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Where Is Germany's Gold?

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Re: Where Is Germany's Gold?

#81

Post by ArkyBeagle »

throwaway90446 wrote: post #26
ArkyBeagle wrote: post #17

Earlier 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.

Agreed that deflation is terrible. I hate paying lower prices for goods and services. Thankfully we have central banks to fight the scourge of lower prices.

Deflation is terrible. We can largely blame deflation for WWII.

Re: Where Is Germany's Gold?

#82

Post by oafitupa »

tdees40 wrote: post #35
oafitupa wrote: post #33

Earlier quoted context omitted.

And we all know that "mainstream economists" are a good source for unbiased opinions.

Sure. Just like "mainstream climate scientists", or "mainstream doctors", amirite?

You didn't just compare macroeconomics to actual sciences, did you?

Re: Where Is Germany's Gold?

#83

Post by oafitupa »

AnimalMuppet wrote: post #78
mschuster91 wrote: post #49

Serious 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?

It's an alternative to paper currencies. How much that's worth to you depends on how much you distrust paper currencies. How much that's worth to the global economy depends on how much the global economy collectively distrusts the money supply (and the central bankers and/or politicians that control the money supply). This is a big part of why the price of gold moves the way it does. It's not that the value of curren…

It's not an "alternative", it's a store of value by its own merit, and has been so for thousands of years, while paper money is pretty recent and is by no means a good store of value or even a good medium of exchange, with the surge of digital money.

Re: Where Is Germany's Gold?

#84

Post by oafitupa »

tdees40 wrote: post #11
carsongross wrote: post #6

Earlier 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…

And when everything fails, just pull a straw man! Right?

Re: Where Is Germany's Gold?

#85

Post by A_COMPUTER »

DennisP wrote: post #50
tdees40 wrote: post #11

Earlier quoted context omitted.

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…

I tend to lean toward everything being fine, but motive seems obvious. It's an extremely valuable pile of stuff being held by a custodian for many decades with no external audits. I can't think of many cases of people being okay with that situation.

I am not a goldbug but I do feel like some people are breaking their backs bending over backwards coming up with reasons to preclude any sort of audit for any reason. I read the article and yeah it sounds like there are a bunch of things that a forensic auditor would wonder about. Gold has been sitting around for half a century, and when the depositor wants it, the bank delays for years and then coughs up a tenth of the gold it promised, with all the serial numbers melted off. they say it took so long because of all the paperwork but apparently can't or won't cough up paperwork about the actual reason the bars were melted down. Isn't this what serial numbers are for? Isn't this what paperwork is for? Isn't this what auditors are for?

Re: Where Is Germany's Gold?

#86

Post by maratd »

xrange wrote: post #75
maratd wrote: post #54

Earlier quoted context omitted.

> So why would they take a fiction over a real shirt that that gives them real value? Ok, relax, I'm a fan of fiat currency as much as anyone, but your argument is a bit off. Most people who argue for a gold standard aren't debating some innate worth of money. They're generally arguing that a backed currency restricts the government's ability to simply print money and create out of control inflation, which has actual…

>government's ability to simply print money and create out of control inflation, which has actually happened many times. ...I suppose that it doesn't even have to be out-of-control for it to have a fairly dramatic effect... http://observationsandnotes.blogspot.com/2011/04/100-year-de...

See that wonderful spike upward in the chart you're quoting? That would be the Great Depression.

I assure you, inflation is the lesser of two evils. Deflation is much, much worse.

Re: Where Is Germany's Gold?

#87

Post by DennisP »

A_COMPUTER wrote: post #85
DennisP wrote: post #50

Earlier quoted context omitted.

I tend to lean toward everything being fine, but motive seems obvious. It's an extremely valuable pile of stuff being held by a custodian for many decades with no external audits. I can't think of many cases of people being okay with that situation.

I am not a goldbug but I do feel like some people are breaking their backs bending over backwards coming up with reasons to preclude any sort of audit for any reason. I read the article and yeah it sounds like there are a bunch of things that a forensic auditor would wonder about. Gold has been sitting around for half a century, and when the depositor wants it, the bank delays for years and then coughs up a tenth of…

And what would make it almost the perfect crime is that if Germany thinks the gold's gone, it's arguably in their best interest to just keep quiet about it. As long as everybody think's the gold's there, Germany rolls along just fine.

Re: Where Is Germany's Gold?

#88

Post by carsongross »

tdees40 wrote: post #77
carsongross wrote: post #70

Earlier quoted context omitted.

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…

If the Fed were lending gold on a fractional reserve basis, a huge number of people would know about it: employees of the Fed, bankers, counter-parties. Why are all of them keeping silent? Why does the Fed endear such intense (some would say insane) loyalty? How do they cover the tracks of this huge operation (both in terms of people and dollars)? Also, to believe this you have to postulate that: 1) Employees of the…

1) Yes.

2) People involved in the banking system, by definition, are willing to fractionally reserve something

3) Nothing particularly complicated, same fence that fractionally reserved frauds have been running for a thousand years.

_shrug_

Re: Where Is Germany's Gold?

#89

Post by A_COMPUTER »

DennisP wrote: post #87
A_COMPUTER wrote: post #85

Earlier quoted context omitted.

I am not a goldbug but I do feel like some people are breaking their backs bending over backwards coming up with reasons to preclude any sort of audit for any reason. I read the article and yeah it sounds like there are a bunch of things that a forensic auditor would wonder about. Gold has been sitting around for half a century, and when the depositor wants it, the bank delays for years and then coughs up a tenth of…

And what would make it almost the perfect crime is that if Germany thinks the gold's gone, it's arguably in their best interest to just keep quiet about it. As long as everybody think's the gold's there, Germany rolls along just fine.

This is what gets me. It doesn't even need to be an ongoing conspiracy. The gold could have been spirited away during the Cold War for some critical-at-the-time purpose, with every intention to be restored, and for whatever reason it just wasn't possible. Decades later you have an institution and a government staffed entirely by people who had nothing to do with it but are left holding the bag. As you say, there is literally no incentive to expose this fact, by anybody. The gold itself hasn't left the vault since the 1960's, it can be traded on paper forever if nobody looks.

To be clear I'm not saying this is what happened, just that there doesn't have to be an ongoing conspiracy among hundreds of people and institutions for the gold to be gone and nobody wanting to say anything.

Re: Where Is Germany's Gold?

#90

Post by AnimalMuppet »

oafitupa wrote: post #83
AnimalMuppet wrote: post #78

Earlier quoted context omitted.

It's an alternative to paper currencies. How much that's worth to you depends on how much you distrust paper currencies. How much that's worth to the global economy depends on how much the global economy collectively distrusts the money supply (and the central bankers and/or politicians that control the money supply). This is a big part of why the price of gold moves the way it does. It's not that the value of curren…

It's not an "alternative", it's a store of value by its own merit, and has been so for thousands of years, while paper money is pretty recent and is by no means a good store of value or even a good medium of exchange, with the surge of digital money.

Paper money, in most countries in modern times, has been a more stable store of value than gold. Consider, for example, the price of gold over the last 10 years - the run up to $1700, the fall below $1200, the small recent recovery. Has that been because of the change in value of the dollar? No, most of that change is in the value of gold, not in the value of the dollar. That's not a very stable store of value. Even the Swiss Franc has been more stable, despite the recent shock.

Paper money has mostly been a more stable store of value than gold... except when it hasn't. When the paper currency becomes toilet paper, gold looks like the perfect store of value.

The modern role of gold, then, is more insurance than it is a store of value. (Or you could think of it as a short on currency.)

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