Buying all the gold?

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I can't help but think there's something big going on with the crazy push for buying gold these days... the ads for "Sell your gold!! Top dollar!! DO IT NOW NOW NOW!!" are everywhere!

I sense something sinister behind it...

What galls me is that someone I knew 5 years ago saw this coming and dumped every cent he had into silver... he did very, very well.

I saw it a few years ago too. I called the real estate crash 8 years ago for the reasons it actually crashed. However, I am too poor to take advantage of such knowledge.

So far as the current bull market in commodities, I don't see it ending any time soon, but it will eventually go through another major correction. It all comes down to a rising crisis in confidence in the world's major currencies. Thus, it isn't so much that the value of metals is going up as it is that the purchasing power of paper money is going down. Metals have been suppressed for years by the bullion banks and the market is just now starting to overcome their ability to manipulate it lower due to people scrambling for quality. The bond market is paying negative effective interest rates, so metals and commodities look pretty good by comparison. However, I would not expect the current situation in the bond market to continue. A crash is coming that is just as easy to see as the real estate crash was. Eventually, a US Treasury bond auction will fail and interest rates on these instruments will be forced to rise. Then that happens, the US goes bankrupt because even at historic average rates there is simply no way to pay the interest on $16 trillion dollars. What is the historic norm? Around 4%, if memory serves. Since smart people realize this, they are buying gold and silver as a lifeboat for their wealth to get across the river of the coming collapse with their wealth intact. Thus, it is not likely that gold and silver prices will collapse any time soon.

Yer right. It is yet another scam. I sure hope that Uncle Sam doesn't put America back on the Gold Standard though! THAT ladies and gentlemen, is what contributed to the great depression.


What's frustrating me is that Gold isn't just pretty, it's incredibly useful in microelectronics(and other low voltage devices). But all the Gold being mined is going into gold bullion to be used as a reserve asset......Meaning it just SITS THERE inside bank vaults for decades!
I'll never understand the human infatuation with gold. I mean, why isn't Copper considered just as sacred and mystical?

Nothing big, just opportunistic speculation. Most people in the general public know nothing about gold or how to sell it. Opportunists come along and buy gold for pennies on the dollar. The seller parts with family heirlooms to get a little money for groceries in tough economic times - you can't eat gold. The opportunists are happy because they bought the gold at a steep discount from the current price, and gold is trending up, so they hold it for a while and sell even higher. This sort of opportunistic business breaks out every time something is trending upward. I've seen it with collectibles (here today, gone tomorrow - does anyone even remember beanie babies?), selling on eBay, gold, and whatever else. The problem is that speculation attracts speculators. If there's any money to be had, more and more speculators saturate the market, and it collapses. Gold is volatile anyway - it's going to collapse sooner or later. Then the speculators move on to the next thing. (For example, in the late 80s/early 90s, speculators ruined the baseball card market, then moved on to comic books and practically destroyed the industry which still hasn't really recovered from its mid-90s bust.)

Gold is a valuable commodity which is now worth several hundred per cent more than what it was in previous decades. It comes as no surprise that small pawn brokers and exchanges want to buy your gold cheap. These are businesses that will be booming in the next decade. They already see it coming. It has been discussed enough times on stock exchange programmes on TV and the trend of Gold's value increasing has not let up in a very very long time.

Rather than grunt and moan about the whole thing I would be trying to accumulate more gold myself and make a private vault.

I can tell you the answer to that...

My current musical obsession is solo handbells, which are made of bronze, which is made of--you guessed it--copper. Personally, I find that reddish/greenish tinge of moderately tarnished bronze attractive, but good polished bronze is more of a yellow-white. And you never really know what a pain in the arse it is to polish foundry-grade bronze until you've actually done it, and it isn't fun.

The thing is, though, bronze holds up pretty well because the metals alloyed with copper resist oxidation. Copper by itself...well, oxygen loves copper the way a tornado loves a trailer park.

Gold, on the other hand, has better conductivity, is also malleable (like copper), and does a better job of resisting corrosion. The downside is it's hard to find.

Copper is getting harder to come by, though, and is still in high demand. Stockpiling gold at a low price is a good idea right now for when industrial demand takes over the investment demand. I'd say the same for silver. Silver is still pretty cheap at the moment, but as industrial demand for it increases, I'm almost willing to bet that the gold bubble is going to burst and silver will eventually become a higher priced commodity. It may not ever surpass gold, but it's still cheap enough now to buy in significant quantities that will pay off in the decades to come. The corner gold-buyer and the heavily hyped gold bullion business are all obviously scams. They are now what the housing market used to be. Same song, same dance, next episode. When they all go under and gold becomes monetarily worthless, go get you a truckload of it and hang onto it for the next 20-30 years and be a millionaire when you retire.

Throughout history, gold has always had value.

I wish I'd bought more gold.

Actually, copper is has a higher electrical and thermal conductivity than gold and is the most electrically conductive metal(in terms of lowest resistance at room temperature). It is also more abundant than gold in the Earth's crust by quite a large factor. The thing about copper is that it is never found in its elemental form in nature the way that gold is. However, due to the beauty of gold along with its low abundance, it will always be of monetary value. Copper in the +2 oxidation state produces some of the most strikingly beautiful blue and green colored minerals(like malachite and hydrated copper sulfate for example). The value that copper can fetch on the market is so high that thieves frequently steal spools of copper wire from construction sites and can get as much as $1200 for it.

i have several gems far more rare than diamonds, none come close to the value of it,

the comercial market isnt logical as such only internally and methodically consistent.

I didn't know about thermal conductivity, but I heard it from an electrician that gold is more electrically conductive. So if copper is really more conductive, then I stand corrected. Maybe he was comparing it to steel, like when connecting electrical sources and I just misheard.

Still, though, the longevity of gold as a conductor versus copper is enough to favor it over copper unless you can dramatically decrease the rate of oxidation (like with insulated wire, protective coating, etc.). I would think in permanent, low-impact applications it might be preferable to copper.

I see gold-plated plugs all the time in audio applications. While I can see that as preferable to steel, I wonder if it's just a gimmick.

Copper is used for insulated wiring, but due to its resistance to oxidation gold is very useful for electrical contacts that might be exposed to air or water. But its biggest electronic application is in microelectronics and other low voltage devices.

I think a great deal of this gold obsession is inspired by the likes of Glenn Beck, who take advantage of paranoiacs with talk of having gold so they can buy food after the apocalypse comes.
Any person who comes around trying to buy my food with gold ,IF the end of the world comes and goes, is getting my foot up his/her ass.

-Bill, otherwise known as Kraichgauer

It is not any good for you until you covert it to cash for buying goods and services.

Gold-- you can eat it and it wont (by itself) keep you warm in the winter.

It has a limited use value (dental fillings, decorations, durables electric contacts etc.)

ruveyn

Well you certainly can't eat paper money and it burns to quickly to be used as a source of fuel.

However as I and others have pointed out it's extremely useful in modern electronics to which we depend on. But most of all, people have this strange, mystical adoration of gold and it will always be valued.

Rarity. It's a monetary metal because it is not easy to find more. When you do, it is expensive to get it out of the ground and separated from other materials. This cost of production limits profitability for mining operations and takes certain mines out of production when costs exceed the selling price. In this way, it is self-regulating. Plus, people want gold. While most of it does go to industrial use (as does copper and silver), people also want it for jewelry. It is also an incredibly stable element. It does not corrode over time and so it is a great choice for electrical connections in safety systems such as automotive airbag systems. It's also extremely fungible. In other words, it's easy to use for trade since it is almost universally seen as having value.

Rhodium or element #45 has gone through some extreme price fluctuations over the last decade, if I ever start investing in metals, it's gonna be Rhodium.