Lepista

Gold strategy in the current economy

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From a textbook on the theory of money:

The textbook has ten full pages of references but no indication that the "professional monetary economists" have solved this "mystery".

That was when gold was decreed to be money by the state. The "cross of gold" which the population were nailed to.

Not market demand.

What gold is very, very good at is regulating fraud. Bankers fractional games are much harder to work when they have to have a pile of gold to show the king/police/whatever upon demand.

Problem with this scenario for the gold investor who is making this punt is that the king/police/whatever show zero inclination to limit the bankers.

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No, theres no organic market demand, just scared people who blieve in nonsense.

Why not invest in pieces of the one true cross? Same methodology, same ethics.

Who cares about the semantics, organic, natural or not. The price went up (a lot) because demand went up. No gold standard needed - which was my point.

You are part of that demand! You bought gold believing that a gold standard is not a strong possibility. You invested in gold and not pieces of the one true cross because sufficient people / central bankers believe it is money/currency reserves.

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Who cares about the semantics, organic, natural or not. The price went up (a lot) because demand went up. No gold standard needed - which was my point.

You are part of that demand! You bought gold believing that a gold standard is not a strong possibility. You invested in gold and not pieces of the one true cross because sufficient people / central bankers believe it is money/currency reserves.

We;ll if you want people to be mentally healthy, happy and rational you do indeed care whether they are doing something from their own genuine intent or because they are thinking badly.

Me buying pie because I like pie = good.

Me buying pie because I have fallen for a lot of nonsense and think someone else will want pie (when they are playing the same game and no one really likes pie) = bad.

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We;ll if you want people to be mentally healthy, happy and rational you do indeed care whether they are doing something from their own genuine intent or because they are thinking badly.

Me buying pie because I like pie = good.

Me buying pie because I have fallen for a lot of nonsense and think someone else will want pie (when they are playing the same game and no one really likes pie) = bad.

You've got it wrong again, everyone one wants pie that is good.

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You've got it wrong again, everyone one wants pie that is good.

But not gold.

Hardly anyone wants it. You don't. I don't. Errol doesn't. Goldfinger, wherever he is now, doesn't.

We all bought it hoping someone else wants it later on if TSHTF. And they don't either, they buy it for the same reason - to pass it on.

All a bit of a waste, really.

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We;ll if you want people to be mentally healthy, happy and rational you do indeed care whether they are doing something from their own genuine intent or because they are thinking badly.

Me buying pie because I like pie = good.

Me buying pie because I have fallen for a lot of nonsense and think someone else will want pie (when they are playing the same game and no one really likes pie) = bad.

Not really. All your natural/organic/demand stuff is just semantic masturbation.

You demand/buy it, despite your misgivings. I do too. At the end of the day, we are the demand that we dislike, even despise. Quite sad really.

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But not gold.

Hardly anyone wants it. You don't. I don't. Errol doesn't. Goldfinger, wherever he is now, doesn't.

We all bought it hoping someone else wants it later on if TSHTF. And they don't either, they buy it for the same reason - to pass it on.

All a bit of a waste, really.

Yes gold is good pie. Paper pie is not good pie.

Edited by killerbee

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Not really. All your natural/organic/demand stuff is just semantic masturbation.

No, it's the difference between people fulfilling their genuine, real desires, and wasting their time on myth.

You demand/buy it, despite your misgivings. I do too. At the end of the day, we are the demand that we dislike, even despise. Quite sad really.

if you don't care what form demand takes, then you shouldn't have an issue with fiat money, or (to take an extreme but logically accurate example) rape.

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No, of course not.

However, just like the goldbugs I am looking at the past and extrapolating foward. We may get a black swan, where gold suddenly has market demand that it has never had before, but as you can buy pretty much anything and have that sort of black swan, it's not a viable and reliable investment strategy. (Only negative black swans can be invested in with any degree of accuracy.)

You don't have a crystal ball either - no one does.

All I know is gold has never been money before (absent the state forcing people to use it) and there is no reason to think gold will be in the future (unless the state forces people to use it again, which is as I already said is what the goldbugs rocketship pictures are all based on.)

I agree with what you say here to an extent apart from the gold is not money bit. Gold is money if used for consideration wrt a willing transaction between two or more persons in exchange for goods or services.

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I agree with what you say here to an extent apart from the gold is not money bit. Gold is money if used for consideration wrt a willing transaction between two or more persons in exchange for goods or services.

No, that makes gold an occassionally used medium of exchange. (In the same way that carrots or other crops are in some farming communities).

Money means that item in an economy which is most often used as a medium of exchange.

An example - in a prison you trade your soap for some porn, using new socks as the middle man. But everyone else is using tobacco as their medium of exchange, so tobacco is money in the prison.

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No, of course not.

However, just like the goldbugs I am looking at the past and extrapolating foward. We may get a black swan, where gold suddenly has market demand that it has never had before, but as you can buy pretty much anything and have that sort of black swan, it's not a viable and reliable investment strategy. (Only negative black swans can be invested in with any degree of accuracy.)

You don't have a crystal ball either - no one does.

All I know is gold has never been money before (absent the state forcing people to use it) and there is no reason to think gold will be in the future (unless the state forces people to use it again, which is as I already said is what the goldbugs rocketship pictures are all based on.)

I simply googled 'what is money' here is what I found...

Money is any object or record that is generally accepted as payment for goods and services and repayment of debts in a given socio-economic context or country.

I reckon that makes you wrong again, you are having a bad day.

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No, that makes gold an occassionally used medium of exchange. (In the same way that carrots or other crops are in some farming communities).

Money means that item in an economy which is most often used as a medium of exchange.

An example - in a prison you trade your soap for some porn, using new socks as the middle man. But everyone else is using tobacco as their medium of exchange, so tobacco is money in the prison.

BINGO!! You just defined money.

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No, it's the difference between people fulfilling their genuine, real desires, and wasting their time on myth.

if you don't care what form demand takes, then you shouldn't have an issue with fiat money, or (to take an extreme but logically accurate example) rape.

Just put your money where you mouth is, stop being part of the demand, and sell your gold.

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No, that makes gold an occassionally used medium of exchange. (In the same way that carrots or other crops are in some farming communities).

Money means that item in an economy which is most often used as a medium of exchange.

An example - in a prison you trade your soap for some porn, using new socks as the middle man. But everyone else is using tobacco as their medium of exchange, so tobacco is money in the prison.

Not 'most often'. The term is 'generally accepted'.

So everyone in the whole country would accept my gold sovereign for their packet of fags. Gold is money.

Edited by killerbee

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Not 'most often'. The term is 'generally accepted'.

So everyone in the whole country would accept my gold sovereign for their packet of fags. Gold is money.

Then so is absolutely anything whatsoever you could swap fags for.

That makes is so heroin, cheesey wotsits, pampers, a bag of spuds etc etc are all money.

Or, you are being bloody daft rather than let go of a wrong headed idea.

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Then so is absolutely anything whatsoever you could swap fags for.

.

No.

Heroin is illegal so I don't think it would be generally accepted. Cheesey wotsits, pampers, spuds could certainly fit the bill if they were generally accepted but it is not likely that everyone would.

I'm just stating facts.

Edited by killerbee

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im a mises believer and this is how i see it.

money is the MOST MARKETABLE COMMODITY.

in prison tobacco is the most marketable commodity so is money.

at the mo FIAT is the most marketable commodity due to govt using force by law to say it is. currently the market is believing that.

however if hyperinflation, run on the pund etc happens then THE MARKET will decide that fiat is not money as nobody will want it.

so i think that if this happens what money is will change rather quickly between different commodities depending on whether food, heat, defence are provided. if people are starving then food is money. also consider if TPTB can use force again to make the market decide what money is.

FWIW i think for a period PM's will be money again for a period of time if fiat collapses.freewill is a very powerful thing. govts manage it with welfare, xfactor, cheapo goods and the like but dont control it 100%. it could all go pete tong and kick off IMO

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im a mises believer and this is how i see it.

money is the MOST MARKETABLE COMMODITY.

Yes, thank you. I knew there was a correct terminology for it.

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No.

Heroin is illegal so I don't think it would be generally accepted. Cheesey wotsits, pampers, spuds could certainly fit the bill if they were generally accepted but it is not likely that everyone would.

I'm just stating facts.

Gold isn't generally accepted.

There is a video a few pages back proving it beyond any doubt.

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Yes it is.

No, really. You can';t go shopping with gold.

Yet.

The bet with gold is that at some point you will be able to. There isn't a shred of evidence that absent the state forcing people to use it, that will ever be the case.

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Yes, thank you. I knew there was a correct terminology for it.

Is that the correct terminology because you say so?

Money is created by a kind of a perpetual interaction between concrete things, our intangible desire for them, and our abstract faith in what has value: money is valuable because we want it, but we want it only because it can get us a desired product or service.

I think you know gold is money for the reasons above.

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No, really. You can';t go shopping with gold.

Yet.

The bet with gold is that at some point you will be able to. There isn't a shred of evidence that absent the state forcing people to use it, that will ever be the case.

This is true but that does mean gold is not money, your definition of money is flawed.

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Is that the correct terminology because you say so?

No, it's because VonMises wrote an absolutely massive book outlining what money was and it's place in the economy etc - he did this from direct observation. That is, Von Mises description of money is derived from reality and is therefore accurate and true.

Money is created by a kind of a perpetual interaction between concrete things, our intangible desire for them, and our abstract faith in what has value: money is valuable because we want it, but we want it only because it can get us a desired product or service.

I think you know gold is money for the reasons above.

No.

Money is the most commonly desired item in an economy - for the item itself. Ciggies are prison money because prisoners smoke. Gold isn't going to be money in this sense ever, because most people aren't jewelers and wearing jewelry is itself a niche interest. Even the wedding ring is dying out these days and that's not actual demand either, it's a wacky cultutal tradition.

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No, it's because VonMises wrote an absolutely massive book outlining what money was and it's place in the economy etc - he did this from direct observation. That is, Von Mises description of money is derived from reality and is therefore accurate and true.

No.

Money is the most commonly desired item in an economy - for the item itself. Ciggies are prison money because prisoners smoke. Gold isn't going to be money in this sense ever, because most people aren't jewelers and wearing jewelry is itself a niche interest. Even the wedding ring is dying out these days and that's not actual demand either, it's a wacky cultutal tradition.

Here's a direct observation from Herr kb no book required...

If I wanted to get a packet of fags from a complete stranger I could offer them a whole list of things in payment. It might take a while to find out they are interested in cheesey wotsits so its much easier to have some sort of generally accepted form of payment. They are from Mongolia, luckily I've got a gold sovereign in my pocket. The transaction takes place. That defines gold as money.

goodnight

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