antelope sniper posted:
�Gold and Silver have been worth nothing. There we considered of no value to the American Indian. Specifically the Sioux called it "The rock that makes white men crazy".
Gold and Silver are also subject to inflation and deflation, and can also be debased or recalled. It happened in this country during the 1930's.�
It is also true that gold has used as a store of wealth and a vehicle of commerce for over 2500 years. Much of the world was on a �gold standard� until the 30�s. Gold was convertible to fiat currencies until Nixon went off in the early 70�s. An ounce of gold could been had for about 42 greenbacks. Today, it takes 1200 greenbacks to buy an ounce of gold. Does this mean that gold went up or that the dollar went down?
If gold is seen as stable, the dollar has lost 95% of its value in those 42 years. Takes 28 times more greenbacks to buy that ounce.
Now let�s look at how the dollar fared against oil. When Nixon disconnected the dollar and gold, oil was about $2 a barrel. It takes $56 dollars to buy a barrel today. Has the true �value� of oil gone up from $2 to $56 or has the value of the dollar, the number of dollars required to buy a barrel of oil risen as the dollar lost value? We all know the answer to this; the dollar has been degraded and has lost value. It has lost about 95% of its value.
Here is the point. It now takes 28 times more dollars to buy that ounce of gold and it now takes 28 times more dollars to buy that barrel of oil. Coincidence? I think not. Let�s look at it another way: a barrel of oil is worth a barrel of oil and an ounce of gold is an ounce of gold. They are commodities that have intrinsic use and in turn value to mankind.
Sorry to be boring but let�s look at this another way. Before the Nixon theft, it took 21 barrels of oil to buy an ounce of gold. That is at $42 and oil at $2. Today it takes 21 barrels of oil to buy an ounce of gold. Gold at $1200 and oil at $56�. 1200/56 = 21.4
The point is that both oil and gold have enduring value to the world and the fiat currencies they are measured in always� always� devalue and deteriorate.
Gold does indeed have enduring value, as does oil or an ounce of silver or an acre of farmland. The fiat currency has value but will ALWAYS be devalued. Want to give something to your kids or grandkids that will have value? Which do you give greenbacks or gold or silver?
My prediction? The dollar will collapse and gold, silver, land etc will �sky rocket� in terms of their �greenback� valuation. Gold may be $4800, oil may be at $224. The DOW may go up or down depending upon how some financial cataclysm develops. Could be DOW at 7000 but it could also be DOW at 50,000. When folks start to lose confidence in value of US debt obligations, those �dollars� will come out of the bond/T bill markets and rush into anything that can be perceived to be an inflation hedge or to have enduring value. Then here comes the �New Dollar.�
FDR confiscated wealth from the US citizenry once. He called gold in at $20.67 then devalued the dollar when he set gold at $32. Clear confiscatory practice. Stole gold and stole purchasing power from the public. This can of course happen again. While gold will almost certainly be part of the SDR basket, that does not mean that gold ownership could not be outlawed. Could mean a worldwide ban on gold mining. BUT, given how gov�ts work around the world, I don�t see this as effective or even likely. Most likely there will be a variety of excessive taxation measures. BTW, I have read that only the dumb sheep turned in their gold at $20.67. Much gold made it to Canada, Mexico and beyond.
So, gold has been �money� for 2500 years and I expect it will continue to be. In fact, one could argue gold has been of enduring value in all cultures engaged in �business� and �commerce� for the past 2500 years. But yes, not with the American Indians and Neanderthals and other primitive cultures. Who among thinks there won�t be a gold market alive and well in 10, 50 or 100 years?
To each his own, you pay your money and take your choice.
TF
