Have You Caught Gold Fever? The Value of That Shiny Metal Is as Artificial as Paper Money

[marmar]

AlterNet / By Scott Thill

Have You Caught Gold Fever? The Value of That Shiny Metal Is as Artificial as Paper Money
The economic doomsters and investment advisers are engaged in a collective hallucination when they see growing value in gold.

March 24, 2010 |


Quick, check out this hot investment tip! For decades now, the Federal Reserve has been suppressing the true value of gold to keep its prodigious impact out of the market, which is currently dominated by fiat currencies like the dollar and light-speed binary code transactions like high-frequency trading. If you stripped away the Fed's continuing manipulation, gold's free-market value, currently hovering around $1,000 per ounce, would increase by multiples. Wait, are you yawning? Why are you leaving?

Here's why: This isn't news. The Federal Reserve, along with investment banks, hedge funds, governments and even you (yes, you), have not been just manipulating the so-called real value of gold and other financial instruments for decades, you've also been manipulating reality itself for centuries. Because gold is just chemical element, or a precious metal as it is called in the business, which means you can't eat, grow or use it to power your house or car.

But what gold is good for, and admittedly has been since the beginning of recorded history, is storing notional value: It is simply an idea made shiny, attractive, and up until our recent Great Depression rerun, pretty lucrative. In other words, it is a hyperreality, a consensual hallucination to borrow a term from novelist William Gibson. It has value as a currency because we decide it does, just like the fiat currency system that replaced it, not because of anything it can actually do on its own.

And the determined devaluation of that notional value has some goldbugs angry. .........(more)

The complete piece is at: http://www.alternet.org/economy/146150/have_you_caught_gold_fever_the_value_of_that_shiny_metal_is_as_artificial_as_paper_money

[hobbit709]

1. The time to buy gold was about 10 years ago.

[TheCowsCameHome]

2. You mean the ads from the New York Mint are fraudulent?

I am shocked, just schocked.

[NJmaverick]

3. Now is a good time to sell gold short

[ret5hd]

4. Are you following your own advice?

[NJmaverick]

5. Only out of laziness, as I would have to figure out how one goes about doing it

and then set things in motion. I am sure I am going to be kicking myself for my lack of action.

[ret5hd]

7. So, at least in your case, the RW meme that "the only reason...

we aren't all millionaires is that we are lazy" is correct. Right?

[NJmaverick]

8. Money is not an obsession with me

I make enough to meet my needs (which are pretty basic) and that's fine with me. If I was that driven by money I wouldn't have spent over 2 decades and over 20,000 hours volunteering my time.

[FSogol]

6. Not me. I wisely invested in comic books. n/t

[Patiod]

9. As a jewelry maker hobbyist, this drives me insane

A lot of people like gold jewelry, and the cost of the gold wire I use for earrings and necklaces is out of my reach because of all this hysteria. And gold plated doesn't hold up very well.

[eppur_se_muova]

10. I'm still keeping my gold tooth.

But then, I didn't really want to give up the original either.

[bvar22]

11. osted this to the other thread:

In 2004, my wife & I initially researched "cashing out" and buying GOLD (bullion or Coins/ not paper Gold) as a hedge against economic/property value collapse.

The more we researched it, the clearer it became that this WAS indeed an artificial market, and we decided not to take that risk. Several countries have the ability to "crash" the price of gold at will by dumping their inventory on the market.
(LOL, IIRC, the price THEN was around $330/oz + Fee). Had we bought THEN, we would have tripled our money.)

Instead, we bought bubble proof property in The Woods, surrounded by extensive National Forest, with an on property Spring for water, and a long growing season.

The Reason: Gold is hard to chew and doesn't taste very good.

However, if you read about the Economic Collapse in Argentina, GOLD was the very BEST medium of exchange during that crisis. (Chains, coins, jewelry)

My wife and I decided we would rather have a tomato.
We are happy with our choice.

[MisterP]

12. I recall a similar "gold rush" back in the late 70s

the economy and dollar were also doing poor then, so
% Robert Ringer's "Restoring the American Dream" (1979), Douglas Casey's "Crisis Investing" (1980), and Howard Ruff tell their libertarian compadres to invest in gold
% the speculation drives up gold, which Ringer has a lot of
% Ringer & friends sell their gold at a profit, leaving the dupes in the dust & Ringer with more $$$ to spread his message that government is strangling America and prosperity, and is dictating to people what to do
it's the same with libertarians across the board: either they're highly-connected PR fiends and billionaires (Mises, Hayek, the Schmitzes, Friedman and Friedman, Stossel, Bohm-Bawerk) or they're genuinely smitten with "the entrepreneur" and hate FDR (Rand, Heinlein, Frank Van Dun)
in the 90s and 00s we had Michael "Savage" peddling goooooold--but like Dennis "Bed-Wetter" Prager, he became subsumed into the meth-fueled weeping machine that is Glenn Beck

[Recursion]

13. I've never understood people who think gold is "intrinsically" valuable

I mean, sure, it has some industrial and artistic uses that give it value, but if the dollar collapses, gold won't help you either. You'll need stuff you can eat, drink, live in, drive, or shoot.

[grahampuba]

15. the folly of rulers.

you mean a non oxidizing super malleable highly conductive material?

you cant eat gold yeah, and there is a chance you'd get robbed or worse for your stash, or you might get stuck with those salted tungsten bars.
but for the articles author to deny golds intrinsic value is a little daft,

is there anything else besides land that has been considered an item of value for longer?
and you cant eat land for that matter either. and if the dollar collapses, No Trespassing signs and the county ledger aren't going to really maintain any of your previous boundaries.

quote me on this.. gold will forever be a global currency.

[Recursion]

16. Nope. Gold has no inherent value outside of its industrial use

Exactly like US dollars, we all agree it's valuable, so people pay a lot for it.

[grahampuba]

17. ive heard that line before...

the 'no value outside of its industrial use, which has been declining' is the line my familys' financial advisor told me August of 2008 (gold @ 726/oz)
currency is a necessity of our world.

[paulsby]

14. i caught gold fever in 1997

when everybody HATED gold. you couldn't even get a gold quote (you had to look for it really hard) in financial papers, etc.

THAT's when you buy an asset.

i started buying MIDSX at that time

buying an asset that's been in a major bull market for years is STUPID.

that's how (idiots) got burned in real estate

it's the same story and has been for centuries. idiots who jump in too late have only themselves to blame

i'm not saying i know gold won't keep going up

i am saying the risk'reward ratio sucks right now