How will gold be valued?

D P Six · November 03, 2011, 20:52

What is gold worth? Yes I know, like everything else, gold is worth what people are willing to pay for it. Prior to 1933 the government said it was worth $20/oz, then they changed their mind and said it was worth $35/oz. Today the dollar value of gold goes up as gov't devalues the greenback. But if the US dollar fails, which is historically what happens when great powers pay their bills with worthless paper, how will gold be valued? As a unit of labor, a bushel of wheat, a Colt SAA? Just wondering.

**Jaxxas** · November 03, 2011, 21:24

I just sold a mostly USGI m1a for a Krugerrand. Sounds like a good place to start!

**Thorack** · November 03, 2011, 21:24

Well,

A model T in that era (20s) cost $200 or about ten ozs. You can still buy a cheap new car with ten ozs. I think gold will be for larger purchases and silver for lesser. Typically a good meal for two cost a silver dollar and thats still true today, with 1 oz of silver at $34.

I doubt you would want to roll into Walmart with an oz of gold and expect them to make change when you buy a case of soda. Besides there will have to be some easy test for purity and weight, especially with all the Chinese counterfeiting of coinage going on.

Paper will probably end up be used again but it will be backed by something, what I dont know, as with the exception of grain and crappy loans we dont make much anymore.

Thorack

carguym14 · November 03, 2011, 22:21

Quote:

Originally posted by Jaxxas
I just sold a mostly USGI m1a for a Krugerrand. Sounds like a good place to start!

Especially if the buyer traded 300 or so FRNs for that Krugerrand.

Bawana jim · November 03, 2011, 22:38

I think the price of oil and the value of gold will be close to each other. The world runs on oil and those who own the oil will want a currency they can trust. The country will not get out of the depression with oil costing as much as it does. It's going to take cheap energy to get us out.

jim

Nomad, 2nd · November 03, 2011, 23:30

Well, 2000 years ago an oz of gold would buy you a toga (NOT every day dress, but a 'suit') and a custom set of sandals and a belt.

Today it will buy you a good Suit, shoes and belt...

In the 1800's it would buy you a top of the line handgun.

Till just a couple years ago it would buy a top of the line handgun. (Now more)

We are in a 'flux period' (When the Paper is worth less, NOT gold more) but I believe these are stable estimates.

Or rather, 2000 years says so.

357ross · November 04, 2011, 09:51

The price of gold has remained relatively stable, no matter how much politicians have tried to manipulate it. Put another way, you had to work just as many hours to buy the new model a as you would today to buy a new car. (Not a grossly overpriced suv or truck.) What has changed is the value of our dollar. This will get much worse when Americans finally learn that there is no gold in our national treasure, i.e. Fort Knox, which was emptied in the '70s after the gold standard was done away with.

FAL freek · November 04, 2011, 23:42

The other day I was told that during the depression a loaf of bread went for about a dime (90% silver coins back then) I did some quick math in my head with todays prices of about $2.50 to buy a 90% silver dime is about the price of a loaf of bread. Interesting. And with todays price of copper of $3.58 an ounce and silvers price of $34.13 it might not be too far off to assume that 10 copper pennies will be worth 1 silver dime again if things get that bad.

Seem to remember hearing once that during the latter half of the 19th century a silver dollar was considered a days wage.

RG Coburn · November 05, 2011, 06:42

Where are you getting 3.58 an ounce for copper? I WANT IN!

FAL freek · November 05, 2011, 09:04

Quote:

Originally posted by RG Coburn
Where are you getting 3.58 an ounce for copper? I WANT IN!

Not what I'm getting for it, that's what it's selling for on commodities:

http://www.kitcometals.com/charts/Copper.html

rowjimmy · November 05, 2011, 09:34

Quote:

Originally posted by FAL freek
Not what I'm getting for it, that's what it's selling for on commodities:

http://www.kitcometals.com/charts/Copper.html

That's per pound...

Bawana jim · November 05, 2011, 09:41

I still think gold is going to be a bubble like houseing and it will be timing that makes it a good investment or bad. When the bubble breaks the majority will have no money to spend. If you just paid $4,000 an ounce with a inflation run up and the economy tanks you will have $35 gold again.

Speculation is risky in todays world, hope it all works out for you guys that do it. Watching our thieves in politics I don't have the stomach to risk my money on something they will steal.

jim

FAL freek · November 05, 2011, 09:51

Quote:

Originally posted by rowjimmy

That's per pound...

Had one of those moments I should know better. It was late last night when I typed that and was doing some research about metal content of coins and their worth. Was looking at silver and coin content and the brain didn't switch over from silver= ounces to copper= pounds. Still kinda groggy this morning too. Takes about 145 pre 82 pennies to equal a pound and they're worth about twice their face value on metal content alone, that I know but didn't make the connection. If it were per ounce there would be a lot of rich folks just from the change they save in their pocket.

**brunop** · November 12, 2011, 01:29

depends on what is going on to go with the dollar collapse. If you read what happened in Serbia in '92, you learn that gold was useful only in the black market, and it wasn't worth very much.

People needed: 1) water & food, 2) guns & ammo, 3) shelter & fuel. And then tarps, batteries for radios, etc.

Gold wasn't worth any of those things at that time. The guy who writes shtfschool blog was one of those people stuck in one of those cities. Much too late he realized that things weren't going to be normal anytime soon, and that the money wasn't worth much. He spent thousands of Euros on some rancid flour when he got the chance - about two months in.

PMs only after you have all the things that you were going to use those PMs to buy when the S hits the F.

mitchellh · November 12, 2011, 05:09

Quote:

Originally posted by brunop
depends on what is going on to go with the dollar collapse. If you read what happened in Serbia in '92, you learn that gold was useful only in the black market, and it wasn't worth very much.

People needed: 1) water & food, 2) guns & ammo, 3) shelter & fuel. And then tarps, batteries for radios, etc.

Gold wasn't worth any of those things at that time. The guy who writes shtfschool blog was one of those people stuck in one of those cities. Much too late he realized that things weren't going to be normal anytime soon, and that the money wasn't worth much. He spent thousands of Euros on some rancid flour when he got the chance - about two months in.

PMs only after you have all the things that you were going to use those PMs to buy when the S hits the F.

If you have the time Listen to this.

Downward Class Migration

**xtremerange** · November 12, 2011, 07:52

Some quick math:

(numbers from the Worldbank and Wikipedia with all the usual caveats)

World GDP 2010: $65 Trillion
Total Gold Mined in Human History: 165,000 metric tons
Converted to Troy Ounces: 5.1 Billion ounces

Needed value of gold in current US Dollars to trade (not value of land, buildings, companies, just what is produced every year) : $12,251

Just an idea.

Personally, I don't think any new political order would go without a paper currency. It has become the needed equivalent of a flush toilet indoors.

gates · November 12, 2011, 08:09

Historically- (recent history) gold hits it peak when the Dow and gold are roughly at parity - 1:1, 2:1 - thats the area where Dow theory advisors like Richard Russell tell you to flip from gold back into stocks, YMMV.

MtnWulf · November 12, 2011, 09:15

I did some quick math in my head with todays prices of about $2.50 to buy a 90% silver dime is about the price of a loaf of bread. Interesting. And with todays price of copper of $3.58 an ounce and silvers price of $34.13 it might not be too far off to assume that 10 copper pennies will be worth 1 silver dime again if things get that bad.

That price in copper may be per pound, but silver is probably undervalued when gold is this high.

At a 16 to 1 ratio for silver to gold, which ic close to the historical average, silver should be around $100 per ounce.

Bawana jim · November 12, 2011, 09:34

I believe that the fed is manipulating prices rather than printing money to control the economy. Yesterday oil was near $100, why? It is easier to get exess money out of the flow by raiseing the price of oil than it is to print money. I believe gold will follow oil up or down.

jim

Super B · November 14, 2011, 02:06

So you are saying gold will either go UP or DOWN? Bwana you, sir, are a prophet!

Bawana jim · November 14, 2011, 10:10

Quote:

Originally posted by Super B
So you are saying gold will either go UP or DOWN? Bwana you, sir, are a prophet!

I am saying that it is going up, then down

When they run the folkes out of money gold will crash again. All they have to do is keep oil high and the cost of everything will follow.

jim

November 03, 2011, 20:52	#1
D P Six Registered FALaholic #: 15219 Join Date: Aug 2004 Posts: 2,094	How will gold be valued? What is gold worth? Yes I know, like everything else, gold is worth what people are willing to pay for it. Prior to 1933 the government said it was worth $20/oz, then they changed their mind and said it was worth $35/oz. Today the dollar value of gold goes up as gov't devalues the greenback. But if the US dollar fails, which is historically what happens when great powers pay their bills with worthless paper, how will gold be valued? As a unit of labor, a bushel of wheat, a Colt SAA? Just wondering.

November 03, 2011, 21:24	#2
Jaxxas Don't Tread On Me! Bronze Contributor FALaholic #: 34933 Join Date: Mar 2008 Location: Arizona Posts: 3,176	I just sold a mostly USGI m1a for a Krugerrand. Sounds like a good place to start! __________________ JaXXas It's funny though, everywhere else I'm considered the lunatic fringe, on FAL Files I'm a moderate.

November 03, 2011, 21:24	#3
Thorack Acquisition Corp Dude Bronze Contributor FALaholic #: 748 Join Date: Aug 2000 Location: Omaha, Nebraska, USA Posts: 5,619	Well, A model T in that era (20s) cost $200 or about ten ozs. You can still buy a cheap new car with ten ozs. I think gold will be for larger purchases and silver for lesser. Typically a good meal for two cost a silver dollar and thats still true today, with 1 oz of silver at $34. I doubt you would want to roll into Walmart with an oz of gold and expect them to make change when you buy a case of soda. Besides there will have to be some easy test for purity and weight, especially with all the Chinese counterfeiting of coinage going on. Paper will probably end up be used again but it will be backed by something, what I dont know, as with the exception of grain and crappy loans we dont make much anymore. Thorack __________________ 1. Whenever you are talking to a woman realize this person was born insane and you will never be surprised. 2. Never let Doctors cut on you unless its life or death and ALWAYS get a second opinion. Last edited by Thorack; November 03, 2011 at 21:33.

November 04, 2011, 23:42	#8
FAL freek Registered FALaholic #: 10400 Join Date: Apr 2003 Location: TN Posts: 7,178	The other day I was told that during the depression a loaf of bread went for about a dime (90% silver coins back then) I did some quick math in my head with todays prices of about $2.50 to buy a 90% silver dime is about the price of a loaf of bread. Interesting. And with todays price of copper of $3.58 an ounce and silvers price of $34.13 it might not be too far off to assume that 10 copper pennies will be worth 1 silver dime again if things get that bad. Seem to remember hearing once that during the latter half of the 19th century a silver dollar was considered a days wage. __________________ Please put the Constitution on the teleprompter Liberals want diversity in everything except your opinion.

November 12, 2011, 01:29	#14
brunop Refresh Key Masher Platinum Contributor FALaholic #: 17136 Join Date: Mar 2005 Location: oregon Posts: 6,475	depends on what is going on to go with the dollar collapse. If you read what happened in Serbia in '92, you learn that gold was useful only in the black market, and it wasn't worth very much. People needed: 1) water & food, 2) guns & ammo, 3) shelter & fuel. And then tarps, batteries for radios, etc. Gold wasn't worth any of those things at that time. The guy who writes shtfschool blog was one of those people stuck in one of those cities. Much too late he realized that things weren't going to be normal anytime soon, and that the money wasn't worth much. He spent thousands of Euros on some rancid flour when he got the chance - about two months in. PMs only after you have all the things that you were going to use those PMs to buy when the S hits the F. __________________ "I love you, Pluskat..." - brunop "Rebellion to tyrants is obedience to God." - Thomas Jefferson "The constitutions of most of our states [and of the United States] assert that all power is inherent in the people; that they may exercise it by themselves; that it is their right and duty to be at all times armed; that they are entitled to freedom of person, freedom of religion, freedom of property and freedom of the press." - Thomas Jefferson

November 03, 2011, 22:38	#5
Bawana jim Registered FALaholic #: 17482 Join Date: May 2005 Location: west coast Posts: 5,341	I think the price of oil and the value of gold will be close to each other. The world runs on oil and those who own the oil will want a currency they can trust. The country will not get out of the depression with oil costing as much as it does. It's going to take cheap energy to get us out. jim

November 03, 2011, 23:30	#6
Nomad, 2nd Registered FALaholic #: 33115 Join Date: Dec 2007 Location: Nomadic Posts: 565	Well, 2000 years ago an oz of gold would buy you a toga (NOT every day dress, but a 'suit') and a custom set of sandals and a belt. Today it will buy you a good Suit, shoes and belt... In the 1800's it would buy you a top of the line handgun. Till just a couple years ago it would buy a top of the line handgun. (Now more) We are in a 'flux period' (When the Paper is worth less, NOT gold more) but I believe these are stable estimates. Or rather, 2000 years says so.

November 04, 2011, 09:51	#7
357ross Registered FALaholic #: 47543 Join Date: Jul 2009 Location: Utah Posts: 1,636	The price of gold has remained relatively stable, no matter how much politicians have tried to manipulate it. Put another way, you had to work just as many hours to buy the new model a as you would today to buy a new car. (Not a grossly overpriced suv or truck.) What has changed is the value of our dollar. This will get much worse when Americans finally learn that there is no gold in our national treasure, i.e. Fort Knox, which was emptied in the '70s after the gold standard was done away with.

November 05, 2011, 06:42	#9
RG Coburn Registered FALaholic #: 27406 Join Date: Mar 2007 Posts: 10,877	Where are you getting 3.58 an ounce for copper? I WANT IN!

November 05, 2011, 09:41	#12
Bawana jim Registered FALaholic #: 17482 Join Date: May 2005 Location: west coast Posts: 5,341	I still think gold is going to be a bubble like houseing and it will be timing that makes it a good investment or bad. When the bubble breaks the majority will have no money to spend. If you just paid $4,000 an ounce with a inflation run up and the economy tanks you will have $35 gold again. Speculation is risky in todays world, hope it all works out for you guys that do it. Watching our thieves in politics I don't have the stomach to risk my money on something they will steal. jim

November 12, 2011, 07:52	#16
xtremerange Curio & Relic Bronze Contributor FALaholic #: 4305 Join Date: Sep 2001 Location: Oklahoma Posts: 2,344	Some quick math: (numbers from the Worldbank and Wikipedia with all the usual caveats) World GDP 2010: $65 Trillion Total Gold Mined in Human History: 165,000 metric tons Converted to Troy Ounces: 5.1 Billion ounces Needed value of gold in current US Dollars to trade (not value of land, buildings, companies, just what is produced every year) : $12,251 Just an idea. Personally, I don't think any new political order would go without a paper currency. It has become the needed equivalent of a flush toilet indoors. __________________ --David

November 12, 2011, 08:09	#17
gates Registered FALaholic #: 129 Join Date: Jul 2000 Location: phx az Posts: 10,332	Historically- (recent history) gold hits it peak when the Dow and gold are roughly at parity - 1:1, 2:1 - thats the area where Dow theory advisors like Richard Russell tell you to flip from gold back into stocks, YMMV.

November 12, 2011, 09:15	#18
MtnWulf Registered FALaholic #: 21997 Join Date: Nov 2006 Location: Appalachia Posts: 861	I did some quick math in my head with todays prices of about $2.50 to buy a 90% silver dime is about the price of a loaf of bread. Interesting. And with todays price of copper of $3.58 an ounce and silvers price of $34.13 it might not be too far off to assume that 10 copper pennies will be worth 1 silver dime again if things get that bad. That price in copper may be per pound, but silver is probably undervalued when gold is this high. At a 16 to 1 ratio for silver to gold, which ic close to the historical average, silver should be around $100 per ounce.

November 12, 2011, 09:34	#19
Bawana jim Registered FALaholic #: 17482 Join Date: May 2005 Location: west coast Posts: 5,341	I believe that the fed is manipulating prices rather than printing money to control the economy. Yesterday oil was near $100, why? It is easier to get exess money out of the flow by raiseing the price of oil than it is to print money. I believe gold will follow oil up or down. jim

November 14, 2011, 02:06	#20
Super B Registered FALaholic #: 404 Join Date: Jul 2000 Location: Tallahassee, FL,, USA Posts: 1,632	So you are saying gold will either go UP or DOWN? Bwana you, sir, are a prophet! __________________ 'The true Soldier fights not because he hates what is in front of him, but because he loves what is behind him.' -G. K. Chesterton Last edited by Super B; November 14, 2011 at 02:19.

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