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and what are those paper $$$$'s worth ? imo, the demand for wallpaper will "hit the skids" as well.
The value of paper money will drop too, but gold drop faster. In the long run, all money, bank investments, pensions, long term care insurance, etc. will have no value. All investments and money represent the power to buy oil, natural gas, and coal, and the energy and stuff it provides in the future. In the long run there will be no fossil energy, and not much energy, and promises to deliver energy in the future are illusionary.
In that case it is very weird that gold and silver were valued not just as ornaments but as stores of value for thousands of years before fossil fuels were substantially exploited.
What's changed?
That was yesterday, today is another day. What will people do with gold in a fossil fuel depleted stone age society? Will you trade your vegetables for something just because it is shiny?? The new stone age won't be anything like even 2000 B.C. In 2100, there won't be any global, national or even trade between cities. Just how do you suppose people will get around to trade gold tokens for stuff from afar. Maybe read some of Chris Shaws' stuff to get some historical perspective on gold and energy. His 5 articles can be found here: http://www.onlineopinion.com.au/view.asp?article=3837
He makes the point that energy has always been the one true currency. Think about it. He is right.
I have thought about it, and decided you were incorrect.
You are moving on to another line of argument now the first that the value of gold is dependent on fossil fuels has proved unsustainable.
I do not intend to follow you there, now that the first grounds are proved specious, nor to read 5 articles.
Please sort out the case you wish to present in the first case, and please do not request that anyone read 5 articles - if you wish to make an argument, you should be able to summarise.
I have looked at the alleged loss of value for gold as much as I wish to.
You didn't think for very long. I thought about what Shaw wrote for months before concluding that he is right. Indeed, I read his articles several times. He has much to say about energy and history, and he is quite humorous too. This gave me new insights for thinking about Peak Oil.
Didn't take long to think about, really.
IMO, humans will always value gold. Also IMO, we're not going back to the stone age. If we're unlucky, perhaps a modern dark age. Perhaps.
For every person buying gold there is another person selling gold - I wonder what the person selling the gold is buying with his money. If he has held the gold for any length of time his pile of money has magically grown, but was it a good store of wealth?
Most people are using gold as a compact, very dense, indestructible store of wealth, gold is not convienient any more for day to day financial transactions - they are two different uses.
If you hold gold as a store of wealth no interest is payable, so it is viable long term so long as everybody accepts gold has value - unlike our current fiat, fractional banking, system which must have growth.
All saving methods are risky, gold is no exception.
Maybe he's just meeting a margin call?
It's interesting to see what happened with gold in other societies that suffered economic collapse. The guy from Argentina recommended gold, but said to buy a bunch of cheap gold wedding rings, rather than coins or other investment pieces. He said the dealers would give you the same amount for any piece of gold, regardless of size or quality. And I suppose offering a cheap wedding ring would make you less of a target than flashing around a big coin or ingot.
The Yugoslavia guy didn't recommend gold. What use is gold, when there's no food or fuel to buy? He said other things were far more valuable: soap, cosmetics, toilet paper, cast iron cookware. People would trade food for those items.
Maybe we'll just trade with cigarettes. Right.
Sorry cjwirth but people move to gold when they are uncertain about the value of paper money. This is exactly what we are seeing now with the problems in the interbank market, even securities backed by the government are being marked down. The US government is panicking if they have to inject hundreds of billions into the market to keep it from collapsing.
Gold has been seen as a store of wealth for thousands of years since unlike paper money the amount cannot just be changed overnight by governments.
Only a small fraction of gold is used for anything, the vast majority of gold is held in store.
You buy gold then. I sold my mutual fund investments in gold and I'm buying land now, 1 hectare on a river, in a location with 2 meters of rain annually, with a short dry season, coldest in the 40s and warmest about 95. After the collapse, you'll have gold, and I'll have food. See ACE's chart on world population at http://www.theoildrum.com/node/3726#more
I won't want any of your gold, and I don't think my neighbors will either.
That's fine if you think that things will really go down the pan.
It is really the old conundrum that you can't eat gold.
However, people are remarkably resistant to throwing away their ill-gotten gains, for instance the French army on the retreat from Moscow carried as much loot as they could for as long as they could before abandoning it, and almost up to the end there were a few optimists who for enough gold would swap some invaluable food, if they had any.
So gold will loose it's value eventually, but things have to get pretty extreme for that to happen.
It was your original assertion that the value placed in gold was solely due to fossil fuels which is incorrect.
The last time the dollar was falling this hard and inflation was roaring, gold went up, not down. Not until Jimmy Carter convinced some of the largest gold buyers in the world (among them at that time being Saudi Arabia) that the dollar would be ok, did gold fall. In other words, gold did not fall until the dollar began to strengthen.
Thus, I don't see how gold can fall at the same time that the dollar falls. You can believe what you choose but are you actually short gold? Are you putting your money into that bet? Some of us have been long gold and silver for quite a while and I don't see any reason to change that position.
Will there be periodic corrections? Yes, just as oil has been volatile. But the trend line remains upwards unless or until the dollar actually strengthens. So long as the dollar is weak, I will expect gold to either rise or at least retain its current levels. Historically, it has been more accurate to think of gold as the "anti-dollar" - when the dollar falls, gold rises. When the dollar rises, gold falls.
You are clearly clueless. Check out the gold price at the end of the first oil crisis. Gold increased 10 fold during the crisis. Jewelry and industrial demand are both negligible compared to the stocks kept as investment by banks and individuals. Gold will follow oil up. And silver will do even better.
The intrinsic value of an asset is a direct function of the amount of energy it takes to extract it from nature. What makes gold so valuable is that once that energy is expended, the product stays good for a very long time (gold doesn't oxidize or otherwise fall apart). Even if its utility is limited, gold is something you can always count on, regardless of the future availability of energy.
Please, no ad hominum attacks. Gold is not very nutritious, see my comments above. Why would things remain the same after the world economy and civilization as we know it collapses, and most people on the planet die??
Most of human history occurred with less than 8% of the current population. Great empires of non-technological societies were forged and extended, often in search of gold (as well as other resources), when global population was a mere 4% of right now. That would have been Rome, you know?
You seem to assume that collapse means The End. It hasn't before so far and I don't expect it to this time either. And if it did, we're talking extinction, where nothing, not skills, food, sewing needles, or gold would matter anyway.
Doubt about the value of gold (and silver, particularly in ancient China) globally as a means of storing value suggests considerable reading of history with regards to precious metals might give your reason to reconsider your position. There have been a very few isolated societies where gold was not seen as having value. Those are far outnumbered by those societies that saw gold as being valuable.
Of course people should prepare first for collapse by emphasizing usable skills, materials, tools, land, etc. But if you reached the point where you felt as prepared as you could be but still wished to find a way to transfer wealth out of a collapsing society, across the void of collapse, and into a new society, gold might be one very likely means to do that.
Economy and civilization will not collapse everywhere and certainly not at the same time. In many parts of the world, people will muddle through for a long time.