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Gold’s value comes from its usefulness, not from central banks. It is important to understand that the market gives gold its value, though central banks would have you believe otherwise. Central banks tell you what they want you to hear. They would like you to think that they control gold’s price, as that perception makes it easier for them to bolster the demand for the dollar. But the reality is quite different. The market determines gold’s price, just like it determines the price of a Picasso or a loaf of bread. Central banks intervene in the gold market – just like they intervene in many other markets. The reason for their attempts to manage the gold price is simple. By keeping the gold price low, central banks make the dollar look better. With their interventions central banks are trying to make the dollar look worthy of being the world’s reserve currency when in fact it is not. The gold price is a barometer that measures whether a national currency is being managed well (i.e., no inflation). So by trying to keep the gold price low, central banks artificially make the demand for dollars higher than it would otherwise be. Intervention is also consistent with the statist philosophy of many governments these days, namely, that they will usurp whatever power is needed to try maintaining the status quo that preserves the privileged position politicians enjoy at the expense of taxpayers.
1) Gold is a special, unique commodity
2) Gold’s supply is its aboveground stock
3) Gold is money
4) Gold is an alternative to the US dollar
5) Gold preserves purchasing power
6) Gold’s value is determined by the market
7) Gold is in a bull market
8) Buy physical gold, not paper ‘gold’
Originally posted by Feltrick
reply to post by jeichelberg
What'll 2 rolls of toilet paper and a wool blanket get me?
Gold will have its uses early on, but during an extended emergency, bartering useful items and skills will be worth more.