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Prison May Be the Next Stop on a Gold Currency Journey

nytimes.com

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Re: Prison May Be the Next Stop on a Gold Currency Journey

#71

Post by wintersFright »

raverbashing wrote: post #41
wintersFright wrote: post #23

Earlier quoted context omitted.

"you still need US dollars to buy oil" well as long as the oil producers are happy exchanging the world's economic lifeblood for paper IOU's which Ben Bernanke is devalueing as fast as he can. I wouldn't bet the current situation will continue much longer.

"as long as the oil producers are happy exchanging the world's economic lifeblood for paper IOU" You can be sure they're still happy, especially producers like Saudi Arabia and Kuwait (and Canada, of course) Can they replace it? Sure, but there may be collateral effects, the harshest ones including 'Democracy delivery missiles' to said country. "which Ben Bernanke is devalueing as fast as he can" No problem! Barrel o…

>>Barrel of oil yesterday was $X today it's $X+Y So as a vendor of goods, you won't mind if you are continually repricing the goods you sell today because the paper you received for the goods sold yesterday doesn't cover the value you expected? As a vendor I think you would start looking for a different medium of exchange. You most certainly would use a different store of value.

Re: Prison May Be the Next Stop on a Gold Currency Journey

#72

Post by wintersFright »

beagle3 wrote: post #66
wintersFright wrote: post #20

Earlier quoted context omitted.

1) In the 30's more people owned gold. Now people are dishoarding gold (cash4gold). Going after gold hoarders won't yield much. Also no one in the 30's went to jail. 2) Coins from a reputable mint are pretty easy. The tungsten forgeries are only cost effective for the bigger bars 3) If you purchase coins then they can be redeemed for the currency of the day at under the radar levels. I don't see why I should pay tax…

> Going after gold hoarders won't yield much. Also no one in the 30's went to jail. I agree with that premise - unless hoarding gold becomes a little more popular. It is in e.g. India; It might come to the US as well, especially if Ben & friends keep devaluing the dollar. I don't remember reading about anyone going to jail, but I do remember reading about federal agents forcibly opening bank safes and such to look fo…

See heading 'The myth of a safe deposit box seizures order' http://en.wikipedia.org/wiki/Executive_Order_6102

As an aside I wonder what percentage of the population had boxes back then - compared to now. I mean no one I know has them now - almost everyone saves in currency/stocks etc.

Why so anti gold then if you are aware of the perils of saving in currency. Silverbug? :)

Re: Prison May Be the Next Stop on a Gold Currency Journey

#73

Post by beagle3 »

wintersFright wrote: post #72
beagle3 wrote: post #66

Earlier quoted context omitted.

> Going after gold hoarders won't yield much. Also no one in the 30's went to jail. I agree with that premise - unless hoarding gold becomes a little more popular. It is in e.g. India; It might come to the US as well, especially if Ben & friends keep devaluing the dollar. I don't remember reading about anyone going to jail, but I do remember reading about federal agents forcibly opening bank safes and such to look fo…

See heading 'The myth of a safe deposit box seizures order' http://en.wikipedia.org/wiki/Executive_Order_6102 As an aside I wonder what percentage of the population had boxes back then - compared to now. I mean no one I know has them now - almost everyone saves in currency/stocks etc. Why so anti gold then if you are aware of the perils of saving in currency. Silverbug? :)

> See heading 'The myth of a safe deposit box seizures order' http://en.wikipedia.org/wiki/Executive_Order_6102

Thanks, I was unaware.

> I mean no one I know has them now -

Banks have essentially stepped out of the safe business (virtual storage is easier and more lucrative). Those that still offer such services keep raising the prices in an attempt to drive customers away.

My business backups were stored in such a bank safety deposit box between 2002 and 2006, at which point they stopped offering the service.

> almost everyone saves in currency/stocks etc.

"saves" is not the word I would use in this case; I'd use "attempts to store value" for currency and "gambles recklessly" for stocks.

But even if we accept "save" - the reason is, of course, the government - think about how hard it has become to keep your gold: try taking delivery of bullion, then try selling it back; you'd probably take 10-20% spread hit if you succeed at all; now try with 10 bars, and you'll likely not succeed at all.

> Why so anti gold then if you are aware of the perils of saving in currency. Silverbug? :)

Oh, you've got me completely wrong. I'm not anti gold. I'm completely anti fiat money and QE. Its just that I've spent a considerable amount of time trying to figure out how to maintain the value of any assets I have, and am unconvinced that I can use gold for that purpose; not because it's not a good store of value (it is, as are silver, and potentially even platinum and rhodium), but because the logistics are such that I'm unlikely to be able to execute it.

Sure, a few coins here and there are easy to manage. But when I sell my apartment, and want that chunk of cash to maintain its purchasing power, a few coins won't cut it.

Re: Prison May Be the Next Stop on a Gold Currency Journey

#74

Post by wintersFright »

wintersFright wrote: post #72
beagle3 wrote: post #66

Earlier quoted context omitted.

> Going after gold hoarders won't yield much. Also no one in the 30's went to jail. I agree with that premise - unless hoarding gold becomes a little more popular. It is in e.g. India; It might come to the US as well, especially if Ben & friends keep devaluing the dollar. I don't remember reading about anyone going to jail, but I do remember reading about federal agents forcibly opening bank safes and such to look fo…

See heading 'The myth of a safe deposit box seizures order' http://en.wikipedia.org/wiki/Executive_Order_6102 As an aside I wonder what percentage of the population had boxes back then - compared to now. I mean no one I know has them now - almost everyone saves in currency/stocks etc. Why so anti gold then if you are aware of the perils of saving in currency. Silverbug? :)

I normally lurk so I don't know why I can't reply to your most recent, so replying here.

Agree on your criticism of my loose word of the term saves. I don't agree with your reasons on why people don't buy gold though - most would have no idea what spread is and how it works. From my experience of trying to convince my friends and family to save something in gold - they just find the idea totally foreign of buying a metal that doesn't earn income...even if said income is not keeping up with inflation.

Interesting perspective on the boxes. I only have one so don't know about increasing/decreasing availability - I know there is a waiting list for the ones at my bank in the city. I find the price very reasonable for the value I obtain from it (150/year).

So what are your thoughts on storing that apartment cash then? I am a goldbug but am interested in other thoughts on preservation of purchasing power.

Re: Prison May Be the Next Stop on a Gold Currency Journey

#75

Post by wintersFright »

hristov wrote: post #38
ekianjo wrote: post #13

Earlier quoted context omitted.

Convert your dollars in gold. Wait 10 years. If all goes well you will have gained a good percentage of US dollars once you decide to sell your gold to buy stuff again. It's difficult to predict the future value of Gold, but there's no way a paper money, backed by inflationary FED, is not going to lose value against something as solid as Gold.

There is a way and it has already happened many times. You goldbugs need to learn some history and gain a bit of perspective.

I'd agree with your last sentence if you substituted 'goldbugs' for 'paperbugs' :)

Some history for you: A USD until 1971 represented a thing. It was redeemable for a specific weight of gold. After Nixon shock it become a concept. It is now only backed by the 'idea' that someone will exchange their goods or services in the future for the paper you hold - or the full faith and credit of the USG if you prefer. The value of the USD is only in the prices placed on the goods. If someone refuses to trade an item with you for your USD then what value is the dollar? If you also read up on Triffin's Dilemma, you will understand why the US must run a perpetual trade deficit - to provide lubricating dollars for world trade. So there are many many many more dollars in circulation than can lay claim to physical goods in this world. Eventually all paper money returns to its intrinsic value (Voltaire!). When it happens to the USD, it's going to be a doozy!

Re: Prison May Be the Next Stop on a Gold Currency Journey

#76

Post by jonasvp »

brc wrote: post #63
jonasvp wrote: post #58

Earlier quoted context omitted.

This is a misunderstanding of Gresham's law which only applies for multiple currencies that are nominally of the same value. Meaning, if there is a $1 silver coin and $1 gold coin, everybody would be hoarding the gold coin and "getting rid of" the silver coin. Also, a currency is not something you hoard, it's something you "get rid of" by giving it to someone else in return for goods and services. In your example, th…

No, Greshams law says nothing about things nominally of the same value. It just states that bad money drives out the good money - meaning that for anything that is falling in value, it will be discarded. For anything that is falling slower, or not falling, it will be hoarded. Currency is definitely something you hoard. It's called savings, and plenty of people still do it.

https://en.wikipedia.org/wiki/Gresham%27s_law

"When a government compulsorily overvalues one type of money and undervalues another, the undervalued money will leave the country or disappear from circulation into hoards, while the overvalued money will flood into circulation."

Or in other words (from the same article): "Bad money drives out good if their exchange rate is set by law."

Re: Prison May Be the Next Stop on a Gold Currency Journey

#77

Post by icebraining »

bitops wrote: post #62
mseebach wrote: post #50

Earlier quoted context omitted.

So there's cause and effect: Are countries unstable because they have multiple currencies, or are people using multiple currencies because the country is unstable. You seem (correct me if I'm wrong) to be arguing for the former, "gold bugs" will generally argue the latter.

No, you're right, I am saying it is destabilizing for a country to have more than one currency. It does weird things to culture. Look at why Europe is so messed up right now - they adopted a single currency without a real government to match. Much as I might not like her, Margaret Thatcher was right when she said that "single currency is a federal Europe through the back door". It's either that or big trouble down th…

Look at why Europe is so messed up right now - they adopted a single currency without a real government to match. Much as I might not like her, Margaret Thatcher was right when she said that "single currency is a federal Europe through the back door". It's either that or big trouble down the line.

We adopted a single currency, which is the new government-enforced legal tender. You're right that it caused plenty of problems, but it's hardly relevant as an example of destabilization caused by many currencies.

Re: Prison May Be the Next Stop on a Gold Currency Journey

#79

Post by beagle3 »

wintersFright wrote: post #74
wintersFright wrote: post #72

Earlier quoted context omitted.

See heading 'The myth of a safe deposit box seizures order' http://en.wikipedia.org/wiki/Executive_Order_6102 As an aside I wonder what percentage of the population had boxes back then - compared to now. I mean no one I know has them now - almost everyone saves in currency/stocks etc. Why so anti gold then if you are aware of the perils of saving in currency. Silverbug? :)

I normally lurk so I don't know why I can't reply to your most recent, so replying here. Agree on your criticism of my loose word of the term saves. I don't agree with your reasons on why people don't buy gold though - most would have no idea what spread is and how it works. From my experience of trying to convince my friends and family to save something in gold - they just find the idea totally foreign of buying a m…

> I normally lurk so I don't know why I can't reply to your most recent, so replying here.

The deeper the response is in the thread, the longer you have to wait from posting until you can reply.

> From my experience of trying to convince my friends and family to save something in gold - they just find the idea totally foreign of buying a metal that doesn't earn income

My grandma kept a stash of gold and jewelry, and she knew why - she had to run away on the eve of WWII, with a small suitcase. My mom knew that she needs to have such a stash, but gave up building it because it was becoming increasingly hard to do. I know I need one, but it's becoming impossible to do at the volume I need.

> So what are your thoughts on storing that apartment cash then?

I'm frustrated, but I have no acceptable solution so far. I'm diversified over foreign currencies and some non-bubblish commodity futures (that are likely to clear even if there's a run; the COMEX gold futures reflect more than the available gold, and if trading stopped tomorrow, it could not settle and there would be huge defaults). But it's still all backed by fiat and lies.

I don't like that; I don't have a solution.

Re: Prison May Be the Next Stop on a Gold Currency Journey

#80

Post by boon »

bitops wrote: post #53
mseebach wrote: post #44

Earlier quoted context omitted.

[response to redacted comment] OK: You make an 8 gram silver coin and call it a "One Liberty Dollar". It will cost you $256 in silver alone. You then trick a bank into accepting it, so they deposit it into your account with a value of $1. The coin isn't a real US dollar, so you're guilty of counterfeiting currency. In reality, however, you've lost significantly more than you've gained, and the bank should be able to…

> It's clearly criminal to pass off something that isn't a real coin as a real coin, and the you should be punished for that. But it seems logical to me that charges of conspiracy and terrorism should be weighed against the fact that any conspiracy certainly wasn't to your financial benefit - as counterfeiting conspiracies very much tend to be. I agree that the government's choice of language was extremely poor and w…

NO. It's a RIGHT.
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