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Brown's Sky Interview Gold Bug Moment


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I noticed that Anna Botting on SKY NEWS has just said TWICE that year on year prices are still up. She seems at pains to point out the market is 'still rising'...protecting her little portfolio, perhaps? <_<

The last clinging BULL hopes?

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...so we rely on the perrcieved value of pieces of paper instead. Hasn't the credit crunch shown us what can happen when reality trumps perception?

:) How quaint. The value of Britain is our population's capacity to do productive work and repay debt - and, for this, we need infrastructure, food, fuel and raw materials. We need honest appraisal of risk and to move away from an addiction to speculation; clarity of legislation and confidence to predict the future economic environment. We do not need inert precious metals. We need an honest and robust financial sector (dramatically smaller than it is today) and a focus not on how we can off-shore to exploit the strength of our currency to exploit overseas workers, but a determination to do something worthwhile ourselves.

The value of the pieces of paper are the worth of the contracts that we have entered into. The market value of the paper reflects our true worth - and pretending that it is elevated by gold is a big mistake, IMHO.

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The value of the pieces of paper are the worth of the contracts that we have entered into. The market value of the paper reflects our true worth - and pretending that it is elevated by gold is a big mistake, IMHO.

it is not elevating anything it is standing as a resort and a store of value in case of exactly the type of situation we have now when the value of paper contracts is questioned no amount of sophistry or appealing to the authority of your own stated opinions will change that fact huge lumps of the worlds population regard gold as money and a legitimate inflation proof means of saving for the future and have done for thousands of years, the simple fact is that the way a well run fiat currency is supposed to work bears little difference to a gold standard totally misses the point that in all of history no system of paper money has ever survived more that a human lifetime and the present one (since 1971) looks to be heading in the same direction, for exactly the reasons you would expect i.e. when people are given the ability to print "money" they print it and print and print it.....game over.

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:) How quaint. The value of Britain is our population's capacity to do productive work and repay debt - and, for this, we need infrastructure, food, fuel and raw materials. We need honest appraisal of risk and to move away from an addiction to speculation; clarity of legislation and confidence to predict the future economic environment. We do not need inert precious metals. We need an honest and robust financial sector (dramatically smaller than it is today) and a focus not on how we can off-shore to exploit the strength of our currency to exploit overseas workers, but a determination to do something worthwhile ourselves.

The value of the pieces of paper are the worth of the contracts that we have entered into. The market value of the paper reflects our true worth - and pretending that it is elevated by gold is a big mistake, IMHO.

I agree that our worth is related to productive capacity, and reserves are the store

of previous years productive activity.

Nothing you have said above makes me believe paper is worth more or less than

inert precious metals (not even the 'quaint' jibe).

The difference I see is that paper can be printed at will, permitting unlimited supply,

and thereby infinite potential for devaluation of existing paper.

Precious metals have to be extracted from rocks, and therefore the supply

is constrained by nature, helping to preserve its value.

ABB

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He's either mad or very stupid.

Didn't he say that the Euros we bought have gone up in value ? Or has the Pound gone down in value ? Maybe that's his plan,sell gold, create a housing bubble, budget deficit, trade deficit, cut interest rates to the bone....and so destroy the value of the Pound, then those that have Euros or pretty much any kind of forex will be rich (I tells yer).

Mugabe and Brown. Only the colour is different.

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The difference I see is that paper can be printed at will, permitting unlimited supply,

and thereby infinite potential for devaluation of existing paper.

Precious metals have to be extracted from rocks, and therefore the supply

is constrained by nature, helping to preserve its value.

The problem with that analysis is although it was extracted at the same rate between its high in the early 80s all the way to the end of the 90s its value fell in that period.

Gold's a commodity which can be used to store or trade value, or be used to back a currency, but it's still a commodity, subject to upward and downward movements in value. It's next to impossible to hyperinflate, though, but outside highly inflationary periods, the performance is a bit indifferent.

In any case the amount of gold reserves the BoE had even before the sale was pretty small compared to currency issued, so I can't see that it made much of a difference.

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:) How quaint. The value of Britain is our population's capacity to do productive work and repay debt - and, for this, we need infrastructure, food, fuel and raw materials. We need honest appraisal of risk and to move away from an addiction to speculation; clarity of legislation and confidence to predict the future economic environment. We do not need inert precious metals. We need an honest and robust financial sector (dramatically smaller than it is today) and a focus not on how we can off-shore to exploit the strength of our currency to exploit overseas workers, but a determination to do something worthwhile ourselves.

The value of the pieces of paper are the worth of the contracts that we have entered into. The market value of the paper reflects our true worth - and pretending that it is elevated by gold is a big mistake, IMHO.

"Gold still represents the ultimate form of payment in the world. It's interesting that Germany could buy materials during the war only with gold. In extremis fiat money is accepted by nobody and gold is always accepted and is the ultimate means of payment" - Alan Greenspan - U.S House Banking Committee, May 20, 1999

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It's interesting that Germany could buy materials during the war only with gold.

The UK or USA weren't likely to accept German RM from Sweden, for example, so that's why Germany couldn't use that as Sweden could basically only use it to buy German goods with it, and Germany's productive capacity was mostly tied up with war material from 1942, so it wasn't exporting much that Sweden wanted. But that's kind of a special case and I don't think the UK's going to be rolling into Poland any time soon.

However earlier in the war Germany traded a variety of goods with the USSR (including some paid for in gold) prior to June 1941, including doing things like setting up factories in the USSR in return for grain. The factories probably swapped hands less than 2 years later, though.

Barter trade in raw materials has also been a common form of exchange between countries over the past 200 years without the use of currency or gold. Currency has tended to dominate since WW2.

Edited by Wlad
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