It takes more dollars to buy an ounce of gold than it did before

saathi · Feb 18th, 2009, 07:23 pm

Quote:

What will be in the gold future we are often asked.

Of course no one knows the future and there are many factors that affect the value or price of gold. But if one judges by the current activity of gold over this past year or so, it looks like the value of gold is going to just continue to rise.

How does that affect the gold coin collector?

Basically it is good news. It means that the gold coins that the collector studiously accumulates only improve in value over the years. Actually it is probably not so much the value of gold increasing as the value of the dollar declining against the value of gold.

A recent article pointed out that there have been so many dollars printed up that for the US to return to the gold standard would mean that every ounce of gold would cost over 52 thousand printed dollars. This means that whereas 100 years ago it only took 20 dollars to buy an ounce of gold. A few years ago 280 dollar bought an ounce, these days it will take 550 to 590 currently to buy an ounce of gold and, if the gold standard was reintroduced, then it would take 52 thousand dollars to buy an ounce of gold. Gold has certainly not changed. But the dollar has!

This demonstrates that the dollar has seriously deteriorated since the gold standard was dropped but that the value of gold continues to remain high.

It is most likely, in my opinion, that gold will continue to improve in value against the dollar provided that more dollars are printed than are needed just to manipulate the economy, and that those people who collect and hold real gold will have a distinct advantage over those who hold dollars only.

This applies to gold coins, gold bars, biscuits, jewellery and any other form of real gold one has.

Even if one paid top dollar for a proof gold coin 2 or 3 years ago the value of that coin will now be over the total cost of purchase and there is no sign that this will decrease.

What about collecting coins and bars in the future? Well with the likelihood of a continual rise in gold (more properly expressed by, "it takes more dollars to buy an ounce than it did before", then the sooner one buys gold the better off one will be.

So the gold future looks bright and there is good sense in continuing to buy as much gold as one can get one's hands on!

http ://goldprice.org/buying-gold/2006/04/gold-future.html

dollar is declining, there is no doubt about it. the way current u.s. economy is headed, the dollar is not going to last, and after the dissolving of u.s. federal government, amero currency will be issued between u.s., canada and mexico, making it a north american union. analysts are predicting this to be the worst year in u.s. history.

AQ · Feb 18th, 2009, 07:57 pm

yeh kaisee logic hai bhai jaan... gold is expensive meaning more money anyway.... everything is getting expensive... I think gold prices are also regulated by oil prices

saathi · Feb 18th, 2009, 08:37 pm

the logic here is that when federal reserve bank was founded in early 1900s, it destroyed what effectively was the means of doing business in the country for a long time. government was printing dollars, not borrowing money from a separate, private banking institution with interest on that money borrowed which it has to pay back. this is the magnitude of the problem, everytime the government sector has to print money for the sake of running the country and to pay off creditors, it asks the federal reserve bank, which not to mention holds the actual gold and prints money as receipts. the u.s. dollar is a floating currency, it has been for a long time. there is more floating currency being spread in the market than there are receipts to back up that money floating around.