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 Replies: 30 / Views: 4,249 |
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Pillar of the Community
United States
1450 Posts |
can there really be a winner? Seems like this is the Dollar/Euro situation that ,in my opinion,is the primary force driving PM prices the last few days. I know there are the margins issues and all,but as the Euro dives the dollar rises and prices of PM's go down. The problem is,the "value" of PM's is still the same but both currencies have really lost value,one just more than the other. So,my question is,do the spot prices of PMs really reflect the "value" or do they only reflect the price? If both currencies collapse,the PMs will still have value but the currencies won't. Is this what we are really beginning to see? The ultimate collapse of worldwide fiat currencies? So should we hold onto PMs with all of our might and disregard "prices" until SOME political entity in the world shows some sense and backbone? It is obvious to me PMs are the only good looker in this beauty contest!
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Pillar of the Community
United States
1348 Posts |
interesting. I never even thought that way.
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Valued Member
United States
309 Posts |
Are euro dollars somehow more tied to PM's? Isn't there still some connection with gold for the euro?
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Valued Member
Cyprus
349 Posts |
how can you pay for goods and services with PMs and what do you receive as change?
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Valued Member
United States
71 Posts |
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how can you pay for goods and services with PMs and what do you receive as change?
This question could be turned back around as well... How can you pay for goods and services with fiat money if it has been rendered worthless? I think the point is that if you hold PMs, no matter what happens to the USD, Euro, Yen, etc. doesn't matter. You'll always have something of value. The same cannot be said about the US Dollar or any other currency in the world. Edited by Geardaddy
05/12/2011 2:25 pm
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Pillar of the Community
Canada
1733 Posts |
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how can you pay for goods and services with PMs and what do you receive as change?
I don't know it's done elsewhere, but I take a recognized brick/bar or two into the bank and they deposit whatever their buy price is into my bank account. If I don't like the price I don't deposit. People keep asking me why I like to have bricks and bars. There's your answer, it's easy as heck to redeem them from a service perspective. |
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Pillar of the Community
 United States
1450 Posts |
Thank you geardaddy for that summary,you said it better than I did. I have been pondering selling and buying strategies and that is the source of this post. Sometimes we confuse price with value and when we do we cannot do comparisons. When I first bought gold it was $600/oz.,that was the PRICE,not the value. To look at the present price of $1500/oz there is a temptation to say that gold has risen in value,it HASN'T,what I bought it with has dropped in value because the supply of it has increased and reduced it's value. As long as the dollar/euro rise ad fall in value prices will change,the problem is,what if the end game is dollars/euros being worth nothing because nobody accepts them as payment anymore? my PM's still have value the other means of exchange don't so maybe we should not worry so much about price because it is a phantom,controlled by the whims of a few rule makers,PMs will endure in value!
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Rest in Peace
United States
9104 Posts |
Back in the day, the Bank of Nova Scotia was a huge broker in gold. They offered spreads on dozens of countries' coins, with payment in various currencies. Old US gold, sovereigns, roosters, k/corona, ducats, Mexican gold, bars, you name it.
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Rest in Peace
United States
9104 Posts |
a gallon of milk = a gallon of gas = a gallon of simpson juice = two dozen eggs = two loaves of bread = a pack of cancer = two silver dimes. These ratios haven't changed drastically in 50 years. What has changed is 50 years ago what costs $1 today cost 14ยข then.
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Pillar of the Community
United States
1450 Posts |
Like I said Fredd,value hasn't changed ,only the price! I guess I will hold onto my PMs a bit longer. Trading them for dollars is really trading down.
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Pillar of the Community
United States
759 Posts |
Remember, historically, one use of PMs has always been preservation of value, sometimes stated as purchasing power.
As long as you're paid in dollars and commerce is conducted in currencies, price does matter though.
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Pillar of the Community
United States
4008 Posts |
The Euro and the dollar are linked... unofficially, of course, but linked nonetheless. If Bernanke asks, the European Central Bank does their best to accommodate him and vice versa. Nor sure how the Yen plays out in this but it is likely that there are similar dotted line relationships there as well.
Yes, the dollar has shrunk terribly in buying power and has ever since the Fed was created and allowed control of the US money supply. By and large, inflation, is a fiat currency phenomenon. Nations tend to think that they can pull the wool over their suppliers eyes via borrowing money at one value and then paying it back at a lower value later. This does not fool anyone who is old enough to vote... at least, it shouldn't. It is an old game and has been around ever since the kings of old would shave coins to recover some gold or adulterate them with copper. These days, it is run the printing presses and dilute the value of the currency via sheer volume.
Fortunately, none of the political games can be used to create so much as a single gram of PMs. This is why PMs have and will always outlast ANY fiat currency.
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Rest in Peace
United States
9104 Posts |
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It is an old game and has been around ever since the kings of old would shave coins to recover some gold or adulterate them with copper. Google old coppernose. |
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Pillar of the Community
United States
4008 Posts |
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Google old coppernose. - BiggFredd I did that and learned something interesting. Thanks for the reference.  |
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Valued Member
United States
287 Posts |
Nice topic, thanks for the ideas to ponder!
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Pillar of the Community
 Canada
9862 Posts |
Long before fiat money,and before PM's,virgins and goats were the medium of exchange.If fiat money collapses and you come to me to buy food,I don't want your shiny metal I want something of real value.This is all speculation of course,if you arrive with more guns than I have ,I'll be polite and let you have the food for a steal.
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Replies: 30 / Views: 4,249 |
Posted 05/12/2011 1:06 pm
