nisiprius wrote:LH wrote:If they ever figure out how to get the gold from ocean there would be an big drop in price
http://oceanservice.noaa.gov/facts/gold.html
Ocean waters do hold gold – nearly 20 million tons of it. However, if you were hoping make your fortune mining the sea, consider this: Gold in the ocean is so dilute that its concentration is on the order of parts per trillion. Each liter of seawater contains, on average, about 13 billionths of a gram of gold....................
if they got all over it:
each person on Earth could have nine pounds of the precious metal
Theme of a pretty good juvenile SF book I read when I was a kid.
Forget gold, vanadium's the stuff I tell ya. vanadium. Sea squirts already know how to concentrate it to several million times the concentration of the surrounding water. All you need to do is figure out how to farm them on a large scale, and be the Eli Whitney of the sea-squirt gin, and, bingo!
Vanadium or tumblr or whatever may be the next thing, and make tons more money than gold in our lifetime, but reading gold again and again in history.
Herodotus Histories:
When the sacrifice was ended, the king melted down
a vast quantity of gold, and ran it into ingots, making them six palms
long, three palms broad, and one palm in thickness. The number of
ingots was a hundred and seventeen, four being of refined gold, in
weight two talents and a half; the others of pale gold, and in weight
two talents. He also caused a statue of a lion to be made in refined
gold, the weight of which was ten talents. At the time when the temple
of Delphi was burnt to the ground, this lion fell from the ingots
on which it was placed; it now stands in the Corinthian treasury,
and weighs only six talents and a half, having lost three talents
and a half by the fire.
Lot of time talking about gold. Temple burns, gold still there, put in a vault..... hmmmm. Some of that same gold may well be in a US vault in fort knox.
I think I will stick with thousands of years of history, Herodotus, the Corinthian Treasury, fort Knox, and such, and stick with gold over Vanadium.
Gold has a way of being highly valued, such that you concentrate it, put it in a vault, then add a tank division next to it.... hmmm.
I can see where you are coming from, and I was there once too. But looking at it, the only reason not to own gold is
1)relatively small net worth (doesn't preclude owning gold either, but the more you have, the more reason to have some gold allocation)
2) You just cannot get over the fact that gold has no expectant long term production over inflation. (see swedroe talking about CCF, see portfolio theory, see permanent portfolio 30 year performance-yeah its a small slice of time, but so is US stock market history, and US history is selective bias for top, the indians are not stupid for owning tons of gold, Argentinians, etc but I digress)
3) You think US will always be reserve currency (glance at a reserve currency history chart...... things change), or that more generally, the US will always do well in your lifetime, that no argentinian, cyprus, wiemar, GD II, type events will take place.
for a portfolio, gold is
1)highly volatile
2)has great correlation benefits with stocks bonds. It jumps when other things tank. It plummets when other things do well.
There is little not to like really baring above three reasons. Hold some, when it drops to 600, rebalance. If it jumps to 2000 (doubtful, I really hope not) rebalance. It will bounce around, but will never be worth zip.
Gold, barring a huge new supply, asteroid mining, sea mining, etc. will always be highly valued expectantly amongst humans. It has 1000s of years behind it.
Every single period in history is modern time, during the "now". They were modern 1000 years ago, we are modern now, and 1000 years later, when we are regarded as primitive morons by the modern people then...... Things are no different now, or then barring genetic change/manipulation (destruction earth etc. etc.), fundamentally, than they were 1000 years ago, or 1000 years hence.
Gold has stood the test of time. When tumblr, and google, and yes, the US dollar, and yes the US stock market, US itself, are long gone, gold will still have worth I posit. Its just a question of time.
Your Vanadium sea squirts made me think of Herodotus golden ants.... which they thought was false, then just recently, they found the "ants".... also just recently, they think they may have found the army obliterated by a sandstorm.
Neat book picture.
I think this is just a philosophical divide of some sort or another : )