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Why would anyone want gold standard?

kevsta said:
because we are not in 1980, and politicians are unable to reproduce the actions they took then. the economic and social consequences would be too great.

they are faced worldwide with the options of print or let it all collapse and chips fall where they may. the shadow banking system is gradually imploding as we speak, PrimeX is the new Subprime (short) Europe is going to get way worse before it gets better.

so do you really, seriously think they will choose the second option?

do you even seriously think that with the utter incompetence and ineptness of the US political system they could ever even elect anybody who could and would take painful choices against the financial powers that be for the good of the people? Europe prove more every passing day that they dont have a clue how to deal with it.

I will take the opposite side of that bet all day long.

ps, this is how I would know. ie the polar opposite of the general public and media's perception now.
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The details keep changing, but these "hell in a handbasket" rants are timeless. I was there in 1980 and remember them then, too. Were people wrong in Jan 1980 (given only what they knew then) to go to gold?
 
kevsta said:
because we are not in 1980, and politicians are unable to reproduce the actions they took then. the economic and social consequences would be too great.

they are faced worldwide with the options of print or let it all collapse and chips fall where they may. the shadow banking system is gradually imploding as we speak, PrimeX is the new Subprime (short) Europe is going to get way worse before it gets better.

so do you really, seriously think they will choose the second option?

do you even seriously think that with the utter incompetence and ineptness of the US political system they could ever even elect anybody who could and would take painful choices against the financial powers that be for the good of the people? Europe prove more every passing day that they dont have a clue how to deal with it.

I will take the opposite side of that bet all day long.

ps, this is how I would know. ie the polar opposite of the general public and media's perception now.
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1980 Kevsta said the same thing you did, word for word.

It's "different" this time. It always is.
 
kevsta said:
So I have a question for you? a thought experiment.

At what price would gold have to get to, for you to reconsider your thesis?

how would this work, would you watch the bull run the whole way up, scared to get involved? so at some distant point it rolls over and collapses and then you would feel vindicated?

would you capitulate and buy in higher with the idea of attempting to pick a top?

what exactly would you do, if in another year gold was at 2650? then $3200? then $3800 in 2 years?

or what else would have to happen for you to question your thesis'?
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Short answer: I wouldn't buy gold at any price.

Slightly longer answer: I might buy it at $20 or $50 or something. Gold has some small utility value in manufacturing. What price point that is (the real price of gold), I don't know, and have no interest in calculating. But, if this price were, say $20 an ounce, and the price fell to $10, then I'd buy. But that is incredibly unlikely to happen. About the same odds as being struck by lightning, and I spend no time thinking about that.
 
The Central Scrutinizer said:
Short answer: I wouldn't buy gold at any price.

Slightly longer answer: I might buy it at $20 or $50 or something. Gold has some small utility value in manufacturing. What price point that is (the real price of gold), I don't know, and have no interest in calculating. But, if this price were, say $20 an ounce, and the price fell to $10, then I'd buy. But that is incredibly unlikely to happen. About the same odds as being struck by lightning, and I spend no time thinking about that.
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Amazing! You wrote all that about something that doesn't interest you and that you don't think about. . . :)
 
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The Central Scrutinizer said:
Short answer: I wouldn't buy gold at any price.

Slightly longer answer: I might buy it at $20 or $50 or something. Gold has some small utility value in manufacturing. What price point that is (the real price of gold), I don't know, and have no interest in calculating. But, if this price were, say $20 an ounce, and the price fell to $10, then I'd buy. But that is incredibly unlikely to happen. About the same odds as being struck by lightning, and I spend no time thinking about that.
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actually gold can replace silver in most applications, its just not economical at these prices, but considering that the above ground silver supply has been steadily dwindling for years, inventory gets lower every year, there must come a price reset at some point.

its not unreasonable to conclude that at some future point if the silver price should approach gold's that the entire above ground stock of gold starts to have industrial as well as monetary value.
 
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kevsta said:
or phrased differently, everything will always be ok, until it isn't.
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Define "ok".

Remember, gold bugs have been preparing for the collapse of society for longer than I have been alive. When is it going to happen? Oh, I know! "This time"!! Because this time is different, just like all the other times that were "different".
 
kevsta said:
actually gold can replace silver in most applications, its just not economical at these prices, but considering that the above ground silver supply has been steadily dwindling for years, inventory gets lower every year, there must come a price reset at some point.

its not unreasonable to conclude that at some future point if the silver price should approach gold's that the entire above ground stock of gold starts to have industrial as well as monetary value.
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Actually, no. Gold is extremely unreactive, and most uses of silver depend on the fact it is a somewhat reactive metal.

Throughout twentieth century major use of silver was film and photographic plates, to the point that in 1970's there were serious concerns world would run out of silver for these purposes. Well, we did not replace silver with gold or with any other metal -- we replaces photoemulsion with CCD's.
 
The Central Scrutinizer said:
Game, set, match.

It's 1980 all over again, for those playing along at home.
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Yep, when the economy improves investors will sell their gold for more profitable investments, and the price will plummet.

And all the gold bugs will be wondering what happened.
 
Mark6 said:
Actually, no. Gold is extremely unreactive, and most uses of silver depend on the fact it is a somewhat reactive metal.

Throughout twentieth century major use of silver was film and photographic plates, to the point that in 1970's there were serious concerns world would run out of silver for these purposes. Well, we did not replace silver with gold or with any other metal -- we replaces photoemulsion with CCD's.
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well, there's quite a crossover here http://www.gold.org/technology/uses/

lots of room to use instead in electronics for example. there's 15kg of silver in every cruise missile, do you envisage your government stopping firing them around any time soon?

I don't expect they'll be recycling much from those.
 
I'm not sure why people point to any manufacturing uses of metal as support for the idea that a particular metal has an intrinsic value. So, you have manufacturers who want, say, gold for their usefulness as a material and governments who want gold to back their currency and expand the country's economy. Who would win that battle? Seems to me that manufacturers would be forced to find other materials to replace gold in their designs, thus removing the utility and intrinsic value of gold.

And as other have tried to get the gold bugs to notice... who manages the gold itself?
 
uh huh, so governments will continue wanting gold for monetary purposes?

because I thought that was a ridiculous laughable medieval idea, and hence gold will be $400 again shortly?

so which is it ? either it will never be money again and is therefore a huge bubble, and so will be available for industrial use if required and therefore have potential utility value..

or it wont? .. what am I and all the other gold bugs missing again?
 
Cl1mh4224rd said:
An appeal to tradition? Really?
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There's a reason why gold has the monetary history that it does. It's not an arbitrary accident. If you could re-run history, gold would be just as important every time. The reason for this is that it has a very special set of physical properties which cannot be matched by any other substance. It's actually relatively useless as an industrial metal because it is so soft and because it is less conductive of both heat and electricity than silver, which is much cheaper (at the moment - who knows what may happen in the future.) But at the same time it is indestructible, impossible to create from something else, common enough for ordinary people to get hold of some and yet rare enough for it not to be too easy for them to get hold of. Put all that together and you have the perfect candidate for value-retaining money, and that is why gold is to humans what gold is to humans.
 
The Central Scrutinizer said:
I agree.

Just like the previous 2 decades, and the 2 decades before that, and the 2 decades before that, and the 2 decades before that, and the 2 decades before that, and the 2 decades before that, and the 2 decades before that, and the 2 decades before that, and the 2 decades before that, and the 2 decades before that, and the 2 decades before that, and the 2 decades before that, and the 2 decades before that, and the 2 decades before that, and the 2 decades before that, and the 2 decades before that, and the 2 decades before that, and the 2 decades before that, and the 2 decades before that, and the 2 decades before that, and the 2 decades before that, and the 2 decades before that...
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This time it really is different because there is a global resources/population squeeze nothing the like of which has ever happened before (peak oil/everything). It's different because this time there really is a threat of civilisation as we know it collapsing catastrophically (and not being able to bounce back, because of the resources problem), and it this collapse is also different to previous collapses of civilisations because of the globalised and techno-industrial nature of our civilisation.

It's no use just looking at the past and claiming the future will be more of the same. That would be like believing that the human population can just go on rising faster and faster, because that's what it has been doing for the last few centuries.
 
Pulvinar said:
Curious if any gold bugs here were adults in 1980. Or have we whipped up a fresh batch?
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I was 13 in 1980. Not that this has anything to do with anything. I am watching what is happening in the world right now, not trying to predict the future based on what happened in the past regardless of the fact that the situation is very different.
 
I was 14.

Generation Au

The popularity of gold among young investors speaks to the metal’s impressive role as a storer of wealth — and says a great deal about a generation that has seen its share of stock market booms-and-busts, a housing market collapse, and, over the past few weeks, government debt of Greece and Italy trading at yields more akin to junk bonds.

Accordingly, many of these gold buyers have little faith in equities and, unlike older investors, are more inclined to consider alternative investments. Others seek tangible, hard assets as a counterweight to stocks, bonds and cash in the aftermath of the 2008 U.S. financial crisis.
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