Free Republic
Browse · Search
News/Activism
Topics · Post Article

To: coconutt2000
It's real value was exceeded after gold passed $550.

Why $550 ? What do you mean by real value ?

36 posted on 05/09/2006 4:23:40 PM PDT by simon says what
[ Post Reply | Private Reply | To 20 | View Replies ]


To: simon says what

Real value is what I consider the value to be minus the effects of speculation.

I place my opinion of what the real value is at something lower than the speculators.

In my opinion, the real value represents the most likely price the commodity will settle at when balance is restored to the market through natural, free market forces. Such as when the effects of the current prices begin to affect consumption.

It is not a reference to a Marxist concept or older economic concept of real or intrinsic value. Value is ultimately decided by the consumer, and prices are set according to demand and supply concerns.

Examples of the phenomena of real, or I guess a better term might be "normal" value, is evident all around us. At the moment, the supply of money chasing the supply gold is high, but this is not a normal state. Gold is also not a static resource, and eventually conditions will change and the price of gold will drop because the conditions which led to the rise in price aren't permanent. The conditions leading to the rise in price are in my opinion unsustainable. When the buying frenzy is over, there will be a lot of people holding onto gold that won't be valued equal to the price they bought it at for a long while.

Leastwise, that's my opinion.


55 posted on 05/09/2006 8:55:49 PM PDT by coconutt2000 (NO MORE PEACE FOR OIL!!! DOWN WITH TYRANTS, TERRORISTS, AND TIMIDCRATS!!!! (3-T's For World Peace))
[ Post Reply | Private Reply | To 36 | View Replies ]

Free Republic
Browse · Search
News/Activism
Topics · Post Article


FreeRepublic, LLC, PO BOX 9771, FRESNO, CA 93794
FreeRepublic.com is powered by software copyright 2000-2008 John Robinson