Remember Peter Schiff? It's Been Ten Years Since

Fractality

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Paper currency as opposed to what? Cows and Bags of rice? Of course they are going to have to continue to use the standard issue fiat currency while its still supported. Some are going to alternatives like Bitcoin as well though. Most Gold bugs that also sell the stuff and not just talk about it tend to acquire their own personal holdings. Its not like they just stuff their mattresses with paper dollars

Absolutely right you are and I'm just over here trying to determine if I should continue to sit on cash, invest in equities, invest in "paper" gold, or purchase physical PMs. All this is stressful. What would Dr. Peat do?
 
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yerrag

yerrag

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Absolutely right you are and I'm just over here trying to determine if I should continue to sit on cash, invest in equities, invest in "paper" gold, or purchase physical PMs. All this is stressful. What would Dr. Peat do?

I trust Peat a lot. Don't make me lose my trust. :D
 

Tarmander

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Really not much has changed since 2009. Prescious metals continue to hold their value somewhat after coming down from 2011. If gold had crashed into 200/oz range and demand died, then that would be something... but there is really a large demand out there.

The stock market is full of money that doesn't want to be there. It goes there to flee the tax man and inflation. At some point that will come home to roost.
 

Queequeg

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The problem with gold is that there is no restriction on the amount of "paper" gold being created such as ETFs. Supposedly it all needs to be backed by physical gold but then this gold is often loaned out to back other derivatives or obligations. The same bar of gold can have many claimants to it. What you have in essence is the price of gold is determined by fiat just like the currency. Unless the whole system comes apart gold will never be allowed to rise in value to where the bugs think it should go.
 
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The problem with gold is that there is no restriction on the amount of "paper" gold being created such as ETFs. Supposedly it all needs to be backed by physical gold but then this gold is often loaned out to back other derivatives or obligations. The same bar of gold can have many claimants to it. What you have in essence is the price of gold is determined by fiat just like the currency. Unless the whole system comes apart gold will never be allowed to rise in value to where the bugs think it should go.

The price of gold is determined by supply and demand, not by fiat. The whole point of having a very small amount of gold (or other commodity) in one's portfolio is that on the off chance that everything goes to ***t and society as we know it collapses, an increase in demand for gold will send its value through the roof and one can therefore (theoretically) retain most if not all of his net worth.
 

Queequeg

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The price of gold is determined by supply and demand, not by fiat. The whole point of having a very small amount of gold (or other commodity) in one's portfolio is that on the off chance that everything goes to ***t and society as we know it collapses, an increase in demand for gold will send its value through the roof and one can therefore (theoretically) retain most if not all of his net worth.
Only if the world turns to ***t. Right now the price of physical gold is suppressed by gold derivatives and ETFs that can be made out of thin air like fiat money. Most people who think they own gold will never see it if the economy comes crashing down unless they have it in their own vaults.
https://srsroccoreport.com/record-10-trillion-paper-gold-trading-market-continues-to-depress-price
 
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Only if the world turns to ***t. Right now the price of physical gold is suppressed by gold derivatives and ETFs that can be made out of thin air like fiat money. Most people who think they own gold will never see it if the economy comes crashing down unless they have it in their own vaults.
https://srsroccoreport.com/record-10-trillion-paper-gold-trading-market-continues-to-depress-price

If it was a sudden crash, as in an unexpected nuclear attack or something, maybe. But in the majority of scenarios, ones with more gradual but foreseeable crashes, I think we'd see gold and other commodities continually creep up in value as people traded in their paper claims for the real stuff, emptying the vaults before the market was entirely decimated.
 

Tarmander

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Only if the world turns to ***t. Right now the price of physical gold is suppressed by gold derivatives and ETFs that can be made out of thin air like fiat money. Most people who think they own gold will never see it if the economy comes crashing down unless they have it in their own vaults.
https://srsroccoreport.com/record-10-trillion-paper-gold-trading-market-continues-to-depress-price

I think this is half true. ETFs and futures definitely suppress the price of gold, but large gold miners and hedgers use the futures market to protect their profits and production. So there is definitely a real world connection between gold and it's derivatives. When you look at cost of production you also do not see a huge gap between it and the gold price. So maybe being more liquid suppresses the price of gold a bit but it isn't as large as some make it out to be...if it was you'd see production costs much higher then market price which would lead to market opportunities.
 

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