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Old 04-02-2020, 07:45 PM
OldDesertrat OldDesertrat is offline
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Default The Problem With Gold



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This bears out what I've read in several sources:

https://www.zerohedge.com/commoditie...plain-language

"Logistics
After the gold has been mined, the rough gold material is often transported to gold refiners for further processing. Another option is that the gold moves from warehouses around the world in various shapes and sizes to the refineries. In this case, gold is often delivered in the form of roughly 12.4-kilo bars (400 Troy ounces) or as recycling material.

Roughly, a typical gold production chain goes like this: Gold Mine or Other Warehouse – Logistics Company – Refinery – Logistics Company – Mint – Logistics Company – Bullion Dealer – Individual."

Commercial air is the main travel path for the "chain". Oops!
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Old 04-02-2020, 09:15 PM
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While this is an underlying issue (the logistics). The main problem is that this huge drop has been precipitated by the ETF markets trying to cash out their gold futures to cover all the margin calls in the main stock market. They needed liquidity, and they needed it quickly. I fully expect the physical market to start climbing, and go well above the current record highs.
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Old 04-03-2020, 11:42 AM
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Platinum is more rare than gold by a large amount yet its less than half the price. The problem with gold is it has no useful function except to be put away and moved from point A to B.
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Old 04-03-2020, 11:59 AM
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Gold has more usages than you let on.

How about corrosion less electrical contacts for just one.
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Old 04-03-2020, 05:00 PM
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Gold is the ultimate fiat scam and the people making money in gold are the peddlers of gold charging MASSIVE markups. It's almost as bad as the diamond industry con. Huge markups.

Yes, it's useful in electronics. That doesn't justify the absurd price.
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Old 04-03-2020, 05:10 PM
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Gold is the ultimate fiat scam and the people making money in gold are the peddlers of gold charging MASSIVE markups. It's almost as bad as the diamond industry con. Huge markups.

Yes, it's useful in electronics. That doesn't justify the absurd price.
Diamond mining... the price setting is a cartel, no arguing that. I do not think De Beers ever publishes the details of its full costs per carat.

As for gold, any western nation gold mining company in the stock market makes its financials available as part of the requirements set by the popular NYSE or TSX. The financials include mining and milling costs.

It's pretty expensive to mine gold and then mill the ore. Typically, huge ball mills consume vast amounts of power to release the 1 gram per ton from an open pit or 5 to 8 grams from an underground mine. Refining the pounded ore is not expensive. The cost of finding gold ore and mining it are what makes it so expensive. Most gold mines operate barely above cost.
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Old 04-03-2020, 09:08 PM
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When nations stop hoarding gold I'll be convinced it's a scam.

Diamonds? Comparing diamonds to gold is just... fundamentally incorrect.
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Old 04-03-2020, 10:12 PM
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Quote:
Originally Posted by OldDesertrat View Post
This bears out what I've read in several sources:

https://www.zerohedge.com/commoditie...plain-language

"Logistics
After the gold has been mined, the rough gold material is often transported to gold refiners for further processing. Another option is that the gold moves from warehouses around the world in various shapes and sizes to the refineries. In this case, gold is often delivered in the form of roughly 12.4-kilo bars (400 Troy ounces) or as recycling material.

Roughly, a typical gold production chain goes like this: Gold Mine or Other Warehouse – Logistics Company – Refinery – Logistics Company – Mint – Logistics Company – Bullion Dealer – Individual."

Commercial air is the main travel path for the "chain". Oops!
So, air cargo hasn’t seen the impact that passenger service has. Additionally a supply disruption drives prices up.
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Old 04-03-2020, 10:53 PM
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When nations stop hoarding gold I'll be convinced it's a scam.

Diamonds? Comparing diamonds to gold is just... fundamentally incorrect.
Yes, nations hoard it b/c they have endless resources and simply hoard everything by spending other peoples' money.

But let's talk about normal folks. If gold was so valuable, why are all the hucksters constantly paying to advertise to sell their valuable assets that are going to explode higher in value?

The answer is that it's a con and they are making more money simply moving it around than they can make sitting on it.

If you look at charts of how gold has performed against many other assets it's just not that impressive. But other assets at least have a practical use, like land for instance.
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Old 04-03-2020, 11:22 PM
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The world is full of average joe's and jane's. The principles of gold and silver in theory are sound; versus fiat currency. However in reality, the average person does not have much gold beyond a wedding band or necklace....nor the understanding of its value relevant to daily necessities....nor the ability to to cut it down into meaningful parts for trading. Thefts and weapons will come forward before gold or silver ever takes its place. I believe a person with various resources (food, medical, weapons, tools, etc) will be much more successful when push comes to shove.
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Old 04-03-2020, 11:28 PM
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And I'm just trying to imagine a worst case Mad Max world scenario. You need to survive. You need food, water, car parts, oil, fuel, ammo, guns, renewal foods source like chickens, etc.

Silver and gold would have little to now value. Dead weight.

I just really don't understand the desire for it beyond a general curiosity. Like diamonds. These are useful in an industrial setting but not at the huge premiums folks pay.
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Old 04-04-2020, 12:21 AM
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Gold is valuable, because at one time, currency was backed by gold. It is however, manipulated by futures contracts, so it does have it's faults in that regard. I do believe, if things completely collapsed, economically, that gold and silver would again become the currency everyone would use. If the bottom falls out economically, I would take gold and silver, over paper fiat currency, in a heartbeat.

I know I bought alot of it, in physical form, when it was cheap, and it's went up easily 600%. So I wouldn't say that it not valuable. It's just one more thing to diversify your investments with and one that's all but guaranteed to go up.
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Old 04-04-2020, 02:18 AM
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When I was 14-1/2, I got my first job. Then a week later, I got my first paycheck. It was $58.00 after taxes.

Walking home, I passed by the coin store on Manchester Avenue. A sign in the window read, "Gold One-Ounce Coins ... $58.00!" I walked in and talked to the man behind the counter. I showed him my paycheck. He said, "Buy this coin! Then come in every week and whenever you can to buy another one! You will thank me later!"

I thought, "I'm not going to waste my whole paycheck on one STUPID coin!"

Now I am 61. If I had purchased an ounce of gold every week, for the past 2,399 weeks, I would have 200 POUNDS of gold today, worth about 3.9 MILLION dollars!

In reality, I would have a lot more, because I would have sold at the highs and bought at the lows over the years.

I remember considering it a second time when gold hit $168/oz. "Wow! Gold is NEVER going to be higher than this!" Then it jumped to $800/oz. I just KNEW that price would not hold, so I didn't buy any.

A while ago, it hit $1,920/oz. Today it is at $1,645.00 as I type this.

Hindsight truly IS 20/20

Joe
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Old 04-04-2020, 02:32 AM
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If I ever get into gold I will follow the advice of a good friend. He told me to buy solid 24K gold chains of various sizes, thin to thick.

He said 1 oz. coins are pretty, but you can't spend one on a loaf of bread. He said the 1 oz. coins will be hard to use in a financial crash, because no one will be able to make change for them.

With chains, and knowing the weight of ONE LINK of a particular 24 Carat gold chain, you can make purchases by cutting off (n) links, based on the value of the gold in each link at the time of the purchase. A good high quality chain will mean that all of the links are pretty darn close to the same size and weight.

It actually made sense to me. Maybe guys like Mr. T and Snoop Dog are smarter than we think! Now all I have to do, is to be able to AFFORD to buy lengths of 24 Carat gold chains.

Joe
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Old 04-04-2020, 02:37 AM
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Quote:
Originally Posted by leadcounsel View Post
And I'm just trying to imagine a worst case Mad Max world scenario. You need to survive. You need food, water, car parts, oil, fuel, ammo, guns, renewal foods source like chickens, etc.

Silver and gold would have little to now value. Dead weight.

I just really don't understand the desire for it beyond a general curiosity. Like diamonds. These are useful in an industrial setting but not at the huge premiums folks pay.
You are right! On a hot, sweltering summer day, I believe a tube of athlete's foot cream, or a 3 oz. bottle of unscented gel deodorant, or a bottle of sunscreen will be worth a lot MORE than a gold coin!

Joe
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Old 04-04-2020, 11:06 AM
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Before our modern world, when it was basically Mad Max every day, gold was valued. Even up into the 20th century it's been valued by even the common man.

It's always been valued...ALWAYS!!!!!!!!!



I'm OK with the naysayers though, more for the rest of us. Not everyone can have "the precious"!
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Old 04-04-2020, 12:13 PM
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Quote:
Originally Posted by gravedigger View Post
When I was 14-1/2, I got my first job. Then a week later, I got my first paycheck. It was $58.00 after taxes.

Walking home, I passed by the coin store on Manchester Avenue. A sign in the window read, "Gold One-Ounce Coins ... $58.00!" I walked in and talked to the man behind the counter. I showed him my paycheck. He said, "Buy this coin! Then come in every week and whenever you can to buy another one! You will thank me later!"

I thought, "I'm not going to waste my whole paycheck on one STUPID coin!"

Now I am 61. If I had purchased an ounce of gold every week, for the past 2,399 weeks, I would have 200 POUNDS of gold today, worth about 3.9 MILLION dollars!

In reality, I would have a lot more, because I would have sold at the highs and bought at the lows over the years.

I remember considering it a second time when gold hit $168/oz. "Wow! Gold is NEVER going to be higher than this!" Then it jumped to $800/oz. I just KNEW that price would not hold, so I didn't buy any.

A while ago, it hit $1,920/oz. Today it is at $1,645.00 as I type this.

Hindsight truly IS 20/20

Joe
Had you bought $100 of Apple stock in 1980 or $100 of Bitcoin in 2009, you'd also be a very wealthy person.

Had you bought a few thousand dollars of land in now premium areas of the nation, you'd be sitting on a mint.

Would-a could-a.

Gold's not remarkable or special in that regard.
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Old 04-04-2020, 12:16 PM
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Originally Posted by Mere_Man View Post
Before our modern world, when it was basically Mad Max every day, gold was valued. Even up into the 20th century it's been valued by even the common man.

It's always been valued...ALWAYS!!!!!!!!!



I'm OK with the naysayers though, more for the rest of us. Not everyone can have "the precious"!
But why? That's what nobody can ever answer. And that's because it's value is mostly perceived or fake or fiat. It's arbitrary.

It's a soft metal. Aside from electronics and art, it's not particularly good at anything.

As for metals, steel is far more useful and interesting. You can make a lot of useful things out of steel.
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Old 04-04-2020, 12:44 PM
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After you finish decorating a mistress's fingers, ears, neck (perhaps nose if you're a barbarian) what is gold good for? Decorating her other less visible areas? Lousy payback.
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Old 04-04-2020, 12:46 PM
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Quote:
Originally Posted by gravedigger View Post
When I was 14-1/2, I got my first job. Then a week later, I got my first paycheck. It was $58.00 after taxes.

Walking home, I passed by the coin store on Manchester Avenue. A sign in the window read, "Gold One-Ounce Coins ... $58.00!" I walked in and talked to the man behind the counter. I showed him my paycheck. He said, "Buy this coin! Then come in every week and whenever you can to buy another one! You will thank me later!"

I thought, "I'm not going to waste my whole paycheck on one STUPID coin!"

Now I am 61. If I had purchased an ounce of gold every week, for the past 2,399 weeks, I would have 200 POUNDS of gold today, worth about 3.9 MILLION dollars!

In reality, I would have a lot more, because I would have sold at the highs and bought at the lows over the years.

I remember considering it a second time when gold hit $168/oz. "Wow! Gold is NEVER going to be higher than this!" Then it jumped to $800/oz. I just KNEW that price would not hold, so I didn't buy any.

A while ago, it hit $1,920/oz. Today it is at $1,645.00 as I type this.

Hindsight truly IS 20/20

Joe
Yes but try buying at $1645.
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