Potential Panic About Gold

by metatron 34 Replies latest jw friends

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  hoser

  Heard a very interesting discourse that said with all the paper money being printed worldwide, gold will continue to rise in value. (This was not a gold sales infomercial.)

  interesting you said that. Gold is not rising in value. The money(USD) is losing value because there is a greater supply of it created every day by the Federal Reserve. Therefore it takes more and more USD to purchase an ounce of gold because the USD is constantly being diluted.

  If we were to go back on the gold standard there would be a major contraction in the economy, because there just isn't enough gold to cover all the money out there
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  Glander

  good point, hoser. That was my thought, too. Just like diamonds, there is so much in reserve that the value can be manipulated easily by releasing stockpilesIf it ever gets to the point that gold, silver, etc. are the only currency then we might be smarter to buy lead, as in bullets.
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  King Solomon

  Hoser said:

  If we were to go back on the gold standard there would be a major contraction in the economy, because there just isn't enough gold to cover all the money out there

  Yup, there's not enough gold in the World for the US alone to go back on the gold standard, let alone for other countries, so it's pointless to even consider (except for gold bugs, who expect it to make them some $$$) Gold suffered the same problem of being mixed with impurities for thousands of years, which is exactly the same kind of devaluation that occurs when counterfeiters (or Fed electronically creating dollars out of thin air) weakens the worth of the currency.
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  hoser

  The problem with gold or any other precious metal is that it has to be converted to cash at some time to be useful. I cannot eat gold when I am hungry. I cannot fuel my vehicle with it when I want to go somewhere. It is speculative to own any commodity unless I have some kind of use for it.

  An investment in gold/silver/diamonds/ whatever is only good if its price rises faster than the rate of inflation.
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  slimboyfat

  If we were to go back on the gold standard there would be a major contraction in the economy, because there just isn't enough gold to cover all the money out there

  Um, gold would go up in value until there is enough. That's the point.
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  hoser

  Um, gold would go up in value until there is enough. That's the point.

  Yes you are correct, however we would limit the creation of new money, thus hurting our economy growth. Under a gold standard the only way new money can come into existence is by mining more gold
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  slimboyfat

  Oh and unlimited money creation has not harmed the economy?
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  hoser

  I don't want to be the devils advocate of the fiat currency system, but I think it is one of the reasons we are able to enjoy such a high standard of living in western countries.
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  slimboyfat

  It has certainly improved the quality of life of bankers and speculators. But money creation does not actually create wealth, quite the reverse for the majority of the population.
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  hoser

  That's cause they don't understand the monetary system and the banks don't want the common folk to understand either. Basically the fiat system we are under punishes savers and rewards borrowers.