Tweet

Black Gold. Worth More than Real Gold?

Written by: Sean Hyman

Article Overview: Let’s face it: gold is very pretty. It makes for great eye-candy when dangling from some starlet’s neck, usually holding some other equally beautiful gem or precious stone. But what’s it really worth?

Black Gold. Worth More than Real Gold?

• Currency Investing

Let's face it: gold is very pretty.It makes for great eye-candy when dangling from some starlet's neck, usually holding some other equally beautiful gem or precious stone.But what's it really worth?

Well that's pretty easy, just take a look at the current quote for gold or a gold chart, recently trading around $909/oz.But what does that really mean?Well I'm not going to rehash the basic laws of supply and demand, but:

An asset it only worth what someone is willing to pay for it!

There are many other uses for gold besides just making pretty jewelry. There are many industrial and engineering uses for gold as it is very malleable, it's resistant to corrosion, and it conducts electricity.So what?What does that mean to me?Absolutely nothing!Why?Because I have choices.I can choose not to buy it and it doesn't affect my life one way or the other.

But oil?Now that's a different story. Now I realize that here in the US we're making a push toward renewable energy and trying to wean ourselves off of foreign oil, but right now we are still years away and it is also cost-prohibitive.Back when oil was $147/barrel and gasoline cost $4.00/gallon, I chose to amend the way that I consumed oil, namely by driving less, and turning down my heat in the winter.But this is something that affects my life directly.

So why all the love for gold?

Well, throughout history gold has been symbolic of wealth and power and in modern times has been known as a hedge against inflation.When Nixon took the US off of the gold standard in 1971, he was merely decoupling one symbol for another! (gold vs. paper)And in 1971, what was the biggest source of wealth and power?That would be the United States. (Whether or not this was true at the time is up for debate, but it seemed to work.)

Fast forward to present day.The US doesn't seem as wealthy and powerful in comparison to other nations and the disparity between that wealth and power gap has narrowed considerably since 1971.

As a result, much has been made recently about the consternation regarding the use of the US dollar as the world's reserve currency, and nations such as China and Russia have recently been calling for changes.

Which brings me back to gold and oil.It appears now that our economy has "stabilized" for the time being and that we might be in the early stages of recovery, yet it seems like deflation is rearing its ugly head.It looks like BOTH gold and oil has been selling off recently. Is this a minor blip or a trend reversal?

Unfortunately, the fall in the price of oil means that demand may be falling which could be indicative of the world economy not recovering quickly enough.This is actually good news for the US dollar as it will gain strength from the "flight to safety" trade, but deflation will bring down both gold and oil.

As far as the intrinsic value of gold is concerned, to me it's worth as much as a piece of paper with a president's picture on it.And it's not as easy to carry.Give me oil any day of the week.

All of the gold bugs who are hording gold coins in safety deposit boxes are living a fantasy. If they were sane or smart, they'd starting hording oil.At least they'll be able to heat their homes and cook warm food, rather than just sitting around with their gold hoping to look pretty enough to be asked out on a dinner date! Because once everyone figures out that gold holds no more value than a piece of paper, it too will lose value.

Now if I can just find away to carry around some oil.

Related Articles
  Golden Income Opportunities in Retirement
  Gold Rises. Recovery In Sight? Really?
  Three Feet From Gold...A lesson in the consequences of quitting before reaching your goal
  Five Ways to Show Honest Appreciation
  My 2012 Gold Forecast

Article Tags: choices, corrosion, currency, different story, electricity, eye candy, gasoline cost, gold chart, gold standard, great eye, history gold, inflation, laws of supply and demand, nbsp, nixon, precious stone, renewable energy, starlet, supply and demand, ul type



Related Forum Posts
Congratulations - Hi Shri, Congratulations to your win. Next time you will go for the 'Gold Medal'. This does not happen everyday. All the hard work is paying you off. We wish you well for future projects you have in mind. Be encouraged! Kindest Regards Beat "Unlock People's Potentials!"
Starting New Business Venture would like some tips - Hello I am new to this website and just want to say its awesome!! currently I am involved in a new business venture, I am new to the business world and I would like some extra help on this subject. Our company specializes in Custom Gold Foil Printed Ribbon, and Personalized Products (Napkins, Buttons Etc). so if anyone has any ideas of where to go, who to contact, or even if your looking for these types of products yourself, let me know and any tips to help me out it would be greatly appreciated.
My reading log - Hi OmnivoreInk, Before starting my business, I read the following books as research: -"The Art of the Start" by Guy Kawasaki -"The AdSense Code" by Joel Comm -"Don't Think Pink" and "Mind Your X's and Y's" by Lisa Johnson And since then I've continued my "research" by reading (in this order): -"Technical Tennis" by Rod Cross -"For One More Day" by Mitch Albom -"The Twits" by Roald Dahl -"Little Black Book of Connections" by Jeffrey Gitomer -"The Secret" by Rhonda Byrne -"The Profitable Retailer" by Doug Fleener -"Blink" by Malcolm Gladwell -"Little Gold Book of YES! Attitude" by Jeffrey Gitomer -"The Chronicles of Narnia: Prince Caspian" by C.S. Lewis -"Little Green Book of Getting Your Way" by Jeffrey Gitomer -"Harry Potter and the Deathly Hallows" by J.K. Rowling And I'm currently reading and am in the process of finishing the following: -"There's No Such Thing as Public Speaking" by Jeanette and Roy Henderson -"The Tipping Point" by Malcolm Gladwell -"The Book of Tells" by Peter Collett -"Little Red Book of Sales Answers" by Jeffrey Gitomer -"Chocolates on the Pillow Aren't Enough: Reinventing The Customer Experience" by Jonathan M. Tisch -"The Artist's Way: A Spiritual Path to Higher Creativity" by Julia Cameron -"The Inner Game of Tennis" by Timothy Gallwey
Re: Customer protection or sales loss? - Hi Beat, I prefer to buy online to save money or obtain discontinued/rare items. For instance, I recently bought a demo Prince Speedport Gold tennis racquet for $157.51 USD (including shipping to my friend's condo) on eBay, while another seller had previously turned me down because he/she insisted that the PayPal account's address match the shipping address. That same racquet retails in Canada for $305.04 CAD after taxes. A lot of my friends don't have PayPal accounts and don't like giving their credit card number to "smaller" online vendors, so I'm often limited as to where I can shop.
Think like an Association - Hey Sebastian, Maybe you could try thinking like an Association... I would study the structure or formats used by other Associations. What are they doing to add value for their members? The BBB plays a monitoring role for consumers by gathering data about business' that are behaving badly. And they're pretty successful at it too. Maybe you can offer a 'Platinum Program' that franchisors buy into. Accredited members only. Criteria could be strict: 1. Age (stability): 10+ years 2. Satisfied franchisees: 85% + satisfaction 3. Size (stability again): 250 units 4. Strong profits 5. Great management -Maybe a 'Gold Program' for those Franchisors that aren't quite at that level, but can strive to reach it... -Top 100, 500, 1000 Listing for qualified members... maybe a slap at Entrepreneur.com and their biased top 10 lists... -Maybe act as a monitor like BBB? -Maybe team up with FranSurvey OR do something similar for each member (not sure about Fransurvey's rep, but I like the concept) There's so much discontent within the franchising arena that I think if you were part of the solution, then you could create a win/win with your Association. The only downside is that this power can get abused if there aren't good checks and balances within the association.


Share this article with your friends. Fund someone's dream.

Leave a comment below or share on the left and you'll help support entrepreneurs in Africa through our partnership with Kiva. Over $50,000 raised and counting - Please keep sharing! Learn more.

Tweet

Newsletter

Get advice & tips from famous business
owners, new articles by entrepreneur
experts, my latest website updates, &
special sneak peaks at what's to come!

Name:
Email:

Popular Articles

A New Year in the Pharmaceutical Industry

Emotional Intelligence in Business

Suggestions

Email us your ideas on how to make our
website more valuable! Thank you Sharon
from Toronto Salsa Lessons / Classes for
your suggestions to make the newsletter
look like the website and profile younger
entrepreneurs like Jennifer Lopez.