Gold price rises to all-time high

so what you're saying is end the fed.

Audit the fed - Ron Paul

End the fed - Ron Paul

gold isn't an idea, it's physical and you can't create it out of thin air

As an "end the Fed" hijacker: "So solly you not so jolly" Seriously though for a person with a handle meaning literaly "of the holy knights of God" (sa' Allah hadin), you of all people should make reference to religion. For what it's worth, I believe you are knowlegable, and your points are valid. But you know, I keep remembering those celluloid newsreels from the days of the Weimar Republic when German people rolled in wheelbarrows full of their hyperinflated fiat currency, and couldn't trade them for a loaf of pumpernickle(pun intended). I sleep a lot better knowing that no matter how monkeyed up this world gets to be, it's Gold that people want as money, and not paper. When I lived in Switzerland, spent Silver Swiss francs, and saw Gold coins from all over ther World, including the USA, in the bank windows, I just had all that much more respect for the feel of Swiss Franc currency in my hands because I knew you could redeem it for precious metals and not empty promises. There's a saying amongst cynics like me. No doubt you've heard it. "In God we trust. For all the rest it's cash and carry ". NO CREDIT !!!

I've almost given up trying to explain this because no matter how many times I say it people still don't get it.

It -does not matter- what you back your currency up with, there is no need to.

There is NO SUCH THING as a "precious metal." Gold is PERCEIVED to be valuable in the European tradition, that's it.

Don't believe me? I'll trade you all the gold in the world for all the goods and services in the world. Now try and trade me back. What do you think I'm gonna do?

Money is simply an artificial indication of the state of the economy. It only works if we have faith in it.

Having gold attached to fiat is having an arbitration attached to an arbitration. It's absurd, you could just -not print any more money- and it would have the same effect.

Backing up your currency with gold only creates an undue restriction on the growth of your economy by making money more "valuable" than it really should be.

In other words, backing up your money with gold is like freezing your economy in time and pretending that it's all worth the same amount forever.

When you can't control inflation or deflation, you're just unnecessarily limiting a government's control over its own currency in favor of the ILLUSION that you can't control it.

Let me put this more directly, there was STILL inflation, deflation and depressions in the era when we had a gold standard. In fact, there were more, because it placed an undue restriction on our economy.

It doesn't fix anything.

You appear to feel you're repeating yourself because people don't understand ? No offense meant, butI think the more discerning disbelieve your premis. For instance you claim "there is no need to back up your currency with anything ?" Perhaps we should back up a bit and examine what money realy is first. I consider money to be something both finite, and valuable per se for other uses. Time is money. Work performed to accomplish a vital service or to produce a necessity of life would be equatable to money. Both depend on time which is finite and valuable.Platinum, Gold, Silver, Copper are valuable metals not because we arbitrarily call them that but because their pyhsical properties make them very useful to create industry.
Gold has been used successfuly as money per se for 5,000 years to back currency because currency is only a promisory note of I O.U. without it. Ie currency is only a redemption certificate used for convenience.
You can counterfeit paper but never Gold. Gold is soft so you can bite into it and make an impression if it's real. And it can't be destroyed. Air can't burn it, water can't disintegrate it, acid can't disolve it. It's 11 Billion years old, so it has permanence and stability because it won't react to anything. And because it has a multitude of valuable uses, we consider it real money. Money is the universal denominator. It arbitrates an exchange for goods and services. Paper
simply won't make the grade. Metals can be precious because they are rare, difficult to obtain and time consuming, and have extremely valuable uses. All that is why we have a Constitution requiring us to coin
money out of precious metals. It's arbitrary yes, but it always works. Gold, Silver, Copper are not simply perceived to be precious metals in the European tradition. Archeologists dig up ancient coins made of those metals from Asia too. Most of the oldest and advanced civilizations in the World have used this medium as money simply because it was literaly cold, hard, cash. The USA was limited in expanding its economy by staying with strictly Constitutional money yes. And there were shortages in the money supply due to hoarding, yes. And inflation was caused by wars, crimes, natural disasters' damages etc. reducing the value of assets of course. But those are
as much a measurement of the human limitations which devised a limited and arbitrary monentary system, are they not ? We cannot create money out of thin air. What we value to trade money for today may change in the future and be regarded as obsolete thus having no demand as a good or service.
So we revert to what has traditionaly backed up currency-coins made of precious metals because their
value is constant or frozen in time. Credit based economics may expand an economy. But they are built on the premis that we can borrow from our perceived future to finance our present. If that pattern were such a simple and secure way to operate, then
I doubt we'd be experiencing the reality we are today.
The inflation tax instituted by the FRS' Monopoly money has destroyed the American dream for many.
When I worked for the minimum wage of $1.25an hour
in 1963, that would be worth the equivalent of $ 20.in today's money because our metal backing standards have been devalued and lowered. The minimum wage today is less than $8 still. If the current system of fiat money is viable, why would it benefit only the wealthy class when the original weights & measures system of
precious metal ratios produced equality in the money supply for Americans from 1792 through 1855 ?

But the gold standard didn't improve our currency, that's the whole point.

Ever heard of the Populist party? Of William Jennings Bryan? Have you studied that period of history at all?

Money was so valuable, banks refused to give it out. By holding onto it, they could force farmers to rely on a line of credit and otherwise hold whole portions of the population hostage.

People WANTED inflation in that time period.

And this didn't actually -stop- inflation or deflation, because those things aren't affected solely by how much money is in circulation. They're affected by how well the economy is doing period. Having a strong currency doesn't affect how well the economy is doing, it just changes the ratio of wealth.

If the U.S. currency inflated 1,000 times but everyone's income adjusted accordingly, it theoretically would make no difference to the economy (assuming a massive panic didn't ensue).

Furthermore, when we were on a gold standard, that standard was not even remotely followed. Because people loathed "government intervention in the free market," no one ever checked up on what the -actual- gold reserves were back in those days. Bankers committed -massive- fraud.

Also the fact that you made more money in the 60's than you do today is an indicator of real wages, not necessarily of inflation. For instance, industrial workers at the end of the 19th and beginning of the 20th century made -jack shit- even when compared to our absurdly inflated currency.

And that was WITH a gold standard.

Why? Because there's more to wealth than monetary policy. And the value of money isn't a static, it's dependent on how reliable its usage is and how accurately it mirrors the economy at large.

That's why I said I'd exchange you all the gold in the world for all the goods and services, because guess who has the real wealth in that situation?

And furthermore, gold -isn't- inherently valuable. Which is the real point I can never get people to concede. That's why it was useless in Africa for instance, because it was everywhere. Salt was valuable there, which is often what it was traded for.

Gold is just useful as a currency because it's rare and relatively stable, but again, that's only one part of the economic equation.

All the gold in the world won't make your economy valuable for the same reason our fuddy-duddy debt system doesn't make our broken economy work.

I finally agree on all your points. That you for taking the time and having the patience to illustrate your rational discussion. It's much appreciated. I agree Platinum, Gold, Silver,Copper are only valuable because they have practical uses. I believe that if we had retained the Constitutional system of weights & measures, and then created a fiat currency so that the American equivalent of a Fed and U.S.Notes circulated, each for their own purposes, that would only be part of the equation. I also believe that our economy is broken because we not only routinely waste what resources we have in a myriad of ways from dumpsters to mindless Corporate wars for profit...
But that is also only part of the equation. We have
also gotten too accustomed to not producing the widest possible variety of high quality goods and services,and being so proud of our professionalism that we wouldn't hesitate to sign our name to our work.
But most of all, as if all these causes weren't already deplorable enough, we've gotten too used to EZ credit. The idea that we could borrow from our future
to finance the present. And that we could ignore taking care of immediate problems by simply leaving them for some future generation to clean up our mess.
They forgot the future's not promised to anyone. And that it's what we do to earn our future survival today that makes it less chancy to believe there could be a future at all. Worse, they capitalized on the problems, pretending to resolve them, so that they could make money. I think our economy is broken because our society is broken. And that ironically when Richard Nixon talked about moral bankruptcy back in the 70s it preceded our financial bankruptcy. Being a patriot, It's sad, but it's become too commonplace to kill the messenger to kill the message because people don't have the courage to face the truth and deal with it.
Escapism seems preferable to social responsibility & social Justice. I don't say that to preach. I say that to
second Michael Moore's lesson that Capitalism is evil.
During the 80s, the "me" generation of Reagan's era
preached that greed is good. Reagan is still widely considered to be some kind of national hero. Though he was a Robin Hood in reverse, people ignorantly still
regard him with wide eyed wonder. I recall he once held up a quarter, nickle and 3 cents telling people that was what value was left of their money. Ironically that 33% also represented the wealth held by the top 1% of the American uber rich whose interests Reagan was realy serving, not ours. Well now thanks to his betrayal of loyalty and people blindly following Reagan,mortgaging the present as W.R.Grace & Co warned would happen, that 33% of American wealth in the hands of the 1% is now well over 75% thanks to the inflation tax BBar was explaining, and our consumer driven economy has tanked. But for those who still blindly accept being mind controlled by TV, because they're too lazy to reason, we can still watch "How to make Internet Millions" if we were even bright enough to loose any sleep over past blind faith.

Exactly, I agree 100% with your points too.

Good piece man.

Clay,

You are crazy.

That's why I dig you.

wow, you'll bleed to death inside of your cast or band aid etc.... you don't have the balls to do what's right. good job.

please tell us oh sage of wisdom shadowtrekker, what should we do?

keep spreading the truth.

yeah it is called push pull inflation, I believe. You are completely forgetting that the first form of inflation was just putting less gold in the currency. Lords and empires did this for years and really fucked up the economy.

On the flip side the longest running inflation free currency was the Byzantine gold coin, it actually holds a world record. So gold inflation can be caped.

The problem with gold a standard, or any standard for that mater, is it become easy for people to horde the money allowing smaller and smaller portion to be separated by the masses, cause deflation and poverty. People complain wealth is held by only a few people now, well that would not change with a gold standard system it would in fact worsen.

All and all, you have to remember something only has value as money because we place a value on it.

That's a cynical and evil way to look at things, although there is a degree of truth in that.

Although in modern times, the power of the military so greatly exceeds the weapons of the general populace that the idea that you'd come out on top with your semi-auto, civilian AK47 is pretty laughable.

And trust me, no matter how survivalist you are, you do NOT want the "shit to hit the fan."

True, buy low and sell high

Where would we be under a gold standard?

We'd be in a depression right now because we'd have to deflate our currency by 1,000 times.

It's all made up anyway, gold just makes the illusion seem more real.

Is that what it is I thought that for every dollar out in the public hand there was a dollars worth of gold in a safe place. Was I miss lead?

Yes, you are mistaken about that. There's no gold to back up your dollar. There hasn't been a gold standard since Nixon.

Nor should there be really, no sane country would rely on one.

To understand why, you have to understand what money is and why we changed it to fiat (read : paper only) currency.

Do you remember being taught about the "bimetallism" argument in school? if you don't, it was about whether or not the U.S. dollar should be based on gold AND silver rather than just gold at the end of the 1800's.

The problem was that there was plenty of WEALTH, as in goods and resources, but not a lot of MONEY, the currency that represented this wealth.

So even wealthy people couldn't get money or credit because banks wouldn't lend it out because it was too damn valuable. So people wanted to create artificial inflation (yes, imagine a time when people actually WANTED inflation) so that money could more accurately represent the wealth of the people.

See, all money is just a make-believe representation of goods and services. Libertarians will often rabidly disagree with this for reasons I can't understand, but it's really just basic logic.

If you have all the money in the world, it's not going to help you if no one cares about it. Let me give you an example. How much was money worth in New Orleans a couple days after the Hurricane hit if you couldn't get out? It was worth shit because it wouldn't buy you anything because no one was around to -sell- anything. What was important was the food and water.

In older societies, there was no money. People just traded what they had for other things they wanted at a market. Of course, this is wholly inefficient. Imagine having to go to the store and find 100 people that want to trade you t-shirts for food for ipods etc. So as a remedy for this, people often accepted a precious metal or object to reliably exchange for other objects with instead.

In the European tradition, it's gold. In many African societies, it was salt or shells. In China, it was silver and jade.

But in a modern society, we've finally figured out that money is just an arbitration, an indication of how much stuff is being made and how many services are being provided. If you have more or less currency in a country but the same amount of goods, does it really matter?

This is getting long so I'll stop here, lemme know if you still don't understand.

Thank you you answer is just what I was looking for

Nice KeithPonder, keep spreading the truth and accurate history.

We left the (international) gold standard because the Vietnam War and the entitlement programs of the 60s were becoming too expensive. When foreign creditors came calling it became apparent that we didn't really have the money. So Nixon floated the dollar and cut a deal with the Saudis to keep it somewhat grounded.

Saladin, the idea that there isn't enough gold to keep the world economy humming is probably false. The Council on Foreign Relations foresees the rise of 'digital gold', for example, and the rumored new world reserve currency will likely be heavily weighted in gold.

You don't get it

It wouldn't matter even if gold was as common as sand.

There is ZERO purpose in attaching your fake, made-up arbitration called money to an ADDITIONAL fake arbitration called "precious metals."

All you're doing is artificially limiting the ability of your currency to deflate and inflate, which can be done in the exact same way with something called -laws-.