Having read about the London gold fix recently i wonder why is gold (or anything for that matter) a safe place to put your faith in.
When a few bankers decide on the price twice daily (I call this manipulation) and the free markets (or me and you) have no say whatsoever whay are we so invested in it?
Please offer some input
Useful skills (in making real things) and knowledge (of how real things works) is safe heaven for money, not precious metals or anything else.
Precious metals is worth something only if there exists a persons who wish to own and stockpile them. Of course, presious metals have their own value too, but it is a very specific thing - either it is a luxury, that will be barely needed in times of crisis, or electronics plating that is too thin to be something noticeable on the gold market.
In case of real crisis, it would be really hard to use your precious metal savings. Just imagine a real situation - you have gold and need potatoes, farmer have potatoes and need spare parts for tractor, mechanic have spare parts for tractor but need replacement carbide cutters inserts for his lathe and so on. And there are no anybody who really need gold. Why do you think that you will get your potatoes in exchange of gold, and if you do, how you will convince farmer to accept your gold?
Gold is weird thing - most people can't use it, and it only needed by elite. If elite is exterminated, then who will need that gold and why do you think it will worth anything?
To be more clear, replace gold with another precious metal, say, osmium. Elites don't collect osmium, so, suddenly, there is no any money properties in osmium. You will never exchange it for something. And it is not different from gold in terms of chemical nobelity. Gold have current value only because there exists those who want to collect and own stockpiles of gold. In situation when nobody will want it, gold value will be as value of low quality soft and weak stainless steel, not higher.
/end thread, nothing else to add.
Gold isn't about a 'real' crisis. It's a hedge against central bank money debasement. And banks have all been printing money like crazy.
The problem with gold is that the way to achieve central bank money debasement include neutralisation of those who need to stockpile gold.
And during that fight gold does not help a lot, since those who is behind central bank money debasement did everything to make nearly impossible to use gold as a mean of money saving. You will inevitably loose part of gold value at the moment of buying and at the moment of sell.
You lose money holding fiat 100% guaranteed. They actually have targets about how much your currency will lose value every year. It's usually 2% but of course it's compound interest.
In most cases, certainly yes. In rare cases using fiat of another country with deflation could be even profitable.
2% is very optimistic. Infaltion is often hidden in food, goods and other stuff. F.e. you could by a sausage for $1 10 years ago. Today same sausage cost $1.2 and you think that inflation is 2%. But in new sausage you have only 50% of meat that was in sausage 10 years ago, other is soy beans or whatever. So, real infaltion is much higher - at least 7%.
On top of all that, if you have to move around, hauling gold isn't exactly lightweight goods
Disagree. $250,000 is like 10 pounds of gold.
People with more resources will happily take your gold for a few potatoes
What for? What they will do with that gold? Where they get potatoes? Do they have enough potatoes to satisfy demand?
Perhaps my point wasn't clear so I'll use an example.
During the hyper-inflation in the Weimar, the people who had access to foreign gold bought the assets of the native Germans who were desperate for food and fuel etc. at knock down prices.
As things calmed down, the asset holders became the power brokers, giving jobs to their favoured people, who were also non-native Germans.
The theatres were turned into sex-show. Book stored turned into pornography shops. Prostitution (both adult & child) was rampant.
And then one day, for no reason at all, a madman came to power and brainwashed everyone.
You still don't show how that gold will be backed with goods, to make it work like money.
In Weimar Germany wealthy elites who control food and goods wanted to obtain gold from people. People, obviously don't need gold, they want food and goods. Without those who want to stockpile gold, there is no endpoints of exchange chains that makes the gold worth something.
Gold obviously don't have any real value except its value as a soft non-rusting metal. It is highly overpriced only because of those who have some sick obsession to stockpile gold for whatever means. If nobody will want to stockpile gold, what it could be useful for in such enormous amounts?
In reality, precious metals are not far from fiat. Their price is artificial and controllable. It is not a self-valuable asset, at least at current prices.