Buying crude oil with gold

Originally posted by Metal Brain
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.

Gold hasn't been accepted as currency for many years. Take your ounce of gold and walk down to WalMarts and try to buy a TV with it.

Originally posted by Metal Brain
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.

It is simply not true. Gold, as well as other commodities have intrinsic value, that is they are purchased for what you can do with them, aside from using them as a means of exchange.

Paper money has only one single purpose, that of money simplifying trading. It works as that only as long as government is able to dictate that people accept it in payment of debts, that is making it "legal tender".

Otherwise paper money may be worth as little as nothing. What, other than the denomination inscription on a bill determines its value? The paper and ink of a $1 note, is of similar value to the paper and ink of a $100 note. What gives it value is the government declaring it to be "legal tender".

Gold, and other commodities will have value with or without a government dictum.

Originally posted by no1marauder
Gold hasn't been accepted as currency for many years. Take your ounce of gold and walk down to WalMarts and try to buy a TV with it.

Sure, you have to exchange it for currency to buy. So what? That is the nature of commodities. It is not much different than exchanging Norm's peso's for dollars. You can't walk into Walmart and buy with Pesos in the USA either.

Originally posted by no1marauder
Gold hasn't been accepted as currency for many years. Take your ounce of gold and walk down to WalMarts and try to buy a TV with it.

You can take an ounce of gold to a gold broker, then take the cash to Walmart and get a half dozen TV sets.

On the other hand, a couple of years ago you could go to the market in Zimbabwe with a million dollar bill and not have enough money for a roll of toilet paper.

Originally posted by Metal Brain
Sure, you have to exchange it for currency to buy. So what? That is the nature of commodities. It is not much different than exchanging Norm's peso's for dollars. You can't walk into Walmart and buy with Pesos in the USA either.

Yes you can exchange it FOR currency. That doesn't make IT currency.

Originally posted by normbenign
You can take an ounce of gold to a gold broker, then take the cash to Walmart and get a half dozen TV sets.

On the other hand, a couple of years ago you could go to the market in Zimbabwe with a million dollar bill and not have enough money for a roll of toilet paper.

So you think that makes it "currency"?

Gold has no more intrinsic value than a Federal Reserve Note. It has very few actual uses and none of them contribute in any significant way to its price. Federal Reserve Notes could be be used to wallpaper my den, so I guess they have "intrinsic value" by your specious definition.

Originally posted by Metal Brain
Sure, you have to exchange it for currency to buy. So what? That is the nature of commodities. It is not much different than exchanging Norm's peso's for dollars. You can't walk into Walmart and buy with Pesos in the USA either.

My '70s pesos is worthless anywhere. Hyperinflation and the issuing of new national currency in Mexico made it so. It has only some historical value, somewhat like Confederate money might have to collectors.

However, that is not an isolated case. There are several currencies issued by the US government that are not "legal tender" today. That is the problem with fiat currencies. They can and often do become worth zero, nada. Being the world's exchange currency came with being the world's most dependable economy, a position the United States is in a position to lose in the near future.

Originally posted by normbenign
It is simply not true. Gold, as well as other commodities have intrinsic value, that is they are purchased for what you can do with them, aside from using them as a means of exchange.

Paper money has only one single purpose, that of money simplifying trading. It works as that only as long as government is able to dictate that people accept it in pa ...[text shortened]... tender".

Gold, and other commodities will have value with or without a government dictum.

I see your point, but gold does not have many industrial uses compared to other metals. Gold is a monetary metal and many people accept it because others do as well. What I think is important is that it is a hedge against inflation. The money supply of fiat paper money can be increased until it is worth very little in some cases. The supply of gold stays pretty much the same.

It is hard to tax people with gold. It is easy to tax people that use fiat money. That is the threat to the world reserve currency and all fiat currencies for that matter.

Originally posted by no1marauder
Yes you can exchange it FOR currency. That doesn't make IT currency.

True, but my gold is worth nearly twice the dollars I purchased it with. How many fiat currencies have that worth?

Originally posted by no1marauder
So you think that makes it "currency"?

Gold has no more intrinsic value than a Federal Reserve Note. It has very few actual uses and none of them contribute in any significant way to its price. Federal Reserve Notes could be be used to wallpaper my den, so I guess they have "intrinsic value" by your specious definition.

"So you think that makes it "currency"?"

Did I say that made it currency? I said it had value in free markets, and thus can be traded for currency.

"Gold has no more intrinsic value than a Federal Reserve Note. It has very few actual uses and none of them contribute in any significant way to its price."

I guess you are smarter than centuries of human experience. Scarcity, supply short of demand creates value in any scarce commodity. That you don't value gold, or that I don't, doesn't devalue it as long as a sufficient number of consumers want it for whatever reasons.

Intrinsic value has a lot to do with circumstances. Gold could be very little in demand compared to other commodities, depending on conditions. In survivalist conditions, gold could be melted down into bullets or balls for muzzle loading arms. Your federal reserve notes won't even make good spitballs or kindling. Seriously, it's long and tedious, but Mises Theory of Money and Credit, is good stuff.

Originally posted by normbenign
"So you think that makes it "currency"?"

Did I say that made it currency? I said it had value in free markets, and thus can be traded for currency.

"Gold has no more intrinsic value than a Federal Reserve Note. It has very few actual uses and none of them contribute in any significant way to its price."

I guess you are smarter than centuries of eriously, it's long and tedious, but Mises Theory of Money and Credit, is good stuff.

That you don't value Federal Reserve Notes doesn't devalue it either. It is brought and traded in far greater numbers than actual gold is.

If you insist that Federal Reserve Notes are essentially worthless, please PM me and I'll give you an address where you can mail all yours to.

Originally posted by Metal Brain
I see your point, but gold does not have many industrial uses compared to other metals. Gold is a monetary metal and many people accept it because others do as well. What I think is important is that it is a hedge against inflation. The money supply of fiat paper money can be increased until it is worth very little in some cases. The supply of gold stays ...[text shortened]... money. That is the threat to the world reserve currency and all fiat currencies for that matter.

Gold has been a monetary money, because of its relative scarcity, and other traits particular to it as a metal. Yes, iron and copper are more common industrial metals, but are not nearly as scarce as gold. There are still quite a few uses for gold, including dental fillings, electronic contacts, and others. It may work as a hedge against inflation, so long as the system doesn't go completely to hell.

Even though the supply of gold can and is increased by mining, it's intrinsic value stays relatively stable, because not that much is found, and not that much is used. Fiat paper is multiplied easily and often without much thought.

"It is hard to tax people with gold. It is easy to tax people that use fiat money. That is the threat to the world reserve currency and all fiat currencies for that matter."

I'm not sure how valid a point this is. Because gold is seldom money any more, it has to be converted to money, and when it is it is easily taxed, just as land or other capital gains are taxed.

Originally posted by no1marauder
That you don't value Federal Reserve Notes doesn't devalue it either. It is brought and traded in far greater numbers than actual gold is.

If you insist that Federal Reserve Notes are essentially worthless, please PM me and I'll give you an address where you can mail all yours to.

You are intentionally obtuse. I clearly stated that Federal Reserve notes have value because government dictates they are "legal tender". However aside from this, they have no other use intrinsic to what they are, pieces of paper with printing on them.

Gold, on the other hand, regardless of its current form, coin, jewelry, ornaments, electrical components, has intrinsic value, usefulness that doesn't require a declaration of governments to give it worth.

Personally, I don't think gold is a very good hedge against the failure of the dollar. As has already been hashed over, gold has to be converted to money in order to buy stuff, so I'd prefer as a hedge a commodity which is itself useful in the type of circumstances where the dollar has become severely devalued.

Remember that whatever your hedge, if anyone knows you have it, you become the target of those that don't.

Originally posted by normbenign
You are intentionally obtuse. I clearly stated that Federal Reserve notes have value because government dictates they are "legal tender". However aside from this, they have no other use intrinsic to what they are, pieces of paper with printing on them.

Gold, on the other hand, regardless of its current form, coin, jewelry, ornaments, electrical compo ...[text shortened]... atever your hedge, if anyone knows you have it, you become the target of those that don't.

That the government says something is "legal tender" says nothing about its value.

Gold's so-called (by you) "intrinsic values" are insignificant and play virtaully no role in determining its price. Paper with writing on it has "intrinsic value" by your definition - I can decorate my den with it, or clean the kitchen counter with it or do any of the many things physically possible with a piece of paper. Only the most "obtuse" would argue that makes it have "intrinsic value". Same with gold.

Originally posted by no1marauder
That the government says something is "legal tender" says nothing about its value.

Gold's so-called (by you) "intrinsic values" are insignificant and play virtaully no role in determining its price. Paper with writing on it has "intrinsic value" by your definition - I can decorate my den with it, or clean the kitchen counter with it or do ...[text shortened]... y the most "obtuse" would argue that makes it have "intrinsic value". Same with gold.

I suspect that when the Vikings invade again Ron Paul will be able to fashion jewelry to buy them off and prove the intrinsic value of his investments. I hear that Lothar will not be satisfied with aluminum tho my suspicion is that one well placed fork will solve that problem.