Gold

[upside_umop]

Most of it is automated now, so it makes sense to have the capital investment close to the market. I don't want to own a car welded by an untrained indian.

I just think JB's constant scare mongering of the USA is a little weak.

[hal]

Gold's a great investment. The gold gamblers between 1981 and 2002 lost 70%.

Wow thats handy information. What about from 2002 to 2012?

[upside_umop]

Not sure how to link to bloomberg but there was a video from a guy (admittedly selling his gold fund) looking at gold as a financial asset and if i understand him correctly the value of gold has been about 40% of the money supply but has not increased with the expansion of the money supply. I think he was saying that if gold was to reach 40% of the money supply again it would need to be about $4,500 an oz. Is gold money? why do central banks still hold gold if it isn't.
I agree it is purely speculative because if gold isn't money then it probably isn't that valuable even if it is rare(you can make pretty jewellery from lots of things). I also think paper money could quickly lose value as well if people stop believing in it and they keep making more. Zimbabwe is a good example of what happens when you have too much printing. I bet they would trade a couple of million dollars(zimbabwe) for an oz of gold. $US might get there one day.

I watched that video - what a joke. Why on earth does he think that gold has a linear relationship to the monetary base? Gold is worth as much as it costs to mine out and for someone to spend the time and opportunity cost to lock it away. To me, that would be 0. But to the other fools, it's currently $2000 nzd.

Is gold money? No - you can't go and use it in general expenditure, can you? The Fed still holds it's gold at historical cost so obviously doesn't care about it too much.

What other central banks hold gold in developed countries? 5/8 th's of sweet f.a.

JB, you talk of these gold miners making fat profits? You mean, your ARV, HLX, NAV, PXG to name a few? These have only been going one way and that's down...

[upside_umop]

Wow thats handy information. What about from 2002 to 2012?

What about over the last 100 years?

[hal]

What about over the last 100 years?

I guess that is the point.

It is easy to be selective. I have a feeling though that this thread was only started in the the period I have mentioned and of course the Gold price has risen wonderfully in this time period.

[corran]

I didn't see anywhere that it said $80 trillion in debt JB?

maybe you need to look a little deeper than just that video. Liabilities do not just include national debt. What about medicare, social security, food stamps? When you consider the total (including unfunded) liabilities that the US has, you'll see a fair bit more than $16 trillion.

Is gold money? No - you can't go and use it in general expenditure, can you?

It is true that often you can't use gold directly in general expenditure... but defining money only as something you can use directly in 'general expenditure' is a very narrow definition. By that definition money is restricted to the medium of exchange (currency) that is legal tender in the country you're in. What about being a store of value and a unit of account? Gold definitely meets those criteria. And there are more and more places that are accepting gold in exchange for goods or services. My gold coins definitely have way more chance of buying me stuff over here than the NZ dollars I've got lying around!

What other central banks hold gold in developed countries? 5/8 th's of sweet f.a.

Well lets see... here's a few for you:
Germany: 3400 tonnes
Italy: 2450 tonnes
France: 2435 tonnes
Switzerland: 1000 tonnes

You can find the full list of the internet easy enough if you look... seems a bit more than 5/8 of f.a. to me!

[elZorro]

Most of it is automated now, so it makes sense to have the capital investment close to the market. I don't want to own a car welded by an untrained indian.

I just think JB's constant scare mongering of the USA is a little weak.

One plant I know about was built in India precisely because it was closer to the developing (China/Asia) market for a large industrial-scale set of equipment. For 2-3 years the precise plans for how to build some of this gear were documented in NZ by staff of an international company, some of the robotic plant here was dismantled and sent over, and the factory engineering staff here will mostly be unemployed by Christmas. Cheap labour was only part of the story, their competitors are doing the same.

[Skol]

What about over the last 100 years?

I can oblige there. Since 1801, gold has been the worst investment on earth - bar none.

To take an extreme example [of price volatility], while dollar invested in bonds in 1801 would be worth nearly a thousand dollars by 1998, a dollar invested in stocks that same year would be worth more than half a million dollars. All this is in real terms, taking inflation into account. Meanwhile, a dollar invested in gold in 1801 would by 1998 be worth just 78 cents.


Which goes to show that you better take your profits while you're ahead corran.

[skid]

How about some proof! A goldbug fantasy.

Its a fact of life that there are large institutions that are going short or long on gold.
Its a part of the more speculative side of buying and selling gold[at least on paper]
those that are shorting are betting that the price is going to go down.
Thats what you would be doing Skol,if you were actively speculating on your argument.You are basically entering in to an agreement to buy gold at some future date at what you hope will be a lower price than what it is now-you then pocket the profits.
Of course if the price goes up,then you are caught out and have to settle the bill-that means you then have to buy gold at that time to settle.This in term adds to the rise in price etc.
Apparently the latest rise caught alot of these specs out and hence they got fleeced.
Disc. holding some gold but not for speculative purposes [a % for insurance-but i suppose thats another argument]

[skid]

With manufacturing going back to the US, the competitive advantage of cheap energy, and the status of world reserve currency...the USA are fine![/QUOTE]

Do you really think the US economy is fine? They have tremendous debt.
They are keeping their heads above water because China is still financing their debt[Buying treasury bonds] If they stop[or have to stop because of a slowdown]it will not be pretty.{Europe is Chinas biggest trading partner]