Why does Gold(and silver) have value?

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Why does Gold(and silver) have value?

Postby G20M1 » Wed Jul 10, 2013 8:26 am

Recently I was talking with a co worker about the price of gold and silver falling lately, and that the market is being manipulated. Then the subject came up as to why gold and silver have value, and has had value though out most of human history. After some thought, the reason I came up with is Labor. Gold is a representation of the human labor that went it to finding and extracting it, I then realized that everything that has value is a representation of labor, food, oil, houses. Just wondering what other people thought on this subject of value.
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Re: Why does Gold(and silver) have value?

Postby ScaupHunter » Wed Jul 10, 2013 8:36 am

The labor idea is valid, though not complete.

Gold and silver also have intrinsic value because they are tradable, attractive to humans ( shiny ), and fairly immutable. A gold or Silver coin is very hard to destroy or make useless. Gold and silver can be seen and held in your hand.
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Re: Why does Gold(and silver) have value?

Postby bighop » Wed Jul 10, 2013 8:56 am

The only reason anything has value is scarcity.

The reason labor is devoted to obtaining something is because it has value, the labor does not provide the value.
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Re: Why does Gold(and silver) have value?

Postby JuniorPre 360 » Wed Jul 10, 2013 9:02 am

I couldn't believe how much a wedding ring cost when I bought one. I closed my eyes, swiped my card, and saw me in a nice 16 ft flat bottom boat with a surface drive towing a layout boat drift away into the fog. It has yet to return.

Humans will always put value on shiney things like gold and diamonds. But gold has a ton of uses. It's found in all of our computers, tv's, cell phones, cars, pretty much everywhere. People actually buy computer parts and melt the gold out.
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Re: Why does Gold(and silver) have value?

Postby assateague » Wed Jul 10, 2013 9:04 am

Things have value because people want them. Period.
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Re: Why does Gold(and silver) have value?

Postby bighop » Wed Jul 10, 2013 10:50 am

assateague wrote:Things have value because people want them. Period.

But only if they're scarce. You would provide no value to air until I took it away from you.

How valuable was gold to Midas?
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Re: Why does Gold(and silver) have value?

Postby vincentpa » Wed Jul 10, 2013 11:17 am

bighop wrote:
assateague wrote:Things have value because people want them. Period.

But only if they're scarce. You would provide no value to air until I took it away from you.

How valuable was gold to Midas?


Both of you are correct and incorrect.

Things have value because people want them. The tangible value of something is how much people are willing to pay for it, which is related to its scarcity.
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Re: Why does Gold(and silver) have value?

Postby ScaupHunter » Wed Jul 10, 2013 12:19 pm

JuniorPre 360 wrote:I couldn't believe how much a wedding ring cost when I bought one. I closed my eyes, swiped my card, and saw me in a nice 16 ft flat bottom boat with a surface drive towing a layout boat drift away into the fog. It has yet to return.

Humans will always put value on shiney things like gold and diamonds. But gold has a ton of uses. It's found in all of our computers, tv's, cell phones, cars, pretty much everywhere. People actually buy computer parts and melt the gold out.



You got burned. As did I and so does everyone else. I talked the jewelry store down from $2,500 to $1250 for my ex-wifes wedding ring. Three years later they were selling them for $250 during a closeout sale. I did a bunch of digging and pinned my present wifes custom jeweler down in a discussion a few years later. He told me that there is as much as an 800% mark up for jewelry. I bought my wifes wedding band with a diamond, a ruby, and a saphire in white gold for $600 from that particular jewler. It is easily a $5,000 ring at a regular jewelry store. We got better stones, and a custom ring for that price. Take your wifes ring in and have it assayed by a neutral assessor. Then do some comparison shopping and see what that type of ring sells for used. You are way in the hole. Jewelry is one of the biggest rip offs in the world. Only very rarely can you get what you paid into it back out of it. It is like buying a new car. You can kiss 10% to 20% of purchase price goodbye as soon as you walk out the door with it. In a year or two you will often only get 50% back, and it goes downhill from there.

There is no shortage of diamonds. They are one of the singularly most overpriced items in the world. The last time I bought a piece of jewelry at a regular jewelry store, I worked it down from $2,000 to $500 by talking to the manager. She told me no on the price and called me back both times when I walked. The wife was astounded that they would come down so far. She has since found the custom jewler she uses and he charges us what the jewelry is worth instead of gouging us like a conventional store does.
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Re: Why does Gold(and silver) have value?

Postby boney fingers » Wed Jul 10, 2013 12:28 pm

JuniorPre 360 wrote:I couldn't believe how much a wedding ring cost when I bought one. I closed my eyes, swiped my card, and saw me in a nice 16 ft flat bottom boat with a surface drive towing a layout boat drift away into the fog. It has yet to return.

Humans will always put value on shiney things like gold and diamonds. But gold has a ton of uses. It's found in all of our computers, tv's, cell phones, cars, pretty much everywhere. People actually buy computer parts and melt the gold out.



I paid 300 for my wifes ring and after 17 years were still married and she even lets me drive my nice boat around once in a while.
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Re: Why does Gold(and silver) have value?

Postby assateague » Wed Jul 10, 2013 12:31 pm

bighop wrote:
assateague wrote:Things have value because people want them. Period.

But only if they're scarce. You would provide no value to air until I took it away from you.

How valuable was gold to Midas?



Polio is scarce. Does that mean that I want it? Or that it is valuable?
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Re: Why does Gold(and silver) have value?

Postby bighop » Wed Jul 10, 2013 12:51 pm

assateague wrote:
bighop wrote:
assateague wrote:Things have value because people want them. Period.

But only if they're scarce. You would provide no value to air until I took it away from you.

How valuable was gold to Midas?



Polio is scarce. Does that mean that I want it? Or that it is valuable?

Are you sure polio is scarce, or are people that contract polio scarce?
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Re: Why does Gold(and silver) have value?

Postby slowshooter » Wed Jul 10, 2013 1:07 pm

If value was based on what we wanted, we would have a vagina-based economy. :lol3:
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Re: Why does Gold(and silver) have value?

Postby bighop » Wed Jul 10, 2013 1:55 pm

assateague wrote:
bighop wrote:
assateague wrote:Things have value because people want them. Period.

But only if they're scarce. You would provide no value to air until I took it away from you.

How valuable was gold to Midas?



Polio is scarce. Does that mean that I want it? Or that it is valuable?

Whether you want it or not has nothing to do with it. Value only comes into play after you've decided you want something. Because you don't want it doesn't make it less valuable. The question is, once you want polio, how much is it gonna cost? I imagine a vial of polio virus is fairly pricey and well protected, if you could find it...
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Re: Why does Gold(and silver) have value?

Postby assateague » Wed Jul 10, 2013 1:58 pm

No. You claimed that value was based on scarcity. I claimed that it was based on want. Your example does nothing aside from support exactly what I said. Until somebody wants something, it doesn't matter if it's everywhere or almost nowhere. It will have no value. "Want" is the precursor to "scarcity", when it comes to value.
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Re: Why does Gold(and silver) have value?

Postby JuniorPre 360 » Wed Jul 10, 2013 2:02 pm

ScaupHunter wrote:
JuniorPre 360 wrote:I couldn't believe how much a wedding ring cost when I bought one. I closed my eyes, swiped my card, and saw me in a nice 16 ft flat bottom boat with a surface drive towing a layout boat drift away into the fog. It has yet to return.

Humans will always put value on shiney things like gold and diamonds. But gold has a ton of uses. It's found in all of our computers, tv's, cell phones, cars, pretty much everywhere. People actually buy computer parts and melt the gold out.



You got burned. As did I and so does everyone else. I talked the jewelry store down from $2,500 to $1250 for my ex-wifes wedding ring. Three years later they were selling them for $250 during a closeout sale. I did a bunch of digging and pinned my present wifes custom jeweler down in a discussion a few years later. He told me that there is as much as an 800% mark up for jewelry. I bought my wifes wedding band with a diamond, a ruby, and a saphire in white gold for $600 from that particular jewler. It is easily a $5,000 ring at a regular jewelry store. We got better stones, and a custom ring for that price. Take your wifes ring in and have it assayed by a neutral assessor. Then do some comparison shopping and see what that type of ring sells for used. You are way in the hole. Jewelry is one of the biggest rip offs in the world. Only very rarely can you get what you paid into it back out of it. It is like buying a new car. You can kiss 10% to 20% of purchase price goodbye as soon as you walk out the door with it. In a year or two you will often only get 50% back, and it goes downhill from there.

There is no shortage of diamonds. They are one of the singularly most overpriced items in the world. The last time I bought a piece of jewelry at a regular jewelry store, I worked it down from $2,000 to $500 by talking to the manager. She told me no on the price and called me back both times when I walked. The wife was astounded that they would come down so far. She has since found the custom jewler she uses and he charges us what the jewelry is worth instead of gouging us like a conventional store does.

I almost threw up when I was reading this. I am never buying another piece of a waste of good hard earned money again.
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Re: Why does Gold(and silver) have value?

Postby assateague » Wed Jul 10, 2013 2:09 pm

Yep. The Kimberley/De Beers diamond mines are one of the most heavily "controlled" industries in the world. Only by keeping supply where they want it can they get the prices they demand. Folks like to think that the "blood diamonds" thing of a few years ago was driven by genuine concern for human rights violations. While that may have been the case amongst the do-gooders in the west, the real driving force behind the crackdown on them was- wait for it- the De Beers Group. They needed to keep those diamonds out of the market, and what better way than coining the phrase "blood diamonds"?
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Re: Why does Gold(and silver) have value?

Postby vincentpa » Wed Jul 10, 2013 2:16 pm

assateague wrote:No. You claimed that value was based on scarcity. I claimed that it was based on want. Your example does nothing aside from support exactly what I said. Until somebody wants something, it doesn't matter if it's everywhere or almost nowhere. It will have no value. "Want" is the precursor to "scarcity", when it comes to value.


I think I solved this for you two bozos in post number 7 of this thread.
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Re: Why does Gold(and silver) have value?

Postby assateague » Wed Jul 10, 2013 2:32 pm

Stop it.
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Re: Why does Gold(and silver) have value?

Postby bighop » Wed Jul 10, 2013 2:57 pm

vincentpa wrote:
assateague wrote:No. You claimed that value was based on scarcity. I claimed that it was based on want. Your example does nothing aside from support exactly what I said. Until somebody wants something, it doesn't matter if it's everywhere or almost nowhere. It will have no value. "Want" is the precursor to "scarcity", when it comes to value.


I think I solved this for you two bozos in post number 7 of this thread.

Sorry, we decided your opinion was too available and unwanted, and therefore had no value.
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Re: Why does Gold(and silver) have value?

Postby bighop » Wed Jul 10, 2013 3:04 pm

assateague wrote:No. You claimed that value was based on scarcity. I claimed that it was based on want. Your example does nothing aside from support exactly what I said. Until somebody wants something, it doesn't matter if it's everywhere or almost nowhere. It will have no value. "Want" is the precursor to "scarcity", when it comes to value.

Want isn't a precursor to scarcity, but it is to value.

Can something be valuable that is not scarce?
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Re: Why does Gold(and silver) have value?

Postby ohioboy » Wed Jul 10, 2013 7:14 pm

bighop wrote:
assateague wrote:No. You claimed that value was based on scarcity. I claimed that it was based on want. Your example does nothing aside from support exactly what I said. Until somebody wants something, it doesn't matter if it's everywhere or almost nowhere. It will have no value. "Want" is the precursor to "scarcity", when it comes to value.

Want isn't a precursor to scarcity, but it is to value.

Can something be valuable that is not scarce?



bottled water.
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Re: Why does Gold(and silver) have value?

Postby ctdeathfrombelow » Wed Jul 10, 2013 7:22 pm

ohioboy wrote:
bighop wrote:
assateague wrote:No. You claimed that value was based on scarcity. I claimed that it was based on want. Your example does nothing aside from support exactly what I said. Until somebody wants something, it doesn't matter if it's everywhere or almost nowhere. It will have no value. "Want" is the precursor to "scarcity", when it comes to value.

Want isn't a precursor to scarcity, but it is to value.

Can something be valuable that is not scarce?



CLEAN water.

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Re: Why does Gold(and silver) have value?

Postby assateague » Wed Jul 10, 2013 7:56 pm

bighop wrote:
assateague wrote:No. You claimed that value was based on scarcity. I claimed that it was based on want. Your example does nothing aside from support exactly what I said. Until somebody wants something, it doesn't matter if it's everywhere or almost nowhere. It will have no value. "Want" is the precursor to "scarcity", when it comes to value.

Want isn't a precursor to scarcity, but it is to value.

Can something be valuable that is not scarce?



To use your earlier example, air/oxygen.
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Re: Why does Gold(and silver) have value?

Postby bighop » Wed Jul 10, 2013 8:44 pm

assateague wrote:
bighop wrote:
assateague wrote:No. You claimed that value was based on scarcity. I claimed that it was based on want. Your example does nothing aside from support exactly what I said. Until somebody wants something, it doesn't matter if it's everywhere or almost nowhere. It will have no value. "Want" is the precursor to "scarcity", when it comes to value.

Want isn't a precursor to scarcity, but it is to value.

Can something be valuable that is not scarce?



To use your earlier example, air/oxygen.

Only becomes valuable in a time of scarcity.
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Re: Why does Gold(and silver) have value?

Postby bighop » Wed Jul 10, 2013 8:44 pm

ctdeathfrombelow wrote:
ohioboy wrote:
bighop wrote:
assateague wrote:No. You claimed that value was based on scarcity. I claimed that it was based on want. Your example does nothing aside from support exactly what I said. Until somebody wants something, it doesn't matter if it's everywhere or almost nowhere. It will have no value. "Want" is the precursor to "scarcity", when it comes to value.

Want isn't a precursor to scarcity, but it is to value.

Can something be valuable that is not scarce?



CLEAN water.

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Only if clean water is scarce.
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