At Christmastime an article in the newspapers noted that there was an increase in the price of gold.... it had just risen to $800 per ounce , and bearing in mind the visit of the Magi with presents of gold ,frankincence and myhrr (?) I thought how little commerce has changed in relation to gold over the past 2000 years . We would all still be delighted by a present of pure gold .
I remember when first reading the novel 'Goldfinger ' and Ian Fleming's description of Fort Knox . Just imagine, a whole town , to simply store gold . But what was the purpose of holding this precious metal ? Apparently to give backing to the national Treasury of each country .
Of course we have moved on from 'the gold standard ' , as it was called .The USA moved away from the standard in 1971 and the UK moved about 30 years later under Gordon Brown .
We are now seeing (23 rd Jan) that , because of the severe problems on international Stock Exchanges , the price of , our old friend , gold is rising rapidly , $900 heading towards $1000 per ounce .
It is said that central Bankers hated the idea of the gold standard , probably because it worked , but despite the sophistication of world finances and the interlinking of the worlds stockmarkets the commodity most in demand as a hedge is still .......gold . Oil , diamonds are also in great demand ,but oil and diamonds are useful in their own right....energy and engineering...but gold apart from wedding rings and teeth does not seem to have a useful purpose ....except that it is rare.... it shows that we are still puny in our thinking .....when trouble comes calling we depend for our salvation on a commodity buried deep in a hole in the ground , millions of years ago to somehow , rescue us ....
They also say that historically the value of gold has fairly kept in touch with rises and falls of economies .
For example a 'decent suit for a gentleman ' would cost an ounce of gold at the following points in American history : during the War of Independence , the Civil War , the presidency of FDR , and of course today.
That would be about right , one could expect to pay $900 for a ' good suit '....today...
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read Goldfinger recently...wonder if Fleming visited Fort Knox in his capacity as a British spy, or to research the book
Gold bugs would say the shiny metal is the safest investment because, unlike any legal tender, it's worth about the same in India, Britain, or the U.S...it also tends to increase in price when the dollar drops against other currencies
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