In the interview he said:
For the reason that if there is one thing I believe in—and I’m thinking as a Canadian here—it’s that I would love people in Canada to own gold as I think it’s the safest asset they can own.He converts his own gold bars into Canadian Maple Leafs and sells them here.
So if you can make it a little bit easier for them by breaking it down to a smaller unit, then they have a chance to get in. For us, it’s a reasonably profitable business because the premiums are quite high, as you know.
You can listen to him talk about the future of gold and silver in the following video.
8 comments:
Any commodity that has real value is a good thing to invest in during a time of high inflation. For example, my camera is a lot like a bar of gold.
The problem with your camera is that in 20 - 30 years it will have lost its value in the market as its technology becomes obsolete. Gold and silver is a store of value as they do not lose their value. An ounce of gold has essentially the same purchasing power today as it did 100 years ago.
True. But for the next 20 years it is like a bar of gold. Considering that most people are not rich enough to leave their economic value in brick of gold for long periods of time, my investment virtually the same.
"Gold and silver is a store of value as they do not lose their value. An ounce of gold has essentially the same purchasing power today as it did 100 years ago."
You see, here is your problem. Gold DOESNT have the same value as it did a hundred years ago. It is now in greater demand because it has a MARKET VALUE and a DECORATIVE VALUE, whereas a hundred years ago it only had a decorative value.
http://www.finfacts.ie/Private/curency/goldmarketprice.htm
The price of gold starts to increase in 72, just when Nixon eliminated the gold standard. DRAMATICALLY. What is not obvious is that gold started to have a non-decorative value during this time. The real value of gold has been increasing ever since it use in a dental and computer component. So, yes, the real cost of gold has increased even as the nominal cost of gold skyrocketed in relation to money-supply inflation.
BUT! Let's take a look at the nominal increases in the price of gold! They illustrate my on the unworkablity of gold as a currency in the modern world. In times of crisis, the price of gold has skyrocketed in price, because THE DEMAND for gold as a secondary source of value apart from paper, fiat money is obvious. What is not obvious, is the fact that the limited nature of gold INCREASES the real exchange value of products, BEACAUSE it is a limited commondity. If everyone demands gold coins as an medium of exchange, then the market value of gold will increase the value of products.
"True. But for the next 20 years it is like a bar of gold. Considering that most people are not rich enough to leave their economic value in brick of gold for long periods of time, my investment virtually the same."
But people do, and those people will be better off for it when hyperinflation hits, as you would learn if you listen to Sprott. And your investment is not the same, your investment is continually losing value, from when you buy to tomorrow it has lost value. The more you use it, the older it gets the more it becomes obsolete. It won't just take 20 years for its market value to drop substantially.
You're interpreting the data on gold incorrectly and you do not understand what I'm saying. The value in dollars of course goes up because the value of the dollar goes down. Look at the price of oil in gold:
http://www.thedailygreen.com/environmental-news/latest/oil-gold-commodities-47041507
The value of it goes up because of inflation.
"If everyone demands gold coins as an medium of exchange, then the market value of gold will increase the value of products."
It will increase the price of products in DOLLARS but not GOLD. This stays stable and has proven to for centuries.
"In times of crisis, the price of gold has skyrocketed in price,"
Times of crisis are usually due to collapsing currencies, ie USSR, Iceland, Argentina, Zimbabwe, etc. What better reason to own gold?
"But people do, and those people will be better off for it when hyperinflation hits, as you would learn if you listen to Sprott. And your investment is not the same, your investment is continually losing value, from when you buy to tomorrow it has lost value. The more you use it, the older it gets the more it becomes obsolete. It won't just take 20 years for its market value to drop substantially."
No, it has only lost exchange value and relative value. Sure, I can't get the same amount of money that I spent purchasing, but since I already HAVE the object, the object I wanted anyways, it has the same value as a high end camera, or any object, has as a possession. Gold, in the end, is a possession, just like cash.
"You're interpreting the data on gold incorrectly and you do not understand what I'm saying. The value in dollars of course goes up because the value of the dollar goes down. Look at the price of oil in gold:"
I'm not refuting the fact that gold has a stable price relative to oil. What I'm pointing out is the fact, that when you look at the price of gold per ounce, at a price of gold chart UP CLOSE, the price of gold definitely does go up and down. Historically, sometimes dramatically.
"It will increase the price of products in DOLLARS but not GOLD. This stays stable and has proven to for centuries."
Excuse me? I just said: if gold were used as a medium of exchange the real price of commodities would increase, because the demand for gold coin would exceeed its supply. You are not reading.
"
Times of crisis are usually due to collapsing currencies, ie USSR, Iceland, Argentina, Zimbabwe, etc. What better reason to own gold?"
You are still demonstrating an inability to think. I just told you that in times of crisis, when there is an high demand for gold, teh price of gold skyrockets. I see no difference between those crisises and a world where gold is used as a medium of exchange. The demand for gold as that medium would exceed its supply - BY MANY MANY TIMES>
"Sure, I can't get the same amount of money that I spent purchasing"
This is the point. It doesn't store wealth.
"What I'm pointing out is the fact, that when you look at the price of gold per ounce, at a price of gold chart UP CLOSE, the price of gold definitely does go up and down. Historically, sometimes dramatically."
Of course its the price in dollar is going to go up and down; and only ever dramatically during inflationary periods. Its purchasing power is what stays constant which is why its price in relation to oil is significant.
"the demand for gold coin would exceeed its supply"
The demand for anything of value exceeds its supply. That's why it should be used as a currency. That the demand for paper money never exceeds its supply is exactly why its so worthless.
"I just told you that in times of crisis, when there is an high demand for gold, teh price of gold skyrockets"
You are the one not thinking. The price of gold only sky rockets in respect to the inflationary currency its being priced in. Its purchasing power doesn't suddenly decrease causing all prices to sky rocket in relation to gold. In fact, if anything, during a crisis gold's purchasing power would increase, causing relative prices to shrink.
"This is the point. It doesn't store wealth."
The only reason people want wealth is the fact that it can be exchanged for things. This is why the first economies were based on the barter system. Therefore, the camera has an economic value in the sense that satisfies one of my wants, which would be equally at any one time for "cutting edge technology". I might lose money if I try and sell it, but would I try and sell it if I want a really nice camera in the first place?
Also, quote mining is a beautiful thing, eh? Ignore the rest, respond to one little sentence.
"Of course its the price in dollar is going to go up and down; and only ever dramatically during inflationary periods. Its purchasing power is what stays constant which is why its price in relation to oil is significant."
No, Josh, its the real price of gold that is going up and down. It's already been adjusted for inflation. And, yes, if we had a gold standard currency, the value of that currency would go up and down with its supply and demand.
"The demand for anything of value exceeds its supply. That's why it should be used as a currency. That the demand for paper money never exceeds its supply is exactly why its so worthless."
No, that's why it is a perfect medium for reflecting the revalue of a product, assuming no monetary inflation. Gold itself will lead to a "gold inflation" because it is a much more limited commodity.
"You are the one not thinking. The price of gold only sky rockets in respect to the inflationary currency its being priced in. Its purchasing power doesn't suddenly decrease causing all prices to sky rocket in relation to gold. In fact, if anything, during a crisis gold's purchasing power would increase, causing relative prices to shrink."
THEY ARE INFLATIONARY ADJUSTED PRICES, BONEHEAD. It is the real value of the gold that is increasing due to a high demand for it as a secure investment.
"The only reason people want wealth is the fact that it can be exchanged for things. This is why the first economies were based on the barter system. Therefore, the camera has an economic value in the sense that satisfies one of my wants, which would be equally at any one time for "cutting edge technology". I might lose money if I try and sell it, but would I try and sell it if I want a really nice camera in the first place?"
Agree, but its purchasing power shrinks and this is a measure of wealth, especially if feeding yourself becomes more important than taking pictures.
"No, Josh, its the real price of gold that is going up and down."
I've gotta see evidence on this one.
"Gold itself will lead to a "gold inflation" because it is a much more limited commodity."
If inflation is the increase in the money supply, what is "gold inflation"?
"It is the real value of the gold that is increasing due to a high demand for it as a secure investment."
Again, I'm gonna need to see evidence.
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