Re: [Pen-l] Re: Gold money is fiat money too.

[Shane Mage <shmage@xxxxxxxxxxxx>]

On Jan 31, 2009, at 5:30 PM, Laurent GUERBY wrote:

"plastic money fees" are not low--they're *negative* if you use a

"rewards" card and pay in full by the due date (and of course zero if

you use a debit card).  

I assume you're aware that the vendor pays a fee to the bank for each
plastic money transaction, which of course you, the consumer, are
paying?

Of course, but *you* are charged the same whether you pay by cash or card.

And transaction costs of speculating in gold are anything but low--you

pay the dealers "ask" price every time ("one click per day") you buy,

but get the dealer's "sell" price every time you buy. The spread is

your transaction cost per day, and it aint peanuts. 

Typical bid ask spreads in the gold market are about 0.1%-0.15%...

Which, on your "one click a day," amounts over a year to 55% of the average transaction amount.

Shane Mage

This cosmos did none of gods or men make, but it

always was and is and shall be: an everlasting fire,

kindling in measures and going out in measures."

Herakleitos of Ephesos

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