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enrieb

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Posts posted by enrieb

  1. Good luck with Thailand sounds fantastic, I would love to go there sometime, mabey even try living out there in the future, after reading this thread I am seriously thinking about it. I used to do Thai boxing when I was younger and met a quite a few Thai people over here while training, so what little I know about real Thai culture has always interested me.

    I hope you keep posting on here when you get there and let us know how its going, as with any luck some of us may be following from your example.

  2. with regards to gold, many people dont like how fiat currency works, however a gold backed currency simply means fixing exchange rates, and currencies against each other which is very restrictive.

    in terms of gold as an asset however, i think gold will continue to rise, mainly because when things get edgy for the dollar, gold tends to do well.

    gold is priced in dollars therfore holding gold is pretty much similar to you holding dollars. the difference is that as the dollar drops, gold becomes cheaper for non-us countries to buy, more people buy it and the price of gold goes up.

    the trade off is that your rise in gold prices will offset your losses in the falling value of the dollar which is what makes gold a stablish asset to have as it balances itself out.

    Thanks for coming back on that mfp,

    Now its not that people 'don't like' how fiat currency works, its that fiat has some positve points in its favour and some negative points. Some people, govenments, corporations benifit from these points. In general though people get a raw deal as their purchasing power is taken away over time by inflation in the fiat curreny. Gold-backed does not mean fixing exchange rates as the price of gold changes also.

    As an asset is may well contiune to rise, though it should not be seen simply as rising all by itself, try to think of it more as if the value of the fiat curreny in which it is priced falling. It would not worry me to much should the price of gold fall as in general it retains a value in relation to other comodities such as oil, corn, other metals etc... you find when the 'dollar' price of gold is low so is the price of other comodities so the value remains.

    Gold is not just priced in dollars, it can be priced in any other fiat curreny, you can price it in dow jones shares if you wish, i think its 18 ounces of gold to 1 share of the dow at the moment, which is about average, it has been 1 to 1 at some points in the past. 36 to 1 at the one point, which was a good time to sell the dow and buy gold, these things do change and gold will not always be the thing to be in.

    For my part even though I own several thousand pounds of gold, I hope the price of gold drops further over the next few years, as I am still adding to my position. Long term I expect we will be in for a long period of inflation, due to the increase of money supply which seems to be ongoing for now

    .

    I don't much care if in the future currencies become backed by gold (though it will help raise the price) as gold already has a monetary value as a medium of exchange. Let the central banks inflate, let them create credit, go buy a house, buy two. I hope the central banks sell all their gold, let the price half, I missed the opportunity last time, this time I am ready I will buy all I can. The banks will sell it, then try buy it back with money printing (inflation), who loses in this exchange the banks? or the gold bugs? or the general public?

    Now it what you wrote above is what 'you believe' to be the bull argument from gold bugs then I understand why you come to the conclusions that you do. However have you considered the possibility that you may be mistaken about what you believe their position is? On page 37 of this thread Bear Monger asked why gold was a good investment, many links were posted which will help you understand the gold bug argument. You can read them if you want to understand what the real positon is about gold or you can choose to ignore them. I will put a few of the links here, make up your own mind, but please don't tell us the gold argument makes no sense when you are not fully informed about what the gold argument actually is.

    things priced in gold? and exactly how much is a piece of gold worth? who determines the price of gold?

    http://www.financialsense.com/editorials/c.../2005/1123.html

    http://www.mises.org/money.asp

    http://www.gold-eagle.com/editorials_04/evans061304.html

    http://inflationdata.com/inflation/Inflati...rices_Table.asp

    http://inflationdata.com/Inflation/Article...n_Inflation.asp

    http://www.gold-eagle.com/editorials_04/evans061304.html

    US-Dollar: http://en.wikipedia.org/wiki/Image:Gold_price.png

    For some theory on a theoretical goldprice (related to USD money supply): http://www.paulvaneeden.com/pebble.asp?relid=41

    http://www.europac.net/Schiff-SquawkBox-6-13-06_lg.asp

    http://youtube.com/watch?v=EWR3rZDOnA4&amp...ted&search=

    http://video.google.com/videoplay?docid=52...p;q=Fiat+Empire

  3. the gold arguement really makes no sense.

    its simply a case of government controlled vs free market.

    Can you describe what you believe to be the gold argument, because I don't think that your understanding of the gold argument is at all the same thing as those who think gold will contiune to do well.

  4. OK, I have skimmed through the last 37 pages of this thread (phew!) and I'm no clearer as to why gold is a good investment at the moment. Can someone give a summary of the factors that they think will make the price of gold hit the oft quoted $1200 mark?

    Also, I have read a few times that gold is cheap at the moment but the 5 year graph I can see at BullionVault looks like gold has never been more expensive - the graph shows gold going from about $320 in 2002 to just under $700 today. Have I missed something obvious here? :huh:

    Try to think of it as a fall in the value of purchasing power in the fiat currencies instead of a gold rising for some strange and mysterious reasons. You maintain your purchasing power by owning commodities such as oil, corn, metals, etc.. just so happens that gold is both liquid and tangible.

    To understand gold you need to understand money supply, banking, inflation, purchasing power.

    here are a few links that may help you decide if you are for or against the pro gold argument.

    http://www.financialsense.com/editorials/c.../2005/1123.html

    http://www.mises.org/money.asp

    http://www.europac.net/Schiff-SquawkBox-6-13-06_lg.asp

    http://youtube.com/watch?v=EWR3rZDOnA4&amp...ted&search=

    http://video.google.com/videoplay?docid=52...p;q=Fiat+Empire

  5. 'Printing money' is just shorthand way of saying 'increasing the supply of money' money supply can be increased in a number of ways, the main being, increased government spending or creating a credit bubble. The effects of inflation can be hidden in the economy by various means, such as, importing cheap goods, increasing immigration to lower wages and of course under-reporting the real rate of inflation by manipulating the way we measure inflation, or overstating economic growth by the same process.

    When a country has a huge trade deficit caused by importing cheap goods(that at first, creates the illusion of economic growth) the excess money supply will be absorbed by the trade deficit, this takes money out of our real economy but the money still exists. This money can come flooding back into the country if there is a perception that the value of our currency is falling, this will increase the velocity of money and lead to more inflation. For the UK this would be bad news, but for a country like the USA with their petro dollar being used as the worlds reserve currency this could well lead to hyperinflation, as I have heard it reported that as much as 2/3 of the dollars that exist in the world are held out side the USA in central banks.

    If there is a currency crisis then foreign governments could sell the assets that they own in the UK to preserve purchasing power, this would increase the velocity of money and the amount in circulation in the real economy, at this point money printing would happen as an actual physical process. The foreign investors would then wait for the currency to stop falling in value at which time they could then buy up the same assets the they sold for a fraction of the price.

    The actions taken by the government have already laid the foundation for this to happen, we have yet to see the real inflation and currency problems, they will happen further down the line. Ask yourself if you have witnessed any of these things happening in recent years.

    Increase in the money supply: e.g.

    1.Increased government spending?

    2.Credit bubble? Perhaps caused by lax lending standards and low interest rates

    Ways of Hiding the inflation: e.g.

    1.Increase in Cheap imports?

    2.Increase in Debt?

    3.Increase in low paid workers,(Imigration)?

    Signs that we may be in an inflationary period

    1.Rise in cheap imports causing a Huge trade deficit

    2.Increased debt

    3.Rising comodity prices, oil, food, gold?

    4.Assets all rising at the same time, stocks shares, houses prices?

  6. I read this report a few days ago, it helps explain the sudden move upwards and will probably keep it around the $700 mark for the time being, though I hope theres a temporary move down again so I can add to my hoard.

    http://www.mineweb.co.za/mineweb/view/mine...5&sn=Detail

    In its latest annual survey of the gold market, GFMS Ltd reports that global mine production cash costs rose by $45/ounce, or 17%, year-on-year to $317/ounce. The increase in cash costs was roughly twice the size of those experienced in 2004 and 2005, with much of the increase largely beyond miners' control (energy prices, for example, although it is arguable that some of this may have been hedged by some producers).

    .................

    GFMS notes that with few exceptions producers have emphasised the challenges of increased procurement costs of essential infrastructure, including diesel, tyres and extraction reagents. Costs of contractors and skilled workers have also been on the increase a result of the boom in the mining industry, and there is of course a kickback from the increased gold price in the form of higher taxes and royalties.

  7. It's sometimes hard to get across discussions about economics due to some of the technical jargon, It has taken me a long time to get to the point where I have the most basic grasp of these things, when we add topics like Austrian economics and Keynesian theories into the subject area the jargon can cause confusion. What may at first look like lazy comments are often just short hand ways of discussing the subject and can require a good grasp of the concepts, even a phrase like 'money printing' to describe a government economic policy is just short hand for a much more complicated series of events. It's not as if Gordon Brown is actually stood there day and night at a printing press churning the stuff out, though in a round about way he may aswell be, hence the short hand.

    It has taken me a while to get a grasp on the jargon so that I can better understand the subjects and what others are saying to me. I have found Jim Puplavas FSN show to have been a great help at introducing me to the basics components of more complex economic topics combined with the wiki and other online resources.

    I used to think I was pretty switched on and knowledgeable about economics compared to most people that I know, but in the last 12 months I have learnt so much more, Fiat currency, Austrian economics, what inflation really is and more. I just cannot believe just how uninformed I was before, I used to look at these things in two dimensions and have only shadows or glimpse of how I perceived them to work, now I see that these things work in at least three if not even more dimensions, I now try to view objects from as many different perspectives as possible, only then can I be objective in my views. I best stop now before I start going on about platos cave or flatland.

    Just add that the link Goldfinger posted before has a really good step by step explaination of what our position is.

    Further to enrieb's post I also recommend What Has Government Done to Our Money? by Murray N. Rothbard:

    http://www.mises.org/money.asp

  8. Sorry to be boring but I feel compelled to revisit the question first posed by kenclarkesshoes.

    The issue is how the calls by some on this board for a completely free market can be squared with calls by some of these same people for the government to do more to control the explosion of debt and 'credit'. We can't have both - or if we can please explain how!

    That's actually a complete misrepresentation of the position of what we are saying, now I don't think that you are doing that deliberately, just that's probably what you perceive our position to be.

    In reality we do not want the government to control or interfere with the market, we especially do not want the government to interfere or attempt to control the market by creating more money just to keep the economy from going into recession, as this will only lead to inflation and the loss of purchasing power in the paper currency that we have and turn what should be just a correction in the economy into something far worse.

    If you have the time to read the link about the French revolution I posted above or read up on the German hyperinflation in the weimar republic you will understand what we are for and against. The printing of money has happened in many other countries in recent years Argentina had a huge problem, hyperinflation also had a huge influence on the disintegration of the former Yugoslavia and currently hyperinflation is raging in Zimbabwe where they have interest rates at 600 percent with inflation running at 1300 percent and can only print one side of the bank notes because they need to spend it before it loses its value. The parallels between the farmland being seized in Zimbabwe sounds very similar to what can be read in the link above about inflation in France at the time of the revolution.

    It's possible that the US could be facing hyperinflation at some point in the future due to the huge amount of dollars in circulation as a result of it being the international reserve currency and the currency in which oil is traded, this means that there is an artificial demand for dollars held by the worlds central banks, should the dollar continue to fall in value or be replaced as the world reserve currency by the Euro or Yuan Then all this excess of dollars will come flooding back into the market causing the dollar to fall further. The dollar as the international reserve currency has also had the effect of allowing the US to run a huge trade deficit far beyond what would normally be possible. I have heard it said that almost 70 percent of the dollars in the world are held outside of the US.

    Whether or not this could happen in the UK is not something anybody can accurately predict, however it is perfectly possible in theory should any government go down the road of increasing the money supply at to fast a rate, be that with a credit bubble or with government spending and probably both. This is something we do not want to see happen at all, I think that most people on here do understand the Austrian economic theories to do with money supply and inflation that being 'Inflation is always and everywhere a monetary phenomenon'

  9. I read the article and agree with most of what was said, however did any of you click on the link to http://www.mises.org/ that he recomended? It has a lot of good information, but by far the most interesting thing that I came across there was a pdf book about 'Fiat money and inflation in france' at the time of the French revolution.

    It tells of the french govenments attempts to keep the economy afloat by the insane economic policy of printing money, which of course leads to deflation of the currency, which them promps the govenment to print even more money leading to further deflation and so the cycle continues towards its bitter end.

    The parallels between the hyperinflation in germany as was recently described by Jim Puplava on FSN were quite striking. What I found most interesting about the book were the accounts of the rise in cost for food and items needed for day to day life, also the way gold shot up in price compared to the paper currency and the attempts by the govenment to stop people trading in anything other than the worthless paper money. This was done by making it illegal to trade in anything other than paper money and also making it illegal to invests assests outside of the country these crimes were punishable by large fines, imprisonment and death. The accounts of mob rule and the attititude of the poplulation towards those who hoarded gold is very interesting as is also the complete breakdown of farming, manufacuturing and the merchant classes due to the flood of worthless money.

    I must admit that I did not really know much about the french revolution before hand, so I am now busy checking throught the wiki to find out more, yet there seems to be a lack on information on the wiki about the finacial history of the revolution. But I seriously recomend that you read the pdf book if you get a chance, it's not very long and only takes a few hours, heres the link to the site and the link to the pdf book also.

    http://www.mises.org/

    http://www.mises.org/books/inflationinfrance.pdf

  10. Actually there was a very real sense in the early 90s that 'it was unravelling' - society that is - or the economy. People were bemused, no-one quite understood why we had gone from 'everything is possible' in the late 80s to 'millions are unemployed and everyone is in fear of their jobs' in the 90s.

    What turns a boom into a recession? What turns a recession around back into growth?

    The answer is largely 'sentiment'.

    How old were you in the 80s?

    Also Sentiment is not the cause of economic growth or recessions.

  11. I live in the south manchester area and I have noticed a lot more 'for sale' and 'to let' signs over the past 6 months, a few of them have sold, but most have been on the market for quite a while now. The amount of flats being developed in the city center is complete overkill, if this thing plays out like I expect it to, I should be able to pick up a city center flat for a bargin in a few years.

  12. I just finished reading crash proof today, fantastic depiction of the USA house of cards economy and why it is eventually going to fall. What I enjoy most about Peter Shiff is the way he explains complex subjects in simple everyday terms that people from a non economic background can relate to. Here in the UK I find that many economic commentators and articles are often weighed down with technical jargon that hides what is happening in the economy from the general public. When I try to explain to others what the economic data means, the jargon makes me come across as if I am speaking a different language, judging from the puzzled look on their faces. I find Peters examples far more effective at getting these concepts across, especially when it comes to consumerism, inflation and trade deficits.

    I have a few questions to ask Mr Shiff

    1)How does he keep his composure when dealing with the 'bubble head mentality' that is so pervasive of the main stream economic media. The CNBC Squawk Box June 13th interview where he laid out exactly what inflation is and is not, is an excelent example of the kind of economic misrepresentation that takes place in the media.

    http://www.europac.net/Schiff-SquawkBox-6-13-06_lg.asp

    2)Where does he get his metaphors from such as 'selling cows to buy milk' 'Farmer Chang/ Farmer Jones' 'The (inflation) Circus Comes to Town' etc...

    3)I expected that the USA and UK would enter recession around the year 2001 due to the stock market bubble and trade deficit, the last thing that I expected was that the governments would lower interest rates creating a housing boom and risk even worse long term economic problems. Things began to look grim for the UK housing market in 2005 yet they managed to keep the lid on it but at what long term cost. My question is as the USA/UK economy moves closer towards the end game, what options are left to the governments to delay further the day of reckoning, and how much worse could they make things?

  13. I also suppressed the urge to buy a big flat screen, I figured that owning one would only subject me

    to even bigger adverts for products that I don't need. I used The cash I saved to buy some gold instead, I find it quite satisfying to have spent money on something that has an intrinsic value, whereas the TV would have been worth just half the price in a year or so.

    As for people on £25-30k living frugally, all sections of society have spent more that they should have in this credit boom, when the boom rolls over then these people are going to find out the true value of money. A few years ago I was living beyond my means and ended up in debt. I managed to cut my outgoings right down and eventually paid off the debts, now my debts are gone I have kept my outgoings down to a minimum and saved the cash. I haven't been this well off since I was 20 and living at my parents. I don't earn a high wage at all, I just cut out most of the crap that I used to spend cash on, I think there's still a lot of cash out there to be earned in the economy, but people just waste it on silly things that they don't need. They confuse the words 'want' with 'need' and when eventually the long overdue day of reckoning arrives they will learnt the true meaning of these words.

  14. Is that the actual shop in Blackpool? Anybody been there BTW? What are they like? Do they ask for ID and the like if you buy less than £3000 worth?

    I've been there quite a few times, I never have any problems with them, but it does help if you spend a good amount of time reading their website, it has a lot of information, faqs and links to their other sites. Their gold sovereign site provides plenty of info on sovereign coins, it's well worth a read. They also have a shop on ebay with a number of guides aswell. They always ask for ID, but then again I suppose you could use some fake ID or get a freind to buy them for you. I always take a passport.

    ID Required for Callers

    In addition to sight of the following documents, we have to record Date of Birth, & Payment Details.

    Passport or Photo Drivers License

    Proof of Address (Recent Utility Bill or similar)

    Other Documents of Similar Value

  15. Well nuts are of course something you could trade with people as a form of currency. But way back in ye olde days people found that limiting yourself to trading in one type of item can put the trader at a disadvantage.

    Nuts are only an effective comodity to trade with, if people actually want or even need them. If you take your nuts to people who already have food you may find that your nuts are not in demand, But you could take your nuts to an area of the country where nuts or food is in short supply.

    You may want to buy some fish or bread to relieve the symtoms you have developed from such a nut intensive diet, but the fisherman may not want your nuts in exchange for his fish.

    The same problem can happen to the fisherman, the farmer, the miner, the blacksmith or anybody else who has something of value to trade. This is why that some form of Money is better as a medium of exchange, you sell your nuts for money and then buy anything that you need.

    So what is the best form of money? the best thing to use as a 'medium of exchange'

  16. I thought it was some sort of communally agreed token of some sort by which transactions are made.

    I also thought it had to be something scarce, for instance, not twigs or grass.

    I also thought that the guys who controlled it's distribution had to be bosses in some way. Big spears, or nads or something. (Or at least convince others not to nick the reserves)

    I also believe it can be used as a control mechanism to subjugate others to do ones bidding, particularly if you use the 'carrot and stick' approach to control.

    I also believe that there is a certain sense of achievement and feeling of a buffering from some of the vicissitudes of life which can come with having a big pile of it.

    I'm not sure it is entirely necessary for happiness, although it helps.

    I'm pretty sure it doesn't insure against existential angst, and mortality.

    A good definition of money is this: the most marketable commodity. To be widely marketable, a medium of exchange should possess the following characteristics: (1) transportability, (2) divisibility, (3) high market value in relation to volume and weight, (4) recognizability, (5) resistance to counterfeiting.

    Money represents 'work done' perhaps you harvested 10 ton of grain, or mined a ton of coal, caught some fish or produced a barrel of oil. It is all 'work done' using energy, your energy or the energy of people working for you. Now all you need to do is find a way of trading that 'work done'. Of course a ton of coal or 10 tons of grain can be difficult to transport also the fish and the grain will go off, so you need some kind of 'medium of exchange'

    http://en.wikipedia.org/wiki/Medium_of_exchange

  17. trying to argue that gold is a good hedge against inflation imo is pointless, since every single asset will be good against inflation. that included gold, stocks, pet dogs, property and our 250k tins of bakes beans

    so advocating holding gold, over stocks of silver, or tin, or coal, or oil is moot.

    trying to argue the merit of gold over these other assets is the way you should look at gold

    so scan any gold bug tell me why the PRICE of gold, not the inflation price of gold is going to go up more so than another asset.

    firstly to answer the question at the begining of the thread about 'gold, and why it will go the same way as property'

    Gold and other precious metals are assets that are both tangible and liquid (i.e. easily traded), unlike real estate which is tangible but not liquid, or company shares and bonds which are liquid but not tangible.

    With property it depends on where the property is and what is happening in the surrounding area, is there an over supply of houses in that area? or are they in demand? Has the area changed due to economic decline, flood risks, unemplyment, crime etc... You can take your gold to a different part of the country where it would be in demand, you cannot take your house anywhere.

    so scan any gold bug tell me why the PRICE of gold, not the inflation price of gold is going to go up more so than another asset.

    This is not something that 'I find' gold bugs are saying, I'm sure that 'some are' just probably not the majority. Gold will probably go up broadly inline with the other above asset classes as you say above, however gold as a form of money has these advantages over other comodity assets, advantages that I believe were first listed by Aristotle in the fourth century BCE. Here is some of the desirable features that money should have (taken from the wiki.)

    To function as money, the monetary item should possess a number of features:

    To be a medium of exchange:

    It should have liquidity, and be easily tradable, with a low spread between the prices to buy and sell, in other words, a low transaction cost.

    It should be easily transportable; precious metals have a high value to weight ratio. This is why oil, coal, vermiculite, or water are not suitable as money even though they are valuable. Paper notes have proved highly convenient in this regard.

    It should be durable. Money is often left in pockets through the wash. Some countries (such as Australia, New Zealand, Mexico and Singapore) are making their bank notes out of plastic for increased durability. Gold coins are often mixed with copper to improve durability.

    It should minimize contamination and contagion. Since money is frequently handled it becomes a pathway for infectious disease transmission. Recent studies have shown that the area in business offices that show the highest contamination by disease causing organisms is the accounting office where money must be counted and handled. Unlike paper, silver is used as an anti-bacterial and anti-viral agent, as are platinum and titanium. This property of silver has been recognised for millennia, which is why silver is often used in eating utensils.

    To be a unit of account:

    It should be divisible into small units without destroying its value; precious metals can be coined from bars, or melted down into bars again. This is why leather and live animals are not suitable as money.

    It should be fungible: that is, one unit or piece must be exactly equivalent to another, which is why diamonds, works of art or real estate are not suitable as money.

    It must be a specific weight, or measure, or size to be verifiably countable. For instance, coins are often made with ridges around the edges, so that any removal of material from the coin (lowering its commodity value) will be easy to detect.

    To be a store of value:

    It should be long lasting and durable; it must not be perishable or subject to decay. This is why food items, expensive spices, or even fine silks or oriental rugs are not generally suitable as money.

    It should have a stable value.

    It should be difficult to counterfeit, and the genuine must be easily recognizable.

    To be anonymous:

    In the opinion of all libertarians and most laissez-faire economists, money should not be subject to government tracking.

    In the opinion of all libertarians and most laissez-faire economists, it should be usable for purchases in a black market.

    It should not require equipment, tools or electricity to use.

    Money also is typically that which has the least declining marginal utility, meaning that as you accumulate more units of it, each unit is worth about the same as the prior units, and not substantially less.

    For these reasons, gold and silver have been chosen again and again throughout history as money in more societies and in more cultures and over longer time periods than any other items.

    One key benefit of these features of money is that it facilitates and encourages trade, as barter is far less efficient.

  18. Anybody had experience buying 1oz Krugerrands from any of these sites?

    http://www.goldline.co.uk

    http://www.atsbullion.com

    http://www.taxfreegold.co.uk

    Are their others?

    I'm looking to buy several in the near future

    Do you receive new or used coins?

    If they are used what condition were they in?

    I brought a 1oz Krugerrand last week from Chard (taxfreegold) Its the first time I have purchased gold and I don't like buying things over the internet from people I don't know, so I travelled to the shop in blackpool. Chard has a pretty good website that answered most of the questions I had about gold, though they were not to forcoming with information in the shop, but they were more freindly than my local BNTA member. Now I know where they are and have met some of the staff in person I will feel more comfortable about buying from them online, until I find a good local dealer.

    On the quality of the coins, I was disapointed at their presentation (a small used component bag) and there were a few small marks at one end of the coin, but they were just bullion and not proofs. I have been waiting for the price to drop before I got into gold, but I just needed to buy at least one coin to see how I felt about owning gold. Paying over £350 makes me take the subject more seriously and at first I felt like I had done the wrong thing, but after spending all weekend looking at it and reading more information about the historic price of gold and comparing it to the ever falling value of paper money I felt a lot better about it.

    If you are going to buy online and have them delivered it would probably be best to order the 22 carat bullion coins like kruggerands rather than the 24 carrat mapels as the softer 24 carrat coins will probably have more wear unless you are paying the extra cash for proof verisons. If you are new to gold (as I am) then I would recomend only buying from BNTA members untill you know a bit more about it.

    Here is the FAQ page from Chard (taxfreegold.co.uk, 24carat.co.uk, goldsovereigns.com)

    http://www.goldsovereigns.co.uk/aboutus.html

    I do think this time the world economy is in a real mess, inflation, potential long term collapse in the dollar, rise of china, peak oil, long term gloabl warming, unreliable pensions not to mention the growing involvement of the US and UK in the middle east are just some of the reasons I would rather have at least some cash in something tangeable even though I feel I may be getting into gold a little late. However don't let my pessimistic predictions influence you on where to put your cash, I have been wrong before.

  19. Reading back through your reply I feel that we are misunderstanding one an other over what real assets are versus paper assets. It may be my fault in not explaining my position as clearly as I could, If you feel you are finding my explanations unhelpful could you point out specifically where you feel I am not explaining my position fully. I do not think that we are in oposition as to how supply and demand works just in how we are reading one an others posts, the internet not being a perfect medium I am not quite sure what you mean by your use of 'through increasing money supply?' do you mean this to be that you disagree that increasing money supply are responsible for the fall in the value of fiat currency against real assets.

  20. I have to admit I am not an expert in finacial matters yet I think we are looking at this from opposite ends of the problem. Please feel free to give me your description of where you think money and inflation comes from as I believe that the central banks are the sole cause of inflation via the lowering of intrest rates that results in the printing of money which undermines the fiat currency through long term inflation against real assets.

    In short if you were to purchace a small amount of gold worth the price of a barrel of oil, say five years ago then I would expect that that small amount of gold would still be roughtly worth the same value of a barrel of oil whereas paper fiat currency has fallen against the value of 'real tangible assets'.

    Edited... replaced last noun phrase 'paper money' for 'real tangible assets' which is what I originally meant to say.

  21. Yep, gold, like the housing market or any limited asset, tracks money supply

    My understanding is;

    - Once money supply slows - limited assets also drop - good time to sell

    - IR rises lowers money supply - so keep your eyes on upcoming inflation figures

    - The only way gold would go ballistic is if fiat money collapses - unlikley while the dollar is still being used to trade oil and the US is slowly taking control of the remaining world stocks in the middle east (no doubt to ensure it remains traded in dollars so it retains its 'value' and they can inflate their way out of debt problems at home through increasing M3 supply)

    The price of Gold is not related to the housing market, it is not related to the money supply. Gold is real, as in not a paper asset. The price of gold can be affected by the suppy of paper money but it not determined by the supply of paper money. When paper money falls in value due to inflation gold remains at its own market value, this looks like the price of gold jumps up but in reality it is the fall in the value of paper money that makes the value of gold rise.

    Crudely speaking if you buy 1000 dollars of gold and then the dollar drops in value by 50 percent you then have 2000 dollars of gold. Gold can be affected by money supply but if the money supply is out of control then gold or other real assests (not Fiat paper) can rise in value.

  22. Here are two links to financial sense newhour, the first one has an audio interview about ways to invest in gold and why you should. Just right click on the mp3 link and select 'save target as'

    http://www.financialsense.com/Experts/roun.../2006/1104.html

    This second link again from FSN has an interviw with G. Edward Griffin it's a simplistic description of how the banking system works and how the government print money which results long term in inflation of paper money which loses value over time. Owning gold will not make you rich (unless there is a currency collapse, which is possible with the dollar, please see other relavant threads for more info) but owning gold will help you protect you from the effects of inflation.

    http://www.financialsense.com/Experts/2006/Griffin.html

    Don't take my word for it or even these interviews, spend some serious time learing about how the world economy works and what is really happening. This forum has some excellent threads with good links that will get you up to speed pretty quick, it's your decision whether or not to invest in gold, don't do it just because you heard if from someone or read it somewhere, invest your time in finding out what is the best way to use your money.

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