Hello @TIMEFRAME Hope you’re doing good. There will be wide spectrum of opinions about anything in this world
What I have mentioned is based on my personal knowledge and analysis. Just wanted to add my 2 cents on the topic, for an informative discussion.
As with gold, I personally believe that, gold holds no value. Gold is always measured against Gold/USD and Gold without being converted to any currency notes, will be useless and valueless.
Gold = Currency
Gold = No Currency
Tell me, why does RBI measure its forex reserves in USD?
Well , if so why Chinese, Russians & Saudi Arabia , UAE even Switzerland, including India buying Gold
Here is a link about Gold & its Relation with the US dollars ,( https://vaulted.com/nuggets/what-backs-the-united-states-dollar/) what i am trying to tell you that , due to n"N"number of American sanctions , US dollar is loosing its position and slowly many countries are going back to Gold Standard. same thing was told by the would be & ex. US President. Another example of Russia , USA imposed 16000 sanctions on Russia , but still Russia is winning the Ukraine War
US have done big blunder when it siezed Russian forex reserve which was in form of US doller (and used it to fund Ukraine war), which legally belongs to Russia.
No matter what this step have triggered all countries to move away from Dollar or atleast reduce dependency on it. US will loose its hedge money status eventually but not anytime soon unless there is an alternative.
Gold is Gold, nothing can be compared to Gold Standard not even dollar specially after it have delinked its dollar from it, but it will remain dominant.
America have a history of putting counties into war, creating political instability, supress rising power amd what not. No country want to be in situation were they are controlled by external threat or power.
BRICS currency can be alternative but its still far from reality, infact our UPI is more promising in terms of direct trade (removing any mediator/ SWIFT system). There is No permanent enemy or friend in geo-politics.
Regardless of how many countries buy or sell gold, it doesn’t make for a right decision. More often than not, many countries take blunder decisions financially. If some country is buying gold, gold will lose its value eventually and it will solidy the USD as the World’s reserve currency further.
Do give their national anthem a hear, you will understand where they come from.
US is always deceived other countries , exiting the GOLD Standard is one example , to avoid paying its Debts , now in future they will do it again , since the present Debt is soaring in terms of Trillions !!!
You are misinformed on this.
Gold has some inherent value due to its physical properties and use in various products.
(eg. modern electronics, semiconductor manufacturing, medicines, …)
Sure, the use of gold as a common commodity to peg currencies against,
impacts how gold is valued. But, even without that, gold is a valuable commodity.
Sure, with enough energy (and time) any element can be fabricated from Hydrogen.
By this measure, nothing is “rare”,
Practically, the costs involved are what make it rare.
The inherent value isn’t ₹7761/g (24K). This is called a fugazi. I am not misinformed on anything, as you can see in the article link I posted above all those things are written.
Exactly. But it is not “useless” / “valueless” like this post claims…
It is good to have a well-informed discussion,
However, It will help to have productive discussions
if one avoids posting extreme/absolute statements that are easily proven false.
If you mean to say that the inherent value of Gold is less than the current market-value due to gold beng used to peg currencies, then please say so.
Please don’t claim that Gold is valueless.
OK.
This post made it sound like that though.
Especially when the linked article itself highlights that the practical cost of fabricating gold makes it infeasible to do so (at current value of Gold). So, does that make Gold currently undervalued? Of course not, because there are far more cost-effective ways to access gold.
I stand by this statement. It is with regards to backing a currency, not applications in tech. @cvs
Warren Buffett says, “You could take all the gold that’s ever been mined, and it would fill a cube 68 feet in each direction. For what that’s worth at current gold prices, you could buy all - not some - of farmland in the US.” which would produce more value? @cvs
Of the annual demand worldwide, only 6% is used in tech and the rest 94% is used in Jewellery/Banks.
Of that 6% in tech usage, they say they can use sand instead of gold but since gold has faster turnaround times, they use that instead of cheaper sand.
Gold is used because they made do with whatever is available and there are plenty of alternatives which are cheaper such as sand but gold is readily available. So much for a rare commodity.
I cannot vouch for the accuracy of this assertion.
However, if the above assertion is true,
then currently the “cube of 68 feet of gold” is providing more value
than the effective value being provided by the entire farmland in the US.
To put this in perspective,
a lot of the value that Gold is targeting
is a different layer of wants/needs than what farmland provides.
For example, having “the entire farmland of US” at our own disposal,
would NOT enable the 2 of us to have this discussion here in public on TradingQnA.com.
Instead,
a few milligrams of Gold in our PCs,
some of it in the machines in factories halfway across the world,
and still more of it in the coffers of nations,
that enables them to trust each other’s development plans/claims,
…all of this Gold in various places is what is enabling us to have this conversation exactly like how we are right now. That is the value of Gold.
Is Gold the ONLY possible element that can fulfill such needs.
No. However, it is the incumbent / legacy / currently established convention around.
And there are switching costs to replace an incumbent with an alternative - as proponents of cryptocurrencies have found out over the past several years.
Again. 6% is not valueless.
It is hurting. Please stop…
EXACTLY!
Faster turnaround times. Easier processing.
Hence preferred to any alternatives, i.e. the value attributed to Gold due to its use in Tech.
Please decide first whether Gold is rare or not…
…You can’t have it both ways depending on what suits your latest argument better.
Then, please post that,
so we can discuss that further
instead of debating the verifiably incorrect statement posted that “Gold is useless / valueless”.
So, let’s talk in the context of gold backing a currency
Is the following a fair summary of what you have been trying to highlight
in the above posts so far -
a. Gold is currently used to back a currency.
b. Gold has some value attributed to it because of a.
c. If we stop doing a, gold will be “valueless” in this context,
i.e. not have any value attributed to it due to a.
If so,
then agreed.
that is by definition.
else, If something else,
then please elaborate the insightful nuance
that is not coming across from the posts so far.
I think I did a shoddy job of communicating my point. Gold IS RARE, but it CAN be replicated (just that we didn’t have the need to do so and also because we haven’t run out of gold).
Okay maybe not useless, thinking on a hindsight. But completely valueless.
I didn’t start the conversation on tech usage, my discussion was confined to central banks and currency only. If you can kindly check the previous posts, you will notice I haven’t initiated the conversation on tech. I said, gold is valueless and useless, w.r.t. to central banks and currency. Without conversion to currency, it stands a 0 value.
@cvs Like you agreed, it again comes in terms of money. Faster turnaround times means saving currency. So, again gold without currency is even worser than steel. Atleast with steel we can build houses.
Oh… Probably these is some confusion in concept and currency and its use.
For that matter at least gold has use in electronics and jwellery. US Doller do not have even those use cases. It still paper.
The six characteristics of money are durability, portability, acceptability, limited supply, divisibility and uniformity. one can read more about it by googling further.
As of now (and historically even before paper currency) gold has these characteristics.
USD had these characteristics when it was co-related with gold. if you understand reckless printing of USD, the durability (wrt time) has gone out of window. This is the reason why Satoshi Nakamoto invented Bitcoin as alternate standard of global currency
Now USA (and every other country’s) central bank governor punches the digits in his account to produce (!) money as the government sees it correct way. Reducing value of currency. Earlier at least they had to ask factory (mints) to print it.
However gold still remains as gold standard as globally accepted denomination.
Gold has always has Its own value , for Industrial purpose , in some way in Chemical & Medical but "Dollar Currency " is of either paper or plastic , if you burn it , its value is “ash” where as if you burn Gold ,it will be gold only and also its value increases
As expected Nifty is coming down to 24000 level , Once the 24000 level breaks it will break Retail investor’s confidence , and panic sets in , Market is expecting Donald Trumps win in us presidential Election , so that the Ukraine Russian war ends and Inflation will come down , But it seems reverse is going to happen so sensing this probably FIIs selling in Indian Market , Nifty tried to pull back near 24100 level , but it seems it will break 24000 level ultimately , and panic sets in for retail traders/Investors
as globally accepted denomination.
