i never stated baseball cards were more stabel than gold
Really not a "simple test". And you expect every transaction in a store or something to test the gold to make sure it is pure? You can still cheat the gold system, don't pretend you can't. And God probably didn't make gold
Actually it is, you have to move your index finger and understand sympols like numbers and points
It was an analogy.
Yea the cost is pretty high to do all that. Anyway, I am done discussing counterfeiting- it is not an issue. If you want to defend gold as a currency keep doing so, but this point frankly does not matter enough when it comes to determining which currency is sensible.
In response to clax from his post here: http://www.politicalfray.com/showthread.php?p=28594#post28594
It has! How many times do I have to show you: http://goldnews.bullionvault.com/files/real_gold_price_2.png
That uses the dollar as a bench mark, and which comoditys is it referring to.
If comodities where the benchmark, and the graph showed dollars verses gold I think it would look very different. All this graph proves is that if you have a bench mark that bounces around then your data will to.
Did you just skip my whole part about real vs. nominal earlier?
This is in REAL terms. In other words, inflation is adjusted for. The inflation of the dollar does not matter here because it is factored out. What they did was take the value of the dollar at one point in 2000 (let's call that time point t=0). They then plot the value of gold throughout those years vs. the value of the dollar at t=0. The value of the dollars is constant in that graph- it is that at t=0. Only the relative changes in gold value are seen. This is how economists determine real returns (returns accounted for inflation) for any asset.
Also, there are 2 graphs in that image if you look closely. The yellow line is the one of the value of gold vs. the constant USD (t=0, 2000). The red one is a commodities index at t=0 in the year 2000.
Okay, could those spikes and drops have anything to do with issues other than value of the dollar, like a cold war, trust being lost in the dollar. Trust being lost in the fed, vise versa. It is a fact that people buy gold more when the dollar is threatened. Being that gold is a tangible asset and a dollar is not
Yes I agree that people buy gold and it is affected by the Cold War, etc. But that is exactly why it is not a good currency. A currency should be a relatively stable store of value, not something that bounces up and down so that 1 gold coin might buy you a carton of milk one day, 1/4 carton the next, and 6 cartons the day after that (excuse the hyperbole, but you get my point).
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But the dollar has not been, 2221% inflation sence 1912, that isnt stable over 100 years.
2012 a penny is unable to perchise anything yet a tenth of an ounce of gold, estimating that gold trades for 1400 dollars an ounce, a tenth of an ounce is worth 140 dollars, it would seem, that the dollar has suffered masive inflation, but the gold has suffered minor deflation. Minor deflation seems more stable than massive inflation.
I don't need any graphs to show that a dollar in 1912 was far more valuble then a dollar in. 2012. Gold has stayed relitively level deflating a bit.
Like I also said earlier, take the value from 1971, the year gold was no longer tied to the dollar. You have had 225% inflation since then versus what should have been 467.4% if the Fed committed to long-term 2% annual inflation on the dot. Definitely not bad. The Fed's recent track record is good.
And before you ask why we should have any inflation at all- the answer is because it is the best of the options. Switching between deflation and inflation screws up expectations and the deflationary periods hurt especially due to price stickiness, potential spirals, etc. And why a deflation target does not work- again stickiness hurts. As for 0% consistently (day to day), it is not possible- we just don't have the tools to do it and probably never will.
It is subject to demand changes, so its real value increases and decreases. The same is true of the USD, except that using a variety of policy options, the Fed can counter these changes by changing the supply of USD.
Can you please read what I wrote again? The 467.4% figure was what the dollar should have inflated over that time span at a 2% annual inflation rate. We actually had less inflation than that.
As for your generalizations about the USD demand going down considerably and gold demand up, do you have data to support those claims? Because I know for a fact it is not consistently true especially if you are talking about over the last decade, 2, 3, or more. Again, I am all for logical discussion, but generalizations like this based on just a hunch and not actual data annoy me, especially when people try to pass them off as fact.
Why are you asking me this? Can you answer the questions I gave you before first or do you admit you made it up?
As for how much the value of gold has changed since 1965 you can see here and calculate it yourself if you want to (or look it up): http://goldnews.bullionvault.com/files/real_gold_price_2.png
If gold in flated sence 65 then the dollar has massively inflated, becuse it now sits at 1400 dollars an ounce and in sixty five roughly 40 dollars an ounce. If gold inflated ten percent, and the dollar was fixed it would be worth 44 dollars anounce today. But that is not reality, 40 to 1400 is massive deflation, or massive inflation of the dollar. And being that the ounce of gold buys something now a little more valuble than it did back in 65 proves that gold has not inflated. But has deflated. Or it has inflated a little and the dollar has inflated alot.
Why are you going backwards in the discussion? You are comparing two floating values. It makes more sense to compare real changes because then you know the actual change (minus computing error).
That aside, you want currency to be stable, not bouncing around. A consistent inflation rate is stable (given our options probably the best sort of stability). A jumpy up and down graph is not as we see with gold.
A small correction on my explanation of the red line in the graph from earlier (although you probably won't care because I feel like you still don't understand the graph hence your regression to nominal arguments- again): the red line is actually gold vs. the changing commodities index with 100 on the right side being the value in 2000 at t=0. A graph using the commodities index at t=0 throughout vs. gold would be the same as the USD one
This does not affect my arguments or weaken them as I was not using the red line graph (was using the USD one).Similar threads
