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The argument that gold is equivalent to currency is false. It's almost impossible to buy food from the grocery store with the gold watch you got last Christmas.
by sgman 17y ago
The argument that gold is equivalent to currency is false. It's almost impossible to buy food from the grocery store with the gold watch you got last Christmas. For all practical purposes, gold is a second-hand good like anything else, and selling it to a dealer ensures you get nowhere near the appropriate value for it, just like selling any other second hand good.
- nandemo 17y agoI think both the article and your reply are a bit misleading because you talk of both "gold" and "gold jewelry", which aren't the same thing. While gold is not exactly equivalent to paper money, it is a currency. Only it's not as used as before, and of course not as liquid as US dollars nowadays. It is certainly more liquid than other currencies though: most people would prefer to be paid in gold than in Zimbabwean dollars. But of course gold and "gold watch" are different stuff. Plain "gold" usually means coins and bars, which are pretty much liquid. The spread can be as low as 2.5%, not much different from retail foreign exchange. Definitely not like any other second hand good.
- dmm 17y agoThe spread on Gold American Eagles is currently 1.02% at apmex.com. That's better than most atm transactions :)