Price of gold at all-time high but be careful of these gold ETFs

[Into the Night]

No sane person would buy gold at $2000 an oz, so why are the banks buying it up? I heard gold could go to $5000 an oz. Is it possible?

Not only possible, it's probable. This number is VERY conservative.
Once people figure out that 'paper gold' (gold promissory) is worthless, actual gold could go much higher in value very quickly, and the FRN dollar is constantly decreasing in value.

 

[Joe Capitalist]

2008/2009 showed that banksters think it's their job to bankrupt the entire world. The too big to jail banksters got their bailouts and retainer bonuses while millions of American workers were illegally foreclosed on. The banks sold off the mortgages yet acted as if they owned the deeds.

Banks are already overleveraged and soon will demand yet another bailout, so how can they afford to be buying so much gold? I gave you the answer to a simple question. I don't know how the fed can survive a systemic collapse.

Your answer is a big, heaping pile of steaming BULLSHIT.

 

[goat]

Not only possible, it's probable. This number is VERY conservative.
Once people figure out that 'paper gold' (gold promissory) is worthless, actual gold could go much higher in value very quickly, and the FRN dollar is constantly decreasing in value.

I believe you're right about gold going to $5000 an oz is a conservative number. As I noted, 2024 is the year for banks to go bankrupt, so I'm not sure if they're buying up mostly paper gold. Where's Walt when I need him?

 

[Into the Night]

Your answer is a big, heaping pile of steaming BULLSHIT.

Argument of the Stone fallacy, Sock.

 

[Into the Night]

I believe you're right about gold going to $5000 an oz is a conservative number. As I noted, 2024 is the year for banks to go bankrupt, so I'm not sure if they're buying up mostly paper gold. Where's Walt when I need him?

Banks are not the same. Some have been stupid and will go bankrupt. Others are more sensible and will survive it.
Banks aren't buying gold. Private individuals and some nations are, but not banks.

Banks in the United States are heavily regulated. They are required to use FRN dollars and to conduct all their accounts within it. This fascism comes from the Federal Reserve.
The Federal Reserve also is communism, since they own the value of the currency. That is the nature of any fiat currency.

The Federal Reserve was created in 1913 to act as a clearing house for checks. In 1933, it was given power of fiat of the currency. FDR signed that law.
This was about the same time other nations went to fiat currency, particularly in Europe, due to the ruinous cost of both world wars.

 

[Damocles]

No sane person would buy gold at $2000 an oz, so why are the banks buying it up? I heard gold could go to $5000 an oz. Is it possible?

If inflation again rises, yes it would be "possible"... but honestly, that would be 150% rise from a pretty historic high and inflation would have to get pretty bad to get it to $5000...

Buying gold now is buying when things are high...

Buy low, sell high. I would not buy gold right now, I would hold it.

 

[Text Drivers are Killers]

Bitcoin is not a fiat currency.

HAHAHAHA. Of course bitcoin is fiat you moron. It has no intrinsic value and is not backed by anything of value. Hell - it doesn't even exist. The ultimate mouse-click money.

 

[Into the Night]

HAHAHAHA. Of course bitcoin is fiat you moron. It has no intrinsic value and is not backed by anything of value. Hell - it doesn't even exist. The ultimate mouse-click money.

Bitcoin is not fiat currency. No central authority determines it's value.
ALL currency has value (you can buy and sell with it). That is one of the inherent features of any currency, whether it's FRN dollars, Bitcoin, gold, silver, or clamshells.

It DOES exist. The blockchain is real and definable.

 

[Into the Night]

If inflation again rises, yes it would be "possible"... but honestly, that would be 150% rise from a pretty historic high and inflation would have to get pretty bad to get it to $5000...

Buying gold now is buying when things are high...

Buy low, sell high. I would not buy gold right now, I would hold it.

I do not treat gold as an investment scheme. It is a currency, nothing more.
I continue to buy it, even at these conversion rates, because the pressure is very high to devalue the dollar even more.

 

[goat]

If inflation again rises, yes it would be "possible"... but honestly, that would be 150% rise from a pretty historic high and inflation would have to get pretty bad to get it to $5000...

Buying gold now is buying when things are high...

Buy low, sell high. I would not buy gold right now, I would hold it.

The best part of political sites is the archives, so we can go back in time to confirm stupidity. Please don't lose the evidence, Damo, 2024 has started out to be an exciting year.

 

[Text Drivers are Killers]

Bitcoin is not fiat currency. No central authority determines it's value.
ALL currency has value (you can buy and sell with it). That is one of the inherent features of any currency, whether it's FRN dollars, Bitcoin, gold, silver, or clamshells.

It DOES exist. The blockchain is real and definable.

You don't know what fiat means. Has nothing to do with central authority. Fiat means the currency has no intrinsic value. That is bitcoin. THINK

 

[Into the Night]

You don't know what fiat means.

You are describing yourself. You cannot project YOUR problem on anybody else.

The word 'fiat' first appeared in the English lexicon around 1630, stemming from the Latin 'fiat', which means "let it be done" as in an authoritative sanction.

Has nothing to do with central authority.

Yes it does. That is part of the definition of the word. It always has been.

Fiat means the currency has no intrinsic value. That is bitcoin. THINK

All currency has value. That simply means you can buy and sell with it.

All currency is three things:
1. It is a store of value. You can buy and sell things with it.
2. It is a unit of account. You can set a price with it.
3. It is a medium of exchange. You can mediate barter with it.

If a currency loses even ONE of these three characteristics, it is no longer currency.

Bitcoin is a currency. So is the FRN dollar (even when it loses value!). So is gold and silver. So is Yen (which has already crashed).
There is no central authority for Bitcoin declaring it's value.
A fiat currency has a central authority declaring it's value, like the FRN dollar or the Yen. For the FRN dollar, that authority is the Federal Reserve, acting upon the orders of Congress.

Obviously, you don't like Bitcoin. I don't either, but it's not a fiat currency. I already stated why I don't like Bitcoin.

 

[Walt]

Gold ETFs may be a scam.

I doubt it. Gold ETF's are easy to audit. The gold is either there, or it is not. There is some gold futures that might be used temporarily, but it would be an easy red flag to catch.

 

[Walt]

The banks are in trouble again, so quite a few are supposed to go bankrupt in 2024.

That might happen. Banks own long term bonds, and loans that are of low interest rates. A run on the bank would require them to sell those bonds and loans at a loss. As long as they can let the low interest bonds and loans expire, they will be fine. There is also a secondary problem with commercial real estate, but that is not as big of a problem.

many smaller banks will close down and people with money in those banks will lose it all, FDIC or not.

That is almost impossible. I cannot imagine the FDIC being allowed to fail.

 

[Walt]

No sane person would buy gold at $2000 an oz, so why are the banks buying it up?

Any American banker buying significant amounts of gold right now will go to prison. I am not even joking about that.

American banks have obligations in Dollars, and only in Dollars. They need to be moving money into more stable and liquid forms of assets. Gold is not stable in terms of Dollars.

If you are a bank, and someone has a $100 deposited with you, you have to be able to pay that person $100. That is one hundred green pieces of paper saying $1. It does not matter what those pieces of paper are worth. Banks have no obligation to deliver a certain value in gold.

 

[Walt]

I heard gold could go to $5000 an oz. Is it possible?

Yes, but it would mean gold is in a bubble. Speculators can push gold as high as they want. Each gold speculator would buy gold at a higher price, not because they think gold is worth that price, but rather because they think they can sell the gold for an even higher price.

This all puts a major hole in the argument that gold is stable. If gold were stable, we would see price rises matching inflation of 2 to 3%. Inflation is not 150%.

 

[Walt]

Silver corrodes. Gold doesn't.

Silver does not corrode. It does tarnish, which is different than corroding. When silver oxidizes, it does not change size, so no corroding. Gold wears, which silver does not do. Wearing is somewhat similar to corrosion in that integrity is destroyed slowly.

It is GOLD that is used in electronics, not silver so much.

Tiny amounts of gold are used in electronics, but the wearing is a major problem. Much more silver is used in industrial processes, because of its oxidizing, it is more reactive. You can do far more with silver.

Gold's value is not its use in electronics. Its value is that it is rare, and more importantly perceived as valuable.

Silver is NOT scratch resistant. CD's, DVDs, and Blueray all use aluminum for their reflective surface, not gold or silver.

Silver is more scratch resistant than aluminum, gold, or plastic. If you want scratch resistants than of the four, you would go with silver.

But CD makers do not want scratch resistance. CD's are played without contact, so with reasonable care, lose no data over decades. This meant that used CD's were exactly equal to new CD's. In turn that meant that artists could expect sails at first, but almost nothing after that. It was a major problem in the CD market.

Gold is not an investment. It is a currency.

Gold is difficult to use in exchanges, so it is not much of a currency.

 

[Walt]

Banks are already overleveraged and soon will demand yet another bailout, so how can they afford to be buying so much gold?

Not over leveraged, but rather having a short term liquidity problem. And more importantly, they are not buying gold. They need short term liquidity, and are doing everything in their power to get it. You can get a 5% CD, because banks are desperate to get your money locked into place, to take care of short term liquidity.

Picture you put $100 in a checking account. The bank promises you that you can have $100 any time you want it. They then took that money and bought a two year Treasury at 1% a year. That will pay them $2 in two years, and give them the $100 they owe you(also in two years). After a year, you demand the $100 in green pieces of paper, as is your right. They have to sell that Treasury, before it has matured.

The problem is that interest rates have gone up to 5%. That means that the buyer of that Treasury could get 5% for the next year on new Treasurys, so will demand a discount for any old Treasurys they bought. They might buy the Treasury that the bank is trying to sell at $97, rather than $101.

That leaves the bank $3 short. Who cares about $3... But if you multiply that by a billion or more, you start seeing why banks would fail.

Notice that gold will not solve any part of that problem. The bank does not care about the value of the dollars they owe the depositors. The solution to the problem, as far as the bank is concerned, is for the depositors to just wait until the bonds and loans mature.

 

[Walt]

Against the dollar, gold has gone up over 1000x.

I think your math is mistaken. The gold standard pegged the dollar to $20.67 per ounce. Currently it about 100 times that, not 1000 times that.

or should I say that the FRN dollar has gone DOWN in value to 0.7 mils?

Again, the value of a dollar has decreased by a factor of 30. Gold has changed its price, even adjusted for inflation. That makes it an unreliable non-inflationary standard.

We are back to the problem of gold going to $5000. If it increases by 150%, while inflation is increasing by 2 to 3%, that means it is not reacting to inflation. It would seem more like a bubble.

Or possible an extreme increase in the demand for gold. That being said, increases in demands for gold would tend to be a one time thing. You could not make long term investments based on it happening consistently.

 

[Walt]

I believe you're right about gold going to $5000 an oz is a conservative number. As I noted, 2024 is the year for banks to go bankrupt, so I'm not sure if they're buying up mostly paper gold. Where's Walt when I need him?

Right here. Banks need dollars, not gold. They are not speculating on gold.

Or at least not American banks. American banks have almost all their obligations in dollars.

Swiss banks, like Credit Suisse, actually hold a lot of gold. Historically, the Swiss Franc was pegged to gold, but lately they have been trying to link it to the Euro.

Of course Credit Suisse was one of the two major banks of Switzerland, until it collapsed, and had to be taken over by USB. Switzerland lost nearly half their banking system, with gold being unable to save them.