America's Impending Master Class Dictatorship

[CloudStrife]

Like I said... Gold is worth something because everyone generally accepts that is... although folks can't always agree what exactly it is worth.

And my comment about now being a terrible time to buy gold has to do with the fact its current "value" against the dollar is unreasonably inflated and with surely fall... and people buying it now will get hosed.

Just out of curiosity, what would you guys do with $1161.60 worth of gold?

How is its value inflated? It's the dollar that is over-valued.

 

[thatwhichisnt]

Like I said... Gold is worth something because everyone generally accepts that is... although folks can't always agree what exactly it is worth.

And my comment about now being a terrible time to buy gold has to do with the fact its current "value" against the dollar is unreasonably inflated and with surely fall... and people buying it now will get hosed.

Just out of curiosity, what would you guys do with $1161.60 worth of gold?

Well, that can be said about everything. Price is the amount that both the seller and buyer can agree on for the exchange of goods or services. No one really knows what the effective price on anything is because that has to be negotiated between both parties.

Are you of the opinion that gold is inflated? Or maybe it is is because the dollar is actually inflated, which naturally brings up the cost of commodities, especially gold. The reason that we haven't seen so much price inflation is because the government is good at fudging numbers, as well as unemployment is slowing down the velocity of money. Banks also are not lending as much because they are preparing for the second wave of the housing disaster. Price increase is a symptom of inflation. Inflation, don't worry, is going to show its ugly head very soon.

Gold is a store of wealth. So, the only thing I would do if I owned it would be to let it sit and continue to gain value.

 

[Woods]

How is its value inflated? It's the dollar that is over-valued.

You obviously weren't around for the .com bubble... or you'd understand that I'm saying that the price of gold is about topped out, so the only place for it to go is down.

People who buy stuff at the height of its value invariably get hosed... they are on the wrong end of "buy low, sell high."

 

[thatwhichisnt]

Ohhh..I might be getting the picture now

Gold has always been a standard but if there were to be a world economic colapse gold would lose its relative value ?? or something like that

So all the gold salesmen are trying to sell off stuff they might not need ??

I'm close to blonde about economics

Usually during tough economic times gold gains value, outside of a deflationary depression (where the dollar gains purchasing power dramatically instead of losing it). People always flock to gold because its supply is stable. There is never a rush of new gold on the market. What causes gold prices to rise is a change in demand. If a lot of people want gold, but there is only a fixed amount of it in the system, the naturally prices will rise.

 

[CloudStrife]

You obviously weren't around for the .com bubble... or you'd understand that I'm saying that the price of gold is about topped out, so the only place for it to go is down.

People who buy stuff at the height of its value invariably get hosed... they are on the wrong end of "buy low, sell high."

How do you figure it's topped out?

 

[thatwhichisnt]

You obviously weren't around for the .com bubble... or you'd understand that I'm saying that the price of gold is about topped out, so the only place for it to go is down.

People who buy stuff at the height of its value invariably get hosed... they are on the wrong end of "buy low, sell high."

How do you know the price is topped out? If adjusted for inflation, the price still has a ways to go to be even during what it was in the early 80's. The inflation we are about to see in this country will vastly be worse than what we saw then. Its also funny how that inflation magically happened after the dissolution of Bretton-Woods.

 

[Woods]

Well, that can be said about everything. Price is the amount that both the seller and buyer can agree on for the exchange of goods or services. No one really knows what the effective price on anything is because that has to be negotiated between both parties.

Are you of the opinion that gold is inflated? Or maybe it is is because the dollar is actually inflated, which naturally brings up the cost of commodities, especially gold. The reason that we haven't seen so much price inflation is because the government is good at fudging numbers, as well as unemployment is slowing down the velocity of money. Banks also are not lending as much because they are preparing for the second wave of the housing disaster. Price increase is a symptom of inflation. Inflation, don't worry, is going to show its ugly head very soon.

Gold is a store of wealth. So, the only thing I would do if I owned it would be to let it sit and continue to gain value.

I definitely think that gold is inflated... just like the value of currency in the world, it goes through cycles... about the exact opposite of currency.

In the 80's when the dollar was weak compared to the yen, folks freaked and bought gold being certain the endtimes were nigh and gold was going to be the only acceptable form of wealth transfer... so the price of gold shot up.

When the economy recovered and things calmed down, the price of gold went down until the next ecomonic freak out... which would be about right now.

I'm probably more optimistic than most around here, but I'm assuming the economy will recover, and as the dollar rebounds, the price of gold will plummet, and folks who bought lots of gold will get screwed like the folks who bought MSFT stock at its peak.

It's all just boom/bust, boom/bust... even magical gold experiences it.

 

[CloudStrife]

I definitely think that gold is inflated... just like the value of currency in the world, it goes through cycles... about the exact opposite of currency.

In the 80's when the dollar was weak compared to the yen, folks freaked and bought gold being certain the endtimes were nigh and gold was going to be the only acceptable form of wealth transfer... so the price of gold shot up.

When the economy recovered and things calmed down, the price of gold went down until the next ecomonic freak out... which would be about right now.

I'm probably more optimistic than most around here, but I'm assuming the economy will recover, and as the dollar rebounds, the price of gold will plummet, and folks who bought lots of gold will get screwed like the folks who bought MSFT stock at its peak.

It's all just boom/bust, boom/bust... even magical gold experiences it.

We might a temporary "recovery", but our system in inherently flawed and certain to fail on its current course. We can't continue to spend our way out of debt.

 

[thatwhichisnt]

I definitely think that gold is inflated... just like the value of currency in the world, it goes through cycles... about the exact opposite of currency.

In the 80's when the dollar was weak compared to the yen, folks freaked and bought gold being certain the endtimes were nigh and gold was going to be the only acceptable form of wealth transfer... so the price of gold shot up.

When the economy recovered and things calmed down, the price of gold went down until the next ecomonic freak out... which would be about right now.

I'm probably more optimistic than most around here, but I'm assuming the economy will recover, and as the dollar rebounds, the price of gold will plummet, and folks who bought lots of gold will get screwed like the folks who bought MSFT stock at its peak.

It's all just boom/bust, boom/bust... even magical gold experiences it.

That is where we differ. What you call a recovery I call another false boom for the Fed, brought to you by low federal funds and discount rates, as well as a low reserve requirement. I see the economy tanking once again because the roots of the problem have not been addressed, but this time being much, much worse.

 

[leVieux]

Great thread, Prodigal !

leVieux

 

[Woods]

We might a temporary "recovery", but our system in inherently flawed and certain to fail on its current course. We can't continue to spend our way out of debt.

Nobody here advocated increased spending or anything like that... so I don't know why you would bring that up.

Real recovery would involve a balanced budget.

And in an economy where confidence in the dollar is strong, one where we at least have a balanced federal budget, gold is next to useless except as jewelry and electronic components.

 

[CloudStrife]

Nobody here advocated increased spending or anything like that... so I don't know why you would bring that up.

Real recovery would involve a balanced budget.

And in an economy where confidence in the dollar is strong, one where we at least have a balanced federal budget, gold is next to useless except as jewelry and electronic components.

A balance federal budget will likely never exist without a near complete reconstruction of our system and gov't. As it is, the "value" of our dollar is artificial.

 

[thatwhichisnt]

Nobody here advocated increased spending or anything like that... so I don't know why you would bring that up.

Real recovery would involve a balanced budget.

And in an economy where confidence in the dollar is strong, one where we at least have a balanced federal budget, gold is next to useless except as jewelry and electronic components.

Well, do not hold your breath on a strong dollar or a balanced budget. Every action the government takes is in the exact opposite direction of both of those. Especially the balanced budget, since we have a bunch of Keynesian running it. Want balance budgets and a strong dollar? Gold standard.

 

[Woods]

That is where we differ. What you call a recovery I call another false boom for the Fed, brought to you by low federal funds and discount rates, as well as a low reserve requirement. I see the economy tanking once again because the roots of the problem have not been addressed, but this time being much, much worse.

That's cool... takes all kinds... I was never gonna convince you that gold is an inherently limiting form of currency for an economy anymore than you were going to convince me that a gold standard is necessary to fix the economy.

I have a hard time blaming the boom/bust cycle of economics on the Fed because it's always worked that way... always.

Throughout history, it's always been times of plenty, and times of famine... boom times and bust times for whatever reason... be it man made, natural disaster or otherwise.

 

[Woods]

A balance federal budget will likely never exist without a near complete reconstruction of our system and gov't. As it is, the "value" of our dollar is artificial.

The value of gold is just as artificial.

 

[CloudStrife]

The value of gold is just as artificial.

Gold can't be manipulated in the ways that paper money can.

 

[Woods]

Gold can't be manipulated in the ways that paper money can.

Sure it can.

The supply of gold can be manipulated just like the supply of money.

What an example of an inherently limited commodity whose value is maniuplated by controlling supply? Diamonds work just like that.

 

[thatwhichisnt]

That's cool... takes all kinds... I was never gonna convince you that gold is an inherently limiting form of currency for an economy anymore than you were going to convince me that a gold standard is necessary to fix the economy.

I have a hard time blaming the boom/bust cycle of economics on the Fed because it's always worked that way... always.

Throughout history, it's always been times of plenty, and times of famine... boom times and bust times for whatever reason... be it man made, natural disaster or otherwise.

The Fed was created with the "official" purpose on fighting inflation and managing the business cycle. However, since its inception it has proven totally incompetent of doing either of them. The Fed is the main source of inflation, and its actions result in a more violent business cycle because it denies the market a real recovery.

 

[thatwhichisnt]

Sure it can.

The supply of gold can be manipulated just like the supply of money.

What an example of an inherently limited commodity whose value is maniuplated by controlling supply? Diamonds work just like that.

Last time I checked the State did not have a monopoly on the supply of gold in an economy. The only way the supply of gold can rise is by the mining of new gold, which is an expensive job. The Fed, if they wanted to raise the money supply, can do it immediately with the push of one button.

Which one is easier?

 

[CloudStrife]

Sure it can.

The supply of gold can be manipulated just like the supply of money.

What an example of an inherently limited commodity whose value is maniuplated by controlling supply? Diamonds work just like that.

Gold can be taken in and horded or outlawed, but that's about it. Both of those would increase its value. Paper money, on the other hand, can be limitlessly printed. Heck, with fractional banking you don't even need to have real money to affect its value.