Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Gold/Mining/Energy : Gold Price Monitor -- Ignore unavailable to you. Want to Upgrade?

To: Zeev Hed who wrote (36416)	7/3/1999 2:26:00 PM
From: Jim S	Read Replies (2) \| Respond to of 116756

Hi, Zeev-- I'm struggling with your model that a gold-based currency will cause perpetual inflation. It seems to me, that if an established value were set for gold (arbitrarily, say $1000/oz) and NO new gold were mined, that the cost of a loaf of bread in dollar terms would go DOWN, not up, as more people bought bread with ever more valuable dollars; eg, the same number of dollars would be spread among more people as the population increases. The increased competition for those more-scarce dollars would drive down the price of goods and services. Perhaps I didn't explain this very well, but you understand my point, don't you? jim

To: Zeev Hed who wrote (36416)	7/3/1999 10:26:00 PM
From: Achilles	Read Replies (1) \| Respond to of 116756

Wouldn't it work the other way around? Imagine a world in which bread is the only thing being produced. The amount of bread being produced increases as the economy grows, but the amount of gold remains the same. This means that the cost of bread must fall. Or am I missing something?

To: Zeev Hed who wrote (36416)	7/4/1999 9:57:00 AM
From: Enigma	Read Replies (1) \| Respond to of 116756

Zeev - I'm not sure that production of gold has to follow industrial growth - a regulating factor is always hoarded gold - which comes out of the woodwork with higher prices. In any event I don't think most are arguing for gold as being part of a gold standard any more - but gold as a store of value for individuals and institutions and as a reserve asset of CBs - IMO some CBs are going to be amongst the bidders at the B of E auctions - we may never know because the purchasing will be through nominees I understand - but the rumour mill may be busy. Overall gold supply is relatively constant - compared to paper and credit, and something constant is worth investing in - for a rainy day. d