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  #51  
Old 03-23-2020, 09:26 AM
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OK. Why did you pick 1970?
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Old 03-23-2020, 09:50 AM
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OK. Why did you pick 1970?
Why did he pick U.S. Treasury bonds? I'm ready to do a comparison with the DJIA to solve the following puzzle, but first would need data showing the dividends paid on the DJIA, since of course we'd reinvest them. Can any good Googler provide that series?
Alice and Bob each inherit $1000 worth of DJIA in 1950. Bob reinvests his dividends, and still has all that stock. Alice also reinvests hers until date X, when she trades all her stocks for gold; she still has all that gold. For what values of X (call this the Alice-win set) would Alice have more wealth than Bob today?
Every single day since Trump's election would be in the Alice win-set! That win-set also includes many dates near market highs since 1997. Several dates in the 1960's or 70's would also be in the Alice win-set if the DJIA yield averaged less than 1.3% and my program is correct.

All of which is beside the point. Gold may or many not outperform some other form of savings over some period so what? (And the point which it is beside is different than the question OP asks. )
  #53  
Old 03-23-2020, 11:38 AM
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Originally Posted by septimus View Post
..
In 1970 you could purchase 1 troy ounce of gold in New York City for $36.41. That gold could now be sold for $1500.30. (This ignores costs to store or safeguard your gold.)
...
$1500.30 > $730. Hope this helps.
We could do that same with any number of stocks, not to mention real estate, art, collectables, etc.

You also could have bought gold for $2178 in 1980 and sold it for $386 in 2001.

Gold is simply a commodity. It goes up and down.
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Old 03-23-2020, 11:51 AM
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Originally Posted by DrDeth View Post
We could do that same with any number of stocks, not to mention real estate, art, collectables, etc.

You also could have bought gold for $2178 in 1980 and sold it for $386 in 2001.

Gold is simply a commodity. It goes up and down.
So you're taking my side of the "debate."

Well ...
Quote:
You also could have bought gold for $2178 in 1980
... Except for this gibberish. If it seems to help your side of an "argument" to use so-called "constant dollars", at least say that's what you're doing.

Last edited by septimus; 03-23-2020 at 11:54 AM.
  #55  
Old 03-23-2020, 03:44 PM
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In 1970 you could purchase 1 troy ounce of gold in New York City for $36.41. That gold could now be sold for $1500.30. (This ignores costs to store or safeguard your gold.)
So you made a selective choice. People point this out. You respond that it's gibberish. I am completely less than impressed.

You keep twisting and twisting and twisting. Claiming all sorts of complete refutation of people's arguments but missing the actual points being made and burying yourself deeper in the process. Even some of your own cites refute you!
  #56  
Old 03-23-2020, 05:01 PM
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I apologize for the following off-topic tirade. But we are here to fight ignorance, and the ignorance I address is huge. Nor do I take kindly to baseless accusations against me.

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Originally Posted by ftg View Post
So you made a selective choice. People point this out. You respond that it's gibberish. I am completely less than impressed.

You keep twisting and twisting and twisting. Claiming all sorts of complete refutation of people's arguments but missing the actual points being made and burying yourself deeper in the process. Even some of your own cites refute you!
Wow. Almost every single sentence you've contributed to this thread, or the other one, has been completely wrong.

Let's start by obliterating your claim, from the other thread,
"Note that many European countries are reducing their gold reserves since they are just a waste of money in terms of storage and other fees."
Upthread we've found a source for central bank sales. In most cases the central bank's gold stock did not change over the last decade, or changed by too little to register given the source's 1-tonne granularity. I now present the results for all European countries whose gold stock changed by 1 tonne or more:
Belarus purchased 24 tonnes of gold during the last decade.
Belgium sold 1 tonne.
Bosnia and Herz purchased 2 tonnes.
Czech Republic sold 4 tonnes.
France purchased 1 tonne.
Germany sold a whopping 37 tonnes, 1% of its stock.
Greece purchased 1 tonne.
Hungary purchased 29 tonnes.
Poland purchased 26 tonnes.
Russia purchased 1464 tonnes
Serbia purchased 7 tonnes.
Turkey purchased 138 tonnes.
Ukraine sold 3 tonnes.
If we exclude Russia (a special case?) this is still a net purchase of 183 tonnes. Without excluding Russia, the net purchase is 1647 tonnes.
Dopers: Please raise your hand if you think this is compatible with ftg's claim
"Note that many European countries are reducing their gold reserves since they are just a waste of money in terms of storage and other fees."
The only significant sale was Germany's. (IIRC that was part of an experiment they wanted to see how long it would take the N.Y. Fed to deliver Germany's gold!)

Yes, I used 1970 as a starting part for one comparison. I also mentioned that many other starting dates, including some way back in the 1960's, would work even besting the DJIA with dividends reinvested. And I've repeatedly stressed that these comparisons are largely irrelevant anyway to any essential point I just make them to obliterate the nonsense that gold is ALWAYS a bad investment.

Finally, see if you can understand the following:
When discussing apples, if one of the debaters thinks oranges, specifically seven oranges, would be a more useful example than apples, it is the responsibility of that debater to write the word "oranges."
If instead he discusses an example involving "seven apples", where he actually is talking about "seven oranges" then said debater is remiss.
Do you understand that? To write "apples" when one means "oranges" is inappropriate. Do we need to put that up for a vote also?

"Constant dollars" are sometimes a useful way to think about a matter of economics or pricing. No argument there. In prior posts I bypass the need for inflation adjustment by comparing TWO investments and using nominal dollars at BOTH ends of an investment period. Others may find constant dollars convenient for some purposes.

But so-called "constant dollars" are not dollars. You don't slip them in to a paragraph to inflate your figures hoping Septimus is too dull to notice! Capische?

I'll give Dr. Deth the benefit of the doubt and guess that he Googled over-quickly, missed the word "constant," and didn't notice the absurdity of the number derived. Yet you have no such excuse. I pointed out Dr Deth's blunder and you retort with more gibberish: "twisting and twisting." Seriously: You couldn't even figure this much out??

HTH.


~~~~~~~~~~~~~~~~~~~~~

By the way:

I've never thought of myself as a "gold bug." Until 2019 the last time I purchased gold was trinkets for Mrs. Septimus two decades ago. (I try not to be overly niggardly but Mrs. Septimus prefers automobiles and iPhones to gold trinkets.)

Some months ago, based on my readings, I did sell a moderate-sized fraction of my stocks and used the proceeds to buy gold, both physical and ETF, as a "hedge." I got lucky. I wish I'd traded a larger fraction of my stocks.

I did not buy the gold because I thought we were on the verge of Armageddon. I think I was aware that gold cannot be used as toilet paper, but I bought it anyway. I apologize if any Doper is offended that I purchased gold and thinks that gold buyers are too stupid to post in these forums.
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Old 03-23-2020, 06:39 PM
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Quote:
Originally Posted by septimus View Post
So you're taking my side of the "debate."

Well ...
... Except for this gibberish. If it seems to help your side of an "argument" to use so-called "constant dollars", at least say that's what you're doing.
Nope, gold is simply a commodity like oil, pork bellies, and silver.

There is nothing special about it.

There are hundred of stocks that would have dont better, and overall, the DOW does better than gold.
  #58  
Old 03-23-2020, 06:45 PM
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Originally Posted by septimus View Post
...

Yes, I used 1970 as a starting part for one comparison. I also mentioned that many other starting dates, including some way back in the 1960's, would work even besting the DJIA with dividends reinvested. And I've repeatedly stressed that these comparisons are largely irrelevant anyway to any essential point I just make them to obliterate the nonsense that gold is ALWAYS a bad investment.

....

"Constant dollars" are sometimes a useful way to think about a matter of economics or pricing. No argument there. In prior posts I bypass the need for inflation adjustment by comparing TWO investments and using nominal dollars at BOTH ends of an investment period. Others may find constant dollars convenient for some purposes.

But so-called "constant dollars" are not dollars. You don't slip them in to a paragraph to inflate your figures hoping Septimus is too dull to notice! ...[/SIZE]

Sure, you can cherry pick lots of dates and come to the conclusion either that gold is a crap investment or fantastic. Same with the DOW, same with Pork bellies.

Yeah, sure, adjusted for inflation- but just so both figures are, it comes out the same.

There is nothing special about gold, it is no more a hedge against inflation than Pork bellies are.
  #59  
Old 03-24-2020, 04:21 AM
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Originally Posted by DrDeth View Post
Nope, gold is simply a commodity like oil, pork bellies, and silver.
There is nothing special about it.
There are hundred of stocks that would have dont better, and overall, the DOW does better than gold.
Quote:
Originally Posted by DrDeth View Post
Sure, you can cherry pick lots of dates and come to the conclusion either that gold is a crap investment or fantastic. Same with the DOW, same with Pork bellies.
Yeah, sure, adjusted for inflation- but just so both figures are, it comes out the same.
There is nothing special about gold, it is no more a hedge against inflation than Pork bellies are.
Who do you think you're arguing against here? Certainly not against me nor against anyone else in the thread.

My only comment to YOU is that we don't refer to oranges as apples, and we don't refer to "constant dollars" as dollars. You may find that thinking of "constant dollars" simplifies your thinking, but refer to them correctly when you mention them.

Please acknowledge this, and pledge to exert more care in future. Otherwise your posts will cease to be worth reading.
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Old 03-24-2020, 05:52 AM
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Please acknowledge this, and pledge to exert more care in future. Otherwise your posts will cease to be worth reading.
An excellent point that you should consider.
  #61  
Old 03-24-2020, 05:10 PM
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Gold is a commodity, but it's got a number of qualities that make it fairly unique among commodities for use as a value store.

It's very value dense. One can carry a significant amount of wealth in gold. Can't do that with oil or pork bellies.

It's very liquid, as commodities go. You can likely get a substantial portion of the melt value of your gold in any city of 100k or more anywhere in the world.

It doesn't go bad or degrade (easily).

It has a history of being a value store, which means that people treat it like a value store, and tend to retreat to it in times of monetary upheaval.

Like, it's one thing to say that gold is valued as it is for mostly arbitrary historical/psychological reasons. That's true. But you can't use that to discount the real effect that those have. Because history and psychology have real effects on the world! If a huge number of people labored under the delusion that pork bellies were a good inflation hedge, they would actually become a better inflation hedge because people would preferentially buy them when they were worried about inflation.
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Old 03-24-2020, 05:39 PM
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My father had braces on his teeth during WWII. Gold was used for the teeth bands (it used to be that instead of gluing the brackets right onto your teeth, they put bands around your teeth, and then fastened the brackets to those). They were using gold, I think mainly because most other metals like nickel, steel and copper were needed for munitions.

I have no idea if gold couldn't be used in munitions, or it was to expensive, because it couldn't be retrieved. According to my father, his father paid a deposit on the gold in his braces, then after they were removed, the orthodontist reclaimed the gold, and his father got the gold deposit back. I don't know if it was for the full amount of the gold, or not.

My father is smiling closed-mouthed in every picture of him between the time his adult teeth came in, and the braces came off.

I can guess he had some pretty messed up teeth for a Depression-born kid to get braces during a world war.
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  #63  
Old 03-24-2020, 06:10 PM
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Originally Posted by iamthewalrus(:3= View Post
Gold is a commodity, but it's got a number of qualities that make it fairly unique among commodities for use as a value store.

It's very value dense. One can carry a significant amount of wealth in gold. Can't do that with oil or pork bellies.

It's very liquid, as commodities go. You can likely get a substantial portion of the melt value of your gold in any city of 100k or more anywhere in the world.

I.
You can't eat gold.
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Old 03-24-2020, 06:18 PM
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Getting back to the OP, a good benchmark might be tellurium. Its about as common in the earths crust as gold. It is used in solar panels, I don't have a good cite for this but cobbling together a few numbers from over the internet, I think that around 1,700 metric tons of tellurium are used world wide in industry (maybe a bit less), as compared to 700 metric tons of gold (not counting jewelry).

Its price has fluctuated a lot over the last decade when solar panel demand caused a spike which then crashed in 2011 as production increased. So prices ranged from $30 to $450 perk kg. Still its much much cheaper than gold.
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Old 03-24-2020, 06:25 PM
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You can't eat gold.
Right. You can't eat most things that are a store of value. What does that have to do with anything I posted?
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Old 03-24-2020, 06:37 PM
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You couldn't make functional braces bands out of pure gold-- It's way too soft. It might have been some alloy, though.
  #67  
Old 03-24-2020, 07:58 PM
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How on Earth does anyone think that gold is some sort of magic wealth generator?
Because a goldbug conned persuaded them.

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Originally Posted by DrDeth View Post
You can't eat gold.
Actually, you can. But it's rather lacking in nutrition.

Intrinsic value is bullshit. Value or worth are always relative. Something value or worth is exactly what a buyer and seller agree upon. If I'm really really hungry, a dozen shiny fat gold coins might not be enough to buy your scrawny chicken. What, $2000 for a fried wing? It's cheaper than starving.
  #68  
Old 03-24-2020, 09:17 PM
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Right. You can't eat most things that are a store of value. What does that have to do with anything I posted?
You can eat pork bellies. i.e bacon.
  #69  
Old 03-25-2020, 09:56 AM
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You can eat pork bellies. i.e bacon.
Pork bellies are a commodity but generally not considered a store of value.
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Old 03-25-2020, 03:47 PM
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People often assert that gold has no inherent value.
Nothing has inherent value. It has only the value people extrinsically and arbitrarily ascribe to it, except for those things necessary to stay alive (ironically air and water are pretty cheap).

Quote:
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Its electrical conductivity is 30% less than copper. That is significant.
I did not know this. So it's a total scam to gold-plate the contacts on cables.

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Originally Posted by JasmineOlive View Post
gold is more than worth it! gold has its own value and is much higher than any currency in the world.
I would rather have a million US dollars than an ounce of gold. There. Currency is worth more.
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  #71  
Old 03-25-2020, 05:39 PM
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The purpose of gold-plating electrical contacts is to prevent corrosion, which is practical or even necessary for some contacts in some applications. For audio equipment, though, yes, it's mostly a scam.
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