Gold Investment Thread

Cynllo

Ostrich
Orthodox Inquirer
^ This is a great website that has been mentioned here before:


TF does a daily run-down, and talks about miners often. He regularly interviews miner CEOs as well. It is pretty red-pilled, with a strong anti-vaxx crowd, just avoid JQ talk.

@Going strong, one of the threads on that site had instruction on accepted testing methods/equipment. I can't find it right now, but will keep digging.

Do you have a summary of what you think is boiling?

I think I will take a position and see how it goes. I'm sending over some cash to brokerage now. But I think we are looking at 2024 and maybe onward for the real openings to arrive. $30 for silver seems reasonable this year and why not gold to $2,250. Given the links posted above, it seems like something that could keep it's head above water, even with the Biden boom still unfolding.

I've been researching cryptos, and have identified a number I think are good for the next bull market. As in, possible gains well above BTC and ETH; with a view at selling them at certain points based on their market cap. rank. Having observed and played the markets for about ten years now, good moves become more obvious. There is a point at which I can say (for crypto) "This has hit its likely peak here" and sell. Once I've done cryptos I think I'll look through stocks. I'm just going through them all by cap (crypto), making notes, categorising them, checking fundamentals. It's fairly obvious what industries should do well over the next 10 years, just a question of finding them and taking a position, and knowing where a feasible top is for the bull. Many of these markets PMs, commodities, energy have long winters and then short bull markets. I've been planning for some time to get in on them at a suitable bottom ... which has never come. That's one reason I like crypto more. The bull-bear cycle has been very predictable, and is likely largely algorithmically set. Crypto bottoms are very obvious, but tops harder to gauge.
 

Pointy Elbows

Pelican
Orthodox
Do you have a summary of what you thinks boiling?

I think I will take a position and see how it goes. But I think we are looking at 2024 and maybe onward for the real openings to sit in. $30 for silver seems reasonable and why not gold to $2,250. Given the links posted above, it seems like something that could keep it's head above water, even with the Biden boom still unfolding.

I've been researching cryptos, and have identifies a number I think are good for the next bull market. As in, possible gains well above BTC and ETH; with a view at selling them at certain points. Having observed and played the markets for about ten years now, good moves become more obvious. There is a point at which I can say (for crypto) "This has hit its likely peak here" and sell. Once I've done cryptos I think I'll look through stocks. I'm just going through them all by cap (crypto). It's fairly obvious what stocks should do well over the next 10 years, just a question of finding them and taking a position, and knowing where a feasible top is for the bull. Many of these markets PMs, commodities, energy have long winters and then short bull markets. I've been planning for some time to get in on them at a suitable bottom ... which has never come. That's one reason I like crypto more. The bull-bear cycle has been very predictable, and is likely largely algorithmically set. Crypto bottoms are very obvious, but tops harder to gauge.
I'm no expert but here goes: Precious Metals are still a rigged market. World demand for real physical is the only thing that will break the game. Maybe now is the time, with the war, BRICS, and all such, but I never get my hopes high... When it does get price discovery, who knows the limits (maybe 3-digit silver and gold at 7k)? We came closest to breaking the system with Silver Squeeze that happened after the GameStop. There are still many paper ounces for every physical ounce out there, and I don't have time or inclination to day-trade. So I HODL both. I've bought physical (and miner shares like AG) to help if SHTF. I wait and buy in small increments what I can afford at a time. All told, it is about 7% of net worth. Metals are a straight SHTF investment for me. I expect they will be underpriced until most everything else breaks. In a way, I hope they never boom as then we'll have other problems.

If you've had success at picking crypto, and have a system that works to your satisfaction, why not stick with that? You can take occasional profits to buy metals, playing an arbitrage. Let metals be where you park profit and forget about it, so long as your nut is covered. Good luck in metals, just set your mind for a long grind with many WTF moments.
 

Cynllo

Ostrich
Orthodox Inquirer
If you've had success at picking crypto, and have a system that works to your satisfaction, why not stick with that? You can take occasional profits to buy metals, playing an arbitrage. Let metals be where you park profit and forget about it, so long as your nut is covered. Good luck in metals, just set your mind for a long grind with many WTF moments.

Diversification. You never know which asset might get the ground taken from beneath it. As mentioned I'd also like to pick up various assets, and give each a ballpark of the bubble to sell on. If you have several commodities, robotics companies, tech, fin-tech and other stocks - all bought near market lows you'd probably be able to sell one category a year in a bubble, then put that money back into something undervalued. I have more or less the same plan with crypto, but the seasons are much more obvious.

I'd like to be spread out across a number of things. With crypto, in could be banned by the US or EU; or it could be made legal tender in Nigeria, Brazil, UAE... Gold could be commondered by the government, or end up in the BRICs currency basket. Stocks could go to the moon, or seized in a bail in. Bonds could deliver a steady trickle, or pop in an instant. A lot of people seem to be stuck on one or a few assets, doesn't make much sense to me. Often it seems to be ideological. In a sane world gold shouldn't be an investment. It should be the hedge of last resort. But since we don't live in a sane world...
 

BeatUpTruck

Robin
Other Christian
Whatever you might think of Kevin O’Leary, I heard him say something the other day that I liked - he doesn’t touch mining stocks. Why deal with a company and their management mistakes when you can just buy the commodity?
Made sense to me.
 

paternos

Pelican
Catholic
Whatever you might think of Kevin O’Leary, I heard him say something the other day that I liked - he doesn’t touch mining stocks. Why deal with a company and their management mistakes when you can just buy the commodity?
Made sense to me.
I like miners.

I see it as a bank account. They have ownership over a certain amount of underground gold, silver and copper.

They just need to put in tools, energy and people to get it out of the bank account.

Hence I don't like small miners, because I don't know how big the bank account is. (very risky)

For the big miners, we have access to quite accurate (I believe) estimations of what's in the ground.

So I love miners with a low price / book ratio. A low price / sales. I don't care too much about management, I care what is in the ground, management is always shifting, what it is in the ground is stable.

I also love that I can sell miners easily, at a very low cost. Like 0.01 % while selling and buying physical gold is quite a risky and costly operation.

Not saying it is bad to have some gold coins as a worst case scenario. E..g. 3 month of living money with which you can pay a flight and some / housing.
 

C-Note

Hummingbird
Other Christian
Gold Member
Small/exploratory mining stocks are very speculative, as paternos said it's uncertain as to how much mineral resources they really have in their claims, and/or if they'll be able to come up with a mining plan and financing to harvest what they have. In my case, I just looked at what the big guys, like Rick Rule and Eric Sprott, have invested in and put small amounts in some of those companies. I also spread small amounts among a number of battery metals and rare earths exploratory miners. One way to diversify with junior miners is to do it by region, i.e. look at Canada and buy some stock in two explorers in Newfoundland, two in Red Lakes, two in BC, and so on. In battery metals, I went a little heavier in graphite, because it seemed to me that they were a better value compared with nickel and lithium, which get more hype and attention.

Precious metals streaming companies, like Wheaton, are attractive investments because they profit off of trading metals without the risk of doing the exploration and mining themselves.
 

Seadog

Kingfisher
I've got a question for specialists in bullions, or for smart chemists :

A friend of mine went to sell a gold coin (a perfectly good Maple Leaf) at a big jewelry store. Unfortunately the jeweller turned out to be a crook.

So the crooked jeweler says, "I'm going to test the coin for its gold composition. I'll drop a small drop of acid on the coin, on its border/brim... But first, look, to begin with, let's try dropping acid onto this pure square of gold that I have here with me, and, see, the acid does nothing"

(the crook drops acid or whatever on a small golden square thing, and there's no reaction.)

The crook resumes : "Good, now I'll drop my acid on your coin. It should produce no reaction if it's gold indeed."

(acid or whatever it is, is dropped onto the gold coin, at the border/brim, and startlingly, after a few bubbles subside, the border of the coin turns a very bright silver color, as if gold had disappeared to reveal silver underneath).

At this stage the crook says " Oh too bad, it's silver coated in gold, almost worthless". He then puts an oily brown liquid on the silver-coloured stain, "to stop the acid from eroding further the metal".

As a result, the gold coin (which is 100% authentic, by the way, it was proven later on by other means) is now stained, with a dark brown cloud over the gold, at the spot where the chemical products were applied.

So my question is, what was the chemical used to produce this bubbling, then the bright silver color onto the gold coin, and what other product was used later on to turn the "silver stain" into dark brown? Also, how to wash it. My friend washed it with white vinegar and the stain faded but far from totally disappeared.

Was this chemical reaction(s) due to the fact that the gold Maple Leaf has a very, very small percentage of some alloy in it (zinc or copper?) to make it less malleable?

I'm thinking now, was all this, Aqua Regia being poured onto a small part of the gold coin?

How close of a friend is this? Do you have a pic of the coin? I know a reasonable bit about gold and this story sounds like there must be more to it.

To what end would the crooks game be? To simply ruin people's otherwise good coins? Most people upon simply being told their $2000 coin is worthless, won't just say "ho hum, might as well leave it with you then". They'll probably get a second opinion, discover it's still an oz of gold, and although you might not get the price you would for a pristine coin, a "slightly damaged" oz of gold, is not worth much less than a
near mint" oz of gold. Chemistry, and the chemistry of gold specifically(alchemists of middle ages are probably responsible for way more than their share of chemical discoveries), was one of the most studied fields of the last thousand years. It's very unlikely some 2 bit thieves are discovering new chemical reactions of gold, particularly with a simple on top of the shelf apparati, and garden-variety level chemicals. Additionally, specialist chemicals have specialist prices, often many x the price of gold.

Gold generally does not react with acids, specifically nitric acid(it's used to test it), so wouldn't be that as Road2Damascus said. There's a specific mixture 3:1 nitric/hydrochloric if I recall, they will dissolve it called agua regia, or "king's water". It was supposedly used to hide gold in the middle ages. "Don't mind those random bottles of liquid while your raping and pillaging".

Mercury will dissolve gold, but that's a purely physical process. And it is pure metallic mercury, not a dissolved compound. That was one way of refining gold in the old days. Dissolve it, since rock and other impurities won't, make bricks of gold amalgam, transport, boil off the mercury, try not to inhale the fumes, profit?

.9999 gold is actually very good. Today's "gold standard" as it were. It only became wide spread maybe 25 years ago, previous being .999. It's not .9999 gold, and .0001 zinc or like that, it's .0001 other, by virtue of technical limits of separation and refining.

Think of it like this. You grab a 5g bucket of stony swamp muck. You can pull out big rocks and sticks by hand go from 30% water to 60%. Run it over a screen made of sticks to get rid of small gravels. up to maybe 80% Through a basic cloth to get rid of sands. Now you have probably 96% pure water. You're probably around the limit of what you can do on site. To go further, you need specialized filter papers to remove the dirt. But now there's maybe 1% salt. You can get a very small, very high cost membrane, like they use for desalination on sailboats, with holes on the atom size level, apply high pressure and get rid of the salt. Now you're probably around 99.99, but even still there will be dissolved gasses (o2) from the air, other dissolved solid in the ppm range (look at the back of a bottled water label). The point being, it's 10 times more work to get from .999 to .9999 as it is to .99 to .999, which is probably 50,000 x as hard as goin from .00001% pure (sitting in a river bed in a sea of rocks) to 90% pure (pluck out the nugget).

Finally, if this were any kind of common wide spread scam, you'd most likely of heard about it. If someone rips off a dozen people selling TV boxes filled with sandbags in a parking lot of a medium sized city you hear about it on the news. And again, to what gain would this be?
 

Going strong

Hummingbird
Orthodox
Gold Member
The story is true, I was present during the whole interaction, as I was helping a friend out (because, I almost always can tell whether coins, official seals or documents are true, it's a hobby of mine, so I went to help)...

The gold coin was totally true, as it's part of a batch that was bought at an extremely famous luxury store in a rich European city. I know the buying process from last year in Europe, the coins were absolutely authentic - and, as described, a few days ago, alongside my friend I closely watched the chemical testing and reaction, from half a meter away. I couldn't believe the nerve of the crooked jeweler, by the way...

The catch and the gain come when the crooked jeweler tells you "Oh well, your 'fake' shiny coin is still a nice-looking replica, so I'll buy it for a couple hundreds bucks".

There's no doubt by the way, I've investigated, and I can tell you that tens of jewellery stores are in on this con-artist thing, where I live (not in the US). They fool people into thinking their gold is fake or bad and offer to buy the "fake gold" as a replica or silver thing for a few bucks...

The crooks, from what I researched, all employ the same Walter-White "genius" chemist.

It might surprise you, but the country I live in has many world-class geniuses in science, like chemistry, surgery and medicine, and a good number of these geniuses earn minimum wage. Therefore, some are for the hiring. For example a friend of mine here does eye surgery, world class, for a fraction of the Western world prices... Just to give you a better idea of the situation. You get world class scientists for a few hundred usd.

It's also a country where world-class chemists invent performance enhancing products that fool the scientists and officials of the rest of the world's sport field. They win everything in every sport and don't get busted, well except a few incidents.

So, I guess they've also discovered how to stain or dye or react with pure gold. Someday they'll learn how to make gold from lead, maybe, ending thousands of years of trials?

Ah and the jewelers, they're also protected by an ethnic mafia from the FSU. Just to highlight the fact that they're not amateurs and that they keep everything hushed. Reason why you're only reading about this here. Reason why my friends and I have (or have we? ) cancelled any intention of retaliating against the crooked jewelers. Let bygones be bygones, and let's walk quietly in the streets.

Regarding the perfectly fine 99,999 gold coin, it is still stained brown on its rim, though not corroded in spite of the initial fumes that were produced. Weird. If you are really interested, I'll send you a picture by PM.

Given the shiny silver aspect that the gold took in during 30 seconds, before an oily chemical was used "to neutralise the acid", I think it was white phosphorus or liquid mercury mixed with a tiny drop of Aqua Regia (I wrote about Aqua Regia earlier on the thread by the way), for the fumes. But I'm not sure and am still shocked at how it looked like gold receded to become like silver underneath a gold coating. Then back to its normal aspect with a small brown stain that did not corrode the gold. We're still trying to determine which chemicals were used, out of simple curiosity.
 

paternos

Pelican
Catholic
The story is true, I was present during the whole interaction, as I was helping a friend out (because, I almost always can tell whether coins, official seals or documents are true, it's a hobby of mine, so I went to help)...

The gold coin was totally true, as it's part of a batch that was bought at an extremely famous luxury store in a rich European city. I know the buying process from last year in Europe, the coins were absolutely authentic - and, as described, a few days ago, alongside my friend I closely watched the chemical testing and reaction, from half a meter away. I couldn't believe the nerve of the crooked jeweler, by the way...

The catch and the gain come when the crooked jeweler tells you "Oh well, your 'fake' shiny coin is still a nice-looking replica, so I'll buy it for a couple hundreds bucks".

There's no doubt by the way, I've investigated, and I can tell you that tens of jewellery stores are in on this con-artist thing, where I live (not in the US). They fool people into thinking their gold is fake or bad and offer to buy the "fake gold" as a replica or silver thing for a few bucks...

The crooks, from what I researched, all employ the same Walter-White "genius" chemist.

It might surprise you, but the country I live in has many world-class geniuses in science, like chemistry, surgery and medicine, and a good number of these geniuses earn minimum wage. Therefore, some are for the hiring. For example a friend of mine here does eye surgery, world class, for a fraction of the Western world prices... Just to give you a better idea of the situation. You get world class scientists for a few hundred usd.

It's also a country where world-class chemists invent performance enhancing products that fool the scientists and officials of the rest of the world's sport field. They win everything in every sport and don't get busted, well except a few incidents.

So, I guess they've also discovered how to stain or dye or react with pure gold. Someday they'll learn how to make gold from lead, maybe, ending thousands of years of trials?

Ah and the jewelers, they're also protected by an ethnic mafia from the FSU. Just to highlight the fact that they're not amateurs and that they keep everything hushed. Reason why you're only reading about this here. Reason why my friends and I have (or have we? ) cancelled any intention of retaliating against the crooked jewelers. Let bygones be bygones, and let's walk quietly in the streets.

Regarding the perfectly fine 99,999 gold coin, it is still stained brown on its rim, though not corroded in spite of the initial fumes that were produced. Weird. If you are really interested, I'll send you a picture by PM.

Given the shiny silver aspect that the gold took in during 30 seconds, before an oily chemical was used "to neutralise the acid", I think it was white phosphorus or liquid mercury mixed with a tiny drop of Aqua Regia (I wrote about Aqua Regia earlier on the thread by the way), for the fumes. But I'm not sure and am still shocked at how it looked like gold receded to become like silver underneath a gold coating. Then back to its normal aspect with a small brown stain that did not corrode the gold. We're still trying to determine which chemicals were used, out of simple curiosity.
I would buy a gold testing kit myself. Not too expensive. So you know what you sell.

And otherwise who cares? Gold coins are bought based on weight, not on looks.

Selling copper as gold, and buying gold as copper is the oldest scam in the world.

For this reason I don't like physical gold too much. Always this conflict of interest if you try to sell. They might show you the test, that it's a lower carat than you think.

Also from the perspective of the Jeweler it's risky, they need to be sure it's real as well. If they think they might be scammed, they will be careful in buying the product. E.g. if you gold plate a little bar of another metal in a thick layer of gold, then with a simple surface test it might not be uncovered.

So if you can find an independent tester, who is willing to give you a report with their name under it. That might a good investment.
 
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BeatUpTruck

Robin
Other Christian
Any serious gold buyer has a sigma tester or similar that does a penetrating test.

Gold coins are not only bought for weight. A gold coin in mint condition is worth more.

If a gold coin doesn’t pass analytics then it’s fake and the buyer wouldn’t want it - if they tell you it’s fake but they still want to buy then it is a huge red flag.

Mostly it’s old 22 karat collectable coins that are fake. Buying modern minted four nines fine coins is pretty safe. Still worth the $1000 for a metalytics tester if you plan to do much dealing.
 

ISR92

Robin
After the fiat Ponzi comes apart, people will pay any price for a bit of gold. I see this point in history as a great time to accumulate it; its price is actively being suppressed by the fed (if they didn't then quantitative easing fails as people would buy gold over bonds) so the "true" price is likely much higher.

It is crazy how "comfortably numb" we are to the sheer madness of the current financial system. We are trading worthless paper notes for everything and nobody ever asks "why doesn't our money have any intrinsic value?". I think about this a lot.

Fiat will be the undoing of human civilization. The US will default on its debt and then the contagion effect will cause massive unrest in other countries. By that point though, the USA will be unarmed because the media have been "steering" people's thinking against gun ownership with false flag shoot-ups and hoaxes like the oh-so-obvious Sandy Hook hoax.

I don't own any but I want to buy say $7000 worth. Just enough that customs doesn't make a big deal about it. For most countries, it is more than $10k and eyebrows get raised. So even if gold goes up 40%, I should be fine.
 

chance vought

Kingfisher
Protestant
After the fiat Ponzi comes apart, people will pay any price for a bit of gold. I see this point in history as a great time to accumulate it; its price is actively being suppressed by the fed (if they didn't then quantitative easing fails as people would buy gold over bonds) so the "true" price is likely much higher.

It is crazy how "comfortably numb" we are to the sheer madness of the current financial system. We are trading worthless paper notes for everything and nobody ever asks "why doesn't our money have any intrinsic value?". I think about this a lot.

Fiat will be the undoing of human civilization. The US will default on its debt and then the contagion effect will cause massive unrest in other countries. By that point though, the USA will be unarmed because the media have been "steering" people's thinking against gun ownership with false flag shoot-ups and hoaxes like the oh-so-obvious Sandy Hook hoax.

I don't own any but I want to buy say $7000 worth. Just enough that customs doesn't make a big deal about it. For most countries, it is more than $10k and eyebrows get raised. So even if gold goes up 40%, I should be fine.
If the world gets to the point you are describing, good luck at the border! Any one in government is going to take what they want.
What is intrinsic value?
Value is subjective.
Fiat is money because other people accept it in exchange for things that you want.
Rai stones on Yap.
Cowrie shells.
Glass beads.
Silver in China.
All these things were money, until they weren't, because a better money (gold) replaced them. I don't think it's intrinsic value.
Fiat replaced gold. There was a reason people accepted fiat more than gold.
Gold will hold its value, but it won't replace fiat as money.
 

ISR92

Robin
If the world gets to the point you are describing, good luck at the border! Any one in government is going to take what they want.
What is intrinsic value?
Value is subjective.
Fiat is money because other people accept it in exchange for things that you want.
Rai stones on Yap.
Cowrie shells.
Glass beads.
Silver in China.
All these things were money, until they weren't, because a better money (gold) replaced them. I don't think it's intrinsic value.
Fiat replaced gold. There was a reason people accepted fiat more than gold.
Gold will hold its value, but it won't replace fiat as money.
Not quite. Fiat is money because of a) trust and b) government decree. People would not have arrived at paper notes as currency if not for government decree.

Intrinsic value is a philosophical concept. The way I define it is if an entity is stripped of all sentiment, it will still be useful in a meaningful way. Gold fits the bill as even if it is no longer seen as a desirable store of value, it has other uses in electronics, jewelry, semiconductors, cutlery, weaponry, etc. This is why I consider Bitcoin to have no intrinsic value as without the Bitcoin network, it is useless.

Fiat has a small amount of value as the paper it is printed on, but paper is abundant and easy to produce, hence why fiat has very little intrinsic value.

Fiat replaced gold because it has a few superior monetary properties which are immediately beneficial to the consumer. Namely fungibility and portability. Governments also like it because they can control its supply and issuance at will.

As for whether gold will hold its value, I don't have an opinion on this. I'm not into crystal ball gazing. There's a lot of gold in space. One day it might be economically viable to mine it. Though as this technology comes to fruition, the price of gold would assumedly drop accordingly.
 

paternos

Pelican
Catholic
All these things were money, until they weren't, because a better money (gold) replaced them. I don't think it's intrinsic value.
Well said.

I literally spoke with a friend of mine about it yesterday, as humans we desire a certainty and many know exactly wat will happen.

Especially around investing:
- Bitcoin IS the money of the future. If you buy now you'll be a millionaire in a few years.
- Gold IS the money of the ages. Physical gold, it's real.
- ETFs, the stock exchange over time ALWAYS goes up.
- Buy real estate, Houses ALWAYS keep their value.
- Buy art, it's so scarce people will always love it.
- Rolex, they only increase in price.

Everything depends on the situation. When the energy falls out Bitcoin is worthless. Gold can easily be stolen. All your property grabbed in 3 seconds and put in a pocket. Real estate valuable until your country is in war or economically weak. Art, it's just to our liking. Nobody likes porcelain today while it used to be of huge value. Brands can be broken in 1 week, make people belief Rolex is a watch used by pedophiles and it's done.

When we die all our possessions will be sold and given away in a few hours. And in a lifetime some things will gain, some will loose, sometimes very abrupt.

I don't know what it is, but around investing, cults always emerge. The eco-cult today. The internet cult around 2000. The financial cult around 2007. Those that once had it right and gambled all in on it with other peoples money we honor as prophets. Like Michael Burry who "predicted" the financial crisis.

Anyone who says this IS safe or THE FUTURE has no clue, he is just convincing himself, and / or is filled with pride and greed.

It's fascinating.

Gold is uncertain as well, if our governments say they will forbid the ownership of gold, punishable by law, that people need to put it in government safes for their safety, that the whole market is rigged, that actually the reserves are 3x that people once thought, a new technique to more easily extract gold. Or the other way, the Chinese go to the Gold standard. Don't forget it is a very very expensive metal.

Prices are always relative. This small little block is about 2000 dollar today. That's a lot of bread, oil, coal, meat, fruit.

Wouldn't 100 dollar be more realistic for such a small piece of shiny metal? I mean it looks good in the hand.

istockphoto-1056608520-612x612.jpg
 
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chance vought

Kingfisher
Protestant
Not quite. Fiat is money because of a) trust and b) government decree. People would not have arrived at paper notes as currency if not for government decree.
Was it trust? Or was it useful because of the extra speed and portability combined with the number of people who already used an existing network established during the gold standard.

Was it by decree? "This is now money." Then why doesn't anyone use the Zimbabwe dollar, or argentine peso. My argument is it was slowly and incrementally instituted (1914, 1933, 1971) and prior to that the Bank of England in 1688? A better transactional technology than gold on top of gold at first on the same network, corrupted over time.

No currency or money, ever was purely by fiat. It HAS to start out "backed by" something else that is already money.
Intrinsic value is a philosophical concept. The way I define it is if an entity is stripped of all sentiment, it will still be useful in a meaningful way. Gold fits the bill as even if it is no longer seen as a desirable store of value, it has other uses in electronics, jewelry, semiconductors, cutlery, weaponry, etc. This is why I consider Bitcoin to have no intrinsic value as without the Bitcoin network, it is useless.
100%... The only thing of value of Bitcoin is the network.

On intrinsic value:
The more value it has as something else, the less value it has as money. 80% of gold is held as a monetary good, with 20% used in jewelry and industry.

Silver is 50% held as money and 50% used for other things, and has declined in value relative to gold for 100 years.

Other metals, more rare than gold, like platinum, is 90% industrial use, no one holds it as a monetary asset, even though it is more rare than gold.

Intrinsic value is a flaw in money.
Fiat replaced gold because it has a few superior monetary properties which are immediately beneficial to the consumer. Namely fungibility and portability. Governments also like it because they can control its supply and issuance at will.
Absolutely agree here.
As for whether gold will hold its value, I don't have an opinion on this. I'm not into crystal ball gazing. There's a lot of gold in space. One day it might be economically viable to mine it. Though as this technology comes to fruition, the price of gold would assumedly drop accordingly.
Agree, the supply of gold is infinite, the only limitation being human time.
 
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zoom

Kingfisher
Catholic
Gold Member
Whatever you might think of Kevin O’Leary, I heard him say something the other day that I liked - he doesn’t touch mining stocks. Why deal with a company and their management mistakes when you can just buy the commodity?
Made sense to me.

Physical commodities and mining companies are not the same. Mining companies are real businesses that generate real profits. These profits can be returned to shareholders in the form of dividends or share buybacks. There is a storage cost or a risk of theft to owning the actual commodity.

If you are really bullish on a commodity then you should consider investing in the miners. They offer incredible leverage. Now is a great time to invest in gold miners because the miners are lagging in comparison to gold. The last time gold was at this price range, the miners were around 30% higher.

Anyone looking for a lower risk gold mining investment should consider the majors, Newmont and Barrick. These are large companies that have mines all over the world. These companies also pay dividends. Full disclosure, I own both of these companies.
 

inthefade

Kingfisher
Orthodox Inquirer
Physical commodities and mining companies are not the same. Mining companies are real businesses that generate real profits. These profits can be returned to shareholders in the form of dividends or share buybacks. There is a storage cost or a risk of theft to owning the actual commodity.

If you are really bullish on a commodity then you should consider investing in the miners. They offer incredible leverage. Now is a great time to invest in gold miners because the miners are lagging in comparison to gold. The last time gold was at this price range, the miners were around 30% higher.

Anyone looking for a lower risk gold mining investment should consider the majors, Newmont and Barrick. These are large companies that have mines all over the world. These companies also pay dividends. Full disclosure, I own both of these companies.
NEM has been good to me as far as miners go. Also 33 years of div payments.
GOLD is looking good as well. I may grab some. I like the balance sheet. $2.97 in cash per share! 27 years of divs and 4 years of div growth.
Both have weekly options as well which is a plus for me.
 

Seadog

Kingfisher
Not quite. Fiat is money because of a) trust and b) government decree. People would not have arrived at paper notes as currency if not for government decree.

Intrinsic value is a philosophical concept. The way I define it is if an entity is stripped of all sentiment, it will still be useful in a meaningful way. Gold fits the bill as even if it is no longer seen as a desirable store of value, it has other uses in electronics, jewelry, semiconductors, cutlery, weaponry, etc. This is why I consider Bitcoin to have no intrinsic value as without the Bitcoin network, it is useless.

Fiat has a small amount of value as the paper it is printed on, but paper is abundant and easy to produce, hence why fiat has very little intrinsic value.

Fiat replaced gold because it has a few superior monetary properties which are immediately beneficial to the consumer. Namely fungibility and portability. Governments also like it because they can control its supply and issuance at will.

As for whether gold will hold its value, I don't have an opinion on this. I'm not into crystal ball gazing. There's a lot of gold in space. One day it might be economically viable to mine it. Though as this technology comes to fruition, the price of gold would assumedly drop accordingly.

Fiat actually *did* come about without decree.

People used to trade gold. But having to carry around or secure large amounts of gold was onerous, insecure, etc so they deposited it with someone for safekeeping. They in turn got a certificate of deposit (think a bank book), and over time, people just traded those certificates back and forth, never bothering to actually redeem them. Then the clever bankers realized that they always had gold on hand, so why not just loan out some extra paper slips, that didn't actually have gold backing them? More people would be working, more people would prosper, and as long as everyone didn't try to cash out their gold claims at the same time, you actually accelerate the economic activity.

History lesson over. Now the problem with that of course, as every place be it a company store issuing tokens, the Greek Drachma or the USD, is that it's creation is governed by fallible, greedy, shortsighted humans. Could I make a better fiat system? Probably not. They work great until they don't.

Gold is the opposite. It's a clunky difficult to spend asset with a highly variable value. But if the apocalypse comes, it will likely still be worth something.

I'm not sure about intrinsic value being philosophical. All value comes down to time. Think of money as frozen time. I can work 8 hours a day on a farm for a summer and sell the fruits for money, or vice verse I can use money to get someone elses time, either it's fruits, or directly having them do stuff for me.

The intrinsic value of a bike, is that it lets me move around in 1/5th time time. The other 4/5th of time I can now use to farm, study, whatever.

The intrinsic value of a gun/bullet is that I can kill something I can see either that's a threat or for food. It doesn't necessarily let me do something I might not otherwise be able to, just quicker, with less hassle, and less cunning.

Even a computer, everything it does is some variation of "is it a 1 or a 0?". The fact that it can do that a billion times a second is where the intrinsic value is. Maybe the intrinsic value of copper is higher than gold if you need tools. Maybe it's higher than steel if you can't machine steel. Gold is higher than steel without the ability to shape steel. Steel higher than gold if you have a good whet stone.
 

ivalyosha

Robin
Orthodox
Has anyone purchased and stored gold with an offshore provider like Bullion Star? They're based in Singapore and look very legit. They store the gold for you in your name in their Singapore vault or you can take possession directly by visiting the vault or asking them to ship it to you.

It seems like a good compromise between the risks of holding physical gold yourself and buying paper gold through ETFs.

I'm in Western Europe and I don't trust the EU to protect my property rights long term considering the immense debts and economic problems Europe will have to contend with. I trust Singapore a lot more with my gold.

 
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