Posted on 07/06/2006 6:40:55 AM PDT by Hydroshock
No, I don't. I find that just "holding" gold, or any other form of wealth for that matter, is morally repugnant.
Our Creator gave us life, and accepting that gift also means we accept a challenge to be deserving of that gift. Anyone who "would hold the gold" (your words from here) is both "wicked and lazy" (words from here) because the very least that's expected of us is to be ready to give "it back with interest."
From what we can tell, America has been growing as well with the Fed as it did before. That's another way of saying that long range economic growth was just as good with the gold standard as it's been since those bean counter salaries at the Fed got added to our taxes.
There's more to it than that though.
Besides overall growth, we've also got to live with the year to year changes. and that's what the Fed's been able to change. Sure, nobody's completely eliminated economic cycles, but in this age the cycles are more like measles --less often and a lot less lethal than they were a hundred years ago.
Poor DipSawyer seems to think inflation was less of an issue during the gold standard years. Thanks.
...post the chart of inflation in the 1800s...
Centuries of price data -- I love that stuff!
Of course, this is all well and good for number geeks like us, but let's keep in mind that normal people can only take on so much before they sink an ax into their monitors....
the man who claims that the paper dollar is more stable admits that if forced to choose he would hold the gold.
No, I don't. I find that just "holding" gold, or any other form of wealth for that matter, is morally repugnant.
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This is another example of someone responding to something I never actually said, the line about being forced to choose was not even directed at you in the first place.
I should have phrased 187 differently, you responded to something I never said TO YOU as if I had. The words are mine but they were directed at someone else as you can easily see if you go back and reread.
The words you used in post # 178 were "the man who claims that the paper dollar is more stable admits that if forced to choose he would hold the gold." Since I am one of the men who claim "that that the paper dollar is more stable", I took it to mean that you're suggesting that I would willingly choose to "hold the gold". For me, "holding gold" is morally repugnant, even though the last time I tried it I ended up with a great tax loss write-off on my income tax.
No problem. This is obviously one of those cases where that which I thought you meant wasn't the same as what we felt the other was hoping to be understood. I think.
Well, the unbacked dollar today buys more gold than it did in May of 2006.
I guess that's another "cherry-picked" choice.
There are dangers in having a dollar that isn't tied to anything -- but tying it to gold isn't really useful, as the quantity of gold held by a country is not a meaningful measure of the value of the country or of the true economic power of the country.
The federal reserve's attempts to keep money supply in defined ranges based on the true product of the country serves the same purpose as a gold standard.
As an aside I don't see the Urban CPI as an effective inflation indicator. The GSCI and the CRB index are more reliable I suspect.
As far as central banking goes I understand Andrew Jackson's great distrust or the Bank of the United States. I believe though that central banking will be around for quite a while, and probably as long as technological change requires rapid redeployment of physical assets. Unfortunately there is a price to pay.
You are seeing the Fed dealing with inflation. Real asset inflation preceeds monetary inflation.
The most sensitive indicator of inflation is the collectibles market. Old cars make new highs. Average people seek a killing. Notice the "Antique Road Show".
The increasing price of oil and gold are the effects of the intentional dollar debasement.
BUMP
That's why gold and oil have not increased in price in other currencies?
Thanks; I wondered what I was looking at. So instead of having changes in interest rates being the cause of changes in home values (per your post 125), we're now saying (post 192) that because of the Fed, real estate value trends lead interest rates.
Wait a second. For the past 15 years the prime rate has fallen (albeit erratically) by about half. During this same time frame the value of all private real estate has gone from a virtually static level, to a point that for years now it's been increasing by over 15% annually. Maybe this new theory isn't much better than the other one.
We are experiencing commodity inflation now. One commodity that has become more expensive is oil. Another is gold.
"So instead of having changes in interest rates being the cause of changes in home values (per your post 125), we're now saying (post 192) that because of the Fed, real estate value trends lead interest rates."
In #125 I said "The booming housing markets that we have just seen were and are products of past negative real interest rates."
I did not say "rate changes" but "past negative real interest rates" were the cause of increased prices of houses. I also said earlier that the CPI is a poor marker for inflation.
Other of commodities as well, including financial market products during the '90's.
We got interest, we got home prices. Which moves first? OK, we'll forget the idea that "asset inflation preceeds monetary inflation" and have a hard look at what real mortgages do to real estate values. Over the past dozen years inflation adjusted mortgage rates have generally gone down (even if they haven't gone negative). During this same time the total value of all privately owned real estate has gone up at an increasing rate. So far so good, but which causes which?
For five years (starting in '94) real rates did not go down but property values took off. Then for five years real mortgages fell while the growth in prices moderated. The huge property surge in '04 may just have well been the result of the slight interest increase in '03 as the slight drop in '04.
These are the kinds of correlations that astrologers use.
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