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Denninger On Gold


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HOLA441

These threads are very amusing, but tend to go in circles.

There is little point in continuing the debate. Best to just wait for the future developments (like $5000 gold, gold being integrated into the currency system etc etc).

There is no debate here though, that's what is so sad.

I outline a logical, empirical point of view and you reject it based on mystical grounds.

I can only debate with someone who wants to actualyl find the truth of things, not with someone who wants an outcome no matter whatand bnds themselves and history out of shape to get to it.

I agree that gold will almost certainly go up and fiat money seriously unravel - it's just that you have no actual process behind your thinking other than willed persistence and wishing upon a golden star. You are right by accident, which isn't much cop if you want to plan properly, debate an issue or learn anything.

Edited by Injin
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HOLA442

With all my respect to you (and there are not so many I do respect, so you are on the same board as E. Tolle ie) does Errol not has a point in believing that there will be more people that put value in gold, thus making it cost more in whatever measure you chose.

Of course he does. I'm not seeking profit though, just some measure of the truth of things.

And as OP and the rest of discussion make case that US$ (or any other currency) is better than gold, would you agree/disagree with such statement, ie would you rather keep your savings in a currency or in gold.

But real life isn't like that - there aren't just two options to choose from. You can save cheese string, or planks of wood. You can spend all your money on parties and hope that you'll get bailed out later in life by those that had a good time....

If you chose neither, what is this mythical, the term you use, "something" has has a true value and can serve as an inflation hedge?

There isn't one.

Thank you.

No problem.

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HOLA443

It's just a religion gold has no real value, you've been told it does.

Why not use titanium as a means of exchange or platinum, the fixation with gold is intriguing on the psychology level but if the consensus disappears over it's economic value it's about useful as fiat paper money.

This is true. Injin's approach* overlooks the force of sentiment (herd mentality) in the market place. Collective supply and demand--and the pendulum theory of investment go hand in hand. Advertising manipulates the herd because it reached enough individuals who make enough decisions to influence the market.

Value is ascribed by the market and the market is driven by people who buy and sell in that market. Herds form when Tulips become popular and herds bring the value down when someone says something that spooks the herd. It can be a real of imagined threat to the ascribed value--it does not matter. A lie can trigger a stock market collapse. In a word all markets are precarious.

The market thrives on scam and herd economics. Look how we have been told over the last almost century how good tobacco is and how sensual it is to smell like a fag end.....

Gold is just another thing that is marketed and which appeals to greed--or that intrinsic characteristic of human beings.

There you go--the only thing "intrinsic" is man's desire to make a buck--easily.

At the moment the herd is buying gold--thousands of tons a day are being "sold" to unwitting people who believe in the storehouse theory. The fact that gold has stagnated at around $1100-1200 during a time of the greatest economic upheaval in history suggests that the market may be irrational but it sees a scam when things go to far. Gold ETFs etc. may be the scam too far.

*The antithesis of Gruber's thesis and a sort of reverse Keynsian approach to the "too big to fail" idea of governments being immune to sovereign debt crises. Governments can and are going broke and nothing has intrinsic value.

Edited by Realistbear
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HOLA444

so when denninger told us we were going to get hyperinflation in 2008 did he think gold was naff back then?

I guess he changed his mind again or has changed it again or may change it again

Go go denninger! Hyperinflation, deflation, gold, dollars they are all the same yay!

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HOLA445
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HOLA446

I think gold is ok.

Views?

I agree. Buy it when its cheap and sell it when you have made a profit. Wait too long for a profit and you may lose. Jump out too soon and you may not make as much as if you held on a bit longer.

Is gold any different from silver, tulips, paper Kronas, potatoes, soy beans or any other thing that is bought or sold?

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HOLA447

There isn't one.

You have to elaborate on this.... In The Black Obelisk (Remarque) - an excellent story of living during Weimar inflation - they purchased lots of restaurant meal vouchers and then were enjoying virtually free meals for quite some time, so something worked for them?

Living through the serious inflation in Russia in 90s I can tell that again some things - gold included, but US$ as well - worked OK.

Someone in earlier discussion put forward an idea that investing in oneself would be good and I agree that learning a new skill that you can sell later would be great, but you can only invest so much in it, it's more a question of time and efforts than money.

Genuinely trying to solve this puzzle rather than impose a view.

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HOLA448

This is true. Injin's approach* overlooks the force of sentiment (herd mentality) in the market place. Collective supply and demand--and the pendulum theory of investment go hand in hand. Advertising manipulates the herd because it reached enough individuals who make enough decisions to influence the market.

You have it exactly backwards.

There is no "herd."

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HOLA449

You have to elaborate on this.... In The Black Obelisk (Remarque) - an excellent story of living during Weimar inflation - they purchased lots of restaurant meal vouchers and then were enjoying virtually free meals for quite some time, so something worked for them?

And that somthing wasn't working for the guy on the other side of the trade, obviously.

Living through the serious inflation in Russia in 90s I can tell that again some things - gold included, but US$ as well - worked OK.

Of course. Was it guaranteed though? Was it riskless?

Someone in earlier discussion put forward an idea that investing in oneself would be good and I agree that learning a new skill that you can sell later would be great, but you can only invest so much in it, it's more a question of time and efforts than money.

Genuinely trying to solve this puzzle rather than impose a view.

markets are like this (and it's this terror half the world is trying to avoid at present) -

You make your stuff, you take it to market and you don't know until it's time to sell if it's worth anything or what you will get and this is the only way it will ever be.

To admit that admits that tomorrow you might fail - and that leads to all sorts of empathy for the current losers..which is profit diminishing for the current winners and so can't be entertained! There is a strong thought amongst all people that "the wins wer down to me and the losses wer down to events." Actually in a market, it's almost all down to events for good and bad.

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HOLA4410

As I always say it is just something of value, an asset that can be traded internationally, and benefits from a high value to weight ratio meaning it is transportable.

It is no better or wose than other things such as rare paintings or star wars figurines.....

I don't know why people get so excited about this. I would agree that Silver is a better bet than Gold. No one should put all their wealth into any one asset and that includes gold and silver. There is however a high probability of a good spike in these assets and there would be likely a subsequent fall. Just make your own decision. Mine is that the world economy will have leg down number 2 and that Silver and gold will have a role in protecting wealth from the falling values of fiat currency in a climate of fear, be it deflation or inflation. I do not favour a mortgage which will probably double in servicing costs over 2-3 years on an asset I strongly suspect will fall in value, maybe for many years.

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HOLA4411

No - who, apart from Injin and yourself say it is? I'll happily sell up when I think it's topping out, nothing religious, mystical or demonic will compel me to hold on to my precious any longer than is necessary to make a reasonable profit and deploy said profit into another appreciating asset class. Alles klar?

What you are doing here is gambling. You're gambling that you'll know that it's topping out, and then you're gambling that the appreciating asset class that you transfer to will continue to appreciate.

I just wish people would acknowledge that they're gambling, and not try to sound so wise/smug about what they're doing.

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HOLA4412
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HOLA4413
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HOLA4414

And that somthing wasn't working for the guy on the other side of the trade, obviously.

Well that's the "beauty" of the market forces that you advocate, and I do disagree with you. When someone wins, another lose. I exchange my ££ for gold (beans, whatever) today, tomorrow price changes either way, someone wins, someone loses.

Again, to come to the original question, is not riskier atm to store your wealth in fiat currencies than in gold? There are risks in both but one is just risk while another is, and you seem to be the strongest proponent of this, pure madness.

Of course. Was it guaranteed though? Was it riskless?

markets are like this (and it's this terror half the world is trying to avoid at present) -

You make your stuff, you take it to market and you don't know until it's time to sell if it's worth anything or what you will get and this is the only way it will ever be.

To admit that admits that tomorrow you might fail - and that leads to all sorts of empathy for the current losers..which is profit diminishing for the current winners and so can't be entertained! There is a strong thought amongst all people that "the wins wer down to me and the losses wer down to events." Actually in a market, it's almost all down to events for good and bad.

As MT put it only 2 things are certain, death and taxes (and he was not sure about death). All other are just our estimates what we think is more/less risky. And in today's climate fiat currencies look the most risky asset to hold, apart from UK houses of course :)

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HOLA4415
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HOLA4416

Is gold any different from silver, tulips, paper Kronas, potatoes, soy beans or any other thing that is bought or sold?

I'll happily swap my tasty tesco value potatoes for any spare gold that you may wish to dispose of. One giant 10kg pack for just one of your small sovereigns.... ;);)

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HOLA4417

I'll happily swap my tasty tesco value potatoes for any spare gold that you may wish to dispose of. One giant 10kg pack for just one of your small sovereigns.... ;);)

I second this. Anyone want to swap potatoes for gold?

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HOLA4418

Well that's the "beauty" of the market forces that you advocate, and I do disagree with you. When someone wins, another lose. I exchange my ££ for gold (beans, whatever) today, tomorrow price changes either way, someone wins, someone loses.

it's not win win trading in that example because of the fiat money involved. unlike normal market operations, the goldbugs want to get wealthy because someone else (actually pretty much everyone else) is going to lose big time.

Again, to come to the original question, is not riskier atm to store your wealth in fiat currencies than in gold? There are risks in both but one is just risk while another is, and you seem to be the strongest proponent of this, pure madness.

You can't store wealth.

As MT put it only 2 things are certain, death and taxes (and he was not sure about death). All other are just our estimates what we think is more/less risky. And in today's climate fiat currencies look the most risky asset to hold, apart from UK houses of course :)

Sure.

Gold will serve anyone who follows it's path well.

it just doesn't have all the features that some goldbugs would like, any more than this piece of wood is from the true cross.

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HOLA4419

it's not win win trading in that example because of the fiat money involved. unlike normal market operations, the goldbugs want to get wealthy because someone else (actually pretty much everyone else) is going to lose big time.

I think your view of the current situation is that everyone is going to lose big time regardless. Fiat crush/state failure - you see I've been reading your posts for a while :)

Why single out "goldbugs" that they have equally low esteem for the fiat currencies and want to "protect themselves", sorry for the phrase.

You can't store wealth.

That's an interesting pov. What can you do with it, spend, waste, lose, get taken away, look as it disappears?

Sure.

Gold will serve anyone who follows it's path well.

it just doesn't have all the features that some goldbugs would like, any more than this piece of wood is from the true cross.

Oh that wood would be priceless, regardless what you put the price in. You won't see it on ebay I can assure you ;)

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HOLA4420

I'll happily swap my tasty tesco value potatoes for any spare gold that you may wish to dispose of. One giant 10kg pack for just one of your small sovereigns.... ;);)

Point brilliantly made.

Gold's value is dictated by what the market is prepared to give in exchange.

Myth of mystical storehouse of value, fiat free, intrinsic value exploded forever!

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HOLA4421

These threads are very amusing, but tend to go in circles.

There is little point in continuing the debate. Best to just wait for the future developments (like $5000 gold, gold being integrated into the currency system etc etc).

What happens when gold hits $1,000,000 an ounce?

At this stage, I expect that owning or not owning some gold is going to be the least of your problems.

[i own some gold as insurance. In some extreme outcomes, it starts to lose its insurance value.]

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HOLA4422

I think your view of the current situation is that everyone is going to lose big time regardless. Fiat crush/state failure - you see I've been reading your posts for a while :)

Fraid so.

Why single out "goldbugs" that they have equally low esteem for the fiat currencies and want to "protect themselves", sorry for the phrase.

Oh, I don't single out goldbugs. The fact is though that this thread is about gold and goldbugs.

That's an interesting pov. What can you do with it, spend, waste, lose, get taken away, look as it disappears?

Value is an opinion about objects. it can't be stored in obkects as it always resides in subjective opinion. Everything is a massive roll of the dice.

Oh that wood would be priceless, regardless what you put the price in. You won't see it on ebay I can assure you ;)

It would be just another piece of wood, really.

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HOLA4423

What happens when gold hits $1,000,000 an ounce?

At this stage, I expect that owning or not owning some gold is going to be the least of your problems.

[i own some gold as insurance. In some extreme outcomes, it starts to lose its insurance value.]

Firearms > gold

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HOLA4424

Fraid so.

Oh, I don't single out goldbugs. The fact is though that this thread is about gold and goldbugs.

Value is an opinion about objects. it can't be stored in obkects as it always resides in subjective opinion. Everything is a massive roll of the dice.

It would be just another piece of wood, really.

I think I get it.

What I don't get is what are you doing on this board.

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HOLA4425

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