We like to talk about the intrinsic value of precious metals. I think it's common misunderstanding. There is no intrinsic value in anything. The value (i.e. the readiness of others to put some efforts in order to acquire the thing) is purely in our head. Without humans who desire to possess gold/silver/seashells/woodsticks/whatever all these "tangible" assets are no assets at all. They are just elements in the nature and the universe couldn't care less about one kind of atoms rather than another. That's why fiat currency is no different in principle from gold and silver. As long as we attribute value to these pieces of paper and are ready to exchange our goods and services with other people using fiat currency - it's no different from metal money or feathers money or seashells money. The only difference is that it is easy to create paper money beyond reasonable amounts and by this to undermine trust in it. Ultimately, fiat currency won the historical race. It will be reset and reformed every time when next government fails and destroys it again. But it will stay with us for the foreseeable future for the sheer convenience of it. It doesn't matter what token we use as money, as long as there is trust in it. Paper tokens are no different from metal tokens. Many of us hope that the rest of humanity will "awake" somehow and rush into precious metals once they realize how badly modern finance is screwed. You can rewatch all these videos people posted here when somebody tried to sell a gold coin to a random pedestrian or to use silver coin to pay for goods. You can watch Bloomberg's frontpage where every couple of hours new headlines pop up informing about endgame unravelling in Europe, slowdown in China, ineptitude of Americans to handle their debts, Japan sinking in its debt, etc etc.. And above all this there is a small box with live commodity prices with gold price falling no matter what. This is mass awakening for you.
True. But gold has been in our heads for a long time, has special properties as a metal, and is in limited supply. Silver too. Mainly you are right, but since all investment in non survival items is about belief, gold and silver seem the best to believe in. You cant eat them. But you can live in a house. But housing isnt so great an investment right now. That may be due to debt issues, but the point is that nothing is a perfect investment without belief. And all humans seem to believe in the shiny permanence of gold. The intrinsic value is belief, but its there, but not logical.
True. This point recently hit me like a ton of bricks. Whilst clumsily opening a small PM purchase delivered to my work, a gold certicard fell onto my desk just as a collegue walked in. Their response - 'why are you wasting your money on that 5h!t? If I wanted gold - give me $50 notes anyday of the week.' It is all about perception.
It's a good point you make, but I would ask you when the fiat inflates beyond repair what would you rather have in your mits and what are you going to use to convert into the new currency, regardless of what it is. I think you should remember most prudent investers hold 5-10% Precious metals in their portfolios. Others may choose to be more heavily hegded but that is their choice.
Just what value gold will exactly have in the future is largely dependant upon what it is being compared to. To say 1oz of gold will be worth $1000, $10000 or even $1million in the future is a meaningless exercise as the purchasing power of the fiat mentioned is unknown. $1million US in the future could (though unlikely) be the same as $1million zimbabwe or $1million Reichsmarks. But in answer to your question, I believe gold definitely has "Intrinsic Value". Almost from the beginning of mankinds civilisations up to and including the present, gold has been valued. It doesn't matter to a large extent that it is illogically valued. The reality is it is percieved as valuable and always has been. If you doubt it, then go back in almost anytime and see how much a mans life is worth in terms of gold. Actually, you don't have to go back in time. Just take a walk in a park at night time with your heavy gold chain on and see how much value others perceive your gold to have. It can't exactly be measured at all times. And measurement of its value will change dependant upon time, place, audience. But the question of whether gold has "intrinsic value" or not, I think thats undeniable. Therefore posed with an uncertain future, I will be sure to have gold in my possession. Who knows...... ones safety or needs may depend upon those blobs of yellow. That is value. How much gold one needs to give away in return for various favours/deeds, will be a different issue.
Most PMs to my way of thinking have intrinsic value by industrial demand and not monetary. This is another reason why Ag is pretty much all I stack I see your point,You wouldn't get $100 from your friend for an one ounce gold bar,but easily $1000 from a SS or dealer. Remember the price isnt just something we guess but relates to inflation and central banks general report card The PM community continues to grow which will continue the interest but dont think increase the speculation
Its intrinsic value is in it represents the best form of money we have available even though its not currency anymore. It best fits the defintion of money, fiat, oil, feathers, shells dont compare. It's no coincidence that gold has been rising for the last decade.
Why are you apparent sheep killers still pegging precious metals to fiat? Eh? How about doing it right by first converting gold to barrels of oil or a man's suit. Compare perceived market 'value' with one goods and service to another, not goods or service with fiat. fk me dead. Oil:Gold 15:1 (avg) Gold:Silver: 12:1 (avg) Silver:Carton of Eggs (dozen)? Gold:Sports Car (top tier) 56:1 Continue.
The intrinsic value for anything is the utility of said Item. For fiat, intrinsic value is paper and ink. But there is economical value to it. For gold and silver, intrinsic value is its utility in industrial. Its economical value is the belief/trust for it as a hedge against inflation. Economical/financial value goes up and down with the market.
I think my amature knowledge of human nature makes it all but inevitable. We see world wide a consensus amoung those that control the ability to make this decision toward not letting a currency deflate on their watch. The human nature instinct of not wanting to be blamed for a world wide banking collapse etc will see them take the only measure they have to "stop" this from happening-print. I can't see a central consensus listening to a Steve Keen Style debt jubilee or even further away a Peter Schiff style " let it collapse and start again". When it does eventually inflate beyond repair, all it will take is a major trading economy like Japan, Germany or even Australia go onto a gold standard and watch them follow suit to find the intrinsic value of gold as money/wealth.
I'm wondering how common this sentiment. Even in this thread people bring anecdotal examples when others absolutely don't grasp the value of gold. Our bet is that in the time of turmoil and currency reset the wealth will be transferred through gold (and some other assets). But given that general publc is totally clueless about gold and silver I'm wondering how it will play out. It reminds me the episode from Moby Dick when captain Ahab nailed a gold coin to mast and promised it to the first sailor who spots Moby Dick. The value of the coin was so obvious to everybody on the ship. Today a person tried to sell golden Canadian Maple for $25 and people didn't even asked him about the coin.
Because my income is in fiat and the economy around me is in fiat, too. I don't get my salary in barrels of oil or eggs. I get fiat, so I have to be aware of gold/fiat rates if I want to preserve my wealth in PM.
Wrong thinking. You are still falling for convenience. When you convert back into fiat you run the risk of 'depreciating' the metals, unlike converting to another goods or service. Gold and Oil are constants, Fiat is not. - When you 'buy'/convert from Fiat into Metals you 'lock' in that purchasing power (value), when compared to another goods and service. - When you buy/convert back Fiat from Metals you are playing dice games with chance, and hoping you lose no purchasing power. .
+1. I agree with Syd888. Comparing the price of oil with a man's suit, or a carton of eggs with XXX oz silver seems a bit non-conformist-for-the-sake-of-it and simply a pain in the ass. Even you couldn't price eggs in Ag oz on the spot. Yes, it is convenient to compare the value of 'things' using a currency because that is how I aquired everything I own, that is how I still earn, and that is how I am still obliged to trade (except here). Depreciated the metals? Are you kidding? If there is that much metal around that selling an oz or two will shift the market, then most of this forum is irrelevant. And I reckon there's an argument that oil is not constant. We know. That's why we stack.
Why does it have to be intrinsic value? That's for jewelry. What we care about is trade value. And trade value does not always imply intrinsic value, or else why would we pay exhorbitant amounts for poorly designed houses? Something that has trade value does not also have to be the medium of exchange. I'm getting FOFOA on you, so i'll lay off that part. Are you really suggesting that something like paper fiat, can have the same or less trade value as gold? Like they're on some kind of theoretical par? Of course they can - but only if supply is restricted. Is it restricted?
what are u derlict or sumfin wrcmad? wasnt discoursing whiff u no, u still not clicked in thanks though for attempt i brush my sandles and waltz away from your 'wisdom' p.s. you lost on context surrounding 'depreciating' metals... i will bite your stupidity; has nothing to do with hunt brother dumping wombat cheddar cheese 4 ya .
