Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Hate to break it to you, but everything is subject to "improvements in production methods".
You didn't break anything to me.
I said that comparing gold with something that is dropping like a rock in price
and has done so every year either of us has been alive isn't very useful.
Improvements in production methods in bread aren't a significant factor.
Improvements in production methods of the production of oil are irrelevant in the price.
"Oh gosh! I guess you'll discount that next 100 barrels for me since you have so much better pipe!" Get real.
Next, you'll say that automated sewing machines have really effected the price of a fine man's suit.
I said that comparing gold with something that is dropping like a rock in price
and has done so every year either of us has been alive isn't very useful.
It isn't useful to compare the price of gold to anything, gold is a volatile speculative asset.
Quote:
Originally Posted by mortimer
Improvements in production methods in bread aren't a significant factor.
Oh yes, clearly farming technology and automation hasn't been a significant factor in food production. C'mon....seriously?
Improvements in oil extraction methods are by no means "irrelevant", they effect the underlying cost of oil in many ways. But there is a limited supply of oil regardless of extraction costs and this effects the price of oil as well.
Fine suits are still largely hand sewn, though the fabric is manufactured by machines. But this hides another issue, manufacturing costs are only one component of retail pricing.
Not over generations. That is what is being compared.
Quote:
Originally Posted by user_id
Oh yes, clearly farming technology and automation hasn't
been a significant factor in food production. C'mon....seriously?
We are not talking about production. We are talking about pricing.
Quote:
Originally Posted by user_id
Improvements in oil extraction methods are by no means "irrelevant" ...
Yes. They are totally irrelevant - just as the improvements in the production of gold.
No one cares what your cost of production is for commodity items like bread and
copper and other stuff that is substantially the same as it was in the 1920's.
If you are producing your product at a loss, that is irrelevant to market value.
When doing that, it is reasonable to compare the relative value of oil to corn
or copper to iron and the average wage and the price of a good breakfast. and so on.
When you look across the 4 1/2 generations a $20 bill ( an old, worn-out,
non-collector bill ) and a $20 gold piece have diverged in value in terms of
all that stuff like suits, bread, oil, or anything else you want to imagine.
Not over generations. That is what is being compared.
If you're comparing long-term gold prices, then you need to look at a 30~40 year average rather than current prices. But still, what is the point? Its a speculative asset.
Quote:
Originally Posted by mortimer
We are not talking about production. We are talking about pricing.
Umm.....production and pricing are related.... Technology increases productivity which translates into lower prices, the only time this doesn't happen is when you're dealing with raw materials that aren't renewable and hence have a limited supply.
Comparing the current price of gold to other commodities isn't going to tell you anything useful.
every investment depending on the part of the cycle its in is a "speculative asset"
right now bonds can be called a speculative asset. nasdaq at 5000 was a speculative asset.. im not sure of your point. there is nothing speculative about any asset class if its the right time for that asset class.
if its not the right time then any asset can be called speculative.
every investment depending on the part of the cycle its in is a "speculative asset"
right now bonds can be called a speculative asset. nasdaq at 5000 was a speculative asset.. im not sure of your point. there is nothing speculative about any asset class if its the right time for that asset class.
if its not the right time then any asset can be called speculative.
They have nothing to do with the price of bread, oil, gold, men's suits, houses, etc.
Gold as a proper investment is something you buy to hand down to your grandchildren
or to have as the ultimate asset when you have liquidated everything else.
People buying now so they can sell at $2,000 or $2,500 are just buying
the "speculative asset" that you mentioned, but are not gold investors.
There is nothing wrong with speculating in something you know how to trade.
Some people do it in pork bellys or real estate ... stuff like that.
Gold, as an investment, is something that will be worth something substantial
100 years from now. You can't say that about google, apple, or your house.
The gold that China or Korea bought last year is not something that is planned
to EVER be liquidated, but the dollars they hold in reserves are tools to be used
to purchase other assets such as ... oh .... picking at random: gold mines.
It is the above buyers that will be in there buying hand-over-fist - just like now -
at $2,000 and even $3,000 an ounce. You deny that the dollar has depreciated,
but the above buyers and other very weathy individuals know about it.
You were there when gold was $400/ounce - saying "it's a bubble!" "It's going to $100 ..."
They have nothing to do with the price of bread, oil, gold, men's suits, houses, etc.
Sure, if prices were being fixed. But this isn't the USSR, here prices are determined by supply and demand and both the cost and amount of supply is related to production.
Quote:
Originally Posted by mortimer
Gold, as an investment, is something that will be worth something substantial
100 years from now. You can't say that about google, apple, or your house.
You can't say that about gold either, you have no idea how much gold will be worth in 100 years. Its entirely plausible that gold is near worthless in 100 years.
Quote:
Originally Posted by mortimer
You were there when gold was $400/ounce - saying "it's a bubble!" "It's going to $100 ..."
The problem with metals is the manipulation that goes on. It's hard to know what to believe. The fiat currency argument is persuasive, but it's touted by people in the business of selling gold and silver. A real estate person will never tell you that buying real estate is a bad idea. On the other hand, the Chinese, Indians, and lot's of others are buying every dip, loading up. So, who's right?
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
