Gold Prices Worldwide Prove Deceptive

The Global Post:

Gold has been having a great run lately. On Nov. 9, it closed at a record high of $1409.80 per ounce. It's being hoarded as the only safe bet in a world threatened by European debt and Fed printing presses run amok.

And just before this week's crucial G20 meeting in Seoul, the yellow metal's prestige got a strong jolt from World Bank President Robert Zoellick. With global currency wars set to be a hot topic in Seoul, Zoellick suggested that finance ministers consider re-adopting a modified global gold standard for the world's currencies.

But have things really gotten that bad? Is gold really the answer to what ails us? Or in this digital age, is basing the global economy on hefty slabs of metal a bit like promoting horse and buggies as a solution to Beijing's traffic jams?

Read the whole story: The Global Post

Comments

[Joel Mclaughlin]

02:14 PM on 11/28/2010

http://www.foodtimeline.org/foodfaq5.html - compare consumer prices to todays prices from when we were on the gold standard. True inflation is just ramping up in 2010 (not based on government statistics that accidentally leave out things like energy costs, food costs or housing costs when beneficial to magically keep inflation numbers lower than true costs). Something else to think about is that if we were on a true gold standard, prices would have dramatically decreased during the industrial revolution, because prices lower with innovation. But, thanks to the Federal Reserve, that didn't happen - they were more than happy to destroy our dollar 30 times over dramatically helping the little guy.

[mulegino]

02:25 PM on 11/15/2010

Agree that the obsession with gold, which Keynes referred to as a "barbarous relic"- is dangerous, and serves as more evidence that too many economies of the west- namely that of the US- are based on dangerous bubbles, financial predation (now cannibalization), de-industrialization, hoarding and looting of public resources.

Of course, the "gold bugs" use the Becks and Limbaughs, as well as the "survivalists" to push their product via fearmongering.

A major step forward in addressing the economic ills of the west is not a worldwide gold standard, but national economies wherein governments regain sovereign control over their currency, and engage in bilateral or multi-lateral agreements with other nations whereby they establish fixed exchange rates relative to the others' currency- such as Bretton Woods.

Then, the national governments enact fiscal and sovereign monetary policies which favor industrialization, productive commerce, wealth generating infrastructure, etc.

The real physical products of human labor are the truly "intrinsically valuable" commodities, not a scarce metal whose uses are somewhat limited in physical production.

The economics of scarcity, and the blindness that pervades much of the world is due to the fact that the economics of mass destruction- the faith based "classical" economics, which are really the economic equivalent of nature worship, are regarded as axiomatic by a wide swathe of the political and financial elites, who posit the false dichotomy of "capitalism" versus "socialism", as if nationalist, or dirigist policies, such as that of the American System, had never existed.

[funkalicious]

05:12 PM on 11/14/2010

Gold goes up during times of economic uncertainty and when a currency is under a devaluation period via the printing press. Gold must be brought out of the ground by the toil of men. a Fiat currency like the federal reserve notes we carry around in our pockets can be devalued by prinitng more there is no work involved, no caloires expended and it destroys wealth savings.

Bernake is trying to devalue the debt, our Creditors are none to happy about it. His printing press creates uncertainty. gold is portable its money good in any country in the world unlike our dollar. Which has imaginary value and to our creditors it is now becoming a nightmare as it is worth less than when they lent us the money.

Gold will continue to rise as Bernake devalues the currency with his printing press, Gold by its nature is a store of value if the dollar is strong gold will weaken but not while the printing press is rolling. Gibsons paradox read it.

[G52]

08:45 AM on 11/14/2010

The gold standard is outdated and has been replaced by petro dollars even Jed Clampett figured that out.

These folks that are investing in gold as they did buying multiple homes in the morgage crisis are in for a rude shock.

Carnival barkers like Bubble Boy are hoodwinking a lot of folks who are new to the metals.

Gold has to be traded back or sold to buy food or other necessarry items. It is not a liquid asset that can be converted easily.

While I like the effect gold and silver has had on my own assets, I have been with it for a while.

Now is not a time to buy!

[kalital]

06:04 AM on 11/14/2010

1) Gold "bubbles" can hardly be compared to the Great Tulip Crash -- they're not comparable commodities -- tulips were a bizarre speculative craze, while gold has been a human standard of value for thousands of years; 2) Gold may have gone up sharply in the last five years, but many say, with good reason, that it's currently undervalued relative to other economic indicators; and, most important, 3) The "dirty" aspect of gold mining is precisely what makes it valuable. The gold reserves of the entire world comprise about a 20-21 meter cube. It's a rare resource.

To dismiss gold as a measure of value because it's used far more in jewelry than industry ignores the fact in much of the world -- including India -- wealth is held in jewelry.

Zoellick's call for a return to the gold standard is absurd for a lot of reasons. For example, a gold standard works only when the price of gold is relatively stable. Also the general assessment is that 40% of one's currency should be backed by gold if one is on a gold standard. Given that there's a limited supply of gold in the world, this means that the amount of currency one can print and have is finite. For an economy to expand, either gold has to decrease in value against the currency, or we need an alchemist to invent a way to make more gold. Since capitalism depends on growth, this is kind of a problem.

[frank day]

05:20 PM on 11/13/2010

Bling!

[Dewts]

05:12 PM on 11/13/2010

gold has been valuable for ten thousand years, it will be valuable for as long as humans are around. long after federal reserve notes are gone gold will hold it's luster.

[ligligl]

01:53 PM on 11/13/2010

Another bubble

[turkeywrld]

01:22 PM on 11/13/2010

A run on gold prices simply reflects the fear and insecurity of people in a world out of control due to the power of faux 'monetary' systems backed by zilch ..and the explotation of that fear by those who know nothing other than how to make a quick buck ..

[Foodgrade]

12:17 PM on 11/13/2010

And what does one do with the gold? Shave pieces off to buy things? Sell it for worthless paper? I think the only ones profiting from gold are the con men selling it on TV. I notice that money is good enough for them or why would they be selling the gold?

[TruthDecay]

11:44 AM on 11/13/2010

The value of gold is imaginary. Period. It's rare but not rare enough to justify the price or demand. It can be useful as a super conductor but very few useful products are made with gold, the best stuff is made with steel, aluminum, plastic and even wood. People have been told that it's worth something because it's shiny and yellow and every lemming ran right off the cliff after it.

The price of gold does not change, the demand for gold and the value of currency do. Gold today at 1300 per oz. is worth no more than the 600 per oz. 3 years ago, it's the dollar that is worth less so more dollars are required to purchase the same amount of gold. Also investors that are hedging against their currency by buying gold drive the price up. See: bubble.

[castleblanca]

11:30 AM on 11/13/2010

Glenn Beck says, "Buy gold."

That tells us everything one needs to know on the subject.

[Dewts]

05:13 PM on 11/13/2010

ok, what does that tell you on the subject? what have you learned?

[stealur]

03:23 PM on 11/15/2010

That Goldline loves us. I mean, they take our worthless dollars and sell us precious gold.

[10LittleIndians]

07:18 AM on 11/13/2010

That's all the world economy needs, another bubble that will burst soon.

[Butterfly M]

11:24 PM on 11/12/2010

Here are a couple of Interesting facts.

India has the largest silver collection in the world. But India has not one single Silver mine. There is no natural silver in India. How did they collect so much silver? They have been collecting silvery from around the world since they first discovered silver

Indian household owns more than thrice the amount of gold bullion the India govt has.

[Rohan Kumar]

04:42 AM on 11/13/2010

India never had big Gold mines either...
The stocks of Gold are high despite the looting that occurred during last 1000 years..
Most Gold is in the form of jewelery.
That used to be the housewives corpus fund.

[Lawrence0123]

09:57 PM on 11/12/2010

I want da gold, give me da gold...where da gold at, give me da gold.

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