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.
Gold is nothing to hang your hat on, either. Read Wealth of Nations.
It means I'm gonna be filthy rich.
Who wants to touch me?
FYI...the week before BLACK MONDAY, the markets fell and made a rebound. Then Monday hit and while the markets all went down, none of them "collapsed", as he stated. And it took no time at all for the markets to bounce back.
Trust me, when it comes to this topic, I know far more about it than you, Paul, and probably the majority of FREEPERS and lurkers.
And SALT is the oldest and longest lasting commodity that has backed currencies; heck, it was used as currency and trusted more, when metal coinage could be and was so easily debased.
"Fiat money" is a ridiculous term and only used by boobs.
Been to Alaska just once. Picked up the gold panning bug real fast! 8-)
Been to Alaska just once. Picked up the gold panning bug real fast! 8-)
Is it any fun at all or just a quick money activity?
I used the term "fiat currencies", not "fiat money". What makes "fiat currency" a ridiculous term?
Because only idiotic goldbuggers use the term on FR.
From the prices I see in the stores here that could make him some $$$$$
Your ignorance is surpassed only by your arrogance.
"Fiat currency" is not a 'goldbug' term. It is a description of currency that is not backed by any solid asset, but is backed only by the full faith and credit (i.e. the promises) of the government that issues it.
The other aspect, just being out in the boonies, 'playing' in a creek/stream (something both basic--3 year olds do it--and primal in that), away from the world.
Ahhhhhhhh. Work hard and relax at the same time.
Quick money isn't as easy to come by as the solitude, either. You earn it, either doing homework, dirtwork, or both.
Oh yeah...I'm the "ignorant" one, but Ron Paul, your "hero", wrote an article filled with lies and 1/2 truths and completely inaccurate info. LOL
Thanks. I could imagine myself being out there fishing half the day and looking for gold the other half. I always suspected it might be fun. Thanks again for the confirmation.
What do rising gold prices mean?
Uh, maybe that the supply of new dollars is outstripping the supply of new gold?
Or maybe that public confidence in the dollar has sunk slightly faster than that of public confidence in gold?
Or maybe it's just random? Who knows?
"Fiat currency" is not a 'goldbug' term. It is a description of currency that is not backed by any solid asset, but is backed only by the full faith and credit (i.e. the promises) of the government that issues it. >>>
Uh, the promises AND the assets. The assets of the U.S. government are certainly worth vastly more than a few tons of refined yellow metal in a safe.
Maybe this has something to do with the price of gold/silver.
Debt to the penny:
12/05/2005 $8,119,496,424,139.25
http://www.publicdebt.treas.gov/opd/opdpenny.htm
Print Print Print away...WEEEEEEEEEE!!!!
Little green rectangles that can be printed at no cost vs a precious metal that exists in 1 gram per 5 tons of the earth'surface.
Which is the better value? Hmmm...
Gold going up in tandem w/ the dollar could also mean some Saudis and other Muslims are buying in anticipation of an Israeli strike on Iranian nukes -Katy bar the door if that happens. The trash talk from Iran about destroying Israel helps the gold price. Never trust someone who says he wants to kill you. Even if he says it just once
I had this debate just the other day with someone and they kept telling me I was nuts but my contention was that other than for some industrial purposes gold has no value. It's like freaking tulip bulbs, it's only valuable as long as we think it has some value. He insisted that I was nuts.
Of course he probably didn't want to tell me that he had purchased gold in 1980 @ $850 an Oz. and was pumping it to avoid a loss (grin).
http://www.amazon.com/exec/obidos/tg/detail/-/0671885286/qid=1133949904/sr=1-2/ref=sr_1_2/104-7658784-2060762?v=glance&s=books
Very good book. "The Great Reckoning" Gold, Islam, computers, deflationary markets etc
I never saw or heard of anyone throwing gold in the trash bin. Gold is a beautiful lustrous compact convenient store of wealth. People know this instinctively.
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