Can Gold Be Used As A Currency?

[20MillionDinar]

http://www.youtube.c...ayer_embedded#!

It worked! Kinda. I took Matthew Bishop’s challenge, and tried to spend a gram of gold like I would any other currency. And, frankly, didn’t have a lot of luck — until I managed to find a small business where the owner just happened to be standing around. In the end, I got three lobster rolls (and free drinks, too) for one gram of gold. Which were very tasty — thank you Snack Box!

So, what did I learn on my expedition in Times Square?

• When I tell the Snack Box owner that the gold is real and that “you can tell by how shiny it is”, I’m not kidding. Pure gold is really shiny.
• The most surprising people turn out to know how much a gram of gold is worth, with an astonishing level of accuracy.
• Gold is not a currency. I’m reasonably sure that Andrew, the guy behind the counter at Snack Box, would not have accepted my gram of gold unless his boss was telling him to.
• If you do want to spend gold, then try your luck with small businesses, and don’t expect a good implied exchange rate.
• Also, bringing a film crew along is unlikely to help you at any big chain store.

Most interestingly, however, at least to me, was how much it actually cost us to obtain that gram of gold. For the purposes of the video, I was using the value of one gram of gold based on its market price per ounce. But if you go out and attempt to buy a gold bar, you’ll never be able to find one for a mere $53. In fact, my producer wound up paying double that, in Manhattan. Even if you do a lot of searching online, you’ll be hard pressed to find one for less than $80. We didn’t try to sell the gold — we wound up getting a delicious lunch instead — but my guess is that in most cities the effective bid/offer is absolutely enormous. And much bigger than for any major global currency.

Still, it was a fun — and tasty — experiment. If you try it yourself, do let me know the results!

[The Machine]

I seen something similar to this a while back ..... some guy was going around with a 1oz gold $50 maple leaf trying to get people to swap it for $50 cash ....... it was amazing to see how little people knew about the value of gold ..... one person even said "oh thats $50 Canadian thats worthless i'll keep my dollars" or something along those lines lol.

there are a lot of people out there that need an education !! +1

[20MillionDinar]

I seen something similar to this a while back ..... some guy was going around with a 1oz gold $50 maple leaf trying to get people to swap it for $50 cash ....... it was amazing to see how little people knew about the value of gold ..... one person even said "oh thats $50 Canadian thats worthless i'll keep my dollars" or something along those lines lol.

there are a lot of people out there that need an education !! +1

LOL

That is pretty amazing! Consider yourself one of the lucky few TM!

[The Machine]

LOL

That is pretty amazing! Consider yourself one of the lucky few TM!

I found it well i think this is it .... the video is from back in 2009 check it out you'll have a good laugh

[WallyWeaver]

I found it well i think this is it .... the video is from back in 2009 check it out you'll have a good laugh

It does seem funny but as a SoCal native the reaction of the people is understandable. Southern California might be the scam capital of the world; it certainly is the scam capital of the US, in my opinion. I think I even read an article a few years back that more high profile scams are hatched in southern California than anywhere else in the US. I believe it...

With that in mind, I definitely understand everyone's reaction. Heck, I can't even go to the grocery store without being asked to give to this or that charity or being asked to sign some type of petition supporting who knows what, etc. And the petitioners/ charities are aggressive, too. They come right up to you as you're walking out of an establishment and bombard you with whatever they are pushing. It pretty much happens everytime I go to a grocery store. I've even had people pull up to me in parking lots, many times, trying to sell me furniture or tools or stereo equpment out of the back of their truck. Gas stations are bad, too, for people trying to sell you services or get hand outs. I could go on and on, it's just a part of the culture here.

Because of that inundation I think we have a mindset here of please don't bother me, thank you.

With that said.... I sure would like to know if and when this guy wants to perform his experiment, again. I might be willing to actually stop and listen for this fellow.

WW.

[20MillionDinar]

I forgot to post this with the original article: **Not My Words**

There’s not a day goes by that I don’t see a level of casualness, or downright pointlessness, to the ins and outs of gold chatter.

So, when I see Reuters deploying their editors to ask the wrong question — or, even more annoyingly, wasting their time wondering if something ONCE widely accepted can or should be accepted NOW — it just makes me wanna bring out my gold guns (er, maybe that’s my visual interpretation of quashing the nonsense via my provoking prose here)

Anyway, when somebody writes an e-book with the title of ‘Is Gold a Currency?‘ (the reference to that is via the video on the Reuters page), one begins to scratch their head (er, I do) and ask back rhetorically: “Is Google’s stock a currency?’

The answer to that one is an obvious NO!

But, why do the words ‘currency‘ and ‘money‘ get so conflated around GOLD?

My bet is this: people like confusing and repositioning timelines — as in ‘history was like this’ so it ‘should be like this’ NOW.

You see, there is a long history of governments throughout the world pegging their currency value to gold.

As far as the U.S. goes, between a FIXED gold standard and a FLOATING fiat currency system (i.e., not linked to physical reserves), money has shifted back ‘n forth in about 10 different time-frames… ever since the first form of paper money was issued by The Massachusetts Bay Colony in 1690.

There’s gold seen as “money” (like when you see coins tossed around in Old Western movies); there’s gold remembered as an asset to find and hide away; and there’s gold the inert metal, traded as a commodity 24 hours a day, that does not have much pragmatic use.

But, the raw modern reality is this: Even though I can easily convert GOOG shares to cash, it doesn’t mean that those GOOG shares are legal currency in the US (I’m pretty darned sure I’m not going to be able to take those share certificates and go out to a nice restaurant or buy a new car with them).

Gold bullion (in the form of coins, bars, ingots, jewelry, etc) is certainly more recognized and/or accepted for ‘exchange transactions’ than certifications of stock. Yet, the rub is still this:

Bullion is, by useful function in today’s modern world, a ‘monetary asset.’ Just like the shares of Google are an asset, and not a currency, neither is gold really currency. Not even useful money NOW! (Things like cowrey shells, arrowheads, and cacao beans were ONCE useful too, ya know)

Gold bullion is more a solid form of back-up money. Or, to be technically correct, a “currency of last resort,” as Greenspan has stated many times through the years. As in, “if the public one day decides not to have confidence in the USD, CAD, YEN, etc. — all derivatives of tangible and ideal money — maybe we can all feel good about resorting to lugging around heavy and obnoxiously impractical coins.”

Yes, gold CAN BE pure insurance against paper currency breakdown. Which, like California falling over into the Pacific Ocean, is not something I’ll expect to see in my lifetime.

The cries for “buy, buy, buy” gold (bullion, that is) can get so loud that the high priests of the metal (think Glenn Beck, Mike Maloney, or Howard Ruff) truly feel that using your hard-earned money for anything else is a crime.

News Flash to all Gold Bugs: there is ab-so-lute value in holding your cash [paper money] in dollars (or any other major currency based on where you live and conduct business).

In summary:

Money, as commonly understood, represents both a medium of exchange and a store of value. Ideal money (not a required ideal, either, to work) is both, and it’s important to acknowledge that the dollar HAS served in that capacity in living memory.

For reasons as to why it may not hold rein in that position at ALL TIMES, read this article…

Currency — a made up word that just means paper notes — can be an excellent stand-infor money, as long as something sustainable (doesn’t JUST have to be ‘tangible money’) always stands behind the currency.

Until the day comes when society-at-large no longer wants to have faith in using their debit cards and other digital forms of monetary transactions at WalMart, just accept the fact that GOLD (and even real estate) will probably make you look like the ever-so-wise one if you’re around to see a legit collapse of the current banking/currency system.

And, quite honestly, if you want to believe in the ultimate doomsday scenario — think Mad Max style — gold is the last thing people will clamor for… in that situation, if you have some mini bottles of liquor stored up, you’ll control the world

Edited May 7, 2012 by 20MillionDinar

[WallyWeaver]

Yes, gold CAN BE pure insurance against paper currency breakdown. Which, like California falling over into the Pacific Ocean, is not something I’ll expect to see in my lifetime.

Until the day comes when society-at-large no longer wants to have faith in using their debit cards and other digital forms of monetary transactions at WalMart, just accept the fact that GOLD (and even real estate) will probably make you look like the ever-so-wise one if you’re around to see a legit collapse of the current banking/currency system.

And, quite honestly, if you want to believe in the ultimate doomsday scenario — think Mad Max style — gold is the last thing people will clamor for… in that situation, if you have some mini bottles of liquor stored up, you’ll control the world

Good post, 20. And phew, glad to hear California won't be falling into the ocean in my lifetime.

[20MillionDinar]

Good post, 20. And phew, glad to hear California won't be falling into the ocean in my lifetime.

Thanks WW. Me too! LOL

I always enjoy reading about different people's perspectives in regards to financial matters.

Edited May 7, 2012 by 20MillionDinar

[GinaG]

My husband and I were talking about buying gold, are we? well, let's just say we have a little more information on the gold subject. Thanks for the post.

[20MillionDinar]

My husband and I were talking about buying gold, are we? well, let's just say we have a little more information on the gold subject. Thanks for the post.

You're welcome. **I would never want to be the one to tell anybody to buy or not to buy precious metals at this time.

However, I am personally holding off for a few months before making any more purchases. I want to either see lower lows or higher highs as my physical bullion is only being used as a hedge against inflation for the LONG TERM.