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Felix Salmon, blogger for Reuters and gold skeptic, decided to find out if gold really is currency and went shopping with one gram of bullion in New York City.
“We are going to find out if I can spend this $52.86 on something real.”
Salmon was turned down after trying to purchase a case of beer, stamps and a toy. (One gram of gold, on first glance, really doesn’t look like much of anything so it could partly explain people’s hesitancy.) On his fourth try Salmon was finally able to purchase some lobster rolls.
The challenge was a result of a debate that Salmon had with the Economist’s Matthew Bishop, author of In Gold We Trust?
“As the gold price goes up, it tells us we should worry about why it is going up, and it tells you something about the value of paper currencies. And what it tells you is that governments are taking a lot of risk with our currencies right now,” said Bishop during his debate with Salmon.
Joe Weisenthal at Business Insider says the video contains proof that gold is in a bubble:
But the crazy part is right in the beginning. Felix goes up to a guy loading wholesale beer, and the guy knows instantly (!) what a gram of gold is worth: right around $50!
When the guy loading wholesale beer knows the price of a gram of gold instantly, you’ve just got your famous example of the taxi driver giving you stock tips. DANGER!
CORRECTION: Article originally ran the amount as being an ounce. Salmon is actually carrying a gram.
10 Comments
Ed233
Outrageous conclusions from an experiment that has no merit and makes no sense. How would anyone know for sure they were negotiating with something of value. Where do you guys think up such ridiculous experiments? The next thing you’ll be telling us someone has a secret alchemy for making gold from blending other metals together. Start by looking up the history of gold. I see you people are looking for new writers. You can get rid of this guy for sure.
AKGeo
Nice little tidbit of pretentiousness there…so the guy loading wholesale beer can’t off the top of his head know the price of a gram of gold, when Gold prices have been slathered all over the media for the last decade? Or perhaps newspaper columnists wearing pink shirts and trendy thick-rimmed glasses are the only ones capable of making a quick mathematical computation from ounces to grams?
When you have some schmuck walk up to you on the street with an unfamiliar bit of ‘currency’ in the middle of a city with boatloads of fraud and scams happening daily, looking to buy a case of wholesale beer, you’re going to be skeptical. That has nothing to do with the true value of the stuff. If it trades at a certain dollar value, then someone who has what I’ll admit is problem with over-trusting strangers and a few brain cells active would have no problem taking a certified gram of gold in trade.
Turtlehat
Most Americans have not seen a silver coin in circulation since the 1960’s, and have not seen a gold coin in circulation since 1933. A gram of gold to base a story upon is just plain nuts.
And to say it is one ounce of gold is misleading. It is a phony test and a nonsense story with discredit to the author.
Kevin P
first paragraph still states ounce, though rest of article is gram.
Pinky40
I live in Asia where Gold is still real money,there,s a Gold shop on every corner. When you want to buy or sell you simply walk in and make the tranaction no questions asked. No paper work to fillout,pretty easy to trade for cash when ever you need it.The US has not a clue since American people are in the dark when it comes to Gold and Silver. This will change at some point, The US is covering up the real story when it comes to Gold and Silver.BUY BUY BUY
Mnelson
Cases of beer, postage stamps and toys are all fixed quantity inventory items, in which a bartering cannot be as easily concealed as it can in items bought and sold by the pound, such as the lobster rolls. Did the vendor of lobster rolls sell “light” for the balance of the day to pocket the gold without declaring the income? We’ll never know, but of the four scenarios, that was the only opportunity to do so.
jamesont
It is not the acceptance of gold that is the problem. All we need is a gold-backed currency. It doesn’t have to be physical gold. I think Michael missed the point….
Assayer
If someone off the street offered a gram of gold, I would be suspicious. Is the assay certificate a forgery, does it really weigh 1 gram? Are store clerks expected to keep on-hand a balance with calibration weight? Get a grip ….. poor survey and remember GOLD IS MONEY!
Smcgeorge
I believe he went shopping with a gram of gold, not an ounce.
Michael Allan McCrae
You are correct. The article has been updated to a gram instead of an ounce.