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 Replies: 40 / Views: 4,596 |
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Valued Member
United States
103 Posts |
I had an interesting talk with my uncle today. While I respectfully disagree, some good points were brought up that I'd like to share for further discussion.
In the end, how are precious metals any different than lets say, baseball cards.
Do precious metals really have this "set in stone" value. Are they really that safe?
I mean what's stopping the government from coming out tomorrow and saying "Silver worths 1 dollar an ounce!" I mean obviously there are factors that are stoping them, but it could happen.
I think my uncle was trying to get across that people act like precious metals are so much more valuable than other collectibles, and that unlike baseball cards, or hockey cards, the value is really there like it is in money, and not there because that's what people are willing to pay.
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Pillar of the Community
United States
3670 Posts |
"Do precious metals really have this "set in stone" value. Are they really that safe?"
I truly believe yes and the days of 2 dollar silver is way gone, as industrial use (to tired to list the 486 reasons silver is good in industry) will sky rocket every day as it has been. Like antique collectibles like you mentioned in the baseball cards, they only increase in value in time. The market has fell out of cards an comics no doubt, but for the right rare piece like the Honus you mentioned in the other thread, no telling how much an item like that would bring in an auction....
If it is attached to someone famous, and that can be proved an documented, it can have unlimited value....
And as far as Pm value, unless several governments around the world find a magic box with enough funds to cover their debt, I don't see Pm's going back down anytime soon. US has a printer of course, but how long would it have to run to print off 15 trillion, lol? By the time the economy swings around, I believe inflation an other industry factors will keep PM's on the up and up....
I think of PM's like gas prices, they are not going back to what our daddy was payin when we were riddin shotgun with a lolly pop, lol....
Edited by Silverhawk74
07/29/2011 02:24 am
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Pillar of the Community
United States
1150 Posts |
I could give you many, many reasons why they have value, however I'll stick with one.
There is only so much precious metal on Earth. We can't produce it like we can paper dollars and baseball cards. It takes the labor of men to extract those PMs.
On a side note, the government doesn't get to tell anybody what has value, or how much value something has. Governments have tried that, and it has always failed.
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Valued Member
 United States
103 Posts |
Mitchhailey - don't baseball cards have scarcity?
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Valued Member
United States
103 Posts |
My solution to the debt problem always is: (get ready lol)
Have the government print 14 trillion dollars and NEVER CIRCULATE IT TO THE PUBLIC ;)
Bring the money in 100 suitcases to all the countries we owe, and secretly pay the debt off
Sometimes I feel that comical idea of "just print more money"....might just actually work...if the government was secret enough....
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Valued Member
Australia
278 Posts |
there is a really good documentary on tulip bulbs you need to sit down and watch.
I know tulips right....
they were worth way WAY more than gold at one point.
People swapped houses and plots of land for them, then the next day they were just plant bulbs.... worth not too much at all.
It sent banks and everything into a mess and HUGE losses were made world wide!
Try and find it, well worth the watch!
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Moderator
 United States
16679 Posts |
Quote:
Mitchhailey - don't baseball cards have scarcity?
Of course they do but, they are paper; just like paper money. That is why that stuff does not interest me. One spill from a drink or moisture or sunlight, value destroyed. I would take those baseball rookie cards and sell them for coins or PM's! I can spill water on my 1916-D Mercury dime all day long and...  swcoin.ecrater.com
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Bedrock of the Community
Australia
21788 Posts |
Gold is the 19th most abundant element in the Earth's crust.
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Pillar of the Community
United States
2661 Posts |
Quote:
In the end, how are precious metals any different than lets say, baseball cards.  For real? There is a finite supply of any PM. Man made objects such as baseball cards can be mass produced to meet demands. A metals value is directly related to it's rarity, but not dictated by that measure. |
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Pillar of the Community
United States
2335 Posts |
IMO gold only has value because the market says it does. The government couldn't suddenly say gold is only worth X amount unless they had a huge, unknown supply that they could flood the market with. On the other hand, while it's highly unlikely it is possible that MR. Market could wake up one day & say gold is worthless.
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Pillar of the Community
United States
4085 Posts |
There are three things that make up the relative value of a collectible or commodity:
1) It must have some degree of scarcity (supply vs. demand)
2) It must be accepted as a medium of exchange
3) It must have some utility value other than being a collectible item
Different commodities have different relative scarcity, utility and acceptance as a medium of exchange and so therefore have different value and stability of that value.
As mentioned above, precious metals have physically limited scarcity and they are widely accepted as a medium of exchange. They also have high utility in industry. As long as this holds true - which is likely in my opinion - they will continue to have value.
Baseball cards have scarcity - but not as strong as precious metals as it is a man-made item. Furthermore, they are not accepted as a medium of exchange and have little utility value (these are its weaknesses). Therefore, their value is much more fleeting that precious metals.
Wheat is physically limited - there's only so much land - and it has high utility value, but is no longer widely accepted as a medium of exchange (this is its weakness - although used to be a medium of exchange in ancient times). So it is valued more for its utility as food than as money.
The paper dollar is an interesting case. It has scarcity but that scarcity is controlled by humans (this is its weakness). It is widely accepted as a medium of exchange (the most widely accepted I would say). Its utility value is limited except as a medium of exchange.
If you look at the overall combination of scarcity, utility and acceptance as a medium of exchange, precious metals would probably rank at the top. All of the others have a weak point. Precious metals really don't. Thus, precious metals are valued highly.
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Pillar of the Community
United States
1391 Posts |
This is a complicated question and one that I have been looking at. I am sure I am far from any real answer but here are some of my thoughts.
1. What is money? As near as I can tell money is a portable unit of work. If you think about in the old days and say I had an apple orchard and you had a wheat field. How do we exchange goods? If it the wheat matured before the apples do I give you a bunch of apples months after you give me wheat? Or what about something more long term like a horse or a cow?
So you need an agreed upon unit of exchange to move goods and labor over space and time.
2. So if my agreed upon unit of exchange is something common like an acorn or a pebble from the river what happens when I need some more wheat from you? I can just go to the oak tree and collect a another bushel of acorns and tell you that is how many apples I gave you last year. I have the acorns to prove it right? By doing a simple act I basically made your work half as valuable as it was, or mine twice as valuable.
Sure there are laws that stop people from collecting more acorns to put into the economy, but what is backing those laws? The way I see it there are several types of laws. Laws of physics, natural law, civil law, etc. So physical law is what stones and trees obey. A rock falls down a hill because of gravity. Natural law would be say like not commiting murder. Civil law would be customs and culture that are enforced, like don't cross the road at certain times, or obey certain traffic laws, etc.
I guess my point there is that there are certain things that are universal to any human cultures and certain things that are not universal. Saying that a piece of paper is worth $10.00 is not universal.
3. So if something is not universal that means it can be changed at will. Will of the king, the ruleing class, the people, etc. So if we move "money" from the civil law and move it to pysical law. i.e. the king can order more money to be printed, but he can't order more gold to be created magically.
4. So why gold or silver? It looks pretty, it is easy to work and it doesn't rust away.
Any way, many people over millenia from all sorts of different cultures have seemed to come to this conclusion.
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Pillar of the Community
United States
667 Posts |
I have a much simpler answer. If everyone could get as much as they wanted when they wanted it then it would be of no value.
People will always need to trade to get something they want. As long as they perceive that the shiny gold and silver metal is of value then it has value.
The dollar is backed by the government - governments can fail, they all do at one point or another. Gold and Silver is not a government back source of value.
So without going into the boring details of an economist I will put it this way. If everyone accepts gold and silver as having value then you can use it to buy, trade and build wealth. Now if everyone could mine the stuff freely in their back yard and get as much as they want it would be worthless. It may come one day that something will replace gold and silver. Think of a fresh water crises - it is is rare water could become the new gold and silver.
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Valued Member
United States
103 Posts |
Well upon reading some responses about scarcity and supply/demand.
Couldn't this be said about other collectibles.
For example, some vintage Elvis Presley albums are worth around an ounce of gold.
In theory, couldn't I buy the same thing with that Elvis Presley album as I can with an ounce of gold.
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Pillar of the Community
United States
830 Posts |
I keep going back to something said over and over in "The Secret of OZ"** It doesn't matter what backs a currency, its all about who is controlling the quantity. ** For those who haven't seen it: http://www.youtube.com/watch?v=7qIhDdST27g |
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Moderator
United States
188770 Posts |
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I would take those baseball rookie cards and sell them for coins or PM's! A good call, in my opinion. I wish I had sold my cards when they were worth something. Now they sit in a box in the closet collecting dust and decay.  Quote:I can spill water on my 1916-D Mercury dime all day long and...  |
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Replies: 40 / Views: 4,596 |
Posted 07/29/2011 02:10 am
