Price of gold at all-time high but be careful of these gold ETFs

[Into the Night]

Silver does not corrode.

Silver corrodes.

It does tarnish, which is different than corroding.

Tarnish is corrosion.

When silver oxidizes, it does not change size, so no corroding.

It does change size. It corrodes.

Gold wears, which silver does not do.

They both suffer wear from friction.

Wearing is somewhat similar to corrosion in that integrity is destroyed slowly.

Friction is not corrosion.

Tiny amounts of gold are used in electronics, but the wearing is a major problem.

Not a problem.
Gold wire is used in mounting chips to their packages. It's encased in the package.
Gold plating is used on switch contacts and edge connectors, making both very reliable.

Much more silver is used in industrial processes, because of its oxidizing, it is more reactive.

Oxidation is corrosion.

You can do far more with silver.

So?

Gold's value is not its use in electronics.

Neither is silver's value.

Its value is that it is rare, and more importantly perceived as valuable.

WRONG. It is valuable because you can use it to buy and sell.

Silver is more scratch resistant than aluminum, gold, or plastic.

WRONG. Silver is easy to scratch. It also corrodes.

If you want scratch resistants than of the four, you would go with silver.

Bad choice. A far better material is to go with carbon.

But CD makers do not want scratch resistance. CD's are played without contact, so with reasonable care, lose no data over decades.

Blatant lie. CD's DO age. CD makers DO want scratch resistance. That's why they coat their CDs in plastic. UV light is what causes CDs to age. Keep them away from UV light.

This meant that used CD's were exactly equal to new CD's.

They are not.

In turn that meant that artists could expect sails at first,

CDs are not wind powered.

but almost nothing after that.

CDs do not furl any sails either.

It was a major problem in the CD market.

No one considered the lack of sails on a CD to be a problem (except you).

Gold is difficult to use in exchanges, so it is not much of a currency.

Exchanges will easily convert from local currency to gold or back. That is the purpose of an exchange.

 

[Walt]

Banks aren't buying gold. Private individuals and some nations are, but not banks.

Night is 100% correct here. Right now, gold prices are being pushed up by individuals, and speculating companies. It is mostly bought on speculation, with a significant minority bought out of fear. Most is being bought at an unreasonably high price, because the speculator believes that they can sell it for an even higher price. That is probably a bubble.

Banks in the United States are heavily regulated. They are required to use FRN dollars and to conduct all their accounts within it.

They have promised dollars to depositors, and are regulated to provide those dollars.

This fascism comes from the Federal Reserve.

And Night veers back into insanity.

 

[Into the Night]

Not over leveraged, but rather having a short term liquidity problem.

They are over leveraged, giving them short and long term liquidity problems.

And more importantly, they are not buying gold.

Banks don't buy gold. US banks must use FRN dollars.

They need short term liquidity, and are doing everything in their power to get it.

No, they don't.

You can get a 5% CD, because banks are desperate to get your money locked into place, to take care of short term liquidity.

Does not give them liquidity.

Picture you put $100 in a checking account. The bank promises you that you can have $100 any time you want it. They then took that money and bought a two year Treasury at 1% a year.

Banks make money not by buying Treasury notes. They make money loaning it out...typically unsecured credit, auto loans, home loans, etc.

Notice that gold will not solve any part of that problem.

Yes it does. Banks can no longer get funny money from the Fed.

The bank does not care about the value of the dollars they owe the depositors.

Because of the funny money from the Fed.

 

[Into the Night]

Again, the value of a dollar has decreased by a factor of 30.

Math error. 2032/20 is not 30.

Gold has changed its price, even adjusted for inflation.

Gold does not have inflation.

That makes it an unreliable non-inflationary standard.

Gold is reliable. It has no inflation.

We are back to the problem of gold going to $5000.

Not a problem.

If it increases by 150%, while inflation is increasing by 2 to 3%, that means it is not reacting to inflation. It would seem more like a bubble.

The bubble is the FRN dollar.

Or possible an extreme increase in the demand for gold.

No, it means faith in the FRN dollar has evaporated. It is ceasing to be a currency.

That being said, increases in demands for gold would tend to be a one time thing.

The FRN dollar only needs to collapse once.

You could not make long term investments based on it happening consistently.

Gold is not an investment. It is a currency.

 

[Walt]

If inflation again rises, yes it would be "possible"... but honestly, that would be 150% rise from a pretty historic high and inflation would have to get pretty bad to get it to $5000...

Damocles noticed that the claim that gold keeps up with inflation, and that inflation is not 150%. I am impressed with Damocles.

There is a way gold can go up by 150% without inflation increasing by 150%. That is if gold does not increase only with inflation.

The obvious way gold can increase without inflation is with speculation. Speculators are buying gold not because they think it has increased in value, but rather because they think they can sell it for even more. The bubble will keep increasing until the bubble bursts. That is difficult (or even impossible) to time, because any bubble can easily double in price... Even bubbles that just doubled in price many times before.

The other possible explanation is an increase in demand for gold. If more people are using gold that has a limited supply, the price of gold will increase. That tends to be a one time thing. There is only so much use for gold.

Important to make clear I am not speaking of the consuming/industrial/jewelry use of gold. I am talking about more people using gold as a store of value... maybe.

Buying gold now is buying when things are high... Buy low, sell high. I would not buy gold right now, I would hold it.

Extremely prudent. That being said, gold may well go to $5000, and Damocles and I will look wrong. It may then go to $10,000, making Damocles and I look extremely wrong. And then it will probably plummet to $1000, and everyone will realize how prudent it is not to buy gold when it is overpriced.

$2000 might be a bubble, or it might just be a high. $5000 is almost certainly a bubble. I cannot tell you when a bubble will burst, and a lot of people will make a lot of money off the bubble before it bursts. I can tell you that the bubble will burst.

So it probably is not prudent to buy gold right now... It may be profitable.

 

[Into the Night]

Night is 100% correct here. Right now, gold prices are being pushed up by individuals, and speculating companies.

Gold is not an investment, Sock.

It is mostly bought on speculation,

Gold is not an investment, Sock.

with a significant minority bought out of fear.

Fear of the FRN dollar devaluing, which it is.

Most is being bought at an unreasonably high price,

Most??? Define an 'unreasonably high price'.

because the speculator

Gold is not an investment.

believes that they can sell it for an even higher price. That is probably a bubble.

The bubble is the FRN dollar. Gold is not an investment.

They have promised dollars to depositors, and are regulated to provide those dollars.

WRONG. They are required to use FRN dollars by law.

And Night veers back into insanity.

Fascism and communism is the insanity. You cannot project YOUR problems on anyone else, Sock.

 

[Into the Night]

Damocles noticed that the claim that gold keeps up with inflation, and that inflation is not 150%. I am impressed with Damocles.

There is a way gold can go up by 150% without inflation increasing by 150%. That is if gold does not increase only with inflation.

The obvious way gold can increase without inflation is with speculation. Speculators are buying gold not because they think it has increased in value, but rather because they think they can sell it for even more. The bubble will keep increasing until the bubble bursts. That is difficult (or even impossible) to time, because any bubble can easily double in price... Even bubbles that just doubled in price many times before.

The other possible explanation is an increase in demand for gold. If more people are using gold that has a limited supply, the price of gold will increase. That tends to be a one time thing. There is only so much use for gold.

Important to make clear I am not speaking of the consuming/industrial/jewelry use of gold. I am talking about more people using gold as a store of value... maybe.



Extremely prudent. That being said, gold may well go to $5000, and Damocles and I will look wrong. It may then go to $10,000, making Damocles and I look extremely wrong. And then it will probably plummet to $1000, and everyone will realize how prudent it is not to buy gold when it is overpriced.

$2000 might be a bubble, or it might just be a high. $5000 is almost certainly a bubble. I cannot tell you when a bubble will burst, and a lot of people will make a lot of money off the bubble before it bursts. I can tell you that the bubble will burst.

So it probably is not prudent to buy gold right now... It may be profitable.

Gold is not an investment, Sock.

 

[Walt]

You don't know what fiat means. Has nothing to do with central authority. Fiat means the currency has no intrinsic value. That is bitcoin. THINK

Fiat is from the Latin for "let it be done." The Emperor used to order things by "fiat." It is all about central authority. Bitcoins are mostly not being ordered to be used by governments. In fact, governments are doing the opposite.

Fiat currency does have a form of intrinsic value. It is the only thing we can pay taxes in. That is an important part of our lives, because not paying taxes can land us in prison. Gold is not an important part of our lives.

 

[Into the Night]

Fiat is from the Latin for "let it be done." The Emperor used to order things by "fiat." It is all about central authority. Bitcoins are mostly not being ordered to be used by governments. In fact, governments are doing the opposite.

Fiat currency does have a form of intrinsic value. It is the only thing we can pay taxes in. That is an important part of our lives, because not paying taxes can land us in prison. Gold is not an important part of our lives.

Fiat currency has value. You can buy and sell with it.

You don't get to speak for everyone, Sock. Your avarice is showing again. You don't own any gold. Very well, trust in that constantly devaluing FRN dollar. Madness lies that way.

 

[Walt]

Silver corrodes. Tarnish is corrosion. It does change size. It corrodes.

Corroding is the destruction of integrity. If tarnishing happens only on the surface, like with silver or bronze, then there is no corroding. With iron, rust(oxidizing) causes a change in size, which exposes deeper layers to more rust. Silver does not have this problem.

I have seen 2,000 year old silver coins that while tarnished are fine other than that. While iron from 2,000 years ago would have to be stored in perfect conditions, or it will corrode away.

They both suffer wear from friction.

Silver wears much slower than gold. If tarnished, it actually wears even slower than untarnished silver.

WRONG. It is valuable because you can use it to buy and sell.

I have never used gold to buy or sell anything. I have used dollars to buy and sell gold, but not gold to buy and sell anything. I have used Bitcoins to buy and sell computer software and services. Mostly when I want to buy things I use credit cards and checks payable in dollars. Mostly when I want to sell things I receive bank transfers in dollars.

Can you buy a candy bar at the corner store with gold?

Exchanges will easily convert from local currency to gold or back. That is the purpose of an exchange.

So you can sell gold for currency? I can sell anything for currency, that does not make everything currency.

And it is not that easy to convert. It has to have its value estimated, which is difficult. There have been times and places where conversion is illegal.

 

[Walt]

Math error. 2032/20 is not 30. Gold does not have inflation.

Gold has gone up by [roughly] 100 times compared to the dollar. The dollar has gone down by [roughly] 30 times in terms of inflation. That means gold has gone up by about 3 times in terms of inflation adjusted value.

That would make gold deflationary. While gold can both have inflation and deflation, it tends to be deflationary. With rises in productivity, the amount of money in inflationary adjusted terms should increase. Gold usually does not increase at the same rate. That causes long term deflation.

Short term inflation and deflation is more about the velocity of money, than the money supply. One dollar spent 100 times in a year is a $100 in terms of inflation, while one dollar not spent at all in a year is $0 in terms of inflation.

So when we were on the gold standard, you saw wild fluctuations in short term inflation. One year would have 20% inflation, and the next would have 20% deflation. It would even out to about zero, but it would be a roller coaster ride to get there.

As people got more control over whether they needed to spend money immediately, we began to see liquidity traps. If people knew there was deflation, they put off purchases till later, so they would have to pay less. That decreased the velocity of money, and caused more deflation. Gold could not break out of this.

The bubble is the FRN dollar.

The dollar is hardly shooting up in value.

No, it means faith in the FRN dollar has evaporated. It is ceasing to be a currency.

Maybe people are no longer accepting US Dollars where you live. I have no problem using US dollars where I live.

 

[goat]

Any American banker buying significant amounts of gold right now will go to prison. I am not even joking about that.

American banks have obligations in Dollars, and only in Dollars. They need to be moving money into more stable and liquid forms of assets. Gold is not stable in terms of Dollars.

If you are a bank, and someone has a $100 deposited with you, you have to be able to pay that person $100. That is one hundred green pieces of paper saying $1. It does not matter what those pieces of paper are worth. Banks have no obligation to deliver a certain value in gold.

The first time I read it, my search said banks advantage to buying paper gold and central banks buying up record numbers in tons of physical gold. Now it only says central banks buying physical gold. I don't know what happened but I'm sure I read banks have an advantage to buying paper gold. I'll keep looking.

 

[Into the Night]

Corroding is the destruction of integrity.

More or less correct.

If tarnishing happens only on the surface, like with silver or bronze, then there is no corroding.

That is corrosion.

With iron, rust(oxidizing) causes a change in size, which exposes deeper layers to more rust.

Iron will continue to corrode, while silver does not. Like most aluminum corrosion, only the surface corrodes.

Silver does not have this problem.

Yes it does.

I have seen 2,000 year old silver coins that while tarnished are fine other than that.

They are corroded.

While iron from 2,000 years ago would have to be stored in perfect conditions, or it will corrode away.

Iron will continue to corrode.

Silver wears much slower than gold.

Both are worn by friction. Friction is not corrosion.

If tarnished, it actually wears even slower than untarnished silver.

Tarnishing is corrosion.

I have never used gold to buy or sell anything.

Your problem. Other people do.

I have used dollars to buy and sell gold, but not gold to buy and sell anything.

Your problem.

I have used Bitcoins to buy and sell computer software and services.

Which only means Bitcoin is also a currency.

Mostly when I want to buy things I use credit cards and checks payable in dollars.

Your problem.

Mostly when I want to sell things I receive bank transfers in dollars.

Your problem.

Can you buy a candy bar at the corner store with gold?

Yes.

So you can sell gold for currency?

Gold IS a currency. You can exchange it for local currency and back again.

I can sell anything for currency, that does not make everything currency.

I never said everything was currency, Sock. You are hallucinating again.

And it is not that easy to convert.

It is easy to exchange dollars for gold or back again.

It has to have its value estimated, which is difficult.

It is very easy. Any exchange can determine the exchange rate in seconds.

There have been times and places where conversion is illegal.

Just like drugs!

Doesn't prevent the use of gold or silver as currency, Sock.

 

[Into the Night]

Gold has gone up by [roughly] 100 times compared to the dollar.
The dollar has gone down by [roughly] 30 times in terms of inflation.

Math error. 30 <> 100.

That means gold has gone up by about 3 times in terms of inflation adjusted value.

Gold has no inflation.

That would make gold deflationary.

Gold has no deflation.
An ounce of gold is still an ounce of gold.

While gold can both have inflation and deflation, it tends to be deflationary.

Gold has no deflation.

With rises in productivity,

A good thing.

the amount of money in inflationary adjusted terms should increase.

Money is not wealth or productivity. Redefinition fallacies.

Gold usually does not increase at the same rate.

Gold is not wealth or productivity. Redefinition fallacies.

That causes long term deflation.

Gold has no deflation.

Short term inflation and deflation is more about the velocity of money,

Velocity is neither inflation nor deflation. Redefinition fallacies.

than the money supply.

Money supply vs wealth is the direct cause of inflation or deflation.

One dollar spent 100 times in a year is a $100 in terms of inflation,
while one dollar not spent at all in a year is $0 in terms of inflation.

Velocity is not inflation nor deflation. Redefinition fallacy.

So when we were on the gold standard, you saw wild fluctuations in short term inflation.

Gold is not inflation. Redefinition fallacy.

One year would have 20% inflation, and the next would have 20% deflation.

Gold is not inflation nor deflation. Redefinition fallacies.

It would even out to about zero, but it would be a roller coaster ride to get there.

Gold is not a roller coaster. Redefinition fallacy.

As people got more control over whether they needed to spend money immediately, we began to see liquidity traps.

Gold is not a 'liquidity trap'. Redefinition fallacy.

If people knew there was deflation, they put off purchases till later, so they would have to pay less.

Typical of deflation.

That decreased the velocity of money, and caused more deflation.

Velocity is not deflation nor inflation. Redefinition fallacies.

Gold could not break out of this.

Gold is not inflation nor deflation nor velocity. Redefinition fallacies.

The dollar is hardly shooting up in value.

Correct. It is losing value.

Maybe people are no longer accepting US Dollars where you live. I have no problem using US dollars where I live.

FRN dollars are a currency, but one that is losing value. A day may come soon when it ceases to be a currency. Already, people are losing faith in the dollar. They are already looking around for another currency.

 

[Into the Night]

The first time I read it, my search said banks advantage to buying paper gold and central banks buying up record numbers in tons of physical gold. Now it only says central banks buying physical gold. I don't know what happened but I'm sure I read banks have an advantage to buying paper gold. I'll keep looking.

Paper 'gold' is just fiat currency. It has no gold backing it.

 

[goat]

Paper 'gold' is just fiat currency. It has no gold backing it.

Do banks have an advantage buying paper gold?

I read it the other day but now I can't find it.

 

[Into the Night]

Do banks have an advantage buying paper gold?

I read it the other day but now I can't find it.

No.

 

[goat]

No.

Bullshit. I know what I read so I need to find it.

 

[Into the Night]

Bullshit. I know what I read so I need to find it.

What you read is inconsequential to your question.
Banks have no advantage buying paper 'gold'.