[weaddercaps]

Originally posted by Straybow
Except that stock is also the ability to vote in company shareholder meetings, may pay dividends, and also represents a fraction of the value of the company which can buy its own stock back from you. Does Gold buy itself back from you? No. All of these things either have nothing to do with exchange of money, or function the same way. No money is created or destroyed in the process. It is a zero-sum game.

It's getting pretty funny that you can't understand this. Do you really think that money magically appears in the stock market when stocks appreciate in value? Do you really think dividends magically create money?

[blodwarttufla]

Gold price would plunge.

What's abundant is not worth fighting for.

[Z1IRo4Ap]

Originally posted by Dauphin
If you buy at $50, then the price falls to $15 a year later and I buy from you, do I somehow "make" the $35 that you lost? No. Did the guy you bought from make $35 a year after he sold it? No. His profit depended solely on his purchase and sale prices. He may look at the paper and say, "Good thing I sold last year and cut my losses," because he bought at $60.
The person who sold at $50 would have done (in opportunity cost terms and arguably in real terms) if he bought the gold back from you at $15. Which would be sensible as gold is cheaper and will very likely raise in value again.

Of course, all this implies that people buy gold as an investment opportunity, they don't, they buy it to avoid risk and negative growth in asset values - which is why gold prices tend to be inversely related to stock prices.
Errrm, that was the stock example where a price drop does not generally recover but is a sign of severe trouble. The gold commodity trade is the example that followed.

Besides "would have done" is the gotcha of trading. Like all the poor sobs who bought at $600+ in 1980 and it took 26 years for the price to return to that level in real dollars (it would have to get to $2000+ in 2008 dollars to break even after inflation).

[AntonayPina]

Originally posted by Straybow
Ah, so when the farmer sells grain, he's just exchanging one form of money for another and his land and labor produce no wealth. And when the grain is ground and sold as bread in the supermarket no wealth is created. You're arguing against yourself here. Grain is another commodity, and now you're arguing against how it's real value, when with Gold you are arguing that it's not real value.

They're both commoditized and traded on exchanges. Your position is the one that denies that the underlying has actual value. I had already pointed out several times that underlying has actual value, in regards to both stocks and commodities. Of course you can't read, so you missed that.

As for the "zero sum", we were talking about the exchanges. You wanted to pretend commodity markets were "zero sum" because no money was created or destroyed in the process, only transferred. Well that's the same for the stock market as well. (And your grain commodities too.)

Feel free to continue arguing against yourself though, it's great fun to watch.

Stock prices loosely but ultimately come from the value of products or services provided by the company of which the stock represents ownership. That is real production of wealth. That doesn't change the fact that the stock market operates in the "zero sum" manner which you attribute solely to commodities markets.

Gold is real wealth. Mining Gold is producing more wealth. Reducing Gold to being worthless is destroying wealth, even though no currency (other than Gold currency) is lost in the process. Your argument that it is otherwise is inane.

[alias]

Snoopy, all you are saying is that no currency is created or lost. Which is what I was saying.

The underlying value is lost though. It is a real loss of value. Just as much so as if any other asset depreciated in value. (Even though Gold prices don't always behave this way currently, since it is viewed more as a "constant" value. But that would obviously not be the case if it's inherent value was depreciated by limitless supply.)

[Duaceanceksm]

You would still pay 850/oz for Gold? When it could be produced for virtually nothing?



I would have LOTS of Gold to sell to you.

[OnerePeepsy]

Goldschläger would be cheaper!

[imporrilk]

Originally posted by Straybow
Errrm, that was the stock example where a price drop does not generally recover but is a sign of severe trouble. The gold commodity trade is the example that followed.

Besides "would have done" is the gotcha of trading. Like all the poor sobs who bought at $600+ in 1980 and it took 26 years for the price to return to that level in real dollars (it would have to get to $2000+ in 2008 dollars to break even after inflation). Fundamentally there were no difference in your examples, which lead to confusion. When you buy gold you tend to buy it as paper, so I assumed that's what you were talking about.

I then compared to gold as non-investment commodity, which is why it is different to shares.

Regards the recovery issue, yeah, you lose, but that's no different to shares. How much you lose is also different in the example discussed, and the would have is quite simple - he can just do it there and then in the example provided.