Gold tops $1,400/ounce per my prediction.

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her209

No Lifer
Oct 11, 2000
56,336
11
0
btw I feel kind of silly for not jumping on the chance to have got 10k worth of gold for 6k back when it was around 550 an ounce. didn't think much about gold going up then oh well.
Hindsight is 20/20.
 

halik

Lifer
Oct 10, 2000
25,696
1
0
That's because they were trying to back the dollar with gold but still using a fractional reserve banking system. They were "printing gold," the US increased the money supply by 60%. To put it simply the gov't and banks were running the same scheme with money that the banks are doing today with gold and silver. What happened? Well, first the Roaring 20's. But then when the market beat their scheme, what happened? Massive loss of dollar value. Massive deflation. Great Depression. The Fed didn't re-inflate. That's what people say caused the GD, but they ignore the initial inflation beforehand. People who say a gold standard won't work are correct, but mainly because the banks and governments will still want to (unnaturally) expand the money supply. Again, Phokus, you can't see the forest from the trees.

What inflation? There was a deflation in the early 20s (recession) and then moderate to zero inflation till the great depression.

http://inflationdata.com/inflation/Inflation_Rate/HistoricalInflation.aspx?dsInflation_currentPage=7

What happens when population / gdp growth outpaces gold supply growth under your "true" gold standard?
 
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JS80

Lifer
Oct 24, 2005
26,271
7
81
What inflation? There was a deflation in the early 20s (recession) and then moderate to zero inflation till the great depression.

http://inflationdata.com/inflation/Inflation_Rate/HistoricalInflation.aspx?dsInflation_currentPage=7

What happens when population / gdp growth outpaces gold supply growth under your "true" gold standard?

If the economy recovers, the inflation effect will be greater than historical norm because of the enormous money pumped by the Fed. It will be interesting to see how they unwind it if the economy recovers.
 

gingermeggs

Golden Member
Dec 22, 2008
1,157
0
71
If the economy recovers, the inflation effect will be greater than historical norm because of the enormous money pumped by the Fed. It will be interesting to see how they unwind it if the economy recovers.
well that's one very big IF!
the shit is going to hit the fan, is the general consensus now....dimes on your dollar!
 

gingermeggs

Golden Member
Dec 22, 2008
1,157
0
71
^^^^^
EZArticle-Link-gold-member.jpg

A rabbi can't help you!
 

bamacre

Lifer
Jul 1, 2004
21,029
2
61
What inflation? There was a deflation in the early 20s (recession) and then moderate to zero inflation till the great depression.

http://inflationdata.com/inflation/Inflation_Rate/HistoricalInflation.aspx?dsInflation_currentPage=7

What happens when population / gdp growth outpaces gold supply growth under your "true" gold standard?

Sorry, I should have said "monetary" inflation instead of implying "price" inflation. And what I am referring to is the massive increase in the money supply after the recession of '20/'21 and before the Great Depression.

http://en.wikipedia.org/wiki/Roaring_20's

I asked once before, perhaps you missed it, but what happened to our money supply from 2000 to 2007?

And btw, I was not suggesting we move to a gold standard.
 
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sandorski

No Lifer
Oct 10, 1999
70,225
5,801
126
so the gold coins i bought in 2002 for $450 bucks that are now worth 1400 bucks each was a bad investment?

does not compute.

It was a good investment then, because the Price was Low. Buy Low, Sell High. To think that buying now is a good investment is foolishness.
 

LegendKiller

Lifer
Mar 5, 2001
18,256
68
86
couple of things, first you are 100% correct about the housing market but that is as far as it goes.

gold prices is the same for everybody world wide. I pay the same price per ounce as a Saudi prince or a Chinese businessman. its a world price on a world market.

you cant get a loan from a bank to buy gold.

the housing bubble is an american thing and you can not compare the bullshit policies that the government, banks and predatory lenders did to the housing market to the gold market.

You can absolutely get a loan from a bank to buy gold. You can even buy gold when there isn't gold bought.

Gold is just as prone to bubbles, from credit or otherwise, as any other asset. Being able to buy it at the same price as everybody else matters little. That house could have been bought by 5,000,000 people, but what matters is the price they are buying it at.
 

LegendKiller

Lifer
Mar 5, 2001
18,256
68
86
Phokus, throughout history fiat currency has never survived. So how can a fiat currency be better than gold, which like this man has said, has been a currency for 3k+ years? Your argument just isn't there. I think buying mass amounts of gold as an investment in an "oh shit" scenario is silly, but owning gold is by no means a dumb idea.

Throughout history no country has survived. So fucking what?

Gold is a fiat currency, it's only worth what somebody else will pay for it. It can be manipulated pretty fucking easy.
 

LegendKiller

Lifer
Mar 5, 2001
18,256
68
86
That's because they were trying to back the dollar with gold but still using a fractional reserve banking system. They were "printing gold," the US increased the money supply by 60%. To put it simply the gov't and banks were running the same scheme with money that the banks are doing today with gold and silver. What happened? Well, first the Roaring 20's. But then when the market beat their scheme, what happened? Massive loss of dollar value. Massive deflation. Great Depression. The Fed didn't re-inflate. That's what people say caused the GD, but they ignore the initial inflation beforehand. People who say a gold standard won't work are correct, but mainly because the banks and governments will still want to (unnaturally) expand the money supply. Again, Phokus, you can't see the forest from the trees.

100% reserves is a ridiculous system that cannot work.

Name a single country using it. Name a single modern economy that can use it without utterly collapsing and becoming an agrarian one over night.

You can't see past the 10 seconds it takes you to say "fractional reserves" (you're slow), otherwise you'd see the logical conclusion.

Your summary of the GD places all blame on the monetary expansion (though, as already shown, there wasn't much inflation), but don't blame anything on a variety of other factors. This is typical libertopian behavior.
 

Craig234

Lifer
May 1, 2006
38,548
350
126
so the gold coins i bought in 2002 for $450 bucks that are now worth 1400 bucks each was a bad investment?

does not compute.

A bubble increased in value? Well, that disproves it's a bubble. No bubble in history has ever had a period of increasing value.
 

Craig234

Lifer
May 1, 2006
38,548
350
126
Here are a couple ways:
PowerShares DB Gold Short (DGZ)
PowerShares DB Gold Double Short (DZZ)
ProShares UltraShort Gold (GLL)

Thanks. They're at 52-week lows, consistent with the increase in gold, I guess.
 

silverpig

Lifer
Jul 29, 2001
27,703
11
81
1. Your grand parents paid for it with silver. Open a history book.



Your comment makes no sense.

Gold over the long run, has a fixed value and rarely changes much in value, so the wages would remain around the same. If gold was the world's currency, the value would not fluctuate much at all because demand would be maxed out and there would be no competition from paper currency or anything else.

As far as paying an employee, it's market rate. Name a price and see if anyone applies for your job. Over time the wages will balance out to be fair on a world market. Supply and demand. If a worker demands a 1/10th of an ounce per hour, and the employer is willing to pay, based on their research into what average wages are in that industry, they will pay it. It's a chain reaction - the market will price workers.

How do you figure that gold has a fixed value over the long run when the supply of gold increases more slowly than does the world economy?
 

DominionSeraph

Diamond Member
Jul 22, 2009
8,386
31
91
Phokus, throughout history fiat currency has never survived. So how can a fiat currency be better than gold, which like this man has said, has been a currency for 3k+ years? Your argument just isn't there. I think buying mass amounts of gold as an investment in an "oh shit" scenario is silly, but owning gold is by no means a dumb idea.

Real estate would do you much better. Gold's value is pretty much all float -- there's no correlation between what you paid and what someone may decide it's worth trading for later. Real estate, however, has real value and it is priced within a framework of other commodities with real value.
If a dozen eggs costs $1 and a house $100,000, the house is likely to remain at around 1,200,000 eggs trade value.
If a dozen eggs costs $1 and you spent $100,000 on an ounce of gold, don't bet on anyone trading you 1,200,000 eggs for your bit of metal.

Real estate can bubble, but in the end it does have some real value as the foundation for satisfying a basic need. If you keep the value of that need in mind when buying you can avoid the bubble areas. Gold, OTOH, is really only good for jewelry and electronics, so its basement value is tied to luxuries, and luxuries have a really low basement. Its value as a currency is indeterminate and unlikely to ever be solidified as the network just doesn't exist for it to be implemented as a broad-based currency. And it suffers from severe drawbacks over a more adaptable money supply, so there's absolutely no reason for anyone to switch. If your paper money goes bad you switch to a better paper money system; you don't scramble around for gold.

Also, if the government did decide they needed gold for coinage...

Do you think they'd pay for your gold in gold??
 
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senseamp

Lifer
Feb 5, 2006
35,787
6,197
126
You could have food inflation and housing deflation. I don't think the egg/house cost ratio remains constant.
 

JMapleton

Diamond Member
Nov 19, 2008
4,179
2
81
How do you figure that gold has a fixed value over the long run when the supply of gold increases more slowly than does the world economy?

That is a good point. Gold in the past has increase because new economies have emerged.

Keep in mind, in my mind, I price everything in terms of purchasing power. My statement was I suppose a very scientific "in a vacuum" statement, that gold would not increase if all economies of the world were equal.

I compare it to real estate however. If you look at the price of real estate in the US over the past 100 years, you'll find it increased in value only enough to keep up with inflation, thus not increasing in value at all.
 

LegendKiller

Lifer
Mar 5, 2001
18,256
68
86
That is a good point. Gold in the past has increase because new economies have emerged.

Keep in mind, in my mind, I price everything in terms of purchasing power. My statement was I suppose a very scientific "in a vacuum" statement, that gold would not increase if all economies of the world were equal.

I compare it to real estate however. If you look at the price of real estate in the US over the past 100 years, you'll find it increased in value only enough to keep up with inflation, thus not increasing in value at all.

Housing has definitely increased in value above inflation, just not much. It shouldn't increase much over inflation either way, only because it's a relatively risk-free investment. Unless the land is on a fault line.

Gold shouldn't really increase much above inflation either. However, man's logical shortfalls carry over to gold more than housing for exactly the reason somebody stated before, gold is easily traded and is standard, unlike housing, which prevented massive speculation until recently.
 

JMapleton

Diamond Member
Nov 19, 2008
4,179
2
81
It's only worth what someone is willing to pay for it........................................
When the shit hits the fan people scramble for eggs, milk and bread. let alone trying to hide or secure qualities of gold. Tell me when you bought gold......did they give it to you personally or is it in a safety deposit box you have never seen before- except on a photo on a website..............fool!
Hell, I scramble some eggs every sunday! never mind the shit hitting the fan!
You want a solid currency, try homebrew beer or lamb legs or something you can eat and trade easy for some ammo, flour, sugar n shit!

So says everyone else on ATOT. You're being short sighted. You're thinking of the first few days after a major event that changes civilization. Actually a good "hiding spot" would probably be the most valuable. Maybe a cabin in Montana or something.

But eventually, probably within a short time of a major event, society will re-emerge and being to rebuild and they will need a currency. Gold and silver are the only two options to serve as an international currency if all governments collapsed.

In reality, we will probably not see such a "major event." We are more likely to see a "major economic event," like a default of a major currency (ie US Dollar). This will drive the price of silver and gold to an astronomical level.

I can see gold at $20,000 an ounce, maybe $50k if such an event happened. Laugh if you want but it's possible.
 

LegendKiller

Lifer
Mar 5, 2001
18,256
68
86
I can see gold at $20,000 an ounce, maybe $50k if such an event happened. Laugh if you want but it's possible.

Warren Buffet's dad and uncle said something similar. They stocked flour and sugar in the attic and bought a farm.

Sure, it's possible. It's also possible that I'll win the $200mm lottery , get my wife pregnant with triplets, discover an oil well in my back yard, create the first efficient fusion reactor, and be named Warren Buffet's successor all on my 33rd birthday (11/11/11).
 

DominionSeraph

Diamond Member
Jul 22, 2009
8,386
31
91
You could have food inflation and housing deflation. I don't think the egg/house cost ratio remains constant.

You could have individual factors that could alter the real cost of either, but they share commonalities in the baseline standard that is what would be used to tell you that they changed in real cost, and once that change is compensated for you'd find that they remained in balance.

Bad harvest leading to less feed corn, leading to fewer eggs, doubling the cost. But you have references that tell you it was the eggs that doubled and not the housing that halved.

Gold doesn't care since it's valueless.