View Full Version : Why gold prices are falling in the face of economic disaster?
Simple question. This the first time in history gold is not considered a hedge against the dollar. The way I see it if the Feds raise debt limit the dollar will weaken against gold. If the government defaults the dollar will weaken against gold. But instead gold is weakening against all major currencies including the dollar while big countries such as China have been doing nothing but taking physical delivery of the yellow metal.
Is there really no floor for demand for gold or are the bank managed ETF funds really that manipulative?
The value of gold is no more than illusion. It is, like everything else in this world, worth only what people are willing to pay for it
Eurodriver
10-14-13, 05:48
The value of gold is no more than illusion. It is, like everything else in this world, worth only what people are willing to pay for it
Exactly.
Gold is a fiat currency, just like the dollar.
Exactly.
Gold is a fiat currency, just like the dollar.
Gold is not fiat. I can hold it and it has value. China, Indian and Russia all have been quietly stockpiling gold. The Dollars days are numbered and you don't want to be only holding dollars when that day comes.
theblackknight
10-14-13, 06:13
Diamonds too.
sent from mah gun,using my sights
Eurodriver
10-14-13, 06:29
Gold is not fiat. I can hold it and it has value. China, Indian and Russia all have been quietly stockpiling gold. The Dollars days are numbered and you don't want to be only holding dollars when that day comes.
"The dollar is not fiat. I can hold it and it has value. "
Gold is only valuable because we say it is. The same way that the dollar gets its value.
I'm not against buying gold. But please tell me how, when the U.S. Dollar is no longer the world reserve currency, your gold stash is going to save you.
I'd rather have ammo, food, no debt, and other essentials than some fiat metal in the safe.
I know if a guy is starving and he wants something from me and all he has is some shiny metal ingots I'm going to tell him to pound sand. So will anyone else.
HackerF15E
10-14-13, 06:30
Gold is not fiat. I can hold it and it has value.
That was exactly his point: just like a dollar bill, which you can also hold, gold has no intrinsic value beyond what someone else thinks it is worth.
Gold obviously has some actual unique industrial uses, and combined with its relative rarity, that gives it some value for the industries that actually use it.
Other than that, it is just a shiny object....and we all know that humans like how shiny objects looks.
Bottom line, gold could be the next dutch tulip.
Crow Hunter
10-14-13, 07:05
Simple question. This the first time in history gold is not considered a hedge against the dollar. The way I see it if the Feds raise debt limit the dollar will weaken against gold. If the government defaults the dollar will weaken against gold. But instead gold is weakening against all major currencies including the dollar while big countries such as China have been doing nothing but taking physical delivery of the yellow metal.
Is there really no floor for demand for gold or are the bank managed ETF funds really that manipulative?
Gold has been significantly higher than its "normal" price for several years.
This is a "reversion to mean".
From what I understand, production costs are somewhere around $750-$850 per ounce.
If the market has decided that gold is no longer worth more than what it takes to get it out of the ground, the price will drop. It could even drop below the price it takes to get it out of the ground. It was like that for years, such that many gold mining companies went out of business.
A Vanguard fund that invests in gold producing companies is down by 40% this year.
Personally, I think this is a good thing. That means that more people have confidence in the world economy and are moving money into equity/bond funds.
I am hoping it gets down to $1,000 or less an ounce. When that happens I am going to get some gold coins. I have always wanted to own some that I could let them trickle through my hands while laughing manically.:jester:
ETA:
Another, more ominous problem could be the beginning of a deflationary cycle. The Fed is out of ammo, they can't drop the interest rates anymore. All it will take is a run on the dollar by lots of outside forces and suddenly the dollar starts being worth more and more. In that case, the fiat currency printed on paper will be better to hold than actual gold. Even if gold holds it's value, it will be worth few and fewer dollars because the dollar itself will be worth more and more and the longer people hold out to spend their dollars on gold, the lower the price will fall on gold and other items. It will be a vicious cycle. How would you feel to be paying your "average" $1,100 mortgage payment with dollars that could be buying 3 or 4 or more oz of gold instead? Ouch.
It would be nice if persons occasionally used a dictionary...
Fiat means whatever is declared legal tender by the government. Be that notched sticks or really durable paper products. Several African countries (and now the US through QE measure) have made the term "fiat" a joke through relentless printing and devaluement. A well managed fiat currency in and by itself not fundamentally flawed. Domestic exemplars being successful colonial currencies, and Lincoln era "greenbacks"
Gold has relative intrinsic value by it's use in commercial electronic products, jewelry, etc. and in fact has been declared not legal tender and seized by the USG before (1933 I think). Perhaps people, in the US, are looking back and wondering what the next wave of governmental choices will be.
Eurodriver
10-14-13, 09:16
It would be nice if persons occasionally used a dictionary...
Fiat means whatever is declared legal tender by the government. Be that notched sticks or really durable paper products. Several African countries (and now the US through QE measure) have made the term "fiat" a joke through relentless printing and devaluement. A well managed fiat currency in and by itself not fundamentally flawed. Domestic exemplars being successful colonial currencies, and Lincoln era "greenbacks"
Gold has relative intrinsic value by it's use in commercial electronic products, jewelry, etc. and in fact has been declared not legal tender and seized by the USG before (1933 I think). Perhaps people, in the US, are looking back and wondering what the next wave of governmental choices will be.
Dano, my statement of gold is a fiat currency was not meant to be taken literally (The internet is hard to convey this). As you and Hacker said, it does have some intrinsic value but if the economy collapses so badly that the US Dollar is worthless, gold would be pretty worthless as well. I can use paper money to start a fire, make clothing, insulation, and use as toys for the kids.
http://www.economicshelp.org/wp-content/uploads/blog-uploads/2008/08/inlfation-776572.jpg
My only point is that gold is only valuable because we say it is - the same way the US dollar has its value.
I guess what one can't do is simply "print more" gold, which is a hedge against inflation but I can't bring myself to count on it as an end of the world reserve currency. If we were in Zimbabwe, I would very much want gold on hand. But the world economy is tied into the U.S. dollar so much that I can't see the US Gov't failing and gold being of any use.
Gold and silver will always have value. Any TEOTWAWKI event you could imagine would not be worse than the fall of Rome, the Dark Ages, or the Black Death. Life will go on and people will trade metals.
The markets know we will raise the debt limit (print money), and belive it or not, reign in spending.
Sent from my cell using the interwebs.
brickboy240
10-14-13, 09:45
Prices on ammo remain high.
Forget gold and buy more ammo.
-brickboy240
Army Chief
10-14-13, 09:57
It seems to me that the inherent tangible value of gold is fairly secure, despite market fluctuations, but the practical value of it as a daily commodity isn't especially relevant in a working, if highly vulnerable, economy.
As long as folks have access to beer money and basic provisions, the whole "gold, beans and bullets" thing doesn't really come into play. Strip away the thin veneer of civilization following a national or regional calamity, or a true collapse of the economic system, and you may well see things change. For the moment, however, I suspect we're mired somewhere in between the realm of gold as a good long-term investment and gold as an immediately useful barter/trade item, which probably has something to do with the pricing and valuation corrections we're seeing in the market right now.
I surely do not posit myself an expert in these matters by any means, but this would seem to follow a certain logic, since gold is really of interest only to the wealthy and the wary when things appear to be going "well enough" for most. People do understand that we're in trouble, of course, but not to the extent that many of them are really taking steps to do much about it. Not that I can see, anyway. I suspect most figure that the government will find some way to bail them out if/when the unimaginable happens, even though that kind of thinking is likely what will have led us to the brink of oblivion in the first place.
AC
It seems to me that the inherent tangible value of gold is fairly secure, despite market fluctuations, but the practical value of it as a daily commodity isn't especially relevant in a working, if highly vulnerable, economy.
As long as folks have access to beer money and basic provisions, the whole "gold, beans and bullets" thing doesn't really come into play. Strip away the thin veneer of civilization following a national or regional calamity, or a true collapse of the economic system, and you may well see things change. For the moment, however, I suspect we're mired somewhere in between the realm of gold as a good long-term investment and gold as an immediately useful barter/trade item, which probably has something to do with the pricing and valuation corrections we're seeing in the market right now.
I surely do not posit myself an expert in these matters by any means, but this would seem to follow a certain logic, since gold is really of interest only to the wealthy and the wary when things appear to be going "well enough" for most. People do understand that we're in trouble, of course, but not to the extent that many of them are really taking steps to do much about it. Not that I can see, anyway. I suspect most figure that the government will find some way to bail them out if/when the unimaginable happens, even though that kind of thinking is likely what will have led us to the brink of oblivion in the first place.
AC
Agree. I don't own any Gold, but the thought has crossed my mind to pick up some. I think Silver is probably the better choice though (from a bartering standpoint).
C4
Gold and silver isnt really a hedge against fear. Gold is a hedge against inflation. Or maybe a better way to say it is "a hedge against the appearance of inflation" since most of the buying and selling of everything these days is emotional and not really driven by anything rational. So as long as people dont see hyper-inflation as being a huge factor(which currently it is or could be, but it isnt due to the Fed manipulating all the markets), Gold prices wont go up really high. When qe3 ends and the Fed no longer can control inflation, Gold and Silver, in theory, should go up. The price spikes of both in recent years can be loosely correlated to QE1 and QE2 ending.
www.themoneychanger.com has a nightly email that talks about gold and silver mostly as well as the rest of the markets.
He talks about the dow in silver and gold and how its a better indicator of the overall health of the markets.
Silver is an easier investment to get into because its much cheaper vs. Gold. Some days you can make more money with it because you can own more oz. If you had 20k dollars you could buy say 1000 oz of silver vs. 15oz of gold. If silver goes up $1 you make 1000 dollars, to make $1000 in a day on 15oz of Gold it has to go up $66, which is a lot rarer than Silver going up $1 in one day.
One rule is to always buy physical, however some times thats not at all practical. I am in a Gold ETF in my ROTH IRA right now. Its not ideal from a "I cant take and barter" standpoint, but I also can not go buy an oz of gold because I dont have enough cash generally. I do buy physical silver and have somewhere between 170-200oz. I have various forms(eagles, rounds, 10oz bars, maple leaf's, philharmonics, 1oz bar that is scored to break into 1/10oz pieces, 90% coins, etc...). Its easy to run to the coin shop and buy 10oz or 2oz or whatever spare cash you have that you want to spend.
The last thing to think about Gold and Silver is they are not short term investments. Silver, at its peak of $50 an oz was 1000% above where it was in 2001 at $5 an oz.
ramairthree
10-14-13, 10:50
Gold, like platinum and diamonds, does have intrinsic technical and industrial value.
The jewelry market of gold and diamonds makes my jaw drop though.
However, I suspect running out and buying 10 Walmart 6290s right now may prove to be a better investment than 10,000 dollars worth of gold.
IMO if something happens gold and silver will be of little value. You can't eat or drink gold and silver and not many smart people would trade life saving things like food, water, ammunition or guns for it. The exception may be for those that hedge their bets and think it will be a short term deal.
Gold, like platinum and diamonds, does have intrinsic technical and industrial value.
The jewelry market of gold and diamonds makes my jaw drop though.
However, I suspect running out and buying 10 Walmart 6290s right now may prove to be a better investment than 10,000 dollars worth of gold.
This is probably a good idea.
My only point is that gold is only valuable because we say it is - the same way the US dollar has its value.
The thing is we, and every other human has been saying it is for 5000 years now.
While it is a "currency" it is the most long lasting and universal one there is.
Edit to add: We can keep printing dollars, there is only so much gold out there. We might not have mined it all, but we can't print it and we and we can't grow it.
brickboy240
10-14-13, 11:03
If it hits the fan tomorrow...what will your neighbors want?
A gold coin or ring? A bar of silver?
Nope...they will trade you food and other necessities for ammo, guns and maybe tools.
I am still thinking of buying another Wal Mart Colt 6920 and rat-holing it away. I think that is money better spent than precious metals.
You cannot eat gold or silver, nor will you use it to defend your family.
-brickboy240
Because the market is doing the ol' fixeroo....
There is a gold bubble just like the dollar bubble, the housing bubble, the debt bubble, etc. When the dollar tanks along with the rest of the worlds currencies, gold will skyrocket. The bubble will eventually burst too though. The recent up and down of gold is just short term fluctuation.
When the dollar tanks... And it will I still believe guns, ammo and gold will be worth a hell of a lot. I'm still looking at buying a farm and power it with solar energy. Food is high on the priority list.
Heavy Metal
10-14-13, 11:51
If you buy precious metals, understand, they are a hedge and not a good investment. A hedge and an investment are not the same thing.
Metals would be for post-crisis recovery. During the crisis, as others have mentioned, food, medicine, ammo, toilet paper would be a better bet.
If you buy precious metals, understand, they are a hedge and not a good investment. A hedge and an investment are not the same thing.
Metals would be for post-crisis recovery. During the crisis, as others have mentioned, food, medicine, ammo, toilet paper would be a better bet.
Hard to wipe a dirty bum with a walking liberty...
The terms of "fiat" and "intrinsic" are being highly abused in this thread. :D So I will just give an example. Back in the 1960s a quarter would buy a gallon of gas. Lots of pre-65 silver quarters were in circulation then. Today, I can take a pre-65 junk silver quarter to a coin dealer and exchange it for enough FRN to go buy a gallon of gas.
Like any commodity gold and silver are used and abused for price speculation. But also like any useful hard asset they have an intrinsic value compared to other commodities that over time will fluctuate but will average out to remain nearly the same. The key thing is that they act as a store of value; they preserve your wealth to a large degree.
The value of an ounce of gold will never be zero and will likely remain constant in relation to other in demand commodities such as wheat, oil, cattle. The value of a $1000 FRN from today is very like to be at or near zero 100 yrs from now. Just as the dollar bill printed in 1912 is today worth less than 2% of what it was back then compared to what you could purchase with it. And less than 10% of what it was worth in 1965.
If you wanted to leave you grandkids an enduring inheritance would you leave them something with intrinsic value such as gold, land, gems; or something with fiat value such as Federal Reserve Notes with cartoon drawings?
The terms of "fiat" and "intrinsic" are being highly abused in this thread. :D So I will just give an example. Back in the 1960s a quarter would buy a gallon of gas. Lots of pre-65 silver quarters were in circulation then. Today, I can take a pre-65 junk silver quarter to a coin dealer and exchange it for enough FRN to go buy a gallon of gas.
Like any commodity gold and silver are used and abused for price speculation. But also like any useful hard asset they have an intrinsic value compared to other commodities that over time will fluctuate but will average out to remain nearly the same. The key thing is that they act as a store of value; they preserve your wealth to a large degree.
The value of an ounce of gold will never be zero and will likely remain constant in relation to other in demand commodities such as wheat, oil, cattle. The value of a $1000 FRN from today is very like to be at or near zero 100 yrs from now. Just as the dollar bill printed in 1912 is today worth less than 2% of what it was back then compared to what you could purchase with it. And less than 10% of what it was worth in 1965.
If you wanted to leave you grandkids an enduring inheritance would you leave them something with intrinsic value such as gold, land, gems; or something with fiat value such as Federal Reserve Notes with cartoon drawings?
Or you could invest your money instead of stashing it under your mattress to beat inflation...
Soros doing what he does.
http://classic.cnbc.com/id/101110403
"The dollar is not fiat. I can hold it and it has value. "
Gold is only valuable because we say it is. The same way that the dollar gets its value.
I'm not against buying gold. But please tell me how, when the U.S. Dollar is no longer the world reserve currency, your gold stash is going to save you.
I'd rather have ammo, food, no debt, and other essentials than some fiat metal in the safe.
I know if a guy is starving and he wants something from me and all he has is some shiny metal ingots I'm going to tell him to pound sand. So will anyone else.
Gold has been money for thousands of years. If you choose to ignore history that's fine. A currency crisis probably won't turn into mad max or the road. Having some gold or silver ensures you don't start from scratch when the currency is reset.
Some ridiculous statements here. Anything is valuble if we say it is. In the end humans place value on what they like. Whether its soft and shiny or covered in grass.
Sent from my SCH-I535 using Tapatalk 2
Metals would be for post-crisis recovery.
This. In anything but a mad max scenario, precious metals bridge the gap from the current currency to the next. A store of wealth. There comes a point when prepping becomes over the top, hoarding, OCD, crazy etc. 5 years worth of food, 15 wasrs etc. I actually don't own any gold. A portion of my income get divvied up into silver, just like a 401k, savings account, etc. diversification that's it.
MountainRaven
10-14-13, 13:33
I just want to say that I don't believe in the Gold Rule - He who has the gold makes the rules. I believe in the Iron Rule - He who has the iron makes the rules. The Gold Rule only works so long as those with iron are convinced that gold has value and that it is easier to work with those who have the gold than to simply take it by force. When they aren't, well... the Spanish had the iron and the aboriginal Americans had the gold. The vikings had the iron and the Monks had the gold. The barbarians had the iron and the Romans had the gold.
That and the Gold Rule is fundamentally elitist. The Iron Rule is fundamentally egalitarian.
Crow Hunter
10-14-13, 13:55
The only catch with holding/hoarding gold as a hedge against an economic disaster is the fundamental belief (that may be wrong) that the government in power will allow you to keep it AND use it in trade.
There is an actual historical precedent for this in the US in which holding and using gold for currency was illegal. It stayed that way for a LONG time.
Sure, there was some underground/blackmarket utilization but that means that you will be subject to the "fiat" of whoever is willing to illegally accept your gold/silver for exchange. While your gold might be worth $1,000,000 an ounce on the open market in trade between nations, if your home country has declared that illegal, the person you are trying to purchase a gallon of gas from might only deem it worth the price of that gallon of gas.;)
The market is random and can't be predicted. Don't put all your $ in a single basket. Be that actual eggs or stocks or gold.
I don't own any gold or silver other than the occasional pre-64 coin that I have found over the years. All of my net worth is in stocks/bonds/land.
I do plan on buying some gold and silver when the price drops to what I think is a fair price. Not for investment, just to fufill a greedy dream of mine.
http://www.apmex.com/
APMEX has a cool feature that will let you see the value of Gold/Silver/Platinum/Palladium over up to a 30 year span.
I just want to say that I don't believe in the Gold Rule - He who has the gold makes the rules. I believe in the Iron Rule - He who has the iron makes the rules. The Gold Rule only works so long as those with iron are convinced that gold has value and that it is easier to work with those who have the gold than to simply take it by force. When they aren't, well... the Spanish had the iron and the aboriginal Americans had the gold. The vikings had the iron and the Monks had the gold. The barbarians had the iron and the Romans had the gold.
That and the Gold Rule is fundamentally elitist. The Iron Rule is fundamentally egalitarian.
Very good.
Sent from my SCH-I535 using Tapatalk 2
The_War_Wagon
10-14-13, 14:06
ETF's. Also known as, "the popcorn fart."
HackerF15E
10-14-13, 14:55
Gold has been money for thousands of years.
Yes. It was a shiny object in a day when there was no industrial infrastructure to make other shiny objects. It was unique in a day when people believed the sun orbited the earth, or that the sun was God.
300 years ago, the Spanish doubloon was the most powerful currency on the planet and the dollar -- today's most powerful currency -- didn't exist.
Yes. It was a shiny object in a day when there was no industrial infrastructure to make other shiny objects. It was unique in a day when people believed the sun orbited the earth, or that the sun was God.
300 years ago, the Spanish doubloon was the most powerful currency on the planet and the dollar -- today's most powerful currency -- didn't exist.
and the doubloon was made out of gold....
"The dollar is not fiat. I can hold it and it has value. "
Gold is only valuable because we say it is. The same way that the dollar gets its value.
I'm not against buying gold. But please tell me how, when the U.S. Dollar is no longer the world reserve currency, your gold stash is going to save you.
I'd rather have ammo, food, no debt, and other essentials than some fiat metal in the safe.
I know if a guy is starving and he wants something from me and all he has is some shiny metal ingots I'm going to tell him to pound sand. So will anyone else.
agree 100%
brickboy240
10-14-13, 15:40
Go buy a 1oz gold coin.
Then go to Wal Mart and buy a Colt 6920 for 1140 bucks.
Now...taking our current political and social climate into consideration...which of those two items do you honestly believe you can unload for 150-200% it's current purchase price in the next 1-2 years?
Yeah, skip the gold and buy another AR. Money better spent.
After the next crazed shooting or Hillary winning in 2016...you can cash that AR in. The gold coin? Not so much.
-brickboy240
Ok. Then what should we use for money that can't be printed or counterfeited at will?
Ok. Then what should we use for money that can't be printed or counterfeited at will?
Why bother? Whatever it is, it will still only be worth what folks believe it's worth. All our economies, societies, cultures, boundaries et al, are only what we all believe they are. It's why we fight so hard for our beliefs- much of our reality is based on what we believe
Eurodriver
10-14-13, 17:08
and the doubloon was made out of gold....
See paragraph 1 of Hackers post.
The first fundamental mistake most are making here is to assume that the financial crisis many worry about would be the equivalent of returning to the stone ages. If an asteroid hits, many nukes are launched or Yellowstone erupts then we worry about that, meantime most are discussing something completely different.
Also as mentioned by Armati and Caesar25, gold always has had and always will have value to someone somewhere. To think that somehow it's different today is asinine. Even if we went into a period of prehistoric tribalism then a tribal leader would want gold as a status symbol and for barter knowing the neighboring leader might want some even more or that the greatest weapons makers in the land love the stuff in return for their hard work.
I've mentioned it dozens of times here before in threads that are very similar, SILVER is essentially a stand alone water purifier!!!!!!!!!!!!!!!!!!!! And long term storage of water is much more viable with Silver than ANY OTHER TESTED/KNOWN SUBSTANCE!
It will retain its value in any scenario you could imagine based on this point alone.
I'm not advocating everyone go out and buy as much as you can get/afford, but a few ounces of silver and an ounce of gold are a good bet for long term hedge against inflation and transitioning to new currency in the event of a currency collapse.
The fact that silver can maintain long term water supply viability makes it VERY USEFULL in any scenario where clean/potable water is hard to come by.
Go do the research on silver and water purification/decontamination. It's all over the place, NASA, local health departments, Russian space program/FKA, boy scouts of America, etc, etc, etc...
Combine its usefullness in water purification/storage with its other uses in medicine, dentistry et al and you have a VERY usefull metal that can be traded quite easily and WILL always maintain an intrinsic value beyond what "People are willing to pay for it" at a given time.
Here is a snippet from NASA regarding silver/water purification and the space program:
"After testing 23 methods of purifying water, NASA has chosen
silver as the purifying agent on the Space Shuttle Program.
Silver will be used in two functions that will provide
Shuttle crews with pure water for drinking, air condition-
ing, food preparation and other operations. Water wastes
will be recycled in Shuttle flights and silver's first job
will be to treat hydrogen-saturated water coming from the
Shuttle fuel cells: this water will pass through a tubular
device of palladium and silver alloy. From the silver-
palladium tubes water will flow to a purifying unit where
silver will eliminate bacteria, including Pseudomonas A
and type IIIA bacteria, NASA scientists report. By establ-
ishing 100 parts of silver in a billion parts of water as
hygenic for drinking in the Shuttle, NASA eliminates the
need for 1,000 to 1,500 parts per billion of chlorine
generally used for purification.
The unit will provide Shuttle crews with 32 gallons of
pure water daily for all uses within the Shuttle, and
for backpacks when the Astronauts work outside the veh-
icle in Space. Compared to earlier prototypes, the new
unit weighs 90% less, needs only one third the space,
doubles the production of water and simplifies the proc-
ess: it eliminates the need for mixing, metering and test-
ing water while in flight and eliminates the risk of cor-
rosion."
END SNIPPET-
Try to put those 6920's in your long term water supply and see if it helps keep the water purified and clean over extended periods of time; see if it can purify contaminated water- let me know your results...
To answer the question posed by the OP/thread- why is gold losing in the face of econimic disaster- Because the markets are all gamed from the top down. Controlled.
If gold is such a bad investment, why are all the BIG world banks and emerging super powers buying it up like there is no tomorrow?
They are dumping "paper gold" to make it look like it is dipping (Creating a dip in the market), and then buying all the physical gold they can get their hands on.
People see gold going down (Via market manipulation) and they start to sell it off, guess who's buying it? The same people "dumping" "paper gold" but not really selling any physical gold.
MountainRaven
10-14-13, 21:40
I feel it should be mentioned that in East Asia, gold was used solely for decoration, and not as money: Silver was used as money.
So the idea that gold was or is the historic global currency is bunk.
As others have mentioned, it also has actual uses apart from being just shiny and doesn't cost nearly as much as gold.
ForTehNguyen
10-14-13, 21:53
golds primary purpose is to be used as money. Look up the definition of money, no other substance comes close to golds properties for fitting that definition. Money will always be needed and it was money replaced the barter system. The price suppression of gold will only ensure that it rises more dramatically once these fiat currencies collapse. Gold takes work to produce and has scarcity, unlike toilet paper currencies. When these currencies collapse people will flock to something real, not another fiat currency. Guess what that will be.
The next major disaster will be a USD crisis not a zombie filled asteroid apocalypse. Get real
ForTehNguyen
10-14-13, 22:00
Yes. It was a shiny object in a day when there was no industrial infrastructure to make other shiny objects. It was unique in a day when people believed the sun orbited the earth, or that the sun was God.
300 years ago, the Spanish doubloon was the most powerful currency on the planet and the dollar -- today's most powerful currency -- didn't exist.
yet you forget hat this country was built and succeeded on a gold standard, and when we left it we've had nothing but inflation and big govt. Guess what the longest surviving fiat currency is - the USD. Only due to its status as world reserve currency which is coming to an end.
domestique
10-15-13, 02:42
IMO if something happens gold and silver will be of little value. You can't eat or drink gold and silver and not many smart people would trade life saving things like food, water, ammunition or guns for it. The exception may be for those that hedge their bets and think it will be a short term deal.
+1,
My lead will trump your gold.
Edit: In all seriousness. If I was rich enough to be stockpiling currency, it would be diamonds. They are lighter, easier to move, and “diamonds are forever”. The problem is in America we see diamonds as decorations/jewelry unlike other parts of the world (India, China, Russia etc.) who use diamonds as investments and currency.
Diversification anyone? If you're growing a garden, would you plant only one vegetable?
Gold, silver and diamonds all have value in an industrialized world. Even if an asteroid were to hit tomorrow, do you really think we'd simply revert to the stone age beyond a few initial months?
I will say that unless you're rich, silver makes more sense than gold. Even if you are, a little of both can't hurt. I'd also invest in arms, ammo, reloading components & equipment, beans, camping equipment, water sourcing, heirloom seeds, etc., etc., etc.
If you really think the end of the U.S. as we know it will come in your lifetime, it would be best to position yourself geographically in an area where you could survive without much infrastructure or support. That would be a better hedge against disaster than all the gold or cash you could buy.
Eurodriver
10-15-13, 10:37
I think the US defaulting and losing out on being the reserve currency is going to be much more violent and rough than any of us imagine.
TEOTWAWKI? No. The end of america as we know it? Yes.
Crow Hunter
10-15-13, 10:37
Since my previous post on the subject was eaten by the ether...
Quick summary.
There is a precedent in the US of the government declaring the use of gold as a currency illegal.
From the 1930's until the early 1970's using gold for anything other than jewelry was illegal.
If there is an economic meltdown and a currency reset, chances are that the government will declare the use of anything other than its specific fiat currency illegal and subject to fines/seizure/forfeiture/imprisonment for use. (Including foreign currency)
This means that you will have to use your gold on the blackmarket/underground economy. Your gold, while being worth $X amount on the open market will only be worth what someone is willing to take "under the table" for it with a probably significant negative risk premium attached. As in, "if I take this illegal for tender gold/silver coin in trade for this item, I will be doing something illegal and I am not going to do that for a value equal to what it is worth".
So, in effect, your gold is now a "fiat" currency whose worth is dictated by the "fiat" of the person's willingness to complete an illegal transaction and the value they will put on it.
Now owning and then deciding to sell it legally after the "Reichmark" resets to the "Deutchmark" as a "Deutchmark" denominated valued item, shouldn't be a problem, assuming the government doesn't decide to seize it all to pay it's bills or to prop up the perceived value of it's currency on the world market. In theory, you should retain the "real" value of the gold in that it should still be worth the same in "real" terms.
Of course, the same thing could be said of any real property from toilet paper to land. Which will you find more useful immediately after the meltdown and during the transition?;)
Don't put all your eggs in one basket. Diversify!
I think the US defaulting and losing out on being the reserve currency is going to be much more violent and rough than any of us imagine.
TEOTWAWKI? No. The end of america as we know it? Yes.
Exactly. The petro dollar allows us to spend recklessly and the rest of the world HAS to choke on our currency if they want to buy oil.
I agree with the policy of diversification of assets. Land, precious metals, tools, training, supplies, gems, cash for emergencies, owning a business or investing in one you know a lot about.
Friends from Vietnam told me how in the 70s and 80s the govt would periodically change the currency. And inly allow a small amount if old to be exchanged for the new. People would buy hard assets to store wealth since the currency could not be relied on. Honda scooters were a favorite trade item. However, if you wanted to escape by boat (50% death rate) it cost 1 oz gold, nothing else, and paid in advance.
Fiat money is paper money backed by nothing that can be printed at will for purpose of "taxing" aka stealing wealth so the government can spend more money without raising taxes. That's it.
4x4twenty6
10-15-13, 11:46
yea, I suggest you all diversify. Isn't that part of being prepared?
Would you say "I have enough .45 ammo I don't need all that .223." or I don't need all that flour for baking I have a lot of rice I can eat"
Precious metals will hold their value and be used as a bartering too just like goats, chickens guns and ammo.
The reason for recent crazy gold dips is someone(US banks) are unloading huge amounts of paper gold to keep prices low. Guess who is buying shit loads of physical gold at these artificially subdued prices? ASIA- Specifically China.
Who else can unload 600,000 oz of gold at one time in one day and then 800,000 oz at one time a few days later. All this happened last week at key points in the Gold price.
This has also happened in September and April of this year.
China is planning to bolster their fiat with physical gold and possibly try to take over as the world reserve currency.
Since my previous post on the subject was eaten by the ether...
Quick summary.
There is a precedent in the US of the government declaring the use of gold as a currency illegal.
From the 1930's until the early 1970's using gold for anything other than jewelry was illegal.
If there is an economic meltdown and a currency reset, chances are that the government will declare the use of anything other than its specific fiat currency illegal and subject to fines/seizure/forfeiture/imprisonment for use. (Including foreign currency)
This means that you will have to use your gold on the blackmarket/underground economy. Your gold, while being worth $X amount on the open market will only be worth what someone is willing to take "under the table" for it with a probably significant negative risk premium attached. As in, "if I take this illegal for tender gold/silver coin in trade for this item, I will be doing something illegal and I am not going to do that for a value equal to what it is worth".
So, in effect, your gold is now a "fiat" currency whose worth is dictated by the "fiat" of the person's willingness to complete an illegal transaction and the value they will put on it.
Now owning and then deciding to sell it legally after the "Reichmark" resets to the "Deutchmark" as a "Deutchmark" denominated valued item, shouldn't be a problem, assuming the government doesn't decide to seize it all to pay it's bills or to prop up the perceived value of it's currency on the world market. In theory, you should retain the "real" value of the gold in that it should still be worth the same in "real" terms.
Of course, the same thing could be said of any real property from toilet paper to land. Which will you find more useful immediately after the meltdown and during the transition?;)
Don't put all your eggs in one basket. Diversify!
Agree not to place all eggs in one basket. The gov taking gold away is a valid position to be concerned of. They can also make our guns illegal as well. But we both know any institution willing to do so is no longer ours and would be against its citizens. What then does that make the institution doing such things?
the following are my opinions only, so...
I see the fact that gold, silver, and other precious metals are held and used transactionally by the world's central banks shows it does have value other than being shiny. what is interesting is that while western nations are selling gold to finance their indiscretions, China, India, and other emerging nations have been hoarding it.
since the end of the barter period in time and the use of coins, etc., for trade, the period that the US has been "off" the gold standard, is hardly a moment. there are earnest talks of reinitiating the gold standard as a way to "pin" the value of the dollar, so it's not like the concept doesn't have validity. unfortunately, the dollar has been so devalued that to do this, the price of gold in dollars would expose the fraud that has been created.
as a medium of exchange in the great SHTF era, I agree with people that say bullets or beans will be a better daily bartering tool. but at some point, either before this or in the recovery phase, when a veneer of social order exists, there will be a need for real currency, long after the last dollar has been burned for heat or wiping bottoms. in the event of a dollar collapse, gold and silver will be one of the few things convertible at any reasonable rate, to the new currency.
Newt Gingrich keeps a 1B Deutschmark note from the Wiemar Republic on the wall of his office. this was given to him by my wife's grandfather and he told us of the hyperinflation of this time. he said people would line up with baskets of this currency outside of butchers and bakeries and if someone had to use the bathroom, they would set the basket of currency down to hold their place in line. he said it was not uncommon for them to come back and find the currency there in a pile but the basket missing...
the following are my opinions only, so...
I see the fact that gold, silver, and other precious metals are held and used transactionally by the world's central banks shows it does have value other than being shiny. what is interesting is that while western nations are selling gold to finance their indiscretions, China, India, and other emerging nations have been hoarding it.
since the end of the barter period in time and the use of coins, etc., for trade, the period that the US has been "off" the gold standard, is hardly a moment. there are earnest talks of reinitiating the gold standard as a way to "pin" the value of the dollar, so it's not like the concept doesn't have validity. unfortunately, the dollar has been so devalued that to do this, the price of gold in dollars would expose the fraud that has been created.
as a medium of exchange in the great SHTF era, I agree with people that say bullets or beans will be a better daily bartering tool. but at some point, either before this or in the recovery phase, when a veneer of social order exists, there will be a need for real currency, long after the last dollar has been burned for heat or wiping bottoms. in the event of a dollar collapse, gold and silver will be one of the few things convertible at any reasonable rate, to the new currency.
Newt Gingrich keeps a 1B Deutschmark note from the Wiemar Republic on the wall of his office. this was given to him by my wife's grandfather and he told us of the hyperinflation of this time. he said people would line up with baskets of this currency outside of butchers and bakeries and if someone had to use the bathroom, they would set the basket of currency down to hold their place in line. he said it was not uncommon for them to come back and find the currency there in a pile but the basket missing...
I have a federal note printed by the central bank of china that was good for 50 units (grams) of gold backed by the full faith and trust of the 1940s central bank of China. Well guess how much that note is worth now? Someone 70 years ago thought it was a good idea to place their trust in a paper currency and apparently lost almost an ounce and a half of gold. I hope I learned from the persons mistake as I hold that worthless (but elegantly printed) paper.
Crow Hunter
10-15-13, 14:10
Agree not to place all eggs in one basket. The gov taking gold away is a valid position to be concerned of. They can also make our guns illegal as well. But we both know any institution willing to do so is no longer ours and would be against its citizens. What then does that make the institution doing such things?
The big problem isn't taking it away. That WOULD get people up in arms. Making it illegal to use as a means of legal tender for debts isn't so far fetched. Particularly when so few people actually own it today.
No government wants another currency to undermine the full faith and credit of their own currency.
If the USD ever gets on such fundamentally shaky ground that people are afraid to take it and would instead rather take Euros, Pesos, or Gold/Sliver, the government WILL step in and enforce its use.
It has been done in the US many times before. Even when the US WAS on the gold standard.;)
Your best bet is to own free and clear anything that you want to keep (hedge against deflation), and diversify your holdings among many different asset classes including commodities, guns, real estate, US Equities, International Equities, bonds, cash, etc.
If the USD ever gets on such fundamentally shaky ground that people are afraid to take it and would instead rather take Euros, Pesos, or Gold/Sliver, the government WILL step in and enforce its use.
You mean like when Iraq, Libya, Syria, and Iran are/were selling oil in gold and Euros?
Submariner
10-15-13, 18:52
No government wants another currency to undermine the full faith and credit of their own currency.
No government want to have any limitation on its ability to print currency at will and force you to take it for goods and services.
Legal tender laws suck.
Failure2Stop
10-15-13, 20:42
Invest in ammo, cheap lighters, knives, useful skills, and G19s.
Typos brought to you via Tapatalk and autocorrect.
Invest in ammo, cheap lighters, knives, useful skills, and G19s.
Typos brought to you via Tapatalk and autocorrect.
Interesting. Why G19s? Cheap, reliable, and concealable?
Failure2Stop
10-15-13, 20:50
Interesting. Why G19s? Cheap, reliable, and concealable?
What would you trade for a reliable, simple pistol when the world goes silly? What if in those times firearms were heavily restricted?
They're easy to find and inexpensive to acquire right now, and are very easy to support in times of limited resources.
Like buying a few hundred acres during the Louisiana purchase.
I can't think of much that has a better growth potential when pretty much everything else will be devalued.
Typos brought to you via Tapatalk and autocorrect.
Failure2Stop
10-15-13, 20:51
And maybe a few chickens...
Typos brought to you via Tapatalk and autocorrect.
Invest in ammo, cheap lighters, knives, useful skills, and G19s.
Not to be a killjoy but while a G19 is adequate for personal defense it won't enable one to acquire enough game to feed the family. That's a rifle's job. Nor would a handgun be necessarily be more reliable than many automatic rifles, not to mention let's say bolt action or pump. Accompany that with the increase in terminal ballistic performance and it's pretty much rifle all the way, at least for most.
All the rest sound like winners, althought I'd take a quality Bic over the cheaper substitutes if not the manganese block with the flint built in.
Chickens are a given :D
Eurodriver
10-16-13, 14:59
Not to be a killjoy but while a G19 is adequate for personal defense it won't enable one to acquire enough game to feed the family. That's a rifle's job. Nor would a handgun be necessarily be more reliable than many automatic rifles, not to mention let's say bolt action or pump. Accompany that with the increase in terminal ballistic performance and it's pretty much rifle all the way, at least for most.
All the rest sound like winners, althought I'd take a quality Bic over the cheaper substitutes if not the manganese block with the flint built in.
Chickens are a given :D
In the situation described, specifically by F2S above, a G19 is the perfect weapon.
The last thing you want to do in a situation like that is be carrying around an automatic weapon. It will draw too much attention.
Hell I could carry 4 G19s wearing shorts and a light jacket and no one would notice.
My guess is you already have several rifles. Reliable handguns are very necessary.
Failure2Stop
10-16-13, 15:02
Not to be a killjoy but while a G19 is adequate for personal defense it won't enable one to acquire enough game to feed the family. That's a rifle's job. Nor would a handgun be necessarily be more reliable than many automatic rifles, not to mention let's say bolt action or pump. Accompany that with the increase in terminal ballistic performance and it's pretty much rifle all the way, at least for most.
All the rest sound like winners, althought I'd take a quality Bic over the cheaper substitutes if not the manganese block with the flint built in.
Chickens are a given :D
Remember, the G19s in this instance are for trade, not personal use.
I could care less what you carry or why, as we all have unique needs. The conversation is what would be valuable items as currency.
I'm already on the "Glock Standard". Whenever I see something I want I instantly think of the number of Glocks I could buy with the same money. I used to do the same with ammo, but prices have gotten wonky with it.
Remember, the G19s in this instance are for trade, not personal use.
I could care less what you carry or why, as we all have unique needs. The conversation is what would be valuable items as currency.
I'm already on the "Glock Standard". Whenever I see something I want I instantly think of the number of Glocks I could buy with the same money. I used to do the same with ammo, but prices have gotten wonky with it.
Yes, the logic is strong with this post (movie reference). Perhaps knowing a tad about your background I should have thought the response out better. First time that's ever happened to me. ;)
In hindsight though they would all be great ideas. Just not sure how much time I'd have to barter combat skills for items but there would surely be takers somewhere no doubt.
Hell I could carry 4 G19s wearing shorts and a light jacket and no one would notice.
Why don't you do that and send us a photo.
:D
Failure2Stop
10-16-13, 15:24
Yes, the logic is strong with this post (movie reference). Perhaps knowing a tad about your background I should have thought the response out better. First time that's ever happened to me. ;)
In hindsight though they would all be great ideas. Just not sure how much time I'd have to barter combat skills for items but there would surely be takers somewhere no doubt.
Being able to barter the ability to repair clothing, equipment, vehicles, and shelter is trade-able.
The ability to make stuff: ammunition, candles, tools, long-lasting food, warm/waterproof clothing, eating containers and utensils, etc; from readily sourced material will provide a way to maintain trade-able items/food.
Skill at arms speaks for itself, and while not readily trade-able (like the ability to track, butcher, hide, and improvise), they will certainly help keep you and you loved-ones a few steps ahead of victimization and starvation.
Eurodriver
10-16-13, 15:26
Why don't you do that and send us a photo.
:D
Send me 3 G19s and you've got a deal!
Being able to barter the ability to repair clothing, equipment, vehicles, and shelter is trade-able.
The ability to make stuff: ammunition, candles, tools, long-lasting food, warm/waterproof clothing, eating containers and utensils, etc; from readily sourced material will provide a way to maintain trade-able items/food.
Skill at arms speaks for itself, and while not readily trade-able (like the ability to track, butcher, hide, and improvise), they will certainly help keep you and you loved-ones a few steps ahead of victimization and starvation.
I think my mistake and the one many others might likely make is that a barter arrangement comes and goes rather quickly. You run into or hear of someone you don't really know in need of something and you know you can fill that need. Question then becomes what can he offer in return, but again that's limited to the scope of someone passing by, an essential trader of old.
If it's someone who you will be interacting with daily or regularly then the rules of the game are surely changed to fit that relationship.
So everyone buying Gold and Silver.
How much do you have on hand?
How many lbs of Gold or Silver?
I'm just curious.
And maybe a few chickens...
Typos brought to you via Tapatalk and autocorrect.
Yes I hear G19 goes well with chicken :)
Moose-Knuckle
10-16-13, 21:20
Invest in ammo, cheap lighters, knives, useful skills, and G19s.
A man after my own heart.
After reading Slavo's experiance in the Bosnian War I hoard Bic lighters, Zippos, flints, wicks, et al.
Submariner
10-17-13, 16:59
Invest in ammo, cheap lighters, knives, useful skills, and G19s.
G17 and G19 magazines, too.
So everyone buying Gold and Silver.
How much do you have on hand?
How many lbs of Gold or Silver?
I'm just curious.
Tell me your gun inventory and I'll tell you my silver inventory!
Actually, my silver holdings are modest since I first built up inventory of immediately use hard assets such as AR15s, Garands, Glocks, mags, ammo, components, MREs and freezedried, hand tools, work clothes, gloves, lesrning dome remodeling and acquiring more shop tools, etc.
After 15 years of that I finally thought it time to add to the collection of circulated coins I inherited. Last month I bought 35 one ounce coins. I plan to buy about $300 worth of bullion coins or collector grade coins every month. That will still allow me to continue adding to other preps and hard assets.
I think tool and prep/barter oriented assets should be first priority. But if that is taken care of or you have a large sum you want to protect from ravages of inflation, then I would consider 10%-20% in precious metal coins. I would also put a higher priority on starting or operating your own business than PM.
Metals for me are to preserve idle funds long term. If I can put the money to work in useful tangibles that I have possession of then that is my first preference.
Heavy Metal
10-17-13, 23:11
Not to be a killjoy but while a G19 is adequate for personal defense it won't enable one to acquire enough game to feed the family. That's a rifle's job. Nor would a handgun be necessarily be more reliable than many automatic rifles, not to mention let's say bolt action or pump. Accompany that with the increase in terminal ballistic performance and it's pretty much rifle all the way, at least for most.
All the rest sound like winners, althought I'd take a quality Bic over the cheaper substitutes if not the manganese block with the flint built in.
Chickens are a given :D
Anyone counting on game lasting more than six weeks till the hordes shoot it all is fooling themelves.
MountainRaven
10-17-13, 23:43
Anyone counting on game lasting more than six weeks till the hordes shoot it all is fooling themelves.
Game will still be around. They'll just learn that humans are always bad news - not just when its getting cold out - and get scarce fast.
But squirrels, rabbits, gophers, and prairie dogs aren't that smart.
Sticking with the currency topic, in the event of a collapse situation, paper money will be very necessary in the immediate days following. Problem being is that it will be in limited supply and most people don't keep a lot on hand. Getting more will not be easy. I would think that hyper inflation would quickly turn paper money into toilet paper. Precious metals like gold and silver will become primary in the midterm. In a protracted situation, gold and silver will become much like paper money and end up nearly useless, silver having more utility value. As mentioned in this thread other goods will become much more valuable as trade items. I do agree that in a recovery time frame, I would think that gold and silver would again become the monetary standard, followed eventually by a paper note.
Therefore I might think that having a good supply of paper cash on hand would be good. Spend it rapidly on necessity items that you didn't stock up on while paper money is still being taken. However as paper money becomes useless switching to gold and silver will become important. Again use it wisely with the understanding that it too will probably become less useful. By then other goods will take over as trade items. Be diversified to get through each stage.
FWIW - as far as silver goes at least, I will say that a monster box of silver American Eagles is 41lbs actual shipping weight. ;)
Sticking with the currency topic, in the event of a collapse situation, paper money will be very necessary in the immediate days following. Problem being is that it will be in limited supply and most people don't keep a lot on hand. Getting more will not be easy. I would think that hyper inflation would quickly turn paper money into toilet paper. Precious metals like gold and silver will become primary in the midterm. In a protracted situation, gold and silver will become much like paper money and end up nearly useless, silver having more utility value. As mentioned in this thread other goods will become much more valuable as trade items. I do agree that in a recovery time frame, I would think that gold and silver would again become the monetary standard, followed eventually by a paper note.
Therefore I might think that having a good supply of paper cash on hand would be good. Spend it rapidly on necessity items that you didn't stock up on while paper money is still being taken. However as paper money becomes useless switching to gold and silver will become important. Again use it wisely with the understanding that it too will probably become less useful. By then other goods will take over as trade items. Be diversified to get through each stage.
FWIW - as far as silver goes at least, I will say that a monster box of silver American Eagles is 41lbs actual shipping weight. ;)
Good idea surf.
30 cal slut
10-18-13, 09:29
Folks,
Think of gold as another currency.
When the dollar gets weaker, in general, gold rises. When the dollar gets stronger, gold tends to decline.
What can cause a weak dollar? If you print more of them, they are worth less, all else equal. That causes gold to rise.
Also, if the federal government borrows more money and adds to the public debt, that can cause the dollar to weaken.
Our currency is not backed by anything other than the full faith and credit of the United States.
Technically, our currency is based on debt-money.
Based on a concept called fractional reserve lending, if our central bank - the Federal Reserve - prints $1 of whole sale "money" (called "reserves"), the banks can turn around and turn that into $5 of commercial and consumer loans.
Just like that. It's magic.
One more thing to point out. The very existence of our federal reserve (a private corporation, owned by banks, with the power of a federal agency) enables deficit spending by the fed.gov.
Why? If they gov't needs to borrow money - the federal reserve simply "prints" more wholesale money to finance the purchases of treasury bonds (gov't IOU's) - the public debt.
So if you think about the relationship between money supply and public and private debt, they are very much inter related. If you print more money, the dollar weakens. When you print more money, interest rates come down, and borrowing by everyone goes up. The dollar weakens.
From an intuitive standpoint, the charts below should tell you why gold has gone up since 2001. Technically speaking, the price of gold bears a very strong statistical correlation to negative yields (interest rates, adjusted for inflation on us ten year treasury bonds). But ...
All you have to know is this:
If all I have is a PMAG, when the money supply is at $10, it's worth $10.
That same PMAG when the money supply is at $20 - well, it's worth $20. How did it get to $20? We printed more money.
The same happens with gold and other commodities that we have to import, such as crude oil. All these are just a mirror for the "monetary inflation" that's occurring. Just to clarify - the word "inflation" refers to the increase in the money supply. The words "price inflation" refer to what usually happens after "monetary inflation."
This should not be a mystery. This is basic math.
This be one measure of our money supply.
http://research.stlouisfed.org/fred2/data/BASE_Max_630_378.png
This be our public debt:
http://research.stlouisfed.org/fred2/data/GFDEBTN_Max_630_378.png
If you pull up a long term chart of gold or crude oil, guess what it's gonna look like?
:cool:
30 cal slut
10-18-13, 09:31
So getting back to OP's question.
When the dollar weakens, gold goes up.
When the dollar strengthens, gold goes down.
What was happening ahead of the fed.gov debt ceiling deadline, was that the dollar was strengthening on anticipation that the continued shutdown would mean no increase in the debt ceiling.
So the dollar got stronger.
And gold got weaker.
30 cal slut
10-18-13, 09:37
and after the debt ceiling got raised this week - gold shot up $35 because the dollar got weaker.
and after the debt ceiling got raised this week - gold shot up $35 because the dollar got weaker.
Economist Fischer believes that we are now QE to infinity and we have lost hope to ever get the debt back down. There just isn't enough tax base to support paying the principle and be markets are hooked on federal liquidity injections to sustain itself.
So oil will peak higher as will all other commodities.
30 cal slut
10-18-13, 13:17
yup. but story on energy may be better with increasing domestic production. so that's nice.
food for thought:
Public debt (what fed.gov owes to China, Japan, Saudia Arabia, etc) as of last count:
$16.7 trillion
Unfunded pension liabilities (what we owe in today's dollars above and beyond what we are collecting, over a 70 year actuarial timeline). In other words, what economists would call "even more debt" due to Medicare and Social Security:
$120 trillion
So, $16.7 trillion + $120 trillion = $136.7 trillion is what we need right now to satisfy all our government promised obligations.
This is versus about $16.7 trillion in income.
Repeat: $136.7 trillion in "debt" vs. $16.7 trillion in "income."
Folks, if this were you and me, we'd be insolvent. Which is a fancy word for broke.
But wait, there's more.
It gets even worse if you take into account the insurance policies taken out against a US gov't default (credit default swaps).
I think the notional amount involved starts with a Q. Like, quadrillion.
We're so f* cked right now.
30 cal slut
10-18-13, 13:19
(making mental note to reload more rounds tonight in anticipation of future need).:jester:
Exactly.
Gold is a fiat currency, just like the dollar.
this is the truth, but why are people so willing to admit it now that the facts are playing out as they have many times before with the value of gold and other political instruments that would supposedly right our economic system if we fixed our currency to them???
i'll tell you why gold prices are dropping. there's other things that are better to invest in at the moment.
Therefore I might think that having a good supply of paper cash on hand would be good. Spend it rapidly on necessity items that you didn't stock up on while paper money is still being taken.
I have the same plan.
Be diversified to get through each stage.
This is where gold and silver come in. IF you suddenly had to leave your house, it's easily portable as opposed to a crate of G19s, WASRs, canning jars and lids etc. You have some wealth you can take that's easily portable. Only you can decide how much to have as a rainy day fund.
this is the truth, but why are people so willing to admit it now that the facts are playing out as they have many times before with the value of gold and other political instruments that would supposedly right our economic system if we fixed our currency to them???
i'll tell you why gold prices are dropping. there's other things that are better to invest in at the moment.
Gold is not fiat money. Gold cannot be printed out of thin air. Tobacco was once used as money after one of our earlier dollars collapsed. That is not a call to stockpile tobacco to be used as money. It's an example that when fiat money collapses people will resort back to items that take labor to produce to use as a medium of exchange. This is why gold and silver are not fiat. They require labor to produce/mine. It is not an investment. If you are investing in it to make more US Dollars down line, you're a speculator. A speculator is not the same as one that is changing to be worthless dollars into a universal medium of exchange.
http://en.wikipedia.org/wiki/Fiat_money
http://en.wikipedia.org/wiki/Continental_dollar#Continental_currency
http://en.wikipedia.org/wiki/Coin_clipping
http://www.youtube.com/watch?v=iFDe5kUUyT0
This guy has a ton of videos that are much easier to understand, in a shorter timeframe than all of the books I read combined.
yup. but story on energy may be better with increasing domestic production. so that's nice.
food for thought:
Public debt (what fed.gov owes to China, Japan, Saudia Arabia, etc) as of last count:
$16.7 trillion
From yesterday.
http://imageshack.us/scaled/landing/845/vvly.jpg
http://www.youtube.com/watch?v=iFDe5kUUyT0
This guy has a ton of videos that are much easier to understand, in a shorter timeframe than all of the books I read combined.
Yes, Caeser + 100! I thought of that same video when reading this thread. Great post. Highly recommend others take the time to view. It does a great job of explaining we're riding this failed economic system all the way in.
It is not a difficult concept to grasp. FIAT means a currency that has a value given by THE AUTHORITY OF A GOVERNMENT. As in , " The govt says this is worth something, so it is." That same piece of paper without the backing of a govt is near worthless.
Gold, such as other commodities, have an intrinsic value. That means they have a value based on their very substance. That is they are useful. The price of gold is no longer controlled by the govt, and gold has a value regardless of what any govt deems it to be worth. In fact the value of gold has survived many ages of govts and civilizations.
So please stop spouting ignorance that gold is fiat money just like Federal Reserve Notes ( debt instruments).
Whether you choose to store any portion of your wealth in gold or not does not change the meaning of words.
So getting back to OP's question.
When the dollar weakens, gold goes up.
When the dollar strengthens, gold goes down.
What was happening ahead of the fed.gov debt ceiling deadline, was that the dollar was strengthening on anticipation that the continued shutdown would mean no increase in the debt ceiling.
So the dollar got stronger.
And gold got weaker.
I think of gold as the fixed point, like a bollard or a post that a boat is tied to, and the value of the dollar is like a boat that rises or falls on the tide...
http://www.youtube.com/watch?v=iFDe5kUUyT0
This guy has a ton of videos that are much easier to understand, in a shorter timeframe than all of the books I read combined.
This is the best documentary I have ever seen in my life. And I have spent years of my life devoted to and studying economics and finance.
Ouroborous
10-21-13, 21:10
http://www.youtube.com/watch?v=iFDe5kUUyT0
This guy has a ton of videos that are much easier to understand, in a shorter timeframe than all of the books I read combined.
Killer vid Caesar--thanks for the link.
Looking forward to passing this on to the few who'd be interested.
Powered by vBulletin® Version 4.2.5 Copyright © 2024 vBulletin Solutions, Inc. All rights reserved.