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What do Rising Gold Prices Mean?
http://www.house.gov/paul/\ ^ | 12/05/05 | Rep. Ron Paul

Posted on 12/06/2005 11:25:43 PM PST by Capitalism2003

December 5, 2005

The market price for an ounce of gold rose to over $500 last week, a significant milestone for economists watching precious metals and commodities markets. The last time gold topped $500 was December 1987, in the wake of the “Black Monday” stock market collapse earlier that fall.

Gold prices historically rise when faith in paper currencies erodes, as investors seek the intrinsic value of gold to protect themselves from inflation. It’s interesting to note that while the U.S. dollar has regained some of its value relative to other paper currencies like the Euro, it continues to lose value relative to gold and other hard assets. This shows the folly of using one fiat currency to value another.

Gold is history’s oldest and most stable currency. Central bankers and politicians don’t want a gold-backed currency system, because it denies them the power to create money out of thin air. Governments by their very nature want to expand, whether to finance military intervention abroad or a welfare state at home. Expansion costs money, and politicians don’t want spending limited to the amounts they can tax or borrow. This is precisely why central banks now manage all of the world’s major currencies.

Yet while politicians favor central bank control of money, history and the laws of economics are on the side of gold. Even though central banks try to mask their inflationary policies and suppress the price of gold by surreptitiously selling it, the gold markets always cut through the smokescreen eventually. Rising gold prices like we see today historically signify trouble for paper currencies, and the dollar is no exception.

President Nixon finally severed the last tenuous links between the dollar and gold in 1971. Since 1971, the Federal Reserve and U.S. Treasury have employed a pure fiat money system, meaning government can create money whenever it decrees simply by printing more dollars. The "value" of each newly minted dollar is determined by the faith of the public, the money supply, and the financial markets. In other words, fiat dollars have no intrinsic value.

What does this mean for you and your family? Since your dollars have no intrinsic value, they are subject to currency market fluctuations and ruinous government policies, especially Fed inflationary policies. Every time new dollars are printed and the money supply increases, your income and savings are worth less. Even as you save for retirement, the Fed is working against you. Inflation is nothing more than government counterfeiting by the Fed printing presses.


TOPICS: Business/Economy; Editorial; Government
KEYWORDS: 9trillionindebt; business; buymygold; chickenlittle; dollargoindown; economy; gold; goldbubble; goldbuggery; goldgoldgold; goldmineshafted; printthatpaper; yellowmetalfever; yukoncornelius
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1 posted on 12/06/2005 11:25:43 PM PST by Capitalism2003
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To: Capitalism2003

Gold represents protection from the devaluation of fiat currencies, including our U.S. Dollar. Ron Paul is dead right.


2 posted on 12/06/2005 11:30:58 PM PST by Roberts
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To: Roberts

It means quite a few more locals will be running dredges out 70 mile nx summer. For most, just a hobby or addiction; how you see it. When gold prices increase, it becomes another seasonal activity here in rural Alaska.


3 posted on 12/06/2005 11:37:41 PM PST by Eska
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To: Constitution Day

Naah, not gonna post it.

Been done to death this month.

< |:)~


4 posted on 12/06/2005 11:40:55 PM PST by martin_fierro (< |:)~)
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To: Capitalism2003
Someone REALLY needs to tell Ron Paul that BLACK MONDAY was just that and by December ( heck, before that! ), the market had rebounded and the rise of gold prices, in December of '87, had less than nothing to do with that day.

Actually this entire thing by him, is junk.

5 posted on 12/06/2005 11:45:56 PM PST by nopardons
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To: nopardons

Silly goldbugs, talking up the value of gold so that they can dump their shares higher.


6 posted on 12/06/2005 11:46:59 PM PST by Gordongekko909 (I know. Let's cut his WHOLE BODY off.)
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To: Roberts
"Ron Paul is dead right."

And dead irrelevant.
7 posted on 12/06/2005 11:47:18 PM PST by decal (Mother Nature and Real Life are conservatives; the Progs have never figured this out.)
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To: Eska

This is kinda interesting. People look for gold as a hobby?


8 posted on 12/06/2005 11:47:41 PM PST by durasell
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To: Roberts

No he isn't and he has less than no idea what he's talking about. His "facts" are spurious; oh bloody hell, they're garbage!


9 posted on 12/06/2005 11:48:20 PM PST by nopardons
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To: Gordongekko909

Exactly so!


10 posted on 12/06/2005 11:49:21 PM PST by nopardons
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To: Capitalism2003

Gotta love Ron Paul; he was almost my congress-critter once, but they changed the districts around, and I'm not in his district now.


11 posted on 12/06/2005 11:49:49 PM PST by de Buillion (The skinny turd from MA is a domestic enemy, and he injured himself in VietNam 3 times.)
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To: Roberts

IMHO, goldbugs have got it all wrong.

It's not the dollar, or "fiat currencies" - goldbugspeak for money.

There's nothing wrong. The sky isn't falling. The dollar isn't collapsing - in fact it's rising. What's happening is global economic growth.

What's driving gold is DEMAND. One billion Chinese, with money to spend. One billion Indians, with money to spend. Both cultures, have historically valued precious metals. Now they're showing up at the buying counter - with money in their pocket, ready to spend some of it.

Gold. Silver. Platinum.

Prices are rising - because of competition. Simple as that.


12 posted on 12/06/2005 11:50:39 PM PST by Cringing Negativism Network (Hyphenated-Americans unite!!)
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To: Cringing Negativism Network

Lil Jon wants gold too.

13 posted on 12/06/2005 11:53:29 PM PST by Gordongekko909 (I know. Let's cut his WHOLE BODY off.)
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To: Gordongekko909

Hehe I am surprised the mods have not pulled this advertisement for gold.

Wonder how long till someone catches on ;)


14 posted on 12/07/2005 12:01:59 AM PST by silentknight
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To: Gordongekko909
And so do many people. Actually, it is the purchase of jewelry, that is driving much of the uptick in the gold market now.
15 posted on 12/07/2005 12:02:17 AM PST by nopardons
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To: durasell
More a disease. I have friends that snowmachine their fuel & supplies back in 40-50 miles (trail becomes swamp in spring) and then spend summers in wet suit heavin boulders out of the creek; work their way down maybe 8 feet to hard pan; where the gold filters down to. They get an ounce or so in 3-4 hours with a 5 inch dredge. Hard work just the same; much easier ways to make a living.

That gold seems to grab onto to some people and its all they think about; yet they still only make 10-20 gran at it. One of the more successful local gold junkies here, spent his time pickin morels last summer.

16 posted on 12/07/2005 12:06:35 AM PST by Eska
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To: Eska

Alaska is one of the few states I haven't visited, but always wanted to since reading Going to Extremes. One day.

Thanks for the answer. Maybe these guys have been unduly influenced by Robert Service....

Were you ever out in the Great Alone, when the moon was awful clear,
And the icy mountains hemmed you in with a silence you most could hear;
With only the howl of a timber wolf, and you camped there in the cold,
A half-dead thing in a stark, dead world, clean mad for the muck called gold;
While high overhead, green, yellow and red, the North Lights swept in bars? --
Then you've a hunch what the music meant. . . hunger and night and the stars.


17 posted on 12/07/2005 12:10:52 AM PST by durasell
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To: nopardons

History is filled with examples of fiat currency collapses. Ron Paul has a better grasp on financial issues than most, and is far more "conservative" in the true sense of the word than anyone in the Congress.


18 posted on 12/07/2005 12:12:06 AM PST by Roberts
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To: Cringing Negativism Network

Just for kicks, read "The Coming Collapse of the Dollar and How to Profit from It" by James Turk and John Rubino. It provides a nice history lesson regarding the dangers of fiat currencies throughout world history and the reasons why governments prefer fiat currencies to gold and silver backed currencies (which relate primarily to their ability to print and spend more).


19 posted on 12/07/2005 12:15:08 AM PST by Roberts
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To: Roberts

I'm putting all my money in coltran. It's the future!


20 posted on 12/07/2005 12:16:57 AM PST by durasell
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