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Can gold be debased?

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  • Can gold be debased?

    It seems to me that gold has certain characteristics that make it special:
    Relatively rare.
    Looks different from other metals (not silvery like silver, platinum, nickel), and it is pretty.
    Does not significantly corrode.
    Does not have very significant industrial uses (so far) that would consume the supply rapidly.
    Supply cannot be rapidly increased because difficult to mine.
    The above results in the supply being relatively stable over time.

    So, relatively rare and relatively stable amount seem to do it.

    What if the supply of gold were to suddenly and steadily increase? Here is a clue.


    Outstanding episode of A History of the World in 100 objects, and sure to be of interest to iTulipers.

    http://www.bbc.co.uk/ahistoryofthewo...RtGxstjbE4EEmg


    Mega gives the episode two thumbs up!

  • #2
    Re: Can gold be debased?

    Originally posted by mooncliff View Post
    It seems to me that gold has certain characteristics that make it special:
    Relatively rare.
    Looks different from other metals (not silvery like silver, platinum, nickel), and it is pretty.
    Does not significantly corrode.
    Does not have very significant industrial uses (so far) that would consume the supply rapidly.
    Supply cannot be rapidly increased because difficult to mine.
    The above results in the supply being relatively stable over time.

    So, relatively rare and relatively stable amount seem to do it.

    What if the supply of gold were to suddenly and steadily increase? Here is a clue.


    Outstanding episode of A History of the World in 100 objects, and sure to be of interest to iTulipers.

    http://www.bbc.co.uk/ahistoryofthewo...RtGxstjbE4EEmg


    Mega gives the episode two thumbs up!
    If they found tomorrow that the entire Pacific Ocean has gold underneath the sea bed, I think we can assume with certainty that the gold price will nosedive faster than anything one envisons today for the dollar.

    Such an unlikely event notwithstanding (I would say the probability is lower than the second coming of Christ), gold should hold value over time.

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    • #3
      Re: Can gold be debased?

      Yes, I think a sudden increase is very unlikely... but anyway, listen to that History of the World about silver... absolutely fascinating... the rise and fall of Spain... and it involves China...

      And if you haven't seen this post yet, in a similar vein...
      http://www.itulip.com/forums/showthr...=twilight+zone


      And rather than there being a huge amount under the Pacific, there already is a huge amount IN the Pacific... in the water that is. If we could just figure out how to extract it for a reasonable cost...

      Or a good metal asteroid being mined might be good too...
      The metal in Eros might be worth 20 trillion USD... not bad...
      http://news.bbc.co.uk/2/hi/sci/tech/401227.stm
      Last edited by mooncliff; 09-28-10, 06:54 AM. Reason: added something

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      • #4
        Re: Can gold be debased?

        Originally posted by hayekvindicated View Post
        If they found tomorrow that the entire Pacific Ocean has gold underneath the sea bed, I think we can assume with certainty that the gold price will nosedive faster than anything one envisons today for the dollar.
        I am unsure about that hayek, since you would still need to go dig it out.

        On the flip side, what is the production cost of the FRN (Federal Reserve Note)?

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        • #5
          Re: Can gold be debased?

          The best way to summarize the value of gold is as follows:

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          • #6
            Re: Can gold be debased?

            Absolutely. The labor needed to 'dig out the gold' is a prime component residing in gold's value.


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