Gold prices surge past $522 level

BBC ^ | December 9, 2005 | London BBC

[Petronski]

No I didn't. Rubin is a Jew's Jew.

See, when I was talking about blaming the Joooooooooos, I was being darkly sarcastic about paranoid anti-semitic nuttery sometimes found on the internet. That's why it's spelled that way.

You don't sound so sarcastic.

[hubbubhubbub]

GATA has made estimates of the total short positions and associated derivatives held by the bullion banks based on the volume of Au dumped on the market at critical times when the price was rising too fast for the Central Bankers comfort. Check out www.GATA.org or ww.LeMetropoleCafe.com

[Petronski]

GATA just oozes credibility.

[hubbubhubbub]

I was being sarcastic too. Rubin stiffed Bill & Hill when they came to him in need of $$ for that house in Chappaqua. That was after he and his crony friends at Goldman Sachs made hundreds of millions using U.S. Treasury assets during Clinton's watch.

[Toddsterpatriot]

If you were in charge of the Federal Reserve and the economy was expected to grow 4% next year, how much would you want the money supply to grow?

Or don't you know? LOL!!

[sitetest]

Dear Axenolith,

"Property tax rise would have forced him to sell some or all of that land long before it reached 200K an acre..."

Not really. Where I live, there are folks who keep their land as agricultural land until they get ready to develop it. Low taxes. A side benefit is that you can often rent out the land in the meanwhile to folks who actually want to farm it, and derive a small rental income in the meanwhile.

But even without the ability to somehow reduce or offset the taxes, the residential property taxes where I live are low. A property with a market value of $200,000 that's been held for many years might only have taxes of $1000 - $1500 per year. Over the period of 30 or 35 years of holding it, one would have paid on average less than a thousand dollars per year.


sitetest

[sitetest]

LOL. My counter: $623.

[Revolting cat!]

Better hurry up and buy, people! You'll have time to sell when it goes back down to $300!

[sitetest]

Dear hubbubhubbub,

Thanks for making my point. Maybe gold will be $250 per ounce in five years, maybe $1,000. If it goes to $1,000 in five years, it will have appreciated in real value - the ounce of gold will buy more stuff then than it will now. If it goes to $250, it will certainly buy less.

We can treat gold in a lot of ways, but once we admit that it may vary in price wildly, it really isn't a store of value anymore. It may be a good investment at times. It maybe be a poor investment at other times. It may be little more than a commodity in which many folks are engaging in rank speculation (like, right now).

But it ain't a store of value.

Now, it's going up in price. Maybe it'll stay up. Maybe it'll go higher. Maybe lots, lots higher.

Or maybe it'll drop like a stone, again.

If it were a store of value, it would, year in and year out, buy roughly the same amount of stuff. But that isn't what one sees over the last 35 years at all. In 1980, it could buy, at least for a little while, $800 worth of stuff using 1980 dollars. In 2001, it could only buy about $250 worth of stuff, and only in 2001 dollars, which were worth something less than 1980 dollars. For TWENTY YEARS, gold DID NOT HOLD VALUE, it WAS NOT A STORE of value.

And today, it still isn't acting like a store of value.


sitetest

[AdamSelene235]

No one is perfect. So how much did the money supply fluctuate under the gold standard?

Gold Standard? Did you mean Gold Exchange Standard?

Most so-called Gold Standards had heavy political disincentives for transacting in gold.

[Toddsterpatriot]

Gold Standard? Did you mean Gold Exchange Standard?

No, I meant Gold Standard.

[timydnuc]

I'm not an economist, nor do I play one on TV, I'm an investor and an MD. All I hear is from golf and fishing friends that are brokers or investors. I've heard them say that as the price of gold goes up it is an indication of inflation to come. I can understand that, but (before I make a fool of myself by asking them) is it possible that this may not be the case due to the additional volume of investment in the global market. Example: there are more investor getting into all markets because of India and China increasing their economic strength. My question is this: is the sheer volume of new investment, due to the afore mentioned, raising the price of gold?

[hubbubhubbub]

I reject the premise of your question. You are implying that in order for the economy to grow by 4% we need 4% inflation. That's total economic nonsense. Unfortunately what you are espousing is what passes for economics education nowadays.

[hubbubhubbub]

Obviously you didn't read my post. But that's o.k., now wander off.

[Alter Kaker]

Unfortunately Father bought stocks on margin in 1929. When the crash came we had to move out of the city house onto the farm. If he hadn't had his gold I think we would have starved during the 30's.

Maybe so, but you would have been much better off with government bonds or even cash. Your grandfather and W. J. Bryan were right --- the overwhelming majority of people benefit from a low level of inflation, whereas gold is inherently deflationary.

[Alter Kaker]

Do savers benefit from inflation? Maybe the negative savings rate in the US answers that question.

No, savers lose, but investors win.

[sitetest]

Dear hubbubhubbub,

To the contrary, I read your entire post.

Most of it wasn't worth a response, but nonetheless, it made the point for me.

Thanks!


sitetest

[Toddsterpatriot]

I reject the premise of your question. You are implying that in order for the economy to grow by 4% we need 4% inflation.

Not at all. The money supply is not related to the growth in GDP. Your confusion about the topic shows that you don't understand the gold standard and its shortfalls and you certainly don't understand money supply or inflation.

Unfortunately what you are espousing is what passes for economics education nowadays.

You make me laugh. Please, explain what causes inflation, if you know.