Comment on Gold hits $3,500 for first time as US dollar sinks to three-year low
Dagwood222@lemm.ee 11 months ago
I never understood the idea of hording gold in case of an economic collapse.
Think about it; the government is gone, there’s no gasoline or power of any kind, no way to get food. Who is going to want gold?
That’s not really what it’s for, though. Putting cash reserves in gold can help your cash grow with inflation instead of suffer by it.
It’s all a way to keep your savings from suffering during high inflationary periods. So gold going up a lot means ppl believe a high inflationary periods is coming.
Think about it; the government is gone, there’s no gasoline or power of any kind, no way to get food.
That kind of complete collapse, world-wide is unlikely. Gold could be useful if a country’s currency collapses, which does happen sometimes. Gold dealers will still exist and they can sell it to other countries if they have to. Central banks do buy gold for various reasons. Though, gold is super volatile and highly speculative compared to central-bank currencies (usually), so I don’t really trust it as a “store of value” or currency. Gold has the reputation it does mostly for traditional reasons. Theoretically, any rare, expensive to mine/acquire resource could take its place if enough people/institutions agreed on it.
It’s fruitless to speculate on what the collapse would look like.
I think it was John Dillinger who said that there are a thousand things that can go wrong in a bank robbery, and if you’re a genius you can plan for fifty.
I agree. But countries having their currencies collapse/hyperinflate happens somewhat often and can be studied. It’s not exactly the complete economic/societal collapse preppers seem to think about.
I’m starting to hoard bottlecaps, personally.
.45 rounds for the spray and pray.
The gold is for getting richer during the restructuring after the collapse.
You have to survive the first ten years or so.
Agree 100%. Jewelry is ridiculous and only for stupid people obsessed with status symbols.
Gold is good for use as a coating to protect copper from corrosion in electrical circuits and wires.
Diamonds are good for drill bits?
Smart greedy people have been taking advantage of dumb people for centuries, millenia even. Spending hard earned money on this nonsense has never made sense to me, but the people selling sure are happy.
If society broke down, all this status symbol nonsense would become very quickly irrelevant. Food, water, ammo, medicine would be currency. Can’t do shit with gold unless other people think it’s valuable.
Gold has been used as a store of value for millennia and it still will be long after the dollar, yen and euro are distant memories. If society were to collapse, gold would literally be the only universal currency, as it has been until fairly recently. The only thing that could change that would be ubiquitous space mining that would produce gold in such quantities as to render it worthless. That’s hardly going to happen after a societal collapse, though.
Think of it this way.
Suppose you were smart and got 100 ounces of gold back when it was cheap. Say it cost you $50,000. That’s your supply.
I spent that money on a ton of quality copper tubing to make stills; a ton of hand tools; quality binoculars; lab equipment.
Which of us is going to have the longer line outside our trading post?
That’s what investing is about. You have money, and want to make more money from it. What will you do?
Some people, like you, decide to invest it on producing a product, or invest on a company that produces products so they can produce more and give you a cut.
Other people, prefer to store that value in another form. Say buying gold with your dollars.
The thing is, that there’s no objective better option.
Both options have risks and rewards. And the reward is very closely related to the risk. There’s no such thing as low risk high reward. In your example, a risk would be new lab technologies developing that would make your lab equipment obsolete, which means that you just lost a lot of money. But if you manage to sell that lab equipment, you’ll probably make good money.
The thing about these news is: the reward of buying gold is decreasing (and risk increase). Why? Because its price is increasing, which means that if you buy gold today and sell it tomorrow, it’s likely that you’re gonna lose some money.
The fact that people keep buying gold even though the risk increase and rewards decrease, means that other options have an even worse risk-reward ratio. This means that people are pessimistic about the economy.
It’s not about one way of investing being better than the other. It’s about seeing people’s perception of the economy through their choice of investment.
I’ll pay some thugs an ounce of gold to steal your stuff.
Negative. If society collapse, I personally, and my family can’t eat gold. Period.
I’m not giving away precious ammo or food for gold. Either you’ve got something of value, or I’m not taking your gold. Period.
I’m talking about an extremely desperate situation, inherent to the whole “society collapse” phrase. I stand by this. Gold doesn’t mean shit. It only means something if people like you apply value to it, where there’s still some semblance of societal order and structure.
Sure except gold has been a source of value for Milena and well continue to be.
You do you, mate.
Gold doesn’t expire/gets moldy, unlike bread.
But who is going to want it? You could buy things like hatchets that will last and are easily traded.
Copper tubing to make stills will be the most valuable currency.
Eventually, you’ll need a consistent currency.
If a farmer needs to buy an axe but his crops are still growing, what does he use? His plow? Sheep? Daughter? He needs all of these things to keep his farm going.
He needs credit but he doesn’t want the axe to cost a fortune in crops with interest. And the axe maker doesn’t want the risk of handing out axes if crops fail.
What if there’s a way to store credit? Something durable, rare and easily divisible like gold is perfect. Farmer can trade crops for gold. Now, he has something he can trade over the winter and while crops grow in the summer.
It doesn’t have to be gold but it should be rare or tightly controlled to avoid runaway inflation. Bartering doesn’t scale. You need a currency and gold works.
Eventually,
You’re putting the cart before the horse. In America, the term for a dollar is ‘one buck.’ That comes from the early colonial days when one deer skin [aka buck skin] was the common currency. Trade is possible without a currency. In the early days, access to things like tools and drugs will be far more valuable.
surewhynotlem@lemmy.world 11 months ago
Currency is useful. If the government is gone, the dollar is gone.
Shiny metal is a very common currency. It isn’t consumed for anything useful and it’s scarce.
Dagwood222@lemm.ee 11 months ago
People aren’t dependent on a particular currency.
Back in colonial America, one deer skin was the basic unit of trade. That’s why people still call a US dollar a ‘buck.’ Shells, salt, and other commodoties have been used.
njm1314@lemmy.world 11 months ago
I guess it’s hope that they’ll be other governments that will want it?