5 ms·

Big deal. There's a glut of oil and a dearth of gold.

achow 7y ago
Big deal for Maduro.
Eliezer 7y ago
I hear rumors that there are exactly as many units of oil sold as units of oil bought, and the same holds true for gold. I honestly have no idea what you could mean by saying that there's a glut of one and a dearth of the other.
- dagenix 7y ago
  By that logic, you could never have an excess or dearth of anything.
  - jermaustin1 7y ago
    That isn't true, something being bought at the rate it is produced means that demand outstrips or meets supply. No excess, possible dearth. Let's say I manufacture a million widgets and can only sell one of them. HUGE excess. Now let's say someone wants to buy a million widgets, but it takes me 3 weeks to build one. HUGE dearth.
    - dagenix 7y ago
      I agree with you, but that's not what gp wrote: > I hear rumors that there are exactly as many units of oil sold as units of oil bought Gp compared the number of items sold with the number bought, not taking into consideration the number manufactured.
    - Dylan16807 7y ago
      And then you adjust your prices until supply and demand are back in balance. The excess/dearth, by that overly simplistic definition, becomes roughly 0. Even though the underlying issues haven't gone anywhere.
mikeash 7y ago
Seems like the other way around to me. Most oil gets used pretty quickly after it’s produced. Most gold sits in vaults doing absolutely nothing.
- dahfizz 7y ago
  Sitting in vaults is what gold does. It's being "used" as a store of value. Just because it isn't being burnt up doesn't mean it's providing no utility.
  - mikeash 7y ago
    No particular quantity is needed to fulfill that function. If the gold supply were half as big, then each bit would store twice as much value and nothing would change other than the vaults being smaller. We have way more gold than is needed to do what it’s used for.
    - dahfizz 7y ago
      You're being reductive. If supply is the only thing that matters, then why has the price of gold continued to rise even though we mine thousands of tons each year?
      - mikeash 7y ago
        Saying that there’s a glut of oil and a dearth of gold based on their prices is pretty reductive too. It’s a simple thought experiment: what would the world look like if there were twice as much X, or half as much X, than there actually is? For X=oil, there would be profound changes. Half as much would require a totally different looking economy. Twice as much would enable big changes. For X=oil, nothing much changes. The industrial and decorative uses continue as they do now. The “store of wealth” uses just have a ~2x difference in $/kg compared to now. Why does the price of gold continue to rise? Because enough people think they’ll be able to sell it for a good price later.
- Fjolsvith 7y ago
riffic 7y ago
The oil's being burned and there's a finite supply. The gold will still exist in some form after the oil runs out.

Big deal for Maduro.

I hear rumors that there are exactly as many units of oil sold as units of oil bought, and the same holds true for gold. I honestly have no idea what you could mean by saying that there's a glut of one and a dearth of the other.

dagenix 7y ago
By that logic, you could never have an excess or dearth of anything.
- jermaustin1 7y ago
  That isn't true, something being bought at the rate it is produced means that demand outstrips or meets supply. No excess, possible dearth. Let's say I manufacture a million widgets and can only sell one of them. HUGE excess. Now let's say someone wants to buy a million widgets, but it takes me 3 weeks to build one. HUGE dearth.
  - dagenix 7y ago
    I agree with you, but that's not what gp wrote: > I hear rumors that there are exactly as many units of oil sold as units of oil bought Gp compared the number of items sold with the number bought, not taking into consideration the number manufactured.
  - Dylan16807 7y ago
    And then you adjust your prices until supply and demand are back in balance. The excess/dearth, by that overly simplistic definition, becomes roughly 0. Even though the underlying issues haven't gone anywhere.

mikeash 7y ago

Seems like the other way around to me. Most oil gets used pretty quickly after it’s produced. Most gold sits in vaults doing absolutely nothing.

dahfizz 7y ago
Sitting in vaults is what gold does. It's being "used" as a store of value. Just because it isn't being burnt up doesn't mean it's providing no utility.
- mikeash 7y ago
  No particular quantity is needed to fulfill that function. If the gold supply were half as big, then each bit would store twice as much value and nothing would change other than the vaults being smaller. We have way more gold than is needed to do what it’s used for.
  - dahfizz 7y ago
    You're being reductive. If supply is the only thing that matters, then why has the price of gold continued to rise even though we mine thousands of tons each year?
    - mikeash 7y ago
      Saying that there’s a glut of oil and a dearth of gold based on their prices is pretty reductive too. It’s a simple thought experiment: what would the world look like if there were twice as much X, or half as much X, than there actually is? For X=oil, there would be profound changes. Half as much would require a totally different looking economy. Twice as much would enable big changes. For X=oil, nothing much changes. The industrial and decorative uses continue as they do now. The “store of wealth” uses just have a ~2x difference in $/kg compared to now. Why does the price of gold continue to rise? Because enough people think they’ll be able to sell it for a good price later.
Fjolsvith 7y ago

riffic 7y ago

The oil's being burned and there's a finite supply. The gold will still exist in some form after the oil runs out.