Holy pop-out words Batman!
Yes, and I wish they popped out earlier... I kept having to scroll back to read them after I'd passed the gap.
Where Is Germany's Gold?
61–70 of 91 posts
Re: Where Is Germany's Gold?
#62Earlier quoted context omitted.
Or gold was in a bubble that collapsed. The Depression proves that the gold standard doesn't work. There was no stability; there was deflation. Since the concept behind the gold standard means "gold always..." - a universal quantifier, one needs only show a counterexample to blow it out of the water.
> The Depression proves that the gold standard doesn't work. Not really. The government went off the gold standard in 1914 when it began printing whatever dollars it needed. A legally fixed exchange rate, however, continued. This led to an increasing disconnect between the dollar and gold, by 1929 gold was worth about twice as many dollars as the legal exchange rate. This is what lead to the banking collapse, as ever…
More generally, any time two unrelated commodities' values are pegged to each other, there will inevitably be a correction, usually wrenching.
Bimetalism, the attempt to peg the value of silver in relation to gold, has quite an illuminating history of failure.
Re: Where Is Germany's Gold?
#63Serious question: what exactly is the value of gold? I mean, with other rare metals as palladium or titanium their value can be inferred from industrial consumption, but what is the actual usage of gold and silver other than for filling teeth, making jewelry (we have had artificial "prices" with the diamond cartels) and trace amounts used in electronics?
Serious answer: go read wikipedia's entry on 'gold'.
Re: Where Is Germany's Gold?
#64Earlier quoted context omitted.
It's always good to think about what evidence would convince you that the other side has a point. I lean towards the side that thinks that the central and money center banks (not faceless multinationals) are suppressing the price of gold via fractionally-reserved lending of physical gold. What would convince me that this is not the case would be a comprehensive audit of the Federal Reserve's books and gold holdings.…
I think a dinosaur lives in the subways under Manhattan. I would be convinced otherwise only by a full audit of all subway tunnels conducted using a dinosaur scanner (which someone will need to invent). But seriously, there are lots of things that are hard to prove wrong, but that's hardly a good reason to believe them. In your case, what motive would the Fed have? Has an employee of the Fed (or any other central ban…
> "using a dinosaur scanner (which someone will need to invent)."
I'm not sure I understand you fully. What is this portion of your comment analogous to?
Re: Where Is Germany's Gold?
#65So here's how this works. Gold bugs are big fans of buying gold. They have lots of gold. Their narrative of the financial system is that gold is the uber-asset that all other assets must be denominated in, and that fiat currency is doomed to collapse. The massive run-up of gold prices during the financial crisis played into this narrative, and despite the fact that mainstream economists, politicians, bankers, etc. st…
"and despite the fact that mainstream economists, politicians, bankers, etc. still thought of it as a "barbarous relic" (Keynes), gold-bugs saw it as the key to a prosperous economy." You mean the same bankers, economist and politicians of the bail out to big banking institutions? You mean the same bankers, economist and politicians of the too big to fail? the same bankers, economist and politicians that have brutall…
This is like saying that all computer programmers are responsible for enriching themselves for hacking target and home depot. It is crazy that you are so easily dismissing an entire academic discipline.
Re: Where Is Germany's Gold?
#66Earlier quoted context omitted.
Yes, but not of our universe. Amazing book, by the way. I would also highly recommend the whole Baroque cycle.
The Baroque cycle? Only if you thought Cryptonomicon was regretfully short, and the final chapter was the crowning achievement of Stephensons writing. Otherwise, I'd read pre-Cryptonomicon Stephenson.
The Baroque Cycle was a lot of heavy chewing, but it was ultimately a pretty good story, and I was sad to come to the end of it. It's also, along with Cryptonomicon, one of the more interesting explorations of the world of money and finance I've found.
You might also enjoy REAMDE which it a bit faster-paced. I happened to enjoy Anathem as well, though that was also a bit of a slog. It did have a resolution though. And protractor.
Re: Where Is Germany's Gold?
#67Earlier quoted context omitted.
People should really try and understand what makes things valuable beyond the beanie baby pokemon hype bandwaggon. Gold as a raw material is useful to a degree, just as diamonds are, but artificial scarcity [1] [2] and wild speculation create a mess of distortions. [1] http://www.theatlantic.com/magazine/archive/1982/02/have-you... [2] http://archive.wired.com/wired/archive/11.09/diamond_pr.html
At the end of the day we live in a world governed by supply and demand. We're not going to shift to a 'usefulness' based mindset, and we should avoid shifting to the mindset that an object is equal to the sum of it's parts. Supply and Demand are king.
In the case of gold, I think it is useful to look at the types of demand - jewelry and electronics consumption vs. currency hedge and speculation. In this way you can learn a lot about gold from bitcoin and vice versa.
Re: Where Is Germany's Gold?
#68Earlier quoted context omitted.
It's always good to think about what evidence would convince you that the other side has a point. I lean towards the side that thinks that the central and money center banks (not faceless multinationals) are suppressing the price of gold via fractionally-reserved lending of physical gold. What would convince me that this is not the case would be a comprehensive audit of the Federal Reserve's books and gold holdings.…
It's always good to think about what you'd do if your belief was falsified. Suppose that Ron Paul himself goes through every book, every record and every nook and cranny of Fort Knox personally with an electron microscope and announces he found only evidence that the Federal Reserve is and has been above-board with respect to the United States' gold holdings. What would you do then? Would you actually say "Well, I gu…
I think what I would do, in that case, would be to come to the conclusion that it was not likely that the gold price was being artificially suppressed via fractional reserved lending.
So, let's get that audit going...
Re: Where Is Germany's Gold?
#69Earlier quoted context omitted.
If I was a government, I wouldn't even want to take it back. Storing gold seems like a hassle compared to storing the equivalent value in regular currency.
Gold actually has intrinsic value. Fiat currency does not.
Yes, but is gold's value for the electronics industry anywhere near its market price? The demand seems a lot smaller than the offer (they use about 320 tons/year - http://www.bullionstreet.com/news/electronics-industry-uses-... and the metal is recyclable).
Re: Where Is Germany's Gold?
#70Earlier quoted context omitted.
It's always good to think about what evidence would convince you that the other side has a point. I lean towards the side that thinks that the central and money center banks (not faceless multinationals) are suppressing the price of gold via fractionally-reserved lending of physical gold. What would convince me that this is not the case would be a comprehensive audit of the Federal Reserve's books and gold holdings.…
I think a dinosaur lives in the subways under Manhattan. I would be convinced otherwise only by a full audit of all subway tunnels conducted using a dinosaur scanner (which someone will need to invent). But seriously, there are lots of things that are hard to prove wrong, but that's hardly a good reason to believe them. In your case, what motive would the Fed have? Has an employee of the Fed (or any other central ban…
Well, the Federal Reserver produces a paper currency, the dollar, and gold has historically been a competitor of paper currencies. So it makes sense that the Fed would not want competition in currencies, and would attempt to both disparage and devalue it.
The Federal Reserve is also intimately bound up in fractionally reserved expansion of the paper currency, so it is reasonable to assume that they might use the same basic technique with gold. And that, in fact, is the historical origin of banking, in the modern, leveraged sense: gold assayers began loaning out gold on a fractionally reserved basis, allowing them to collect interest beyond their core assets. Worked great until people ran on them.
So I assert that it is less irrational to believe that there is a possibility that central banks engage in manipulation of gold prices than it is to believe that there is a dinosaur living in the subway under manhattan.
YMMV.