The great gold crunch

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11-24-09 07:39 PM

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Main - Debate - The great gold crunch

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RomManic

Posted on 08-01-09 11:14 PM (rev. 2 of 08-01-09 11:14 PM)

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So here's a question: When someone owns more gold than the government, what happens? Can they BUY the government if it's in so much of a pickle that the government itself needs a bailout?

EDIT:

Some background on this: I've been watching a fair bit of TV lately, especially CNN, and I noticed that more and more people are buying gold. Which means that no matter how much they sell, they'll be making a shit-ton of money somehow. Which means someone is buying gold from the front-end. Which means those people buying gold from the front-end are creating a funnel into one ultimate source.

Any thoughts?

Marzen

Posted on 08-02-09 06:47 AM

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I'm not sure. How much gold does the government actually HAVE? All the economic stuff with gold backing the entire economy confises the crap outta me, so I just normally leave it be. But I'm not sure that countries are for sale... Normally. I've heard of it before, but they were incredibly small countries.

Besides, if a government is in substantial financial debt, I'm not sure if buying it would be the best course of action. But oh well.

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Posted on 08-03-09 04:08 AM

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If you think it's funny to have gold in your pocket and brag about it to your friends, noone could care less. I think gold has better uses than to sit on one's bed table, like in processor components for example...

The government is not meant to be bought. It's a public service...

ultimatepower22

Posted on 08-04-09 04:54 AM

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You'd be surprised what people would do for money...

Gold, yes, it's worth a lot, and is used for processor components, and things like that, but that's it. Find anything better than gold for it (and something that people like more) and it becomes practically worthless.

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Bukkarooo

Posted on 08-04-09 06:48 AM

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Wouldn't this only really work if the country used a gold standard? Or am I thinking along the wrong lines here...

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Omi

Posted on 08-06-09 06:46 PM

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Posted by ultimatepower22

Gold, yes, it's worth a lot, and is used for processor components, and things like that, but that's it. Find anything better than gold for it (and something that people like more) and it becomes practically worthless.

Gold bars will never become worthless - infact, they continue to increase in value every now and again. Gold is used for many luxuries, especially for the richer side of society, so the more Gold unavailable to the public, the higher it's value becomes, which is how many people get rich these days. It decreases in value too, ofcourse, but in very small amounts in contrast to the increase in value.

Wouldn't this only really work if the country used a gold standard? Or am I thinking along the wrong lines here...

Every country uses gold, the less gold that becomes unavailable then the more money a country would spend on gold, which results in an economic crisis, which means gold-diggers would be able to (by theory) bailout the government.

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Xeruss

Posted on 08-06-09 09:50 PM

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That is an absolutely brilliant idea. Everyone, start sending me your gold.

Honestly though, I think there are far too many variables for something like this to ever really work.

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Posted on 08-11-09 12:50 PM

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currencies need to be stable, otherwise transactions cannot be done in any suitable way, so even if gold is a good investment, it will only affect the US as much as any other foreign investor who owns more of the US's debt than US citizens: read china irl.

TheRantingLogician

Posted on 08-11-09 09:32 PM

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The US no longer uses a gold standard, we operate under a fiat money system now IE: our money has value because the government says it has value. One of the main reasons people buy gold is because there is a set amount of it on the planet, it has scarcity, and with scarcity comes value. The US dollar, like currencies in many other countries, only has value because the US and other countries acknowledge it to have that value. This means that in the here and now it has value, but if the US, for instance, loses power or slips away from its status as world economic super power the country will find its currency value draining away; eventually into nonexistance.

Gold standard was once used for the same reason that people buy gold today. It doesn't matter what countries or governments are around or what currencies are being used, gold will always have value. Some people, like Ron Paul (lol) want gold standard so the value of US currency will always be inarguable. Unfortunately there's not enough gold, and the value of gold is not high enough, to facilitate ever backing the spending the US participates in.

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Main - Debate - The great gold crunch

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