Another question for the experts.

[JoondalupJ]

Just heard that gold is worth 1500 dollars an ounce at the moment.
Doesn,t the USA have more gold bullion than anyone , in fact don,t they have the the most gold in the world by miles.

Why are they so broke then , what am I missing in this world of finance????

 

[checkraiseulite]

Gold is a really small market. A few hundred billion USD at most.

Inb4:

 

[Visions]

Most of the world's gold is jewellery, etc. Only about 30,000 tonnes is actually held by "sovereign" nations, of which the USA holds about 8,000 tonnes. This equates to about 282 million ounces which at $1500 an ounce is 423 billion dollars worth. Still way below their debt level.

 

[Membling]

The US could sell it and halve their debt however the influx of gold to the market would lower the price by a substantial amount. Also there would have to be a buyer of the gold.

This isn't taking into account foreign debt, foreign ownerships, etc etc that are considered liabilities.

 

[JuddsABlue]

Why would anybody buy gold? What benefit would there be if some country said to America "We'll buy all your Gold at the going rate!, as long as you cover the shipping!"

Then what happens? What changes in that country that bought the gold

How does it even work? Ive never been able to understand it. Gold is useless, it doesnt do anything, it doesnt create anything (of value anyway such as power). It just looks nice

Why is so much important placed on this stupid bar of rubbish?

 

[skzm]

Gold is useless, it doesnt do anything, it doesnt create anything (of value anyway such as power). It just looks nice

How about the bit of paper in my pocket with a picture of Ben Franklin on it. It doesnt do anything, it doesnt really create anything and it doesnt really look nice either....

 

[JuddsABlue]

How about the bit of paper in my pocket with a picture of Ben Franklin on it. It doesnt do anything, it doesnt really create anything and it doesnt really look nice either....

this is exactly what I'm talking about

Money is money because we created it, who 'created' the value of gold and why?

Whats so special about it? Why were people willing to sacrifice things for gold back in ye olde days?

And now, as big as everything is, why is gold still valuable when we actually have benjimin franklins? What is golds purpose now we have money? Does every single note belong to a small spec of gold each country has?

Gold is now used in jewerelly, but what else? Is golds value directly associated to its potential to become jewerelly?

Are we limited to the amount of money we can print against the amount of gold we have?

Just cant get my head around the whole thing

 

[PAUR]

It's an exchangeable medium with an 'agreed' price. The price is a market force. Basically you can choose to Barter if you want but using gold or money lets you around the fact that you may not have the exact item someone else wants

But yes if everyone said, man gold is useless, I don't want to buy it. The price would plummet - but until people don't value golds aesthetic appearance it will be a 'rare' commodity.

Go wikipedia exploring.

http://en.wikipedia.org/wiki/Money