REVERSE re-distributioning of wealth with GOLD!
- Thread starter charles brough
- Start date
Total bullshit. In 1970, an ounce of gold was trading for an inflation-adjusted equivalent of about $200; less than even minimum wage pay for a week's work. By 1980, it had spiked to an inflation-adjusted price of about $2400, which most people would consider a pretty good week's pay. Just three years later, in 1983, it was back down to less than $700 (which I guess is an okay week's pay for a non-professional job). As recently as 2001, gold was trading for around $280, just barely meeting the minimum wage.
The price of an ounce of gold has been all over the map in the last 50 years alone, with incredible spikes in value followed by equally dramatic drops.
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No. If the only two things we had available for comparison were gold and fiat currency, then it would be meaningless to distinguish between an increase in the price of gold vs. a decrease in the price of fiat currency. But we have a whole wide world of goods and services to consider, and the price of gold has increased in relation to pretty much all of them, while their price in relation to fiat currency has remained about the same. Arguing that fiat currency has been devalued because gold prices increased is like arguing that my car is holding still and the city around me is moving when I drive to work.
kx000
Valued Senior Member
This
charles brough
Registered Senior Member
Exactly! In the long term expect much higher gold prices and all other prices as well (meaning: less value in the dollar) but people should not confuse it with the near term. We could have a speculative spike in gold prices during the comming months in which it goes up another $1000 an ounce without it reflecting inflation and, hence, the real value of the dollar.
If that happens, the price of gold will then crash. Even so, it will resume its over-all climb afterwards. The debt crisis is serious and the Euro Union could very well disolve and force Europe, the US and much of the rest of the world to fight a collapse with massive deficit and hence inflationary spending. This is the longer trend and justifies the accelerating uptrend in the price of the precious metals. In "The Last Civilization," you can get an even better look where the trends are taking us.
How can you say the price of gold will crash, when it has never done it in the past?
Was that sarcasm? You do realize that the value of gold fluctuates wildly, right?
charles brough
Registered Senior Member
"Crash" was not the best choice of words I admit. All commodities experience a sharp and scary fall after going through a speculative rise. Gold is no exception.
It is going through one now, but the actual speculation phase where it shot up unreasonably was not spectacular, so neither is the fall so far.
brough
civilization-overview dot com
I hate nit-pickers
If you want gold, go and buy some.
I guess if you are a speculator and lose big time, the term 'crash' might be appropriate.
The OP started out talking about speculators buying used gold jewelry at a discount and made it sound like the people were getting screwed. But the fact is each of those people got money they needed for other things they considered more important than owning the jewelry. So it was a good deal for both parties involved, and unlike a loan they didn't have to pay off at high interest rates. Another big plus.
Fraggle Rocker
Staff member
Did you miss Post #22? If the price of real estate, petroleum or labor dropped that precipitously, "crash" is the mildest word you would see in the headlines!
No. I didn't say fiat was being devalued because of gold rising. It is a result, not a cause and effect.
Fiat is being devalued every passing year because of the policies being adopted. A fixed sum of fiat buys you less and less goods and services every year. And it buys you less and less gold every year.
At the end of the day, it doesn't matter if people agree, I wont lose sleep over it. I started converting fiat into gold and silver since 2007 and increasingly so in recent years. So far....so good. Better than a piddly 3%pa savings account, I've put my money where my mouth is.
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Stryder said that gold was going up in value, and you said
But you are wrong, because the value of gold has shot up waaaaay faster than inflation. So the increasing price of gold is clearly not the result of a loss of value on the part of fiat currency, but rather an increase in the value of gold.
The price of gold has gone up by more than 300% in the last ten years. Do you believe that we've had 300% inflation since 2001?
charles brough
Registered Senior Member
. . . very wise choice! I started only early this year.