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Post by glennkoks on Apr 6, 2023 13:19:50 GMT
I have mixed feelings on the matter. I don't think that a return to gold would work, but I could be wrong. The only way I think it could work would be on a percentage basis. Say for every dollar printed or created out of thin air it had to be backed by 10% gold or something similar. |
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Post by blustnmtn on Apr 6, 2023 14:14:12 GMT
The days of currency backed by gold are over. Governments and politicians need the ability to produce cash on a whim by turning on the presses. I never bought into bitcoin or other crypto currencies but if you think about it logically they are just as real as the American Greenback, Yuan or Euro. Backed by nothing but faith... I think government issued money has always been a faith based system. I think MMT is utter superstition. |
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Post by missouriboy on Apr 6, 2023 15:40:40 GMT
Ok I see this as a basket approach. Gold being probably one of the hardest to value on utility. It makes up for that on durability understanding and compactness. When you look at it the price of commodities indicates real "inflation" that is all commodities and weighted by utility or use. If you think of a Lamb in NZ in 1980 it was $10 and now $160 I eat lamb and it accounts for maybe 2% of my basket. etc. Gold comes into play if you need to hid or move places, are we thinking that may happen because I will resist movement that I don't do by choice. I am not an economist ... but to me. all economics boils down to demand and supply (I invert this because, without demand, nobody will break their back (or somebody else's) to create supply. Demand is determined by human needs, wants, and ability to pay. Value is an often nebulous quantification of ... what will you accept for that which you have that I want. Not all "things" are fungible ... and they change over time. Economic models are even worse than climate models in predicting an outcome ... particularly at points of inflection. And, like climate modeling, when they fail, they sometimes do so dramatically. Thus, economists are like priests, reading the entrails of their time and place. And common people, merchants and thieves ply the margins of these relationships.
Money was created to ease transactions and allow those in charge to steal more efficiently. There have been many types of "money", but gold (and it's cheaper cousin, silver) has retained its value over very long time periods. For comparison, a $200,000 house is currently about 100 ounces (6.25 lbs) of gold. Perfectly portable if you're on the run. The equivalent exchange in silver weighs about 500 lbs. Good if you are settled, but a bit bulky if you're on the run. I suspect that gold's exchange rate for other goods was higher in past times (before paper currencies). You might have been able to exchange your 100 ounces for more expensive "digs" in the old days. But it has retained "a positive value" for longer than any paper currency ... even though transactions are not quite as convenient. The current price does not yet reflect any economic decline/collapse. Other in-demand tradable items are not easily moved in bulk. Ammo, even at $2 a round, wouldn't cut it for purchasing that $200K house. Walnut's $20K price might lower the number of ounces required for that $200K house, even though its price might go up.
I'm not predicting economic collapse. But things might get challenging for a lot of people.
Some things have a special value in time and space. Horses were so valuable in the American West of the 1800s that thieves were hung for "stealing" one. However, surviving members of the James-Younger gang got prison time for bank robbing. Portland has apparently decided that thieves should get achievement awards instead of hanging or prison. Thus Walmart leaves. Genghis Khan brought a mounted, well-armed lot to knife fights in Central Asia and Europe, and left with whatever they could carry. In some places, they didn't leave until fast-learning Europeans finally kicked them out with much blood shed.
There are lots of other people here in Middle Earth who will resist movement that they don't do by choice. No Woke-ster will move us. For practical purposes, they seem incapable of successfully moving anything.
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Post by missouriboy on Apr 6, 2023 15:53:08 GMT
The days of currency backed by gold are over. Governments and politicians need the ability to produce cash on a whim by turning on the presses. I never bought into bitcoin or other crypto currencies but if you think about it logically they are just as real as the American Greenback, Yuan or Euro. Backed by nothing but faith... I think government issued money has always been a faith based system. I think MMT is utter superstition. I think you're right. And superstition lasts until it doesn't. Then the mob goes mad. And government tries to put it back together again. And if they are incompetent, then locals will do it. Of course, gold is a long-held superstition as well. It has been used as money (in coinage) for 2500 years, right up to when Nixon took us off it. Humans are creatures of habit they say. |
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Post by missouriboy on Apr 6, 2023 16:26:48 GMT
The days of currency backed by gold are over. Governments and politicians need the ability to produce cash on a whim by turning on the presses. I never bought into bitcoin or other crypto currencies but if you think about it logically they are just as real as the American Greenback, Yuan or Euro. Backed by nothing but faith... It's like cutting off the drugs to an addict. It needs to be done because they will not do it themselves. |
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Post by walnut on Apr 6, 2023 17:52:37 GMT
Even if they start milling abundant lower grade gold bearing rock, the price of gold is going to go up and the nature of that will be very deflationary. I think that we will find ourselves in a more or less permanent worldwide recession.
Also as Moboy pointed out, we probably do not have near enough gold at fort Knox to cover US liabilities, could start a panic of biblical proportions.
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Post by code on Apr 6, 2023 21:46:43 GMT
Even if they start milling abundant lower grade gold bearing rock, the price of gold is going to go up and the nature of that will be very deflationary. I think that we will find ourselves in a more or less permanent worldwide recession. Also as Moboy pointed out, we probably do not have near enough gold at fort Knox to cover US liabilities, could start a panic of biblical proportions. I wouldn't be surprised if some of the Gold at Knox was fake. |
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Post by code on Apr 6, 2023 21:53:41 GMT
Question for all. I would sure appreciate it if all of you would post your favorite websites you go to for financial information and information about the state of the economy and the markets.
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Post by missouriboy on Apr 6, 2023 22:23:03 GMT
Even if they start milling abundant lower grade gold bearing rock, the price of gold is going to go up and the nature of that will be very deflationary. I think that we will find ourselves in a more or less permanent worldwide recession. Also as Moboy pointed out, we probably do not have near enough gold at fort Knox to cover US liabilities, could start a panic of biblical proportions. I wouldn't be surprised if some of the Gold at Knox was fake. Yow. Like oligarchs devoured the Russian Army by pocketing defense money. We could/can be equally corrupt. |
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Post by code on Apr 6, 2023 22:27:48 GMT
I wouldn't be surprised if some of the Gold at Knox was fake. Yow. Like oligarchs devoured the Russian Army by pocketing defense money. We could/can be equally corrupt.
Sure, it's China, right, and could never happen here? I'm not so sure.
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Post by glennkoks on Apr 7, 2023 14:00:51 GMT
Question for all. I would sure appreciate it if all of you would post your favorite websites you go to for financial information and information about the state of the economy and the markets. I visit Bloomberg daily to check on the markets. For economic news from China I like to watch the China Update on Youtube. For the libertarian in me I like to watch Stoic Finance on Youtube as well. This way I get the mainstream business news from here and around the world from Bloomberg. Whats going on in China from a person who is actually there. And my daily dose of gloom and doom from Max at Stoic Finance. |
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Post by walnut on Apr 7, 2023 14:37:28 GMT
Bloomberg is so gloomy all the time I think that you are getting some confirmation bias lol. I look at investing.com (also a slightly gloomy bias) and CNBC.com (they are biased for whichever way the wind blows, they flip every week).
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Post by Sigurdur on Apr 7, 2023 15:10:26 GMT
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Post by nonentropic on Apr 8, 2023 3:10:27 GMT
they are mining well down below 1gm/T now and price would pull that down further.
No matter the price impacts supply through exploration/development vigor
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Post by ratty on Apr 10, 2023 6:53:43 GMT
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