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Interesting, thanks for the link.

Mods,

gold is now probably a key economic factor to watch in this crisis.

As steps have been taken by governments to make false markets in just about every asset (stocks, houses, bonds, etc.) by making money free, restricting supply and having outright purchases made by various public authorities, the pressures resulting from excess debt are now moving onto currencies.

The nature of the crisis is changing and the thing to watch now is capital flight, whether into strong currencies (are there any left?) or into tangibles. As far as I can tell capital flight or the threat of it is the only thing that will stop Western Governments from reinflating/devaluing willy nilly through QE and other similar moves back to 2007 levels. I personally think that such phase is inevitable.

A lot of people, some very well informed, think gold is currency/money and even though I and others may disagree they may be right! So that makes gold an important factor to keep an eye on and discuss when it makes big moves.

I went to ticker forum today to see whether they were discussing the recent big moves, and since Mr Denninger will bash anyone discussing gold, all forum members dutifully kept quiet about it so as not to antagonise their Ducce. There was not a single reference to it even though the extent and timing of the recent moves are intriguing to say the least. It's the forum's loss.

If the goldbugs here can restrain their enthusiasm and not bore the rest of us to death with constant braggging and irritating 'I-told-you-so's, could you be more flexible re. gold and let gold topics stay on the main board when market or political news justify it?

Thanks for reading.

W

Edited by williamdb

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:)

Why is it I suddenly feel rather silly?

No idea. You shouldn't do for wanting to discuss gold on a forum entitled "House prices and the economy". Gold is as relevant as the USD, GBP, CDO< NWO and every other TLA I can think of.... night nights!

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No idea. You shouldn't do for wanting to discuss gold on a forum entitled "House prices and the economy". Gold is as relevant as the USD, GBP, CDO< NWO and every other TLA I can think of.... night nights!

TLA ?!? :unsure:

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Interesting, thanks for the link.

Mods,

gold is now probably a key economic factor to watch in this crisis.

As steps have been taken by governments to make false markets in just about every asset (stocks, houses, bonds, etc.) by making money free, restricting supply and having outright purchases made by various public authorities, the pressures resulting from excess debt are now moving onto currencies.

The nature of the crisis is changing and the thing to watch now is capital flight, whether into strong currencies (are there any left?) or into tangibles. As far as I can tell capital flight or the threat of it is the only thing that will stop Western Governments from reinflating/devaluing willy nilly through QE and other similar moves back to 2007 levels. I personally think that such phase is inevitable.

A lot of people, some very well informed, think gold is currency/money and even though I and others may disagree they may be right! So that makes gold an important factor to keep an eye on and discuss when it makes big moves.

I went to ticker forum today to see whether they were discussing the recent big moves, and since Mr Denninger will bash anyone discussing gold, all forum members dutifully kept quiet about it so as not to antagonise their Ducce. There was not a single reference to it even though the extent and timing of the recent moves are intriguing to say the least. It's the forum's loss.

If the goldbugs here can restrain their enthusiasm and not bore the rest of us to death with constant braggging and irritating 'I-told-you-so's, could you be more flexible re. gold and let gold topics stay on the main board when market or political news justify it?

Thanks for reading.

W

+1, the gold threads were always interesting.

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Interesting, thanks for the link.

Mods,

gold is now probably a key economic factor to watch in this crisis.

As steps have been taken by governments to make false markets in just about every asset (stocks, houses, bonds, etc.) by making money free, restricting supply and having outright purchases made by various public authorities, the pressures resulting from excess debt are now moving onto currencies.

The nature of the crisis is changing and the thing to watch now is capital flight, whether into strong currencies (are there any left?) or into tangibles. As far as I can tell capital flight or the threat of it is the only thing that will stop Western Governments from reinflating/devaluing willy nilly through QE and other similar moves back to 2007 levels. I personally think that such phase is inevitable.

A lot of people, some very well informed, think gold is currency/money and even though I and others may disagree they may be right! So that makes gold an important factor to keep an eye on and discuss when it makes big moves.

I went to ticker forum today to see whether they were discussing the recent big moves, and since Mr Denninger will bash anyone discussing gold, all forum members dutifully kept quiet about it so as not to antagonise their Ducce. There was not a single reference to it even though the extent and timing of the recent moves are intriguing to say the least. It's the forum's loss.

If the goldbugs here can restrain their enthusiasm and not bore the rest of us to death with constant braggging and irritating 'I-told-you-so's, could you be more flexible re. gold and let gold topics stay on the main board when market or political news justify it?

Thanks for reading.

W

+1

I enjoyed it when there was a gold / mods truce, with having just one ("THE") gold thread on the main board.

Can we at least keep one on here...?

At least it will keep all the gold discussion on the main board tidy and in one place. And it will give the mods a lot less work trying to police it all the time....

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maybe us gold bugs are upsetting the STR as they can see the problom with QE devaluing paper money.

anyone that thinks that printing money will force gold/silver down are wrong and lets face it they are printing a lot of money.

what will see gold down is any recovery for a period of time but the presure of QE will ensure it returns to an upward trend in the long run. me i'm going to buy more if it dips because sooner or later the house of cards is going to tumble down and if you don't think that is possible then do look back to last september.

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maybe us gold bugs are upsetting the STR as they can see the problom with QE devaluing paper money.

I have always believed that it was just too simple to wait it out with STR or FTB funds sitting in a bank/building society account until the day the housing market bottomed out.

The free lunch is not going to be handed out on a plate.

Edited by Take Me Back To London!

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Topic moved in 5, 4, 3....

... 2, 1, Moved! :lol:

Not today Josephine.

Edited by williamdb

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i liked your earlier assessment of the non-goldbug's interest in gold.

these two links may be of interest:

http://www.zerohedge.com/article/gold-and-systemic-crisis

http://mises.org/media.aspx?action=category&ID=92

Yes I read the ZH article and was surprised by the TFH tone.

But I can't find myself to agree with the 'gold-as-money' paradigm. I agree that gold was money in the past, by convention and for a very long time. But that it was used as currency in the past doesn't make it so now.

And I don't see any new convention that would bring gold back as currency. Governments would have to be desperate to agree to such a loss of monetary control. The wishy washy move towards SDRs confirms it. Fiat based on fiat ... ugh.

The only way might come back is if everything went down the dustbin, to a point were politicians would agree to a loss of monetary control all over the world. I'm quite certain we're not there yet.

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Yes I read the ZH article and was surprised by the TFH tone.

But I can't find myself to agree with the 'gold-as-money' paradigm. I agree that gold was money in the past, by convention and for a very long time. But that it was used as currency in the past doesn't make it so now.

And I don't see any new convention that would bring gold back as currency. Governments would have to be desperate to agree to such a loss of monetary control. The wishy washy move towards SDRs confirms it. Fiat based on fiat ... ugh.

The only way might come back is if everything went down the dustbin, to a point were politicians would agree to a loss of monetary control all over the world. I'm quite certain we're not there yet.

I agree that gold will most probably not be brought back as a currency, but I think of gold as a nations 'unofficial currency' reserve.

If this were not the case why do the worlds central banks continue to hold it (and accumulate it e.g. China*) and why do many other cultures such as hindus, muslims, sikhs accumulate it as a form of 'saving'. Also, given it's (+ silver) role as money for the last 5000 years and the relatively recent (1971) final cut from the money system, who are we to say it is not money?

interesting times and all that.....

*i appreciate you may not buy into this and agree that china probably does have some alternative agenda, however, why tell your people to accumulate it if you were not serious?

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why do many other cultures such as hindus, muslims, sikhs accumulate it as a form of 'saving'.

These cultures have no provision of public welfare. When you are old it is expected that your children will take care of you and inherit your gold. Should the child default on this obligation then the gold is used to buy these services. The Indians are not buying jewellery because they are a particularly vain people, they do so for security.

Take a step back and look at the big picture. All wealth is transferred from one generation to the next via death. The young work and save and in turn transfer that wealth to the new young. There is no alternative to the young caring for the old. What has changed recently is the old living longer interrupting the flow of wealth. This has prevented the young from saving. Instead the old seek to hang on to their wealth. They seek to impose heavy income tax on the young thus paying the young with their own labour. The other strategy we are seeing is immigration, another device to avoid paying the young their dues by importing more young to lower wages.

The problem with most other savings vehicles is that they are dependent on promises. You cannot guarantee that paying into the state system all your life will give you a pension. The state can change the rules at any time. Likewise private pension funds can be mis-invested or stolen by executives. Savings pools can be inflated away. A pile of gold is immune to all of this. Thus it should be considered a conservative part of a portfolio. Should war negate your bonds and the companies go bust, you still have a pile of gold hidden away, nobody can touch it.

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These cultures have no provision of public welfare. When you are old it is expected that your children will take care of you and inherit your gold. Should the child default on this obligation then the gold is used to buy these services. The Indians are not buying jewellery because they are a particularly vain people, they do so for security.

Take a step back and look at the big picture. All wealth is transferred from one generation to the next via death. The young work and save and in turn transfer that wealth to the new young. There is no alternative to the young caring for the old. What has changed recently is the old living longer interrupting the flow of wealth. This has prevented the young from saving. Instead the old seek to hang on to their wealth. They seek to impose heavy income tax on the young thus paying the young with their own labour. The other strategy we are seeing is immigration, another device to avoid paying the young their dues by importing more young to lower wages.

The problem with most other savings vehicles is that they are dependent on promises. You cannot guarantee that paying into the state system all your life will give you a pension. The state can change the rules at any time. Likewise private pension funds can be mis-invested or stolen by executives. Savings pools can be inflated away. A pile of gold is immune to all of this. Thus it should be considered a conservative part of a portfolio. Should war negate your bonds and the companies go bust, you still have a pile of gold hidden away, nobody can touch it.

Good analysis

Not only do I expect my children to default on their obligation to literally look after me (they will, after all be appointing and paying others to do so by paying tax) but I expect the state to default too. Hence I will hold some wealth as gold and make my own arrangements just as the Indians do. Think of Britain as a Third World Country and you won't get any nasty surprises.

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I agree that gold will most probably not be brought back as a currency, but I think of gold as a nations 'unofficial currency' reserve.

In this day and age I don't see how you can have an 'unofficial' currency? Either it is accepted as a means of exchange or it is not?

If this were not the case why do the worlds central banks continue to hold it (and accumulate it e.g. China*) and why do many other cultures such as hindus, muslims, sikhs accumulate it as a form of 'saving'.

Central banks stopped selling gold because starting 2002 gold started to rise and became an investment as good as any other? The cultural angle is interesting, and someone else's post re. lack of trust in governments and need for tangible wealth sounds like the most plausible and interesting explanation to me.

Also, given it's (+ silver) role as money for the last 5000 years and the relatively recent (1971) final cut from the money system,

I don't think what happened in the past should have a bearing on what happens in the future. I am not trying to be antagonising but the following point is relevant: sea shells were used as currency/money a long time ago, probably for thousands of years. No-one would ever think of using sea shells again despite this, and I don't see why gold should have any greater claim to being money, based on that same argument.

Gold would be more practical than most other tangible assets without doubt, but there is nothing inherent to this particular metal that should give it de facto money status as far as I can see.

Also, given it's (+ silver) role as who are we to say it is not money?

Ah! Because we decide. Money is defined by convention, our ancestors have no say in what we do now.

*i appreciate you may not buy into this and agree that china probably does have some alternative agenda, however, why tell your people to accumulate it if you were not serious?

Tricky, my guess is as good as anyone's. To me a gold bubble would be ideal as gold is virtually useless to society or the economy. A bubble in any other tangible asset that is traded would have a negative impact on food prices or industrial production costs.

If I was at the head of a nation of compulsive gamblers with big savings and I had an urgent strategic need to accumulate tangible assets, I would try to get my people to speculate with something harmless while I take care of the national interest.

In my experience the chinese are not stupid, and ramping up a market before they buy is not something they would do. Not without good reason.

Edited by williamdb

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Central banks stopped selling gold because starting 2002 gold started to rise and became an investment as good as any other? The cultural angle is interesting, and someone else's post re. lack of trust in governments and need for tangible wealth sounds like the most plausible and interesting explanation to me.

I just don't believe that central banks view gold as an 'investment' per se; CBs are holding gold because try as they might, we still are not living in a fiat currency utopia where there is absolutely no need to hold a dense inert metal that is found sparingly in the earths crust. Gold is an insurance for the CBs because the inherent risk of free floating currencies all competing against each other (and all tied to nothing tangible except the confidence in the host country*) is that they (individual currencies) will fail, which brings me to my next point....

I don't think what happened in the past should have a bearing on what happens in the future. I am not trying to be antagonising but the following point is relevant: sea shells were used as currency/money a long time ago, probably for thousands of years. No-one would ever think of using sea shells again despite this, and I don't see why gold should have any greater claim to being money, based on that same argument.

Gold would be more practical than most other tangible assets without doubt, but there is nothing inherent to this particular metal that should give it de facto money status as far as I can see.

I posted the link to the audio version of Rothbard's 'What has the Govt. done to our money?' because it details the historical demise of gold (and silver) as money. This is very important, now I'm sure (having read many of your posts) that there is nothing 'new' in there for you. However, the simplicity of the book is it's success. Man chose gold and silver as currencies over a 5000 year period; he could have chosen shells, or tally sticks, or iron etc., but he settled with gold and silver. In the modern era, complications arose with bi-metallism, but by the time a simple solution could have been found (an adjustable / reviewed valuation to each other), the manipulation of gold by powerful men as the sole currency (i.e. Bryant's cross of gold) dictated that silver was no longer money.

These same powerful men (this is not a nwo rant! just fact concerning US history and modern Govt.s) have now (successively last century) decreed that gold is no longer money. The important point here is that it was a small collective of powerful men (Govt.s) and not the people, hence it was not the people who decided against using gold and silver.

Now, I appreciate you can state that the people vote for the Govt.s etc., but a reading of modern American history is full of examples where the original intentions of the constitution have been distorted for the benefit of the wealthy powerful few.

fwiw, I am far more of a silver-bug then gold-bug, indeed i wouldn't really consider myself the latter. However, I do think the modern fiat money system is failing (inflation etc) over time and that a more honest system which cannot be corrupted by the few vested interests that comprise Govt. to the detriment of the common man is long overdue.

*FDR's devaluation of the USD vs. Gold springs to mind here

edit - substitute fed for US Govt. as applicable

Edited by p.p.

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I just don't believe that central banks view gold as an 'investment' per se; CBs are holding gold because try as they might, we still are not living in a fiat currency utopia where there is absolutely no need to hold a dense inert metal that is found sparingly in the earths crust. Gold is an insurance for the CBs because the inherent risk of free floating currencies all competing against each other (and all tied to nothing tangible except the confidence in the host country*) is that they (individual currencies) will fail, which brings me to my next point....

I was trying to find an answer to your question but the truth is, I don't know.

I posted the link to the audio version of Rothbard's 'What has the Govt. done to our money?' because it details the historical demise of gold (and silver) as money. This is very important, now I'm sure (having read many of your posts) that there is nothing 'new' in there for you. However, the simplicity of the book is it's success.

:) I'm listening to them now.

These same powerful men (this is not a nwo rant! just fact concerning US history and modern Govt.s) have now (successively last century) decreed that gold is no longer money. The important point here is that it was a small collective of powerful men (Govt.s) and not the people, hence it was not the people who decided against using gold and silver.

Now, I appreciate you can state that the people vote for the Govt.s etc., but a reading of modern American history is full of examples where the original intentions of the constitution have been distorted for the benefit of the wealthy powerful few.

Fair enough. When I wrote 'We decide', I meant the people in power today, not 'we the people'. Fact of life.

fwiw, I am far more of a silver-bug then gold-bug, indeed i wouldn't really consider myself the latter.

I know nothing about silver but wish I knew more; this business of massive shorts at comex is disturbing if anything. One thing I note is that silver would bring an answer to the criticism often made that gold can't be used as currency because there isn't enough of it around.

However, I do think the modern fiat money system is failing (inflation etc) over time and that a more honest system which cannot be corrupted by the few vested interests that comprise Govt. to the detriment of the common man is long overdue.

I couldn't agree more with the above. But the power derived from fiat by those privileged few is such that I don't think they would ever relinquish it unless forced to. And it doesn't look like we've reached that stage yet does it? The revival of gravity defying bank bonuses indicates they don't feel threatened yet.

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