Gold price expectation

Gold Refining Forum

Help Support Gold Refining Forum:

This site may earn a commission from merchant affiliate links, including eBay, Amazon, and others.

Lino1406

Well-known member
Joined
Nov 1, 2007
Messages
2,356
Location
Israel
Here is a calculation of present gold price if money printing is stopped
www.facebook.com/Everymetalchemistry-anymetal
 

Attachments

  • goldstandard.jpg
    goldstandard.jpg
    393.4 KB · Views: 353
MarcoP said:
Hi Lino, what "If 1/4 of that money is backed by that gold the gold price?" means?

Marco

https://en.wikipedia.org/wiki/Gold_standard

It means that 1/4 of the "value" of all printed and virtual currency is represented by the currency emissioning institutions' actually owned and stored gold metal.

I do not believe any of those prognosises, since things are far more complicated. Gold and other resources are only one little part of what is represented by currencies, and their real value depends on how much is needed by the industry, - the rest is market speculation. A much more important part is, how much value the different states actually are able to produce/actually are producing, - this is working craft, infrastructure and knowledge, too. Further how much the respective currency is trusted by the market and the big players. In my understanding a gold backup is only and can only be one safety buffer between many others.

And I am pretty sure that this explanation is still oversimplified.
 
I'm with Björn on this. We will never go back to a gold backed currency since that would create a huge problem for the economy. The only reason to do it would be a complete break down of the monetary system and at that point it doesn't matter how much currency there is in circulation today. What is backing the monetary systems today is the whole economy behind it. An idea that we all can trade money for goods when we want to and all over the world. The economies of the world are all connected and the need to back the monetary system with gold isn't there any longer.

No, gold is just a commodity today and what is backing the currency is the value we have built up in the goods we possess, my apartment, my car, the road and railway outside my window, my gold, my old coins, the hydro plant upstream that was built 50 years ago, farms and woodlands... that is what really backs a currency today.

Gold today is just a commodity among other. No one is calling for creating a wheat or corn backed currency but that would be just as practical as a gold backed... except for the volume of wheat to pay off a car or a large building project. :lol:
By letting the value of gold float we end up on a reasonable pricing. Anyone wanting to trade in dollars for gold can do it at current spot without much trouble, but most of us want to trade it in for a steak, some ice cream or electricity. Very few dollars goes to buy gold. To lock it into a currency it would artificially inflate the price of gold while virtually bankrupt a country trying to buy that much gold in one go.

And what does it mean to back 1/4 of the currency? It's like building a quarter suspension bridge... here I have four dollar bills, which one is backed by gold? :mrgreen:
It's just a play with numbers and fills no practical means.

Göran
 
Reguardless of how the system goes it can all be manipulated by the people holding the majority of the product. Thus nothing is safe or written in stone.
 
"MarcoP" wrote: Hi Lino, what "If 1/4 of that money is backed by that gold the gold price?" means?

It is a reminder that the former monetary system failed when the gold - $ US coverage fell below that figure
(on 70's of former century), due to several accumulated pressures. Hence it is considered the lowest limit for
currency protection ability.
 
The perception that gold is a storehouse of value is what gives gold it's value, a perception that has been ingrained into society for thousands of years and will not be quickly dislodged by modern economics...hence gold's recent rise in a falling stock market. Among other things this perception that can still be exploited by a country ie. China, Russia, to somewhat back their currency to make it more appealing.
 
The only opposition of gold backed currency are the people who own rights to print fiat one. It is not complicated to get back to have currency backed by precious metals but it is vehemently opposed by those who can at this moment make currency at their will. I have to disagree with you Goran, today's currency is backed by belief and speculation only. Money are being printed much faster than any value crated (like houses, roads and anything you mentioned). Current monetary policies are rather dilution of any value.
I would be against gold backed currency. If something like that will be implemented, governments will move to confiscate every last grain of it in a heartbeat.
I would rather like to see end of speculation with paper gold. Buying and selling imaginary non existent stuff.
 
Barren Realms 007 said:
Reguardless of how the system goes it can all be manipulated by the people holding the majority of the product. Thus nothing is safe or written in stone.

I agree Barren. It doesn't really matter what is backing the money supply unless there are strict checks and balances that are followed.
I think Milton Friedman put it best when he said “If we put the federal government in charge of the Sahara Desert, there would soon be a shortage of sand.”
 
Back
Top