Quote:
Originally Posted by axiomatik
? As recently as 2000, gold was only $237/oz. Does that mean we'd all magically have 6 times as much money now as we did ten years ago?
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i don't know if this is a troll post or what? absolutely.
if we all bought gold in 2000, and if we all sold our gold right now, then yes, we'd all "magically" have almost 6 times as many
dollars we did in 2000. that magic is called "investing."
inflation between 2000 and 2010 was 27%. if we held a set amount of dollars in a box somewhere, those dollars would now "magically" have 3/4 times the amount of value they had ten years ago. where did it all go? those dollars the US government printed in the interim sucked the value right out of the box, your wallets and your bank accounts. i don't know about you, but i'd rather have 6x instead of 3/4x.
similarly, if we held a set amount of gold as currency from 2000 to 2010 (and ignored the effect that would have on demand for gold and all that), then yes,
in this very instant we'd have roughly six times the buying power we did ten years ago with the same amount of gold, due to artificially inflated demand for gold, (actually not quite 6x, based on the peg of 2000 and 2010 dollars to gold).
why? that magic is simply the power of demand. that's also why you should fear the death of the dollar as the reserve currency of the world. having the dollar as reserve currency "artificially" drives up international demand for the dollar, giving it more buying power it would otherwise have. high demand things are worth more of other types of things. simple enough.
Quote:
Originally Posted by axiomatik
It's a commodity. It's price fluctuates with the market, and has very little inherent value besides being shiny.
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alright. i don't see how this is an argument against gold? money is also a commodity. the value of the currency also fluctuates with the market (hi, i'm forex, etc.). it has even less inherent value because the US government pretty much pulls it out of thin air all the time.
that doesn't mean gold can't bubble or crash. economic instability drives demand for gold up. if $237 in 2000 is worth $300 in 2010, you'd expect a steady priced commodity bought for $237 in 2000 to be worth $300 in 2010. but instead, gold is worth what, like $1300. however, that doesn't mean much from 2000-2010. at a minimum, you should be able to conclude quite easily that gold from 2000-2010 is clearly a superior store of wealth compared to dollar (and probably all fiat currencies). it probably would have been even without the artificial demand caused by the economic shitstorm. look at any super long term chart for value of gold; it's pretty obvious.
that doesn't necessarily mean it's a good buy or a bad buy. in short term, it depends on the circumstances of the moment what you think is going to happen. in long term, its a hedge for people who already have alot of money. not people with mortgages and expenses. i wish i bought in 2008. my friend told me it was going to jump up, and i didn't believe him. I think it was at $750 or so at that point. he bought in. he held, i told him it was going to drop, and he should sell. he told me to stfu. he said it was going to crest $1000. i think he sold at $1100/oz or so on something like 50oz. 50 x $350 sick ROI. he held it less than two years. i didn't believe them. now it's at fucking $1300, lol. almost double its value in less than 3 years, and i missed out on all of it. good thing i'm not an investor.