Gold is now a bad investment.

[baja]

Originally Posted by watermock

Jeepers. That's insanity defined.

Well, they restocked the casino for banks with $1 dollar chips worth 25 cents yet the only jobs being created are in Governent, eduction and health care. Once again, manufactring takes another hit it won't recover from.

Cap and trade is next. At least for the US, Canada and the EU.

Cap & Trade, the Hiroshima of the war on national sovereignty.

[watermock]

Originally Posted by Tombstone RJ

The thing about gold is that yes, it's a precious metal but it's only real function is for jewelry or for hoarding in a vault somewhere.

In other words, it has no real use (yes, yes, there are some practical applications but overall it's a static commodity).

If everyone's economy tanks, if the world goes into a deep depression, if the US economy goes down the stink hole, what will all of this do to the price of gold? In other words, who is gonna want gold and why would they want it?

What does it matter if you have a billion $ in gold if no one can use it?

I'd rather be financially vested is something that everyone NEEDS. Titanium, platinum, etc...

Just saying...

gold is valuable becauise they have to claw it out from your cold, dead hands.

Let me ask you this.

Diamonds are rocks. They are worth nothing.

[watermock]

Inertness

Gold's most important property is, perhaps more accurately, a lack of a property. It is chemically inert; that is, it doesn't react with other chemicals. This means that it is permanent. Whereas iron rusts away and copper gets covered in a green coating over time (verdigris), gold stays exactly the way it is.

There are a few chemical substances that can attack gold: the most notable is called aqua regia (literally, 'royal water') and is made from a mixture of hydrochloric acid and nitric acid. This is sometimes used for etching a gold surface. Another is sodium cyanide (NaCN) which is used in the extraction of gold from ore. These are unusual, though, and in general, gold is safe from attack by most chemicals.

Beauty

Gold and copper are the only pure elemental metals that have a colour. All other metals have a silvery-grey look. Copper is arguably as beautiful as gold, but it doesn't keep that look for long, because copper very quickly gets coated in a dirty tarnish and over time turns green. Because gold is chemically inert, it retains its colour more-or-less forever. Golden jewellery from thousands of years ago is as beautiful now as it was when it was made.

Ductility

Ductility is the ability to be stretched into a wire. Gold is the most ductile metal and can be made into very thin wire which can be used for the most intricate of decoration in the style known as filigree. A single gram of gold can be stretched into a wire 3.2km long.

Malleability

Malleability is the ability to be hammered out into a flat sheet. Gold is the most malleable metal by far. It can be flattened into sheets only four-millionths of an inch thick (100 nanometres) without breaking. A gram of gold can be flattened into a sheet with an area of 0.6 square metres (6.7 sq ft). Such sheets of gold, known as gold leaf are so thin that they are slightly transparent - the light shining through is green in colour, giving us the bizarre fact that gold is 'green inside'.

Gold leaf is used in decoration: it can be used in frescoes, ceiling ornaments or on furniture to give an opulent look. It is also sometimes used in India as decoration in cookery - slivers of gold leaf adorn certain desserts. And yes, you are supposed to eat it!

Industrial properties

Gold also has properties which make it useful in industry. It is a good conductor of electricity. Although not as good a conductor as copper, gold does not tarnish so it is very good for exposed contacts such as in slot-in boards in computer equipment. It is also used for the tiny connections to silicon chips in integrated circuits.

An ultra-thin coating of gold on glass can reflect 98% of infra-red light while letting through visible light. This is used on the windows of some office buildings in hot countries to reduce the effect of heating by the sun. The gold coating also reflects ultra-violet light and other potentially dangerous high energy radiation, so it is also used on the visors of space suits and the windscreens of high-altitude aircraft to protect the people inside from radiation. A single gram of gold can be used to coat 10 m2 of glass.

Gold is also used in its pure form for some tooth fillings. These are expensive but are still popular with some dentists.

One final important use of gold is as a catalyst in certain chemical reactions - for example, in the oxidation of carbon monoxide. This is important in air-conditioning systems to remove poisonous carbon monoxide from the air.

(In a parody of this, Dr Who's enemies the Cybermen are killed by the addition of gold dust to their breathing apparatus).

A Puzzle

Which weighs more, an ounce of feathers or an ounce of gold?

The correct answer, paradoxically, is an ounce of gold, because gold is traditionally weighed using special units called 'Troy ounces', probably named after the medieval trading city of Troyes. An ounce of gold always means a Troy ounce, which is 31.1g, about 10% greater than a normal ounce. This entry will use grams throughout, but bear in mind when looking up information on gold, that if ounces are mentioned, that they are these 'special' ounces.

Gold and Money

Since gold was the most valuable metal available in antiquity, it was used from Greek and Roman times as money. The earliest use of gold in coins dates from about 700BC in Greece, although the gold is alloyed with silver (see Electrum later in this entry). Gold was used for coins by many different countries after this, even up to the 20th Century in Britain, where a 'sovereign' was a gold coin worth one pound.

In England in 1698, Sir Isaac Newton was put in charge of the Royal Mint. In 1717, he decided that the economy was best served by setting a standard price for gold of four pound five shillings per troy ounce. In 1816, this 'gold standard' was adopted as the basis for the currency. Gold was considered to hold its value even in times of war or economic depression, so it became the fundamental unit of currency. Every banknote bore the legend 'I promise to pay the bearer one pound sterling'. This meant that the note could be exchanged for an equivalent value in gold at the Bank of England.

The gold standard was adopted by Germany in 1871 and by the USA in 1900. Countries began to stockpile gold. By the beginning of the 21st Century, the USA was the world's greatest hoarder of gold, with over 8,000 tonnes of the stuff. Much of this was held in the famous Fort Knox.

Gold can be traded on the stock market as a commodity, and in fact more than 930 tonnes of gold are cleared through London every day. However, this is virtual gold which is bought and sold. No actual metal changes hands. The stock market price is artificially much higher than the actual value of the metal. This is not a good basis for any currency. This was brought home to the governments of the world in 1968 when gold was allowed to float freely rather than being fixed in price. At first the value rose, so that by 1980 it had reached a record high of US$850 per troy ounce. Then the price started to fall and by 1999 was down to less than a third of that. Now governments no longer use gold as the standard and are selling off their gold reserves.

Alloys

Pure gold is soft, which means that jewellery made from it can get damaged easily. To strengthen the gold, other metals are normally added - such a mixture of metals is called an alloy. The amount of gold in the alloy is indicated by a number of carats: 24-carat is pure gold, 12-carat is 50% gold, 50% other metals (by weight). Alloys can often have very different characteristics from the original gold, depending on what metals are added and in what quantities.

Yellow Gold Alloys

Yellow gold alloys are ones which have been designed to retain the golden colour of the metal. There are three main yellow gold alloys used in jewellery making:

9-carat gold is typically 9 parts of gold, 2 of silver, 11 of copper and 2 of zinc.
14-carat gold is typically 14 parts of gold, 1 of silver, 7 of copper and 2 of zinc.
18-carat gold is typically 18 parts of gold, 4 parts of silver and 2 parts of copper.
So: copper is the main ingredient of 9-carat gold!

White Gold Alloys

White gold alloys change the colour so that they look silvery or gray in colour. These aim to look as close to platinum as possible, without the expense of using platinum.

There are two main types of white gold alloy:

Nickel white gold uses nickel as the main ingredient other than gold. This is cheap, it strengthens the metal and it bleaches the gold to a colour very closely approximating platinum. But many people are allergic to nickel - it can cause dermatitis. A typical nickel white gold alloy has 18 parts of gold, 4 parts of nickel, 1 of copper and 1 of zinc.

Palladium white gold is much more expensive because palladium is expensive. It does not cause any allergic reaction. A typical palladium white gold alloy contains 18 parts gold, 4 parts palladium, 1 part silver and 1 part copper.

Electrum

One alloy which is rarely found now but was important in antiquity was 'electrum' - it was a mixture of one part of silver to four parts of gold. This alloy occurs naturally in many mines, so no refining was needed to produce it.

Electrum looks very much like gold. Legend has it that the Ancient Greek philosopher Archimedes was given the task of determining whether a crown offered to the king was made from electrum or pure gold. One way would be to estimate the density - electrum is less dense than gold, but the crown was too complex a shape to calculate its volume. While Archimedes was taking a bath, he noticed that as he got into tub, the water level rose. He realised that he could measure the volume of the crown by immersing it in water. He jumped out of the bath and ran naked down the street shouting 'Eureka, eureka!' (which means 'I have found it'). Whether this is true or not, Archimedes went on to discover the principle of flotation, which shows how the weight of a solid changes when it is immersed in a liquid.

Where Gold Comes From

Creation

Current thinking is that gold is created when stars explode. Stars are initially composed of the gaseous element hydrogen. This 'burns' in a nuclear reaction (fusion) to produce helium. When all the hydrogen is used up, the helium burns to produce carbon, which in turn burns to produce heavier elements. This process continues until the core of the star becomes iron, compressed to an incredible density and at an enormously high temperature. Since iron is unable to burn in the same way, the nuclear process stops and the star collapses inwards. This causes massive shockwaves which literally rip the star apart. As the shockwave travels through the upper layers of the star, elements are flung together in all sorts of haphazard arrangements and some combine to produce gold and other heavy elements. Then the star explodes, shooting off most of its mass into space. A small remnant star is left behind. This explosion is known as a supernova - it is the ultimate fate of all large stars. Supernovas are so bright that they can briefly outshine all the other stars in the galaxy put together.

Gradually over the aeons, all the debris from one such supernova explosion gathered together to form our solar system. The heavier elements clumped together to form the inner planets while the lighter elements formed the sun at the centre and the gas giant planets further out. Gold is distributed in microscopic quantities through the earth, both on land and in the sea. It is there in such tiny concentrations that it is not worth extracting.

Concentration

For gold to be present in sufficient quantities for mining, some sort of mechanism is needed to concentrate the gold. This is achieved by flows of hot water, which often occur deep underground, near volcanic vents and along tectonic plate boundaries. If the water is hot enough and has just the right chemical constituents, it will dissolve the gold out of the surrounding bedrock. As the water flows it carries the gold along. Eventually at some point along the water flow, the conditions change: perhaps the water cools below some critical temperature. The cooler water is now not able to hold the gold in solution, so it stops being dissolved and reverts to solid form: it 'precipitates'. Since the point at which this occurs is fixed, the gold concentration builds up at this point. This process might take 50 - 100,000 years. Eventually a vein of gold is formed. This may be pure or it may be mixed with other precious metals - silver is very common.

.

Get a clue.

[watermock]

A single gram of gold can be stretched into a wire 3.2km long.

.

[watermock]

white gold sold as platinum is a ripoff.

Of course, this is sold to the groom and bride as "better than gold".

[watermock]

Maybe the human spirit is the antithesis of gold? No less destructible?

Current thinking is that gold is created when stars explode. Stars are initially composed of the gaseous element hydrogen. This 'burns' in a nuclear reaction (fusion) to produce helium. When all the hydrogen is used up, the helium burns to produce carbon, which in turn burns to produce heavier elements. This process continues until the core of the star becomes iron, compressed to an incredible density and at an enormously high temperature. Since iron is unable to burn in the same way, the nuclear process stops and the star collapses inwards. This causes massive shockwaves which literally rip the star apart. As the shockwave travels through the upper layers of the star, elements are flung together in all sorts of haphazard arrangements and some combine to produce gold and other heavy elements. Then the star explodes, shooting off most of its mass into space. A small remnant star is left behind. This explosion is known as a supernova - it is the ultimate fate of all large stars. Supernovas are so bright that they can briefly outshine all the other stars in the galaxy put together.

[watermock]

Gold can be traded on the stock market as a commodity, and in fact more than 930 tonnes of gold are cleared through London every day. However, this is virtual gold which is bought and sold. No actual metal changes hands. The stock market price is artificially much higher than the actual value of the metal. This is not a good basis for any currency. This was brought home to the governments of the world in 1968 when gold was allowed to float freely rather than being fixed in price. At first the value rose, so that by 1980 it had reached a record high of US$850 per troy ounce. Then the price started to fall and by 1999 was down to less than a third of that. Now governments no longer use gold as the standard and are selling off their gold reserves.

This is both a lie and the truth.

Actually, they are both lies.

[watermock]

Now governments no longer use gold as the standard and are selling off their gold reserves.

Exactly what governments?

Seems China and India buy as much as they can get....

[watermock]

This the corrupt Comex I have discussed.

It's a frequent playground for certsin entities like GOLDMAN SACHS, which controls our govererment.

[Tombstone RJ]

Originally Posted by watermock

gold is valuable becauise they have to claw it out from your cold, dead hands.

Let me ask you this.

Diamonds are rocks. They are worth nothing.

My point is simple: Gold is a commodity that people value and they value it highly. Fine. However, if the economy tanked and people had to survive on lets say the "barter" system, then gold, aside from being pretty to look at is really not all that practicle. Are you gonna make tools out of gold? Are you going to plow a field with a gold tractor? Are you going to make bullets out of gold? Are you going to build a dam out of gold? Are you going to feed your family on a bar of gold? Are you going to pump water out of the ground with a gold windmill? Are you going to build a boat out of gold? Are you going to fish with a gold net?

It's value is based on perception more than practical applications. The fact that it is rare increases it's value substantially.

Yes, you can use gold for industrial purposes, but it's cost is so extreme, that it's impracticle for things like wiring and alloys. No one is gonna invest in gold wiring when copper wiring is fine if not better. Oh and btw, nobody can afford copper wiring either.

Gold, why valuable is a luxury item, not a practicle item

[baja]

Originally Posted by Tombstone RJ

My point is simple: Gold is a commodity that people value and they value it highly. Fine. However, if the economy tanked and people had to survive on lets say the "barter" system, then gold, aside from being pretty to look at is really not all that practicle. Are you gonna make tools out of gold? Are you going to plow a field with a gold tractor? Are you going to make bullets out of gold? Are you going to build a dam out of gold? Are you going to feed your family on a bar of gold? Are you going to pump water out of the ground with a gold windmill? Are you going to build a boat out of gold? Are you going to fish with a gold net?

It's value is based on perception more than practical applications. The fact that it is rare increases it's value substantially.

Yes, you can use gold for industrial purposes, but it's cost is so extreme, that it's impracticle for things like wiring and alloys. No one is gonna invest in gold wiring when copper wiring is fine if not better. Oh and btw, nobody can afford copper wiring either.

Gold, why valuable is a luxury item, not a practicle item

Tell me what value does a dollar bill have except for the value people agree to, well it's the same with one ounce gold coins and in it event of complete financial collapse gold will become the new money.

Say you have a horse to trade and you want solar panels but the guy that has the solar panels doesn't want a horse what do you do? You both agree gold has a value that everyone agrees on so you 'buy' the panels with your gold coin (s).

[Tombstone RJ]

Originally Posted by baja

Tell me what value does a dollar bill have except for the value people agree to, well it's the same with one ounce gold coins and in it event of complete financial collapse gold will become the new money.

Say you have a horse to trade and you want solar panels but the guy that has the solar panels doesn't want a horse what do you do? You both agree gold has a value that everyone agrees on so you 'buy' the panels with your gold coin (s).

If the guy needs the gold to make the solar panels then yes, I see your point. However, if that is not the case, then the gold is of no use to either of us. If he does not want my horse, then we barter for something else.

I probably would not have the time nor the energy to hall a bunch of gold around anyway.

The question is, do you need gold to live?

[watermock]

Let Mock try to explain.

Assume there is no gold in Ft. Knox.(there probably isn't)

Then it becomes a function of the economy, debyt and most importantly, THE MONEY SUPPLY.

Gold is a finite commodity. So are others.

A fiat currency is just that. Fiat, you can print it till the ink runs red.

There is a finite amount if goods and if you havce an infinite amount of fiat money, it doesn't matter.You can't buy squat.

[Garcia Bronco]

If we have complete financial collapse then gold will be just as worthless. And if I want it bad enough from you...I'd just take it anyway. Who's going to stop me besides you?

[watermock]

That's why they cant make rifle shells fast enough.

[baja]

Originally Posted by Tombstone RJ

If the guy needs the gold to make the solar panels then yes, I see your point. However, if that is not the case, then the gold is of no use to either of us. If he does not want my horse, then we barter for something else.

I probably would not have the time nor the energy to hall a bunch of gold around anyway.

The question is, do you need gold to live?

What you are missing is there is and always has been an agreed on value of gold which means you 'pay' the guy in gold the value of the solar panels and the seller has a convenient instrument of value to exchange for what ever he might need, say seeds for example. The seller of the seeds uses the gold he received to buy, lets say a horse and uses the gold for the purchase. All gold serves is a transfer conveniently goods and services for one person to another exactly as currency is used to day but because there is only so much gold it can't be devalued by creating more gold out of thin air like the fed is now doing with the creation of trillions of dollars.

[watermock]

there is only so much gold it can't be devalued by creating more gold out of thin air like the fed is now doing with the creation of trillions of dollars.

You can only repeat this so many times Baja.

A fiat currency is only as strong as it's economy and debt, and of course, M1, the supply.

Look, there are petrodollars. Ever hear of them? They out number Gold 100/1 or whatever.

Going to run around with a barrel of crude on a mule? Talk about worthless.

There is no real problen with a fiat currency, as long as it has a backing of economy and the promise that the supply won't grow exponentially.

What you WANT is for the money to exchange fast, this is called the multiplier effect.

I there is no faith in the value, people will try to pawn it off as fAST AS POSSIBLE.

This is simple economy 101.

[watermock]

Actually, the world has ben on a oil standard for 50 years.

A brick of Gold buys alot of crude, and you just might be able to carry it.

[Tombstone RJ]

Originally Posted by baja

What you are missing is there is and always has been an agreed on value of gold which means you 'pay' the guy in gold the value of the solar panels and the seller has a convenient instrument of value to exchange for what ever he might need, say seeds for example. The seller of the seeds uses the gold he received to buy, lets say a horse and uses the gold for the purchase. All gold serves is a transfer conveniently goods and services for one person to another exactly as currency is used to day but because there is only so much gold it can't be devalued by creating more gold out of thin air like the fed is now doing with the creation of trillions of dollars.

I understand what your saying. Your saying that gold is the currency through which the guy and I would do business.

What I'm saying is that if we were living in an apocolyptic time where all you had was your ability (some kind of skill people value like a gun maker) and everyone lived through a bartering system (kinda like Mad Max Beyond Thunderdome) then gold would be relatively worthless because it's a luxury item, not a survival item. You would need food, water, shelter, clothing and some kind of a skill that you could use to barter with others for things you need.

If all you had was a bunch of gold, and no skill to make things that people need and no service that people would need (Mock would need a male prostitute) then you will not survive.

Wow, this thread has gotten wierd.

[baja]

It has gotten weird.

All I'm saying is in the times we are speaking of if you have gold you can buy anything you want because the gold would be readily excepted because the seller would know he could in turn buy what he needs because everyone would accept gold at a certain fixed value. Fixed because the fluctuating value you see today is because the item that is changing is the dollar value not the gold value. This seems so simple I am surprised it needs to be mentioned more than once.

[baja]

Originally Posted by watermock

You can only repeat this so many times Baja.

A fiat currency is only as strong as it's economy and debt, and of course, M1, the supply.

Look, there are petrodollars. Ever hear of them? They out number Gold 100/1 or whatever.

Going to run around with a barrel of crude on a mule? Talk about worthless.

There is no real problen with a fiat currency, as long as it has a backing of economy and the promise that the supply won't grow exponentially.

What you WANT is for the money to exchange fast, this is called the multiplier effect.

I there is no faith in the value, people will try to pawn it off as fAST AS POSSIBLE.

This is simple economy 101.

I understand all this Mock, it is exactly the reason the dollar (being tied to oil) has been kept afloat at current values.

[Meck77]

Originally Posted by Garcia Bronco

It's over bought and over priced and the bubble will burst.

Carry on.

Should be interesting when congress votes to raise the debt ceiling in April. The stock market is artificially being pushed up by the institutional buyers. Gold has had a nice little pull back. Time to get in if you can.....

http://www.nytimes.com/2011/02/12/us...html?src=twrhp

AK are you still shorting gold or silver?

14 trilliion, 15, trillion, 20 trillion in debt? It's not going to work folks.....

[mhgaffney]

You guys are full of BS.

But that's OK. I actually buy silver -- not gold. But I'm very happy you think precious metal is a bad investment.

Sorry to seem selfish -- but this wacko logic on your part is actually going to help put money in my pocket.

As the dollar goes to hell -- metal will increase in value. This is a no brainer. Last summer I bought junk silver at $19/ounce./ It is now over $30/ounce and is projected to go much much higher.

One day you might need silver to buy gasoline. If the dollar goes to hell you won't be able to carry enough in a wheelbarrow to fill your gas tank.

It happened in Weimer Germany in 1922. It happened in Mexico - and Venezuela. It happened in Russia.

You think it can't happen here?

Go ahead,. Be stupid. As I say -- that will put $ in my pocket.

American hubris is over the top. Each week we reach a new low. If I had a dime for every stupid ignorant post on the OM I'd be a millionaire.

MHG

[W*GS]

Originally Posted by mhgaffney

If I had a dime for every stupid ignorant post on the OM I'd be a millionaire.

Moving that dime from one pocket to the other doesn't make you richer, moron.

[chadta]

Originally Posted by mhgaffney

If I had a dime for every stupid ignorant post on the OM I'd be a millionaire.

MHG

Sounds like a conflict of interest to me, i mean since you've cornered the market on stupid posts, i think its wrong that you should now benefit from them.