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#2731 - 12/13/07 03:02 AM Silver and Gold...
daevid777 Offline
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Registered: 08/30/07
Posts: 951
Loc: Hell's Pisshole, Texas
I've seen posts about buying silver coins, or gold ingots... I just wanted to know why these particular metals, in the form of "coin" would be valuable. I mean, what is the real value in these metals? And... is it "reasonable"?

Ignorance here, and true and veritable evidence I seek - don't go being assholes (I know you could).

Properties of metals, I guess...
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#2734 - 12/13/07 05:05 AM Re: Silver and Gold... [Re: daevid777]
TornadoCreator Offline
member


Registered: 10/24/07
Posts: 586
Loc: No Fixed Address
Well an ounce of Gold (1oz) is currently worth £396 ($827 USA) if it's pure, a single coin probably ways about an ounce so I would say gold coins are pretty damn valuable, silver I don't know.
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#2738 - 12/13/07 11:31 AM Re: Silver and Gold... [Re: daevid777]
ballbreaker Offline
member


Registered: 09/04/07
Posts: 134
Loc: Toronto, Canada
Gold and silver don't have any inherent use-value unless you want to rim your toilet seats and personal jets with it like the Saudi royal family does (in which case it still doesn't have a use-value I suppose).

These metals serve as good media of exchange because they're scarce and less vulnerable to fluctuation than fiat money; technically we can use any commodity we want as a medium of exchange but historically (for both economic and cultural reasons) gold and silver have been where it's at.

Could you elaborate on what you mean when you ask "is it 'reasonable'?" ? Are you asking whether or not the gold standard is preferable to fiat money, or what?

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#2739 - 12/13/07 11:44 AM Re: Silver and Gold... [Re: daevid777]
ta2zz Offline
veteran member


Registered: 08/28/07
Posts: 1552
Loc: Connecticut

While I do not claim to be an expert on the issue common sense should guide you…

Gold and silver has a spot value meaning the current accepted value… When you buy a coin, token, or slug you pay slightly more than spot price on an ingot… Some think this is a better deal because they think these will not need verification to their purity…

When and if paper money goes bad what will you trade with? Gold and/or silver looks like the answer but no one is thinking about what happens to spot value once you are forced to use this metal to buy things… Who is to say that a real steak will not cost you an ounce of gold?

Nothing gives gold and silver value except the greed of man… Food and clean drinking water will be more valuable than gold… Medical supplies would also be priceless…

In reality this will never happen unless there is a total breakdown of the US…

But seriously this will not happen as Bush signed something with the UN that gives them the power to come in and restore order in case of an epidemic… Do you think they would try in any such disaster as a total breakdown of currency… Imagine everybody thinks the US laws are bad… What if our laws are put aside due to say the avian flu?

Think about that…

Now if there were a worldwide disaster that kills of say 70% of the worlds population or perhaps a global war unlike anything yet seen? Then should you survive I myself believe that guns will then be the true equalizer… Guns will determine if you eat, and keep your gold or other valuables…

Closing thoughts:

Some might say that would you have bought gold years ago at 400ish an ounce you would have profited selling it at 800ish now… As I am led to believe this value fluctuation is not in the value of the gold but the paper money used to buy it…

So were gold and silver to be used as currency a gold and silver standard would have to be applied to everyday items…

Peace

~T~
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#2748 - 12/14/07 11:43 AM Re: Silver and Gold... [Re: ta2zz]
ballbreaker Offline
member


Registered: 09/04/07
Posts: 134
Loc: Toronto, Canada
Firearms and medical equipment are not divisible like gold and silver; that is, I can't trade in 1/2guns and 1/500needles for the eggs I need for breakfast.

Water and food have, naturally, a greater "use-value" than gold and silver, but we need to consider a given quantity of food or water, not food and water in the abstract. Of course water "in the abstract" is more valuable than diamonds (the diamond-water paradox here) but a given quantity X of water is unlikely to be valued more than a given quantity Y of diamonds; all you need to do for proof of this is look at the current price system.

Also, gold is not a better form of currency because no one currently checks the purity of metal coins...the "paper money" of the past represented a certificate to a quantity of gold, people were generally not literally exchanging bars of gold and silver necklaces for their weekly groceries.

 Quote:
But seriously this will not happen as Bush signed something with the UN that gives them the power to come in and restore order in case of an epidemic…


Really? This sounds like bunk...please keep in mind that General Assembly resolutions like "guns, Israel, and Americans are bad bad bad" are not legally binding on anyone, and that the UN has a budget smaller than the city of New York's fire department.

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#2758 - 12/15/07 03:39 AM Re: Silver and Gold... [Re: ballbreaker]
daevid777 Offline
active member


Registered: 08/30/07
Posts: 951
Loc: Hell's Pisshole, Texas
Everyone,

Thanks, my question was definitely answered, more than I expected...

I was originally talking about the valuation of "gold and silver" for "what it is", rather than representational value - which seems to be "what it really is. Economics, investments never cease to amaze me. If there is any magic, that's where the real illusionists are at. I guess I should start a chicken farm right away...
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#2780 - 12/16/07 09:58 AM Re: Silver and Gold... [Re: daevid777]
Fist Moderator Offline
veteran member


Registered: 08/31/07
Posts: 1453
Loc: B'mo Cautious MF
Precious metals tend to be good investments if you are trying to retain the value of your labor. You invest your cash (the value of your labor) into gold because the supply of gold is more or less fixed. Gold is mined and some gold is used in certain technical applications but unlike cash, govts can't simply make more gold in the same way that they can print cash.

In times like these where govts are keen to increase the money supply by lowering interest rates (literally printing more money) your cash becomes worth less and less as it's supply is increased. That is why the Euro and GBP are trading almost 2:1 against the USD. In this environment gold can be a good investment.

But be warned! Should the economy improve, people will leave gold for better investments and the price will fall. Before the tech bubble burst in the 90's gold was under $300 because all of the big money was in the market, and gold was just a hedge against inflation. Now, with the dollar down and the housing market taking a bath, the big money has run to gold in order to secure value. Today that gives us $800+ gold.

When it comes to what a thing is 'worth' John Locke states the case pretty well:

http://en.wikipedia.org/wiki/John_Locke

Wiki also has a good article on gold as an investment:

http://en.wikipedia.org/wiki/Gold_as_an_investment

It is worth noting that two recent presidential candidates have advocated a return to pegging the value of the USD to gold. Steve Forbes in the 90's and Ron Paul now have both openly promoted the idea.

Here is some food for thought... why? And why would anyone oppose this?
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#3527 - 01/16/08 09:11 AM Re: Silver and Gold... [Re: daevid777]
Chandler Offline
stranger


Registered: 08/30/07
Posts: 36
This sounds like a "why" question to me. I know you know that gold and silver "have" value such and such. You were referring to "reason", which asks "why" and "wherefore".

Even most scholars and Christians agree that gold and silver had instinctive appeal to early man, not practical appeal. They were not used to conduct electricity, hypnotize hysterical housewives, or fuel UFOs. They were just "flashy", and the word "flashy" has revolved back around into our language due to the acquired monetary value of "shiny 'tings". But "flashiness" was also an intrinsically interesting thing to early man. So we might suppose that "flashiness" today is still appealing for the same primeval (and not just primordial, retrospective) reason. Maybe we still just feel better around shiny things. Our reasons for it may all be contrived.

But an intelligent being is one which definitively has instincts that are more productive than an unintelligent one. Our instincts just happen to "pay off".

It so happens that due to our historical fascination with gold, which was good for little more than inscriptions and trading before, it became an optimal conductor for electricity at one time. All of the gold hoarding that the human race had engaged in for centuries paid off with an immediate use for it. It immediately became an infrastructural medium of the elite.

So sometimes it's reasonable to be unreasonable.

But here is the best "reason": gold could be easily denominated -you could melt off an ounce of gold and stamp it with a one ounce seal; then you could combine it with four more ounces and stamp it with a five ounce seal; then you could melt it down into five separate coins and seal those again.

Gold is durable and has a low melting point.

But originally of course, we would not know this if we weren't apishly attracted to shiny 'tings.








Edited by Chandler (01/16/08 09:16 AM)

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#6415 - 03/26/08 12:20 PM Re: Silver and Gold... [Re: daevid777]
Sharschosen Offline
stranger


Registered: 12/30/07
Posts: 31
well, their value is based on the fact that they are rare metals that people consider "pretty", and so desirable. People will pay what they can that the seller demands for pretty, rare metals.
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#8073 - 04/21/08 04:54 PM Re: Silver and Gold... [Re: Sharschosen]
Cipher Highwind Offline
stranger


Registered: 04/17/08
Posts: 7
I've been into precious metals for over a year now; brought heavily into gold at $650 and silver in the $11-14 range, and kept buying on dips.

Gold and silver are not just 'pretty', they hold their value, and have widely been acknowledged as money for thousands of years. It is portable and scarce; the 1/4 oz. Krugerrand, for instance, is about the size of a nickel yet has $230 worth of gold in it.

The prices keep going up because Central Banks worldwide have been flooding the markets with fiat money, not to mention the decline of the dollar. Additionally, gold production is said to have peaked, though lack of investment in the sector and the time-delayed nature of production of reserves could well be the culprit.

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