What intrinsic value???

[mmissinglink]

There is no commodity or anything that is traded for that matter that has intrinsic value. So if you were just looking to get into an argument on some phantom intrinsic value in a commodity, I'm sorry to disappoint. :lol:

But suppose one were to regularly write out-of-the-money covered calls on their physical?


Isn't that an asset producing income -- and thereby considered determining at least one mainstream definition of "intrinsic value"? :lol:

I'm not sure what you mean by "write out-of-the-money covered calls".


Just because a term has some "mainstream" 'definition' doesn't mean it's sensible or valid. I could probably rattle of dozens if not hundreds of "mainstream" defined terms that are ridiculous or absurd. As just one example, many if not most Lefty Liberals that I know of claim that only white people can be racists and that black people can not be. This is a mainstream concept in today's America and they define "racism" in a very bizarre way that I reject.

I choose to reject that which makes no sense even though there may be some mainstream position for that thing. Intrinsic value for inanimate things makes no sense.

The value that is created when someone uses a commodity to produce income is not a function of the commodity itself, but rather a function of the person using or deploying it. That value created isn't intrinsic of the blobs of metal sitting on a shelf....if anything the value is of the person deploying the asset in a certain way.


I'm sorry to burst more bubbles here but no one in this forum has put forth a good argument in favor the notion that a piece of metal has intrinsic value.



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[wrcmad]

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What people are doing, who believe that there is a specific, objective intrinsic value in an ounce of silver or gold, is they are conflating one thing for another. They are not only guilty of not questioning the drivel that unfortunately is being spewed by a handful of mainly pumptards and permabulls but also of poor reasoning because they are themselves relying on a logical fallacy argument (fallacy of ambiguity) when they trip all over them self trying to explain the convoluted notion they appear to not question. Production cost is NOT and can NOT be intrinsic value but this is what is being conflated by most who believe in the fairy tale of intrinsic value in commodities (labor theory of value).
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One of the best paragraphs I've read all week.
Still sounds like cognitive bias - anchoring to me.

 

[wrcmad]

There is no commodity or anything that is traded for that matter that has intrinsic value. So if you were just looking to get into an argument on some phantom intrinsic value in a commodity, I'm sorry to disappoint. :lol:

But suppose one were to regularly write out-of-the-money covered calls on their physical?


Isn't that an asset producing income -- and thereby considered determining at least one mainstream definition of "intrinsic value"? :lol:

Technically, yes.
Ironically in this case, it takes a derivative-structured trade to artificially create an intrinsic value for metal. :lol:
Wouldn't that be considered manipulation ??? :lol:

 

[mmissinglink]

I'm pretty sure we've had this discussion a couple of years ago but I forget the thread.

To me, the bottom line seems to be that the idea of "intrinsic value" is ill-defined and ill-defined concepts can often obscure things more than provide us with enlightenment. The question I would then ask is whether the people who use the idea of "intrinsic value" are really grasping for a way of explaining something that they feel is there but cannot properly define (like "love" or "justice"). It is clearly wrong to say that because "love" or "justice" cannot typically be adequately defined that they don't exist. Almost all people know these things exist when they feel or see them even if they cannot use words to say why they are real.

Is "intrinsic value" one of these sorts of concepts? Is there "intrinsic value" embodied within certain things because of their properties or characteristics?

Yes to the first sentence of your comment....and some people still are spreading mis- and disinformation about the value of precious metals. That's the part that is troubling.



No to the later part. It's not a matter of not being able to describe something accurately, it's a matter of some folks not understanding terms and then conflating one thing for another. What they are doing is akin to believing and claiming that justice is love.

What people are doing, who believe that there is a specific, objective intrinsic value in an ounce of silver or gold, is they are conflating one thing for another. They are not only guilty of not questioning the drivel that unfortunately is being spewed by a handful of mainly pumptards and permabulls but also of poor reasoning because they are themselves relying on a logical fallacy argument (fallacy of ambiguity) when they trip all over them self trying to explain the convoluted notion they appear to not question. Production cost is NOT and can NOT be intrinsic value but this is what is being conflated by most who believe in the fairy tale of intrinsic value in commodities (labor theory of value).

Value is always attached by the individual....it is not embodied within a piece of metal, a dollar bill, a work of art, or dog poo from my dog. If it were, then the person who believes that intrinsic value is embodied within inanimate things would have no intellectually consistent argument against me claiming that my dog's poo has intrinsic value or that all fiat paper money has intrinsic value.



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Sorry, I don't actually follow what you mean. Maybe I don't read the same pumptards and permabulls that you do so I am missing context. Are you saying certain things are NOT valued because of their physical properties or characteristics?

One of the reasons I created this thread is because I am currently reading Jim Rickards "The New Case For Gold". While there are many things that I think make sense that Rickards argues and certainly he is far more educated than I on possibly anything to do with the financial world, he argues that gold and silver have intrinsic value....and his argument is poor at best. Rickards is considered a pumptard by some and a permabull by others. Frankly, some of the things he talks about is over my head but the things that aren't, I can certainly agree or disagree with his arguments.


To answer your question, if something is "valued because of their physical properties or characteristics" then this is always going to be a value the individual attaches to that thing. Now collectively, many people can attach value to a thing but that does not in any way, shape, or form mean that the attached collective value by these individuals is intrinsic of or by that thing....these are after all, attached values, not an intrinsic value.

Properties and characteristics certainly can be intrinsic....but valuation is always attached.

If value were objectively intrinsic in a thing like a bar of silver, there would be no argument as to what the ideal buy and sell price of that bar is. But I bet if you ask a hundred stackers what the specific intrinsic value of a silver bar is, you'd probably get 101 different answers.





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[bordsilver]

Intrinsic properties and characteristics. Attached valuation because of the intrinsic properties and characteristics. Seems like we're getting into circular wordplay here even though the two of us seem to agree on the underlying elements. :/

If value were objectively intrinsic in a thing like a bar of silver, there would be no argument as to what the ideal buy and sell price of that bar is. But I bet if you ask a hundred stackers what the specific intrinsic value of a silver bar is, you'd probably get 101 different answers.

As we've vigorously agreed no value is objective it is purely subjective and per individual. But, as we've also vigorously agreed, many of those individuals are basing their valuation on the intrinsic properties and characteristics (in conjunction with their circumstances, expectations and information). Does that mean there is no such thing as "intrinsic value"? Depends on how you define it I guess and I'll leave that for grammaticists.

 

[Gatito Bandito]

I choose to reject that which makes no sense even though there may be some mainstream position for that thing. Intrinsic value for inanimate things makes no sense.

The value that is created when someone uses a commodity to produce income is not a function of the commodity itself, but rather a function of the person using or deploying it. That value created isn't intrinsic of the blobs of metal sitting on a shelf....if anything the value is of the person deploying the asset in a certain way.

Does a factory with idle machinery have intrinsic value? Or does it take some people to stop twiddling their thumbs & actually do something with it?

Same goes for real estate.


Still don't see the difference between those 2 examples, versus lumps of precious metals, when it comes to intrinsic value.



Speaking of which, I really haven't been following along..

Have you yet to put forth your definition of intrinsic value, here? Would love to have it. And please be brief.

 

[Gatito Bandito]

But suppose one were to regularly write out-of-the-money covered calls on their physical?


Isn't that an asset producing income -- and thereby considered determining at least one mainstream definition of "intrinsic value"? :lol:

Technically, yes.
Ironically in this case, it takes a derivative-structured trade to artificially create an intrinsic value for metal. :lol:
Wouldn't that be considered manipulation ??? :lol:

What's so ironic about it, if others do the same exact thing in the stock/share market re: businesses, for example?

 

[wrcmad]

But suppose one were to regularly write out-of-the-money covered calls on their physical?


Isn't that an asset producing income -- and thereby considered determining at least one mainstream definition of "intrinsic value"? :lol:

Technically, yes.
Ironically in this case, it takes a derivative-structured trade to artificially create an intrinsic value for metal. :lol:
Wouldn't that be considered manipulation ??? :lol:

What's so ironic about it, if others do the same exact thing in the stock/share market re: businesses, for example?

Ironic because to satisfy one of the of the permabullshitartist's main criteria for stacking (intrinsic value of PMs vs worthless fiat), requires deplored manipulation via the very paper they condemn.

 

[SilverDJ]

What can be said is that you can be certain that the value of gold and silver to the general population will never drop to zero. There is in practice zero chance they will one day become worthless, like a fad that has worn off etc, like a paper currency that has now become worthless for *insert reason*.
History and the mindset of humans throughout history and into today and tomorrow will always attribute some worth to gold and silver (gold more so of course).
What that "value" is will vary, but it will always be worth something to most people.

You could argue that gold to a starving person in Africa is worthless, but it's not, because they would almost certainly know it's worth something to others and would likely happily take it over a loaf of bread, because they know they'll be able to trade it for more food or whatever with someone.

 

[Gatito Bandito]

Ironic because to satisfy one of the of the permabullshitartist's main criteria for stacking (intrinsic value of PMs vs worthless fiat), requires deplored manipulation via the very paper they condemn.

So how is it considered manipulation if it's fully-backed (hence, "covered" ) -- nothing more, nothing less -- by an actual corresponding amount of physical?

 

[wrcmad]

Ironic because to satisfy one of the of the permabullshitartist's main criteria for stacking (intrinsic value of PMs vs worthless fiat), requires deplored manipulation via the very paper they condemn.

So how is it considered manipulation if it's fully-backed (hence, "covered" ) -- nothing more, nothing less -- by an actual corresponding amount of physical?

The obvious response would be one I have already given - your inference is that intrinsic value of a PM is created only (artificially through paper), once a covered call is written (created from thin-air). This seems to satisfy the pumptard's definition of manipulation - artificial price formation via paper created from thin-air. Backing is irrelevant.
The other response I could give is that there is no evidence COMEX isn't backed - contrary to the pumptard claims, so it logically follows by your own argument that manipulation is not evident there either.

 

[mmissinglink]

Intrinsic properties and characteristics. Attached valuation because of the intrinsic properties and characteristics. Seems like we're getting into circular wordplay here even though the two of us seem to agree on the underlying elements. :/

If value were objectively intrinsic in a thing like a bar of silver, there would be no argument as to what the ideal buy and sell price of that bar is. But I bet if you ask a hundred stackers what the specific intrinsic value of a silver bar is, you'd probably get 101 different answers.

As we've vigorously agreed no value is objective it is purely subjective and per individual. But, as we've also vigorously agreed, many of those individuals are basing their valuation on the intrinsic properties and characteristics (in conjunction with their circumstances, expectations and information). Does that mean there is no such thing as "intrinsic value"? Depends on how you define it I guess and I'll leave that for grammaticists.

To some it may be some hypothetical "circular wordplay" to others it's called logic and the reality on the ground.


The subjective "value" of some object is entirely different from its "characteristics" and "properties".....no grammatacist necessary at all.

 

[mmissinglink]

.
What people are doing, who believe that there is a specific, objective intrinsic value in an ounce of silver or gold, is they are conflating one thing for another. They are not only guilty of not questioning the drivel that unfortunately is being spewed by a handful of mainly pumptards and permabulls but also of poor reasoning because they are themselves relying on a logical fallacy argument (fallacy of ambiguity) when they trip all over them self trying to explain the convoluted notion they appear to not question. Production cost is NOT and can NOT be intrinsic value but this is what is being conflated by most who believe in the fairy tale of intrinsic value in commodities (labor theory of value).
.

One of the best paragraphs I've read all week.
Still sounds like cognitive bias - anchoring to me.

To the contrary. I was accustomed, for a period of time (before I discovered learned some things about the Austrian School of Economics) to reading, watching, and hearing a different group of permabulls who all regurgitated the same mantra of "intrinsic value" in precious metals....and I swallowed that mantra until I critically examined it and understood it was a nonsensical mantra.

So my position is anything but relying on some initial piece of information and sinking roots into that....I rejected anchoring in exchange for logic and the reality on the ground.




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[mmissinglink]

I choose to reject that which makes no sense even though there may be some mainstream position for that thing. Intrinsic value for inanimate things makes no sense.

The value that is created when someone uses a commodity to produce income is not a function of the commodity itself, but rather a function of the person using or deploying it. That value created isn't intrinsic of the blobs of metal sitting on a shelf....if anything the value is of the person deploying the asset in a certain way.

Does a factory with idle machinery have intrinsic value? Or does it take some people to stop twiddling their thumbs & actually do something with it?

Same goes for real estate.

Still don't see the difference between those 2 examples, versus lumps of precious metals, when it comes to intrinsic value.

Speaking of which, I really haven't been following along..

Have you yet to put forth your definition of intrinsic value, here? Would love to have it. And please be brief.

No, there is no difference between a factory, real estate, or a blob of metal sitting on a shelf. Nothing material and inanimate has intrinsic value. I learned this when I tried selling a piece of property my dad purchased 40 years ago. That property lost value over this time even though at the time it was purchased, the neighborhood was sort of up and coming and had a lot of promise for property values to shoot up. It took me forever to sell that property and I was glad to finally stop the financial bleeding it cost me to maintain. What is its intrinsic value? Empty set. It has none. The only value it can have is the value individuals attach to it.

Intrinsic value is value by and unto itself. The fact that it requires people to attach value to a piece of property or a blob of metal means that the value is NOT intrinsic.

The mistake (IMHO) that too many times some people make is to conflate values like cost of production or market value or yield to "intrinsic value".


Here's your intrinsic value of gold for you.....


http://www.dailymotion.com/video/x3u83u5


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[Gatito Bandito]

The obvious response would be one I have already given - your inference is that intrinsic value of a PM is created only (artificially through paper), once a covered call is written (created from thin-air). This seems to satisfy the pumptard's definition of manipulation - artificial price formation via paper created from thin-air. Backing is irrelevant.
The other response I could give is that there is no evidence COMEX isn't backed - contrary to the pumptard claims, so it logically follows by your own argument that manipulation is not evident there either.

So by your definition, intrinsic value doesn't exist anywhere. Because it is *all* artificially created, by most accepted definitions.



And yes, already fully aware of the "trap" I laid for myself re: manipulation -- yet, I also set it out for you, as well.


BTW, I wouldn't get busted for manipulation in my above scenario; however, can't exactly say the same for some major financial institutions, who have already publicly settled for BIG money (and feel free to yet again make the claim that settling for good $$ isn't the same as guilt -- but most people know better.. )

 

[Gatito Bandito]

Nothing material and inanimate has intrinsic value.

Okay, sounds good.

Others in the financial world might not agree with you, but that's all I wanted to hear.


Anyway, sounds like you in actuality have a beef with "the pumpers" (who probably don't even visit this forum) -- perhaps some who have claimed that PM's have intrinsic value, and/or who have "wronged you" in the past?

If that's the case, then why not take it up directly with them? Just my suggestion.

 

[mmissinglink]

Nothing material and inanimate has intrinsic value.

Okay, sounds good.

Others in the financial world might not agree with you, but that's all I wanted to hear.


Anyway, sounds like you in actuality have a beef with "the pumpers" (who probably don't even visit this forum) -- perhaps some who have claimed that PM's have intrinsic value, and/or who have "wronged you" in the past?

If that's the case, then why not take it up directly with them? Just my suggestion.

Because there are stackers here who regurgitate the "intrinsic value" myth/faulty logic too. If they spew it here, then that means they likely spew it elsewhere (including in public and/or to certain non-stackers they may encounter and this can only end up doing damage to stackers and stacking. I've already seen the consequences of such mis-information on some newbies....it's not good.

Besides integrity, IMHO, logical arguments are crucial if we are going to communicate with others about the merits of investing one's money into blobs of precious metals.



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[wrcmad]

.
What people are doing, who believe that there is a specific, objective intrinsic value in an ounce of silver or gold, is they are conflating one thing for another. They are not only guilty of not questioning the drivel that unfortunately is being spewed by a handful of mainly pumptards and permabulls but also of poor reasoning because they are themselves relying on a logical fallacy argument (fallacy of ambiguity) when they trip all over them self trying to explain the convoluted notion they appear to not question. Production cost is NOT and can NOT be intrinsic value but this is what is being conflated by most who believe in the fairy tale of intrinsic value in commodities (labor theory of value).
.

One of the best paragraphs I've read all week.
Still sounds like cognitive bias - anchoring to me.

To the contrary. I was accustomed, for a period of time (before I discovered learned some things about the Austrian School of Economics) to reading, watching, and hearing a different group of permabulls who all regurgitated the same mantra of "intrinsic value" in precious metals....and I swallowed that mantra until I critically examined it and understood it was a nonsensical mantra.

So my position is anything but relying on some initial piece of information and sinking roots into that....I rejected anchoring in exchange for logic and the reality on the ground.




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I wasn't referring to you.
I can see you are well aware of the realities.
But for many, the initial piece of information is still strongly embedded... As you pointed out.

 

[wrcmad]

The obvious response would be one I have already given - your inference is that intrinsic value of a PM is created only (artificially through paper), once a covered call is written (created from thin-air). This seems to satisfy the pumptard's definition of manipulation - artificial price formation via paper created from thin-air. Backing is irrelevant.
The other response I could give is that there is no evidence COMEX isn't backed - contrary to the pumptard claims, so it logically follows by your own argument that manipulation is not evident there either.

So by your definition, intrinsic value doesn't exist anywhere. Because it is *all* artificially created, by most accepted definitions.

On the contrary.... I was referencing your definition.

 

[mmissinglink]

I really hope that no one here is suggesting that the definition of "value" in "intrinsic value" means "usefulness or importance" because that would be a misapplication of a definition.

"Value" in "intrinsic value" means the amount of money that something is worth....more or less a valuation. And since it's tied to "intrinsic", this would mean an objective, specific value that no one could possibly disagree with since the thing itself is delineating its own specific value or that without humans, it would be objectively valued.

If you believe that a piece of silver has intrinsic value, then you would have to state specifically what the objective, indisputable value of silver is. Otherwise you would have to believe that silver has no intrinsic value and that each of us attaches some value to it, which in my view is the only possible thing that makes sense. Go....

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