Gold

[denpal]

Buying Guns, Magazines and
Petrol With Silver...
Saturday, 4 February 2012 – Melbourne, Australia
By Shae Smith
Buying Guns, Magazines and Petrol With Silver...

A few days ago, it was rumoured India and Iran agreed to trade in hard assets... India will give Iran gold. In exchange, Iran will give India oil.

This is a huge trade. India imports about US$12 billion of Iranian oil each year. To give you an idea, $12 billion dollars of oil equals about 6.87 million ounces of gold!

In one transaction both countries have ignored the value of paper dollars. Instead, they've bartered one commodity for the other.

The thing is, the Indian-Iranian deal isn't the first to use bullion as payment. But it may be the first on billion-dollar scale.

But one thing's for sure. It's further evidence that the way we value paper money is changing.

In fact, paying with bullion is happening more than you may think. It's not just gold either. Consumers are using silver for smaller transactions...

Take the case of a US blogger. He recently revealed that two different people bought guns from him on eBay with silver coins.

Then there's the Backwoods Home magazine in the US. If you don't want to pay in cash, you can pay your subscription in silver coins.

Or the Oregon Service station that'll reduce the cost of petrol to 20 cents a gallon if you pay using old coins...



At the time this photo was taken in May last year, two pre-1964 silver dimes were worth $5 based on their 90% silver content. Gas prices in America were nearing $4 a gallon at the time.

And there's even a mini mart in Los Angeles that prefers junk silver instead of greenbacks as payment for your groceries....

(NB: Junk silver simply refers to American coins pre-1965, which have 40% to 90% silver content. See this video to find out more.)

It's clear there's a growing number of people and businesses who are ditching paper money for real assets.

Smart Knowledge is an investment newsletter service that firmly supports the gold standard. To the extent that they only offer memberships priced in ounces of gold....If you're after their premium membership service, that'll be 5.75 ounces, thank you.

And in September last year, Donald Trump accepted a $176,000 deposit for a commercial lease in one of his skyscrapers. But not in cash or a cheque. The company taking the lease (APMEX a precious metals investment firm) paid the deposit using three 32-ounce gold bullion bars.

It might look like a marketing stunt. But Trump's not alone to wanting to do business with the shiny yellow metal.

In November 2010, the ICE Europe futures exchange started accepting gold bullion as a margin deposit for its crude oil and natural gas futures. Less than two months later, JP Morgan announced it would accept physical gold as collateral for some trades.

According to a Casey Research report from March last year...

'The World Gold Council is gaining traction in its push to have the Basel Committee on Banking Supervision accept the precious metals as a Tier-1 asset for banks, along with government bonds and currencies.'

It's surprising that precious metals aren't already considered a top notch asset for a bank.

But maybe these few transactions are just a sign of things to come.

Because using real assets, like gold, as payment could continue to happen on a billion-dollar scale. And the more it occurs, the more it shows that people are losing faith in the US currency and paper money in general.

The world's reserve currency is losing partners willing to trade in it. Iran has managed to completely avoid getting stuck with potentially worthless US dollars by snapping up a tangible asset.

Ironically, that puts Iran in the same camp as Donald Trump. Both are buying gold!

Now, this doesn't mean we've returned to the gold standard... yet. But consumer and business trading in gold is a sign some people value precious metals more than cash.

As more and more merchants open up to the possibility of trading with bullion, maybe it won't be long until gold is used as money for every day transactions... whether governments like it or not.

Shae Smith
Editor, Money Weekend

[Skol]

It's only a rumour India will trade oil for gold.

Indians are shrewd operators, has it occurred to you that if the the rumour's true that they're dumping gold at what they see as an exorbitant price in exchange for oil?
As for the Donald, I rest my case.

Answer my question about whether gold was a great 'store of wealth' in 1980 as it's value evaporated.

Looks like the POG is evaporating a little at the moment. Maybe it's the hedge funds starting to ease out of gold and into the stock market, there's been some talk about that on TV in the USA.

Shall we blame it on the 'manipulators'?

[skid]

As for some US States making gold and silver a currency all that is, is a bit of grandstanding by a bunch of Ron Paul converts, if you want confirmation that gold isn't a currency try buying your next lot of groceries with it.[/QUOTE]

Who knows?- All it would take is a credit card co accepting payment from a gold acc.
It may seem far fetched but its a changing world.

[skid]

As for some US States making gold and silver a currency all that is, is a bit of grandstanding by a bunch of Ron Paul converts, if you want confirmation that gold isn't a currency try buying your next lot of groceries with it.

Who knows?- All it would take is a credit card co accepting payment from a gold acc.
It may seem far fetched but its a changing world.[/QUOTE]

This gold acc could also have the facility to convert at the going rate to currency to actually pay the credit card payment.
That way all the Americans [or any others] that felt they were on a sinking ship could keep their money in gold and simply convert and pay credit card payment.
[which is not quite-but almost like paying for groceries in gold]
OK - maybe Im getting carried away but it just shows that its not impossible eh?

[Pumice]

Anyone want to have a go at puting a value on gold?
Heres my quick attempt using global GDP and current gold holdings.
Obviously this will have some fundamental and caculation flaws, but hopefully someone out there would like to give it a crack.


US$/Ounce Tons (CNBC) Ounces Value of world gold
$1,750 30,700 982,400,000 $1,719,200,000,000


Discount rate Workd GDP (World Bank) Ounces/Discounted world GDP
$63,040,000,000
8% $788,000,000,000 $802.12
10% $630,400,000,000 $641.69
15% $420,266,666,667 $427.80
20% $315,200,000,000 $320.85

[Pumice]

[QUOTE=Pumice;366975]Anyone want to have a go at puting a value on gold?
Heres my quick attempt using global GDP and current gold holdings.
Obviously this will have some fundamental and caculation flaws, but hopefully someone out there would like to give it a crack.


Table format:easier to view
Attachment 3811

[Skol]

This man seems to talk a lot of common sense compared with other 'experts', like Von Greyerz, Sinclair, Schiff, Aden Sisters, ad infinitum.

www.kitco.com/ind/Nadler/feb032012.html

Talking of the Aden Sisters, I've got a list here of 133 analysts and their gold forecasts.

The Aden Sisters predict gold $3000 to $5000 by Feb 2012.

Hahaha, hope none of you guys subscribe to them or you should be asking for your money back.

So far I'm more correct than the 133 analysts, and I'm not even an analyst.

[CAM]

Heres one for Skol

http://www.nzherald.co.nz/business/n...ectid=10784326

But seriously....why don't people ignore the advertising and do some due diligence before investing large amounts of money

[Skol]

Thanks for that one Cam

There was some news about that last year in the papers, some people never learn, sad though to see them lose all that money.

There will be an interesting case coming up soon, Michael and Jacquie Bradley, watch for that one, next month I think. Michael Bradley died about a year ago after the SFO got involved but the case is still going ahead.

I have a friend who lost a colossal amount of money on that one, went ahead despite my advice to steer well clear.

[trackers]

some people never learn

You're right about that