Sell Your Gold, It's Not Backed By Anything

That is one telling graph I gotta say....

JSH, in a SHTF situation, gold will be accepted more than any other item, short of food, shelter, water, or tools and supplies, as will silver....

Lets keep in mind this board acts as a great small scale example of how the larger society will react (or at least the smart section, lol)in certain situation, and I for one tend to pay more attention to the 90% who sees the value in gold and silver, as opposed to the 10% who does not....

I guarantee you I could start a poll simply stating two things....

1. I think gold will be highly sought after and accepted largely around the world in a SHTF situation....

2. I think gold will NOT be highly sought after or accepted largely around the world in a SHTF situation....

I can go ahead and tell you 9 out of 10 will select answer number one, no point in even wasting all our times posting it....

Oh, but it is. Unfortunately, it is not painful to those who display it.



Only if the huge amount of liquidity that has been injected into the various economies is sopped up again. Central bankers tend to be like the guy with a hammer. Everything looks like a nail to them. In their case, the nail is a liquidity shortage. From the dismal results provided by QE and QE2, it is now clear, even to bankers, that we do not have a liquidity crisis. Unfortunately, a huge amount of currency was printed and put into circulation, where it now sits, not doing much except depressing the value of the currency by its sheer volume. This and the worldwide debt situation is what gold has responded to.



At one time, gold's value was set by government edict to $20.67 per oz. I believe that was sometime prior to 1933. After 1933 the value of gold was reset to $35 an oz., where it stayed until 1971 when Nixon closed the gold window, effectively taking the US off of the gold standard and ceasing to back US currency with gold. Of course, the government price fix did not mean that people could buy gold at that price. That was just the official price. In 1970, a jeweler told me that he paid around $125 an oz. for gold, even though the official price was $35 an oz.

Early on in the fiat paper game, it was understood that the productivity of a nation was the real backing for their currency. Because of that, central banks were careful to regulate the amount of currency in their economy rather closely. What they wanted was to have enough money in circulation so as to promote commerce but not so much that inflation was created. That worked well until one day the central bankers started moving away from this model. These days, the amount of currency is not related to the productivity of the US economy but is related to the health of that economy. As the economy becomes robust, money is removed from circulation to slow inflation. As the economy lags, more money is printed and circulated to promote lending and borrowing. Unfortunately, when an economy lags and there is no relation whatever to the amount of money available, then some really big problems are created by the sudden increase in the volume of money available to an economy. Chief among them is inflation... classically, this is too much money chasing the same or fewer goods and services. A slowing economy produces fewer goods and services, so what does Bernanke do? He prints more money, of course! That is why we have $1600+ gold. More dollars from a lagging economy means that each dollar is worth less than before, so more of them are needed to buy any particular good or service. This is the simple version. The full version appears in book length tomes.



That must be due to your locality. Milk is $2.69 here. It was about $1 more last year but it has been dropping in price. It is one of the few things that have done so. Many other food items are not just higher in price these days but a LOT higher in price.



Indeed so. A Federal Reserve Note is just that... the PROMISE of payment. All "notes" are a promise to pay in full. PMs ARE payment in full and are, therefore, real money.

That could be a valid point JSH, as many a people presented with an ASE, would not buy it for 5 bucks, according to Ed above there seems like, from a recent you tube video he watched, and that fact scares me, lol....

Frankly, I think random gold or random silver will not be acceptable as currency or barter in times of "crisis." We're talking the complete collapse of the government backed currency of every government...just think of what events would had to have preceded this for such an apocalypse to occur.

I would trade for none other than food, resources, ammunition, and possibly women :)

If the world is anarchy and I'm living in a compound with my contingent I won't care about gold or silver

JSH:

You state that "again, gold has no inherent value - it's just a metal" You are again incorrect - but not because I or any other forum member says so...

Let's examine the words: According to Websters Dictionary of the English Language inherent means: "Existing in someone or something as a permanent or inseperable element, quality or attribute"

There are 18 definitions for value, but the most pertinent is definition #2.
Value: "Monetary or material worth as in commerce or trade"

So the question before us is: Does Gold have permanent monetary or material worth in commerce or trade?

We can go back and forth saying yes and no to each other till the year 2525 and we will not have the answer a single thought experiment will yield...

Imagine that we all have access to a time travel machine. You are allowed to take with you, 10,000 FRN's that are labelled with the number 100 (in other words you are taking one million dollars cash back in time). I on the other hand am allowed to take one lonely one ounce gold coin. We travel back to the year 1790 - very early in the history of the US.

We each go the Trading Post, and seek to buy goods. After the gold coin is assayed and determined to be real, I am able to buy lots and lots of food and goods. You on the other hand , will be laughed out of the store. No matter how many times you point to the words "This note is legal tender for all debts public and private" you will still fail to purchase anything. That is because the government mandate ordering the merchant to accept the note - DEMANDING that you give the paper value - is not there!

What have we demonstrated? We have shown that gold has indeed retained its' inherent value - while the FRN's have not! Not because I think it should, or you think otherwise - But because as long as there has been commerce and trade - gold has been the best storehouse of value that exists.

And as long as enough of society exists - to have commerce and trade - that value will remain.

Now if the world goes to complete and total powder, no commerce, no stock market, all the banks fail - worldwide nuclear war, and we are all wandering around half-blind from radiation fall-out etc... then and only then, (because there will be no commerce or trade), will gold become worthless.

At that point in time, the most valuable things will be food, medicine, garden seed, and guns and ammunition. (and fuel, as the Mad Max movies demonstrate)

But even then, as soon as commerce and trade begin to emerge - people will look for something more efficient than barter. And because gold, is rare, portable, and divisible - it will again emerge as the best storehouse of value...

It may not be perfect, but after thousands of years of experimenting with everything from livestock to seashells - if there were anything better to represent a permanent value in comerce and trade than gold - it would have emerged!

Best,

LastGold

Wow, I just kept thinking while this girl was talking. Wonder if whoever has the big cue cards is the idiot? Who knows..

Crazy.

Gold only has inherent value as a trading medium, the gold itself only holds value for people who want to make jewlery. It is because it is easily portable and scarce that it makes a good trading medium, and it has a lot of momentum of people who consider it valuable, but really I would rather have a nice Remington 570 with plenty of shells then a gold coin.