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Gold/Mining/Energy : Gold Price Monitor
GDXJ 98.04+0.4%Nov 11 4:00 PM EST
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To: Zeev Hed who wrote (36409)7/3/1999 6:03:00 PM
From: PaulM  Read Replies (1) of 116756
 
"Do you really think that the value of a single commodity should equal the world annual gross product?"

I think not only world annual gross product, but world annual gross product since the beginning of time has to be denominated in some medium of exchange.

I say "has to be" because the alternative would be stone age barter system, in which each of us has to be our own farmer, barber, shoemaker and under-wear-maker etc. until we find someone willing to trade these services for what we have.

The issue is: how many mediums of exchange and which. A single one that all countries are willing to accept will facilitate global trade that otherwise would not take place in a world of many mediums of exchange.

That leaves: which medium of exchange? This issue has been debated at length and I won't go into the reasons gold is superior to government issued fiat.

P.S. It is true that gold in the many thousands per ounce is above fair market value in a free market. But it is precisely because we don't have a free market system that gold will trade at that price. This is also the same reason that oil skyrocketed in the 70's and will again. The supply of dollars will caused a "shortage" of these commodities.

Regards
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