You can't corrupt a piece of precious metal but the regime behind a piece of paper can be.
You can't? What is 14k gold? How do you create it?
Why isn't all gold 24K?
And how would someone know the difference between a 14K gold piece and a 24K one at face value without a scale?
Why do you think, thousands of years ago, that they came up with something called a "Touchstone" to test the purity of the gold?
Fortunes were made from this effort and fortunes continue to be made.
Fortunes were made from developing the internet into a commercially viable system of commerce.
Fortunes were made in the agricultural industries, which lead to the mass production of food.
Fortunes were made transporting manufactured consumer goods (which also created fortunes) from point A to point B..
Fortunes were made discovering hydrocarbons, providing our economy a dense form of energy that could be effectively used to create work for transport, heating, and manufacturing.
Fortunes will someday be made exploring and manufacturing on the moon, and farthest reaches of our solar system.
Gold creates very little value, although it does have nice desirable conductive properties. But it requires fuel, labor, and manufactured equipment) to extract, process, and transport.
And like I mentioned, since the cost to extract gold is well under 50% of the current spot price, every ounce that is produced now and in the future undermines the value of previous quantities of gold.
Thus, the only way for it to go up in value is for gold producers and venders to increase demand for it through propaganda and fear.
Of course, the missteps of our financial elite and current government certainly work to the gold industries favor.
But gold is not a panacea. It's merely a medium of exchange, the value of which is determined by the marketplace, like anything else. And sometimes, as we saw with $150/bbl oil, those markets that are so thinly traded are easily manipulated.
But then again, the Fed probably doesn't mind gold be at the current price. It creates the impression of inflation and that's an impression that is far more desirable than deflation.
Hawk |
