Posted on 05/12/2011 7:09:24 AM PDT by SeekAndFind
What is gold really worth? In one sense, the answer is obvious. Gold is worth $1,515.10/oz, because that is what it is trading for in the market as of this writing. However, all this number means is that an ounce of gold has 1,515.1 times the market value of our current, undefined, “fiat” dollar.
A deeper and more interesting question is, “What should gold be worth?” In other words, in terms of what quantity of gold would we define the dollar if we wanted to have a stable currency, a stable economy, and stable financial markets?
This is not just an academic question. The dollar is experiencing a crisis of confidence. Our undefined, unstable dollar caused the crash of late 2008, and it is the principal problem behind what is unfolding as the slowest economic recovery on record.
Right now, the dollar problem is chronic and debilitating, but it could become acute and economically life threatening at any moment. In an acute dollar crisis, Congress would be forced to act, and the action that would best address the problem would be to define the dollar in terms of gold.
The idea of defining the value of the dollar in terms of the value of a fixed weight of gold is not a radical notion. The radical—and ultimately unworkable—notion is for the dollar, which is our basic unit of market value, to have no legal definition. Our undefined, floating dollar is producing the same kind of economic chaos that we would expect if we had a “floating” second, pound (mass), or foot.
The cost of coping with this economic chaos is enormous and growing. It shows up in many different ways, including anemic real GDP growth, wild swings in gasoline prices, 9.0% unemployment, stagnating real median incomes, and rising inequality.
(Excerpt) Read more at blogs.forbes.com ...
no just making a joke. I look for pre-65 quarters and dimes in my change. any pre-83 penny is worth 3 cents and any nickel 1945-2011 is worth 7 cents. save those pennies and nickels.
“Contrary to popular belief, gold has very little intrinsic value.”
Yea, about the same intrinsic value as a well made custom men’s suit.
The Roman Republic/Empire survived on the Gold std for almost 800 years.
A LOT more than the dollar!
Looks like another George Soros hit piece on Gold. Because the price of Gold has rocketed up over the last 10 years. Soros is trying to get people that are hold gold to sell. LOL!
When I read a headline like this... That means buy more gold.
if they had ransacked cities and took the seashells and left the gold, I don’t think it would have worked.
Talk to me when you are wiping your arse with $100 bills. This is very likely when we lose control of our fiat money. It is mazing the defendwers of paper money. In history EVERY currency has devalued to nothingness. This time it is different, right? LOL.
I'm sure you can find points in history where two different commodities occasionally trade in the same ratio. But that doesn't mean that they always trade that way. Silver doesn't track gasoline, as you can see from the above examples.
Just to clarify:
2001 gasoline cost 0.4 oz of silver
Apr 28, 2011 gas costs 0.078 oz of silver
May 2, 2011 gas costs 0.115 oz of silver.
That change of 0.067 oz between Apr 28 and May 2 is an 80% increase in the price of gasoline when paid in silver. Yet gas only increased 2.3% when priced in dollars.
I guess it was I who missed the point! Sorry.
Contrary to popular belief, there is no such thing as “intrinsic value.”
Gold is worth exactly what it’s always been worth. The value of gold has not changed it’s the value of the dollar that has changed. The dollar is now worth approximately 1/1500th of an ounce of gold. A speck.
A decent suit along with a shirt tie and belt will run you about $1500.00 at a quality men’s fashion store.
http://www.brooksbrothers.com/IWCatSectionView.process?IWAction=Load&Merchant_Id=1&Section_Id=576
I look pretty darn good in a $300 suit.
How long does it take to find a ounce of gold compared to a ounce of BS.
Or togas. Funny how that’s been true forever.
I would be interested in hearing the factors you considered to come to this conclusion.....not to argue about it, but always interested in other's thoughts on the subject.
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