102 replies to this topic

[TakeAStepBack]

That's in effect, wealth confiscation.

[TakeAStepBack]

and i have no idea how we got back to a gold conversation.

[hoagie]

And when supply increases annually no greater than around 1.1%, you have an extremely stabile supply line. Demand changes tend to drive the purchasing power up (in the event its a unit of exchange vs. simply a commodity). Check out the free silver arguments of the 1800s. When such an item is used as a store of value and medium of exchange, inflation isn't even remotely the concern it is in todays world.

 

And it isn't stupid humans wanting a shiny thing to hold onto as much as it is a place to rest their expelled energy for goods and services at a later time. If I make shoes, I dont have time to grow crops. So my time is consumed on making shoes. Therefore, I want something I can store the value of my expelled energy in, such as gold. To later, or perhaps immediately exchange for food or other goods. This permeates teh entire structure of praxeology. What i dont want is something that if i store, will actually be worth less in a year than it is today. Such as a FRN.

 

 

None of this is "real" tho.  You can only exchange something that other's want and find valuable, and I still am not understanding why anyone values gold at all.  You certainly cant eat it, or till the fields with it.  Its like everyone has been hypnotised since 6000BC

[concert andy]

Are you referring to Gold?  Where are you getting 1.1% growth?

 

[concert andy]

and i have no idea how we got back to a gold conversation.

 

 

I will tell you... Post #33.

 

You started using gold as a reference in responding to Hoagie

 

 

 

No, wealth does not vary culture to culture in a global economy. Resources and physical holdings of economic utilitiy only change in resource, and a medium of exchange for those goods/services is essential to trade.

Here is a hint: Why is it that as of last month, Germany plans to repatriate over 700 metric tonnes of its gold reserve? Why do countries hold gold reserves? Citing confidence in the event of a Euro crisis. The store of value is absolutely essential to economic stability. Confidence is a game of faith and faith is empty in the physical world when trust is lost.

 

[concert andy]

PS.  When we live in a FIAT currency world and you want us to return to the gold standard, this will always be part of the discussion.

 

Shouldn't it?

[hoagie]

If 100 million tons of gold were discovered tomorrow, would the value of gold fall?

 

all Im saying is that it is arbitrary that we all decide to value gold.  Yet,m for some reason, we all desire it...tho you couldnt pay for groceries with a gold bar at Wegmans.  IDK, i think economics is all voodoo and make-believe anyway.  

 

MAYA reality.  Illusion.  Not real. Fake.  Invented.

[hoagie]

Civilization is our trap, and will lead to our end.  I think you said that TASB

[concert andy]

If 100 million tons of gold were discovered tomorrow, would the value of gold fall?

 

Not immediately, but yes, it would.

 

 

all Im saying is that it is arbitrary that we all decide to value gold.  Yet,m for some reason, we all desire it...tho you couldnt pay for groceries with a gold bar at Wegmans.  IDK, i think economics is all voodoo and make-believe anyway.  

 

MAYA reality.  Illusion.  Not real. Fake.  Invented.

 

 

Politics is voodoo, and they control the policy that dictates economics.

[TakeAStepBack]

None of this is "real" tho.  You can only exchange something that other's want and find valuable, and I still am not understanding why anyone values gold at all.  You certainly cant eat it, or till the fields with it.  Its like everyone has been hypnotised since 6000BC

 

There is no other way for me to explain it. No you cant eat it, but if you make shoes, you can exchange it and it stores the value of your productivity so that you can purchase food with it. And vice versa for the farmer who grows food but also needs shoes, or a plow or whatever. You seem to marginalize the point that this is all human action. No one is completely self sufficient and everyone is looking to increase their standard of living. It's really elementary.

[hoagie]

There is no other way for me to explain it. No you cant eat it, but if you make shoes, you can exchange it and it stores the value of your productivity so that you can purchase food with it. And vice versa for the farmer who grows food but also needs shoes, or a plow or whatever. You seem to marginalize the point that this is all human action. No one is completely self sufficient and everyone is looking to increase their standard of living. It's really elementary.

true ONLY if people want gold.  At one point, salt and cowry shells were agreed on.  here is a cool excerpt i just found...

 

 

 

Confirmation of Huxley's intentional use of color is summarized in his "Natural History of Visions," a 1959 lecture posing the question, "Why are precious stones precious?" (Human 216). These brightly colored pebbles, says Huxley, are not beautifully harmonized like a work of art or a piece of music; they are single objects which the human mind responds to in an unaccountable way. He states that one reason for our interest can be found in the Phaedo where Socrates speaks about the ideal world of which our world is in a sense a rather bad copy. Socrates says: "In this other earth the colors are much purer and more brilliant than they are down here. The mountains and stones have a richer gloss, a livelier transparency and intensity of hue". Plato writes not merely about a metaphysical idea but also about another inner world which has landscape and beautiful regions of memory, fantasy, imagination, dreams, and-most remote -- "the world of visions" (218). Huxley explains the importance of light and color in this world of visions:

This experience of the pure light of the void is a visionary
experience of what may be called the highest, the most mysticalkind. On a rather lower level the lights seem to be broken up and become, so to speak, incorporated in different objects and persons and figures. It is as though this tremendous white light were somehow refracted through a prism and broken up into different coloured lights. In this lower form of vision we have theintensification of light in some way associated with the story-telling faculty, so that there are visions of great complexity and elaboration in which light plays a tremendous part, but it is not the pure white light of the great theophanies. 

Huxley deduces, therefore, that precious stones are precious because they are objects in the external world -- along with fire, stained glass, fireworks, pageantry, theatrical spectacle, Christmas-tree lights, rainbows, and sunlight -- which most nearly resemble the things that people see in the visionary world (232-35). Poets and storytellers, by giving us a mystic vision of these objects with gemlike qualities, bring us into contact with the visionary world and potentially stimulate our own visions within us.

Read more: http://www.letsrun.c...2#ixzz2M1pG24OK

[TakeAStepBack]

Are you referring to Gold?  Where are you getting 1.1% growth?

 

 

I apparently got my wires crossed. Even still, look at this next to the "production" of FRNs in comparison. Also, look at the "price" of gold over 200 years. See any interesting trends?

[TakeAStepBack]

true ONLY if people want gold.  At one point, salt and cowry shells were agreed on.  here is a cool excerpt i just found...

 

I know this. And those units of exchange were discarded because they are 1) not indestructable and therefore horrible stores of value 2) became abundant commodity, making them worth next to nothing in exchange and 3) entirely un-mobile for trading purposes.

[concert andy]

I apparently got my wires crossed. Even still, look at this next to the "production" of FRNs in comparison. Also, look at the "price" of gold over 200 years. See any interesting trends?

 

Yes, the price of gold has been historically low.  First recording is 1792 $18.08. In 1967 $35.60.  Please note that is still a 96% increase.

 

The trend was stable until it was traded freely with no negotiated restrictions of value (1945).

 

I think you blame it is FIAT currency being the basis of the extreme highs in price today.

[hoagie]

someone should invent a way to destroy gold.

 

besides sulfuric acid

[concert andy]

someone should invent a way to destroy gold.

 

besides sulfuric acid

 

Why?

[TakeAStepBack]

Yes, the price of gold has been historically low.  First recording is 1792 $18.08. In 1967 $35.60.  Please note that is still a 96% increase.

 

The trend was stable until it was traded freely with no negotiated restrictions of value (1945).

 

I think you blame it is FIAT currency being the basis of the extreme highs in price today.

 

Actually, I do not believe that the price of gold is extremely high (and I realize this is a "same difference" to many), it is the excelerated debasement of FRNs, meaning the purchasing power of said notes is reaching the bottom, as the race intends.

 

In 1913, I purchased an item for $20. then in 2013 the same item would cost $465.21.

An annual rate of inflation change of 2,226.1%

In just 100 years.

[TakeAStepBack]

So a 96% inflation over a 200 year span in gold, vs. a 2,226% inflation over 100 years in fiat dollars.

[TakeAStepBack]

I'll take gold for $1,600.00, Alex.

[concert andy]

So a 96% inflation over a 200 year span in gold, vs. a 2,226% inflation over 100 years in fiat dollars.

 

It has only been 40 years, not a 100 since Nixon moved us off the Gold standard.

 

So 2,226% increase in 40 years.

 

That sounds like the standard definition of a bubble to me?

[TakeAStepBack]

Technically, monetary inflation became policy in 1913 with the creation of the federal reserve and its fractional lending policy. We'd have to trip down history lane to get the entire monetary policy position for the whole life span, but bretton woods was an anchor, not technically a gold standard. The US fixed the price of gold and all currencies were pegged to dollars for exchange. The US was still (as we saw when bretton woods ended) drastically inflated the amount of currency in rotation from 1913 to 1971 (which was part of the reason we stabbed the world in the back on bretton woods).

[Julius]

The targets are terrorists who are actively planning to hurt US and the West and have the means to do it. Take them out by any means necessary.

 

As far as I can tell, the ONLY credible argument against is the bad will generated from the target's neighbors and the innocents who get caught in the blast. But in so many cases the "innocents" are wives and children of terrorists and my heart has no room in it to feel anything for them. 

[concert andy]

Technically, monetary inflation became policy in 1913 with the creation of the federal reserve and its fractional lending policy. We'd have to trip down history lane to get the entire monetary policy position for the whole life span, but bretton woods was an anchor, not technically a gold standard. The US fixed the price of gold and all currencies were pegged to dollars for exchange. The US was still (as we saw when bretton woods ended) drastically inflated the amount of currency in rotation from 1913 to 1971 (which was part of the reason we stabbed the world in the back on bretton woods).

 

Of course,.

 

But technically, the price of gold was 19.39$ in 1792 and 20.67 in 1932. Meaning the 2,2xx% increase started in around 1970 or earlier in 1932 when price jumped 30% and first real jump in price.

 

In 1933 the price jumped to 35$.  

 

Then in 1945 the negotiaition set it at 35, which was the price until 1967 give or take a few dollars.

 

 

 

I say it is a bit of a bubble because, previously.  The price of gold was set by governments.

 

Since 1970, the price of gold has been set by supply and demand.

[concert andy]

The targets are terrorists who are actively planning to hurt US and the West and have the means to do it. Take them out by any means necessary.

 

As far as I can tell, the ONLY credible argument against is the bad will generated from the target's neighbors and the innocents who get caught in the blast. But in so many cases the "innocents" are wives and children of terrorists and my heart has no room in it to feel anything for them. 

 

What about if the target is a US citizen?  Not an innocent per se, in the wrong place, or related to someone who may be planning something bad.

 

But even if they are guilty, don't they have the right to fair trial, due process like every other citizen.  And let a jury of your peers rule on death penalty.

[TakeAStepBack]

Of course,.

 

But technically, the price of gold was 19.39$ in 1792 and 20.67 in 1932. Meaning the 2,2xx% increase started in around 1970 or earlier in 1932 when price jumped 30% and first real jump in price.

 

In 1933 the price jumped to 35$.  

 

Then in 1945 the negotiaition set it at 35, which was the price until 1967 give or take a few dollars.

 

 

 

I say it is a bit of a bubble because, previously.  The price of gold was set by governments.

 

Since 1970, the price of gold has been set by supply and demand.

 

Well, yes and no. The only reason there was no visible effect was because the US govt. imposed price controls. Which is why you saw the steep increase beginning the early 70s. But only because of the artificially suppressed price against currencies which was discarded at that time. The inflation was still occurring throught he 1900s beginning with the federal reserve.

 

And the price of gold isn't set by supply and demand alone. Gold, being money par excellence, moves with currencies (yes, there are supply/demand variables in teh equation too) as well. Along with the game of confidence in govt monopoly on said currencies.

[concert andy]

Well, yes and no. The only reason there was no visible effect was because the US govt. imposed price controls. Which is why you saw the steep increase beginning the early 70s. But only because of the artificially suppressed price against currencies which was discarded at that time. The inflation was still occurring throught he 1900s beginning with the federal reserve.

 

And the price of gold isn't set by supply and demand alone. Gold, being money par excellence, moves with currencies (yes, there are supply/demand variables in teh equation too) as well. Along with the game of confidence in govt monopoly on said currencies.

 

Not sure it was the US who set the rule.  That was the standard price of the time (1933), and then in 1945, this was negotiated to be the standard price, worldwide.

 

I agree that it is not set on supply and demand alone, but the price increase mostly has to do with high demand, and low supply, after the initial correction.

 

AS WELL AS ...

 

When ever the market does bad, people invest in physical things of value, like gold.  Hence the price increase.

[TakeAStepBack]

When ever the market does bad, people invest in physical things of value, like gold.  Hence the price increase.

 

Why?

[concert andy]

Why?

 

I do not know, but it has always been the case.

 

I remember in 2002 and in 2008, I said out loud on the days the market was down big.

 

Time to buy gold.

 

It historically goes up, when market does bad.

 

I do not have the correlation of why, just the knowledge that it does.

[concert andy]

May be this article will help:

 

 

Why buy gold in a deflationary economy Gold went up $38 Tuesday, and it should continue its climb

 

http://www.csmonitor...tionary-economy

[concert andy]

This article is much better:  Gives history with reasons why stuff happened:

 

 

Buying Gold in A Recession

http://www.quotegold...-recession.html

 

 

 

Although gold has been a universally-recognized store of value and medium of exchange for over five thousand years, a successful “gold standard” made gold less attractive as an investment asset for the duration of the Industrial Revolution. With the exception of a string of devaluations during the Great Depression, the convertible-paper gold standard, in which the dollar was pegged to gold at $35/oz, was generall honored until the late 1960's. Alan Greenspan then rose to national fame by showing that the Pentagon, and the Johnson Administration, were publishing wildly optimistic accounting of Vietnam War expenditures, and that the US government was effectively stoking heretofore-unrealized inflation.

 

International investors lost faith in the US dollar, and in 1975, the bull market in bullion began in earnest. From a fixed price of $41 per ounce, gold soared to an average price of $650 in 1980. Due to one freak trade, you often read that gold's historic peak was $845 per ounce, but that “peak” lasted all of one second. The highest daily closing price was $750 in 1980 dollars (about $1,900 in today's dollars, according to government inflation figures.)

 

Of course, if you're that lucky investor who has that perfect read on the market, maybe you will hit the peak just as somebody did in January 1980, when they went short gold at $845. But probability is a tenacious enemy, and for the average investor's purposes, gold established a medium-term high of around $670 in 1980-81.

 

After Federal Reserve Chairman Paul Volcker restored the credibility of the US dollar by raising interest rates into a deep recession, the flight to gold evaporated during the 1980's, or, more accurately, the value of the dollar soared. By 1997, gold's day in the sun appeared to be a relic of the past, as worldwide investors fled the Asian financial crisis of 1997 and the Russia default of 1998 to the safety of the US dollar – not gold. Furthermore, as the European Union moved closer and closer towards adopting the euro, central bankers and currency speculators dumped French francs, German deutschmarks, and other European currencies in favor of the dollar, as the euro was considered a highly risky asset. The United States made life still harder for the euro by paying down US Treasury debt, increasing the strength of the American balance sheet – and, by extension, the strength of the dollar – at precisely the time that the euro needed investors' support most.

 

Meanwhile, the “gold bugs” who remembered the stagflationary run on the dollar during the 1970's, from $41/oz to $845, had lost fortunes betting that one day, the United States Treasury would once again find itself overextended, and forced to print more money to pay its guarantees.

 

Stagflation once again figures very prominently in today's financial discourse. Many investors, and gold bugs in particular, do not trust the inflation statistics reported by the Federal Reserve and Treasury since 1995, in which Republican Alan Greenspan and Democrat Michael Boskin introduced a host of “hedonic adjustments” and other dubious methodology to the inflation calculation. The overall effect was to reduce the government's reported annual inflation by approximately 2 percent per year. Unstated inflation became an even greater problem after Sept. 11, when the Greenspan Fed held interest rates down at one percent for over a year.

 

Since 2000, the price of gold has soared approximately 250 percent. Judging by the inflationistic bias of current Fed chairman Ben Bernanke, inflation has a ways to run yet. John Williams has made a career out of calculating effective, pre-Greenspan/Boskin CPI through his website, Shadow Government Statistics.

 

Although John Williams spent many years in the wilderness, recent financial movements seem to have vindicated his view that inflation has been dramatically and calculatedly understated since 1995. Although CPI only rises by 2 percent a year, asset prices excluding bonds – stocks, equities, real estate and commodities – have soared by over 100 percent in the past decade and a half. Somewhere, someone is missing out on a very large aspect of inflation. It doesn't help the government's credibility that many of its entitlement payments are basically indexed to CPI, giving the government yet another reason to understate annual inflation.

 

As confidence in the Treasury's ability to meet all its guarantees has once again crumbled, more and more investors are flocking to gold as protection against inflation.

 

So how do I invest in gold?

 

There are three general ways to invest in gold: through a gold exchange-traded fund (ETF) such as the streetTRACKS ETF, a gold mining royalty or holding company (similar to an ETF, but not punished by arcane US tax regulations), or a gold mining company.

 

Gold ETFs and holding companies are less volatile than miners, and they generally offer zero leverage on the price of gold. In the last nine months, they have outperformed the S&P by approximately 30 percent. Royal Gold Inc. (NYSE:RGLD) is one example of a gold royalty company.

 

Gold miners offer leverage on gold. Gold mining has high fixed costs (around $400/oz, on average), so when the price of gold rises by 1 percent, the profit of the gold miner rises by significantly more than 1 percent. For example, if the price of gold is $900 per ounce, and it rises to $909 (+1%), a gold miner's profit will rise from 900 – 400 = $500/oz to $909 – 400 = $509/oz, an increase of 1.8 percent. Obviously, gold miners also lose out by a similar margin when the price drops. Gold miners with attractive price-earnings ratios include Kinross Gold Corp. (NYSE:KGC) and Barrick Gold (NYSE:ABX).

 

However, given the severe inflationistic bias of federal policymaking (or, from a forex standpoint, the fall in the value of the dollar – over the long run, it's the same thing) and evidence pointing to historic underestimation of inflation, gold could very well rise to a sustained peak of over $2,000/oz. Gold has the additional advantage of benefiting when any country devalues its currency. For example, if Europe decided that it didn't like a strong euro, euro holders would disproportionately flee into gold. Gold can be thought of as currency insured against competitive currency devaluation, at the price of high extraction costs and a low rate of inflation, as the global supply of gold rises slightly each year from mining. However, as confidence in global financial institutions continues to crumble, gold looks like an increasingly attractive, if volatile, bet.

[Joker]

The targets are terrorists who are actively planning to hurt US and the West and have the means to do it. Take them out by any means necessary.

 

Really? you got a link?

 

I haven't been able to find anything that mentions the 16 year old American kid they targeted and killed was actively planning to hurt us, never mind him having the means to do so.

[TakeAStepBack]

They run to it because it is money, while FNRs are not, and are subject tot he whims of central planners. While people bitterly cling tightly to their statist security blanket, the realization of gold, and other precious metals, as the best known store of value to man, shines through when central planners lose control and the illusion of confidence crumbles.

 

That is why people flock to gold. Because it is the best store of value known to man. All it takes are the inevitable mistakes (disastrous usually) of central planners to make state subjects flock back to the realities of economic law.

[MeOmYo]

Drones are great for the economy. The more people we kill, the more people hate us. The more people hate us the more enemies we have and the more people we have to kill. The more people we have to kill, the more drones we need.

[concert andy]

They run to it because it is money, while FNRs are not, and are subject tot he whims of central planners. While people bitterly cling tightly to their statist security blanket, the realization of gold, and other precious metals, as the best known store of value to man, shines through when central planners lose control and the illusion of confidence crumbles.

 

That is why people flock to gold. Because it is the best store of value known to man. All it takes are the inevitable mistakes (disastrous usually) of central planners to make state subjects flock back to the realities of economic law.

 

But it isn;t money.  It is now a commodity, and the value applied is the closing price or the current trading price.  Not some given price, negotiated.  Hence supply and demand having a bigger impact than you give credit.  You seem to blame the value of money (long term) as the reason, and the volatility associated with fiat currencies.

 

Hence the over inflated price of gold.  Just like the government not paying down during a boom, or saving for a recession.

 

The price of gold increases each time there is a correction.  Meaning it just keeps compounding the value, leading to redicolously high prices we have now.  For example in 1987 (black Friday)...  Gold went up.  Then in 2002 end of the stock market boom, gold went up again.  Then in 2007/8 gold went up again.

 

My point is, the price of gold never went down to its original price.  It always hovered at the current price after an event.  Next event, value goes up, and up and up....

 

Hence why i think there is a bubble going on with Gold.

[TakeAStepBack]

Currency is not money. Money, by its very definition, is a store of value. Gold, is a store of value. No, THE BEST store of value wwe know of, and when central planners start destroying wealth through currency manipulation/inflation, people look to gold to hedge against the disastrous policies of central planners. Such as your article states regarding Greenspan's Hedonic methodology on inflation since 1995.

 

 

Economists, however, have a language all their own when it comes to money. They define it as something that serves as a medium of exchange, a unit of accounting, and a store of value.

 

The "price" of gold is not "going up" as stated. What you're seeing is the decrease in purchasing power of dollars. Which, I have shown is remarkably bad. To the tune of 2,200% over 100 years in terms of inflation. Which is why central planning and fiat currencies are generally known as "a race to the bottom". In other words, the destruction of wealth through confiscation.

[concert andy]

Currency is not money. Money, by its very definition, is a store of value. Gold, is a store of value. No, THE BESt store of value wwe know of, adn when central planners start destroying wealth through currency manipulation/inflation, people look to gold to hedge against the disastrous policies of central planenrs. Such as your article states regarding Greenspan's Hedonic methodology on inflation since 1995.

 

 

Economists, however, have a language all their own when it comes to money. They define it as something that serves as a medium of exchange, a unit of accounting, and a store of value.

 

The "price" of gold is not "going up" as stated. What you're seeing is the decrease in purchasing power of dollars. Which, I have shown is remarkably bad. To the tune of 2,200% over 100 years in terms of inflation.

 

 

I do not disagree with dollars and gold being a benchmark for something of value.

 

And I do not disagree with much of what you state.

 

This is where I disagree:

 

Why then does Gold keep going up in value?  People say it will go down.  The only way the price of gold goes down, is if the economy booms sometime soon.

 

I have already stated the worst (IMO) that will hapen is a recession or continued depression (whomever view you want to use).

 

So if there is another event, won't gold go up again and again and again?  Another run on something of intrinsic value throughout history.  Wouldn't that mean the price of gold will keep compound to a redicolouos number?  Which is why I say bubble.  Nothing can just keep compounding value, can it?

 

 

Is this what you really mean highlighted in Red?

What you're seeing is the decrease in purchasing power of a fiat currency (fill in the black of the type of currency).

 

Meaning since it has no real value other than applied by a local government and the ability of that government to pay its debts?.  

 

Is this why the price of gold is going up, in your opinon?

[concert andy]

I guess my point is I see why you see this being a currency/policy issue.

 

Do you at least see why I see it as a bubble?

[TakeAStepBack]

I can see how you would perceive it as such and you're not really wrong. The business cycle in theory works off, or parasites off the policies scripted and enacted by central planners. 2008 being a prime example. That was a true housing bubble, and it's growth and eventual burst was predicted as early as 2001. These cycles are wealth confiscation and destruction by policies makers and those who are favored by them. Including central banks in a 12 seat table cartel. What happens next when the currency itself in this scheme is ultimately demise. Sure, there will be safety nets for some favorites and government will carry on. We'll eat the shit sandwich and follow their next big scheme.

 

 

My point is that we all lose in this game at their expense. That is pure injustice, and the reason I am constant about sound money. Im not a fan of being fucked literally by the dick smiling on the tv telling me he's got my interest at heart. While he destroys my wealth and cripples my economic avenues.

[Bone Daddy]

Gold is valuable because ancient aliens programmed it into humans to gather it.

[TakeAStepBack]

Putting it simpler, the dollar is in a bubble, gold is not.

[TakeAStepBack]

Did the aliens also program humans to seek and preserve self interest?

[TakeAStepBack]

Drones are great for the economy. The more people we kill, the more people hate us. The more people hate us the more enemies we have and the more people we have to kill. The more people we have to kill, the more drones we need.

 

I wish we would all declare a war on dirt and dig holes and then fill them back in, in the fashion you provide above regarding killing humans. I'd morally feel a lot less nauseous.

[concert andy]

Did the aliens also program humans to seek and preserve self interest?

 

Yes, that is called Scientology?

 

[concert andy]

I can see how you would perceive it as such and you're not really wrong. The business cycle in theory works off, or parasites off the policies scripted and enacted by central planners. 2008 being a prime example. That was a true housing bubble, and it's growth and eventual burst was predicted as early as 2001. These cycles are wealth confiscation and destruction by policies makers and those who are favored by them. Including central banks in a 12 seat table cartel. What happens next when the currency itself in this scheme is ultimately demise. Sure, there will be safety nets for some favorites and government will carry on. We'll eat the shit sandwich and follow their next big scheme.

 

My point is that we all lose in this game at their expense. That is pure injustice, and the reason I am constant about sound money. Im not a fan of being fucked literally by the dick smiling on the tv telling me he's got my interest at heart. While he destroys my wealth and cripples my economic avenues.

 

I was talking to a coworker about your gold standard argument.  he even mentioned Britton woods from the start, so I knew he would be a good person to discuss this with further.

 

After telling him some of your views, his first question was is he a Ayn Randian.

 

 

The thing we did come away with that may shoot a whole in the "return to the gold standard" argument.  So currently gold is worth alot, and many years ago it was worth a little.

 

 

 

 

If we did return to the gold standard, and then sometime after that.  There is a gold deposit  found some where on earth that was so big it would affect the price of gold drammatically, may be it is found under the ocean.    

 

Because of the laws and rules of supply and demand, the price would drop drastically.  Redusing the value of whatever currency was backed by gold.  If this happens, what then is your feeling about a gold standard?

 

---

 

Another point we came up with, is gold is the same thing as dollars.  They have intrinsic value because we humans placed the value there.  As mentioned gold was a benchmark to store a value.  Without the confidence of the people, that item that had so much value no longer does.

 

Meaning, you want a return to gold standard, but that, gold, to is based on confidence of the people in "gold" to hold their value.

 

The dollar and economy are based on confidence.  My point is we could lose confidence in gold too.  

 

---

 

Also, he told me that when previously when Fiat currencies failed, it was civilization that failed first and not the currency that lead to the fall of that civilization.

 

Thoughts?

[TakeAStepBack]

After telling him some of your views, his first question was is he a Ayn Randian

 

I've read her books. I'm not an objectivist in it's full idea. If i'm anything, I'm Rothbardian.

 

The thing we did come away with that may shoot a whole in the "return to the gold standard" argument.  So currently gold is worth alot, and many years ago it was worth a little.

 

You're still making the mistake of equating gold's worth with dollars. Gold is worth a lot of devalued FRNs currently, yes. That is due to monetary inflation. So again, the gold isn't really worth more, your government sponsored bank cartel's notes are worth a lot less.

 

 

If we did return to the gold standard, and then sometime after that.  There is a gold deposit  found some where on earth that was so big it would affect the price of gold drammatically, may be it is found under the ocean.    

 

Because of the laws and rules of supply and demand, the price would drop drastically.  Redusing the value of whatever currency was backed by gold.  If this happens, what then is your feeling about a gold standard?

 

A lot of IFs there. Anyway, this has heppened in the past with silver. And there were many interventionist policies to try and "fix" the problem. Down to outright removing silver from exchange circulation. As it stands right now, the opposite is true to the mining world of PMs. It is believed that a large portion of the gold has already been extracted, leaving only hard to obtain and unstable mining areas remaining. But i digress. In an instance such as what you refer to, there would be problems with a massive flux in supply of gold. Perhaps in that event, another metal, such as say platinum, could step up to mitigate the effects of such a find.

 

 

Another point we came up with, is gold is the same thing as dollars.  They have intrinsic value because we humans placed the value there.  As mentioned gold was a benchmark to store a value.  Without the confidence of the people, that item that had so much value no longer does.

 

Bullshit. FRNs are valued because the government imposed them on people. Right down to confiscating gold bullion. The value is placed in them based on authority, monopoly and the use of force and violence against anyone who might attempt to begin exchange with anything other than FRNs in the US. This happened to  a guy who made the silver liberty coins not long ago.

 

Forced value is a far cry from evolved or voluntary value in exchange.

 

 

 

Meaning, you want a return to gold standard, but that, gold, to is based on confidence of the people in "gold" to hold their value.

 

The dollar and economy are based on confidence.  My point is we could lose confidence in gold too.

 

It's indestructable, maluable, rare and mobile. If the people chose another option due to confidence lost in gold (which I could see happening in your "what if" scenario), then they choose something else. As long as the process os free tot he peopel to decide. I may not like it, and it may fail over time (as so many other units of exchange have), but at least it was freely chosen.

 

 

 

Also, he told me that when previously when Fiat currencies failed, it was civilization that failed first and not the currency that lead to the fall of that civilization.

 

Really? Civilation did not fail in Germany in the early 1900s. Yet they hyperinflated and destroyed their fiat money. That was the governments handy work, not the work of the people or "civilization".

[concert andy]

I've read her books. I'm not an objectivist in it's full idea. If i'm anything, I'm Rothbardian.

 

Interesting, for those who do not know who he is ... read his wikipedia.  

 

Murray Rothbard

 

 

 

You're still making the mistake of equating gold's worth with dollars. Gold is worth a lot of devalued FRNs currently, yes. That is due to monetary inflation. So again, the gold isn't really worth more, your government sponsored bank cartel's notes are worth a lot less.

 

I guess, I am trying to equate that both have value placed to it, by people.  People give gold or currency (dollars/euro/pound whatever) value.  And you are saying the value of the dollar is weaker, making gold more expensive.  Then why is this not applied accross the board for everything?  And just gold is effected?

 

A lot of IFs there. Anyway, this has heppened in the past with silver. And there were many interventionist policies to try and "fix" the problem. Down to outright removing silver from exchange circulation. As it stands right now, the opposite is true to the mining world of PMs. It is believed that a large portion of the gold has already been extracted, leaving only hard to obtain and unstable mining areas remaining. But i digress. In an instance such as what you refer to, there would be problems with a massive flux in supply of gold. Perhaps in that event, another metal, such as say platinum, could step up to mitigate the effects of such a find.

 

Of course it is a what if, isn't fiat currency failing a what if?   It has happened, but doesn't mean it will again. Same for gold, with the silver example.

 

Platinum has much more use than gold.  It is use for industrial work and jewelery.  So I agree that that may be the metal of the future.

 

 

Bullshit. FRNs are valued because the government imposed them on people. Right down to confiscating gold bullion. The value is placed in them based on authority, monopoly and the use of force and violence against anyone who might attempt to begin exchange with anything other than FRNs in the US. This happened to  a guy who made the silver liberty coins not long ago.

 

Haha!

 

But the government is given power by the people.  By the transitive power, they give the money value.  

 

 

Forced value is a far cry from evolved or voluntary value in exchange.

 

Forced or not, the system is what it is.

 

It's indestructable, maluable, rare and mobile. If the people chose another option due to confidence lost in gold (which I could see happening in your "what if" scenario), then they choose something else. As long as the process os free tot he peopel to decide. I may not like it, and it may fail over time (as so many other units of exchange have), but at least it was freely chosen.

 

I agree.

 

Really? Civilation did not fail in Germany in the early 1900s. Yet they hyperinflated and destroyed their fiat money. That was the governments handy work, not the work of the people or "civilization".

 

Most of your examples are of poor decision/policy making leading to the failed currency.  Which I think is your point of the givernment influence.

 

I have more faith in our government than you in this case, where I think you have almost zero confidence in them for anything.

 

I do think the fed is trying to help the economy, not make it fail, I do believe congress, house want the economy to succeed.  

 

I just do not think they are evil or purposely doing bad things, stupid yes.  Unseen consequences of their actions.  That is why we need smart people who know the history of fiat cunrrecy, or know about the history of these things, running the country, instead of the guy who I want to have a beer with.

[TakeAStepBack]

and just for the record, I don't think we can return toa  gold standard under a FRN banner. This would mean price controls on gold, which as we saw, had terrible consequences. I used to think we could do it. But over time, Ive realized that this wave will have to crash onto shore and a start over.

[TakeAStepBack]

Haha!

 

But the government is given power by the people.  By the transitive power, they give the money value.  

 

That is not how it is suppose to be. And furthermore, it can be argued to great length that the government does not represent even half of the population. The constitution is the law, not the popular vote or any "mandate" by a landslide victory. Economic freedom is probably the most important of them all, for without it, you really have no other freedoms.

 

 

Forced or not, the system is what it is.

There is a huge difference between being forced, adn freely choosing. It's a day and night thing. Definitely not "is what it is".

 

 

Most of your examples are of poor decision/policy making leading to the failed currency.  Which I think is your point of the givernment influence.

 

I have more faith in our government than you in this case, where I think you have almost zero confidence in them for anything.

 

I do think the fed is trying to help the economy, not make it fail, I do believe congress, house want the economy to succeed.  

 

I just do not think they are evil or purposely doing bad things, stupid yes.  Unseen consequences of their actions.  That is why we need smart people who know the history of fiat cunrrecy, or know about the history of these things, running the country, instead of the guy who I want to have a beer with.

 

ALL of the examples, as all historical fiat (and we're seeing this happening again now around the world) failures are the result of poor policy/decision making by governments. All of them. Because nobody is capable of centrally planning the lives of everyone else. It's a farce. In every example we have in history, these so called planners fail. Every single time.

 

There unseen consequences are devastating. They ruin peoples lives, destroy their wealth and in many cases cost people their lives. Government/the State are antithetical to capitalism by defauolt. The only governance I want are the ones who do nothing except protect the rights of the people, and their property as an arbitrator.

 

Otherwise governments are completely and totally destructive.

 

16 trillion in debt and counting.......
 

[concert andy]

That is not how it is suppose to be. And furthermore, it can be argued to great length that the government does not represent even half of the population. The constitution is the law, not the popular vote or any "mandate" by a landslide victory. Economic freedom is probably the most important of them all, for without it, you really have no other freedoms.

 

 

There is a huge difference between being forced, adn freely choosing. It's a day and night thing. Definitely not "is what it is".

 

 

 

ALL of the examples, as all historical fiat (and we're seeing this happening again now around the world) failures are the result of poor policy/decision making by governments. All of them. Because nobody is capable of centrally planning the lives of everyone else. It's a farce. In every example we have in history, these so called planners fail. Every single time.

 

There unseen consequences are devastating. They ruin peoples lives, destroy their wealth and in many cases cost people their lives. Government/the State are antithetical to capitalism by defauolt. The only governance I want are the ones who do nothing except protect the rights of the people, and their property as an arbitrator.

 

Otherwise governments are completely and totally destructive.

 

16 trillion in debt and counting.......
 

 

 

All valid points, now apply this same logic to Japan.

 

The system in Japan failed years ago (1992 under similar circumstances as the US is in now), but nothing man made catostophic happened (Tsunami was out of their control).

 

Why is Japan still around, how do they have a currency, how do they still exist as a nation and not bought or swallowed up by China?  Or some other outcome?

 

 

Note what happened to japan:

 

 

 

However, in the second half of the 1980s, rising stock and real estate prices caused the Japanese economy to overheat in what was later to be known as the Japanese asset price bubble caused by the policy of low interest rate by Bank of Japan. The economic bubble came to an abrupt end as the Tokyo Stock Exchange crashed in 1990–92 and real estate prices peaked in 1991. Growth in Japan throughout the 1990s at 1.5% was slower than growth in other major developed economies, giving rise to the term Lost Decade. Nonetheless, GDP per capita growth from 2001-2010 has still managed to outpace Europe and the United States.[17] Japan had recently embraced the new strategy of economic growth with such goals to be achieved in 2020 as expected.[18] The modern ICT industry has generated one of the major outputs to the Japanese economy.  Japan is the second largest music market in the world.

[TakeAStepBack]

A couple of things about Japan. They've had 5 recessions int he last 20 years. 5.

japan also does not force time off like is done in both Europe and the US. Leading to of course, higher per capita GDP.

 

 

http://www.economist...08/lost-decades

Give this guy a read. japan is a curious case, and there currency floats. Will the US face a similar outcome? We dont know. 10 million yen for a gumball.

 

PPP adjustments aren't perfect, but they're heavily favoured for these sorts of comparisons precisely because of the wild swings induced by currency moves.