The Real Story of Gold

[maokoto]

Gold will always a good value in my opinion, as it is scarce and is a useful metal (jewelry, conductive properties, ductile etc.)

I love Bitcoin, but it only has value because we agree that it has. Gold has intrinsic value (it is useful per se) just as potatoes 

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[malphite]

I still love gold, because people can touch, wear it, and use it for cosmetics.

So the value has all around appeal for most people. And as long there is a demand for it, I see profit.

[HarHarHar9965]

I still love gold, because people can touch, wear it, and use it for cosmetics.

So the value has all around appeal for most people. And as long there is a demand for it, I see profit.

Dude, people wear their underwears everyday too. You can touch it and fucking wear it as a cosmetic if you are into that shit, its not about the extra features it has to offer man, if that's how you feel about an asset or a currency. The only reason there is demand for it is because of its historic existence from decades, if you measure gold in comparison of bitcoin regarding percentage increase in potential, you'd know where to really see profit.

[pitham1]

I still love gold, because people can touch, wear it, and use it for cosmetics.

So the value has all around appeal for most people. And as long there is a demand for it, I see profit.

Dude, people wear their underwears everyday too. You can touch it and fucking wear it as a cosmetic if you are into that shit, its not about the extra features it has to offer man, if that's how you feel about an asset or a currency. The only reason there is demand for it is because of its historic existence from decades, if you measure gold in comparison of bitcoin regarding percentage increase in potential, you'd know where to really see profit.

Gold has the faith of governments. Right now, bitcoin is restricted to a community on the internet (and some corporations who see it easing e-commerce transactions). That is a big difference.

[OROBTC]

I still love gold, because people can touch, wear it, and use it for cosmetics.

So the value has all around appeal for most people. And as long there is a demand for it, I see profit.

Dude, people wear their underwears everyday too. You can touch it and fucking wear it as a cosmetic if you are into that shit, its not about the extra features it has to offer man, if that's how you feel about an asset or a currency. The only reason there is demand for it is because of its historic existence from decades, if you measure gold in comparison of bitcoin regarding percentage increase in potential, you'd know where to really see profit.

Gold has the faith of governments. Right now, bitcoin is restricted to a community on the internet (and some corporations who see it easing e-commerce transactions). That is a big difference.

And THAT is the big risk of Bitcoin, being that such a small community uses it.  I like BTC (I have some) and hope that it succeeds, but gold has 5000 years + of history as the best Store of Value.

The central banks hold gold.  So do I.  If any of you have children, you should consider holding some too.  Inter-generational wealth.

[OBAViJEST]

Gold has the faith of governments.

Wait...why?  What's so special about gold, when so many other elements (rarer than gold or not) are just as expendable, but even more applicaple (energy, etc.)

Why do we hoard gold from each other....why can't we see the 'gold' in fort knox (in a way that does not compromise its security)?

Nothing makes sense any more.  The government is fighting the same sort of thing they pretend to venerate.

[deisik]

Gold has the faith of governments.

Wait...why?  What's so special about gold, when so many other elements (rarer than gold or not) are just as expendable, but even more applicaple (energy, etc.)

Because a gold bar will be the same gold bar even in a thousand years, and by holding gold governments assume they will exist no less than that, lol ("Tausendjähriges Reich")...

[pitham1]

Gold has the faith of governments.

Wait...why?  What's so special about gold, when so many other elements (rarer than gold or not) are just as expendable, but even more applicaple (energy, etc.)

Energy? How do you stockpile energy? 
Do you stockpile barrels of oil? Gold is a lot easier to store? It is a no-brainer to use gold as a store of wealth, rather than oil.

[HarHarHar9965]

Gold has the faith of governments.

Wait...why?  What's so special about gold, when so many other elements (rarer than gold or not) are just as expendable, but even more applicaple (energy, etc.)

Energy? How do you stockpile energy? 
Do you stockpile barrels of oil? Gold is a lot easier to store? It is a no-brainer to use gold as a store of wealth, rather than oil.

I think his argument was going to be directed to a government operating on resources based energies, etc. The whole argument about why gold is one of the best storage of wealth is because it has been around from centuries. Not anything as rare as gold has been around for so long, and if it has, it was unable to capture the potential value people have invested in it. Gold fails in functions for an appropriate currency or storage of wealth but it has one of the most major feature: VALUE AND TRUST OF PEOPLE.

[EternalWingsofGod]

Gold has always had political relationships it is simply due to governments holding large reserves of it
When its devalued its usually to harm or leverage out one country or another.
Geopolitics etc.

[Leinaded]

Gold (or any other metal) may not be a perfect monetary system, but given the nature of the elites that humanity must deal with, it may be humanity's best hope.  With the possible exception of Bitcoin, of course.

Hi I want to share my personal opinion about this. The problem here imo lies in the majority of the population don't know really well how money works in our economy.

What makes a currency a source of prosperity?

• Must ease the transaction of assets: for that it must be easily accesible, used worldwide by any person and be easily exchanged (gold does not fit in this rule since it has a limited quantity)
• Its market capitalization, ie total volume of currency, and its rate of issuing by each country or entity must be tied to some form of quantifiable asset owned by the agent wanting to issue the currency: here lies the elephant in the room, what most experts think is the root of the cyclical economic crises the world has; the Fractional Reserve Banking system that allow the banks to only have a 10% of the total of deposits backed by cash-on-hand available for withdrawal. This extends to loaned money so the 10% rule can be reapplied to issue 10 times more money than the bank has over and over again. A recent example of the implications of this system is the intervention of the Bank of China to save its economy by lowering interest rates on its loans. Companies on the verge of bankrupcy can ask for loans at low interest rates to rebuy their stock and inflate its price artificially without any real growth of the company. The stock market will reflect an economic growth but this will be all fake. This, in my opinion will lead to a bigger economic meltdown when those loans are overdue.
• Must be widely accepted and trusted: gold is falsifiable and difficult to track down, you need some form of verification of the metal and when you need to make big transactions it becomes a problem to check every ingot. The only solution that gold contribute is that one mentioned before of representing a quantifiable asset to back currency issuing, for example if the reserve banking system would be abolished. A better quantifiable asset would be an accurate measure of a country industrial power, enterprises, natural resources, but I admit gold (as diamonds, gems or any other scarce resource), in this case would be more comfortable to measure than a country real assets and resources. But imagine we use diamonds, South Africa with its diamond mines would be allowed to issue much more currency than the rest of the world when its growth is not much bigger if not much smaller than other countries. For that reason it is better to establish an inventory of the total of resources, enterprises and industries available to each country or corporation as a mean to establish its assets. Any other way is opening the door for speculation and repeat past mistakes. What leads me to my next point.
• Must not be object of speculation: as I mentioned before when you tie the market cap to an accurate measure of a country assets you can't create artificial scarcities or flood the market with stocks to drive the price down (in this case the trackeability helps to fight this as well). You know something is wrong in the market when you can buy contracts for several tons of aluminum when you aren't going to use that metal for anything productive, just to speculate on the price. Is famous the story of Wall Street brokerage firm that bought several thousands heads of cattle to speculate on their price but forgot to sell them and they ended paying more than what they invested to rent a place to store the cattle and feed them. To avoid speculation a currency with a trackeable source is specially useful since it allows to know if the buyer is an enterprise in need of the resource or a speculative party. Gold is difficult to track and our paper money can be tracked but needs intervention by the government. Some cryptocurrencies allow a easier tracking by normal citizens and even its automatization and implementation of more security measures as they are open source and constantly evolving, adapting to the new needs of the population.

As you see cryptocurrencies comply with most of these requirements and if not they can evolve and address those needs. Gold only use is to give some form of material backing to the currency issuing but is a lacking way to quantify value as mentioned in the post. The only flaw of cryptocurrencies is they need some sort of computational power, a physical support open to attack or malfunction but that happens with any form of currency we choose as anything can be stolen. When cryptocurrencies improve the redundancy of their storage wallets and the majority of the population learn to use it the malfunction flaw will be addressed.

[OBAViJEST]

Does anyone know the last time a government actually  proved what amount of gold they claim?

...and what happened to all of Gaddafi's?

[deisik]

Does anyone know the last time a government actually  proved what amount of gold they claim?

The last credible audit of the gold at Fort Knox (the US gold) was carried out in 1953, that is more than 60 years ago...

[RealBitcoin]

I think if you really categorize precious metals as money, then I think only silver is a real "precious metal" money.

Gold still suffers from lack of divisibility which is a core property of money. Prices are generally relatively too low for gold, so this makes trade very difficult with standardized gold coins or gold cubes.

So for everyday goods standardized silver coins, cubes or rounds are a better physical "money".

Perhaps if you want to go higher then use electrum coins with standardized purity ratio, but other than that gold is only for rich people.

But i told you guys already that even if these metals serve as money, bitcoin is still way better than them.

[deisik]

I think if you really categorize precious metals as money, then I think only silver is a real "precious metal" money.

Gold still suffers from lack of divisibility which is a core property of money. Prices are generally relatively too low for gold, so this makes trade very difficult with standardized gold coins or gold cubes.

So for everyday goods standardized silver coins, cubes or rounds are a better physical "money".

Gresham's Law

[bryant.coleman]

The last credible audit of the gold at Fort Knox (the US gold) was carried out in 1953, that is more than 60 years ago...

The last complete audit was in 1953, but partial audits were conducted several times after that. For example, a partial audit in 1986 covered around 97% of the government owned gold held in Fort Knox. That said, only around half of all the American gold is stored in Fort Knox. Out of the 7,716 tonnes of gold being held by the United States Mint, some 4,583 tonnes is being held at Fort Knox. The remainder is being held at Denver (1,364 tonnes) and West Point (1,682 tonnes).

https://www.fiscal.treasury.gov/fsreports/rpt/goldRpt/current_report.htm

[deisik]

The last credible audit of the gold at Fort Knox (the US gold) was carried out in 1953, that is more than 60 years ago...

The last complete audit was in 1953, but partial audits were conducted several times after that. For example, a partial audit in 1986 covered around 97% of the government owned gold held in Fort Knox. That said, only around half of all the American gold is stored in Fort Knox. Out of the 7,716 tonnes of gold being held by the United States Mint, some 4,583 tonnes is being held at Fort Knox. The remainder is being held at Denver (1,364 tonnes) and West Point (1,682 tonnes).

https://www.fiscal.treasury.gov/fsreports/rpt/goldRpt/current_report.htm

It is an official story, lol. But there are no audit reports from that time. The US government is said to have lost those reports (for the audits held in between 1974-1986), wtf

[OROBTC]

The last credible audit of the gold at Fort Knox (the US gold) was carried out in 1953, that is more than 60 years ago...

The last complete audit was in 1953, but partial audits were conducted several times after that. For example, a partial audit in 1986 covered around 97% of the government owned gold held in Fort Knox. That said, only around half of all the American gold is stored in Fort Knox. Out of the 7,716 tonnes of gold being held by the United States Mint, some 4,583 tonnes is being held at Fort Knox. The remainder is being held at Denver (1,364 tonnes) and West Point (1,682 tonnes).

https://www.fiscal.treasury.gov/fsreports/rpt/goldRpt/current_report.htm

It is an official story, lol. But there are no audit reports from that time. The US government is said to have lost those reports (for the audits held in between 1974-1986), wtf

Great thread, lots of useful information here that I did not previously know, and I follow gold closely.  Clearly gold is a BIG subject.

I believe that an "Audit of US National Gold" would cost peanuts, relatively speaking.  Hell, even I could put a team together to do a proper audit (that would include several kinds of specialists like metallurgists, testing equipment, auditors & accountants, statisticians, security, credible representatives from the press, etc.) and do a reasonably good job, for, say $5,000,000 (it would cost, but $5 million is PEANUTS vs. the value of the gold we supposedly have).

Such a comprehensive Audit, visible to the world and done by competent specialists, would END the the matter once and for all.

[bryant.coleman]

^^^^ I am afraid that it will cost much more than $5 million. The auditors need to check the authenticity of gold, which itself can be quite time consuming as well as expensive. Then they need to determine which bullion bar belongs to which department of the United States treasury. It is quite time consuming, but not impossible to put in to action if we consider the total worth of the gold.

[OROBTC]

...

bryant.coleman

Yes, it would cost money.  $5 million indeed might be too low, I was making a mental calculation in hatching that number.

An adequate team would indeed be necessary to do a reasonably thorough job of an Audit.

But, I put "statisticians" in my list for a reason.  Were it me (oh, what fun!), I would walk into each room at Ft. Knox, and say: "unstack that pallet right there.  OK, take THAT bar in the middle with that number, core it, and check its (core) purity.  Oh, and THAT one over there in the corner.  And THIS one in Room B, melt the whole thing down and assay it."  Etc.

I think that a well-chosen PORTION of each gold pile would be enough to satisfy everyone that the gold amount is pretty close to what they claim.

I don't think it would cost a fortune.  And it SHOULD be done.  Perhaps it would cost the government MUCH less, as I am sure there would be LOTS of volunteer experts (high visibility!) who perform some of those services GRATIS!