Topic: Why has the world agreed that an ounce of gold is worth 50 U.S. dollars? (Read 1573 times)

Gold is insanely more costly to mine than Bitcoin. No matter how far you go into the future, Bitcoin will always be more convenient, and less aggressive with environment. Bitcoin will never require massive amounts of terraforming and destruction of land to try to pick some small amounts of the thing.

The world hasn't decided that an ounce of gold is worth $50. A gold ounce currently trades over $1100, and that is what the world has decided an ounce of gold is worth currently. You can stamp whatever denomination you want on a one-ounce gold coin and it will not affect the worth of the coin, which is based on the amount of gold in it, not the denomination stamped on it.

yes, that's why it's important to educate people that you do not own a bitcoin unless you hold the private key yourself.

Even multisig is fine, as long as you are in control.

Don't let bitcoin fall victim to the fiat money scam.



it costs more money to mine the gold than it brings up to sell it.

do you even know how most of current gold is extracted?

they literally sift through metric tons of dirt to extract a few grams of gold in a process called strip mining.

I wonder how it will happen when people realize they are getting scammed.

I'm assuming that once the gold price can no longer be kept artificially low and it begins to climb, many people want to claim their gold to sell it.

Obviously, since 200 people have a claim on the same piece of gold, only 1 out of 199 can redeem it, but the other 199 still have their claims.

So I think the vaultkeepers will just attempt to buy the gold of their hand with worthless paper money. They will probably offer a high price too, so the persons "owning" the gold (the gold claim, i mean), will think they get a good deal. While in reality they are getting scammed.

Sure, getting $10000 and ounce might seem like a good deal, but when all those gold claims have been resolved, and all that gold is now the legal property of the vaultkeeper (in other worths the vaultkeepers have now cornered the market) they can now set the new price to $500,000 per ounce and you will never be able to afford an ounce of gold ever again.

However, if you just hold on to our claim refusing to sell, you might not ever see your gold again, since if enough people do this, the vault will become insolvent, claim bankruptcy, and you won't see anything at all.

That's why it is important if you buy gold, you safekeep it yourself.

Well I'm don't have a direct answer for it but i was told the face value was affixed some time ago more like a benchmark and it stays until today even though when inflation has picked up considerably. Whatever it is, regardless what the numbers appear I'm sure people will know how to judge and give a value to it. It's the actual value that is important not the face value. Face value is just the worth assigned by the government to denominate a coin's price as a form of legal tender and that's all to it.

there are new gold discover each day/week/month, how the hell it can beocme rare, it's the opposite, there will be always more gold, and the value will not increase much

not to mention that other planets may be full of gold, and just because we cannot discover them for now, it does not mean anything

 
 
In time paper bitcoin will be a thing too (it already is a thing). 
 
I'm sure the world will eventually see 75 million 'paper' bitcoins being in circulation.

Just wait for gold to become rare. Then stick it to them.

The gold market is heavily manipulated because many people have claims on gold (in other words, a piece of paper saying they own a certain amount of gold) but they don't actualy physically have the gold.

about 200 people have a claim to the same physical piece of gold.

Now what happens if they all claim their piece of gold at once (a run on the banks?) they will run out of gold, and the gold claims become worthless (but the gold itself will be more valueable than ever).

If you own gold, store it at home, don't get scammed, don't store it in a vault, don't let anyone else store it for you, get a good safe, store it at your own home.

It's just like having bitcoin, if you don't own the key, you don't own the bitcoin.

 
  
The inevitable conclusion is that if the United States (and any nation like Russia or China) begins to link their national fiat to cryptocurrency reserves, not only will this strengthen that cryptocurrency, but also the fiat that is backed by it.  
  
If the US Dollar were suddenly backed by strategic reserves of 500,000 bitcoins, then sure Bitcoin would skyrocket - but any concern about the dollar collapsing would immediately vanish.  Here is something real and verifiable that the entire world can see: 1UnitedStatesReserve2lkjfas09s6yE2 has 500,943 bitcoins.  It took NSA computers over two years to generate that vanity address for additional feelings of security.   (not a real address, nor do I have any idea how long it would take to generate something that specific)  
  
Of course, it's ridiculous to think a country would store all it's assets in a single address.  Likely a series of a thousand or so multi-sig addresses would be used, and the keys entrusted to the separate high-ranking members of government and the Federal Reserve.  

Totally agree on the oil and dollar tie after Nixon. It's all about Saudi Arabia's oil and American military (which heavily depend on the former) to back up the value of the US banknote.

Since oil price halved recently, it f* over domestic shale gas industry pretty good. Things won't last forever, what's after the oil for good or bad?

Not only the dollar/oil link but basically every other stock specially groups like S&P...

Imo when things start getting really shitty I would go 100% on Gold + Bitcoin (and some silver just to not be greedy). But stocks, don't look like worth an headache to me.

You know, as silly as this topic was I realized something from it. 
 
When Nixon broke the dollar/gold link it didn't just hurt the dollar's value, it also hurt gold's. 
 
Such will be the fate with the dollar/oil link.

In 1973, soon after the "Nixon Shock" when the U.S. stopped honoring it's obligation to redeem dollars for gold, the U.S. devalued the dollar to $42.22 per ounce. That is still the official value of a dollar in the U.S., though nobody in their right mind would pay that much gold for a dollar. Given that absurdity, it is reasonable that a 1 oz coin would have an official value of slightly more than that.

Check this out: https://www.fiscal.treasury.gov/fsreports/rpt/goldRpt/current_report.htm

The world hasn't agreed on those prices.

An ounce of gold is trading at $1,160...this is what the world has agreed upon as the price.

An ounce of silver is trading at $16...this is what the world has agreed upon as the price.

The reason on how the markets arrive at these prices is simple and complicated...simply, this is where the cross between supply and demand meet. But why supply and demand meets at that level is a bit harder to reason through, there's a lot of speculation.


More importantly - answer this guys question and let us both know! Thanks!

Those are bullion coins. No one with half a brain will spend a $50 gold eagle at face value. The coins are not meant to be spent. They are meant as a revenue generator for the US Mint.

50 dollars for an ounce of gold? Where can I buy gold that cheap?

It's really simple...  The US Mint simply wants to set a face value that is low enough that it's sure will never come into play.  (I.E. market gold price should never drop below $50/oz.)

If the market gold price ever drops below the face value, the US government would be subsidizing owners of these coins, something it probably really doesn't want to do!

When the market gold price is above the face value, the coin trades like it should, as gold, not legal tender.

so basically if one day the whole $ system collapse, the gold will follow, or it will shift based on the strongest currency in the world?

because as it is right now it does not make much sense

It is all a game of demand and supply. There is finite gold and that can be matched with any suitable number of dollars.