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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: TobagoJack who wrote (5864)	4/28/2006 1:14:30 AM
From: Maurice Winn	Respond to of 218228

Of course you are right TJ and gold is not equivalent to a quarry. But the value of gold is defined, over the long run, by the cost of getting more of it. Same with oil [aka energy]. Oil is worth the net present value long-run marginal cost of another megajoule [or some such accounting jargon]. In simple language, there is competition in supplying energy and unlimited supplies of it [the cosmos being made of the stuff as per E=mc2]. Same for boring old gold. So, gold is just a quarry by another name. A Fort Knox type quarry, with a key or three and 100% pure gold waiting to be extracted has much higher value than a rocky quarry in Waihi, New Zealand with gold in situ. That's because the cost of getting the gold out of Fort Knox is a few hundred dollars per ton [or maybe a couple of thousand as security would be important], whereas to get the same gold out of the mine in Waihi is a LOT of work and costs a LOT of dollars and takes a LOT of time. One can choose to buy the mine [which is difficult to carry through a border] or buy a bar of gold [quick, portable, easily traded, etc, etc]. No wonder a bar is vastly more valuable than a ton of ore sold in situ in a quarry. But from a value point of view, they are the same. Unless major paradigm shift happens at which time the portable version will become much more valuable than the quarry version. Which is of course what you are preparing for. I'm sure a LOT of eager beavers have valued quarries and bars and have the ratios right for the risks. It's not as though the smart money is unaware of USD risk [and other fiat fantasies]. Mqurice