Quote:
Originally Posted by Sausage
Not really. Yes gold can be highly volatile when paired against a paper currency, but in reality it doesn't really lose or gain much value.
If we are talking in paper currency then yes the above article is pretty spot on. If we are talking actual value then no ... its not.
Infact I would say that the author of that article doesn't really understand economics much at all.
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Golds value doesn't have to change, even though it does. All the other goods/products change, thus the amount of gold it takes to buy those things changes. Just like when you compare it to paper currency.
Each year roughly 3 million pounds of new gold is mined, so like money it's always printed and taken then out of the system as well. That gold is worth an extreme amount of money on todays market. It's 'real' value - is how much it cost to pull it out of the ground, what the raw material cost of it was.
If gold wasn't treated like stocks, if every time you purchased it you actually got the gold in hand, a lot more gold would be the open market and it's value would be lower. Just like if we all had a shit ton of cash on hand.
What is good about gold, is it being used as an investment to help beat inflation over a long period of time. That doesn't mean it's a security net if everything falls out from under us, it's not actual gold in hand and our Country doesn't have enough gold in hand to maintain the economy. Food and seeds would have more value than gold if the shit really hit the fan.
With the wiki article, I guess that means the 50 or so linked references from sites like gold.org, investment sites and so all got it wrong.
I'm all for gold though... it's a great investment and nothing wrong with having some on hand. But thinking it would save your ass if things really hit rock bottom, is crazy.