Now Wallyworld...

peetzakilla wrote,

I wonder how much the actual value of gold HAS changed? I agree that the devaluation of the dollar is the primary factor in the price of gold but I've got to wonder if the value of gold has been steady?
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will I get flamed if I were to point out that the value of gold exists in pretty much the same way as that of currency? Almost completely subjectively. It's valuable because we all treat it like it is. It has a longer history than fiat currency but not a whole lot more "utility" or intrinsic value.
 
Look at history, and see that for a long, long time the value of gold was "fixed". It did change periodically ($35/oz, $125/oz) but it was "fixed" in the sense that a govt said what it was worth. Meaning govt would pay a fixed price for gold.

Gold was traded, but the price was pretty stable, based on what the govt would pay. Not much market for $70/oz gold when the govt would only pay $35.....And, since our currency was backed by gold, its value remained fairly stable, also.

And while our dollar was traded around the world as well, its value was always at least what our govt paid for gold. Currency brokers might pay a slight premium from time to time, for convienience, but that was about it.

Then, we came off the gold standard (Nixon, wasn't it?). Our dollar, now traded like any commodity, its "value" became dependent on supply and demand. The govt printing more money affects the supply, and world wide confidence affects the demand.

Gold creaking on the $2000/oz level is not because gold is more valuable than it used to be, but because our dollar is seen as less desirable (weaker, what ever you want to call it) than it was. And that situation has accelerated in the last few years, thanks to those extremely insightful individuals and groups that "control" our economy.

At some point, (hopefully before we all drown) it will be recognized that the right way to bail out a leaking rowboat is not to shoot holes in the bottom for the water to run out....there are none so blind as those who will not see...

Everything has/is going up. Fuel costs lead the pack, because fuel is the base needed for both manufacturing and transport. Gas stations seem to adjust their prices daily, Wallyworld and the rest adjust less frequently, but still, often these days. So the jumps seem bigger.
 
Heard on the radio that the price of a Ivy college education for one term was the same as it was way back when in the Good Ol' days. A kilogram of gold would do it then and today.

Some guy in TX is advertising solld gold bullets as an investment. Whatever.
 
You hafta luv it.

A gallon of milk
a loaf of bread
a dozen eggs
a brick of .22LR ammo
150 rounds .45ACP JHP
3 boxes of 12ga shells
4 qts of 10x30
a new car battery
a flat screen tv
and a month's supply of Viagra
all in one store!

Say what you want about Wally World but it has changed how America shops.
 
If I ever encounter a situation where US dollars will no longer serve I doubt that gold will serve much better. I'll probably be better off with any of the following rather than a gold American Eagle (the coin):

  • a couple cheap AR15's and 1krds ammo
  • a couple head of cattle
  • 30 cases of MRE's
  • 400 gallons of diesel or gasoline
  • a pump 12ga, a hunting rifle, and a 9mm handgun and a couple hundred rounds for each
  • a whole bunch of batteries, bottled water, first aid supplies..........

Gold, like greenbacks, only has value if there is a society to value it.

Look at history, and see that for a long, long time the value of gold was "fixed". It did change periodically ($35/oz, $125/oz) but it was "fixed" in the sense that a govt said what it was worth. Meaning govt would pay a fixed price for gold.
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This has always been interesting to me. People look back fondly on those days. But they have a problem with an entity "fixing" the value of currency currently. Given my views on what makes gold valuable, I don't see much of a difference.
 
I knew a man in Germany that paid off a 5 year old (out of 30) house mortgage with a common date, circulated $10 US gold piece...that was in 1928.

If you want to see what the US dollar is going to do if teh giovernment keeps spending what it does not have, study what happened in Germany between WWI and WWII.
 
I have one of those Wal-Mart discount cards. 10% off doesn't help much these days. I try to stock up during the summer when prices are more stable. It's hard to keep up with their prices right now.
 
I know a friend of mine had to pay one ounce of gold to get a leaky boat out of Vietnam in 1979. I wonder how much it costs in gold to escape now?

Yes, gold does retain its value when the currency is being changed out ever few years. As do useful items like motor bikes, washing machines, etc. You cannot eat gold so it is best to first have food, water, skills, firearms, ammo, etc. But if you need black market goods or services in a failed economy (antibiotics, transportation, bribe, even food) then I can guarantee there will be someone willing to take your gold in exchange.

Can you name anytime in history when a currency collapsed that gold was NOT valued as a medium of exchange? Gold, while heavy is a very compact form of wealth. That means it is also easy to hide a large value in small places from the confiscating authorities. It is also durable, malleable, highly divisible, and considered decorative. A relatively small amount of gold will open doors that a bag of rice will not.

Firearms and ammo may have less widespread acceptance if they were outlawed in a really bad political scenario, but even then I bet you could exchange for necessities.
 
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