Mike Mustard

Though I generally like Roubini's macro views, where he understands the niceties of Anglosphere rational economics to be trumped by the crude reality of a debt deflation, I think his views on gold are a little dogmatic. I am not sure why this is, and just put it down to some idiosyncratic quirk of his own.

 

But yes, his is the narrow rationalist criticism of gold, that is has no "intrinsic value" [not productive, can't eat it etc], which surprises me given his excellent and more comprehensive approach to the wider economy. Perhaps being such a public figure there is [peer] pressure to be more "conventional" in some respects.

 

 

Of course the obvious response to all of this is that gold does have [utilitarian] value as a monetary asset, having historically enabled us to measure value economically... and then perhaps once again in the near future as modern currencies become increasingly problematized. It's value is not "real" or "objective", but ideal and subjective [the market being a collection of subjects... hammering out the worth of objects].

Yes. It just seems to be a dogma that some people adopt without really thinking about it.

Aside from the fact that it does still have industrial and medical uses gold is also highly prized for its malleability and the fact that it does not tarnish making it the choice material for much jewellery. It is also used in painting, architecture and religious iconography. It never seems to have been disregarded in all of history.

Its use as money is also a sign of its value. It is a rare metal which can be standardised into coins and used as more permanent store of value than can the coins of a fiat currency. This is an incredibly useful function of the metal, particularly in unstable economic conditions.

Aside from this it seems to hold a symbolic value which is immune to the passing of the ages. This alone suggests that it is pointless to suggest it is valueless by some "intrinsic" measure. i.e. It supposedly has no intrinsic value but it is always valued by most people all of the time. No one in their right mind would throw away a gold coin because it had no intrinsic value.

A rhetorical question I'm sure, but I'll hazard a reply anyway.

 

I guess the proponents of intrinsic value are thinking of something's utility value, having in mind here its industrial or material use. It is not too different from the way in which dialectical materialism valued things when you think about it, and like that outdated philosophy remains clueless as to how and why people actually do, in the real world, put an "idiosyncratic" [from a reductionist's perspective] value on things.

 

I value, therefore I am. Irreducible.

I know there are equations used in finance to calculate the intrinsic value of an option but I do not know if this is what he is meaning.

Normally I do not find it a particularly useful adjective.

Maybe he means that gold doesn't increase productivity and cannot be used in machines that increase efficiency and productivity and so therefore does not contribute to GDP? But if he does mean this I am not sure it is true.

ROUBINI -On Gold

 

...since gold has no intrinsic value, there are significant risks of a downward correction.

what does "intrinsic value" mean?

Has anyone read this? If so, what do you think? Further, would anyone be kind enough to precis it in terms that are understandable to a complete dummy?

 

It doesn't sound good to me. Although what I do take from it is, buy silver now (physical only) because the price could explode any minute. Or have I read that wrong?

 

 

Your intuition has got the better of you. No need for a precis. fwiw I think Mr Butler is driving at is that there is simply not enough physical silver to cover the claims made on it. So if you want some you sure as hell had take delivery ASAP before everyone else does. It's a win win situation. If we have a real and lasting recovery silver is essential and thus will rocket in price. If we have a crash silver will stand next to gold as money itself, as it always used to.

 

Conclusion. Buy lots of it quick.

 

On the other hand you have some people think it will drop like a stone in a crash, like last time. Maybe that is right and if so it would cause a frenzy of buying IMO and soon be gone.

 

Conclusion. Buy now, averaging in. It's cheap at 17/18 dollars anyway.

Do you think the "gold money" silver in vaults is really there? Should we be suspicious of their claims and buy coins and bars instead?

If this was so easy, why couldn't you trade any market, i.e., why bother with gold? You would be retired already anyway from all the profits you have made in trading Google & Co..

I am not implying that having a method would mean it is easy.

In fact it might be difficult and time consuming but good enough for you to make enough profit to make it worthwhile.

I don't see a totally polarized situation in which either you have and use a method and are a billionaire within minutes or else you lose.

I am starting to get worn down.

I am now thinking of playing a more ambitious game and trading in and out of gold as Doctor Bubb describes.

By not doing this we lose the opportunity of filling our boots on the downward waves that occur inevitably in all markets.

If gold is going up anyway in the long term then as long as we buy in again we won't lose our shirts.

The only way we could do worse is if we sold before the peak of any particular wave and then it never quite dipped below our selling point.

My problems with starting to trade is that I do not believe I have access to a method for predicting the waves that will give me an advantage over the majority of the gold traders. Therefore I suspect it would either result in a zero sum game or a series of small losses for me. If I can find a good method I might be persuaded to enjoy a gamble.

I wonder if the internet is a double-edged sword. On the one hand we have this wealth of information available at our fingertips. There is the potential for sharing knowledge and gaining insights from mulitple sources and perspectives for those that are interested.

 

But then on the other hand we have all the potential for a narrowing of consciousness to one bandwidth, where one certain perspective can be reinforced in an ongoing feedback loop between purely like-minded individuals. Instead of facilitating a liberal broad-mindedness, the internet would just facilitate a dogmatic narrow-mindedness which would become incapable of understanding the thoughts of others. Any disagreement is shouted down and a tribal consciousness "which is solitary, poor, nasty, brutish and short [tempered]" is developed. Is this progress?

 

I hope this site continues to be a tolerant and liberal space for tolerant and liberal minds.

 

 

This is a good point. In general the internet might not be making people more aware as many would have assumed.

There is nothing worse than a forum that becomes either totally one sided or, alternatively, totally polarized into a yah boo widdling contest.

None of the debates on climate for example ever involve the latest research or anyone who is really knowledgeable about the latest research. It is just two entrenched camps who could never be persuaded to change their strange minds.

Also, trading just seems to be about predicting the behaviour of the herd. It is really not very interesting unless you have a bet (a bit like watching the 15:20 at Plumpton without having a wager on the winner).

The discussions on longer term investments are, possibly, more interesting because they range over history, psychology, philosophy, politics, geography, conspiracy theories and economics.

Well I've finally put my money where my mouth is...

...and sold to rent.

 

Completing tomorrow and moving my family into rented, despite ENORMOUS emotional pressure from everyone around me. It's a lonely place being right...

 

Managed to offload a "prime london riverside flat" (2 bed, 2 bath) for a shade under £600k.

 

Feels glorious to be free...

A courageous and commendable move. I hope it works out. (I think it will).

Yeah.

 

http://gold.approximity.com/since1930/UK_H...Silver_LOG.html

Good charts. Thanks.

Come back Leslie Phillips!

Was just checking out coininvestdirect. It is hard to stomach the VAT you have to pay just for swapping fiat for PM coins.

Britannia 1 Ounce 2 Pounds 2009

.

Country: Great Britain

Weight: 31.10 Gramm

Purity: 958

Buy Price: £12.24

SELL NETTO PRICE: £15.29

SELL BRUTTO PRICE (incl. VAT): £17.58

Brutto Price includes 15% VAT for customers from United Kingdom

Is there any way around this if I want to buy physical?

The thing that astonishes me most about the UK media is how property price inflation is normally reported as a good thing.

People visiting from continental Europe cannot understand why something becoming more expensive fills so many British people with glee.

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