A Store Of Value.

[scepticus]

There are natural limits to the ability to tax and spend using commodity money (of any sort) - which is why the statists don't like them. They are also objectively definable, making the "iron man" subject to the same reality that 5 year olds can process (at least in a public place where he can be laughed at for trying to pull the black is white crap.)

Iron men need supporters, those supporters need paying as well. If fiat slips in the popular mind, it won't be back for generations, iron man or not. Even Napoleon had to pay all his bills up front in gold after the assignats died.

If we went back to a gold standard we'd be in penury. It is simply too inflexible to cope with variations in population, resource availability and technological innovations.

Way back when, gold was simply a means of obtaining imports. These days forex is the equivalent of gold because you need forex to obtain imports. Or oil. You run a deficit you deplete forex reserves until you can't buy anything in, and then you get hyperinflation.

No need for gold.

[Injin]

I didn't say no one wants it and there is zero demand. In fact it is almost unique in that all over the world, for millenia, everyone has wanted it

That is what gives it value

<dives for cover>

I agree completely.

For millenia people have wanted it...because other people have wanted it, not because they want the gold itself.

This is the very definition of a mania.

Don't get me wrong - it'll work, it's going to all come back, probably - I just get pissed off when people tell me that theres some rational basis behind it, because there ain't.

Edited November 15, 2009 by Injin

[Injin]

If we went back to a gold standard we'd be in penury. It is simply too inflexible to cope with variations in population, resource availability and technological innovations.

Way back when, gold was simply a means of obtaining imports. These days forex is the equivalent of gold because you need forex to obtain imports. Or oil. You run a deficit you deplete forex reserves until you can't buy anything in, and then you get hyperinflation.

No need for gold.

You won't get a choice, sorry Sceppy.

The market can stay irrational longer than you can stay solvent, and the market will almost certainly pick gold.

It's a load of crap and based on a mania, but you are stuck with it. Me, I am going with the herd while not actually being part of it's insanity. Such is life.

Edited November 15, 2009 by Injin

[dr ray]

I agree completely.

For millenia people have wanted it...because other people have wanted it, not because they want the gold itself.

This is the very definition of a mania.

Don't get me wrong - it'll work, it's going to all come back, probably - I just get pissed off when people tell me that theres some rational basis behind it, because there ain't.

OK I agree its a mania and a bubble.

Both terms are derogatory and the term bubble suggests a burst at some stage.

What we have is the nearest to universal, global and permanent mania that it is possible to achieve and while my interactions in the forseeable future are likely to be with humans rather than Martians that suits me just fine.

I think we are in agreement Injin.

BTW I thought your argument that money is not stored labour because digging a hole does not make you richer is wrong. You are confusing leisure (ie gardening) with employment. You dont expect to be paid for leisure even if it involves physical activity and some labour doesn't involve phyical activity at all. Being able to assess risk and gambling profitably is labour and very well paid.

[lowrentyieldmakessense(honest!)]

Don't get me wrong - it'll work, it's going to all come back, probably - I just get pissed off when people tell me that theres some rational basis behind it, because there ain't.

tis rational because plenty are irrational

but they are not as irrational as those who trust government currency

Edited November 15, 2009 by lowrentyieldmakessense(honest!)

[grumpy-old-man-returns]

just noticed this posted by fitkid at GEI. We have mentioned a few times about the possibility of tungsten gold. What would happen to the price of Gold if this is true?

Those holding ETF Gold (or paper gold as we like to call it ), should be very worried.

clicky linky

"THE AMERICAN PEOPLE'S GOLD? ITS ALL GONE

by Il_Bagattel, Friday, January 15, 2010, 07:08

Remember a few years ago when the Rothschilds suddenly and inexplicably

walked away from their 200 year seat on the London Fix?

Here is an article, written by an American, that is so damning that nowhere in the media could it get published but in Pakistan. When this story broke, it was played as though there were just a few fake gold bars floating around out there.

Not so, it seems.

Fake gold bars in Bank of England and Fort Knox

It’s one thing to counterfeit a twenty or hundred dollar bill.

snip

But what about gold? This is the most sacred of all commodities because it is thought to be the most trusted, reliable and valuable means of saving wealth.

A recent discovery — in October of 2009 — has been suppressed by the main stream media but has been circulating among the “big money” brokers and financial kingpins and is just now being revealed to the public. It involves the gold in Fort Knox — the US Treasury gold — that is the equity of our national wealth. In short, millions (with an “m”) of gold bars are fake!

Who did this? Apparently our own government.

Background

In October of 2009 the Chinese received a shipment of gold bars. Gold is regularly exchanges between countries to pay debts and to settle the so-called balance of trade. Most gold is exchanged and stored in vaults under the supervision of a special organization based in London, the London Bullion Market Association (or LBMA). When the shipment was received, the Chinese government asked that special tests be performed to guarantee the purity and weight of the gold bars. In this test, four small holed are drilled into the gold bars and the metal is then analyzed.

Officials were shocked to learn that the bars were fake. They contained cores of tungsten with only a outer coating of real gold. What’s more, these gold bars, containing serial numbers for tracking, originated in the US and had been stored in Fort Knox for years. There were reportedly between 5,600 to 5,700 bars, weighing 400 oz. each, in the shipment!

At first many gold experts assumed the fake gold originated in China, the world’s best knock-off producers. The Chinese were quick to investigate and issued a statement that implicated the US in the scheme.

What the Chinese uncovered:

Roughly 15 years ago — during the Clinton Administration [think Robert Rubin, Sir Alan Greenspan and Lawrence Summers] — between 1.3 and 1.5 million 400 oz tungsten blanks were allegedly manufactured by a very high-end, sophisticated refiner in the USA [more than 16 Thousand metric tonnes]. Subsequently, 640,000 of these tungsten blanks received their gold plating and WERE shipped to Ft. Knox and remain there to this day.

According to the Chinese investigation, the balance of this 1.3 million to 1.5 million 400 oz tungsten cache was also gold plated and then allegedly “sold” into the international market.

Apparently, the global market is literally “stuffed full of 400 oz salted bars”. Perhaps as much as 600-billion dollars worth.

snip

The revelations of fake gold bars also explains another highly unusual story that also happened in 2004:

LONDON, April 14, 2004 (Reuters) — NM Rothschild & Sons Ltd., the London-based unit of investment bank Rothschild [ROT.UL], will withdraw from trading commodities, including gold, in London as it reviews its operations, it said on Wednesday.

Interestingly, GATA’s Bill Murphy speculated about this back in 2004;

“Why is Rothschild leaving the gold business at this time my colleagues and I conjectured today? Just a guess on my part, but suspect something is amiss. They know a big scandal is coming and they don’t want to be a part of it… [The] Rothschild wants out before the proverbial “S” hits the fan.” — BILL MURPHY, LEMETROPOLE, 4-18-2004snip

http://www.daily.pk/fake-gold-bars-in-bank...ort-knox-14477/

They don't want to be a part of it indeed. I will carry the speculation a step further and posit that most of the purloined gold wound up on the market to suppress the price of gold and was acquired by agents of the Rothchild's, on the cheap, at the bottom. This goes also for the Brit's gold that Gordon Brown dumped at the bottom of the market. This gold now sits in secret Rothschild vaults awaiting the day when the lid blows off the price and bits of it will be symbolically presented to "back" the new NWO funny money... which will be controlled exclusively by the Rothschilds. Neat trick, eh? "

Edited January 18, 2010 by grumpy-old-man-returns

[grumpy-old-man-returns]

We have also discussed this before in this thread:

more Tungsten info here

Edited January 18, 2010 by grumpy-old-man-returns

[grumpy-old-man-returns]

here's an easier summerisation of the story for those that are not familiar with gold or the tungsten gold story.

clicky linky

(Thanks, Mike.

Folks, this is the same Mike K. who sent the above tune. The music post and this e-mail are related.

Mike, you ask "Whatcha think?" I think it's difficult for us to think "outside the box" of the existing debt-based fiat currency system and picture a different way of doing things. But if it should happen that a new currency were to appear, backed by gold, the whole concept of "the price of gold" would lose its familiar meaning.

Reader Mike K. writes:

*****************************************************************

2+2=4

http://www.daily.pk/fake-gold-bars-in-bank-of-england-and-fort-knox-14477/

Hobie,

Has anyone considered that the fiends of fiat might actually -want- everyone who can to invest in gold and as heavily as possible?

Think about this Hobie.

There are untold trillions in newly printed currencies hiding out somewhere.

There is more paper owned gold than there is actual gold. That's a safe bet from the

day the first gold smith issued paper against his stash.

The world commercial gold supply is heavily salted. Tungsten.

The "price" of gold is crazy low.

The world doth strongly resist a universal digital currency.

All of the paid actors (world leaders) are hissing at each other like so many cats.

Deep, unconscious fear is the prime motivating factor on this earth.

It's a fiat fiends feast.

First you kick off the wars big time.

Next you induce hunger and shortages.

Now, domestic violence. Act like your trying to stop it but let it run hard.

Have all of the paid actors "discover" that the world gold supply is polluted. bounce it up to about sixty thousand dollars an ounce. Denounce confidence mightily. (Without snickering!)

Have the paid actors rally behind a "transparent" digi-dollar.

Bring the brew to a simmer and stir slowly until public acceptance rises to the top.

Done deal. Scraps on the table. Fumes in the tank. It's all good again.

Price the cost of a days life at one hundred bucks.

Make up a new industrial use for gold and buy it up for one hundred bucks an ounce.

Make sure the vault door is closed all the way before you start laughing hysterically.

Two plus two most probably does equal four.

Whatcha think?

Mike K.

*****************************************************************

Edited January 18, 2010 by grumpy-old-man-returns

[grumpy-old-man-returns]

If you don't hold it you don't own it

Looks like the amount of physical gold available to investors is less than we are told. If so will the price of gold fall when people realise that they are holding worthless fiat gold or will the price of the real thing rocket when people scramble to acquire the real McCoy?

ETF's

[grumpy-old-man-returns]

The Importance of Legatus

do people realise the significance of this meeting:

2010 Annual Summit

Feb. 4-6, 2010

[A.steve]

Now, Betsy, are you sure there's no reason to buy gold?

Yes.

[lowrentyieldmakessense(honest!)]

The Importance of Legatus

do people realise the significance of this meeting:

2010 Annual Summit

Feb. 4-6, 2010

dunno

some more control freaks

[grumpy-old-man-returns]

dunno

some more control freaks

google legatus vs dow.

REINHARDT'S THEORY OF LEGATUS SUMMITS AND THE STOCK MARKET

Nothing financially positive happens to a publicly traded stock following any of Legatus' events.

Accountants can lie, sorry tell an untruth, about a company's earning for decades, but the moment a decision is made and the action is taken to sell and confess, is what Legatus covers up.

That is why Monahan, the commie slayer, invented it.

Monahan hates commies so much he knows wall street has to cook the books to defeat it.

Take note of those dates of the Legatus summits..Since reading in the WSJ, Lauri's award winning Tyco/Belnick article, negative news has followed every Rome event and most local ones.

After Opus Dei came Legatus...I am looking to see what the next one might be about the time Dan Brown pens "The Legatus Code" .

What would a wise investor ask?

When was the completion date?

How much did they cost?

Market rigging is all about timing....

When the peasants figure out the timing...the king is in trouble. BIG TROUBLE!

Summary:

Markets are crashed to pay for the bridging of divides.

The money-laundering occurs just prior to the pilgrimage to Rome and the checks are written during the pilgrimage and the checks clear usually the last day, and then the negative news leaks out, (something along the lines of "insider trading on a mass scale at a major brokerage". Then they start crossing the t's and dotting the i's on Sarbannes-Oxley II.

Sox II will certainly protect the working class' nest eggs, for sure!

Edited January 18, 2010 by grumpy-old-man-returns

[grumpy-old-man-returns]

regarding Legatus meetings:

"I know they met right before 911, they met before iraq, and they met before that crash in sept....and im sure other times too."

next meeting Feb 4th-6th 2010

[nixy]

Yes.

Ah yes, the parable of the talents.

Doesn't apply today though eh?

Weren't able to print (QE) then?

liked this bit

The parable tells of a master who was leaving his home to travel, and before going gave his three servants different amounts of money. (The large unit of money is called a talent, the word not yet having the meaning of a personal aptitude to do certain things.) On returning from his travels, the master asked his servants for an account of the money given to them. The first servant reported that he was given five talents, and he had made five talents more. The master praised the servant as being good and faithful, gave him more responsibility because of his faithfulness, and invited the servant to be joyful together with him.

The second servant said that he had received two talents, and he had made two talents more. The master praised this servant in the same way as being good and faithful, giving him more responsibility and inviting the servant to be joyful together with him.

The last servant who had received one talent reported that knowing his master was a hard man, he buried his talent in the ground for safekeeping, and therefore returned the original amount to his master. The master called him a wicked and lazy servant, saying that he should have placed the money in the bank to generate interest. The master commanded that the one talent be taken away from that servant, and given to the servant with ten talents, because everyone that has much will be given more, and whoever that has a little, even the little that he has will be taken away. And the master ordered the servant to be thrown outside into the darkness where there is weeping and gnashing of teeth.

So the moral?? Go forth and borrow & spend............verily, I say unto you, for it is the right thing to do, as those who do not will be subject to the weeping & gnashing thing.

Actually the parable should be updated to include a 4th servant who bought a wide screen on his maxxed out credit card.

?

[A.steve]

Ah yes, the parable of the talents.

Doesn't apply today though eh?

Weren't able to print (QE) then?

So the moral?? Go forth and borrow & spend............verily, I say unto you, for it is the right thing to do, as those who do not will be subject to the weeping & gnashing thing.

Actually the parable should be updated to include a 4th servant who bought a wide screen on his maxxed out credit card?

As with all scripture and theology, the devil (if you pardon the pun) is in the interpretation. My view is that these time-tested stories grasp issues that are the essence of being human. I think they need to be read in the context of the social environment at the time - so, for example, we should not focus on revulsion at the practice of servitude - but rather on the three behaviours of motivated investors.

QE is a manipulation of debt - I see no reason to assume that QE could not have been practised ~2000 years ago. It is definitely not relevant to the parable, in my view. Similarly, the parable makes no mention of leverage - so I am inclined to think this is not relevant to its message. With respect to your proposed fourth servant, I think you overlooked the relevant detail that all in the parable were motivated investors... there are endless ways to fritter wealth away - but are not relevant.

The moral, in my view - is that one must engage productively and make active use of the assets you have - lest their value leaches away. The point about burying gold is that it generates no value for anyone... hence, it is not a store of value. Value is not a static tangible concept - and that's why you can't hide value away and hope to retain it for another day.

[grumpy-old-man-returns]

Coming proof that Gold will be officially Money once again.....soon?

we have discussed this a few times before. (or Silver, although this link/video states Gold)

There is a nice video on that link (although mainly audio)

Gold - China's End Game ?

(my bold)

"China...

A riddle wrapped in a mystery wrapped in an enigma?

Not really, especially if you know your history.

Fact #1: China knows all about the long term instability of make believe money - after all they invented it and have more experience with it than anyone else. (They called it "fly away" money.)

Fact #2: China is the longest continuously running culture on the planet. Its historical memory is calculated in the thousands of years.

Fact #3: No county suffered more profoundly in the last 100 years than China. Weakened by corruption, it was for all practical purposed torn limb from limb by the Japanese during WW II. The Nazis in Europe were timid gentlemen by comparison.

In China, you have the combination of an incredibly sophisticated culture, with a long memory, that has recently been horrifically traumatized.

Anyone who thinks China is just hacking around without a plan is either ignorant or just stupid (i.e. the entire US news media and political structure.)

China is ENCOURAGING its citizens to buy gold. The government is even producing educational television programs on the subject.

Do you think they're doing that because they can't think of anything else to do with their free time? "

[IRULETHEWORLD]

competing currencies

muhahahahah

link

Dubai Proposes Gold Coins As Legal Tender In The UAE

The Dubai Multi Commodities Centre has proposed that the UAE Central Bank issue gold coins that will be legal currency for the first time in the modern history of the Middle East.

In September 2007 the DMCC minted the first ever UAE commemorative gold coin featuring the Ruler of Dubai Sheikh Mohammed bin Rashid Al Maktoum (see above). The proposed design for the new currency has the President of the UAE, His Highness Sheikh Khalifa bin Zayed on one side and the world’s tallest building, the Burj Khalifa on the obverse.

The new coins would join the ranks of other gold coins that are legal tender such as the Australian Nugget, British Sovereign and South African Krugerand that are already popular with investors in gold in the UAE.

DMCC executive chairman Ahmad bin Sulayem said: ‘We are confident that this design represents the face of the modern UAE. This is a great time to launch a reliable, easily transacted legal tender gold coin, since the level of interest in gold investment is the highest it has ever been globally.’

[IRULETHEWORLD]

we need to increase the rate of theft

link

The International Monetary Fund's top economist, Olivier Blanchard, says central bankers should consider aiming for a higher inflation rate than they do currently to lessen the chances of repeating the recent severe recession.

Mr. Blanchard, a macroeconomist on leave from the Massachusetts Institute of Technology, said the global economic downturn revealed flaws in macroeconomic policy, especially the reliance primarily on interest rates to manage economies. Although Japan had fallen into a decade-long funk despite low inflation and low interest rates, "most people convinced themselves that the Japanese didn't know what they were doing," Mr. Blanchard said in an interview.

In a new paper with two other IMF economists, Giovanni Dell'Ariccia and Paolo Mauro, Mr. Blanchard says policy makers need to consider radically different approaches to deal with major banking crises, pandemics or terrorist attacks.

In particular, the IMF paper suggests shooting for a higher-level inflation in "normal time in order to increase the room for monetary policy to react to such shocks." Central banks may want to target 4% inflation, rather than the 2% target that most central banks now try to achieve, the IMF paper says.

At a 4% inflation rate, Mr. Blanchard says, short-term interest rates in placid economies likely would be around 6% to 7%, giving central bankers far more room to cut rates before they get near zero, after which it is nearly impossible to cut short-term rates further.

[lowrentyieldmakessense(honest!)]

purchased a few yesterday

link

can I get onto Newsnight now