Gold - The RWNJ currency

[Captain Oates 911]

Whatever the USD value of gold is, it sure isn't a stable or a smoothing asset

Gold ETF ticker GLD

Last 12 months

Low 127.80

High 185.85

Today 164.22

One might say that the USD is fluctuating and not gold - but I buy cat food, coffee, chocolate biscuits (cookies), bullets, powder and 'flight tickets to sanity', in USD - and so gold's value against the USD is what counts

[mawilson 2,133]

One might say that the USD is fluctuating and not gold - but I buy cat food, coffee, chocolate biscuits (cookies), bullets, powder and 'flight tickets to sanity', in USD - and so gold's value against the USD is what counts

Well that's exactly right. You can see how other commodities have fluctuated over the same period - cotton, coffee, sugar, cocoa futures - and you'll see they are all very similar.

In gold terms, they haven't fluctuated as much.

[SMR 368]

Well that's exactly right. You can see how other commodities have fluctuated over the same period - cotton, coffee, sugar, cocoa futures - and you'll see they are all very similar.

In gold terms, they haven't fluctuated as much.

I can't speak to all commodities since I really only track the ones I use but if you look at the price of clothing or food over the past 20 years as compared to gold, gold has gone up much faster. Gold has gone up 8 to 10 fold. A pair of jeans or a gallon of milk has not gone up that much when measured in dollars.

So while I understand the attraction of gold to an extent, I think it is inflated by speculation and companies trying to spin a quick profit (of which there are presently many). While I have no interest in defending the fiat dollar (and I think it's a good term), we need to be just as careful of fiat gold. While gold does have some uses in manufacturing of certain products as a conductive, malleable, noble metal, most of the cost of gold is due to speculation. There is no reason that gold should outstrip other commodities, which it clearly is doing. It's rising as fast or faster than oil. And oil has a much better reason to grow.

If you are interested in turning a quick dollar due to speculation, go ahead and buy gold. But it might just as easily collapse back under $1000 an ounce. If gold is ever worth $50,000 an ounce, it won't be because it buys any more useful commodities and products. It will be because the dollar has crashed. Gold is not an investment. It's a hedge but I think the present price of gold is already above the hedge value so you can no longer use it as a hedge.

If you want to stockpile gold in case Armageddon happens, I think you are going to be seriously disappointed if that ever happens. If we are in that situation, why would I give you something of mine that has an inherent use such as food, clothing, shelter, fuel, medicine, weapons, tools, etc. for gold? Gold is valuable in an advanced and stable economy. But in a subsistence economy you need things that you can subsist on and gold certainly doesn't fit the bill. If you're stockpiling for the end of the world, buy canned beans, t-shirts, shoes, blankets, gasoline, firewood, bullets, aspirin, alcohol, cigarettes, etc. Gold won't get you far.

To the topic of the thread, while some right-wingers like to point to the spiraling price of gold as evidence of the collapsing dollar and the problems of the national economy, it more likely just points to the greed of a few speculators who are investing in the next bubble before it collapses.

[Captain Oates 911]

I can't speak to all commodities since I really only track the ones I use but if you look at the price of clothing or food over the past 20 years as compared to gold, gold has gone up much faster. Gold has gone up 8 to 10 fold. A pair of jeans or a gallon of milk has not gone up that much when measured in dollars.

So while I understand the attraction of gold to an extent, I think it is inflated by speculation and companies trying to spin a quick profit (of which there are presently many). While I have no interest in defending the fiat dollar (and I think it's a good term), we need to be just as careful of fiat gold. While gold does have some uses in manufacturing of certain products as a conductive, malleable, noble metal, most of the cost of gold is due to speculation. There is no reason that gold should outstrip other commodities, which it clearly is doing. It's rising as fast or faster than oil. And oil has a much better reason to grow.

If you are interested in turning a quick dollar due to speculation, go ahead and buy gold. But it might just as easily collapse back under $1000 an ounce. If gold is ever worth $50,000 an ounce, it won't be because it buys any more useful commodities and products. It will be because the dollar has crashed. Gold is not an investment. It's a hedge but I think the present price of gold is already above the hedge value so you can no longer use it as a hedge.

If you want to stockpile gold in case Armageddon happens, I think you are going to be seriously disappointed if that ever happens. If we are in that situation, why would I give you something of mine that has an inherent use such as food, clothing, shelter, fuel, medicine, weapons, tools, etc. for gold? Gold is valuable in an advanced and stable economy. But in a subsistence economy you need things that you can subsist on and gold certainly doesn't fit the bill. If you're stockpiling for the end of the world, buy canned beans, t-shirts, shoes, blankets, gasoline, firewood, bullets, aspirin, alcohol, cigarettes, etc. Gold won't get you far.

To the topic of the thread, while some right-wingers like to point to the spiraling price of gold as evidence of the collapsing dollar and the problems of the national economy, it more likely just points to the greed of a few speculators who are investing in the next bubble before it collapses.

top post

The first decision has to be - when I eventually sell this asset, what am I going to buy with it (exchange it for)

The paper money we use as a method of exchange isn't relevant at all as we will only own it for a day or two on our way to the shop

So gold against cat food, gold against health insurance, etc is the way to go.

I think laterally too, so instead of providing for my medicare buy-in at say $6600 pa, (might double),I maneuver my currency assets (etc) so that I can easily move to the UK and get it for nothing

Its all good fun staying ahead of the game and it needs constant thought on a daily basis.

Some people call it opportunism but they are just miffed cos they were too lazy to think about it and do it

As soon as my parents started to creak, I got them to sign the house over to me. When my Ma had to go into expensive residential care, they said they would take the house and I said - "You can't its mine"

Non of my friends bothered with that kind of stuff and they were disinherited by the government who spent it on world-wide lesbian issues conferences in the Caribbean

So just buying gold is lazy and there are many more threats out there

Edited November 23, 2011 by Ashud Cocoa

[Dakine10 5,452]

If you are interested in turning a quick dollar due to speculation, go ahead and buy gold. But it might just as easily collapse back under $1000 an ounce. If gold is ever worth $50,000 an ounce, it won't be because it buys any more useful commodities and products. It will be because the dollar has crashed. Gold is not an investment. It's a hedge but I think the present price of gold is already above the hedge value so you can no longer use it as a hedge.

Probably more correct to say you can no longer buy it as a hedge. If you bought it 5 years ago or more, you can either keep it as a hedge or sell it for a profit. If gold falls back to $500 an ounce, I could still sell it and come out ahead. A little more leeway in that case.

If you want to stockpile gold in case Armageddon happens, I think you are going to be seriously disappointed if that ever happens. If we are in that situation, why would I give you something of mine that has an inherent use such as food, clothing, shelter, fuel, medicine, weapons, tools, etc. for gold? Gold is valuable in an advanced and stable economy. But in a subsistence economy you need things that you can subsist on and gold certainly doesn't fit the bill. If you're stockpiling for the end of the world, buy canned beans, t-shirts, shoes, blankets, gasoline, firewood, bullets, aspirin, alcohol, cigarettes, etc. Gold won't get you far.

To the topic of the thread, while some right-wingers like to point to the spiraling price of gold as evidence of the collapsing dollar and the problems of the national economy, it more likely just points to the greed of a few speculators who are investing in the next bubble before it collapses.

I agree with that. Where it's had it uses historically is when the economic collapse is slightly less than the end of the world scenario - think the Argentina collapse or Weimar Germany for example.

[mawilson 2,133]

Another argument in favour of gold is the fact that you can own physical gold. When you own BP stock, what good is it if your brokerage goes tits up or the entire financial system melts down? (We came close in 2008.)

It doesn't scare you that what you "own" is really a sequence of ones and zeros on a computer somewhere? Which can be wiped out by an EMP or a meteor or a team of Chinese hackers?

It scares a lot of people, which is why they buy *physical* gold - not GLD or gold futures.

You can give it to your kids or grandkids and the government can't track it or tax it.

[Captain Oates 911]

Another argument in favour of gold is the fact that you can own physical gold. When you own BP stock, what good is it if your brokerage goes tits up or the entire financial system melts down? (We came close in 2008.)

It doesn't scare you that what you "own" is really a sequence of ones and zeros on a computer somewhere? Which can be wiped out by an EMP or a meteor or a team of Chinese hackers?

It scares a lot of people, which is why they buy *physical* gold - not GLD or gold futures.

You can give it to your kids or grandkids and the government can't track it or tax it.

Being from outside the USA , I haven't yet developed this fear and loathing and suspicion of my own government. That is a particularly American thing and probably a left over from the revolutionary war

My previous occupation involved writing checks for tens of millions, so the idea of money being simply a row of zeros on the computer screen isn't something that I feel anxious about.

As far as stocks and BP are concerned, my broker doesn't own them and again they are just pixels on a screen - no certificates. There are government guarantees and insurances for the first 500k and 100k cash. I split my brokerages up so I don't exceed these limits on any account

If all the insurance companies, and the government and all the banks disappear, I don't think fondling a cube of gold is going to solve the problems that go with that. I keep my cash in the Bank of England but only because they give much better interest rates. I trust them and the government. The Germans trust their government and the French theirs etc etc

Its curious that when the US government sends people off to die in foreign wars, the young people all troop off to die with total trust in their leaders, but when they get back, they wouldn't trust em with a hundred dollars. Can anyone explain that ?

So no, the fear factor doesn't come into it for me - its simply a question of dodging about to try and stay ahead of ever changing values for different classes of asset

[spookyturtle 9,465]

Alan, it's kinda slow tonight. Would you mind if I picked on you for a while?

[Captain Oates 911]

Alan, it's kinda slow tonight. Would you mind if I picked on you for a while?

Its not a good time because I got a whole string of god nuts trying to condemn me forever on the mouse trap thing and there wasn't one non believer to call em names. Not one. That is SO unusual

I mean it wasn't even god really - it was bloody evolution and 80% of the god nuts believe in evolution nowadays. Well a twisted evolution that says we were created and then evolved later.

You know I don't react well when I am cornered by a mob

I stay inside of TOS (Just) but wind em up til they are foaming and physically threatening and want to clean the grease of my shoes from the pavement and destroy all records that would prove I ever lived

Cant do with that because the wife has 4 days off and I don't know how I am going to survive

She is watching gone with the wind (again) which takes the heat off me for a while, but its going to be tough entertaining her as she has run out of jigsaws and doesn't have hobbies like me

Its going to be tougher than my first 4 days in hell which will be a hoot, with me and big D having a laugh about all the fat people I have insulted

If you want to be gentle then that's ok, but my loins are not girded up for a scrap

ps I have asked her to call me in when he say "Frankly my dear, I don't give a damn".

Its all guys watch that film for

Edited November 24, 2011 by Ashud Cocoa

[mawilson 2,133]

Another argument in favour of gold is the fact that you can own physical gold. When you own BP stock, what good is it if your brokerage goes tits up or the entire financial system melts down? (We came close in 2008.)

It doesn't scare you that what you "own" is really a sequence of ones and zeros on a computer somewhere? Which can be wiped out by an EMP or a meteor or a team of Chinese hackers?

It scares a lot of people, which is why they buy *physical* gold - not GLD or gold futures.

You can give it to your kids or grandkids and the government can't track it or tax it.

Being from outside the USA , I haven't yet developed this fear and loathing and suspicion of my own government. That is a particularly American thing and probably a left over from the revolutionary war

My previous occupation involved writing checks for tens of millions, so the idea of money being simply a row of zeros on the computer screen isn't something that I feel anxious about.

This article (written by FT's Gillian Tett) is somewhat relevant here and shows that the fear of your money becoming worthless is well justified and not a particularly American thing.

A few weeks ago, I stumbled on a Soviet 10-rouble note, tucked into an old notebook. Gazing at the crumpled piece of paper, with the iconic face of Lenin, invoked a frisson – particularly given all that is now happening in the eurozone.

Back in the late 1980s, I lived in the former Soviet Union as a PhD student, where I received a (pretty generous) monthly stipend of Rbs430. As I collected notes each month, I never questioned whether that paper would always be “money”; to me it seemed self-evident that this money had value and could be spent anywhere across the USSR. The Soviet Union – and its monetary union – seemed to be permanent.

But in 1991, my assumptions were brutally turned upside down – along with those of millions of other Soviet bloc inhabitants – when the old Soviet system ceased to exist, and republics such as Tajikistan (where I had been living) declared independence. For the first few months, many republics continued to use the old Soviet rouble. After all, the task of printing and distributing new banknotes is a complex one, particularly amid political turmoil. But nobody really knew who was “in charge” of that rouble; the political union had collapsed. Unsurprisingly, prices went haywire. A hotel room might cost Rbs200 in one town in Tajikistan, but 10 – or 100 – times that in a city in Uzbekistan.The only constant was the level of student stipends.

Then the new republics started to launch their own currencies (which, confusingly, were sometimes also called the rouble), and the disorientation grew. Some of these new currencies were pegged to the old rouble or each other. But confidence in them was low, so people hunted for alternatives. Even before 1991, back during glasnost and perestroika, shops and factories had used barter to conduct some of their affairs since the Soviet financial system was so crude. But after 1991, barter became almost the norm in many regions.

One friend in Dushanbe used to import gas cookers from other Soviet republics, which he “paid” for with items such as cotton, or anything else to hand; on one bizarre occasion he even “paid” with ski goggles.

And I adapted too. By late 1991 I had become a journalist, reporting on events from around the former USSR. In some places I “paid” for things with a bewildering mixture of old and new roubles, which I carried in multiple plastic bags. But elsewhere, barter was better: I used tins of caviar to buy hotel rooms in Latvia and Estonia and I bought – or bribed – my way on to a plane in Baku with a cassette player. The only currency that was accepted everywhere was a grubby dollar bill (closely followed by the Deutsche mark or Swedish krona in the Baltics). But the exchange rate was a lottery. And since dollars could not be used for small transactions, I used Marlboro cigarettes as “currency” too; these were light and could be divided into small denominations (ie single cigarettes) more readily than dollars.

Are there any lessons here for the tumultuous eurozone? I fervently hope not. The eurozone officials are still insisting that it would be impossible for the euro to ever break apart. And even if that “unimaginable” scenario did occur, I assume – or pray – that a break-up would be less messy than in the USSR. Since the eurozone only emerged a decade ago and never pretended to be a single political structure, the separate countries have functioning central banks and finance ministries, staffed by clever technocrats who could get new banknotes printed and distributed in a hurry. Europe also has savvy companies and consumers with a global perspective; if a country such as Greece, say, suddenly left, it would probably continue to use the euro, Swiss franc or dollar as a mental reference point. I don’t expect anyone to start bartering with olives.

But, then again, it is worth remembering that the eurozone’s monetary links are exponentially more complex than they were in the USSR; that could create a different type of chaos. And today’s eurozone population seems psychologically ill-prepared for any shock. Anyone who is old enough to remember the hyperinflation of the Weimar Republic already knows just how flimsy fiat currency can be; so does anyone who saw Argentina in the 1980s (or who, like me, had their assumptions overturned in the Soviet bloc).

But there are millions of Americans and western Europeans under the age of 50 who have never lost their trust. How they will respond to a eurozone break – or seeing part of their savings wiped out – remains an open question. Hopefully we will never need to find out. But that old rouble note on my desk is a potent warning that sometimes the tectonic plates of the political economy can shift with stunning speed – even when politicians insist they cannot.

link

[james&olya 1,121]

The fallacy in the RWNJ's exchanging their USD for gold has to do with their oft-stated presupposition that there is a finite amount of gold. While this may be true for a single moment in time (the same can be said for USD) it is decidedly not true over time. Gold is an extractable resource and can be taken from the ground and even from sea-water. The current price in USD to extract this resource is around 700USD. How does anyone know whether there may be either a new discovery of abundant easily extracted gold somewhere or a technological advance that would make known gold reserves much cheaper to extract? As an 'investment' gold is very vulnerable this way! In centuries past salt was used as a medium of exchange, being considered a scarce resource in some places. Imagine the result if we discovered gold somewhere as abundant as salt is in Utah? Very recently some people even considered diamonds to be a good investment. Who in their right mind would buy diamonds to guard against armageddon?

I agree with those on here who say that if you fear collapse of society and currencies you should be investing in beans and bullets, not gold. If you fear wild market fluctuations maybe productive agricultural land would be the safe investment. But buying gold at 1700 dollars an ounce is crazy! I can only hope that idiots like Glenn Beck actually believe their own BS and will get wiped out when the gold bubble bursts. My guess is that, as stupid as he is, he is not that stupid and probably is invested much more in the stock market. Now is the time to be SELLING gold. Buy low, sell high!

[mawilson 2,133]

The fallacy in the RWNJ's exchanging their USD for gold has to do with their oft-stated presupposition that there is a finite amount of gold.

Trees (for printing paper money) are far more abundant than gold.

[james&olya 1,121]

Trees (for printing paper money) are far more abundant than gold.

So it is pretty amazing how well our system works! That paper, once used by our government to become USD actually holds its value in a more stable way than that yellow metal!

[mawilson 2,133]

So it is pretty amazing how well our system works! That paper, once used by our government to become USD actually holds its value in a more stable way than that yellow metal!

So did this paper, not too long ago:

Nations rise and fall - gold is the only thing that remains constant.

[Captain Oates 911]

As a currency, it is doing well against other currencies. Probably because it's hard to print more gold.

It would be less useful if it wasn't for the global epidemic of monetary inflation.

The oil company SHELL started off as a trader in sea shells as they were regarded as a currency.

I suppose anything will do as a currency, but when the graph does what gold's graph (oops chart) has done, there has to be a great worry because for gold to go up say 300%, the other currency would have to have been depreciated by the inverse of that - and they haven't, and are not likely to be

I could accept even George Washington's wooden teeth as a currency if it appreciated at the same rate as paper money went down, (or is likely to go down), but gold isn't doing that; its leaving everything miles behind and that is red flag just as house prices (another hard asset), did

So its too scary for me and when you see the political shove of Glenn Beck and the 'hate government' crowd, I detect that it is a bubble. If a right winger were to win the election, presumable the RWNJ's would feel safe and gold would fall like a stone.

Therefore

Anyone who thinks Obama will lose should get out of gold.

Edited December 9, 2011 by Ashud Cocoa