Pros and cons of gold

[SeanEdwards]

Pros:

Gold has a long history of being a reliable store of wealth. Letting the people use gold as the basis of currency lends credibility and stability to all financial transactions.

Gold can not be arbitrarily created by a central bank as is done with fiat money. This acts as a restraint on government spending.

Cons:

Gold is just a peculiar rare earth. There's no guarantee that the value of gold wont fluctuate. A vast new source of gold, or perhaps a cheap technology to turn dirt into gold could be discovered at any time. An event like this could devastate a society that had tied all wealth to the ownership of a shiny rock.

Gold could greatly reduce the amount of available credit, in a sense limiting the growth of the economy and society according to the rate at which our society can dig up pretty rocks.

Gold opens up the nations economy to direct manipulation and exploitation. Basically currency and credit manipulation would be taken out of the hands of central bankers, and turned over to potentially unseen individuals or market forces. Sudden fluctuations in gold supply or credit availability would be events that our government would have little power to mitigate or control.

/Discuss

 

[Bruno]

Cons:

Gold is just a peculiar rare earth. There's no guarantee that the value of gold wont fluctuate. A vast new source of gold, or perhaps a cheap technology to turn dirt into gold could be discovered at any time. An event like this could devastate a society that had tied all wealth to the ownership of a shiny rock.


/Discuss

uh, no. Ain't happening.

 

[Ozwest]

Pros:

Gold has a long history of being a reliable store of wealth. Letting the people use gold as the basis of currency lends credibility and stability to all financial transactions.

Gold can not be arbitrarily created by a central bank as is done with fiat money. This acts as a restraint on government spending.

Cons:

Gold is just a peculiar rare earth. There's no guarantee that the value of gold wont fluctuate. A vast new source of gold, or perhaps a cheap technology to turn dirt into gold could be discovered at any time. An event like this could devastate a society that had tied all wealth to the ownership of a shiny rock.

Gold could greatly reduce the amount of available credit, in a sense limiting the growth of the economy and society according to the rate at which our society can dig up pretty rocks.

Gold opens up the nations economy to direct manipulation and exploitation. Basically currency and credit manipulation would be taken out of the hands of central bankers, and turned over to potentially unseen individuals or market forces. Sudden fluctuations in gold supply or credit availability would be events that our government would have little power to mitigate or control.

/Discuss

I like gold right now. In the past 4 months gold has dropped considerably in value.

First reason: If the market freaks, I'm semi relaxed.

Second reason: Geo Political. If Israel bombs Iran, I know my bullion will increase in value. Or if China attacks Taiwan, similar results will occur.

I call it Risk management.

 

[pacelli]

I'd love for 1 dollar to be equal to 876.40 ounces of gold right now.

 

[Josh_LA]

Cons:

Gold is just a peculiar rare earth. There's no guarantee that the value of gold wont fluctuate. A vast new source of gold, or perhaps a cheap technology to turn dirt into gold could be discovered at any time. An event like this could devastate a society that had tied all wealth to the ownership of a shiny rock.

Gold could greatly reduce the amount of available credit, in a sense limiting the growth of the economy and society according to the rate at which our society can dig up pretty rocks.

Gold opens up the nations economy to direct manipulation and exploitation. Basically currency and credit manipulation would be taken out of the hands of central bankers, and turned over to potentially unseen individuals or market forces. Sudden fluctuations in gold supply or credit availability would be events that our government would have little power to mitigate or control.

/Discuss

1. Yes, there's no guarantee it won't fluctuate, just as good as anything else that flucts, you run a risk.

2. Better to reduce credit than to expand it with worthless paper money, and when people have niether, they think of better ways to trade (and we do).

3. Yes, better to be manipulated based on gold than on mere authority to print money. Today we are under manipulation of Fed Res because they print money based on nothing.

 

[SeanEdwards]

uh, no. Ain't happening.

Really? Impossible for a new motherload to be discovered? Impossible for someone to invent a way to economically extract gold from seawater?

What's your evidence?

 

[nate895]

I'd love for 1 dollar to be equal to 876.40 ounces of gold right now.

Umm, how would we buy small time goods if a penny is worth today's equivalent of over $500.

 

[SeanEdwards]

Today we are under manipulation of Fed Res because they print money based on nothing.

Yes, but theoretically that manipulation is subject to the political will of the voters. If we take away the state's authority to determine the money supply, then we are in effect transfering the authority to control the money supply to unseen entities that can never be subject to the will of the voters.

 

[Ozwest]

Most importantly, if the world heads into recession, Gold will be sought.

Silver will be more of a resource. Silver has kicked the guts out of gold due to its applications to industry.

Manufacturing will decline.

I am not a risk taker, until it matters.

 

[Josh_LA]

Umm, how would we buy small time goods if a penny is worth today's equivalent of over $500.

easy, buy it up and share

 

[Josh_LA]

Yes, but theoretically that manipulation is subject to the political will of the voters. If we take away the state's authority to determine the money supply, then we are in effect transfering the authority to control the money supply to unseen entities that can never be subject to the will of the voters.

Oh yes, here we go again, at least we still have a say.

If we can control our money, we'd not need any standard or government, duh!

QUITE A BIG "IF".

 

[Bruno]

Really? Impossible for a new motherload to be discovered? Impossible for someone to invent a way to economically extract gold from seawater?

What's your evidence?

I heard it from a guy named Steve Parent. He seemed credible.

 

[nate895]

easy, buy it up and share

Or we could make it a dollar=1/20 of an ounce of gold, which would mean a penny was 1/2000 of an ounce, and that's about as low as you can go price-wise.

 

[SeanEdwards]

Oh yes, here we go again, at least we still have a say.

If we can control our money, we'd not need any standard or government, duh!

QUITE A BIG "IF".

I'm not sure I understand what you mean. Could you clarify?

 

[Josh_LA]

I'm not sure I understand what you mean. Could you clarify?

my point is

the problem is : we DON'T have much say today over how we can control our money policy, but once we do, it won't matter if we base it on gold or trust or toilet paper.

when we DO, we can argue what's best later (today people arent even outraged enough to say they want control over their money, so how can you trust they'll be better judge than the Fed Res?)

 

[pacelli]

Umm, how would we buy small time goods if a penny is worth today's equivalent of over $500.

Ask those in Zimbabwe who are dealing with hyperinflation of their currency.

 

[bander87]

There are cons in anything that you use as money.

If you can't think of anything that has been better than gold, then these arguments aren't really justified.

 

[nate895]

Ask those in Zimbabwe who are dealing with hyperinflation of their currency.

That isn't hyper-inflation, it's hyper-deflation.

 

[mediahasyou]

The dollar has failed.

Let's open up the market to competing currencies. Competition always brings out the best in everyone.

 

[Ozwest]

There are cons in anything that you use as money.

If you can't think of anything that has been better than gold, then these arguments aren't really justified.

All gold purchases are in U.S. dollars.

Bullion.

Coins are another story.