GOLD PLUMMETS - SPOT CHART

http://www.kitco.com/charts/livegold.html ^

[Fitzcarraldo]

Source: www.kitco.com

[Deuce]

There are two types of value: intrinsic and represational.

EVERYTHING has intrinsic value. Intrinsic value is what the commodity itself is worth. Some things also have represational value (stock certificates, paper money, etc.). These items trade for the intrinsic value of the commodity they represent rather than their own intrinsic value.

[discostu]

Here:
http://www.sjsu.edu/faculty/watkins/spgold.htm

Now get off my case. It's doctrine that Spain choked their economy to death. This is like proving we breath air.

[Lester Moore]

My time is valuable. Either pay the going rate or don't; that's your decision.

And that's why you're so busy jawin' on the internet equivalent of CB Channel 19?

[#3Fan]

You also asked for a link on the California Gold Rush. Is your memory that short?

After you said that it proved that it took a shipload of gold to pay a sailor's wages.

SF was a large town at the time and if you'd read the information in the link you would have seen that the economic effect hit the entire state AND that CA's population increased by nearly 2 million people during the gold rush.

So across the entire state there was hyperinflation like Germany-1923 to the point that a shipload of gold would not pay a sailor's salary? If not, what are the numbers?

Hey dimbulb, if people missed the gold in CA, which was litterally just sitting on the ground when it was first found, for hundreds of years apparently it's NOT that easy. And if our top mining scientist can't figure out an economical way through the permafrost again apparently NOT that easy. Pay attention here.

So you're saying you were wrong when you said that Siberia has gold just laying around?

It's called right of conquest, not stealing. And of course you're the only person in the world who thinks how Spain got the gold is important.

Yes I do think it's important. Britain didn't steal the gold to the extent Spain did and therefore became the greatest empire in world history. It's much better to get things honestly than by filthy lucre. Spain did it the lazy way.

All the actual historians believe it's painfully obvious that what happened was a massive influx of gold crushed their economy.

The same historians that will say the Reagan presidency was bad for the economy? Yes, it was bad for Spain, because they stole the gold instead of exchanged goods for the gold. If they would have exchanged goods for the gold, their economy would have developed like Britain's did at the time.

The easy evidence for this is the fact that Spain had more gold than any of the other European nations, and yet couldn't afford to maintain contact with their colonies.

Because they didn't work for that gold. Their innovation became stuck in the year they began stealing the gold. Britain's innovation developed with the times.

There's only one way that happens: gold became worthless in Spain.

Prove it to me. Show me where a shipload of gold would not pay a sailor's salary.

Actually the trading in the stock market requires no cash. You open a stock account with a check, and then keep it populated by buying and selling stock. No actual US Mint printed dollars are involved.

The check will be drawn from a bank. The bank must keep reserves proportional to deposits. There is a delivery schedule set up to cover this.

[#3Fan]

Great so in two "coins" I have $154, now how am I supposed to use that to buy a bag of Doritos for 3 bucks?

The silver can be divided into fractions of an ounce.

See the common stuff of the life is so cheap compared to the current trading values of precious metals that we'd have to make coins that were mostly something else with only a core of the precious metal, otherwise it would be completely useless.

So your saying that precious metals just have too much value?

Then you're carrying a pocket full of quarter sized things tearing holes in your pants and making them sit on you funny. Really, check out Chapter 4 of Wealth of Nations to understand why metal sucks, Smith nailed it in 1 (as he so often did).

I take it you never carry any quarters, nickels, pennys, or dimes because it makes you sit funny and tears up your jeans?

Bummer, my mom still has the gravy boat she bought with greenstamps they were all the rage in the 70s. Camel Cash and Marlboro Miles were quite popular in the early 90s (Winston had one too, but nobody smokes Winstons so nobody cared). And surely you've at least seen the credit card commercials about airline points? Or do you live in a cave.

So you take these things to the movie theater and buy popcorn and pops with them? I never have. I use legal tender. I've never used that stuff for anything.

No, they're not depending on any government, think about it. You think these guys are gonna traipse up to DC from the Amazon basin to cash in their yanqui dollars? No, they're gonna use them to buy stuff. Like I've said every time, and one of these days it might penetrate your sacred cow, the PEOPLE THAT USE IT give currency it's power.

But the value of the dollar is based on the exchange rate with other currencies and inflation, otherwise, there'd be arbitrage. So the value of those dollars far away is still dependent on the U.S. government.

America could cease to exist tonight and these third world guys would still be using our dollars, at least until they all wore out.

Not true.

It has nothing to do with the government and everything to do with us and how much we travel and spend money, often times without bothering to exchange it for the local stuff.

The reason they use our money is because they couldn't keep their own fiat money stable. The U.S. government goes away, and those dollars go with it.

[#3Fan]

True, but as I've pointed out, if every used real gold our pockets would be shreaded. Check Smith, he outlines the problems very well.

Buy Levis. I always carried many ounces of change at work and rarely did the pockets shred.

[#3Fan]

It's trading for $300+ an ounce. Duh. What it doesn't have is INTRINSIC value.

Melt a gold coin and you can still sell it for 300 dollars an ounce. Burn a dollar bill and it's worthless. It has intrinsic value because it's basic building block is an element. And that element is used for jewelry, electronics, and space equipment.

But we're giving it a lot of value. Important to understand the difference between intrinsic value and accepted value. Good currency doesn't have intrinsic value, things with intrinsic value are useful and it's bad when people start using your money as something other than money.

No it's good, like I said, because no matter what happens, you can always get value for it.

[#3Fan]

Here: http://www.sjsu.edu/faculty/watkins/spgold.htm Now get off my case. It's doctrine that Spain choked their economy to death. This is like proving we breath air.

From $40 to $160 in 150 years. That's, what, less than 1% per year! You call that hyperinflation? If that's hyperinflation, then our fiat dollar has been superhyperinflating since 1974. LOL

Germany's fiat mark hyperinflated to the equivalent of from $40 to $28,000,000,000,000.00 in just 12 years!

[discostu]

This shows that you really really don't know what you're talking about. Go back, read some on the history of money, start with Smith. And come back when you know JS.

[justshutupandtakeit]

Nuggets have been found in gold bearing areas throughout history. Obviously it is not predictable.

If you are really interested you might consult the volume about the Spanish inflation of the 16th and 17th century by McDonald. But I did not say gold finds would lead to Hyper-inflation merely inflation. Hyperinflation is a rare occurence even with paper money. The current inflation rate is less than 2% and even that is likely overestimated. Even the inflation of the late 70s was not hyper-inflation.

Because policy is not in the hands of bankers contrary to popular opinion in some places.

Most discerning thinkers understand that mental effort is the hardest of work and that most rewarded since it can't be done by many. While Marxists discount this form of labor they are wrong to do so. Capital is the result of past work at any rate.

Most people would consider working in a mine (of any type) the greatest abuse they would ever experience.

[justshutupandtakeit]

Cherry picking yrs. does show that gold is not immune from loss of value anymore than any other investment. Thus, the point is entirely valid.

[justshutupandtakeit]

No apparently you don't understand that barter is exchange of commodities paper money is not a commodity gold is unless a government makes it money by fiat.

[justshutupandtakeit]

How could one pay for something worth 5 cents with gold? Even a dollar,1/300th of an ounce- 1/10 of a gram? Ludicrous. Gold was always in short supply in the less developed regions of the world and country because trade deficits drained them. Clearly if it was in desperately short supply (so short that states chartered hundreds of unsound banks to create a paper money supply) two hundred yrs. ago it would be even more rare today with a much larger population. There is no way that the velocity of circulation could speed up enough to prevent economic collapse should we move to a gold standard.

Removing one cause of war obviously does not remove all. There was no gold standard in practice in 1974 since we could not take our greenbacks down to the Fed and get gold (or silver for that matter.)

No Germany could simply have allowed reparations to drain all its gold out of the country, collapse economicly and bring Hitler to power even sooner. That may have been preferable but we have nothing to say about this. Keynes accurately analyzed what would happen to Germany should the Peace conference (of which he was a member) decide to place crippling reparations upon it. Of course, the point was that since then the value of the Mark has been kept stable and its monetary authorities have acted responsibly. But you would prefer to ignore the point and set up a straw man.

[Fyscat]

I believe you know that EVERYTHING moves in cycles. There are people who had 500k plus in equities three years ago that have less then 1/3 at present. Plus with the addition of possible terrorism with a goal of demolishing our economy, I'd suggest to you that a re-evaluation is in order.

[justshutupandtakeit]

For the last 3000 yrs or so States used gold to make money. They stamped it, forged it shaped it marked it. Often there was no uniform weight for each coin. It was initially made into money while the minter took a little "seigniorage" thus it was less than face value. Study of Roman monetary history shows how the authorities regularly debased the coinage and reduced the metal content. This was a standard practice for every monetary policy based on metals. Thus, even the metal coins were a "fiat" currency since they often contained far less gold than the face value. It appears there was no such thing as "money" until the Lydians began to make coins from gold/silver alloys about 3000 yrs. ago.

What leads you to the conclusion that a chronic undersupply of money is a system that "worked fine"? That is nothing like the history I have read. It was so bad in N. America that the colonists used tobacco as money and wampum among other things.

Nor have governments given anyone a monopoly on creating money. Every time a loan is made by a banker money is created and there is no monopoly of this power. Governments convinced no one that banks make sense, this was done by the experts who understood finance such as Hamilton and the great writers in economic theory such as Mill, Ricardo, Smith and Marshall.

There is nothing in your post 105 which I need review merely a confession of faith. It has to be faith since a review of history clearly shows that the gold standard was never actually in practice and the scarcity of the commodity forced country after country to allow other money to be created. In actuality, gold cannot be used by itself as money since it is far too soft. It must be mixed with other metal to make it hard enough to use and prevent "clipping" by sharpers.

By 1692 England was forced to charter the Bank of England to finance the government's wars. A hundred yrs. later Hamilton brought the American economy into the modern world (out of the world of superstition) by creating the National Bank which worked so well its deadly enemies dropped their opposition.

There is nothing "honest" about gold that is mere rhetoric with nothing to base it on. Holding that "honest" money since 1980 would have cost you 2/3s of its value. Better to have held the "dishonest" dollars which now would purchase 3x the quantity of "honest" gold. Honestly, LoL.

[justshutupandtakeit]

A re-evaluation of what?

[Fyscat]

re-evaluation of gold as an insurence asset against the rest of your porfolio. Gold is obviously not a get rich over night investment, unless something consistant and tragic happens which I pray against. But once again, there are forces out there who are smart enough to know our weakness is our economy, therefore it is thier target. Considering that, to say looking at gold is a waste of time and effort is a mistake.

[Dukie]

"Find me a site that isn't in the business of selling gold discussing this issue."

Here's one for you: http://cbs.marketwatch.com/news/story.asp?guid=%7B9808D37A%2DC32D%2D45C9%2D8
F76%2DC551AFB06885%7D&siteid=mktw

[Poohbah]

Page not found.

[Fyscat]

"One might reasonably ask why today -- with stock markets
collapsing, and the derivative problems of J.P. Morgan and Citibank suddenly grabbing the headlines, why would anyone
chose today to dump his gold?"