huskerbob

Will Big Money Interest Propel Gold over Its Final Hurdle?

I guess I have trouble understanding why people buy equities. When was the last time you used share certificates to buy groceries. Boy, if the apocalypse comes they will be worthless because you can't eat eat them.
If you don't understand the value of gold, you may be wondering why central banks hold so much of it. You may be suprised to find that phrases like "gold standard" are not in the least bit arbitrary. You may want to do some research and discover why gold has more intrinsic value than, say, tin. Maybe do some further research into what money is and why the dollar has declined by 95% since we ended the "gold standard".
Aren't you in any way curious about what's happen to the global economy right now? Gold is an intrinsic part of the story of how we have reached this point. Do yourself a favor and spend the effort it would take to learn a little bit about those gold and dollars you use every day.
"It will be interesting to see what happens" if you educate yourself a little bit.

Gold: The Next Reserve Currency Player

Dr. Jackpot: They have piles of oil now. Is it like living on a desert island with "no food and no way to get off"?
You may find this suprising, but some people will accept gold in exchange for currency, food, farmland, machinery, etc. You can exchange gold for lots of useful things. Maybe even an airplane to fly you out of the desert! So no need to worry about the Saudi's sitting on their piles of gold.
Nikhil- a comment from James Turk will help explain why many people worry that GLD exists only to soak up money that would otherwise support the physical gold market: "Thus, for example, when GLD adds a gold bar, there is no assurance that the gold bar really exists unless it is in the vault of the custodian, HSBC. But the prospectus discloses that HSBC uses subcustodians and even sub-subcustodians, and what's worse, "the Custodian is not liable for the acts or omissions of its subcustodians". In other words, if the subcustodian does not have the gold, GLD "Shareholders cannot be assured that the Trustee will be able to recover damages from subcustodians...for any losses relating to the safekeeping of gold by such subcustodian". This means that "Because neither the Trustee nor the Custodian oversees or monitors the activities of subcustodians who may hold the Trust's gold, failure by the subcustodians to exercise due care in the safekeeping of the Trust's gold could result in a loss to the Trust." To be blunt, these disclosures mean that there is no certainty that the gold supposedly owned by GLD really exists. After all, if there was complete certainty that the gold did exist, the objective of GLD would be to provide investors with the opportunity to own gold bullion by investing in shares of an ETF, rather than its stated objective to just track the price of gold."