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XSauravX OP t1_j1gb5fy wrote

Reply to comment by nim_opet in Eli5 Why did Canada get rid of it's all gold? by XSauravX

Cuz gold is finite and dollar ain't I mean the dollar is gonna be totally useless when you are trying to trade with someone who doesn't accept the dollar and gold is accepted by everyone u can easily exchange gold for the currency of that nation but there are country which will not accept the dollar

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croninsiglos t1_j1gd33a wrote

A bond has a guaranteed income vs gold which doesn't for any given currently conversion.

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XSauravX OP t1_j1gdpi2 wrote

What's the point in having 4% guaranteed income while inflation is 7% while gold stays neutral an ounce of gold is still an ounce of gold and usually if gold loses it value it recovers and everyone is fine but if the dollar starts gaining it's old value(deflation) everyone loses their shit

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croninsiglos t1_j1gdw4l wrote

How much did it cost you to house that gold, pay salaries for security, etc?

Due to inflation, the cost in gold is more and more for the same goods, because you still need to convert to the dollar.

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XSauravX OP t1_j1ge23i wrote

Pretty reasonable while looking at the ups

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MercSLSAMG t1_j1gmkg0 wrote

Gold value is related to the US dollar. An ounce of gold = a set amount of USD based upon commodity trading. So if the USD loses value so does gold.

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XSauravX OP t1_j1gmzap wrote

Actually it's just opposite the value of gold has risen and is at ATH rn while the USD is at ATL

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MercSLSAMG t1_j1gnqt2 wrote

If you want to buy 99.9% of stuff with gold you would first have to sell your gold to get a currency. And the exchange rate of gold is based upon USD per ounce.

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XSauravX OP t1_j1gny5m wrote

Yes and an ounce of gold has kept on rising Against the dollar it was around $21 or $34 in 1971 and it's over $1000 now

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MercSLSAMG t1_j1gqc65 wrote

https://www.macrotrends.net/1333/historical-gold-prices-100-year-chart

More like ~$300 USD/ounce. So you take into the inflation of the USD which is 1 dollar in 1970 is roughly 7.50 today - that makes gold not have any increase whatsoever vs. the USD. In fact it's almost identical to a 4% cash bond.

So investing in gold is like investing in cash bonds - which is to say it's a shitty investment to make money, but has near guaranteed value.

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XSauravX OP t1_j1gn204 wrote

Actually it's just opposite the value of gold has risen and is at ATH rn while the USD is at ATL

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MoogTheDuck t1_j1gvb2g wrote

You aren't really asking about gold, you're asking about fiat currency. Some people say that the US dollar (or any fiat currency) isn't real, has no intrinsic value, only exists because we say it does... this is not true. Fiat currency is backed by law and the state's monopoly on legal violence. To say that the dollar is useless is basically saying the US economy doesn't exist.

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nim_opet t1_j1hdie5 wrote

Please find me a bakery that will accept your gold. I’ll wait

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