Posted on 08/06/2002 2:13:08 PM PDT by mindprism.com
Edited on 09/20/2004 1:36:51 AM PDT by Jim Robinson. [history]
You didn
(Excerpt) Read more at nationalinvestor.com ...
The potential for these problems have been reported by all three major, broadcast network's nightly news.
Admittedly they were mentioned only as generic derivatives but they have been the topic of speculation (excuse the pun) on more than a few broadcasts.
Richard W.
The price of gold has for millenia been the result of government "conspiracy", at least since King Ogh took it upon himself to coin money and his heir King Oggha debased the coins just a teensy bit in order to keep some more wealth in his own coffers. That is inflation.
Inflation is traditionally, though not honorably , used to reduce the debts of the ruler by reducing the value of the unit of currency with which the ruler must repay those debts. The creditors suffer thereby perhaps unto bankruptcy. Deflation- the withdrawing of liquidity from the system- imposes hardship on the debtor, requiring him to repay a debt with currency of higher value than that which he borrowed.
The ideal for society and the Market in a system in which the government defines the money and controls its volume is to maintain the PoG unchanging. Market actors' costs of calculation are much reduced and prices are stable, responding to supply and demand without the sabotage of fluctuating money rates.
However, rulers can seldom resist tinkering with or jackhammering on the money for short term gain (for the rulers) or wrongly perceived long term benefits.
Whole schools of economics have arisen whose primary purpose seems to be to justify self enrichment by the ruler at the expense of the population. The best known of these are Keynesianism and Monetarism. They provide a false but pleasing justification for government tinkering and chicanery.
Alas, W has chosen Keynesians as his economics advisors.They are "conservative" Keynesians but they are still Keynesians. Tinkering by conservatives is every bit as damaging as is tinkering by liberals. Tinkering, being a political act, is always for short term gain but the actual effects are almost all long term and have their influence on situations very different from those the tinkering was meant to ameliorate.
The Bushes learned NOTHING from Reagan, that rare species- a president who understood economics.
The government economists largely do not know what they are doing, or worse, they do know and are currently engaged in reducing the debt by inflation- reducing the value of the defined units of money with which they must repay that debt. In a private milieu this sort of thing is called fraud.
All the Gold Pools and gold swaps and bank sales can do is delay the inevitible and make the price sudden and severe. The chart, insteading of showing a relatively evenly sloping rise or fall shows a steady price that ends in a leap or a plummet.
or embezzlement.
Its all psychological. You yell "derivatives," and everyone says, "Huh? What?" You yell "shark," and we've got a panic on the fourth of July.
What do you base that on?
Yes they do. It's just that the average person has never bothered to investigate the term.
The average person probably has a common savings account at a finacial institution and doesn't know he has entered into a derivative contract with the bank. All he knows is that if the bank does well the interest rate on his savings account rises and if times are tough the interest rate may fall a little.
Oh indeed.
If you're gonna inflict fake french upon us in order to sound erudite, you might take a moment to spell it correctly. Just a thought.
I thought I was using broken English. It was the favorite phrase of my German born grandmother. When she used it she meant "Oh yea a$$hole!". Thanks for the tip.
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