In one of my recently published blogs (“bread and gold”) I assumed that gold didn’t have the symbolic, culturally-determined value it used to have until the end of the 19th century.
But having read the extensive information on “gold as an investment” I start to doubt. (http://en.wikipedia.org/wiki/Gold_as_an_investment). The article told me that gold doesn’t have an absolute value, it’s not something definitively valuable like wheat or rice, or potatoes. Almost every paragraph in the article starts with the words: “some people think”, “many people believe”, etc. The value of gold is heavily dependent on what people think or believe about gold as an investment. If most people believe it’s a good investment, then the price will rise (as it does the last couple of years), if they don’t think so then it will decline.
At the end of the day this also holds for money and other assets. The matter becomes now more interesting because of the American debts to investors in non-allied countries such as China. This morning I read about the mortgage market in the U.S., an increasing number of people are not able anymore to pay their mortgage terms. I read about the “subprime mortgage market” and that investment-advisors recommend not to put money in the construction-, car- and retail-industries. Will gold become an informal (and eventually maybe formal) support of money capital? Will it affect the value of money, maybe be an alternative to it in some cases?
According to the OESO, it will not, because the OESO says in their forecasts today that the American economy will continue to grow, and that this recession in the mortgage market is only very temporary.
And I think: of course they forecast that, because if they would forecast otherwise, they would evoke a devastating self-fulfilling prophecy in which “the rich countries” would be pulled downwards together with the U.S. whose debts they support. So it’s better to evoke a self-fulfilling prophecy into the other direction: everything OK guys, you can buy “your” house!
But having read the extensive information on “gold as an investment” I start to doubt. (http://en.wikipedia.org/wiki/Gold_as_an_investment). The article told me that gold doesn’t have an absolute value, it’s not something definitively valuable like wheat or rice, or potatoes. Almost every paragraph in the article starts with the words: “some people think”, “many people believe”, etc. The value of gold is heavily dependent on what people think or believe about gold as an investment. If most people believe it’s a good investment, then the price will rise (as it does the last couple of years), if they don’t think so then it will decline.
At the end of the day this also holds for money and other assets. The matter becomes now more interesting because of the American debts to investors in non-allied countries such as China. This morning I read about the mortgage market in the U.S., an increasing number of people are not able anymore to pay their mortgage terms. I read about the “subprime mortgage market” and that investment-advisors recommend not to put money in the construction-, car- and retail-industries. Will gold become an informal (and eventually maybe formal) support of money capital? Will it affect the value of money, maybe be an alternative to it in some cases?
According to the OESO, it will not, because the OESO says in their forecasts today that the American economy will continue to grow, and that this recession in the mortgage market is only very temporary.
And I think: of course they forecast that, because if they would forecast otherwise, they would evoke a devastating self-fulfilling prophecy in which “the rich countries” would be pulled downwards together with the U.S. whose debts they support. So it’s better to evoke a self-fulfilling prophecy into the other direction: everything OK guys, you can buy “your” house!
I think it would even become more desastrous if gold would become a serious competitor of money. Its value would be launched, it wouldn't be for sale anymore, but only exchanged for other goods and services, becoming money itself. That would be the real free market, and let's pray it will never happen.
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