Gold prices surge past $522 level

BBC ^ | December 9, 2005 | London BBC

[expat_panama]

It just occurred to me that you might be calling us back to the days when bankers were limited to just offering storage services, and that if someone wanted to borrow money then the manager would act as a kind of broker between a particular depositor and an individual borrower.  Perhaps there'd never be a 'run on the bank' because everyone knew just where his particular coins had gone off to.  I can see how some might consider this arrangement as simpler and more 'honorable'-- but I'm not sure if this is the kind of set up that you're pointing to as an ideal.. 

[getsoutalive]

were actually seeking information (like you can't figure out how the bank draft get's prepared in our hypothetical First National Bank of Gold). Which ever it is, please bear in mind that the processes I describe are what actually happen in everyday life, are understood and approved by the overwhelming majority of the population, and represent an advance of civilization to level higher than ever seen before in the history of mankind.

I am questioning where the bank gets the second $100 to give to you. It only had $100 in cash and that was already lent out. It doesn't have another $100 to give you. I understand that the process you describe is what happens everyday, but I would suggest that the process is NOT understood and is only approved by the population because they don't know what is really happening and it CERTAINLY doesn't make it moral. It works today because all banks are part of the system and can legally create new money like this out of the blue. When specie was money, they ability to just print more didn't exist and that is what the bank runs and panics were all about.

[expat_panama]

that the process is NOT understood and is only approved by the population because they don't know what is really happening and it CERTAINLY doesn't make it moral.

Oh come off it.  You trying to say nobody who's ever seen "It's a Wonderful Life" was able to understand why the Bailey Savings and Loan didn't have enough money to give every single depositor his savings in cash all on the same day, you think everyone was rooting for Potter and that the consensus was that the George Bailey ideal was not moral?

[expat_panama]

You do know what an allegory is don't you?

Sure I do-- we got a wild allegory down in the river here that damn near bit my leg off, but that's not important now.  You just tell me why it is that my total family net worth in my post 213 is not good enough for allegory bait, but your total debt burden in your post 211 is?

[expat_panama]

...debt is an existing nominal value that must be paid back with interest, while your net worth is a hypothetical value that can only be realized by the asset being liquidated...

Except of course that gold you own will double it's value by the time you liquidate it but all of the value of every single one of everyone else's (non-gold) assets will never ever ever be realized even though the future interest won't go down (unless of course I'm receiving it which case it'll go down when it goes up) but none of this will ever matter if new wealth is created because the new wealth will never have any value when it's sold either not to mention that all is lost and there's no hope because if we didn't have bad luck we'd have no luck at all and if we didn't get junk mail then nobody would write to us.  ooooohhh woe is meeeeeeee

[hubbubhubbub]

"Please, explain what causes inflation, if you know."

The growth of money in excess of the growth of products and services. Now go away you clown.

[Toddsterpatriot]

The growth of money in excess of the growth of products and services.

Wow, that only took you a month. So, growth of money less than the growth of products and services causes deflation?