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LuckyOne

And So It Begins .....

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Even the IMF are jumping onto the idea that money is being debased by QE and that trade imbalances are causing massive valuation difficulties.

I read this as an explicit criticism of central bankers, currency manipulation and trade and financing imbalances.

http://www.telegraph.co.uk/finance/personalfinance/investing/gold/8117300/Bring-back-the-gold-standard-says-World-Bank-chief.html

Ahead of a Group of 20 summit this week in Seoul, Mr Zoellick said an updated gold standard could help retool the world economy at a time of serious tensions over currencies and US monetary policy.

He said the world needed a new regime to succeed the "Bretton Woods II" system of floating currencies, which has been in place since the fixed-rate currency system linked to gold broke down in 1971.

The new system "is likely to need to involve the dollar, the euro, the yen, the pound and a renminbi (Chinese yuan) that moves towards internationalisation and then an open capital account", he wrote in the Financial Times.

"The system should also consider employing gold as an international reference point of market expectations about inflation, deflation and future currency values," Mr Zoellick said in a commentary piece.

"Although textbooks may view gold as the old money, markets are using gold as an alternative monetary asset today."

The original Bretton Woods agreement laid out a US-led framework for stability in the world financial system after the Second World War, with the dollar pegged to gold and controls in place to limit the flow of capital.

The gold standard is believed to help guard against inflation, but does not allow for the flexible monetary policy that many economists believe is essential in counteracting economic shocks.

It was abandoned by US president Richard Nixon in 1971 as the dollar's value plummeted relative to gold. Today, gold prices are again riding as investors seek a timeless hedge against the risks of inflation and US indebtedness.

Mr Zoellick acknowledged that forging a new monetary agreement to govern the world economy would take time, two years after the West's worst financial crisis since the 1930s. "But we need to begin," he wrote.

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And the FSA appear to be concerned that people are opting out of the traditional monetary system and following the IMF's advice by making negative statements about alternative stores of value.

Arguments between different central banks and regulators are often a precursor to a full blown financial crisis.

There is a storm brewing here. I am just not sure whether it is in a teacup or on a larger scale.

http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/8116117/New-commodity-funds-may-be-next-financial-bubble-FSA-warned.html

Several metal traders and experts have written to the City watchdog claiming that licensing the so-called physically-backed exchange-traded funds (ETFs), which banks including JP Morgan, Goldman Sachs and Deutsche Bank have said they plan to launch shortly, may amount to "approving the next financial bubble". Traders' concerns are based on the ETFs model that will require the investments to be backed by physical metals, such as copper, lead, aluminium and nickel, rather than paper assets offered by futures contracts.

They claim that the success of existing physical ETFs, particularly gold, will not translate to other metals. Metals experts warn that investors will face expensive shipping, storage and disposal costs that are likely to take the lion's share of the investment gains.

They also claim ETFs could distort commodities markets around the world. One trader told The Daily Telegraph: "Metals like copper are in intense demand. By buying futures contracts, investors have never impacted the physical cost or supply of copper. But allowing investors to hoard physical supplies is the equivalent of allowing investors to sit on warehouses of wheat while Tesco is short of bread."

It is estimated that if the planned copper funds are fully subscribed they would be looking to buy more than half the total stocks in LME warehouses. JP Morgan and Goldman Sachs refused to comment. A spokesman for Deutsche Bank said that the ETFs had "not yet been launched." Another source close to one of the banks said: "These fears are overblown. The metal markets have strict rules in place to prevent these sorts of manipulations."

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Soon to be followed by our old friend gold confiscation.

It is their only way out it seems.

As usual, our friend who is just as old will also make himself known : the black market in contraband goods trading at a massive premium to the legal market.

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Soon to be followed by our old friend gold confiscation.

Bullion, of course. The Argentina experience was that ALL gold became valued as 9 carat (low grade jewelery) gold, which of course cannot be seized as there is no record of it. People started cutting up their necklaces to buy essentials, the markets (black) were "policed" by the mafia. it worked. I believe the Russians did something similar with Vodka, but it was difficult to assay the purity.

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"Zoellick really may be the stupidest man alive"

James Bradford DeLong, professor of economics at UC Berkeley

"Paul Krugman wins Economics Nobel : Much deserved"

James Bradford DeLong, professor of economics at UC Berkeley

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Soon to be followed by our old friend gold confiscation.

We'll see a massive CGT-hike on gold first I think, plus perhaps the introduction of VAT too. Discouraging ownership through such measures is a bit less dramatic than confiscation and far less draconian (in appearance) and will probably work better than going round kicking people's doors down. After all, there's no room in the prisons, so as long as you can hide it well enough, gold owners don't have much to fear from confiscation.

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Soon to be followed by our old friend gold confiscation.

Yep, happens every few decades in the UK. Makes one wonder why some of us bother with the stuff, rather than those valuable bits of paper with the German tenant's head on it <_<

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So is the existence of money.

True. It is a temporary token that we use to exchange what participants in the exchange consider to be of value. The tokens that we use may well change. The rate of exchange between the tokens and the things of perceived value change very frequently.

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True. It is a temporary token that we use to exchange what participants in the exchange consider to be of value. The tokens that we use may well change. The rate of exchange between the tokens and the things of perceived value change very frequently.

one wonders then how debasement might be defined in any rational sense?

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one wonders then how debasement might be defined in any rational sense?

The ratio of the number of credits to the plausible authority of the man behind the curtain.

Frogs notice if they are boiled quickly.

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one wonders then how debasement might be defined in any rational sense?

Via the observed rate of exchange between the tokens and things of perceived value. Over time, we may accept different rates of exchange as being the "new normal" but during the times of adjustment, we certainly notice the debasement.

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Via the observed rate of exchange between the tokens and things of perceived value. Over time, we may accept different rates of exchange as being the "new normal" but during the times of adjustment, we certainly notice the debasement.

but it works in both directions. items fluctuate up and down against tokens.

why is debasement only one way?

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but it works in both directions. items fluctuate up and down against tokens.

why is debasement only one way?

Inflation has been a more frequent occurence than deflation in the history of money.

I am very open to the possibility that we might have a sustained period of deflation ahead despite the best and massive efforts of some central banks to the contrary.

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Inflation has been a more frequent occurence than deflation in the history of money.

hc_113.png

Also, how far back are you talking? After the final collapse of rome through to the discovery of the new world it was more or less permanent deflation

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hc_113.png

Also, how far back are you talking? After the final collapse of rome through to the discovery of the new world it was more or less permanent deflation

Can you convert your real and nominal rates to an inflation rate and add it to the graph? My visualisation skills are not that good.

The best that I could find is :

DecadeInflation.jpg

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Inflation has been a more frequent occurence than deflation in the history of money.

I am very open to the possibility that we might have a sustained period of deflation ahead despite the best and massive efforts of some central banks to the contrary.

They'll print trillions every minute to prove you wrong!

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Soon to be followed by our old friend gold confiscation.

You mean forced?? Not going to happen.

The confiscation started a couple of years ago...CASH FOR GOLD!

Confiscation by stealth...the sheeple have no idea!

So it begins...?

Try 2008! ;)

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They'll print trillions every minute to prove you wrong!

Ron Paul and Ben Bernanke are going to have some huge fights in the next 6 months.

It will be interesting to watch. I wonder if there is enough public support in the US to allow for a bill that prevents further QE.

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Any historians around here? I'd be on shaky ground if I tried to draw parallels to such events as the decline of the Roman empire with reference to the debasement of its coin.

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  • 145 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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