You certainly sound ferociously biased. In another comment, you implied you're making huge trades, so it's not very surprising.
> You can't eat gold. You can't live in silver. And you most certainly can't sell it when everything goes down.
Hyperinflation in Zimbabwe ring a bell? They sure didn't seem to mind that you can't eat gold, and just went ahead and exchanged it for food instead: https://www.youtube.com/watch?v=8HD0NWRSEjU
Your dismissal of gold as "baubles" doesn't change the fact that it does seem to work as a medium of exchange, even in a situation where a fiat currency no longer doesn't.
Sure, that's based on trust, just like you said. But mcantelon's point that gold can't be created out of thin air is relevant to that trust.
> Well seeing as my tbills represent the future output of the world's largest economies
Your T-Bills are IOU's from one of the world's largest economies, and guess what? -Those are based on trust too.
> Money moves to safety during times of high vol. People think money moves to gold, when in fact it moves to the highest quality bonds and currency.
Yes, money moves towards perceived safety. The mainstream perception of the ultimate safe investment has been US bonds.
But you know, it's possible that something else might end up being perceived as safer than US bonds. Perhaps something that's not controlled by any government, and can't be created out of thin air. Perhaps something that is still trusted as a medium of exchange.
Government bonds in general have been thought of as a safe investment, but Greece's bonds are government bonds too. Care to buy some?
I trade large currency/bond markets, not the relatively small markets like gold. I was making a point. I can't make people do things, the market is way too big (just ask the Bank of England!). Gold huggers can. Hence why I stated:
> Don't buy t-bonds, don't buy gold. Look at incentives. Look for production of useful goods. Make your own decisions.
Yeah you're picking and choosing your examples there. I only talked about super clusters (euro/dollar/yen/yuan/rupee), not POS countries in Africa that have 0 impact on global markets, as they aren't connected, or correlated. Care to read my other comments, they indicate when hyperinflation occurs:
> Hyperinflation is often associated with wars or their aftermath, political or social upheavals, or other crises that make it difficult for the government to tax the population.
Sounds like Zimbabwe now then doesn't it?
Barter > Gold. Barter is the normal medium of exchange. It scales nicely in the developing world, where things are slow, and people are poor. Gold is a POS medium of exchange for the exact reasons gold huggers love it. There isn't enough of it to do anything with. It's nothing but shiny baubles for the uncritically thinking. Why not diamonds? They're just as rare, just as hard to handle? Why not cacoa beans? Or platinum? Or terbium? HUH!
> Sure, that's based on trust, just like you said. But mcantelon's point that gold can't be created out of thin air is relevant to that trust.
Yeah that's the point. Your gold has no use in a developing country, despite what you think. People trade in dollars for a reason.
> Yes, money moves towards perceived safety. The mainstream perception of the ultimate safe investment has been US bonds.
The US has the fastest nukes, the best standing military and one of the greatest economies.
> But you know, it's possible that something else might end up being perceived as safer than US bonds. Perhaps something that's not controlled by any government, and can't be created out of thin air. Perhaps something that is still trusted as a medium of exchange.
Nothing is safer than the US government.
And do you know why?
Because if the US government isn't safe, well then, none of this matters. The US is a conduit for massive capital. It exports huge amounts of goods and services, and consumes far more. You want to bet on the end of the US? You can't, because that bet is the exact same as the one for the end of the world. You cannot invest for catastrophe. Merely depression!
Buy gold all you want. Your bet, if you look at it closely, is exactly the same as mine.
"Not.. sure.. if intentionally obtuse, or just messing with me.."
> Yeah you're picking and choosing your examples there.
Ah yes, the classic "cherry-picking" -accusation. Always a good distraction.
You said:
>> Your baubles are worth nothing if the 2 largest economies go down.
>> You can't eat gold.
I pointed out that gold was actually "worth" food in Zimbabwe, and that therefore it was unnecessary to try and subsist on it. Gold has been used as a medium of exchange for ages, and it's still useable in that capacity. It doesn't really matter why, as long as you can trade in it.
You claim that if one "super centre" goes down, all others will follow. That may be true, but it's just as possible that all super centres going down would not affect gold's useability as a medium of exchange. For example, all those piece of shit backwaters outside of your super centres may just happily continue trading in gold and whatever other currencies they happen to use.
It's also possible that all other super centres would not fall in a chain reaction.
> Barter is the normal medium of exchange.
No. Barter is a method of exchange. Gold is a medium of exchange.
Here's how barter works:
Let's say you have 10 apples, and you meet some other guy with 10 oranges. You feel like eating an orange might be fun for a change, so you suggest a trade with him. He figures he could use some apples too, and so, he accepts some apples in exchange for his oranges. You both walk away munching on your newly acquired fruity loot, and there is much rejoicing.
Now, if for some reason you don't feel like eating oranges at the time, but feel like making a trade, then a medium of exchange is necessary. You want to exchange your apples for something that you can later exchange for something other than oranges. So, the guy with the oranges needs to give you a few apples' worth of "money" - be it gold or dollars, or whatever medium of exchange you trust enough. You might even accept cocoa beans, if you believe you can exchange them for something you want later on.
OK, I suppose you get the idea, but let me know if there was a part you didn't understand.
> Your gold has no use in a developing country, despite what you think. People trade in dollars for a reason.
I'm sure we all understand that physical gold is just pretty fucking inconvenient as a medium of exchange when you want to deal with someone who's not standing right in front of you, because it can't be converted into ones and zeroes and zapped across the world. But that is completely irrelevant to gold's "worth" as long as you can, in fact, exchange gold for things of value.
On the other hand, you need to consider the possibility that fiat currencies may actually end up dying, if taken over by de-centralized, cryptographic currencies like Bitcoin. That would be a welcome change, in fact.
> But gold huggers work on a small market, and it is their incentive for others to buy into this farce. Take from that what you will (reminds me of pump and dump and the tulip mania).
You're thinking like someone used to the idea of manipulating markets to their benefit, much like a Wall Street trader might. Do you think that gold's exponential rise in the past few years just might have something to do with the on-going disaster that the world woke up to in 2008? http://www.usagold.com/reference/prices/2012jangoldprice.jpg .. or is it just "gold-huggers" working their evil schemes pumping up the price, in a time where the vast majority of investors are completely oblivious to gold as an investment or even a store of value?
Do you think that the prices of gold in various fiat currencies might actually reflect the their perceived trustworthiness as mediums of exchange?
> Nothing is safer than the US government.
Right, and the fact that your nation's external debt is more than 100% of your GDP, and currently increasing at 1.5 trillion dollars per year does not affect the trustworthiness of your IOUs? Just like it doesn't matter that various US states and municipalities are bankrupt?
> Because if the US government isn't safe, well then, none of this matters.
There are other countries out there you know. No one knows what will/would happen if the US went down in flames. But it might also not be the end of the world.
> The US is a conduit for massive capital. It exports huge amounts of goods and services, and consumes far more.
Its main export seems to be global economic calamity. I'm not sure if iDevices count as US or Chinese exports.
Most of the "assets" sloshing around the globe are of imaginary value. Debt sliced and diced into various financial instruments, etc. Bullshit, pretty much. Tens of trillions of dollars "worth" of bullshit. Again, no one knows what will happen in the world's economy, but I'm sure we could do with less bullshit.
> It's just that you don't know what you're doing.
Well what exactly am I doing? Besides, you know, educating you? :p
> You can't eat gold. You can't live in silver. And you most certainly can't sell it when everything goes down.
Hyperinflation in Zimbabwe ring a bell? They sure didn't seem to mind that you can't eat gold, and just went ahead and exchanged it for food instead: https://www.youtube.com/watch?v=8HD0NWRSEjU
Your dismissal of gold as "baubles" doesn't change the fact that it does seem to work as a medium of exchange, even in a situation where a fiat currency no longer doesn't.
Sure, that's based on trust, just like you said. But mcantelon's point that gold can't be created out of thin air is relevant to that trust.
> Well seeing as my tbills represent the future output of the world's largest economies
Your T-Bills are IOU's from one of the world's largest economies, and guess what? -Those are based on trust too.
> Money moves to safety during times of high vol. People think money moves to gold, when in fact it moves to the highest quality bonds and currency.
Yes, money moves towards perceived safety. The mainstream perception of the ultimate safe investment has been US bonds.
But you know, it's possible that something else might end up being perceived as safer than US bonds. Perhaps something that's not controlled by any government, and can't be created out of thin air. Perhaps something that is still trusted as a medium of exchange.
Government bonds in general have been thought of as a safe investment, but Greece's bonds are government bonds too. Care to buy some?