[Vision2020] 7-25-2011: Gold hits fresh record high at $1, 623.49/oz overnight

[Ted Moffett]

On 7/27/11, Andreas Schou <ophite at gmail.com> wrote:

It's a good conductor, and it's pretty, and that's pretty
much all it's good for.
--------------
"Not quite."

I'm not disputing your basic argument about the psychology of gold
markets, but the statement above is lacking in simple research.  You
must be joking!

Just from memory, I immediately recalled that the phonograph record
(!) on the Voyager spacecraft, intended for potential intelligent
beings elsewhere in the universe, to inform them about us and our
Earth, was made of gold, for practical reasons.  This is an important
application other than just being a good conductor, and being pretty,
unless NASA made the record out of gold to impress aliens with its
prettyness. I think gold's resistance to corrosion was a factor, but
correct me if you think I am wrong:

Read about the golden record from NASA:

What is the Golden Record?

http://voyager.jpl.nasa.gov/spacecraft/goldenrec.html

The Voyager message is carried by a phonograph record-a 12-inch
gold-plated copper disk containing sounds and images selected to
portray the diversity of life and culture on Earth.

-------------------------
Read about uses of gold at website below:

http://www.gold.org/technology/uses/

Uses

Gold has a long and fascinating history of use in a diverse range of
industries and applications. The future will see gold being used in a
multitude of new products and processes.

But gold’s many valuable properties mean that its technological
applications are all around us, right now.

Automotive

Gold is used by the automotive industry in catalytic convertors.
Nanoparticles of gold alloyed with other precious metals are effective
in reducing harmful emissions from the engine exhaust.

Medicine

Gold and health have been linked for many thousands of years, but in
modern dentistry, precise surgery, rapidly diagnosing disease, and
treating serious conditions gold plays a key role in modern medicine.

Nanotechnology

At the cutting edge of science, gold nanoparticles have already found
practical use in a range of fields. Diagnostic devices for pregnancy
and salmonella rely on their unusual optical properties. Gold is
proving to be an important catalytic material, with numerous
industrial processes benefitting from its unique reactivity.

Space

Gold’s reflectivity, conductivity and corrosion resistance have played
a vital role in space exploration for decades. Its efficiency as a
reflector of heat and infra-red radiation has been invaluable in
numerous NASA undertakings.

Engineering

Engineers must specify gold in a number of high-tech applications. It
can be used a a lubricating material, as a coating on architectural
glass, in fuel cells, jet engines, the list goes on:
------------------------------------------
Vision2020 Post: Ted Moffett

> Not quite. I'm simply arguing that a lot of people believe gold to be
> the source of value, independent of its actual, practical uses. But
> it's not. It's a good conductor, and it's pretty, and that's pretty
> much all it's good for.
>
> I mean, if the point you're trying to make is that if you buy
> something before a bubble, you'll have made money when the bubble
> reaches its peak, then I suppose I can't disagree with that. But if
> you'd bought houses in 2003 and sold them in 2007, you'd have made a
> tremendous amount of money, too. That doesn't mean that buying houses
> is a good idea independent of market fundamentals.
>
> -- ACS
>
> On Wed, Jul 27, 2011 at 12:31 PM, Ted Moffett <starbliss at gmail.com> wrote:
>> Schou is arguing, if I understand correctly, that gold is not a
>> commodity like many others, with "intrinsic worth."
>>
>> He offers examples of investments he considers more wise than gold,
>> pork bellies or molybdenum, and states "The problem is that the
>> underlying belief leading people to purchase gold is false: it does
>> not have intrinsic worth."
>>
>> I was merely pointing out the fact, which Schou did not refute, that
>> investing in gold in 2008 and selling now in 2011, would give a "nice
>> return."  I was not giving advice on current best investment
>> options... Gold price could collapse next month, for all I know...
>>
>> Schou wrote:
>>
>> "Instead of being in a market where the price is determined by a herd
>> of panicked, mattress-stuffing idiots, ..."
>>
>> If money can be made off a herd of panicked idiots, some will jump at
>> the chance and laugh all the way to the bank...
>>
>> The examples in history are too numerous to bother listing...
>> ------------------------------------------
>> Vision2020 Post: Ted Moffett
>>
>> On 7/27/11, lfalen <lfalen at turbonet.com> wrote:
>>
>>> I tend to agree with you, although I am a neophyte as far as the markets
>>> are
>>> concerned. Except for the hype, I do not see where gold is any different
>>> than any other commodity.
>>> Roger
>>> -----Original message-----
>>> From: Andreas Schou ophite at gmail.com
>>> Date: Tue, 26 Jul 2011 13:56:56 -0700
>>> To: Ted Moffett starbliss at gmail.com
>>> Subject: Re: [Vision2020] 7-25-2011: Gold hits fresh record high at
>>> $1,623.49/oz overnight
>>>
>>>> Ted --
>>>>
>>>> It's still not wise. There are a lot of people who will tell you that
>>>> gold is a commodity of "intrinsic worth," which will retain its value
>>>> even when the value of fiat currencies depreciate. That's not the
>>>> case. But this widespread belief about the value of gold has led to
>>>> its somewhat unusual pricing structure. Think about it this way:
>>>>
>>>> Because people believe that gold has "intrinsic worth," the price of
>>>> gold as a commodity is essentially the sum of hedge positions against
>>>> fiat currencies worldwide. When people are concerned about the value
>>>> of fiat currencies, the value of gold goes up. When people are less
>>>> concerned, the value of gold goes down. In that framework, then,
>>>> purchasing gold is essentially just a hedge against fiat currencies.
>>>>
>>>> The problem is that the underlying belief leading people to purchase
>>>> gold is false: it does not have intrinsic worth. Consequently, the
>>>> value of gold is largely determined by people with a mistaken belief
>>>> about what they're buying, and people who believe that others will
>>>> mistakenly hold that belief. If you think the dollar will drop in
>>>> value (and I don't think this will be the case, unfortunately),
>>>> short-sell dollars rather than buying gold. Or buy something boring,
>>>> like pork bellies or molybdenum.
>>>>
>>>> Instead of being in a market where the price is determined by a herd
>>>> of panicked, mattress-stuffing idiots, you'll be in a market full of
>>>> people who, wisely or unwisely, are trading on the market value of the
>>>> good itself rather than their subjective beliefs w/r/t other peoples'
>>>> subjective beliefs.
>>>>
>>>> -- ACS
>>>>
>>>>
>>
>