Financial Crisis

[samuibeachcomber]

PS: You said.............

what i rule out by logic and applying some simple maths that precious metals can be used as a monetary replacement serving a population of (soon) 7 billion people.

That is not to say you couldn't have a paper system that was just backed once again by metals.

your idea is good Flying but we are running in circles and getting nowhere. there are not enough precious metals physically in existence to back all the paper and book currency which is globally essential. there is also another problem. presently more book money is traded than is in existence and the same goes for any commodity be it crude, grains, pork bellies, orange juice or timber. by decree book money could be outlawed but how can the value of these commodities be backed if not by fictitious fiat money?

surely this is the whole point,backing the money in circulation by gold would mean less "thin air" money around,and we could go back to more sustainable living,what do we need to sustain a good life but some shelter i.e. a home,good health,a job to provide food and some comforts.

but then i forgot what would the fly by night mechants do to extract a crust from the poor people of this world struggling to feed themselves,find safe drinking water etc.the greed and corruption that exists today is beyond comprehension.

[Naam]

there are not enough precious metals physically in existence to back all the paper and book currency which is globally essential.

Explain? Is it because you are saying nothing would need re-valuing ?

any revaluing, be it money or commodities, vs. precious metals would put these metals in the same category as the present fiat money, i.e. fictitious and value based on trust. who would be able to guarantee that a bag of potatoes plus a 10kg ham is worth x-grains of a precious metals basket?

Just because they have possibly inflated the paper beyond comparison to anything does not mean it cannot fail & be forced into a reboot.

of course paper money can fail. but so has gold, silver, platinum, palladium and you name it. value is created by offer and demand and of course necessity. take these three foundations away and you have no value at all.

All that aside though... did you think that article had any possibility? Just curious

the article assumes that the GNoE (Greatest Nation on Earth™) is by default the center of the universe and does not take into consideration that other countries exist. but somehow i liked the last sentence which should include many more people!

[flying]

any revaluing, be it money or commodities, vs. precious metals would put these metals in the same category as the present fiat money, i.e. fictitious and value based on trust. who would be able to guarantee that a bag of potatoes plus a 10kg ham is worth x-grains of a precious metals basket?

No I dont see it that way at all. The market would determine value.

What we have now is some mad men determining value by fooling with the quantities that exist. They are un-naturally changing the value & amount of currency in circulation. They are promising something that they cannot give....our property & our labor.

Edited February 1, 2009 by flying

[Naam]

any revaluing, be it money or commodities, vs. precious metals would put these metals in the same category as the present fiat money, i.e. fictitious and value based on trust. who would be able to guarantee that a bag of potatoes plus a 10kg ham is worth x-grains of a precious metals basket?

No I dont see it that way at all. The market would determine value. What we have now is some mad men determining value by fooling with the quantities that exist. The are un-naturally changing the value & amount of currency in circulation. They are promising something that they cannot give....our property & our labor.

right you are! the market would determine the value and we'd land up exactly where we are now. because presently too any/all values are determined by the market (we all are a part of the market) and not some mad men only. and who would decide which commodity is most suitable to back up the paper money in circulation. why gold or silver? none of the precious metals are essential to sustain human life. carbohydrates, protein, shelter and appropriate clothing is. so why not use wheat, pork chops, beef, potatoes, roof tiles, bricks and textiles as back up?

[samuibeachcomber]

any revaluing, be it money or commodities, vs. precious metals would put these metals in the same category as the present fiat money, i.e. fictitious and value based on trust. who would be able to guarantee that a bag of potatoes plus a 10kg ham is worth x-grains of a precious metals basket?

No I dont see it that way at all. The market would determine value. What we have now is some mad men determining value by fooling with the quantities that exist. The are un-naturally changing the value & amount of currency in circulation. They are promising something that they cannot give....our property & our labor.

right you are! the market would determine the value and we'd land up exactly where we are now. because presently too any/all values are determined by the market (we all are a part of the market) and not some mad men only. and who would decide which commodity is most suitable to back up the paper money in circulation. why gold or silver? none of the precious metals are essential to sustain human life. carbohydrates, protein, shelter and appropriate clothing is. so why not use wheat, pork chops, beef, potatoes, roof tiles, bricks and textiles as back up?

because gold is universal has been used before and was only deemed unsuccesful cos it stifled the money supply.excessive growth could only be applied with that old saying "money for nothing" i.e unfettered growth of just printing money so everyone could have now and pay later.the gold standard was no good for the charlatans of this world.

[PeaceBlondie]

Granted, fiat money has no instrinsic value beyond the paper it is printed upon. But why would precious metals have intrinsic value? It is pretty but tastes much too hard, even with caviar.

[flying]

right you are! the market would determine the value and we'd land up exactly where we are now. because presently too any/all values are determined by the market (we all are a part of the market) and not some mad men only. and who would decide which commodity is most suitable to back up the paper money in circulation. why gold or silver? none of the precious metals are essential to sustain human life. carbohydrates, protein, shelter and appropriate clothing is. so why not use wheat, pork chops, beef, potatoes, roof tiles, bricks and textiles as back up?

Well in my mind the reason not to use heat, pork chops, beef, potatoes etc instead of a limited known quantity like gold or silver is just that.

Using those things you suggest would be the same problem we have now

The reason for gold & silver is it is honest. It cannot be artificially inflated. It has to be worked for to increase. Yes politics would not be able to abuse it & perhaps growth would slow but at least it would be good sustainable growth.

To tell you the truth I agree with you in many ways.

I do not care if it is gold or silver etc,,,,

I only care that the currency cannot grow or shrink beyond the needs of the true market. Definitely I do not want it to grow because some group of politicians decided to expand it at their whim & not the markets.

For me it comes down to taking away the ability for them to take a dime & make 4 nickels out of it. 2 for them & 2 for us the ones that earned it.

Amazing to me how many are not mad at that. They think so what I still have 2 nickels for my dime. They do not consider their nickels are now only 2.5 cents each.

[Naam]

Granted, fiat money has no instrinsic value beyond the paper it is printed upon. But why would precious metals have intrinsic value? It is pretty but tastes much too hard, even with caviar.

fiat money has an advantage over gold. it serves a purpose when there is no bumspray available

[flying]

fiat money has an advantage over gold. it serves a purpose when there is no bumspray available

not to mention the age old tradition of lap dancing compensation

[Naam]

The reason for gold & silver is it is honest. It cannot be artificially inflated. It has to be worked for to increase.

so gold and silver were never artificially inflated and deflated by offer and demand? is work involved for those who hold precious metals if there wet dreams come true and prices shoot up? does generating food stuff not involve any work? rice grows on its own? timber marches from the forest to the construction site where it is needed? steel and sheet metal grow on trees? medical drugs and vaccination serum are derived from thin air?

bottom line (for the umpteenth time) is no demand = no value. as simple as that. true, using precious metals as payment has a long history. but bronce, spices, honey and salt have also a long history. the longest history and highest in demand was always pussy (or its equivalent). beats gold and anything else hands down!

[12DrinkMore]

the longest history and highest in demand was always pussy (or its equivalent). beats gold and anything else hands down!

Hmm, in that case maybe there should be more regulation of this market.

The hedge funds would have a field day, borrowing the goods for a time, selling them off and then buying them back in the market at a lower price!

[Khun Jean]

Why do a lot of people always argue you can't eat gold? Did you ever put a dollar bill in your mouth?

And why should there not be enough gold in the world. There is plenty.

You will not bargain with someone to buy a bread for 1 troy ounce. For that amount you will be able to buy the whole bakery. It will be revalued and maybe a 'new' dollar will be 1000US$ for 1 gram. Or any other rate that will just be a calculation. However not one government will be willing to do that, as they will have to go off the inflationary economic model. A model that helps to create great fortunes for the ones in power.

Being a goldbug for me is only a temporary phase with. It will be worth a lot when inflation hits and interest rates rise. It will be the difference of being able to stay in your house by paying of the mortgage. Buy fiat money with gold at the moment you need food, supplies etc. And when everything returns to normal change it into something more readily acceptable. If shtf beyond having gold would be to own land and be able to grow your own food. for that having Thai family is great because that is what they do or did recently.

[flying]

And why should there not be enough gold in the world. There is plenty.

You will not bargain with someone to buy a bread for 1 troy ounce. For that amount you will be able to buy the whole bakery. It will be revalued and maybe a 'new' dollar will be 1000US$ for 1 gram. Or any other rate that will just be a calculation. However not one government will be willing to do that, as they will have to go off the inflationary economic model. A model that helps to create great fortunes for the ones in power.

This is what I kept trying to state when I said revaluing. But Naam thinks it is just my desire to get rich because I hold some PM's. Hence he always refers back to goldbugs & wet dreams.

Even if I say use anything that is fixed & non inflatable at whim he still returns to things that are inflatable at whim. Claiming it involves work so it is the same.

Boy my wife would like that She could truly grow money eh Naam?

so gold and silver were never artificially inflated and deflated by offer and demand? is work involved for those who hold precious metals if there wet dreams come true and prices shoot up? does generating food stuff not involve any work? rice grows on its own? timber marches from the forest to the construction site where it is needed? steel and sheet metal grow on trees? medical drugs and vaccination serum are derived from thin air?

bottom line (for the umpteenth time) is no demand = no value. as simple as that. true, using precious metals as payment has a long history.

You slay me at times Naam

Perhaps I just do not understand it is your wit?

Your bottom line?

So because this paper has been deemed *it* by our govt *it* has value correct?

Must be as you seem to have no problem with *it*

So following your thinking why would PM's or anything for that matter not be of equal value to that if it were elected as the governments peg of monetary exchange?

Of course you have picked things that have a different type of value. Steel, food, pussy yes all great stuff with ....ahem....work involved in getting it.

But....... most of us agree it has to be something that is not readily available &

counterfeited. If that were not true then there would be no safe peg of your wealth.

We are talking about two different things. You always ask question but then change them into a whole different conversation.

This question is in regards to a Financial Crisis

Financial Crisis that involves funny money. Money that is pretty much the equal of all the things you said we could replace it with. Money that no longer has my trust & many others feel the same way. Money that has the ability to grow & shrink at alarming rates & at the whim of a bunch of politicians that seem to not know the first thing about where they are going or more importantly where we came from.

Edited February 1, 2009 by flying

[Khun Jean]

The reason why gold was confiscated and why now gold and silver is not a legal tender:

"There is no better way to undermine confidence in governments funny money than

to let real money run free"

Robert K. Landis

And that is exactly it. When gold or silver is in circulation nobody would use paper that can be inflated at every whim.

People will rediscover gold and silver as real money and it probably will be used again as a backing for paper money. International trade would benefit tremendously. No more manipulations, interventions etc.

Now that Russia mentioned their wishes in Davos to have a reserve currency that is not controlled by a single country, and China and the Gulf states are thinking about their own reserve currency gold seems the natural choice as it is easily valued at current rates. That was how the dollar as a reserve started until the US defaulted.

Still the trust was there 'dollar as good as gold'. This obviously is not the case anymore because the US will default again soon.

All other currencies are depended on the US, and that is in itself not good.

Many talking heads compare the current crisis with the one in 1929, but nothing is the same. Then there was no enormous debt, no peak oil that already passed, there was still a gold backing on the dollar, no hedgefunds (which are the real culprits (check cayman islands). In short this is a crisis completely unique. There will be no V shaped recovery, it is all downhill with a few bumps upwards until the bottom of the pit is reached. Then when almost everything has fallen into the hands of the then super rich, we have to start from scratch. Then we will have learned the lessons the founding fathers of the US tried to teach us and warned about AND put safeguards against it happening again in the constitution. It was all ignored or not fought for by the people.

[flying]

Then we will have learned the lessons the founding fathers of the US tried to teach us and warned about AND put safeguards against it happening again in the constitution. It was all ignored or not fought for by the people.

Sad but true I feel

As late as it may be I do in fact see more & more waking up.

The question I am now wondering is if it is too late?

Waking up is one thing.....Having a better long term solution is another.

[Naam]

You will not bargain with someone to buy a bread for 1 troy ounce. For that amount you will be able to buy the whole bakery. It will be revalued and maybe a 'new' dollar will be 1000US$ for 1 gram.

sometimes i wish that i too was abducted by aliens

[Naam]

This question is in regards to a Financial Crisis

Financial Crisis that involves funny money. Money that is pretty much the equal of all the things you said we could replace it with. Money that no longer has my trust & many others feel the same way. Money that has the ability to grow & shrink at alarming rates & at the whim of a bunch of politicians...

and the highly praised commodities -among them precious metals- have all the trust and command stable prices except when they grow and shrink at alarming rates at the whim of a bunch of investors, e.g. gold $32 > $860 > $250 > $1,032 > $750 > $923

p.s. from now on i will try hard not to comment on "golden dreams".

[PeaceBlondie]

Okay, so the fact you cannot eat gold is beside the point. We still have not figured out if there is enough refined ore to back all the currencies of the world (doubtful). And PM's fluctuate, with or without the Hunt brothers But my other question remains: why do precious metals have an intrinsic value, other than their use as jewelry? They are nonperishable but can be stolen. Most of them are beautiful. But intrinsic value? They are valuable because somebody thinks they are, or because many years ago, the powers that be, said so?

[flying]

They are valuable because somebody thinks they are, or because many years ago, the powers that be, said so?

IMHO like all things of value..... scarcity and or rarity.

I mean a diamond is a stone yes?

Truffle is a mushroom yes?

But in the end demand must come first.

If everyone thought diamonds were ugly & truffles tasted like sheet well...scarce & rare or not they would not be valued.

Now I know Naam will jump right in here & say see...see...That is what I mean.

But no we are again talking about two different things.

This type of value is a different subject altogether.

The paper of currency also does not lack scarcity or rarity but has value given to it by our govt. So basically anything could replace it but as I always said I just wish it was not so easily inflated & deflated by a politicians whim.

Grow & shrink at a investors whim ( as Naam mentioned ) is a horse of a different color & is no different than any other dollar index.

Edited February 2, 2009 by flying

[BEENTHEREDONETHAT]

flying...

Near as I have been able to discover the US has a controversial 264 million troy ounces of gold.

At 1$ per gram (480 grams to ounce) you would have only 107,712,000,000 total dollars for the US. That certainly would not last long.

Info from Wikipedia US bullion reserves.

ahem... cough... cough... actually it would be much less BTD because an ounce has only 31.1034768 grams.

1 ounce = 437.5 grain I think it was just a spelling error

if BTD meant grains then he was right because there are 480 grains to one troy ounce. he only missed the boat pricewise.

Yes I screwed up and said grams rather than grains, had a senior moment. One of the advantages of getting old is you can blame most anything on having a senior moment.

The $1 a grain was not mine Naam it was from Flyings article.

But at $1,000 grain you will find a lot of people out digging and panning for gold.

[Naam]

The $1 a grain was not mine Naam it was from Flyings article.

But at $1,000 grain you will find a lot of people out digging and panning for gold.

and armed robbers going after the gold miners

[Naam]

They are valuable because somebody thinks they are, or because many years ago, the powers that be, said so?

IMHO like all things of value..... scarcity and or rarity.

I mean a diamond is a stone yes?

diamond are not stones Flying. they consist of pure carbon, (as in coal) crystallised by extremely high pressure and temperatures. diamonds burn like coal but need a higher temperature to start burning.

[Naam]

They are valuable because somebody thinks they are, or because many years ago, the powers that be, said so?

Grow & shrink at a investors whim ( as Naam mentioned ) is a horse of a different color & is no different than any other dollar index.

agreed

[flying]

diamond are not stones Flying. they consist of pure carbon, (as in coal) crystallised by extremely high pressure and temperatures. diamonds burn like coal but need a higher temperature to start burning.

DOH!!!

Of course we all know that & we also know it takes billions? of years to make one.

Unless of course you are superman & then of course you just squeeze the coal.

Stones are a common nickname given to ....well precious stones.

But yes Diamond is carbon based..........like us & all life on earth

Edited February 2, 2009 by flying

[Naam]

diamond are not stones Flying. they consist of pure carbon, (as in coal) crystallised by extremely high pressure and temperatures. diamonds burn like coal but need a higher temperature to start burning.

DOH!!!

Stones are a common nickname given to ....well precious stones.

"precious" is a common nickname given to some metals. but when one sells these metals one doesn't get anything precious in exchange... only worthless fiat money

[lannarebirth]

diamond are not stones Flying. they consist of pure carbon, (as in coal) crystallised by extremely high pressure and temperatures. diamonds burn like coal but need a higher temperature to start burning.

DOH!!!

Of course we all know that & we also know it takes billions? of years to make one.

Unless of course you are superman & then of course you just squeeze the coal.

Or you could just press the "On" button:

http://www.wired.com/wired/archive/11.09/diamond.html

[flying]

Or you could just press the "On" button:

http://www.wired.com/wired/archive/11.09/diamond.html

Wow that is pretty much the coolest thing I have seen in a long time.

yes..........I lead a quiet life

Thanks that is a cool machine!

[flying]

"precious" is a common nickname given to some metals. but when one sells these metals one doesn't get anything precious in exchange... only worthless fiat money

Are you just trying to rattle my cage young man

[AlexLah]

This thread not on how to kill the basterds?

[samuibeachcomber]

And why should there not be enough gold in the world. There is plenty.

You will not bargain with someone to buy a bread for 1 troy ounce. For that amount you will be able to buy the whole bakery. It will be revalued and maybe a 'new' dollar will be 1000US$ for 1 gram. Or any other rate that will just be a calculation. However not one government will be willing to do that, as they will have to go off the inflationary economic model. A model that helps to create great fortunes for the ones in power.

This is what I kept trying to state when I said revaluing. But Naam thinks it is just my desire to get rich because I hold some PM's. Hence he always refers back to goldbugs & wet dreams.

Even if I say use anything that is fixed & non inflatable at whim he still returns to things that are inflatable at whim. Claiming it involves work so it is the same.

Boy my wife would like that She could truly grow money eh Naam?

so gold and silver were never artificially inflated and deflated by offer and demand? is work involved for those who hold precious metals if there wet dreams come true and prices shoot up? does generating food stuff not involve any work? rice grows on its own? timber marches from the forest to the construction site where it is needed? steel and sheet metal grow on trees? medical drugs and vaccination serum are derived from thin air?

bottom line (for the umpteenth time) is no demand = no value. as simple as that. true, using precious metals as payment has a long history.

You slay me at times Naam

Perhaps I just do not understand it is your wit?

Your bottom line?

So because this paper has been deemed *it* by our govt *it* has value correct?

Must be as you seem to have no problem with *it*

So following your thinking why would PM's or anything for that matter not be of equal value to that if it were elected as the governments peg of monetary exchange?

Of course you have picked things that have a different type of value. Steel, food, pussy yes all great stuff with ....ahem....work involved in getting it.

But....... most of us agree it has to be something that is not readily available &

counterfeited. If that were not true then there would be no safe peg of your wealth.

We are talking about two different things. You always ask question but then change them into a whole different conversation.

This question is in regards to a Financial Crisis

Financial Crisis that involves funny money. Money that is pretty much the equal of all the things you said we could replace it with. Money that no longer has my trust & many others feel the same way. Money that has the ability to grow & shrink at alarming rates & at the whim of a bunch of politicians that seem to not know the first thing about where they are going or more importantly where we came from.

paper money today is like monopoly money,its funny money and becoming increasingly valueless,its time it is backed with something tangible and that might as well be gold.the carpetbaggers will hate this notion cos it will curtail the printing presses.if obama wants to do something to help the world he will sack the federal reserve.