The Death of Reaganomics

[Craig234]

Originally posted by: BansheeX

Originally posted by: Craig234Try reading what I wrote, not making things up. There are problems with the gold standard, but I didn't get into that larger topic. Read what I did say.

I made up that you posted a vague quip from someone else saying all simple solutions are wrong, implying gold is both simple and wrong? Maybe if you knew how to actually debate, we wouldn't be having this problem.

I'm annoyed by people who are reckless in misrepresenting what I say. It's one thing to debate reasonably and another to get out the pooper scooper and correct nonsense.

My debating it excellent, actually, but your reading comprehension is scarily bad.

You claim that I posted the quote specifically about the gold standard. Here is what I actually wrote prefacing the quote (in ite entirety):

For all our Ron Paul fans, critics of Keynesian economics proven for decades, and libertarians, who can solve our economic problems, a quote:

When you can learn to discuss what I actually say, let me know.

As far as debating, you should listen to those who try to help you by explaining how your 'there was high growth at the same time as this one police' is lacking as proof.

You were given the helpful response that correlation does not mean causation, which you simply ignored.

By the way, kind of odd how those "problems" didn't manifest themselves at a time of our most robust growth. That era is always going to haunt Keynesian reaches to discredit gold as not being flexible enough.

There are many factors to weigh. Were there technology improvements affecting things? What was the supply of cheap labor? You can increase growth by making workers disposable - they get hurt, too bad, in the meantime work 12 hour days six days a week for just enough to eat and live in the shanties. That increases productivity in the short term by lowering labor costs. Good idea for society? No. The issue of the gold standard is more complex than your posts on it.

 

[BansheeX]

Originally posted by: Moonbeam

Originally posted by: BansheeX

Originally posted by: Moonbeam

Originally posted by: BansheeX

Originally posted by: Craig234

Originally posted by: BansheeX

Originally posted by: ohnoes
hey look everyone, its ron paul, and his cooky ideas of a gold system.

I've tripled my assets in the last five years investing in gold? And I still haven't sold. Wait until Fannie and Freddie need a Fed bailout, it'll be above $1000 again. How you doin?

Yes, gold as an investment and gold as the basis for the US economic system are the same thing.

BTW, congrats on your investment. I've been feeling it's a temptinginvestment since Bush took office, and did not act on it (yet).

Did extremely well as well, our greatest rates of real annual growth in this country were done under the gold standard. Gold is the perfect money, money being a common means of exchange and placeholder for wealth. It's rare, indestructible, easily divisible, requires no upkeep, and has practically no demand from industry to cause volatility.

Exactly, it is totally useless to any of life's real needs and the first thing you'll trade for a horse.

People don't need a common means of exchange in a market or a placeholder for wealth? Funny, I thought they did. Stick to your anti-nuclear thread, buddy.

Why, when you can't reason. A need for a means of exchange and a placeholder has nothing to do with the notion that only gold can do that. Again, gold is worthless as a possession because if has no real value. The value of gold is all in the imagination and you'll die imagining you're eating it. That you're gripped by a colossal illusion doesn't mean that I am.

LOL? And wood pulp with ink applied to it has inherent value? Value is a subjective term, nothing has value without the human situation surrounding it. Gold has value to people as a monetary asset because of its incredible aforementioned attributes. Why is this so hard to understand?

 

[sandorski]

Originally posted by: BansheeX

Originally posted by: Moonbeam

Originally posted by: BansheeX

Originally posted by: Moonbeam

Originally posted by: BansheeX

Originally posted by: Craig234

Originally posted by: BansheeX

Originally posted by: ohnoes
hey look everyone, its ron paul, and his cooky ideas of a gold system.

I've tripled my assets in the last five years investing in gold? And I still haven't sold. Wait until Fannie and Freddie need a Fed bailout, it'll be above $1000 again. How you doin?

Yes, gold as an investment and gold as the basis for the US economic system are the same thing.

BTW, congrats on your investment. I've been feeling it's a temptinginvestment since Bush took office, and did not act on it (yet).

Did extremely well as well, our greatest rates of real annual growth in this country were done under the gold standard. Gold is the perfect money, money being a common means of exchange and placeholder for wealth. It's rare, indestructible, easily divisible, requires no upkeep, and has practically no demand from industry to cause volatility.

Exactly, it is totally useless to any of life's real needs and the first thing you'll trade for a horse.

People don't need a common means of exchange in a market or a placeholder for wealth? Funny, I thought they did. Stick to your anti-nuclear thread, buddy.

Why, when you can't reason. A need for a means of exchange and a placeholder has nothing to do with the notion that only gold can do that. Again, gold is worthless as a possession because if has no real value. The value of gold is all in the imagination and you'll die imagining you're eating it. That you're gripped by a colossal illusion doesn't mean that I am.

LOL? And wood pulp with ink applied to it has inherent value? Value is a subjective term, nothing has value without the human situation surrounding it. Gold has value to people as a monetary asset because of its incredible aforementioned attributes. Why is this so hard to understand?

Gold is as real as paper and ink.

 

[LegendKiller]

Originally posted by: sandorski

Gold is as real as paper and ink.

THey don't get it. Gold idolators and shiny rock collectors will always love their stupid rocks with no value but market value. Ironically, that's the same value paper currencies have!

 

[sandorski]

Originally posted by: LegendKiller

Originally posted by: sandorski

Gold is as real as paper and ink.

THey don't get it. Gold idolators and shiny rock collectors will always love their stupid rocks with no value but market value. Ironically, that's the same value paper currencies have!

yup

 

[First]

Originally posted by: BansheeX

Uhhhh, FYI, the gold standard was abandoned well before the 80s. Try again.

No, it wasn't, it was gradually phased out, officially by Nixon in the early 70's but not completely until the early 1980's. And despite this reality, my contention still stands, that the U.S. has done far better under fiat money than the gold standard. Any sensible economist agrees, and it's why only very few rogue economists will ever support the ludicrous notion that we should return to a gold standard.

I made up that you posted a vague quip from someone else saying all simple solutions are wrong, implying gold is both simple and wrong? Maybe if you knew how to actually debate, we wouldn't be having this problem. Instead, all I get is insults and "nu-uh" statements from fed apologists like you and Evan Lieb. "It's wrong, you don't know what you're talking about." Derr, derr, derr. Good rebuttal.

By the way, kind of odd how those "problems" didn't manifest themselves at a time of our most robust growth. That era is always going to haunt Keynesian reaches to discredit gold as not being flexible enough.

Except the bank crises of the 19th century and the crippling deflationary environment that shut out investment under the gold standard was quite easily far worse for the long-term sustainability of U.S. growth. Gold standards became less and less important around the world because as economic understanding grew more and more people realized that fixed international exchange rates based on gold made no sense despite mild benefits of stability if a country wanted to increase output as much as possible. Gold died precisely because it's an outdated form of currency backing in an global marketplace. It made no sense with countries, like China and Japan, emerging and thus fixed exchange rates were thrown out the door. The world has been the better for it, if you can add numbers.

 

[LegendKiller]

Originally posted by: Evan Lieb

Originally posted by: BansheeX

Uhhhh, FYI, the gold standard was abandoned well before the 80s. Try again.

No, it wasn't, it was gradually phased out, officially by Nixon in the early 70's but not completely until the early 1980's. And despite this reality, my contention still stands, that the U.S. has done far better under fiat money than the gold standard. Any sensible economist agrees, and it's why only very few rogue economists will ever support the ludicrous notion that we should return to a gold standard.

I made up that you posted a vague quip from someone else saying all simple solutions are wrong, implying gold is both simple and wrong? Maybe if you knew how to actually debate, we wouldn't be having this problem. Instead, all I get is insults and "nu-uh" statements from fed apologists like you and Evan Lieb. "It's wrong, you don't know what you're talking about." Derr, derr, derr. Good rebuttal.

By the way, kind of odd how those "problems" didn't manifest themselves at a time of our most robust growth. That era is always going to haunt Keynesian reaches to discredit gold as not being flexible enough.

Except the bank crises of the 19th century and the crippling deflationary environment that shut out investment under the gold standard was quite easily far worse for the long-term sustainability of U.S. growth. Gold standards became less and less important around the world because as economic understanding grew more and more people realized that fixed international exchange rates based on gold made no sense despite mild benefits of stability if a country wanted to increase output as much as possible. Gold died precisely because it's an outdated form of currency backing in an global marketplace. It made no sense with countries, like China and Japan, emerging and thus fixed exchange rates were thrown out the door. The world has been the better for it, if you can add numbers.

This is the same argument I have made time and again. However, they refuse to acknowledge the inherent instability and deflationary tendency of the gold standard cripples economies.

It's why *EVERY* modern economy has fiat currencies. However, some whackadoo economists believe that shiny rocks with no realistic value other than market value is different from paper with no realistic value other than market value.

 

[BansheeX]

Originally posted by: Evan Lieb
Except the bank crises of the 19th century and the crippling deflationary environment that shut out investment under the gold standard was quite easily far worse for the long-term sustainability of U.S. growth. Gold standards became less and less important around the world because as economic understanding grew more and more people realized that fixed international exchange rates based on gold made no sense despite mild benefits of stability if a country wanted to increase output as much as possible. Gold died precisely because it's an outdated form of currency backing in an global marketplace. It made no sense with countries, like China and Japan, emerging and thus fixed exchange rates were thrown out the door. The world has been the better for it, if you can add numbers.

This is the old "cite a cost, exaggerate it" tactic. The "crises" you speak of pale, pale, pale in comparison to what a fiat collapse causes. It's like saying all those firecrackers were so annoying, thus we should move to a great big nuclear explosion.

You ever listen to some of the Fed chairmen that you defend? It's like a game for them. Greenspan once said that despite going off the gold standard, they had successfully gotten the dollar to act as though it were (backed by gold). Now why in the hell would a Fed chairman want to emulate something that, as you say, made no sense.?

However, they refuse to acknowledge the inherent instability and deflationary tendency of the gold standard cripples economies.

Unstable? Thousands of fiat currencies collapse throughout history and you call gold unstable?

It's why *EVERY* modern economy has fiat currencies.

That is complete bullshit. Look at what happened at Bretton Woods. We didn't go off because of any of the instabilities you claim, we went off because we borrowed ridiculous amounts of money over our reserves for pointless shit and then refused to stop the inflation in order to pay it back. Sitting here now with your revisionist history and claims of gold horrors plaguing the financial world is the height of ignorance. Governments want to inflate, and weak-minded, easily manipulated people can't restrain them in any other way than recognizing it and revolting. Even a constitutional law wasn't good enough to last forever. That is why every modern economy is fiat.

 

[Capitalizt]

Originally posted by: LegendKiller

Originally posted by: sandorski

Gold is as real as paper and ink.

THey don't get it. Gold idolators and shiny rock collectors will always love their stupid rocks with no value but market value. Ironically, that's the same value paper currencies have!

Paper is a renewable resource. The fed has an unlimited amount available to print. Gold on the other hand is not renewable. When it's gone, it's gone. That is what gives it value.

There is nothing backing paper but faith.

 

[JS80]

Originally posted by: Fern

You know the talking points: Regulation is the problem and deregulation is the solution. The distribution of income and wealth doesn?t matter. Providing incentives for the investors of capital to ?grow the pie? is the only policy that counts. Free trade produces well-distributed economic growth, and any dissent from this orthodoxy is ?protectionism.?

Isn't Chavez doing one h3ll of a good job at demonstrating how beneficial regulations and wealth redistribution are to an economy?

Originally posted by: miketheidiot
-snip-
actually at the moment we could use a raise in capital gains taxes

I'm wondering if that would be any help, given the depressed values of real estate and the stock market.

Fern

This is what will probably happen if they increase capital gains tax (all else equal):

1) A lot of bargains will be available after the market crashes this year. Investors pick up stocks at low price at same rate as if LTCG did not change. They will HOLD and not take capital gains when stocks rebound. Tax revenues from LTCG DECREASE.

2) Investors will pick up stocks at a lower rate because after tax rate of return is lower. Lower investments = lower tax revenue from LTCG.

Either way it will probably be a macro loss in revenue COMPARED to status quo. Actual dollar figure may go up or down.

Hedge fund and private equity managers will probably hold on to their carried interest and not realize any gains at Obama rates (unless it's a tax increase specifically targeted towards them).

 

[JS80]

Originally posted by: Capitalizt

Originally posted by: LegendKiller

Originally posted by: sandorski

Gold is as real as paper and ink.

THey don't get it. Gold idolators and shiny rock collectors will always love their stupid rocks with no value but market value. Ironically, that's the same value paper currencies have!

Paper is a renewable resource. The fed has an unlimited amount available to print. Gold on the other hand is not renewable. When it's gone, it's gone. That is what gives it value.

There is nothing backing paper but faith.

There is nothing backing gold but....let's see, faith? It's faith that there's some other douchebag out there that wants to buy your gold at $900/oz that you hold on to it.

It's the same as fiat currency, which is more effective because you can control the supply of it (i.e. increase it as the economy expands) whereas gold's supply is relatively fixed. Ironically, your argument that the fed has the power to print unlimited amount of money (which IS NOT TRUE) is EXACTLY why it's a better form of currency than metal-backed.

 

[Capitalizt]

Originally posted by: JS80


It's the same as fiat currency, which is more effective because you can control the supply of it (i.e. increase it as the economy expands) whereas gold's supply is relatively fixed.

Which gives it PERMANENT VALUE regardless of the current "price" in paper. You can argue against a gold-backed currency...fine. But you can't argue that paper is a better store of wealth over time than gold. History proves this wrong. Countless paper currencies have come and gone...They have risen and fallen with empires, but gold hold has always held eternal..It will always be a safe and reliable way to store wealth because it is the only universal currency that does not depend on politicians or central bankers to maintain it's value.

 

[jman19]

Originally posted by: Capitalizt

Originally posted by: JS80


It's the same as fiat currency, which is more effective because you can control the supply of it (i.e. increase it as the economy expands) whereas gold's supply is relatively fixed.

Which gives it PERMANENT VALUE regardless of the current "price" in paper. You can argue against a gold-backed currency...fine. But you can't argue that paper is a better store of wealth over time than gold. History proves this wrong. Countless paper currencies have come and gone...They have risen and fallen with empires, but gold hold has always held eternal..It will always be a safe and reliable way to store wealth because it is the only universal currency that does not depend on politicians or central bankers to maintain it's value.

That might be true, but that doesn't mean it's a better form of currency.

 

[blackangst1]

Originally posted by: Capitalizt

Originally posted by: JS80


It's the same as fiat currency, which is more effective because you can control the supply of it (i.e. increase it as the economy expands) whereas gold's supply is relatively fixed.

Which gives it PERMANENT VALUE regardless of the current "price" in paper. You can argue against a gold-backed currency...fine. But you can't argue that paper is a better store of wealth over time than gold. History proves this wrong. Countless paper currencies have come and gone...They have risen and fallen with empires, but gold hold has always held eternal..It will always be a safe and reliable way to store wealth because it is the only universal currency that does not depend on politicians or central bankers to maintain it's value.

Gold is a traded commodity. It's value is determined the same way oil is.

 

[LegendKiller]

Originally posted by: Capitalizt

Originally posted by: JS80


It's the same as fiat currency, which is more effective because you can control the supply of it (i.e. increase it as the economy expands) whereas gold's supply is relatively fixed.

Which gives it PERMANENT VALUE regardless of the current "price" in paper. You can argue against a gold-backed currency...fine. But you can't argue that paper is a better store of wealth over time than gold. History proves this wrong. Countless paper currencies have come and gone...They have risen and fallen with empires, but gold hold has always held eternal..It will always be a safe and reliable way to store wealth because it is the only universal currency that does not depend on politicians or central bankers to maintain it's value.

The price of gold can go up or down depending on many things. Gold has no real value beyond the market value, which is nothing more than a historical holdover by people who love shiny rocks. This is nothing different than diamonds. The biggest consumer of gold, by far, is jewelers and consumers. If that demand is gone, then gold is worthless. It's a status symbol, nothing of real worth. It can't be burned for fuel, nor used as cattle feed. It can't feed you, nor heat you in the winter.

It's essentially a worthless piece of metal with very little industrial value.

If we suddenly found a massive gold deposit that was 4x the size of *all* gold mined so far, then suddenly gold would be effectively worthless.

What's worse is that it is beholden to market value, which fell almost 20% in months recently. In a recession or depression it can be massively deflationary when used as a benchmark for currency.

 

[Capitalizt]

Legend...You don't get it. People don't like it because it's shiny and pretty. They like it because it is RARE. It is rarity that gives it permanent value. Rarity is what paper lacks.

 

[LegendKiller]

Originally posted by: Capitalizt
Legend...You don't get it. People don't like it because it's shiny and pretty. They like it because it is RARE. It is rarity that gives it permanent value. Rarity is what paper lacks.

It's no more rare than diamonds are. There's a shit-ton of it in the ground, there's a shit-ton of it in circulation. Demand is set by nothing more than societal historical value. Supply is only constrained by what people *let* on the market, not what can actually be *put* onto the market.

There's a lot of rare stuff in this world, much of it has actual value, and much of it has value well above gold. My own shit is rare and it's production is constrained as well as finite, but it has no value because the market doesn't care about it.

Gold is nothing more than a historical norm. It's akin to diamonds and DeBeers making society think that it *must* have them as a store of love and wealth.

What's sad is that diamonds have far more value and application.

 

[Craig234]

Since the thread has digresed, this is an excellent read on the history of the marketing of diamonds. Worth the time IMO.

 

[SirStev0]

Originally posted by: ProfJohn
The panic of 2008???


What the hell is wrong with these idiots. The economy is a mild slow down right now not even a full blown recession.

The 2000/2001 had three non-consecutive quarters with negative economic growth. We have yet to have one quarter of economic growth.

And the 1981-82 recession makes what we are going throw now look like a mild set back. In December of 1982 unemployment hit 10.8% more than double our current rate. And at the same time we had the S&L crisis and a bank crisis during which the 7th largest bank in the country failed (though it didn't fail until 1984)

Instead of referring to the death of Reaganomics we should be talking about the death of history since no one seems to remember what a real recession is like.

Look up the definition of recession then write back.

 

[Vic]

Originally posted by: LegendKiller

Originally posted by: Capitalizt
Legend...You don't get it. People don't like it because it's shiny and pretty. They like it because it is RARE. It is rarity that gives it permanent value. Rarity is what paper lacks.

It's no more rare than diamonds are. There's a shit-ton of it in the ground, there's a shit-ton of it in circulation. Demand is set by nothing more than societal historical value. Supply is only constrained by what people *let* on the market, not what can actually be *put* onto the market.

There's a lot of rare stuff in this world, much of it has actual value, and much of it has value well above gold. My own shit is rare and it's production is constrained as well as finite, but it has no value because the market doesn't care about it.

Gold is nothing more than a historical norm. It's akin to diamonds and DeBeers making society think that it *must* have them as a store of love and wealth.

What's sad is that diamonds have far more value and application.

Uh... I'm not a fan of the gold standard (as currency/banking is faith/confidence no matter how you pretend to back it), nor do I like how these kinds of threads always devolve into gold standard discussions.... but I'd like to point out that gold is in fact rare. Much rarer than diamonds. The estimated sum total of all the gold ever mined in all of history would approximate a cube 66 feet across, or about 150,000 metric tons, with current annual worldwide production now at only 500 tons.
By relative comparison, diamonds are plentiful and in almost infinite supply.
However, OTOH is the fact that most of the world's gold ever mined still exists, will always exist (as gold can be easily recycled more or less infinitely), and most of it is not being actually used but just being hoarded (primarily as bars and jewelery). And its price changes are mostly affected by changes in sentiment rather any actual supply and demand.
IOW, Capitalizt proposes we all be permanently enslaved to a system whereby those who already have and will always have by means of their possession (and thus control) of the pretty rock.
My vision of capitalism is slightly different.

Just sayin here... or is that what you already said 😛

 

[First]

Originally posted by: BansheeX

This is the old "cite a cost, exaggerate it" tactic. The "crises" you speak of pale, pale, pale in comparison to what a fiat collapse causes. It's like saying all those firecrackers were so annoying, thus we should move to a great big nuclear explosion.

No, they don't, and you don't have any understanding of U.S. banking history if you think those were minor collapses relative to those periods of history.

You ever listen to some of the Fed chairmen that you defend? It's like a game for them. Greenspan once said that despite going off the gold standard, they had successfully gotten the dollar to act as though it were (backed by gold). Now why in the hell would a Fed chairman want to emulate something that, as you say, made no sense.?

rofl. Greenspan has literally gone on record as saying fiat money is superior to the gold standard due to the advantage of floating exchange rates.

Unstable? Thousands of fiat currencies collapse throughout history and you call gold unstable?

Every single major industrial power in the world is based on fiat money. Get it through your head that commodity-backed currency is an outdated system of medieval lunacy.

That is complete bullshit. Look at what happened at Bretton Woods. We didn't go off because of any of the instabilities you claim, we went off because we borrowed ridiculous amounts of money over our reserves for pointless shit and then refused to stop the inflation in order to pay it back. Sitting here now with your revisionist history and claims of gold horrors plaguing the financial world is the height of ignorance. Governments want to inflate, and weak-minded, easily manipulated people can't restrain them in any other way than recognizing it and revolting. Even a constitutional law wasn't good enough to last forever. That is why every modern economy is fiat.

The issue with gold is fixed exchange rates which, by their nature, allow you only 1 of 2 macroeconomic options; 1) free capital flows or 2) independent monetary policy. The United States has both options because they aren't stuck on the ancient gold standard. Economies that are on a fixed exchange rate can only have one of these two options, and that limits their ability to mitigate economic disasters.

Bottom line is that every modern economy is fiat because floating exchange rates have proven to be more sensible and superior for increasing output, employment, and stability in a economy. Floating is inflation-friendly rather than deflation-friendly, with deflation the inferior economic alternative due to deflationary environments being harder to overcome with interest rate cuts, as you obviously can't have negative interest rates. In other words, when push comes to shove moderate annual inflation is perfectly fine and superior to the alternative of persistent rising interest rates to bring inflation down, which is precisely how you stifle investment and increase unemployment.

But, again, you don't understand any of this because you're a kooky Ron Paul laymen.

 

[Atreus21]

Originally posted by: DealMonkey

Originally posted by: ProfJohn
The panic of 2008???


What the hell is wrong with these idiots. The economy is a mild slow down right now not even a full blown recession.

The 2000/2001 had three non-consecutive quarters with negative economic growth. We have yet to have one quarter of economic growth.

And the 1981-82 recession makes what we are going throw now look like a mild set back. In December of 1982 unemployment hit 10.8% more than double our current rate. And at the same time we had the S&L crisis and a bank crisis during which the 7th largest bank in the country failed (though it didn't fail until 1984)

Instead of referring to the death of Reaganomics we should be talking about the death of history since no one seems to remember what a real recession is like.

I don't know PJ, we just had the 2nd largest bank failure EVER with IndyMac not to mention the incredible inflationary prices in the commodities market, coupled with the housing meltdown and mortgages that are impossible to obtain unless you're a Congressman. You never know you're in a recession until after it's over...

FWIW, I just got a mortgage at 6.75%.

 

[BansheeX]

Originally posted by: LegendKiller
The price of gold can go up or down depending on many things.

The value of gold relative to other goods is generally pretty flat. Nowhere near the volatility of paper. Look at a chart comparing gold to another commodity. But you're right, paper goes heavily up and down against it. But it's not the other way around.

Gold has no real value beyond the market value, which is nothing more than a historical holdover by people who love shiny rocks.

I disagree with capitalizst that gold is desired only for its rarity. Lots of things are rare. Fiat, in a way, has value based on scarcity as well. It's simply that that scarcity is a manufactured one, and its initial acceptance has a coercive element.

This is nothing different than diamonds. The biggest consumer of gold, by far, is jewelers and consumers.

I think you know you're lying on this one, and let me point out why. There is no way that you can personally believe that gold's recent 300% runup is a result of increased jewelry demand in a worldwide economic downturn. Gold is going up because people are concerned about worldwide inflation. That causes the price to go up higher than the inflation itself, but fear of inflation is still a result of inflation.

This is why I hate your posts, you know you're being dishonest and fooling people into taking your side.

Gold is a monetary asset with no counter-party risk. While diamonds do have rarity for them, they are a terrible monetary asset for the following reasons: their quality varies from diamond to diamond, they can be damaged, their synthetic alternatives are much more difficult to spot, their value relies on quality of a cut, and they cannot be recombined with one another after being cut.

If that demand is gone, then gold is worthless. It's a status symbol, nothing of real worth. It can't be burned for fuel, nor used as cattle feed. It can't feed you, nor heat you in the winter.

Agreed. Anything without demand is worthless. Value is dependent on the human condition surrounding it. If someone came out with a device that created food from other matter, cattle would become worthless overnight. If someone came out with a device that created gold from other matter, gold would become worthless overnight. If you're starving on a mountain, a cow is going to be worth a lot more than gold to you. If you're starving in a modern society and you're burning fiat notes to fuel your oven because they've been made worth less than firewood by inflation, then gold as a common means of exchange and placeholder for wealth will instantly be desired by many people as a form of payment.

It's essentially a worthless piece of metal with very little industrial value.

Another excellent attribute as a monetary asset. Unlike many other metals, gold has no industry demand causing volatile fluctuations in value relative to market goods.

If we suddenly found a massive gold deposit that was 4x the size of *all* gold mined so far, then suddenly gold would be effectively worthless.

Not worthless, but existing gold would have 1/5 the value relative to other goods once it was all mined on on the market. Too bad we're talking hypothetical impossibilities, though.

 

[miketheidiot]

Originally posted by: BansheeX

Originally posted by: Moonbeam

Originally posted by: BansheeX

Originally posted by: Craig234

Originally posted by: BansheeX

Originally posted by: ohnoes
hey look everyone, its ron paul, and his cooky ideas of a gold system.

I've tripled my assets in the last five years investing in gold? And I still haven't sold. Wait until Fannie and Freddie need a Fed bailout, it'll be above $1000 again. How you doin?

Yes, gold as an investment and gold as the basis for the US economic system are the same thing.

BTW, congrats on your investment. I've been feeling it's a temptinginvestment since Bush took office, and did not act on it (yet).

Did extremely well as well, our greatest rates of real annual growth in this country were done under the gold standard. Gold is the perfect money, money being a common means of exchange and placeholder for wealth. It's rare, indestructible, easily divisible, requires no upkeep, and has practically no demand from industry to cause volatility.

Exactly, it is totally useless to any of life's real needs and the first thing you'll trade for a horse.

People don't need a common means of exchange in a market or a placeholder for wealth? Funny, I thought they did. Stick to your anti-nuclear thread, buddy.

aka the dollar. Gold is no more (probably less) stable or better store.

 

[miketheidiot]

Originally posted by: Capitalizt

Originally posted by: LegendKiller

Originally posted by: sandorski

Gold is as real as paper and ink.

THey don't get it. Gold idolators and shiny rock collectors will always love their stupid rocks with no value but market value. Ironically, that's the same value paper currencies have!

Paper is a renewable resource. The fed has an unlimited amount available to print. Gold on the other hand is not renewable. When it's gone, it's gone. That is what gives it value.

There is nothing backing paper but faith.

you must not be familiar with the old bank notes, which were overprinted like crazy. There is a reason banks failed constantly and we had massive bank panics every 10 year under the gold standard, it simply didn't work.