That Shiny Metal Is as Artificial as Paper Money

[Javaman]

http://www.alternet.org/economy/146150/have_you_caught_gold_fever_the_value_of_that_shiny_metal_is_as_artificial_as_paper_money

March 24, 2010 | LIKE THIS ARTICLE ?
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Advertisement Quick, check out this hot investment tip! For decades now, the Federal Reserve has been suppressing the true value of gold to keep its prodigious impact out of the market, which is currently dominated by fiat currencies like the dollar and light-speed binary code transactions like high-frequency trading. If you stripped away the Fed's continuing manipulation, gold's free-market value, currently hovering around $1,000 per ounce, would increase by multiples. Wait, are you yawning? Why are you leaving?

Here's why: This isn't news. The Federal Reserve, along with investment banks, hedge funds, governments and even you (yes, you), have not been just manipulating the so-called real value of gold and other financial instruments for decades, you've also been manipulating reality itself for centuries. Because gold is just chemical element, or a precious metal as it is called in the business, which means you can't eat, grow or use it to power your house or car.

But what gold is good for, and admittedly has been since the beginning of recorded history, is storing notional value: It is simply an idea made shiny, attractive, and up until our recent Great Depression rerun, pretty lucrative. In other words, it is a hyperreality, a consensual hallucination to borrow a term from novelist William Gibson. It has value as a currency because we decide it does, just like the fiat currency system that replaced it, not because of anything it can actually do on its own.

[Echo In Light]

1. k/r

[hlthe2b]

2. Exploitation of fear to buy gold is so rampant....

I overheard two very young (and likely fairly low wage) workers at the grocery store talking about how they were socking away everything they made into gold. Now, the saving is probably not a bad thing, but given the near peak gold prices, I just can't see how this is such a "safe" or prudent investment, at the cost of all else. (particularly since, I would bet they are paying interest on new car loans).

:shrug:

[bvar22]

3. K&R

In 2004, my wife & I initially researched "cashing out" and buying GOLD (bullion or Coins/ not paper Gold) as a hedge against economic/property value collapse.

The more we researched it, the clearer it became that this WAS indeed an artificial market, and we decided not to take that risk. Several countries have the ability to "crash" the price of gold at will by dumping their inventory on the market.
(LOL, IIRC, the price THEN was around $330/oz + Fee). Had we bought THEN, we would have tripled our money.)

Instead, we bought bubble proof property in The Woods, surrounded by extensive National Forest, with an on property Spring for water, and a long growing season.

The Reason: Gold is hard to chew and doesn't taste very good.

However, if you read about the Economic Collapse in Argentina, GOLD was the very BEST medium of exchange during that crisis. (Chains, coins, jewelry)

My wife and I decided we would rather have a tomato.
We are happy with our choice.

[Javaman]

4. Very very wise.

Like I say to the nuts who advocate buying gold as a safety net, "can you eat gold?"

They either give the sputtered incoherent response or it suddenly dawns on them they they fucked up.

I also like using the classic example of the Wiemar republic where people were trading gold candle holders for loaves of bread.

[Hekate]

6. Tomatoes and year-round water sources have more value, for sure. nt

[Hekate]

5. Aphrodite say gold belongs in jewelry, not hidden away in vaults as an "investment"

The older I get, the more I understand that point of view.

Mind you, I always liked jewelry, and my first opal ring was purchased with a small check I got for high school graduation (it's a small opal).

But I used to believe that hiding gold in Fort Knox made some kind of sense -- and now I realize it's just another stupid illusion. Let it out and let the jewelers make something beautiful and real out of it.

Hekate

[paulsby]

7. rubbish

gold has MANY industrial uses, as well as value as a thing of beauty (jewelry) etc.

[Javaman]

9. LOL yeah, all of these people are buying it just for that reason.

if we get to the point were we need gold to use as a currency, industrial use will be the very least of our needs.

[guitar man]

8. Oh yeah?

:rofl:

:hi:

[Javaman]

10. "hey baby, want to kill some humans?" LOL nt

[leftstreet]

11. K&R

[Duer 157099]

12. While I agree that the markets are manipulated, I also believe in intrinsic value

of precious metals. Gold is unique and it has a deep psychological allure for humans. Chemically, it's important too.

[sendero]

13. Maybe there is a balance..

.... I decided back in 2005 when it was clear we were headed for trouble to invest in some metals. I decided at the time to put about 5% of my net worth into silver and gold. I have a lot more silver than gold because it is easier to get in barterable units of measure and it has more industrial uses than gold.

It would be foolish to put 20,30,50% of your savings into metals. It would be equally foolish to put 0% in.

[amborin]

14. K&R