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You carry more than $1280 in your wallet ( https://goldprice.org/gold-pri... ) ? Man I hope you don't drop it...

Accually, right now it $39.+change/g. aint metal cool? and holds its value!

Lemmesee... US bond market in 2007: 36 trillions, US bond market size in 2015: 41 trillions. Yeah, investors surely lost all hope in the US bond market.

I consider gold to be "stable money" for looking at REAL inflation (as opposed to things like the consumer price index, which has been politically hacked of late to make inflation look small and inflation-"corrected" entitlement payments lower.)

Using approximate values off a graph: 10 Year gold price in USD/oz, for a quick reply:

Gold price in 2007: Call it $650 (to err on the high side and bias it in favor of your position). Latest close from the same graph's heading: $1153.80. Denominated in gold, that 36 trillion would be worth about 64 trillion in today's dollars. That makes 41 trillion about a 36% loss, more than a third of the market, not a 14% gain.

In the _actual_ reality, bondholders were given a much sweeter deal than they could have hoped for without government intervention. A firesale of all assets would have resulted in them getting pretty much nothing at all.

No, a firesale of assets would have produced a lot of money, and the bondholders were in line after the workers getting back pay but ahead of the stockholders. For GM it would have worked something like this:
  - The workers would have gotten some - but been out of a job unless/until somebody who bought the assets at the fire sale something new and rehired them - initially without a union. If any was left over...
  - The bondholders - later investors (private-sector bailers-out) first - would have been next in line and gotten the bulk of the procedes. They might not have gotten full face value. But the late investors would have gotten more than the paltry sum they ended up with.
  - Stockholders would have been last in line, and would have ended up with zilch unless there was more than enough to pay off the workers and all the bonds.
So the meddling shafted the bond holders in favor of the unions - mainly the union organization rather than the workers themselves.

As for unions and workers getting their due before the bondholders - I fail to see issues there. Bondholders are paid interest because they are taking the risk, workers are paid because they actually do the work.

Which is approximately the way the law worked BEFORE the government meddled.

Sure. But the value of precious metals isn't going to collapse like bitcoins, fiat currency or anything else created out of thin air if investors and speculators stop believing.

Tell that to the gold speculators.

Look at the price of gold over time: http://goldprice.org/gold-pric...

If you bought gold on August 19, 2011 for $1850 / oz, you would be pretty sore today at $1262 / oz. The period of September 24, 2012 through to July 2, 2013, where gold dropped by $512 / oz looks like a collapse to me.

Just look it up

But they are nanometres thick as well. Say the structures are ~30nm high and assume that half the surface is covered in gold for the sake of simplicity. Then the volume of gold per m**2 is 15e-9 (m**3) = 0.015 (cm**3)

Density of gold is approx 19.30 g cm**-3 so it needs ~0.3g to make 1 m**2 of material.

Price of gold is around $40/g so that's about $12 per metre squared of material.

I had trouble finding reliable estimates of current prices but they seem to be in the range $300-$1500 per square metre. So if the gold can make it perform better it is certainly worth it.

It's just that when your reference storage medium changes value it's not as obvious, because you still have the same number of it.

... and I doubt there has been a significant drop in gold production or need industrial use:
http://goldprice.org/gold-price-history.html#36_year_gold_price

So that means? =P

All mighty dollar?

Somewhat of a stretch isn't it?
http://goldprice.org/gold-price-history.html#10_year_gold_price

The link you provided quotes £33.87 paid per gram of scrap gold. Current market rate is around £34.75 so it's not that bad at all.

The stock market is at 40 year low priced in gold. The fact that the stock market value went up in dollar prices only confirms my point about inflation, it doesn't do anything to help your point.

As to the market being at 2x the nominal value from 2009, yeah, first of all you are looking at the 2009 dip, which was pretty steep, so you are comparing 6,626 in 2009 during the crash to today at 13,610. Compare to 2000. It was around 10,000 in the year 2000.

In the year 2000 gold was 300 and today it's 1778.

When gold was at 300, the Dow was at 10,000, so that's about 1 to 33 ratio.

Today the ratio is 1778 to 13610, which is 1 to 7.6 The value of Dow went down 4.3 times over since 2000.

Eventually Dow and gold will be 1 to 1. Maybe at 10,000 to 10,000 maybe at 100,000 to 100,000, whatever it may be, nominal values do not matter, what matters is the trajectory.

Oil prices are going up, gold is going up, all of the commodities are going up. The product costs and prices are also going up, not as fast, because the market is good at finding efficiencies and bringing costs down despite inflation, but the market cannot beat the laws of thermodynamics and so inflation catches up.

Today more oil is extracted than ever and yet USA consumes less oil than every year since 2005. The prices are going up in nominal terms, while falling in real terms and this is not about supply and demand. Supply and demand curve pushes prices down, it's the inflation that is pushing prices up.

Just because something is shiny doesn't mean it inherently has value. And far from stable, gold's price goes up and down against the dollar. For instance $4,500 of gold purchased in the early 80s is currently worth around $1000, after you take inflation into account.

If we ever live in an apocalyptic society where paper has lost all its value, I imagine a bank certificate for a shiny metal won't be worth nearly as much as maybe oil or a car or maybe a cool Master Blaster style outfit that comes with a dwarf.

Why are you measuring from 2000? Why not measure from 1980 to 2000? Oh that's right, because you're cherrypicking your data to suit your conclusion.

http://goldprice.org/charts/history/gold_all_data_o_usd.png

See any similarities there between the 76-80 period and the 00-11 period?

Gold is down 15% in the past month, btw.

If you want to know what's causing the markets to roil, it's the hedgies unwinding their equities to pay margin calls on their gold futures.

The underlying philosophy of value, while interesting, was a bit beyond the scope of the OP's misconceptions. :)

Paper money's intrinsic value is essentially zero; gold's intrinsic value is a low-double-digit percentage of it's price. The difference is large enough to become qualitative: you can always recover *some* value from your gold, whereas slips of paper can go below zero value (you'd have to pay someone to haul them away). Unfortunately fools are buying up gold like mad thinking it's "safe", and the price is now parabolic; the amount of intrinsic value they're buying per dollar is dropping like a rock. I give it a year or two before they find out what their gold is really worth. It won't be zero, but it won't be four figures either.

golds is U$ 1590.96, the United States Bullion Depository holds 147.2 million oz. troy.

147,400,000 oz of gold times $1,392.00/oz = 205,180,800,000; I think we have a little wiggle room there, mostly because a lot of different countries and people have a vested interest in the Emperer remaining clothed.

What's the point of selling gold in a vending machine when no one is going to take a gold coin as currency?

Because as the dollar continues to lose value against gold at roughly 20% in the last 5 years (actually more like 10 years but that is not displayed on that web site), anyone getting 1.75% interest on a CD or 2.5% on a T-bill is an idiot.

Given that the printing press at the FED is in overdrive, it is very likely that the dollar will accelerate its decline in the next few years. Every dollar printed, does not create purchasing power, it simply dilutes the purchasing power of all the existing dollars out there.

A lot of us are seeing the writing on the wall for the dollar. If the premium is low enough, I will be a regular customer of these machines

I'm not sure saying, "yep, we're printing so much money, Gold is rising for a very good reason" would help much ? But please do enlighten me if you think it would, and how. I'm a bit dumb, so don't fear being very pedagogic and detailed ^^

BTW, Gold prices have been rising at approximately the same rate for years and in all currencies. They rose before Bernanke, outside of Bernanke's purview, and in countries that have NOT been printing money and are broadly deflationnary (Japan). I don't see how Bernanke by himself is a problem ? How has the financial crisis, or the bubble before that (which BTW predates Bernanke's tenure), been handled badly from a monetary point of view ? A scapegoat is always fun, but methinks the issues ran a fair bit deeper - or is it higher ?

And to finish, I'm not sure you're right to use "gold" and "commodity" interchangeably. Contrary to commodity metals, industrial use for gold is about 10% of production, the rest is jewellery and reserves... It might be justified to separate gold from real commodities, pricing factors are substantially different (industrial demand on one side, psychological on the other).

Source: http://goldprice.org/gold-price-history.html

Well, how much gold does 1.5 trillion dollars buy?

Well, gold is around 1,235 USD/ounce at the moment. So we could buy 1,21 billion ounces. That's 34,432 tonnes. And to put that into perspective, it is estimated that throughout humanity we have mined between 140,000 and 160,000 tons, so that'd be 21 to 24% percent of all gold ever mined.

At 19.30 g/cm^3, that's 1.618 × 10^9 cm^3 or 1,618 m^3.

But what about gold leaf then? Well, that's about 0.1 micrometer in thickness. And 1,618 m^3 of gold could be made into 16,180 km^2 of gold leaf. That's enough to cover the land of Delaware and Rhode Island twice. New Orleans is trickier - it's only 467.6 km^2 land, but the metro area is 9,726.6 km^2. There's plenty to cover it, but how much should be covered?

However - we're talking about the RIAA here. They wouldn't want to gild a city. But maybe skin in an attempt to kill the evil pirates? We have enough gold leaf to cover 16,180,000,000 m^2 of skin, and the average adult has about two m^2 of skin. In other words they could completely cover 8,090,000,000 people in gold leaf. Plenty more than there are people in the world.

At least now we know how they ended up at the 1,500,000,000,000 dollar figure.

Yes, the price of gold is awfully stable....

Anyway, I don't object to the gold standard per se. I honestly don't know if it's a good idea or not. I just object to the gold standard being described as the only reasonable way to run things, because gold has "intrinsic value". It has a little intrinsic value because it resists corrosion and that's about it. Most of its value comes from collective delusion, just like fiat currency. There's nothing wrong with that, but it needs to be recognized when advocating its use for backing currency.

Dude, $20 nine years ago is way way way more REAL money than $60 is now. Take a look here.

Gold is not REAL money. It hasn't been since 1933 (in the US). Gold is a commodity.

Dude, $20 nine years ago is way way way more REAL money than $60 is now. Take a look here.

Regarding inflation: http://goldprice.org/bob/uploaded_images/dollar_US D_Purchasing_Power-753629.gif
Fed was created in 1913. I'm not sure if ANYBODY should be grateful for fed for destroying 95% value of the dollar. If you want to know, why majority of internet is libertarian, you should read, what many people did read: http://www.mises.org/money.asp .
As for me: I have read a lot of books about economics and I am damn sure that we would be better of without 95% of the governement. (I'm quite confident our grandchildren would be better of without 100% of government, but the transition period of the last 5% would be probably very long and painful). I would prefer ALL PRIVATE schools for my children, ALL PRIVATE health care for me, private roads. As most libertarians would. They accept, that if you want to have something, you have to pay for it. And that it is immoral to force other people to pay it for you.

OK, you're right, inflation has been 1.6 - 3.4% per year.

From the Consumer Price Index.

Do you have something that you think is a better indicator of US inflation than the Consumer Price Index?

M2 and M3 are measures of the money supply, which is NOT inflation. CPI is a measure of inflation.

Inflation is determined by how much money there is chasing after how many goods. As the economy expands and contracts- seasonally, with productivity, etc, the amount of goods and overall size of the economy change. Inflation happens when the money supply expands faster than (or contracts less quickly than) the quantity of goods for the money to pursue.

Did you really think those monetary supply graphs you linked to were measures of inflation? You think US currency deflated 13% from 1984 to 1995 like the M2 graph shows?

And what's your reasoning with Weimar? Weimar, Argentina, Zimbabwe, Albania- tons of countries have had hyperinflation. The US hasn't, and we haven't even had significant inflation in 25 years, since Jimmy Carter. But when we had 10% deflation, we had The Great Depression. We have a very stable currency, so you point to an example of a country that didn't, and use that to claim we should make our currency much less stable by pegging it to the value to a volatile commodity?

Take a look at 10-year volatility in US Currency vs. Gold. Yes, the gold chart is in US dollars, so it's confounded by inflation. But that doesn't make much difference, since in the past five years, CPI went from 164.7 to 199, an increase of 21%, while gold went from $252.8 to $725, an increase of 186.79%. After adjusting for inflation in the dollar price of gold, the real price of gold changed by 137% while the CPI changed by 21%. Plus, it's generally considered that it's much harder for economies to deal with deflation than inflation, and Gold was deflating while the dollar was inflating. For inflation, prices and interest rates rise. If you have significant deflation, prices can fall if they're allowed to (and a lot aren't, like labor costs), but banks can't well have negative interest rates. They pay you to borrow money and charge you to deposit it? It doesn't work. Banking collapses. Look what happened to Japan's economy under exceedingly minor deflation in the 90's.

Gold is less stable than the US dollar. It's a commodity. Look at everything affecting the price of gold- new mines prospected, new mining technologies, mining labor rates, jewelry demand, investor demand in markets all around the world, the performance of competing economies, the decisions of foreign governments. Indeed, gold hit it's 25-year high a few weeks ago when Chinese Economist Liu Shanen suggested that China should use part of its $988 billion in reserves to buy 1,900 metric tons of gold. A lot of the inflation in gold prices over the past five years is due to the rapidly rising GDP's of India and China, whose combined populations of 2.4 billion can now afford to buy a lot more gold. This is an excellent reason to invest in gold, as one can expect the prices to continue to increase as rising global wealth competes to buy not-so-rapidly increasing stockpiles of gold. But it's also a very good reason not to peg your currency to it, or to any other commodity. We don't want to abandon control of our currency and let external factors cause massive inflation or deflation.

When the currency isn't pegged to some commodity, the Fed can make adjustments to track whatever they want. By manipulating the monetary supply to stabilize CPI, they can control inflation and deflation and stop them from getting out of hand, which is impossible by definition on a bullion standard. This is what they've been doing since 1980 when Reagan appointed Greenspan, and it's why the US dollar has been more stable than Gold in that time.