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Is Gold considered as investment or insurance?
26-11-2018, 06:05 PM.
Post: #221
RE: Is Gold considered as investment or insurance?
(05-11-2018, 12:48 PM)specuvestor Wrote: If you bring USD into a department store or even shops, they can check it with machines or under the light. Try doing that with gold nuggets. The expertise of verifying gold I think has been long lost in common folks.

True, but what this Rotbart meant is, once the bullion's quality is certified, gold is accepted everywhere.
On the contrary, a verified $ banknote is not accepted everywhere.


(05-11-2018, 12:48 PM)specuvestor Wrote: In modern times gold is useful only in extreme dire straits or circumstances like war but the huge bid/ask spread is still there. Last I heard of people using gold as a currency is Vietnam war. Not even Iraq or Afghan war do I hear gold widely used as a currency but more as a "perceived" store of value.

True, as far as a widespread use of gold as a means of payment go.

Clearly precious metals cannot be used directly as a means of payment.
Imagine sending a gold panda to amazon in order to acquire new furniture...

Gold could be used as means of payment indirectly, e.g. through gold certificates, i.e. paper or electronical documents representing a title of ownership over a certain quantity of gold.
The problem here is these certificates can be falsified or hacked, the bars they should represent are not there or are encumbered etc.

That's where blockchain and gold backed blockchain currencies come into play.
Bet there is still the problem of Gresham's Law.
That's where blockchain projects like Kinesis come into play.

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27-11-2018, 01:43 AM.
Post: #222
RE: Is Gold considered as investment or insurance?
(05-11-2018, 12:48 PM)specuvestor Wrote: Last I heard of people using gold as a currency is Vietnam war. Not even Iraq or Afghan war do I hear gold widely used as a currency but more as a "perceived" store of value.

Gold was never widely used as a currency.
Clearly it is too much valuable to be used for everyday expenditures.
Traditionally silver has had that role.
Probably we should talk about precious metals instead of about gold.

That said, as far as I know, precious metals, as bullion, bars, or items (e.g. silverware) have been widely used (i.e. they worked as a currency) among the people during financial crises: in Russia's Jelzin era, Argentina's financial crisis in 2001/02 (e.g. during the banks holiday in Buenos Aires), in India last year when Modi removed major banknotes as legal tender, Venezuela and Syria today...

If they weren't enough widely used, it wasn't because they weren't accepted but because people didn't have enough.

How widely were precious metals used during the Asian financial crisis 1997?
I'm thinking about cities as well as countryside.
I don't know.

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27-11-2018, 07:09 PM.
Post: #223
RE: Is Gold considered as investment or insurance?
just to add that bartering is not the same as using gold as currency
https://www.bbc.com/news/world-latin-america-45246409

Anyways there's always articles like this and I recall even dealers took receipt of fool's gold back in 2011 but cant find it now:
https://www.kitco.com/news/2017-11-01/Fa...m-RCM.html

Physicals always have autheticity issue. Even Bre-X, Sino Forest or coal mines. Currency with denominations help solves these issues as reduces counterfeiting loss. Digital transfers reduces it further but the premise that these currencies have tangible backing like power to tax and sovereign assets should not be confused with 1s and 0s
Before you speak, listen. Before you write, think. Before you spend, earn. Before you invest, investigate. Before you criticize, wait. Before you pray, forgive. Before you quit, try. Before you retire, save. Before you die, give. –William A. Ward

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