2011 – The year when money starts to die

http://www.financeandeconomics.org/ ^ | Alasdair Macleod

[dollarbull]

Between 1716 and 1720, John Law tried to rescue the French government from bankruptcy with a scheme that came to be called “The Mississippi Bubble”. His strategy was to set up two entities: a bank whose purpose was to issue paper money, and a company whose primary but undeclared function was to refinance government debt. Law realised that he had to confiscate all gold and silver other than smaller quantities, and force French citizens to pay their taxes and buy shares in the Mississippi Company, only with the bank’s newly issued notes. These were the three essential elements of his scheme.[i]

This is precisely what central banks in the US, Europe, Japan and the UK are doing today. They are rigging the markets by buying government debt at artificially high prices with freshly created paper money, having previously excluded gold and silver from any role as legal tender. The following quote from John Law, could equally be attributed to a central banker of today: “An abundance of money which would lower the interest rate to two per cent would, in reducing the financing costs of the debts and public offices etc. relieve the King.” This is quantitative easing, pure and simple, and John Law had fully anticipated modern central banking. Law’s scheme ended in disaster and as a precedent for today’s central banking this should worry us greatly.

[Aquamarine]

But I’ll remember not to invest in gold as a way to survive shipwrecks, thanks.

There's your answer, just don't go on a cruise. :)

[truthfreedom]

I’m pro gold.

I was defending the use of the word “effect”

Gold basically tracks inflation over time.

I was just saying that IF people didn’t want to make jewelry out of gold, the price of gold would fall. I’m not saying that people don’t want to make jewelry out of gold anymore.

[fhayek]

ping

[fhayek]

ping

[fr_freak]

But I’ll remember not to invest in gold as a way to survive shipwrecks, thanks.

Don't be ridiculous. The poster I was responding to couldn't envision a scenario where gold was worthless, so I gave him one. The desert island scenario, however, is also a good metaphor for a state of society that we could find ourselves in should things really get bad. You can't eat gold. You can't keep yourself warm with gold. You can't wear gold. That is the point. It all depends on how bad things get, and how long the badness goes on.

The key to having a decent discussion is to make an effort to understand the context in which things are said. You should keep that in mind.

[Atlas Sneezed]

The desert island scenario, however, is also a good metaphor for a state of society that we could find ourselves in should things really get bad. You can’t eat gold. You can’t keep yourself warm with gold. You can’t wear gold. That is the point. It all depends on how bad things get, and how long the badness goes on.

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Now we’re away from the absurd and back to the plausible risk worth insuraing against. You’re engaging in straw man rhetiric, as if anyone is suggesting that gold is a first choice to have in a crisis, above water, food, guins, ammo, and silver for day to day money.

I think its clear that while those things will help your family survive a crisis, gold will help your remaining wealth survive the crisis.

When it comes to the “you can’t eat gold” cliche, tell us what investment or store of wealth you can eat, and why that should be a goal?

[Atlas Sneezed]

The key to having a decent discussion is to make an effort to understand the context in which things are said. You should keep that in mind.

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Which I suppose is why you created a never-happened absurd hypothetical scenario in an effort to refute the true statement that “there has never been a TIME when gold was worth nothing”?

A fictional tale is not a “time.”

(With apologies for my poor spell checking on the prior post.)

[Atlas Sneezed]

I’d trade my gold AND my loaf of bread for Ginger.

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Seriously, because the “Gingers” throughout history have always loved gold, gold has always had value.

[arthurus]

You know some rare people. They are not characteristic of the other 99%.

[fr_freak]

Now we’re away from the absurd and back to the plausible risk worth insuraing against. You’re engaging in straw man rhetiric, as if anyone is suggesting that gold is a first choice to have in a crisis, above water, food, guins, ammo, and silver for day to day money.

Listen, buddy, if you're going to jump in on the middle of someone else's conversation, you should at least know what we were talking about. I don't care what YOU were suggesting. The guy I replied to couldn't see a scenario where gold had no value so I gave him one. Period. That guy wasn't you, so kindly untwist your panties.

[fr_freak]

Which I suppose is why you created a never-happened absurd hypothetical scenario in an effort to refute the true statement that “there has never been a TIME when gold was worth nothing”?

Sweet Jesus - you're just going to keep beating this to death until everyone on this board is certain that you are a fool, aren't you? I bet you're real fun at parties:

HOST: Let's play a game. If you were stranded on a desert island and could only bring one book, which book would it be?
BEELZEBUBBA: I wouldn't bring a book. I'd bring a radio so I could call for help.
HOST: That's not the point of this exercise.
BEELZEBUBBA: Well, then your point is stupid!!

[April Lexington]

if you and one other guy were stuck on a desert island with two loaves of bread, would you sell your loaf to him for all of his gold?

Keep in mind that the United States and Europe (the two sectors in deep doo doo over socialist policies) are only 1/3 of the world. China and India are not facing the same problems. So... there will be gold and bread available... There is no deserted island...

[April Lexington]

I’d trade my gold AND my loaf of bread for Ginger.

So that leaves me with Mary Ann?!?!?! YES!!!!!

[Atlas Sneezed]

We’re not playing a game for entertainment, we’re discussing investing and financial issues.

You’re trying too hard, and frankly, when someone makes you look like an idiot, maybe it’s time to take the batteries out of the bullhorn.

[truthfreedom]

Ok, I think I wasn’t making sense there.

I’m not saying that people don’t want gold anymore.

I’m saying that IF people didn’t want to make jewelry out of gold any more, that would be a cause, and a fall in the price would be the effect. I’m not saying that people don’t want gold jewelry anymore.

[Atlas Sneezed]

The guy I replied to couldn’t see a scenario where gold had no value so I gave him one. Period. That guy wasn’t you, so kindly untwist your panties.

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My panties are just fine. The guy said there was never a ***”TIME”*** when gold had no value. Not a scenario (real, or like yours, absurd).

My only question is that of what personal experience or status of yours makes you so hostile to those who propose or defend the prudent use of precious metals for certain limited purposes?

[Atlas Sneezed]

I’m saying that IF people didn’t want to make jewelry out of gold any more...

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Before we get to the “if pigs had wings” discussions of the rhetorical significance of the word “if” consider that throughout human history, people have always intensely desired gold as their jewelry.

I would suggest that the desire to make a substance an adornment is not the CAUSE of the demand for that substance, but instead the EFFECT of the demand for that substance.

Indian brides aren’t buying gold because they think it makes them looks pretty, they’re buying because they KNOW it makes them look WEALTHY.

[Ramius]

Please... anyone that doesn’t want their useless, worthless fiat currency anymore, please freepmail me and I’ll provide an address that you can send it to.

[dollarbull]

Please... anyone that doesn’t want their useless, worthless fiat currency anymore, please freepmail me and I’ll provide an address that you can send it to.

Send me some gold and we got a deal. moron

[Atlas Sneezed]

Please... anyone that doesn’t want their useless, worthless fiat currency anymore, please freepmail me and I’ll provide an address that you can send it to.

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I think you need to come to grips with the fact that no one is saying it’s worthless, but that it is declining in worth. What do you have to exchange for my currency?