Buy Gold?

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Quote polycarp2:
Quote planetxan:

You all realize that gold is just a shiny rock? Right?

poly replies: True. And its worth whatever people ultimately agree its worth. People pay $20 for a shirt with an inherent value of just fifty cents every day of the week.and consider it a bargain.

Many years ago I found it highly amusing...that if I gave a theater a few pieces of just paper, I could see a movie and get some popcorn.. The theater agreed the paper was worth something.The engraving on it was rather good...but was it really equal to a movie and popcorn when there were so many of the same engraving floating around?.

The value of most things depends on what people agree it is. Perceived values rather than real values. If people agree a shiny rock is equal to a new house...it is. They can just as easily agree its worth nothing. In a food crises, it may be worth a potato if someone has a spare potaato. ..Can't eat the shiny rock.

The true value of anything is the combined labor time from all inputs used to obtain or create it. We don't, however, exchange inherent value for inherent value.

I encouraged my family to buy gold when it was in the $300-$400 range and encouraged others to do the same about 5 message boards back..Access to those boards is no longer available. People now agree that gold is worth more than that..

Retired Monk - "Ideology is a disease"

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There is a very tanglible difference between those 'pieces of paper' and the pieces of shiny rock. The pieces of paper are government notes, currency, with a legal backing. You can pay taxes, an obligation to the gov't, with them. (From this, we can use it as a measure of value.) The gold is still just a shiny rock. There was a time when the gov't gave gold the value of a currency, based on its weight. It does not do that anymore. Try to pay your taxes in gold. The IRS will send you away and tell you to come back with money.

Without gov't backing, the value of 'currency' is the value of the material it is made from, based on its use. Gold is used in some electronics, and for fillings, and to make things look pretty, but that is its only value. A paper currency with no gov't backing is worth, maybe, the BTU value of burning it, or some value to collectors. This gold frenzy is nothing more than people believing that a shiny rock has magical powers, that it 'holds' value, that it 'protects' investment, etc. It really is just a shiny rock. 99% of it's value is based solely on belief. It is the proverbial Jesus toast. Its value is a measure of how crazy people are.

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planetxan
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Jul. 31, 2007 4:01 pm

But gold is still a monetary metal. Belief and symbolism is the basis of all money and currencies. Price in fiat currency isn't always in line with gold's value. The devalued paper currencies from inflation caused by massive printing paper fiat currency is the cause of the current interest in gold--not magic, but mathematics. There is no need to pay taxes in gold anymore than paying in stocks or bonds. Now paying your taxes in gold really would be crazy because you should only pay taxes in the government's own worthless shit.

Silver is a shiny monetary metal also: http://www.youtube.com/watch?feature=player_embedded&v=VBq5seKa3wg

Leeb - Expect $6 per Gallon Gas & Huge Surge in Gold & Silver

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Antifascist
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Antifascist wrote: But gold is still a monetary metal. Belief and symbolism is the basis of all money and currencies.

poly replies: True. And anything people accept as having value, if it isn't required for absolute survival, is based upon agreement and agreement alone.. People once accepted (agreed) that notched sticks had tremendous value (England) and engraved stones (N.. Carolinas) or cacao beans (Maya).

Currently the agreement seems to be that about 12 ounces of gold equals a new car.

The inherent value of gold is the combined labor from all sources that it took to mine and smelt it. The inherent value of the new car is the combined labor input from all souces that it took to produce it.

People currently agree that the inherent value of 50 ounces of gold equals the inherent value of a $100,000 home. The labor time it took to cut the trees, build the machinery to mill the lumber, mine and smelt the ores for the wiring and plumbing, produce the nails, and finally put the thing together.Supposedly, that equals the labor time it took to mine the gold and convert it into 50 one ounce coins. In actuality, it doesn't.

Generally, though, if one flies in the face of social agreements, one tends to go splat. Currently, people agree (through symbolism and belief) that gold is worth more than it inherently is. It's probably wise to pay attention to that.

However, when push comes to shove, if there is one meal left in the world to eat, and a ton of gold left in the world to spend...the value of the last remaining meal will win hands down.

One of the flaws in our system is this. The nation produces an inherent value of 50 widgets...and tries to exchange them for an inherent value of 100 widgets. It's called profit. Can't be done. Over time, the system melts down.

Gold is an attempt ;to by-pass the meltdown...and often works for some individuals within the system....because people agree it does. in the same manner that people agree that the inherent production of a bankers annual 2,000 hours of labor at a billion a year equals the inherent value of one million, two hundred fifty thousand hours of labor in the products produced by others at $20,000 a year....

Just because people agree something is worth more than it is doesn't make it actually so. And it's wise to pay attention to the agreements. Currently, people agree that gold, like a banksters product, financial paper, is worth more than it inherently is. In economics dressed down to its very core, the financial paper's inherent value is the labor input it took to produce the paper and put the writing on it..Not much. Producing "not much" in the real economy most people live in is worth a billion a year...by agreement.

Ride the agreement on gold...knowing that it can change..

Retired Monk - "Ideology is a disease"

polycarp2
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Jul. 31, 2007 4:01 pm
Quote Antifascist:

But gold is still a monetary metal. Belief and symbolism is the basis of all money and currencies. Price in fiat currency isn't always in line with gold's value. The devalued paper currencies from inflation caused by massive printing paper fiat currency is the cause of the current interest in gold--not magic, but mathematics.

First, you are confusing gold's price with its value. It has a fraction of the value of the price. The current interest in gold (a non-monetary money, because the gov't decides what is money) comes from loud mouths on tv and radio preaching doom and gloom, claiming gold is the only thing safe, and who are sponsored by con men selling gold.

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planetxan
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Jul. 31, 2007 4:01 pm

Why shouldn't I buy copper? or iron? If I bought chickens I'd at least get some "return" in the eggs...

chilidog
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Jul. 31, 2007 4:01 pm

From your link:

No State shall... coin Money... make any Thing but gold and silver Coin a Tender in Payment of Debts...

Doesn't this seem contradictroy?

chilidog
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Jul. 31, 2007 4:01 pm
First, you are confusing gold's price with its value. It has a fraction of the value of the price.

I distinctly said, "Price in fiat currency isn't always in line with gold's value." That is why the spot price varies. You are confusing "use value" with "market value." And you are also confusing legal tender with currency. US minted Silver Eagles and Golden Eagles are legal tender so gold and silver are monetary money and can be spent from an account using a debit card. The face value is only symbolic. States are prohibited from coining money or making anything other than gold or silver coin legal tender for payment of debts. Some states, like Utah, are passing laws to include these two coin types as currency. So Planetxan, you need to do your homework, and not try to shit higher than your ass.

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Antifascist
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Quote Antifascist:
First, you are confusing gold's price with its value. It has a fraction of the value of the price.

I distinctly said, "Price in fiat currency isn't always in line with gold's value." That is why the spot price varies. You are confusing "use value" with "market value." And you are also confusing legal tender with currency. US minted Silver Eagles and Golden Eagles are legal tender so gold and silver are monetary money and can be spent from an account using a debit card. The face value is only symbolic. States are prohibited from coining money or making anything other than gold or silver coin legal tender for payment of debts. Some states, like Utah, are passing laws to include these two coin types as currency. So Planetxan, you need to do your homework, and not try to shit higher than your ass.

Silver Eagles and Golden Eagles are legal tender because they are fiat, not because they are silver or gold.

Quote The United States Coinage Act of 1965:

United States coins and currency (including Federal reserve notes and circulating notes of Federal reserve banks and national banks) are legal tender for all debts, public charges, taxes and dues. Foreign gold or silver coins are not legal tender for debts. —31 U.S.C. § 5103

meaning the gov't decides what is legal tender, and it is not gold per se.

But I really have no interest getting in a legal squabble. The point I was trying to get at was that the value of gold and silver is more arbitrary than purely fiat money, and it is a game people play to give them some kind of value they in fact do not possess. Gold drives people crazy and makes them say unpleasant things to each other. And it is just a shiny rock. The reasons that gold became a currency (that it was rare, difficult to counterfeit and easy to carry) are obsolete. Paper or electronic data can serve this purpose. Our monetary system has evolved quite a bit since the constitution. But let me thank you for elevating the conversation. I will leave you to play with your shiny rocks. I hope they are delicious.

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planetxan
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Quote chilidog:

From your link:

No State shall... coin Money... make any Thing but gold and silver Coin a Tender in Payment of Debts...

Doesn't this seem contradictroy?

This is not a contradiction. The intent was to not have money in different states at different values. If a state uses gold or silver as tender, its value would be based on weight, which would be the same no matter where it is.

As I understand it.

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planetxan
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Jul. 31, 2007 4:01 pm

OK, I think I got it.

No state shall make its own money, print its own fiat currency, mint a one ounce copper coin and declare it's worth $100 to pay someone in another state.

No state shall make any Thing but gold and silver Coin a Tender in Payment of Debts... Well I suppose the Supremacy Clause prohibits a state from prohibiting Federal Reserve Notes being used as Tender... Does it also mean that I can pay my California taxes with Krugerrands at 1,700 per coin?

chilidog
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Jul. 31, 2007 4:01 pm

Greyerz - Gold Will Trade Above $2,000 by the End of March

"Inflation adjusted, the 1980 equivalent for silver would be over $500 and I do believe silver will eventually trade over $500 an ounce. If you take gold at $10,000 and the gold/silver ratio is 20/1, this targets $500 for silver."

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Antifascist
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When the dollar takes a nosedive as an international currency, gold or silver ultimately converted to rambini will still get you that pair of Chinese socks at Walmart for a buck...instead of $40.

The pound of grapes from Chile will still cost $2 with the gold/silver ultimately converted to Chilean Pesos...instead of $80 a pound.

Unless, or course, people once again agree that the dollar is worth more and gold and silver are worth less.. Place your bets. or maybe buy a little insurance?

I'm still not adverse to buying a few silver eagles from time to time.....good for "small" exchanges/trades/paper dollar conversions if it comes to that.

Retired Monk - "Ideology is a disease".

polycarp2
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Jul. 31, 2007 4:01 pm

It seems this issue of how to establish, or create, economic wealth--and how to transfer it in the market--are two different things. polycarp seems to agree with John Locke that what establishes, or creates, economic wealth is labor. To John Locke, at a time when the Age of Reason was contending directly with 'God-ordained power structures', attempting to establish an empirical, or 'natural', value component in the economy was necessary to complement the empirical, or 'natural', political component in the society as Locke was trying to promote--with contemporary commentators saying that the American system was 'pure Locke'.

Both components for Locke were human players--the laborer as the fundamental 'unit' in the economy and the individual as the fundamental 'unit' in politics. While, to Locke, labor was a necessary and sufficient component to both establish private property and economic value, the abstract representation of 'money' has not been so forthcoming in any logical analysis of it. There seems to be an understanding that it takes humans doing something to create anything in the economy or in politics--but, what creates it and how we manage that through its transfers by its abstract entities are two different things. planetxan mentions an interesting point that it is a responsibility of government to decide the legal tender--but, especially in today's environment, it is the responsibility of the market to decide its value and, unlike Locke, it is obvious that the 'market manipulators' do not see the 'laborer' as the fundamental unit in the economy any more than the 'individual' is no longer the fundamental unit in politics. But, what has been put in their place to represent 'value' and 'political integrity' (if you will) as what can be more easily transferred by the market manipulators no longer has the natural component and consequences that Locke proposed.

While the excuse given here as to why gold gets 'more valued' because it is 'what is agreed to make it a value'--and, even as polycarp seems to agree to Locke's assessment that the real value in an economy is established by labor, no one seems to get to how gold's 'agreement to its value' and how that agreement is 'transferred in the market' is done--especially since government isn't the one basically doing it. I think there may be some points that Locke understood better than we do now about that manner of 'validation'. From Locke's Two Treatises of Government:

37. This is certain, that in the beginning, before the desire of having more than man needed had altered the intrinsic value of things, which depends only on their usefulness to the life of man; or had agreed, that a little piece of yellow metal, which would keep without wasting or decay, should be worth a great piece of flesh, or a whole heap of corn; though men had a right to appropriate, by their labour, each one of himself, as much of the things of nature, as he could use: yet this could not be much, nor to the prejudice of others, where the same plenty was still left to those who would use the same industry.

So, who is this 'we' that 'agreed' to the value of gold--and how did 'we' do it? Furthermore, why is such a value being expressed as 'increasing' if the fundamentals of the economy on based on what labor produces and how is the value being understood by each individual if the fundamentals of the politics of this nation--'pure Locke'--is based on each person thinking about it to make the judgment--and act on it by agreement in government?

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Kerry
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Jul. 31, 2007 4:01 pm

The value of gold is agreed upon everytime someone buys it, and everytime someone sells it.

If someone is willing to exchange a new car for 12 ounces of gold...the agreed value of the gold at the time is equal to the value of the new car. Agreed values and real intrinsic values are two very different things.

We agree that things are worth more than they are all the time. We agreed that houses were worth more than they are. Look at what happened. Their intrinsic value is asserting itself. The intrinsic real monetary value of a house is what it would cost to duplicate it...in paid labor time. From cutting the trees, to milling the lumber to mining metals for the nails and finally putting the thing together..

If those monetary costs paid to labor to do all of that go down, the monetary value of the home goes down. If those costs paid to labor go up, the monetary value of the house goes up. The true values, however don't change. They remain in the same labor value relationship one to another..Those who kept the true value of homes in mind when they bought them didn't get burned. They aren't underwater. If wages take a nosedive, they will be. The monetary value of the house will be the monetary value of what it costs to reproduce it...in paid labor time..

Shortages or excesses in supply of anything change their perceived values. Intrinsic value remains the same.

Colonial currency was backed by nothing. Yet the colonies prospered. The agreement was, that the currency had a value in relation to real goods...and it was accepted as such. Purely by agreement as all currencies and units of exchange ultimately are.If people didn't agree that the dollar bill in your wallet or the 4 quarters in your pocket weren't worth a cup of coffee, they wouldn't be.

In England, people once agreed that notched sticks were equal to a barrel of wheat, or a chicken or a new cart. They did that for nearly seven centuries...and England became a prosperous super power.. On notched sticks!

Stores of value exist by agreement and agreement alone. They represent something produced by labor.or a resource capable of being converted by labor into something tangible.

Currently, people agree to buy gold at about 1,850 paper dollars an ounce. The gold represents $1,850 worth of stuff. That's what the agreement is. Agreements can change. Tomorrow they may agree gold is worth more...or that gold is worth less. It depends on what someone is willing to pay for it..

The intrinsic value is only what it cost in labor time to mine it, smelt it, and stamp it into a coin or form a bar of bullion.That sounds bad compared to the price. However, that $100 bill in your wallet has a true intrinsic value of only several pennies. A $1,000 bill has the same intrinsic true value...pennies. We "agree" it's worth more than that in exchange for something else..

Retired Monk - "Ideology is a disease"

polycarp2
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Jul. 31, 2007 4:01 pm

But, polycarp, as 'agreement' is what is the basis for all financial transactions, I believe it is a far stretch to claim that such an 'agreement' is reached by each player at the moment of the transaction. So, 'something else' is establishing that value--how that is done is my point of concern. Who is the 'we' to do that--and how do they do it? planetxan mentioned government's role in this but the markets seem to 'establish value' without that component directly. What 'directs' that 'agreement'?

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Kerry
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Jul. 31, 2007 4:01 pm

Hey, remember the video "The Empty ATM"? Guess fucking what? Some Bay Area banking customers discovered today that their ATM cards don't work, and personal checks are bouncing generating penalty fees. See video.

WALNUT CREEK (CBS/AP) – Regulators on Friday shuttered a pair of small banks, including one that operated in Walnut Creek, bringing to 11 the number of U.S. bank failures this year....The Federal Deposit Insurance Corp. closed Home Savings of America, based in Little Falls, Minn., with $434.1 million in assets and $432.2 million in deposits. The bank operated seven California branches.

Check your bank: compare deposits vs. reserves numbers.

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Antifascist
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Jul. 31, 2007 4:01 pm

Waiting for the Next Shoe to Drop :Mom and Pop Investors Call It Quits

"But the move out of stock funds by individual investors has effected daily volume dramatically as it becomes that the only folks buying equities in this Potemkin market are the behemoth financial institutions and their high-frequency computers trading with each other in Wall Street’s version of circle-jerk, a completely meaningless exercise that fails to transfer any of the liquidity in financial system to the real economy. It’s a dead loss."

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Antifascist
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Quote Kerry:

But, polycarp, as 'agreement' is what is the basis for all financial transactions, I believe it is a far stretch to claim that such an 'agreement' is reached by each player at the moment of the transaction. So, 'something else' is establishing that value--how that is done is my point of concern. Who is the 'we' to do that--and how do they do it? planetxan mentioned government's role in this but the markets seem to 'establish value' without that component directly. What 'directs' that 'agreement'?

polyreplies: Shared beliefs. Much of "what's so" exists by agreement and agreement alone. At one time, most agreed the world was flat...and operated on that assumption...making sure ships didn't venture too far out into the ocean and fall off the edge.Those challenging the agreement were ridiculed.

If people agree a given amount of paper equals a house, it does. If they agree a given amount of gold equals a house, it does. Agreements are always subject to change.

At one time people agreed that kings had rights and no one else did. They saw no alternative to that. They embraced it. Slowly, that agreement changed.

Currently the agreement is that private banks collapsing the world economy are absolutely essential. So we keep them.

Currently most agree that the "invisible hand of the market" ,which Nobel Laureate Joseph Stiglitz calls a myth ,is actually so. So we have raised the "invisible hand" to a near-god status...by agreement. and base our entire economic system on what's essentially a myth.

Social agreements on reality, including money, are pretty subtle.The common thread is shared beliefs. which may or may not have anything to do with what's actually so. We begin absorbing shared beliefs as children.They are seldom questioned and are constantly reinforced in daily discourse with others..

Retired Monk - "Ideology is a disease"

polycarp2
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Jul. 31, 2007 4:01 pm

I've asked that same question to my brother, the former banker and economist. My brother states what drives the price of gold primarily is speculation--which I'm not sure if that is exactly the same thing as 'shared beliefs'. I think that market speculation is more a form of a manipulative, and propagandized, maneuver than it is something that is intrinsically 'shared' (as if 'agreed to' without pretension)--a maneuver intent on catering to a specific characteristic in mind--namely, 'greed'--and exploit a particular interest or concern--namely, 'financial insecurity'.

I've mentioned what I see as the 'corporatization of medical practice' before and I see it along the same line of manipulative speculation. While some may see this maneuver as 'meeting a need' and 'solving the problem' of the application of health care--I see it more as 'gaming the system' to ramp up production for speculative interests in the market (very much like the banks did with housing loans)--and, it is something that I think banks on the application of Obamacare to exploit with.

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Kerry
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Jul. 31, 2007 4:01 pm

AMD, the speculation is in a shared belief that gold has value above it's inherent value. The agreement on what that value is relative to currencies changes constantly.. The basic belief remains that gold has value above its inherent value...what it cost to mine it, smelt it, and turn into coins or bars.

Much of reality is by agreement and agreement alone..I'm not using the term "agreement" in the same manner one agrees to mow a lawn for $5. The agreements I refer to are unconscious

We can look back upon collapsed societies and in retrospect say, "why didn't they just do this or do that.?" They couldn't.

Solutions we now readily see were in conflict with the belief systems.. Solutions not only couldn't be implimented, they couldn't even be thought of! They were outside the shared reality of the time. Outside of the "agreements" of how things had to be. How things had to function for a society and an economy to work..

It was, afterall, Pharoahs who kept the world from collapsing into chaos by appeasing the gods. No Pharoah, no rain., no flow of the Nile, no life. Agreements are like that. A few centuries down the line, we won't look much different than that. It's only the "invisible hand" of the market that keeps us from collapse. LOL Not much different than Pharoah worship.

Illustrations: People can't conceive of a world without private banking or Wall Street.. How would it possibly function?.It could. Private banking and Wall St. are rather new innovations in the historical time frame. Land was bought/sold or utilized without either. Businesses grew and prospered without either. Towns and cities were built. Empires flourished.

It's the same sort of thing people would be faced with if technology replaced employment.. How would an economy possibly function without work? Given current structures, it couldn't. Possibilities of structures outside the familiar can't be conceived of. They are outside the agreements of reality

If technology replaced a monk's labor, I can assure you the monastic economy would still function. Goods would continue to be produced and continue to be distributed...even without "work". Different structure. A differing "reality" .

Even without technological labor replacements...societies flourished without "jobs".being provided by an employer. We can't conceive of that. It's outside the agreement. of how things have to be done in order to function.

Abject poverty admidst potential plenty is a function of agreement. on how things have to function. It has little to do with what's actually so...already existing potential to eliminate it.

What is an ideology other than a belief in something that may or may not have a basis in reality? Shared ideologies. Shared beliefs. Same thing. People agree they are true even when they are only myths.. Yet sophisticated folks claim they don't believe in myths and challenge my religion without challenging their own multiple religions. It's downright funny.

The current belief (perception) seems to be that gold is worth way, way more than its inherent value. You can take advantage of that, or not...keeping in mind that agreements (perceptions) about it can change.The core ageement that gold is worth more than its inherent value probably won't change...at least not in my lifetime..

The consolation is, that even a century from now , gold will never drop beneath its inherent value unless the supply exceeds the demand for commercial uses of it. It won't become worthless. The piece of paper in your wallet marked $100 has an inherent value of a few cents which is the cost of producing it. It shouldn't ever drop below that. It won't become worthless either. It will retain its inherent value of a few cents no matter what happens. It can always be utilized to warm a pot of tea. to extract the inherent value from it.

I probably haven't been of much help in the buy or not buy gold debate..

Retired Monk - "Ideology is a disease".

polycarp2
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Jul. 31, 2007 4:01 pm

In the case of gold, as I think I tried to point out earlier on this thread, IF it is used as the conduit to pay labor with--what I see as Locke and you, polycarp, promoting as the real indicator of economic value--how is that to be any different than any article of exchange being used to pay labor? The 'value' of gold is not in its use ever being in that fashion but, more, as a commodity to hold for its value--not 'spend'....which is exactly what Austro-Libertarian those many months ago claimed was what determined 'value'--scarcity....but, such a scarcity requires hoarding, not spending....

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Kerry
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Jul. 31, 2007 4:01 pm

Revolt with Silver:

http://www.youtube.com/watch?feature=player_embedded&v=TW2CxA8xSM8

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Antifascist
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Jul. 31, 2007 4:01 pm

Muppet warning!

Roubini warns of catastrophe for Goldman Sachs 08 November, 2011 "What happened to MF Global could happen to Jefferies, Barclays, Goldman Sachs & Morgan Stanley.Leverage & maturity mismatch can lead to runs," Roubini tweeted to his audience of over 100,000 followers on November 7.

Added Roubini, shadow banking systems, brokers and dealers with high leverage and maturity mismatch and a lack of LOLR safety nets among banks has allowed the institutions to be as exposed to collapse just as much now as ever before. Following last week’s news for MF Global, Roubini predicts that the other Wall Street banks could go bankrupt as well.

Goldman Sachs exec leaves sinking ship in disgust 14 March, 2012

Smith adds, “Over the last 12 months I have seen five different managing directors refer to their own clients as ‘muppets,’ sometimes over internal e-mail.”

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Antifascist
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Jul. 31, 2007 4:01 pm

How does hoarding gold or silver actually debase the power of the financial moguls who 'game the system' to their advantage--including being part of the mechanism that 'prices' gold and silver? As many of the ads for gold and silver keep referring to, FDR's administration during the Great Depression was the one that had people turn in their gold money. What was FDR's point in doing that?

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Kerry
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Jul. 31, 2007 4:01 pm
Quote Kerry:

In the case of gold, as I think I tried to point out earlier on this thread, IF it is used as the conduit to pay labor with--what I see as Locke and you, polycarp, promoting as the real indicator of economic value--how is that to be any different than any article of exchange being used to pay labor? The 'value' of gold is not in its use ever being in that fashion but, more, as a commodity to hold for its value--not 'spend'....which is exactly what Austro-Libertarian those many months ago claimed was what determined 'value'--scarcity....but, such a scarcity requires hoarding, not spending....

poly replies: Tsk tsk. The value of gold is simply its inherent value. The labor time it took to mine it, smelt it, and turn it into coins.. the inherent value of paper money is the labor time it took to turn the tree into pulp, the pulp into paper and the ink put on the paper. The gold coin probably has an inherent value of around $30. The $100 bill in your wallet has an inherent value of several pennies.

People often agree that the value of something is more than it is. Paying $20 for a shirt with an inherent value of 50 cents is pretty common. Some even pay $5,000 for a $5 dress or several thousand for a $10 pair of shoes. If the perceived value of a $30 gold coin is $2,000, that's its current value relative to what it can be exchanged for. . If the perceived value of 50 cents worth of fancily engraved paper is perceived to be equal to a house, people will exchange the house for it.

Anything can be used as money if people accept it as such. As long as the money in circulation doesn't exceed the goods available to buy with it, there is no problem. Conversely, whatever is used as money has to be sufficient to buy the goods that are produced.

Grain has been used as money. Cacao beans have been used as money. Carved stones have been used as money. England used notched sticks as money for centuries with great success!

Rome used mass amounts of cheap copper coins as money...equal to the production of goods and services.. When it switched to gold, there wasn't enough money to maintain the exchange of goods and services. From then on, it was all downhill.

Paper money is probably an ideal. Easy to carry around...easy to control its supply. However, its quantity in circulation has to be kept in balance with the economic production of goods/services just as Rome did with its copper coins. Our privatized banking/monetary system makes that an impossibility. Government doesn't have sufficient tools to control the money supply. It's pretty much determined by banking through the fractional reserve system.

The money supply is expanded by fractional reserve borrowing. (Loaning non-existent money with an accounting entry. The loan brings it into being...government prints it.) When there is a lack of borrowing, the money supply shrinks as loans are paid back.. Unlike Rome, our money supply has become a function of the private sector.

From time to time, the system collapses. When that happens, people look for alternatives such as gold, silver, and other commodities rather than alternatives to change the monetary system that's been in place for several centuries.

Retired Monk - "Ideology is a disease"

polycarp2
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Jul. 31, 2007 4:01 pm
Quote polycarp:

Grain has been used as money. Cacao beans have been used as money. Carved stones have been used as money. England used notched sticks as money for centuries with great success!

You seem to be missing my point, polycarp. If, as you seem to be, you, as John Locke, are equating economic value as labor--or what labor it takes to produce it--how does anything get a value above what labor it takes to produce it? With gold's case, it's not in spending it to pay for labor, it's hoarding it as speculation progresses....such speculation is not based on 'spending the gold on labor', it's on 'hoarding the gold' as a scarcity...exactly like what Austro-Libertarian said created value--'scarcity'--not 'the amount of labor used to produce it'....

Quote polycarp:

It's (money's value) pretty much determined by banking through the fractional reserve system.

Enhanced and endorsed by speculating on those things that can be hoarded--not spent. Even too many houses on the market finally decrease the value of the houses involved....

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Kerry
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Jul. 31, 2007 4:01 pm

American Muppets missed Greece's Titanic finanical collapse by defaulting on its debt. The US government in a massive market intervention is suspected of selling European gold to keep precious metals price down to disguise huge implications of Greece's default for the world economy. Now the Main Stream Media is singing "Happy Days are Here Again!" in Muppet Land with high stock market quotes and happy bank stress tests. The S&P graphs are painted and the Muppets are celebrating prosperity!

Hear interview with Jim Sinclair.

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Antifascist
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Jul. 31, 2007 4:01 pm

Is this Jesus' 'economic theory'?--from Luke 12:16-21 under the NIV heading 'The Parable of the Rich Fool':

And he told them this parable: "The ground of a certain rich man produced a good crop. He thought to himself, 'What shall I do? I have no place to store my crops.'

"Then he said, 'This is what I'll do. I will tear down my barns and build bigger ones, and there I will store all my grain and my goods. And I'll say to myself, "You have plenty of good things laid up for many years. Take life easy: eat, drink, and be merry." '

"But God said to him, 'You fool! This very night your life will be demanded from you. Then who will get what you have prepared for yourself?'

"This is how it will be with anyone who stores up things for himself but is not rich toward God."

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Kerry
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Jul. 31, 2007 4:01 pm

Gold is still way down from my original prediction price.

Mike Malloy seems to agree with me. He has a spot for Goldarama that tells people to sell high.

There is another spot running on the radio (I think Ed's Radio Show plays it) where they talk about gold IRAs. These ads make me think the gold market is drying up because gold companies are getting creative. Another concern I have is the historical gold chart. In 1980 there was a major spike with a crash a year later.

I think gold is heading towards $800 in the long run. I've been right so far... but, "Past results are not indicative of future performance/results"... lol.

Gold's current price: $1644.42
Original post price: $1861.30

spicoli's picture
spicoli
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Jun. 4, 2010 12:12 pm

For a more technical analysis...go long on silver and gold and don't pay attention to the market noise, or MOPE (Management of Perception Economics).

Jim Sinclair - Fed Minutes, Gold Manipulation & Fool’s Play

Jim Rogers “I Will Buy More” Gold

The Coming Paradigm Shift in Silver

Is Gold a Bubble? 14 Charts, the Facts and the Data Suggest Not

Antifascist's picture
Antifascist
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Jul. 31, 2007 4:01 pm
Quote Antifascist:

don't pay attention to the market noise, or MOPE (Management of Perception Economics).

Seriously? Telling people to "don't pay attention" is as bad as telling people not to think!

The proof is in the pudding...

Gold's current price: $1647.70
Original post price: $1861.30

spicoli's picture
spicoli
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Jun. 4, 2010 12:12 pm

I provided four links to think about. And here is another Von Greyerz - Chinese Imports of Gold are Massive Right Now

Gold's price Sept. 20, 2009:

Gold: $1,003.56

Silver price Sept. 20, 2009

Silver: $16.70

Silver today: $31.70

Antifascist's picture
Antifascist
Joined:
Jul. 31, 2007 4:01 pm
Quote Antifascist:

I provided four links to think about. And here is another Von Greyerz - Chinese Imports of Gold are Massive Right Now

Gold's price Sept. 20, 2009:

Gold: $1,003.56

Silver price Sept. 20, 2009

Silver: $16.70

Silver today: $31.70

Thanks for proving my point with the numbers! Why would you buy after the run up when the secret is to buy low and sell high. It is no longer September 2009 when prices were low. It is April 2012 and prices are high so why would you buy now?

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spicoli
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Jun. 4, 2010 12:12 pm

Yes Spicoli, I would buy now because it is the average buy price that really counts and price matters when you sell—like the price of a house or 401k, or stocks, or any other investment. "After the run" is based on an arbitary date which you selected to construct a silly argument. 'High" and "low" are relative to date meaning that even your 2012 comparison numbers show a drop in price, those that bought in Sept 2009 show a increase and rise in price. Another secret, if you had really read any of the professionals in the links, is to buy the dips to compile an "average" purchase price. Obviously you don't read my responses or links and only want to drop meaningless drive by quips and so this isn't a real discussion with any sincerity on your part. So go waste someone else’s time with your invincible stupidities.

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Antifascist
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Jul. 31, 2007 4:01 pm
Quote Antifascist:

So go waste someone else’s time with your invincible stupidity.

Insults... really? That really strengthens your argument!

Don't confuse simplicity with stupidity. "Simplicity is the ultimate sophistication.” -Leonardo Da Vinci

The "experts" also said there were WMDs in Iraq and we all knew how that turned out.

Buying on the dips is a good idea. The problem is the dip is $800 not $1,600.

I do agree with you that this thread is a waste of time. Especially since the facts have already proven me right. The price of gold is down about $200 since my orignal post.

Gold's current price: $1658.43
Original post price: $1861.30

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spicoli
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Jun. 4, 2010 12:12 pm

Save your pennies. The copper in them is already worth more than a penney.They are being debased in 2014. If buying a coin worth more than it costs makes sense to you, then buy some. You'll still have your penney......worth more than a penney...and a hundred of them are worth more than a buck.. All gain at no risk.

I wouldn't heavily invest in them unless you own your own semi-tractor trailer to haul them around in.

Retired Monk - "Ideology is a disease"

polycarp2
Joined:
Jul. 31, 2007 4:01 pm

Spincoli wrote

I do agree with you that this thread is a waste of time. Especially since the facts have already proven me right.

Congradulations! Keep debating that voice in your head!

Conservative Politics, 'Low-Effort' Thinking Linked In New Study

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Antifascist
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Jul. 31, 2007 4:01 pm
Quote Antifascist:

Congradulations! Keep debating that voice in your head!

Conservative Politics, 'Low-Effort' Thinking Linked In New Study

Name calling and insults... really? Haven't you ever noticed that the first person to result to name calling and insults in a debate is usually wrong.

I guess you have never heard of KISS or the genius in simplicity. Steve Jobs sure did and it was the key to his success.

BTW, I am a bleeding heart liberal.

$1861.30 - $1657.39 ≠ 5

Gold's current price: $1657.39
Original post price: $1861.30

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spicoli
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Jun. 4, 2010 12:12 pm

http://demonocracy.info/infographics/usa/derivatives/bank_exposure.html

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Antifascist
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Jul. 31, 2007 4:01 pm

Gold's current price: $1560.60
Original post price: $1861.30

spicoli's picture
spicoli
Joined:
Jun. 4, 2010 12:12 pm

Charles de Gaulle, Monetary Crisis Ghost of 1965

Caesar Bryan - Global Investors Are Frightened At This Point

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Antifascist
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Jul. 31, 2007 4:01 pm

It's Pudding Time Children!

Gold's current price: $1378.90
Original post price: $1861.30

spicoli's picture
spicoli
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Jun. 4, 2010 12:12 pm
Quote spicoli:

It's Pudding Time Children!

Gold's current price: $1378.90
Original post price: $1861.30

Well, the price of gold when I suggested buying it was within the $350 - $400 range to protect purchasing power, not as a speculation.

If I were going to buy precious metals, it would be silver. For all practical purposes, after 20 years there won't be any left in the ground to mine. It has industrial applications. Assuming industrial civilization won't collapse, it would do very, very well over the long haul.

I wouldn't, however, count on that assumption. Most other natural resources that industrial civilization is based on will be used up within the same time frame. Uranium, oil, coal, rare earth's used in computers, cell phones, solar panels, etc.

Perhaps at that point, you could exchange a small bag of home-grown beans for an ounce of gold if that's your preference. Of course, you can't eat the gold.

"Only when you have cut down the last tree, poisoned the last stream and eaten the last fish will you understand you can't eat your money" - Cree Prophesy

Retired Monk - "Ideology is a disease"

polycarp2
Joined:
Jul. 31, 2007 4:01 pm

Jim Willie: Real Physical Price of Gold Soars to $2,000/oz As COMEX Burns!

Force Majeure Was the End Game All Along, COMEX Will Default in the Next Week!

“People Running Through The Gate” To Buy Gold Bullion

Don't panic or be afraid.

Actual profit or loss is not realized until you actually sell your metal.

All these writers have predicted this CME smack down of metal prices, supply problems, and Comex defaulting on deliveries. China, Japan, Austraila and Russia are buying gold in a frenzy. After the Cyprus's bank failure a run on gold and silver worldwide began. US Goverment Silver Eagles have sold 16.6 million ounces this year alone announcing shortages and increase in coinage fee. US wholesale suppliers of silver Amark and CNT are having supply problems. There is a price disconnect between the actual physical silver, and Comex fake paper silver which sold a 100 years of silver supply in a few days using nakes short selling--illegal if we were to do it. The purpose of this CME smack down was to scare small gold holder into selling so that the Comex could replenish their dwindling supply of bullion and force investors into the Dow Stock Market bubble. However, the CME smack down has had the opposite effect of creating a buying fenzy as many people worldwide are buying gold and silver at these artifically low prices. As in October 2008, gold prices fell to $727.30, as all markets fell, but by 2011 gold reached $1917.90. So marcoeconomically the economic situation is worst than before and silver is in short supply. That is why I am long on gold and silver. You can not let the manipulated markets scare you out, or wear you out.

Antifascist's picture
Antifascist
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Jul. 31, 2007 4:01 pm

Probably since commercia/industrial uses for silver exceed production, I'd opt for silver. Estimates are that within 20 years or so, the planet will have been mined out...along with a lot of other essential resources.

From above: Actual profit or loss is not realized until you actually sell your metal.

poly replies: Yep.

Retired Monk - "Ideology is a disease"

polycarp2
Joined:
Jul. 31, 2007 4:01 pm

Yes, but what if there is a total loss because the gold/silver is stolen? If I owned any gold/silver, I would actually be scared to have it in my home, anywhere in my home. One would have to be extremely tight lipped about it because a home that was known to have gold/silver in it would be a magnet for burglars. I would actually prefer investments that can't be stolen like that, or that can be stolen but at no loss to me.

micahjr34
Joined:
Feb. 7, 2011 4:57 pm

You can always bury it in your back yard.

One reason I prefer silver to gold....if metals become a means of exchange, I wouldn't want to have to exchange a $2,000 gold coin for a dozen eggs just because I didn't have a lower-valued precious metal coin.

Silver has industrial uses. It will be mined out in 20 years. The supply won't increase after that. It will be gone. Of course, that's true for nearly every natural resource from oil to coal, to uranium and rare earths's used in computers, cell phones, solar panels, etc.. Gold, however, will still be available for mining.

I'm not certain how any precious metal will be utilized in a resource collapse in an industrial society dependent on natural resources....especially fossil fuels. A bag of beans seeds may become more useful and more valuable than precious metals.

If owning gold is the goal, perhaps you could exchange a few ounces of edible beans for a few ounces of non-edible gold. The relatively short-term future will look nothing like today. Those who know that and prepare accordingly will fare better than those who don't.

Retired Monk - "Ideology is a disease"

polycarp2
Joined:
Jul. 31, 2007 4:01 pm

Polycarp2,

You make a good point. I support bartering over currency, but I have to concede that one of the problems with barter, the same as with cash, is that what you use to barter with can be stolen! Nasty thieves!

micahjr34
Joined:
Feb. 7, 2011 4:57 pm

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