dollar has lost 96% of its purchasing power since the Federal Reserve's creation in 1913.  It would seem that they have miserably failed as stewards of the people's wealth.  Specifically, their mandate for stable prices.  It used to cost $20 US Dollars notes to buy 1oz of gold.  Now it costs $1400 notes.  The 1oz of gold is still the same but the loss of purchasing power of the dollar means it requires substantial more of the fiat notes to purchase it.

But by all means...keep your "wealth" in a medium that loses 2 to 4% every year from inflation.

[ukjeff]

All human civilization is based upon shared "beliefs" genius.  

fun fact: The US Dollar has lost 96% of its purchasing power since the Federal Reserve's creation in 1913.  It would seem that they have miserably failed as stewards of the people's wealth.  Specifically, their mandate for stable prices.  It used to cost $20 US Dollars notes to buy 1oz of gold.  Now it costs $1400 notes.  The 1oz of gold is still the same but the loss of purchasing power of the dollar means it requires substantial more of the fiat notes to purchase it.

But by all means...keep your "wealth" in a medium that loses 2 to 4% every year from inflation.

But your golds value is based on currency, its useless to you until you sell it.

[Tedim]

But your golds value is based on currency, its useless to you until you sell it.

Untrue.....I have done business where gold was the "money" exchanged for goods. It's a lot more common then you think.

[Mr.1derful]

But your golds value is based on currency, its useless to you until you sell it.

Tell that to Iran, who is receiving gold for their oil.

[Griffith]

Go and ask any shopkeeper what is the current value of gold against the dollar.
See how important it is to him/her.

Without anything physical backing up the currency, a government can then just keep producing paper which leads to inflation.

With gold, a they can't pump out paper and 'create' money from thin air.

This is the whole point here.

[crownshep]

I`ve posted it before,but time to post again,and some people might realise that paper "money" is a receipt for gold.

[avxo]

Without anything physical backing up the currency, a government can then just keep producing paper which leads to inflation.

With gold, a they can't pump out paper and 'create' money from thin air.

This is the whole point here.

Not necessarily - nothing precludes a government from issuing a fiat currency with a legally imposed cap on the maximum amount of currency that can be issued. Granted, such a thing would be stupid, but it's possible.

[Voice of Doom]

But your golds value is based on currency, its useless to you until you sell it.

If you think gold has no value in a transaction...you've obviously never been with a women....

[Roger Bacon]

Because they know people have a belief that its valuable and they all share that belief.

BINGO

People will always have faith in Gold.  Historically though, other forms of currency have repeatedly failed. 

[Roger Bacon]

But your golds value is based on currency, its useless to you until you sell it.

So, if you need to trade your gold for a more convenient form of currency you can.