Gold and precious metals as "Money"

[explod]

I do think the value of gold is largely symbolic, like cuttlefish has said. It has value because people "believed" it has value.

I agree with most people that it is better to hoard food and weapons than gold.

I believe that religion is largely sybolic also but you try telling that to Christians and Muslims.

The books I read a few years back of the forthcoming gold surge recommended storing food when it really starts to hit the fan. We are getting closer but have to have some gold to keep some leverage in case the world survives.

 

[prawn_86]

We are getting closer but have to have some gold to keep some leverage in case the world survives.

Yeh it depends on the scenario.

Total catastrophic, apocalyptic scenario gold will be worthless also. Food, seeds, guns are what you want.

Big depression where the 'system' remains intact, gold is probably a better 'hedge'

 

[shaunQ]

I reckon salt is the way to go. With no electricity salt will be essential.

 

[prawn_86]

I reckon salt is the way to go. With no electricity salt will be essential.

Salt is fairly easy to collect. Depends to what scale though i guess

 

[Ageo]

Ok besides barter what else can be used as currency? you see people say if the world collapses people will have no need for gold/silver etc.. but thats crap because there will always be wealthy people who are looking for those precious metals for various applications. Gold (like cash) is widely accepted as currency, for instance if you goto some small villages in south america gold and silver is the only form of payment they accept (not diamonds, platinum and other PM's, stones etc..).

At the end of the day currency will always be accepted and used which means people will always want to source it.

And to answer your question in todays terms why can i use gold to purchase things but when i offer diamonds, other stones and other precious metals they dont accept? (and yes i buy alot of things with gold believe it or not).

Its quite simple, gold is gold and in my lifetime it wont change.

P.S there will never be a define reason why gold is what it is but put simply people have accepted it as currency.

 

[numbercruncher]

Yup gold is gold ----- borderless, the only true global currency.

 

[wayneL]

...for instance if you goto some small villages in south america gold and silver is the only form of payment they accept (not diamonds, platinum and other PM's, stones etc..).

OK this is really where my question was leading.

Can you supply more details about this... a link or something. I want to see if/how "gold as money" works in practical terms.

How do I buy a bowl of Llama soup in these villages as I'm trekking through?

 

[Sean K]

OK this is really where my question was leading.

Can you supply more details about this... a link or something. I want to see if/how "gold as money" works in practical terms.

How do I buy a bowl of Llama soup in these villages as I'm trekking through?

The only place in Sth America you might be able to trade gold for anything else is at the border of Brazil and Venezuela in a town called Santa Elena which is a well known black market/money laundering post for illicit goods out of Colombia, Peru, and Venezuela. Coke turns to gold here.

Otherwise, I don't seem to be able to trade my bottle caps for a grande latte at Starbucks in Miraflores.

 

[sinner]

Otherwise, I don't seem to be able to trade my bottle caps for a grande latte at Starbucks in Miraflores.

You know we are screwed when there is a Starbucks in Peru and not here.

Long Peru/Short Gold!

 

[wayneL]

The only place in Sth America you might be able to trade gold for anything else is at the border of Brazil and Venezuela in a town called Santa Elena which is a well known black market/money laundering post for illicit goods out of Colombia, Peru, and Venezuela. Coke turns to gold here.

Well at least the Drug barons will be able to afford Llama soup. :

Otherwise, I don't seem to be able to trade my bottle caps for a grande latte at Starbucks in Miraflores.

I don't know why you would want to trade even bottle tops for a Starbucks coffee... it's shyte.

BTW, real men drink short blacks... double shot, without sugar.

 

[Sean K]

BTW, real men drink short blacks... double shot, without sugar.

Haven't graduated to that.

Maybe once I hit your old age...

:

 

[MRC & Co]

Fiat currency has the lowest transaction costs, hence why it is used.

If you don't use any form of 'currency' then you may as well just barter for everything, which creates the highest form of transaction costs possible.

Imagine spending hours of your day bartering your goods or services, which are always changing relative to the value each person gives each good or service at that particular point in time. No thanks. Mr Market and some common denominator (whether that be gold, silver, copper, fiat currency or whatever) will do me fine.

 

[wayneL]

Haven't graduated to that.

Maybe once I hit your old age...

:

Oooooh!! Touche'

LOL

 

[Ageo]

OK this is really where my question was leading.

Can you supply more details about this... a link or something. I want to see if/how "gold as money" works in practical terms.

How do I buy a bowl of Llama soup in these villages as I'm trekking through?

Well i dont have details on which villages accept gold as payment but i know many places (not just south america) accept gold as payment (friends who have been etc..).

To answer your question about values etc... if you only had gold then granules would be the best bet (0.1gram, 1/2 gram, 1 gram, 5 gram etc......) they would test to see if its pure and weigh for value. But of course silver and bronze were used for lower denominations in the olden days. Gold can be formed into any shape and weight (1/2 a gram is about $25AUD).

So if you went in for llama soup and it was $1 ideally silver would be the best option.

Think of it like this, silver is like coins (lower denomination) gold is like paper (higher denomination).

Making a little sense?

P.S i remember watching a show about gold where they were showing villages in south america weighing gold and using it as a currency for goods (1 person was buying 3 goats but i forgot how much gold it was for payment).

 

[moXJO]

OK this is really where my question was leading.

Can you supply more details about this... a link or something. I want to see if/how "gold as money" works in practical terms.

How do I buy a bowl of Llama soup in these villages as I'm trekking through?

The old gold prospectors would pay in gold. And it was pretty lawless back then on the goldfields (closer resemblance to a breakdown of the monetary system). I know it’s a bit different from using gold today (stored and not dug up). They would use a pinch of alluvial for smaller items

 

[Sean K]

Well i dont have details on which villages accept gold as payment but i know many places (not just south america) accept gold as payment (friends who have been etc..).

No, you can not accept gold for anything but cash in some 'pawn' like shops anywhere that I have travelled. And, the exchange is pretty crap anyway from what I've seen in Sth America. It's only worthwhile if you are the person that has dug it up, or stolen it, not bought it originally from another vendor.


To go back to using PMs as a form or currency, we'd have to either distribute the 'currency' in small enough forms to make it practical, or increase costs to meet the weight. I think we might be walking around with tiny balls of silver to pay for those mixed lollies.

Is there another alternative?

 

[MR.]

The thing is gold is converted into fiat money for its value to be recognized. For example Ageo is converting gold/silver/bronze in the appropriate portion to equal a particular piece of currency before a trade. Are we going in circles? We already have a currency. What value does an ounce of gold now fetch? It’s valued in fiat money and we accept it.

“Gold is just like any other object” and is certainly not recognized as a form of currency. Can it be used for bartering? Yes! But so can any “object.” How will we define if the trade is fair? Convert it to a currency. Because that is how we value products and services.

Why hoard gold just to be confiscated if it was to became currency? Confiscated at a set amount in return. Gold will be formed into such a shape to represent a currency. What value is set for that disk?

Heard it before.......... “CASH is king.” To a point. Cash will be converted into objects at some stage. If the currency looked like collapsing or not. If a collapse, those objects will be objects that you can use. Gold certainly will not be high on the list, but still makes the list. Land for example will be high.

Is there an object to replace money? No.....

If money was to become worthless "any" objects will be fine because another currency will be born and those objects, whatever they are will have a value in the new currency.

Gold "might" or "might not" become a world currency but that would be the least of our worries will it not?

 

[Sean K]

I do have a good friend in Sth America who did give up their gold necklases, gold rings, mobile phone, and laptop, for the price of a taxi....

Wonder if we'll all get to that stage shortly?

Fighting for scraps of meat in the street?

 

[sinner]

OK this is really where my question was leading.

Can you supply more details about this... a link or something. I want to see if/how "gold as money" works in practical terms.

How do I buy a bowl of Llama soup in these villages as I'm trekking through?

Is that all you wanted? Here ya go, a contemporary example:

http://www.marketoracle.co.uk/Article8947.html

Arabs have always used gold for their store of wealth. They probably always will.

A snippet

The most convincing argument for such an interpretation is that having a gold/silver backed currency is considered the final leg to remove Riba (ربا ‘interest' or ‘usury') from the financial system, which is forbidden arcording to Islamic economic jurisprudence .

 

[nunthewiser]

I
Wonder if we'll all get to that stage shortly?

Fighting for scraps of meat in the street?

Not me ......... i,ll be swapping a piece of my gold for a nice looking cow as stated elswhere in these forums



hahahahha i just read back my post ....... take it how you will