trying to make sense of economics.. - Tilted Forum Project Discussion Community

jigar · 12-17-2010, 12:18 AM

Economics.. - we made it but have lost control ? - the amount of misdirection and ritualism that goes on makes it fiddicult to grasp..

i have dwelt on this question occasionally... what is money .. a instrument to facilitate exchange of goods and services .. - barter 501 ? now if you want to back this with something solid..you would choose ? - why gold?

bear me as i have a technical background not economics..

Latex Ren · 12-17-2010, 02:49 AM

It's interesting you just posted this. I read/listened to something on the internet the other day about the collapse of America and it's based on the pending financial doom.

The end result? Buy gold

It will always be worth something as paper money needs to be based on something tangible.

jigar · 12-17-2010, 03:43 AM

Quote:

Originally Posted by Latex Ren

It's interesting you just posted this. I read/listened to something on the internet the other day about the collapse of America and it's based on the pending financial doom.

The end result? Buy gold

It will always be worth something as paper money needs to be based on something tangible.

well why gold...? gold rate varies and during times of trouble the goldbacking is not as reliable as essential goods and services originally backed by the paper money... i imagine vital goods and infrastructure etc being pledged and a global body is essential or countries powerful enough can do funny business with their currency .. like china..but not the first culprit.. the US infusions backed by nothing are also crazy..over printing leads to inflation they say..why do it then, plus that money is gonna become Foreign investment in other countries..buy up assets overseas with a strong currency and replenish+weaken it by printing more.. ? there has to be a global body to govern currencies , take out the probable manipulations ?

wish to understand the system .

Latex Ren · 12-17-2010, 04:23 AM

I think 'gold' because it has historically been used as currency throughout the world. When a king said "look at me..I'm a king with wealth" he wasn't showing off paper currency, he had chests/rooms of gold and other precious metal/stones.

Now if you are talking a complete breakdown of society..then yeah, gold is mud. You need canned food, water, ammo...etc to have any 'wealth'. If you are talking strictly a monetary collapse, where the US dollar becomes worthless, other countries should still value gold as a financial commodity.

My .02

As a druid-elf, I don't value money. My people value food/water/shelter/and leather pants.

Baraka_Guru · 12-17-2010, 05:23 AM

It's a terrible time to be buying gold. No one knows whether it's a bubble or not and you'd be buying at historically high prices. You're probably better off just sitting in cash. Your best option right now is looking for undervalued stocks. It's like a massive sidewalk sale out there right now.

Here is some general advice: if everyone is doing it, you should seriously consider doing the opposite.

Latex Ren · 12-17-2010, 06:02 AM

then again....some financial analysts are predicting an economic disaster in the next year. Their advice...."your savings/money will be worthless...invest in gold."

If the US dollar takes the hit they are predicting...cash won't be worth toilet paper

ASU2003 · 12-17-2010, 06:18 AM

The only problem I see with gold is that one political party has a lot more interest in deflating the dollar and hence raising the price of gold...

fresnelly · 12-17-2010, 06:22 AM

Quote:

Originally Posted by Baraka_Guru

It's a terrible time to be buying gold. No one knows whether it's a bubble or not and you'd be buying at historically high prices. You're probably better off just sitting in cash. Your best option right now is looking for undervalued stocks. It's like a massive sidewalk sale out there right now.

Here is some general advice: if everyone is doing it, you should seriously consider doing the opposite.

Especially don't buy gold in the form of "Rare Collector Coins". You're paying extra for the jacked-up, dubious 'collector' status and usually low-quantity of actual gold in the mix. Scam, scam, scam.

Baraka_Guru · 12-17-2010, 06:26 AM

There are foreign currencies that are stable.

The thing with "some analysts" "predicting" "disaster" is that it basically drives people to bet against the unknown if not the improbable. "Some analysts" are notorious for being wrong.

Society tends to obsess over gold, and that in itself should be a warning sign.

What do you do when institutional investors dump gold if they get jittery over the price run-up and/or want to cut a profit after a ten-year gain? Retail investors might find themselves holding $200 less per ounce than what they paid for it. Or worse.

What if disaster never comes? You've just wasted money on something that is only theoretically secure in a theoretical disaster.

How much of the gold price is speculative do you think? How high will it go before people take profits and push the price down?

filtherton · 12-17-2010, 07:01 AM

The standard method for making sense of economic data is to first decide on some sort of governing philosophy, (ie supply side, Keysianism). Then you simply wedge whatever data you come across into this philosophical framework. Occasionally, you will come across data that seems to invalidate the basic assumptions of your chosen philosophy- these data should always be treated as outliers and ignored, because hey, you already know how the market works, so it's the data that's wrong, not you.

jigar · 12-18-2010, 12:07 AM

Quote:

Originally Posted by Baraka_Guru

There are foreign currencies that are stable.

The thing with "some analysts" "predicting" "disaster" is that it basically drives people to bet against the unknown if not the improbable. "Some analysts" are notorious for being wrong.

Society tends to obsess over gold, and that in itself should be a warning sign.

What do you do when institutional investors dump gold if they get jittery over the price run-up and/or want to cut a profit after a ten-year gain? Retail investors might find themselves holding $200 less per ounce than what they paid for it. Or worse.

What if disaster never comes? You've just wasted money on something that is only theoretically secure in a theoretical disaster.

How much of the gold price is speculative do you think? How high will it go before people take profits and push the price down?

Quote:

Originally Posted by filtherton

The standard method for making sense of economic data is to first decide on some sort of governing philosophy, (ie supply side, Keysianism). Then you simply wedge whatever data you come across into this philosophical framework. Occasionally, you will come across data that seems to invalidate the basic assumptions of your chosen philosophy- these data should always be treated as outliers and ignored, because hey, you already know how the market works, so it's the data that's wrong, not you.

@ filtherton.. that sounds very redneck bro! lol .... keep stepping on it even if theres no gas? as they say "its all in the mind" -- lol

about gold..given theres a global disaster - gold wont do much, the value will be reduced to nothing.. plus gold rate varies..so how much gold do i get for a dollar ? - keeps changing? there is no real link, just a proxy to bring all the independent barter currencies of the world.. but surely they could create a system where the money you print is based on "suitable" resources the country holds..? Gold by virtue of its few uses is overpriced-and soon wearing gold will be passe i think, as we evolve beyond the primitive affinity to shiny stuff ? ..i wonder why they didnt pledge assets of a country like minerals and infrastructure and the paper currency would be akin to shares...?

Nepenthes · 12-18-2010, 04:01 AM

Quote:

Originally Posted by ASU2003

The only problem I see with gold is that one political party has a lot more interest in deflating the dollar and hence raising the price of gold...

OK, I'll bite. Which political party and why do you think so?

I think the the main reason the price of gold is increasing in the market is due to investor uncertainty.

Seaver · 12-18-2010, 02:20 PM

You're right... Gold never loses value. Except in the late '70s to '90s when Gold more than halved it's value.

It's reached it's peak that it had back in the '70s... which means if you bought Gold in the '70s you would have a 0% profit margin after 30 years! Or how about Palladium that lost 80% of it's value almost overnight in '01. You're right... gold has never been worthless. But to say it's never lost value could not be more incorrect.

Hell at least buy platinum where it lost 66% of it's value after '08 and has been climbing back since. Never buy shit at the peak... you'll only be sure to lose money. You know what the "Buy Gold!" people call those that actually buy gold because they were told to?
"Dumb Money".

jigar · 12-20-2010, 01:45 AM

below is a post i posted elsewhere..reposting here -

gold silver are scarce... if shit became scarce would you hoard it ??
shiny is all they are.. people wanting diamonds and "precious" metal jewelry if they like to wear to adorn themselves or industries wanting it for tech applications..i.e an actual USE is ok.. i think its a outdated concept of gold backed stuff.. -

electronic money rotting! ? - why would that happen... ? - is the holder stupid to not buy up some assets with it.. or simply issue loans at lower rates ? - or even invest in creating a new market.. - money never stagnates..if it does it means trouble..

money is a medium for exchange of goods... the most basic ones are the ultimate guarantee not luxury products..- if a region produces 200 million tons of food, and theres enough water - if food and drink are the only commodities with a significant market.. - you cannot have more money than what will buy up the 200 million ! - or the excess money is a waste and available for abuse/tricks and will cause inflation.... - but if theres a market for healthcare,leisure,sports,communications etc ... it is possible to put in more money - jobs created etc..- given theres enough food and water, there is no problem..- ? money allows the exchange of goods to sustain ... creative pursuits find greater importance, etc

but assume there is a famine, money from before is hoarded up - but there isnt enough grain so price keeps rising ! ? assuming gold was used as a backer, grain can be imported from overseas , - but only if there is an excess elsewhere.. - prices go up to a lesser extent...but as a seller, do i accept the countries currency or demand gold? how do i ascertain the REAL Value of the billion dollars- that it will actually be equivalent to something of equal worth.. if they do the quantitative easing like the US did? -- or more money than actual goods will mean wealthy people act as a sponge and live well OR more money less goods = inflation.. - i could instead take a promisorry note for replenishment of equivalent grain plus 10% as profit in gold/currency ? they can avail credit by offering up anything of value, their infrastructure, agricultural lands could be pledged on paper.. much easier to trade ? - akin to stock markets.. i would prefer such security over gold... - its always marketeable. plus the price/volume is irrelevant now.

what i am trying to resolve is how are currency values arrived at - and whether gold is relevant still - why are incredibly smart bankers and countries..i assume filled with rooms of people smarter or atleast who give more thought to this still running with gold... and allowing the US currency to stay steady when its being diluted all the time plus has weak fundamentals... i beleive it might be that institutions and countries sitting on stock piles of euros and dollars are trying to find as many suckers as they can to offload and minimize their losses ??

OR the US and EU buy up assets overseas with an overvalued currency.? by giving out stakes they can enhance or diminish to the world, they keep their own currencies inflated.., print more whatever ? i know countries cannot be so stupid they dont catch on so i assume theres more to the picture ????

dippin · 12-20-2010, 06:57 AM

Price of gold, inflation adjusted, for the past few decades:

roachboy · 12-20-2010, 07:17 AM

i dont get this sub ron paul militia world obsession with gold as if some abstract notion of fixity of supply makes the value imputed to it more "Real" than the value imputed to script.

and unless you loop this onto questions of the nature of value (where it comes from, what it is) writing buzzy little screeds about how safe gold is gets you nowhere close to "understanding economics"---all it does is allow you to express some anxiety about uncertainty, which is all this ultra-right libertarian stuff about money seems to be about.

we'll all get together and use this here scarce shiny shit for money and abolish the federal reserve and regress to some warped and incompetent society-for-creative-anarchronism version of feudalism but we'll be able to fool ourselves into thinking how very Moral it is because the Evil State won't be running around Distorting Stuff and we'll all have our little tiny piles of shiny stuff and everything will be grand, just grand, because ayn rand tells us so.

Baraka_Guru · 12-20-2010, 07:29 AM

Quote:

Originally Posted by roachboy

[...] and everything will be grand, just grand, because ayn rand tells us so.

The science fiction novelist?

roachboy · 12-20-2010, 08:49 AM

krugman is right:

Quote:

When Zombies Win
By PAUL KRUGMAN

When historians look back at 2008-10, what will puzzle them most, I believe, is the strange triumph of failed ideas. Free-market fundamentalists have been wrong about everything — yet they now dominate the political scene more thoroughly than ever.

How did that happen? How, after runaway banks brought the economy to its knees, did we end up with Ron Paul, who says “I don’t think we need regulators,” about to take over a key House panel overseeing the Fed? How, after the experiences of the Clinton and Bush administrations — the first raised taxes and presided over spectacular job growth; the second cut taxes and presided over anemic growth even before the crisis — did we end up with bipartisan agreement on even more tax cuts?

The answer from the right is that the economic failures of the Obama administration show that big-government policies don’t work. But the response should be, what big-government policies?

For the fact is that the Obama stimulus — which itself was almost 40 percent tax cuts — was far too cautious to turn the economy around. And that’s not 20-20 hindsight: many economists, myself included, warned from the beginning that the plan was grossly inadequate. Put it this way: A policy under which government employment actually fell, under which government spending on goods and services grew more slowly than during the Bush years, hardly constitutes a test of Keynesian economics.

Now, maybe it wasn’t possible for President Obama to get more in the face of Congressional skepticism about government. But even if that’s true, it only demonstrates the continuing hold of a failed doctrine over our politics.

It’s also worth pointing out that everything the right said about why Obamanomics would fail was wrong. For two years we’ve been warned that government borrowing would send interest rates sky-high; in fact, rates have fluctuated with optimism or pessimism about recovery, but stayed consistently low by historical standards. For two years we’ve been warned that inflation, even hyperinflation, was just around the corner; instead, disinflation has continued, with core inflation — which excludes volatile food and energy prices — now at a half-century low.

The free-market fundamentalists have been as wrong about events abroad as they have about events in America — and suffered equally few consequences. “Ireland,” declared George Osborne in 2006, “stands as a shining example of the art of the possible in long-term economic policymaking.” Whoops. But Mr. Osborne is now Britain’s top economic official.

And in his new position, he’s setting out to emulate the austerity policies Ireland implemented after its bubble burst. After all, conservatives on both sides of the Atlantic spent much of the past year hailing Irish austerity as a resounding success. “The Irish approach worked in 1987-89 — and it’s working now,” declared Alan Reynolds of the Cato Institute last June. Whoops, again.

But such failures don’t seem to matter. To borrow the title of a recent book by the Australian economist John Quiggin on doctrines that the crisis should have killed but didn’t, we’re still — perhaps more than ever — ruled by “zombie economics.” Why?

Part of the answer, surely, is that people who should have been trying to slay zombie ideas have tried to compromise with them instead. And this is especially, though not only, true of the president.

People tend to forget that Ronald Reagan often gave ground on policy substance — most notably, he ended up enacting multiple tax increases. But he never wavered on ideas, never backed down from the position that his ideology was right and his opponents were wrong.

President Obama, by contrast, has consistently tried to reach across the aisle by lending cover to right-wing myths. He has praised Reagan for restoring American dynamism (when was the last time you heard a Republican praising F.D.R.?), adopted G.O.P. rhetoric about the need for the government to tighten its belt even in the face of recession, offered symbolic freezes on spending and federal wages.

None of this stopped the right from denouncing him as a socialist. But it helped empower bad ideas, in ways that can do quite immediate harm. Right now Mr. Obama is hailing the tax-cut deal as a boost to the economy — but Republicans are already talking about spending cuts that would offset any positive effects from the deal. And how effectively can he oppose these demands, when he himself has embraced the rhetoric of belt-tightening?

Yes, politics is the art of the possible. We all understand the need to deal with one’s political enemies. But it’s one thing to make deals to advance your goals; it’s another to open the door to zombie ideas. When you do that, the zombies end up eating your brain — and quite possibly your economy too.

http://www.nytimes.com/2010/12/20/op...ef=global-home

it's beyond stunning that in the face of disastrous outcomes produced by exactly this lunatic "free market" thinking that politically/ideologically the united states continues to be so dominated by it that people would prefer to cancel involvement with reality to attempting to fashion a more coherent image of socio-economic activity, the state and relations between them.

YouTube - Fela Kuti & Afrika 70 "Zombie"

Seaver · 12-20-2010, 09:49 PM

Quote:

what i am trying to resolve is how are currency values arrived at - and whether gold is relevant still - why are incredibly smart bankers and countries..i assume filled with rooms of people smarter or atleast who give more thought to this still running with gold... and allowing the US currency to stay steady when its being diluted all the time plus has weak fundamentals... i beleive it might be that institutions and countries sitting on stock piles of euros and dollars are trying to find as many suckers as they can to offload and minimize their losses ??

Read more: http://www.tfproject.org/tfp/tilted-...#ixzz18ipZvdVK

Almost no industrialized nation attaches their currency to gold. The reason is a gold fluctuation could ruin an economy that is otherwise running fine. By controlling their own money, a government can in real time decide the import/export percentage of it's economy. In addition, a terrible crash can immediately spurn global investment akin to Mexico in the mid '90s. They almost had a governmental collapse, their peso dropped almost overnight to 1/4 it's original value. This caused enormous investment from America and Europe to take advantage of the value and started industrial parks which very quickly brought the Peso back up and restarted the economy.

If it had been tied to Gold they probably would have lost the entire government as there would not have been enough to replace the peso/gold oz. scramble. Their exports would have stayed extremely expensive and imports would have ground to a halt.

jigar · 12-24-2010, 12:57 AM

Quote:

Originally Posted by Seaver

Almost no industrialized nation attaches their currency to gold. The reason is a gold fluctuation could ruin an economy that is otherwise running fine. By controlling their own money, a government can in real time decide the import/export percentage of it's economy. In addition, a terrible crash can immediately spurn global investment akin to Mexico in the mid '90s. They almost had a governmental collapse, their peso dropped almost overnight to 1/4 it's original value. This caused enormous investment from America and Europe to take advantage of the value and started industrial parks which very quickly brought the Peso back up and restarted the economy.

If it had been tied to Gold they probably would have lost the entire government as there would not have been enough to replace the peso/gold oz. scramble. Their exports would have stayed extremely expensive and imports would have ground to a halt.

i know - but current spike in gold is attributed to dollar and euro weakness...as a hedge against it, which doesnt make sense.. and if currency isnt pegged to a "real" security, what stops govts from simply printing more to repay debts, or to secretly buy up assets overseas ..since its worth just the paper and no one can scrutinize the internal workings of a govt. ? it also muddies up trade, have a tech background but everything can be traced by logic..but this seems to be illogical.. especially the quantitative easing and supposed currency wars.. - if it meant anything real, the scope to manipulate it is greatly reduced to less feasible ways. ..

Baraka_Guru · 12-24-2010, 04:59 AM

Do you know what currencies are pegged to? Market value. With the exception of China (and probably a few others), who manipulates their currency unfairly, nations are at the mercy of what markets will pay for their currency. The U.S. "simply" doesn't print money to repay debts because that would further devalue the Greenback, which is something they want to avoid. The current value isn't all bad. The depressed value makes it easier for domestic U.S. companies to export to those who would take advantage of a higher purchasing power for American goods.

Generally, most nations don't necessarily want a "high" or "low" value for their currency; what they want is a value they can manage. They want a stable value, rather than volatility. They want to influence the money supply when they strive for certain goals.

The quantitative easing isn't illogical; it's merely risky. The hope is to bolster the stock markets, which essentially infuses an economy with needed cash to produce and expand. The risk is devaluing the currency without that effect.

Economics is tough. In a way it's like trying to herd cats.

jigar · 12-25-2010, 01:18 AM

Quote:

Originally Posted by Baraka_Guru

Do you know what currencies are pegged to? Market value. With the exception of China (and probably a few others), who manipulates their currency unfairly, nations are at the mercy of what markets will pay for their currency. The U.S. "simply" doesn't print money to repay debts because that would further devalue the Greenback, which is something they want to avoid. The current value isn't all bad. The depressed value makes it easier for domestic U.S. companies to export to those who would take advantage of a higher purchasing power for American goods.

Generally, most nations don't necessarily want a "high" or "low" value for their currency; what they want is a value they can manage. They want a stable value, rather than volatility. They want to influence the money supply when they strive for certain goals.

The quantitative easing isn't illogical; it's merely risky. The hope is to bolster the stock markets, which essentially infuses an economy with needed cash to produce and expand. The risk is devaluing the currency without that effect.

Economics is tough. In a way it's like trying to herd cats.

money only makes barter elegant - basic premise is always equal value...and i am sure this is not too hazy or currencies are just arbitrary values ? - and why would countries accept each others currencies..without knowing how they value their currency.. simply printing without any real linkage to real "value" i.e goods or assets means what ?? - there has to be a link, or countries like the US could simply print more dollars and keep their currency strong, pay people in dollars for consumer goods -- they are getting paid or buying a stake in the dollar! - now if everyone has a large amount of dollars, who will want the USD to crash...obviously they want to collect!- in a truly globalized scenario i assume people would can buy up US assets !- here again the US imposes restrictions on investment...50% tax on gains i beleive ? -- but more USD = inflation, your property appreciates but your gains are again in USD as well, BUT - the strong USD allows US investors to pick up assets cheaply abroad..

above likely has holes in it - but i dont see them or wouldnt post here.. pick holes for me.

12-17-2010, 12:18 AM	#1 (permalink)
jigar Upright	trying to make sense of economics.. Economics.. - we made it but have lost control ? - the amount of misdirection and ritualism that goes on makes it fiddicult to grasp.. i have dwelt on this question occasionally... what is money .. a instrument to facilitate exchange of goods and services .. - barter 501 ? now if you want to back this with something solid..you would choose ? - why gold? bear me as i have a technical background not economics..

12-17-2010, 05:23 AM	#5 (permalink)
Baraka_Guru warrior bodhisattva Super Moderator Location: East-central Canada	It's a terrible time to be buying gold. No one knows whether it's a bubble or not and you'd be buying at historically high prices. You're probably better off just sitting in cash. Your best option right now is looking for undervalued stocks. It's like a massive sidewalk sale out there right now. Here is some general advice: if everyone is doing it, you should seriously consider doing the opposite. __________________ Knowing that death is certain and that the time of death is uncertain, what's the most important thing? —Bhikkhuni Pema Chödrön Humankind cannot bear very much reality. —From "Burnt Norton," Four Quartets (1936), T. S. Eliot

12-17-2010, 06:26 AM	#9 (permalink)
Baraka_Guru warrior bodhisattva Super Moderator Location: East-central Canada	There are foreign currencies that are stable. The thing with "some analysts" "predicting" "disaster" is that it basically drives people to bet against the unknown if not the improbable. "Some analysts" are notorious for being wrong. Society tends to obsess over gold, and that in itself should be a warning sign. What do you do when institutional investors dump gold if they get jittery over the price run-up and/or want to cut a profit after a ten-year gain? Retail investors might find themselves holding $200 less per ounce than what they paid for it. Or worse. What if disaster never comes? You've just wasted money on something that is only theoretically secure in a theoretical disaster. How much of the gold price is speculative do you think? How high will it go before people take profits and push the price down? __________________ Knowing that death is certain and that the time of death is uncertain, what's the most important thing? —Bhikkhuni Pema Chödrön Humankind cannot bear very much reality. —From "Burnt Norton," Four Quartets (1936), T. S. Eliot

12-18-2010, 02:20 PM	#13 (permalink)
Seaver Junkie Location: Fort Worth, TX	You're right... Gold never loses value. Except in the late '70s to '90s when Gold more than halved it's value. It's reached it's peak that it had back in the '70s... which means if you bought Gold in the '70s you would have a 0% profit margin after 30 years! Or how about Palladium that lost 80% of it's value almost overnight in '01. You're right... gold has never been worthless. But to say it's never lost value could not be more incorrect. Hell at least buy platinum where it lost 66% of it's value after '08 and has been climbing back since. Never buy shit at the peak... you'll only be sure to lose money. You know what the "Buy Gold!" people call those that actually buy gold because they were told to? "Dumb Money". __________________ "Smite the rocks with the rod of knowledge, and fountains of unstinted wealth will gush forth." - Ashbel Smith as he laid the first cornerstone of the University of Texas

12-20-2010, 01:45 AM	#14 (permalink)
jigar Upright	below is a post i posted elsewhere..reposting here - gold silver are scarce... if shit became scarce would you hoard it ?? shiny is all they are.. people wanting diamonds and "precious" metal jewelry if they like to wear to adorn themselves or industries wanting it for tech applications..i.e an actual USE is ok.. i think its a outdated concept of gold backed stuff.. - electronic money rotting! ? - why would that happen... ? - is the holder stupid to not buy up some assets with it.. or simply issue loans at lower rates ? - or even invest in creating a new market.. - money never stagnates..if it does it means trouble.. money is a medium for exchange of goods... the most basic ones are the ultimate guarantee not luxury products..- if a region produces 200 million tons of food, and theres enough water - if food and drink are the only commodities with a significant market.. - you cannot have more money than what will buy up the 200 million ! - or the excess money is a waste and available for abuse/tricks and will cause inflation.... - but if theres a market for healthcare,leisure,sports,communications etc ... it is possible to put in more money - jobs created etc..- given theres enough food and water, there is no problem..- ? money allows the exchange of goods to sustain ... creative pursuits find greater importance, etc but assume there is a famine, money from before is hoarded up - but there isnt enough grain so price keeps rising ! ? assuming gold was used as a backer, grain can be imported from overseas , - but only if there is an excess elsewhere.. - prices go up to a lesser extent...but as a seller, do i accept the countries currency or demand gold? how do i ascertain the REAL Value of the billion dollars- that it will actually be equivalent to something of equal worth.. if they do the quantitative easing like the US did? -- or more money than actual goods will mean wealthy people act as a sponge and live well OR more money less goods = inflation.. - i could instead take a promisorry note for replenishment of equivalent grain plus 10% as profit in gold/currency ? they can avail credit by offering up anything of value, their infrastructure, agricultural lands could be pledged on paper.. much easier to trade ? - akin to stock markets.. i would prefer such security over gold... - its always marketeable. plus the price/volume is irrelevant now. what i am trying to resolve is how are currency values arrived at - and whether gold is relevant still - why are incredibly smart bankers and countries..i assume filled with rooms of people smarter or atleast who give more thought to this still running with gold... and allowing the US currency to stay steady when its being diluted all the time plus has weak fundamentals... i beleive it might be that institutions and countries sitting on stock piles of euros and dollars are trying to find as many suckers as they can to offload and minimize their losses ?? OR the US and EU buy up assets overseas with an overvalued currency.? by giving out stakes they can enhance or diminish to the world, they keep their own currencies inflated.., print more whatever ? i know countries cannot be so stupid they dont catch on so i assume theres more to the picture ???? Last edited by jigar; 12-20-2010 at 01:52 AM..

12-17-2010, 02:49 AM	#2 (permalink)
Latex Ren Upright Location: Michigan	It's interesting you just posted this. I read/listened to something on the internet the other day about the collapse of America and it's based on the pending financial doom. The end result? Buy gold It will always be worth something as paper money needs to be based on something tangible.

12-17-2010, 04:23 AM	#4 (permalink)
Latex Ren Upright Location: Michigan	I think 'gold' because it has historically been used as currency throughout the world. When a king said "look at me..I'm a king with wealth" he wasn't showing off paper currency, he had chests/rooms of gold and other precious metal/stones. Now if you are talking a complete breakdown of society..then yeah, gold is mud. You need canned food, water, ammo...etc to have any 'wealth'. If you are talking strictly a monetary collapse, where the US dollar becomes worthless, other countries should still value gold as a financial commodity. My .02 As a druid-elf, I don't value money. My people value food/water/shelter/and leather pants.

12-17-2010, 06:02 AM	#6 (permalink)
Latex Ren Upright Location: Michigan	then again....some financial analysts are predicting an economic disaster in the next year. Their advice...."your savings/money will be worthless...invest in gold." If the US dollar takes the hit they are predicting...cash won't be worth toilet paper

12-17-2010, 06:18 AM	#7 (permalink)
ASU2003 immoral minority Location: Back in Ohio	The only problem I see with gold is that one political party has a lot more interest in deflating the dollar and hence raising the price of gold...

12-17-2010, 07:01 AM	#10 (permalink)
filtherton Junkie Location: In the land of ice and snow.	The standard method for making sense of economic data is to first decide on some sort of governing philosophy, (ie supply side, Keysianism). Then you simply wedge whatever data you come across into this philosophical framework. Occasionally, you will come across data that seems to invalidate the basic assumptions of your chosen philosophy- these data should always be treated as outliers and ignored, because hey, you already know how the market works, so it's the data that's wrong, not you.

12-20-2010, 06:57 AM	#15 (permalink)
dippin Crazy, indeed Location: the ether	Price of gold, inflation adjusted, for the past few decades:

12-20-2010, 07:17 AM	#16 (permalink)
roachboy Super Moderator Location: essex ma	i dont get this sub ron paul militia world obsession with gold as if some abstract notion of fixity of supply makes the value imputed to it more "Real" than the value imputed to script. and unless you loop this onto questions of the nature of value (where it comes from, what it is) writing buzzy little screeds about how safe gold is gets you nowhere close to "understanding economics"---all it does is allow you to express some anxiety about uncertainty, which is all this ultra-right libertarian stuff about money seems to be about. we'll all get together and use this here scarce shiny shit for money and abolish the federal reserve and regress to some warped and incompetent society-for-creative-anarchronism version of feudalism but we'll be able to fool ourselves into thinking how very Moral it is because the Evil State won't be running around Distorting Stuff and we'll all have our little tiny piles of shiny stuff and everything will be grand, just grand, because ayn rand tells us so. __________________ a gramophone its corrugated trumpet silver handle spinning dog. such faithfulness it hear it make you sick. -kamau brathwaite

12-24-2010, 04:59 AM	#21 (permalink)
Baraka_Guru warrior bodhisattva Super Moderator Location: East-central Canada	Do you know what currencies are pegged to? Market value. With the exception of China (and probably a few others), who manipulates their currency unfairly, nations are at the mercy of what markets will pay for their currency. The U.S. "simply" doesn't print money to repay debts because that would further devalue the Greenback, which is something they want to avoid. The current value isn't all bad. The depressed value makes it easier for domestic U.S. companies to export to those who would take advantage of a higher purchasing power for American goods. Generally, most nations don't necessarily want a "high" or "low" value for their currency; what they want is a value they can manage. They want a stable value, rather than volatility. They want to influence the money supply when they strive for certain goals. The quantitative easing isn't illogical; it's merely risky. The hope is to bolster the stock markets, which essentially infuses an economy with needed cash to produce and expand. The risk is devaluing the currency without that effect. Economics is tough. In a way it's like trying to herd cats. __________________ Knowing that death is certain and that the time of death is uncertain, what's the most important thing? —Bhikkhuni Pema Chödrön Humankind cannot bear very much reality. —From "Burnt Norton," Four Quartets (1936), T. S. Eliot