GOLD vs Dollar

cnh

shack wrote: »

I disagree. Since the earliest recorded history there has been value placed on items...moreso because of their function and usefulness...but value none-the-less.

That's fine...there is an argument in my field about this....it is called the formalist vs. substantivist debate....

Formalists believe what you do? The others argue that true hunter/gatherers have no such ideas...what they need is plentiful and readily available to anyone...what anyone has anyone else can get or make...early environments had little in the way of 'scarcity' so such modern concepts had no meaning for most of human history..

Again...it's not as though this debate has been settled...it rages on and on..

cnh

apphd

shack wrote: »

The US gold reserves are carried on the "offical books" of the treasury at a fixed price of $42 dollars an ounce which was set in the 70s. Flucuations of the gold prices has no economic effect on the US reserves. The reserves do not change and are not spent. They are not used for any type of commerce. At one time in the past, nations would used their gold when trading with other nations...but that hasn't happend for centuries.

OK, now that was what was missing in my attempt to grasp this. Now I can understand it, maybe not thoroughly, but much better.

Thanks to all that contributed something of value.

apphd

While shack's factoid on the fixed $42/oz answered my op, reading this has created more questions.
I'm going to guess that other major player countries probably did the same thing around the same time as some type of treaty/mutually agreed on economy policy for the benefit of all.
The U.S. dollar is used as the world's currency.
Dollar goes down gold goes up.
So gold investors want to buy low (dollar is high)
Sell high (dollar is low)
How do they profit when the dollar they receive when they sell gold high, is worth less than when they bought gold low? I understand the value ratio between gold:dollar is not a constant 1:2 or 1:4 for example.
Is it simply calculating the offset of the dollars value when bought vs value when sold to determine if/when you want to cash in?

Also when gold is used in jewelry, electronics, and other industries is it purchased at the going trading rate, or is that strictly a number used for commodity trading purposes?

BTW I do not have any money tied up in gold, or intend to. Just something I don't understand well, and that ignorance bugs me.;)

tonyb

Think of it this way....treat Gold like stock,buy low,sell high,make money,or the other way around. No different really. It's more so an investment vehicle for some,and sentimental value for others. Too many though,hang on to Gold far too long driven by theory's of the world economies will come crumbling down. Like Shack said,if that was the case,gold still would be useless.Guns, food,water,shelter,would all be forfront on the survival list.

apphd

tonyb wrote: »

Think of it this way....treat Gold like stock,buy low,sell high,make money,or the other way around. No different really. It's more so an investment vehicle for some,and sentimental value for others. Too many though,hang on to Gold far too long driven by theory's of the world economies will come crumbling down. Like Shack said,if that was the case,gold still would be useless.Guns, food,water,shelter,would all be forfront on the survival list.

I understand buy low sell high with stocks. But when you buy gold high with the dollars in your pocket, the dollar is worth more than the dollar you get when you sell gold high.

shack

Below is a good article about the different ways of gold investing. I don't necessarily agree with the assumptions but it is a good overview. However, beware...those that profit from gold want YOU to invest in gold. Remember, DEMAND is what is driving the price up. The more people that THINK they need gold...the higher they are willing to bid up the price...sometimes irrationally.

Sound familiar? Think REAL ESTATE.

Understanding the market for gold is much different than understanding HOW to invest in gold. It is not for the timid.

One investment strategy over the years is to have some part of your investment portfolio (usually less than 10%) in gold or gold related stocks/funds...STRICTLY as a hedge. Anything more than that and you become a speculator...with all the risks associated with that activity.

Not many investors and potential investors know the dynamics of working with gold investment strategies. The most unknown facts are where to purchase gold cheaply, how to buy it and how to sell it profitably. Learning these facts from a weak standpoint might lead to costly investment mistakes.

Investing in gold can turn your investment portfolio golden within no time. However, you need to be savvy and above par for that to happen. The idea is to have all the facts right so that you invest without making blunders. You must for instance avoid being taken advantage of by unscrupulous traders. For the talented investors who know when to cash in on an opportunity, chances of making a handsome income with gold investments are high. You only need to gather some facts and gradually gain some crucial experience.

There are some distinct gold investment strategies that amplify your profit margins during trading. Purchasing gold bullions is one such strategy. Gold bullions can totally transform your income levels for good. The strategy involves investing in standardized and certified gold bars and coins and then selling them off when the market prices soar.

The notion is quite understandable. You just purchase gold worth the amount of money you have and then sell it after a certain period of time as long as market rates are favorable. After making the purchase you wield direct ownership of the gold. The only disadvantages are storage and insurance costs. After selling, you wait until market prices dip and then buy another lot. The risk stands however that price changes and inflation might project you towards losses or an accumulation of storage costs as you wait for price rises.

Another crucial platform in gold investment strategies is jewelry. This is one of the splendid ways of investing in gold. On the other hand, since investing in jewelry made of gold is costly, it might not augur well with an investor who is after portfolio growth. As much as jewelry is priced highly than the underlying value of the metal, it is a very popular investment strategy in some countries such as India.

Another strategy of investing in gold is through gold exchange trade funds or Gold ETFs. They have become very significant trading instruments mostly due to their ability to hold bullions as the underlying asset. In a way, this is a perfect indirect investment that has an underlying asset that is also market worthy. Gold ETFs are usually traded as stocks on exchanges though their portfolio is also mostly fixed.

Another indirect strategy of investing is through gold mutual funds. The mutual funds work through a process of purchasing, holding and selling gold stocks. The stocks are usually from stocks of trading and mining companies. Investors usually purchase shares from mutual funds and hold them awaiting a future gain. You do not need a lot of knowledge to invest in gold mutual funds, though as a prolific investor you need to choose from different mutual funds.

Investing in gold futures is another cost effective option of gold investment strategies. Even with a marginal investment capital, you can control a huge size of future contracts through effective utilization of trading margins. The trading futures also have low commissions.

sTiLlLeArNiNg

buymesome wrote: »

The fedral reserve is were the moneys at and its a privately owned non fedral establishment .

How come we dont know where money comes from
How come we dont ask where it comes from

Correct! The reason why no one question's them is because they are able/content to live the lifestyle they choose and have many "luxuries" which are not available for other's in different market's. Someone posted earlier in another thread that the US has the "richest" "poor" of any "developed" country....

shack wrote: »

Ohhh...another internet conspriacy link.

Just another big load of crap...

agfrost wrote: »

You're hitching your cart to the wrong wagon.

lol "conspiracy" ? hahaha far from it! It is exactly this way of thinking that allow's them to manipulate the monitary sytem and continually screw us over!

I am no financial expert but my uncle is a highly regarded accountant for multi million/billion $$ international companies and he is the one that turned me onto that zeitgeist film, he told me i would learn a lot from it. I did! lol