Heavens to Betsy, JAQ, what a dreadful idea.
How are they not legitimate?
I don’t think they are an out and out fraud, but they seem to be some combination of a collectible and commodity. Collectible because it’s higher priced than the commodity value. I’ve always regarded people paying $100 for a coin with $50 in gold to be getting ripped off, but maybe that’s just narrow minded of me. Maybe it’s like buying $3 of fish, rice and seaweed for $20 as sushi, which I do.
ETA: I see there’s a thread on this. I will go read it. Probably have my ignorance fought.
Leonardo Da Vinci’s Salvator Mundi sold for over $450 million. I doubt the canvas, frame, and paint are nearly that valuable. I mean, the paint is all dried out and you can’t even reuse it.
The value of any item is always whatever someone is willing to give you for it. If I have an apple, and Jimmy has a stick, and I give Jimmy an apple to trade for it, and Joey gives me two apples for the stick, I have twice as many apples as I did before. It doesn’t matter that I can’t eat a stick, I was not ripped off by Jimmy by nature of the fact that I ultimately got another apple.
That’s how economics work.
Goldbacks aren’t unique pieces of art, they’re being made and sold by the thousand for the express purpose of being collected. Collected in part because they’re “backed” by actual gold present in the note itself. Same with overpriced gold coins.
The painting isn’t valuable because it’s a unique piece of art. It’s valuable because Saudi Arabian crown prince Mohammed bin Salman wanted it bad enough to pay so much money for it. In fact, you picked a really bad example for this particular nitpick, because the Salvator Mundi has been copied at least 30 times by Da Vinci’s followers, and the artwork that the prince purchased may not have been the original. (That is a point of contention among art experts and historians.)
But again, none of that matters, because $450M is what was paid for it, which makes it the most expensive painting in the world.
If Goldbacks end up being something valued, they might be worth something. It depends on what people are willing to pay for them.
Remember Beanie Babies? At the height of their popularity, people were buying them brand new and reselling them for as much as ten times the cost they had paid retail. They made up 10% of all transactions on eBay during their peak. These days, they aren’t worth more than any other small stuffed animal. The fad came and went, the bubble burst. Just as tulips were once insanely overvalued for a brief time in one infamous incident.
Again, the point is that you can’t judge the value of an item by what it’s made out of. You can’t even necessarily judge it by its intrinsic nature. It’s valuable solely based on what someone else will be willing to trade for it.
It costs 17 cents for the government to produce a 100 dollar bill. But it’s still worth $100.
Goldbacks might be a scam, and they might not, but not based solely on the gold content within them.
I’m sorry?
By this statement, tulips were valued exactly where people were willing to trade for them, thus they were correctly valued right up until the moment the market for them crashed, at which point they were correctly valued at 1% of yesterday’s “correct” value. Ultimately, this circular definition of value makes the concept of value, of things having value, sort of pointless.
Goldbacks and made for collecting gold coins share a property in that they purport to have intrinsic material value, but the sell price far exceeds that intrinsic value, and they have no history of holding value in excess of their material value. Other things do have that history, which is why a $100 bill isn’t worth 17 cents.
I was just checking out some lego prices for some models that have been sitting in my son’s room for years. In used condition, most of them could be sold for more than double what I paid. People want them, and will pay for them. They’re not unique pieces of art either.
Collectable things are weird.
Yup. That’s probably the best thing to take away from this.
Yet it is accurate. “Value” has a number of meanings, the first of which is “the monetary worth of something”.
The monetary worth of anything is what someone is willing to give you for it. That’s factual. I can’t say I got a lot out of my business education, but that part stuck with me.
I’m guessing Cheesesteak knew what Tulipmania was; the “I’m sorry?” was about the contradictory usage of “value” and “overvalued”.
I assume so as well, which is why I didn’t respond by explaining what the tulip comment was about.
But I see no contradiction. Someone bought a copy of Super Mario Bros for $2M. To me that is vastly overpriced, and yet that was the price of the sale.
I’ve read and watched investigations of reported auction collusion that is alleged to have artificially driven up the prices of these video games. So, I feel justified in saying that they were undoubtedly overpriced/overvalued. And yet, that was the price. The value of those games was increased.
There is no contradiction there. You can state what the value of an item is and also hold the opinion that the value is inflated and unjustified. I think that a bottle of Lous Vuitton perfume is insanely overpriced at nearly $300. But that’s how much it costs. I don’t think someone is being scammed if they pay that much for a bottle, because the market sets the price. It would be a scam if they paid $300 and got an empty bottle, or a bottle filled with an imitation fragrance that you could buy for $15 at Walmart, but not if they got what they were expecting to receive with the purchase.
Hopefully I’ve explained myself properly.
Indeed so. This argument about some kind of natural ‘inherent’ value veers awfully close to the sort of goldbuggery the Goldbacks are designed to take advantage of.
It seems to me that Goldbacks are pretty scammy. If they’re being sold on the idea that gold will keep it’s value where other currency won’t, and people are having to barter. What use is 1/1000 troy oz of gold? Which also is between two layers of polyester. Is someone gonna peel it apart and use that thin layer of gold?
It’s even a bad rate if you’re trying to make the argument that it’s the gold that is important. A $50 1/20th oz Goldback is 191 dollars. Which makes 1 oz just a bit over $3800.
The US mint sells a 22 karat 1 oz coin for $2047 or $2132 (depending on method of payment.
It’s not a scam if people are collecting them because they value the idea of having little pieces of gold and polyester around them.
It is a scam if people are investing in them with an expectation of being able to recoup their costs in selling them, much less at a profit.
Do you really think that people are collecting them for their nick-nack value?
A painting you pay $450 million for you may reasonably expect to sell for a comparable amount. A $100 bill is backed by the full faith and credit of the United States. Even the Mario game has a value in being extremely rare.
Your better comparison is the beanie baby bubble, and the only reason that wasn’t a scam was that it was not an intentional bubble, but came about due to unintentional manufacturing practices and people making financial decisions with poor information as to their investment vehicle.
But then, I don’t see it as inherently any more scammy than any of the collectable plates or coins I used to see advertised on daytime TV all the time. (I’m sure they are still advertised, I just don’t watch daytime TV anymore.) The only real difference is that the value of this commodity is artificially inflated by a cult of personality, potentially making them an even worse investment than tchotchkes from the Franklin Mint.
I think the real problem here is people using the word “value” to mean either “price at the moment” or “something more / different / in addition to purchase price and/or current price.”
Yes, the dictionary supports both usages. And biz-finance speak is full of using “value” when they really mean just the most restrictive “price at this millisecond.”
Communicating clearly (heck, thinking clearly) requires we use words that mean what we intend and that we all agree on which definitions are being used.
If I was Emperor, the use of “value” as a euphemism / false synonym for “price” would be banned.
Well I think they should have put this gold in between a plastic sheet and a chocolate bar. So it will always have some value.
And one thing I’ve learned is that if people are collecting something right out of the gate, they’re not a good investment. There’ll always be plenty of them out there.
From my (only?) area of knowledge: when I was a kid, comic books were not being “collected”, they were being rolled up and stuffed in our back pockets. THAT’S why they’re scarce, esp. in pristine condition.
By the 80s and 90s, speculators were buying up hundreds of “Sure To Be A Collector’s Item!” comics, with Embossed Holographic Foil Fold-Out Cover, with a Drop of Rob Liefeld’s Hair Conditioner in the Ink!
I’ve often wondered about how those non-comic-fan speculators feel about it now…
… I guess I could just ask a Trump Digital Trading Card “investor”.
Apparently TFG (or, as read into the Congressional Record, the PAB) thinks that the nonsense hearings about Twitter prove that the election was “RIGGED and STOLLEN”.
Too bad his “stollen” claim isn’t on Twitter so he could see the avalanche of Pussy Ass Bitch replies.