Friday, April 18, 2008

RTOB: CON$UMPTION - Gold vs. Black Gold

Random
Thoughts
Of
Brilliance

An often overlooked Fundamental Difference between the SCARCITY of Crude Oil and Gold:

Both commodities are FINITE resources but one of the key differences between Oil and Gold is tied to their very different 'usage properties' and more specifically, has to do with how and in what manner these commodities are used/consumed.

The consumption of gold does not typically result in the metal's outright physical disappearance from the market/world...gold usually maintains its physical properties and never really 'decomposes'/breaks down. In other words, gold just doesn't get used up...it usually continues to exist (unlike industrial metals like copper, aluminum, zinc, lead and nickel). Meanwhile, when Crude Oil is purchased, it ultimately gets 'physically' consumed because of its valueable energy producing properties...in other words, after crude oil gets used it's GONE. Gold tends to stick around...