Buying crude oil with gold

Originally posted by AThousandYoung
It's better to buy non-trendy commodities that have greater real value than gold. Steel tools. Guns. Bullets. Drugs and liquor. Land. Vehicles. Etc.

Commodities that are useful as currency must not only have value, but be divisible and small and light enough to be portable.

Some of the things you list may be of use in an economy that has reverted to barter, but are not very good as money. Bullets probably are the lone usable money in your list.

Originally posted by normbenign
Commodities that are useful as currency must not only have value, but be divisible and small and light enough to be portable.

Some of the things you list may be of use in an economy that has reverted to barter, but are not very good as money. Bullets probably are the lone usable money in your list.

Cigarettes for small change.

If you're using gold as a commodity money you are in a barter economy.

Originally posted by Sleepyguy
Don't forget food and water.

Food and water will always play a part in a barter economy, but aren't very good as money, lacking divisibility and portability.

I have a fifty thousand pesos note, which in the mid '70s would buy a cheeseburger and a beer in Tijuana. It is probably worthless now.

Originally posted by AThousandYoung
Cigarettes for small change.

If you're using gold as a commodity money you are in a barter economy.

Good example, as cigarettes (squares) are a regular prison currency, that is where smoking is still permitted.

I agree that gold is not an effective hedge against hyper inflation, or total collapse of civilization. It is, or was a safeguard against government's tendency to inflate currency.

Originally posted by normbenign
Good example, as cigarettes (squares) are a regular prison currency, that is where smoking is still permitted.

I agree that gold is not an effective hedge against hyper inflation, or total collapse of civilization. It is, or was a safeguard against government's tendency to inflate currency.

If you buy commodities of any kind and inflation occurs you will make money from the inflation. Gold is too trendy to trust.

Originally posted by AThousandYoung
If you buy commodities of any kind and inflation occurs you will make money from the inflation. Gold is too trendy to trust.

No argument from me, but are we supposed to trust the trendy Federal Reserve note?

Originally posted by normbenign
No argument from me, but are we supposed to trust the trendy Federal Reserve note?

Buy iron. If all you're buying is paper that says you own metal somewhere then it doesn't matter what the physical characteristics of the metal are. Iron is very useful and not trendy as far as I know.

Originally posted by AThousandYoung
Buy iron. If all you're buying is paper that says you own metal somewhere then it doesn't matter what the physical characteristics of the metal are. Iron is very useful and not trendy as far as I know.

Where does the average person store the iron he owns?

Originally posted by Sleepyguy
Hm. Interesting use of the word fiat here. I understand the use of the term "fiat currency" as related to the US dollar because the govt decrees its value "by fiat". What entity issues the fiat that makes gold a "fiat currency?" Why is valuing gold a fetish and valuing the US dollar not a fetish?

The US doesn't "decree" the "value of its currency". norm's weird fetish aside, neither gold nor the dollar have any true intrinsic value; they are worth what people will pay for them. Nothing more, nothing less.

Originally posted by normbenign
Where does the average person store the iron he owns?

In his garage, in the form of high quality steel tools. I've already addressed people who are hoarding physical wealth. I think for many people though "buying gold" means buying stocks in gold companies or something equally abstract. Unless they're Pippi Longstocking people don't actually physically store the gold themselves in many cases.

Originally posted by no1marauder
The US doesn't "decree" the "value of its currency". norm's weird fetish aside, neither gold nor the dollar have any true intrinsic value; they are worth what people will pay for them. Nothing more, nothing less.

Gold is bought, sold and traded in all kinds of markets, has been desired as valuable, mined as valuable.

What is the actual intrinsic value of the paper and ink that constitute a $100 federal reserve note? The printed inscription reads "this note is legal tender for all debts public and private". A gold coin, necklace or other jewelry is worth it's weight in gold based on market prices, plus any artistic value it may have. Minus that inscription, the Federal Reserve note isn't worth squat. What can you get me for my old 50k pesos note?

Originally posted by no1marauder
The US doesn't "decree" the "value of its currency". norm's weird fetish aside, neither gold nor the dollar have any true intrinsic value; they are worth what people will pay for them. Nothing more, nothing less.

I guess that is true, but that just means nothing has any true intrinsic value.

Gold has been accepted as currency for several thousand years and there is nothing to indicate that trend is changing soon. Gold is, well, good as gold.

Originally posted by AThousandYoung
In his garage, in the form of high quality steel tools. I've already addressed people who are hoarding physical wealth. I think for many people though "buying gold" means buying stocks in gold companies or something equally abstract. Unless they're Pippi Longstocking people don't actually physically store the gold themselves in many cases.

That would make sense, if you have the knowledge and skill to use those tools. Otherwise, they have little value to most people, and aren't of much use as money due to lack of divisibility, and portability.

I keep agreeing with you on the matter of gold. Unless it is physically possessed it is of little contemporary value as money.

I think ammunition is far more useful as money, however it could be speculative with so much government hostility to firearms.

But then government is hostile to anything that allows people to take care of themselves.

Originally posted by normbenign
Gold is bought, sold and traded in all kinds of markets, has been desired as valuable, mined as valuable.

What is the actual intrinsic value of the paper and ink that constitute a $100 federal reserve note? The printed inscription reads "this note is legal tender for all debts public and private". A gold coin, necklace or other jewelry is worth it' ...[text shortened]... the Federal Reserve note isn't worth squat. What can you get me for my old 50k pesos note?

A $100 reserve note is worth whatever value people place on it.

Same as an ounce of gold.

Originally posted by AThousandYoung
In his garage, in the form of high quality steel tools. I've already addressed people who are hoarding physical wealth. I think for many people though "buying gold" means buying stocks in gold companies or something equally abstract. Unless they're Pippi Longstocking people don't actually physically store the gold themselves in many cases.

I do.
Those that don't are just invested in paper promises. How do they know the gold is really there? They don't.