Friday, October 22, 2010

Is there endless supply of gold?

Everyone seems to buy gold bars nowadays. My friend just called me to tell me about the fantastic idea of buying gold because she said the prices are stable and escalating. So, with all the expensive properties prices plus all the risks of other investment, she said she will keep buying gold.

Many people are into buying gold and I wonder if one day we can deplete the supply of gold. What if it becomes extinct? Can such things happen?

My friend told me not to be silly because when people buy it, they also sell it so that means the stock is more or less the same but the demand increases so prices increases too. That is to say that we are having the same amount of gold floating around but selling at different prices, right?

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