What can Kill the Oil and Gold Bull?

Discussion in 'Commodity Futures' started by chewbacca, Jul 13, 2006.

  1. DrChaos


    True, but in the case of "money nationalization" the best thing is not to have gold, but your money parked offshore already.

    They can frisk you at the airport, x-ray your luggage and find your gold bars too.

    Probably they'd incarcerate you "as a terrorist financing suspedt" if you tried to do that.

    By the way, historically Jews collected diamonds for the purpose of rapid wealth transfer under duress, as they had to get up and leave right away a few dozen times during history. You can sew a hidden pocket into clothes and put your compressed carbon there.
    #31     Jul 15, 2006
  2. SteveD


    this is why gold is such a absolute horrible "haven" in time of turmoil. It is almost impossible to transport in any meaningful quantity.

    It is silly to say that the $800 high for gold was some abnormal spike. A lot of people bought it at that price.

    The US is the "safe haven" of today's world. The internet has enabled the world to understand the financial markets.

    Look at the Saudi Prince who holds very large positions in AAPL, Citibank etc etc. He is not hoarding gold in some basement vault.

    One can make money trading gold but just don't forget that it is just that: A trading vehicle.

    Cardinal NO. 1. Never believe your own BS, LOL.

    #32     Jul 15, 2006
  3. -Look at the Saudi Prince who holds very large positions in AAPL, Citibank etc etc. He is not hoarding gold in some basement vault.-

    maybe he has positions in the yellow metal or the ETF

    in someone else's vault

    #33     Jul 15, 2006
  4. I think gold is worthless, it's a shiny metal that sits around and does nothing for anybody. I don't care if it's rare cuz it doesnt feed people, it doesnt get people to work, it doesnt make anybody's life easier.
    #34     Jul 15, 2006
  5. oil is the inflation hedge of the 21st century folks...think about it. why would you want a synthetic hedge? ie: gold/foreign currency...those are just some of the options available to store purchasing power.

    in reality, whatever purchasing power unit a nation accumulates will be widely used for the purchasing of oil.

    worried about inflation? Long oil!
    #35     Jul 16, 2006
  6. ...and unbacked fiat currencies are somehow a <i>safer</i> store of wealth? Good luck with that.

    In the early days of the U.S.A., every dollar was exchangeable for 412.5 grains of 90% silver. Paper money was merely a conveniently portable 'place holder'. It was a certificate of entitlement to precious metals held by the U.S. Treasury.

    Up until 1933, a U.S. dollar represented a fixed amount of silver or gold. During the Great Depression, the government stopped this- but still, one could always exchange paper dollars for silver coinage.

    In 1965, the government stopped that too. At that point the dollar went from currency to illusion. Since people were already used to accepting paper dollars as currency, they kept doing so, purely out of habit. If the dollar had started out as the unbacked paper it is today, it never would have gained widespread acceptance in the first place.

    It isn't money anymore, but rather a temporary psychological trick.
    #36     Jul 16, 2006
  7. cam0940


    Bingo. Fortunately there hasn't been a crisis that triggered a run on dollars in several decades, but don't let the relative calm fool you. A paper dollar bill--and therefore all paper assets--have no intrinsic value at all. We happily exchange them just on custom, blind faith, and because it's all many of us have ever known.

    Ask yourself, what really makes a dollar worth a dollar? Because that's what's printed on it? Nonsense. It's only worth what the next man is willing to give you for it. If you don't believe me, ask a Russian.

    Meanwhile, on the subject of price spikes, it is absurd to use a peak price as a base for inflation (e.g. Gold) when everyone knows the underlying asset was on an umpteen hundred percent artificial price spike. Mania. Just like tulips and Qualcomm circa 2000.

    But let's play along with your indictment:

    On February 13, 1973 President Nixon raised the official price of Gold in the United States from $38.00/oz to $42.22/oz. It's around $660/oz now. Getting my drift? If you want to use the $800 as a base, then you would have had a ridiculously gaudy advantage over inflation between 1973 and 1981... in fact... an artificial advantage due to the Silver shenanigans. Over time, which is the great equalizer of aberrations, you see that you would in fact have done just fine vs. inflation, thank you.
    #37     Jul 16, 2006
  8. But hey, all money has always been a psychological trick, whether it's in the form of gold, silver, paper backed by gold, or just paper.
    #38     Jul 16, 2006
  9. cam0940


    #39     Jul 16, 2006
  10. f**k you. posting a sarcastic reply to what i said was real cool. you should proud of yourself.
    #40     Jul 16, 2006