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Author Topic: Did gold ever drop to worthless?  (Read 5663 times)
Rocketfella
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June 08, 2011, 09:26:30 PM
 #1

I wonder about the history of gold. When it was new, it was only used for cheap jewelry, since you can't create tools with it. Then people somehow decided that it was valuable.

My question is, was there ever a time in human history, when everyone decided "Well, gold is not really worth anything!"? Of course, the value of gold fluctuates a bit, but was there ever a drop to zero? Why, why not?

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June 08, 2011, 09:34:38 PM
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Gold does not oxidize

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MarketNeutral
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June 08, 2011, 09:43:30 PM
 #3

Has never dropped to zero.

And that goes back to Mesopotamian times and even earlier.

The ancient Egyptians used gold bars as money among the nobility. Greeks. Romans. Aztecs. Incas. China. Japan. India. You name it. They all valued gold as a store of value. (not necessarily always units of account or units of exchange. Sometimes gold was viewed as being too precious to be mere money.)

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June 08, 2011, 11:09:56 PM
 #4

Has never dropped to zero.

And that goes back to Mesopotamian times and even earlier.

The ancient Egyptians used gold bars as money among the nobility. Greeks. Romans. Aztecs. Incas. China. Japan. India. You name it. They all valued gold as a store of value. (not necessarily always units of account or units of exchange. Sometimes gold was viewed as being too precious to be mere money.)



Well bitcoin is also too precious at the moment just to be a currency. Hence people are hording and saving them.
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June 08, 2011, 11:32:25 PM
 #5

Gold has never dropped to 0.

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June 09, 2011, 01:48:54 AM
 #6

Neither has Silver.

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June 09, 2011, 01:54:40 AM
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In the Inca/Aztec civilizations, they had an over abundance of it and I don't think it was nearly as highly valued as the rest of the world considered it.
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June 09, 2011, 02:07:10 AM
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Is anything actually ever worth nothing?

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June 09, 2011, 02:13:06 AM
 #9

Is anything actually ever worth nothing?
Sure, dependin on where it is.

Try to transport your gold out of country.  With BTC it's easy.  With gold, not.  The disadvantage of gold has always been the transportation of it.  It's not efficient as a means of exchange.  Bitcoin is.  They also both share a high input energy to mine, which creates value according to the labor theory of value.

Gold is pretty much worthless as a commodity.  Gold is the most irrational commodity that humans trade.  It has no use other than it's shiny and it's perception of value.  Only a true idiot would believe gold has any meaning or value.  It is a business though and a very profitable one.  Where profit exists, money will follow.
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June 09, 2011, 02:38:23 AM
 #10

During periods of USSR and Chinese communist regime, hiding gold at home was a crime and could land you in jail. You can say gold had negative value (liability) under these circumstances.

To be sure those were abnormal situation, but it may be exactly where US is headed.
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June 09, 2011, 02:46:40 AM
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During periods of USSR and Chinese communist regime, hiding gold at home was a crime and could land you in jail. You can say gold had negative value (liability) under these circumstances.

To be sure those were abnormal situation, but it may be exactly where US is headed.


During those and similar regimes throughout history, holding gold could also save one's life, as it has paid for safe passage for countless people. How much value should one assign this lifesaving asset? Many countries, including the USA, have included gold with other provisions for soldiers going into hostile territory.

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June 09, 2011, 05:05:20 AM
 #12

Has never dropped to zero.

And that goes back to Mesopotamian times and even earlier.

The ancient Egyptians used gold bars as money among the nobility. Greeks. Romans. Aztecs. Incas. China. Japan. India. You name it. They all valued gold as a store of value. (not necessarily always units of account or units of exchange. Sometimes gold was viewed as being too precious to be mere money.)



Well bitcoin is also too precious at the moment just to be a currency. Hence people are hording and saving them.

Just yesterday I made a payment in bitcoins.
Raize
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June 09, 2011, 05:11:06 AM
 #13

After Gold hit $800/ounce in the 1980s it fell over time to under $200/ounce at or around 1999. Silver fell from somewhere like $50/ounce to under $4/ounce. It's all relative, though. You really shouldn't look at Bitcoins as an investment, you should look at it as an online currency. Buy what you want to use and be done with it. If you're looking for an investment vehicle you're only going to end up disappointed in the long run.

That being said, I think Bitcoin will crash down to current levels at some point in the far future after it's already risen well past $100/coin.

Of course, if the US made it illegal or confiscated all coin/dollars at MtGox it would be a huge blow. We'd see $2-$4/coin essentially overnight.

EDIT: (3/11/2013) I underestimated US judiciary influence in Japan, and the likelihood US interests were in conflict with Bitcoin. I thought for sure there'd be pressure to confiscate assets at MtGox. There wasn't nor ever has there been. Given this all happened after the CIA met with Gavin, it sounds like the US is OK with MtGox's existence, and the intelligence community is OK with it, too. My $100/coin prediction didn't happen, either, but my $2-$4 estimate wasn't too far off as far as support levels go.

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Reikoku
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June 09, 2011, 05:13:47 AM
 #14

The US can't confiscate anything at MtGox. MtGox is based in Japan.

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Marlsfarp
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June 09, 2011, 08:10:24 AM
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My question is, was there ever a time in human history, when everyone decided "Well, gold is not really worth anything!"?

Everyone decided it was worth nothing? I don't think so. But then, you could say that about virtually anything. Acorns have never been "worthless."

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June 09, 2011, 11:29:40 AM
 #16

run trade sites over Tor and problem solved

Perfectly doable and pretty easy so long as the person hosting it doesn't get involved in holding money on the accounts.

Such sites would be a much more organized version of #bitcoin-otc.

Relay chat and the web of trust works fairly well.  GPG authentication takes 2 seconds once you know what you are doing.

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GideonGono
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June 09, 2011, 04:46:59 PM
 #17

Well, the only reason that gold or any other currency has is that you know that someone else will accept it in exchange for what you want. So I'd image gold only becoming worthless during catastrophic disasters where the only things of value are water, food, shelter etc.

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June 09, 2011, 07:14:56 PM
 #18

I know some jews sold their gold stash for a bit of food...
Raize
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June 10, 2011, 01:40:50 AM
 #19

The US can't confiscate anything at MtGox. MtGox is based in Japan.

Mutum Sigiligum is registered in Delaware. Even if all physical assets reside in Japan all it takes is a phone call to extradite someone. Additionally, a judge could issue an injunction requiring that MtGox ceases all transfers of US Dollars. Then how are you going to get your money back out of MtGox?

But don't even bother answering that question for the moment, answer this one instead, who is going to be buying Bitcoin if no one can transfer USD into MtGox?

I think the OTC trades on IRC can do well, but they aren't going to sustain the price of BTC alone.

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Yequan
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June 10, 2011, 07:49:11 AM
 #20

With the British group is easy. With the gold, but is not. The disadvantage is that it has been the gold traffic. It is not efficient, as a means of communication. Bitcoin's. They also have a high input energy, mining, and create value based on the labor theory of value....

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