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Alan B'Stard MP

A Thing That Is Unobtainable At Any Price Has A Value Of Zero

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Had to share this in case any yellow-belly misses it. Deninnger is an **** but you have to admire his critiques and reasonings.

My particular favourites:

"A thing that is unobtainable at any price has a value of zero"

"The finer points of speech, specifically credibility, seems lost on those who write under a nom-de-plume"

"Metals discussions tend to be filled with invective and unproven religious diatribes on a regular basis"

"I consider parabolic asset price moves to be hyperinflation. You seem to conflate that with a second term"

"From this comment I would surmise you're in your 20s - you have to be, since you clearly don't recognize the rise in the price of all sorts of necessary 'stuffs' for everyday living. "

"...you omitted Lincoln's greenbacks, although those didn't fit YOUR definition of a currency collapse"

"You can no more provide evidence that "gold is the only real money" any more than I can prove there is a Christian God"

"Have you ever noticed that all those who make such claims and actually put dates on them wind up committing suicide when their prediction fails to materialize as expected?" :lol:

"If we collapse the rest of the world will go down with us, and in most of those nations you will be considered FOOD."

and my particular favourite

"See, there's the problem with the premise of holding Gold as a "hedge" against this sort of outcome. Government - especially our government - has a history of stealing it."

Here we go again, with yet another unarmed assault:

(Incidentally, the first rule of linking someone somewhere is that you actually have to make sure that the web address you link to works. My billing rate is $300/hour if "Gordon" is incapable of managing to get his blog to work on his own, as the link on Zerohedge, along with the links on his site themselves, all say "go here" but when you do you go back where you started... but I digress.)

OK, here we go.

I hope that this response will dispel some of the myths and misinformation surrounding hyperinflation, Gold and our paper money system.

I doubt it. What's more likely is that you're going to introduce yet more claims without evidence, project false light and render unsupported (and unsupportable) claims that require one take their belief as an article of faith.

It appears that Mr. Denninger has an issue with anonymity, perhaps being irritated at not getting the opportunity to engage in ad hominem attacks, as is his custom

Oh no, my issue is quite simple: Nobody snivels in the corner unless there's a conflict of interest - or an outright lie - that might be concealed.

You have the perfect right to speak anonymously, if you can find anyone who will listen. But there's a difference between a right to speak and a right to demand others pay attention to you. The latter comes only with some modicum of integrity, and that can only be shown when one has a reasonable means to discover what sort of conflicts you might have in your speech.

The finer points of speech, specifically credibility, seems lost on those who write under a nom-de-plume. You're certainly entitled to do it, as is Zerohedge, and I, along with the rest of the readers, are perfectly entitled to conclude that the reason you're hiding is that there's something embarrassing that would be learned along with your identity.

Perhaps you're a gold dealer. Perhaps you're a central banker. Or perhaps you're a 12 year old kid posting what one of the Rothchilds' gave you?

Do words stand on their own? Perhaps. You're free to deny people the knowledge of your identity, but wise people consider that those who do so usually have a reason to hide.

The fact of the matter is that people care more for the ideas expressed rather than who is expressing them. Are you afraid to contest on the strength of ideas and facts alone, Mr. Denninger?

They do eh? So whether it was Henry Paulson that advocated for removal of the leverage limits, as just one example, wouldn't matter? Hmmmm... I think not.

Just because you have a specific forum for the “metals” does not mean that you promote an open discussion regarding them or do not ban people who dare to have ideas different than yours.

Time, place and manner. Certainly even you recognize that even a government may restrain speech on that basis. A library does so, even a private library. It's called "The Dewey Decimal System." If you insist on placing your fictional work in the 500s, you will be denied. If you insist on shelving it there repeatedly you will be removed.

Although Karl has a subforum for metals, that does NOT change the fact that he created it precisely so that he could force "gold bugs" into his little gold ghetto,

Oh, it's a "ghetto" eh?

As previously noted, I'm sure your fantastic Novel would, in your opinion, fit well in the 500 section of the library.

The librarian disagrees, of course, and guess what - the librarian is the one who put forward the rules and expects them to be followed.

I am no different in this regard.

Metals discussions tend to be filled with invective and unproven religious diatribes on a regular basis - especially by the metalheads. Therefore, I created a specific place for them so as to keep organization cogent. You don't like it, don't post on Tickerforum. If you insist on filing your posts in the wrong place you'll find you can't file (or read) posts at all.

Well, what is it Karl? Did the hyperinflation occur or not? Of course, it would help if you actually knew what hyperinflation is which clearly you don’t, or perhaps you deliberately choose to define terms according to your convenience.

Oh I do eh?

Well, your definition is certainly different than mine. I consider parabolic asset price moves to be hyperinflation. You seem to conflate that with a second term, which we'll get to momentarily.

Seriously, I mean that has to be the first “hyperinflation” in history where only two asset classes rose. Not only that, these were financial assets (or investments) and they rose much higher than the commodities and goods needed for everyday living.

Only two eh? Hmmm.... and commodities needed for everyday living? How old are you? From this comment I would surmise you're in your 20s - you have to be, since you clearly don't recognize the rise in the price of all sorts of necessary "stuffs" for everyday living.

Never mind the debt-curve, which shows exactly what I'm talking about:

Looks pretty "hyper" to me. But heh, I'm just looking at the facts. Funny things, those damn exponents.

There is a phase transition that occurs going from simple inflation to hyperinflation, namely, a “crisis of confidence” which eventually renders the currency worthless. In a hyperinflation we are not dealing with linear functions anymore, but exponential ones.

Oh, that chart above is not an exponential curve? Well fancy me, now Gordon's attempting to redefine basic mathematics!

Now I’m not going to go into a detailed explanation of how and why a hyperinflation occurs, in general, and why it will occur in the US....

WILL eh?

OK, WHEN?

Again, all the bleating in the world does not an actionable prediction make without time as one of the elements.

So I'll ask a second time - WHEN?

Jim Sinclair made the mistake of putting forward his "when", and that wasn't for "hyperinflation" as defined by you (e.g. a loss of confidence in all other than gold), it was for a mere 50% increase in valuation over 2 years. I've seen short squeezes do that to a stock in an hour. But even so, it looks like there's a pretty good chance he's gonna lose that "bet" anyway.

This results in not only a high inflation rate, but an exponentially increasing one

All growth rates over time are exponential. Go back to math class - in grade school. You failed the first time.

And to give an example as to what kind of inflation to expect during a “currency collapse” a.k.a. hyperinflation, here are inflation rates from some of the worst hyperinflations in history (via Wikipedia):

Uh huh. How many of those were due to external debt? How many came on the back of a war? (Oh, and you omitted Lincoln's greenbacks, although those didn't fit YOUR definition of a currency collapse. Nonetheless, anyone who held them for more than a day sure felt they were in one.)

Is that what happened in the United States in the 20 year period that Mr. Denninger is referring to? No. But it sure as hell IS what’s in store.

Prove it.

And what is the best “real good” to hold in a hyperinflation? The one which is the “most marketable”3 of them all - Gold! – which unfortunately won’t be available for sale anymore then.

A thing that is unobtainable at any price has a value of zero. That's the paradox. If you're right you need guns, ammunition and the ability to produce your own food and drinkable water. The gold will be a good doorstop, and the guy with more guns than you (and there always is someone who does) will soon have both the guns and gold.

only if you don’t know (or refuse to accept) the fact that Gold is the only real money there is – a fact people quickly come to realize when the fire of hyperinflation starts burning.

Yet more conjecture and bald claims without evidence, expected to be accepted at face.

This sort of cult behavior, incidentally, is why there's a Metals forum and all discussions of this religious belief take place there on my system. Religious cultism bears no resemblance to rational behavior. You can no more provide evidence that "gold is the only real money" any more than I can prove there is a Christian God. Both are articles of faith and those who run them demand fealty - or you are called all sorts of names.

When challenged for evidence the claimant simply repeats the charge.

When asked to quantify his predictions with dates so they become actionable, the claimant responds "soon", just as does the nutcase on the corner with the sandwich board proclaiming "Jesus is returning soon - repent NOW or burn in Hell!"

Have you ever noticed that all those who make such claims and actually put dates on them wind up committing suicide when their prediction fails to materialize as expected? The wise ones sucker people along by refusing to provide a date.

That's convenient.

We've already had two spectacular rises followed by two equally spectacular crashes (2000 and 2008) followed by another spectacular rise in 2009 – how many people were able to successfully trade around that?

....continued at link

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why would gold ever be unobtainable , plenty of people have gold jewellery

does this also apply to silver then?

Two weeks food - then no one in the locale has any money. All money flows to the producers - and they extract all the value.

Gold is only useful for the quick get away - across the border to greener grass. There will be no greener grass to run to.

It's completely useless as money in the transition and if you are staying in your locale - should TSHTF - and you are the consumer.

Edited by Alan B'Stard MP

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I didn't read that long post at the top, but I suspect he is rightly pointing out that if something ceases to be exchanged (because its nominal price is too high) then it has zero value.

Physical gold hoarders should bear this in mind.

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The two key points I take away from this:

1. If you are gold holder - an owner of "financial capital" you are a delayed consumer - expecting to trade for real world capital. If armageddon ensues you will not get the value from your gold - compared to the price you paid pre-armageddon.

2. If you are gold holder - an owner of "financial capital" you are a delayed consumer - expecting to trade for real world capital. If armageddon doesn't ensue your financial affairs would be best served elsewhere in production of real world capital - or nominal cash.

Basically, gold is either poor or very poor.

Of course acquiring gold post armageddon may be a different matter. Not sure many gold bugs have factored this into their thinking.

Edited by Alan B'Stard MP

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Two weeks food - then no one in the locale has any money. All money flows to the producers - and they extract all the value.

Gold is only useful for the quick get away - across the border to greener grass. There will be no greener grass to run to.

It's completely useless as money in the transition and if you are staying in your locale - should TSHTF - and you are the consumer.

The article seems to be discussing a potential hyperinflation -- the point of holding gold at such a time isn't to provide spending money, it's to come out the other side with something left.

The real trick is to be a producer though. Not to garner other peoples' money, which would be valueless, but to have some wealth to use/trade.

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The article seems to be discussing a potential hyperinflation -- the point of holding gold at such a time isn't to provide spending money, it's to come out the other side with something left.

I understand that. In a vanilla hyperinflation that would be true.

But people are talking about a global event.

I don't think the argument carries water.

If you acquire the same weight of gold post event - then yes you are fine.

Pre-event: you have wasted a lot of value.

Edited by Alan B'Stard MP

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I have to disagree with Karl Denninger on this one.

I remember coming across this problem with a computer system. It was due to a price of zero.

You had to account, both for a price of zero (free), and a value of price not set. Which means there isnt a price so it cant be traded.

If there is no trade, then the price is simply not known. It isnt zero or free, it is just 'not known'. The two are different. Karl doesnt seem to have grasped this.

I agree with a lot of stuff he says about gold though. There are a lot of gold nuts out there, starting to get like the house prices go up for ever nuts. The latter group were proved right for a very long time, and sad to say, are being proved right still in the UK.

£830 for an ounce of gold, sheesh, that is a lot of money.

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I have to disagree with Karl Denninger on this one.

I remember coming across this problem with a computer system. It was due to a price of zero.

You had to account, both for a price of zero (free), and a value of price not set. Which means there isnt a price so it cant be traded.

If there is no trade, then the price is simply not known. It isnt zero or free, it is just 'not known'. The two are different. Karl doesnt seem to have grasped this.

I agree with a lot of stuff he says about gold though. There are a lot of gold nuts out there, starting to get like the house prices go up for ever nuts. The latter group were proved right for a very long time, and sad to say, are being proved right still in the UK.

£830 for an ounce of gold, sheesh, that is a lot of money.

My understanding of "A thing that is unobtainable at any price has a value of zero" is merely that something that is too expensive simply cannot function as money. If this 'thing' is also completely useless - then it is doubly screwed.

Gold is a great candidate for money because it falls within certain parameters. Uranium wouldn't fall in these parameters - and will never be mistaken for capital (unlike gold!).

If gold is too expensive - its useless simply because you cant cut it fine enough.

If you earned your gold in the good old days - My, how much that apple costs !

Edited by Alan B'Stard MP

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I didn't read that long post at the top, but I suspect he is rightly pointing out that if something ceases to be exchanged (because its nominal price is too high) then it has zero value.

Physical gold hoarders should bear this in mind.

I agree, what good is gold, unless you are paid in it, and can be spent it in the shops.....when it is gone it is gone...if it becomes beyond the reach of the majority to exchange people will find other things to bargain with like fuel,food and water...far more important for survival imo. ;)

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A thing that is unobtainable at any price has a value of zero"

It has more chance of retaining a value once the dust settles and a new currency is formed than a stack of euros/pounds/dollars

"If we collapse the rest of the world will go down with us, and in most of those nations you will be considered FOOD."

Nonsense. Is this guy senile?

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Two weeks food - then no one in the locale has any money. All money flows to the producers - and they extract all the value.

Gold is only useful for the quick get away - across the border to greener grass. There will be no greener grass to run to.

It's completely useless as money in the transition and if you are staying in your locale - should TSHTF - and you are the consumer.

Denniger is spot on about the metals.

Gold, if it has any use at all* is for when someone a lot better than a goldbug has sorted everything out so that trade can work again.

* I think it does, fwiw.

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It has more chance of retaining a value once the dust settles and a new currency is formed than a stack of euros/pounds/dollars

You think?

Same amount of gold chasing less goods?

I think not.

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My understanding of "A thing that is unobtainable at any price has a value of zero" is merely that something that is too expensive simply cannot function as money. If this 'thing' is also completely useless - then it is doubly screwed.

Gold is a great candidate for money because it falls within certain parameters. Uranium wouldn't fall in these parameters - and will never be mistaken for capital (unlike gold!).

If gold is too expensive - its useless simply because you cant cut it fine enough.

If you earned your gold in the good old days - My, how much that apple costs !

When me and Alan are agreeing you know something is up.

Gold only works as a fiat money, to keep the banksters in check, but only in check as far as a Napoleon is concerned. ******ing useless system for most of us.

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Denniger is spot on about the metals.

Gold, if it has any use at all* is for when someone a lot better than a goldbug has sorted everything out so that trade can work again.

* I think it does, fwiw.

So you agree that gold only holds its value post event not pre-event (given that this is likely global and there is no "swiss" border)?

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So you agree that gold only holds its value post event not pre-event (given that this is likely global and there is no "swiss" border)?

Have you seen that video of some goldbug shithead offering gold to people in the street?

Pure comedy gold.

Gold will have a place, eventually but tinfoilers need to stop believing in their special magic beans. It's sad.

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Have you seen that video of some goldbug shithead offering gold to people in the street?

Pure comedy gold.

Gold will have a place, eventually but tinfoilers need to stop believing in their special magic beans. It's sad.

It will - and they are.

I think the latter have security issues - but it would over stepping the mark on a public forum to say so.

Edited by Alan B'Stard MP

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It will - and they do.

I think the latter have security issues - but it would over stepping the mark on a public forum to say so.

They have ended their relationship with the content of old belief, but not the process. They still believe.

No cure, that.

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Two weeks food - then no one in the locale has any money. All money flows to the producers - and they extract all the value.

Gold is only useful for the quick get away - across the border to greener grass. There will be no greener grass to run to.

It's completely useless as money in the transition and if you are staying in your locale - should TSHTF - and you are the consumer.

agree 100%, gold is for the quick getaway and is probably next to useless in the transition, although it was accepted in argentinian and zim black markets, what people never understand is that gold is really seed money. It is there as a preservation of wealth to start again on the other side when the worst is over. Ofcourse, if you have no wealth and arent prepared then a few ounces is useless to you, it has to be kept for once the worst is over.

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I didn't say it's current value, I said a value.

Of course.

My company shares in Farms Inc. will have a value too.

My tin of beans too.

I also suspect these will be worth in ratio more that your element 79 - completely useless as it is.

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A thing that is unobtainable at any price has a price of infinity

Isn't that more accurate?

Only if there is natural demand.

For gold?

None.

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Of course.

My company shares in Farms Inc. will have a value too.

My tin of beans too.

I also suspect these will be worth in ratio more that your element 79 - completely useless as it is.

I think you are wrong on that one.

I think there is enough insanely irrational sentiment to make gold a good buy, still for a while yet.

Just for the love of christ don't fall for it yourself.

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If something is too expensive it is traded in a smaller amount, smaller flats, smaller houses, smaller coins, smaller cars, smaller mars bars. If your gold bar is too expensive to sell you sell smaller gold bars and your richer. Im not a gold bug and IMHO hold is over priced but something becoming worthless when it is too expensive is BS...

Edited by AteMoose

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