Why would anyone want gold standard?

[The Central Scrutinizer]

ok, thank you for explaining that. I would have thought that anybody in here responding to posts on the topic would be interested enough to watch to understand the arguments they are attempting to oppose a bit better, but clearly not.

I'm waiting for delivery of Rickards book and will revisit this once I have exactly what you ask for.

Basically, we've heard all the gold bug arguments before, and have destroyed them all. So unless you come up with some new argument (you haven't) that supports gold or returning to the gold standard, it's just the same old nonsense. But I still take the time to point and laugh.

 

[kevsta]

serious question. if it turns ultimately out you are wrong on this, how will you feel?

It wont make much difference to me either way, Im on my own metals standard anyway and will continue to be so.

 

[The Central Scrutinizer]

serious question. if it turns ultimately out you are wrong on this, how will you feel?

Terrible. But I've been right for 52 years, so I kind of like my track record.

It wont make much difference to me either way, Im on my own metals standard anyway and will continue to be so.

Fascinating. Please tell us more.

 

[Cavemonster]

ok, thank you for explaining that. I would have thought that anybody in here responding to posts on the topic would be interested enough to watch to understand the arguments they are attempting to oppose a bit better, but clearly not.
.

Honestly, that seems based in a condescending assumption that others here have not already studied and explored the arguments they oppose.

For the most part, those engaged in debate have already heard countless arguments from your point of view from experts and amateurs alike. It's a recurring topic here and one that people with any interest in economics have explored.

Your job, if you want people to watch your link, is to give people a reason to believe it's worth 10minutes of their time and not just a retread of the many arguments they've already heard.

Imagine you dropped in on an amateur historian forum where a debate with a holocaust denier was taking place, and you plomped down a link to a 10min video and said "This guy doesn't believe the holocaust happened, do you think he's delusional?"

They would only be "interested enough to watch to understand the arguments they are attempting to oppose a bit better" if they had reason to believe there was some novel, intellectually honest argument or evidence being presented, otherwise, why waste their time?

 

[timhau]

For the most part, those engaged in debate have already heard countless arguments from your point of view from experts and amateurs alike.

Not 'alike'. It's been heavily weighed towards the amateurs, even if we don't count the bat- crazy.

 

[GlennB]

[Thinks]

Maybe we should adopt a sock standard?

No-one ever runs out of socks. Odd-ones appear but I'm sure that's the result of their secret breeding rituals.

Different colours might represent different currencies and if you need to devalue you just swap silk ones for cotton.

The only downside is moth-based depreciation.

While we were discussing the upcoming global financial meltdown, MrsB pointed out that thermal underwear would become enormously valuable and eminently tradeable (well, outside the tropics anyway).

So there you have it - corner the market in long-johns. Actual, physical long-johns mind, not mere contracts. Stockpile and guard !

 

[kevsta]

Honestly, that seems based in a condescending assumption that others here have not already studied and explored the arguments they oppose.

For the most part, those engaged in debate have already heard countless arguments from your point of view from experts and amateurs alike. It's a recurring topic here and one that people with any interest in economics have explored.

Your job, if you want people to watch your link, is to give people a reason to believe it's worth 10minutes of their time and not just a retread of the many arguments they've already heard.

Imagine you dropped in on an amateur historian forum where a debate with a holocaust denier was taking place, and you plomped down a link to a 10min video and said "This guy doesn't believe the holocaust happened, do you think he's delusional?"

They would only be "interested enough to watch to understand the arguments they are attempting to oppose a bit better" if they had reason to believe there was some novel, intellectually honest argument or evidence being presented, otherwise, why waste their time?

Apologies it wasn't meant to sound condescending, but exasperated might be a better word. Im not really used to this level of disinterest in subject matter and continually sniping without actually ever replying to previous answers.

the individual I put on ignore started going on about 911 and all sorts, then someone else suggested I'm a jew hater, it's pretty bloody ridiculous behaviour from a supposedly more intelligent than average forum.

With regards to the Jim Rickards Bloomberg video, this is actually pretty new information, my apologies for not describing it attractively enough.

he has a book just released last week called Currency Wars

http://www.amazon.com/Currency-Wars-Making-Global-Portfolio/dp/1591844495/ref=lh_ni_t

In it, he is describing the financial warfare simulations that he helped set up and design, as the primary financial consultant on the project from scratch, with the Pentagon and all the military attendees.

He is of the opinion that the 3rd great currency war is now well underway, and that future serious clashes with other countries will be fought in this area first, before any potential military engagements

I therefore assert that with his long background and expertise in capital markets, and his direct involvement in the concept, game design rules, and of being on the side of the winning team, he has a far greater understanding of these matters than you, I, or anybody else on this board.

and Rickards is of the opinion that we will probably be returning to some form of gold standard, probably in less than ideal circumstances, after the next bout of imaginary money printing (SDRs) arrives and then fails.

On the Bloomberg video is also another well qualified guy, Jim Grant of Grant's Interest rate Observer. http://en.wikipedia.org/wiki/James_Grant_(finance)

there is some general discussion of the ideas around the gold standard, and of what they (and I) consider inaccuracies, of academia's consistently incorrect arguments and propaganda around the subject.

did you for example know, that actually the US is still on the gold standard? if you calculate the amount of gold the US (hopefully still) has, applied to M1, you are still on a shadow gold standard at 17% backing.

I would think there might well be things you have heard before, and quite possibly some you have not.

I therefore would be interested in all of your opinions of the subjects discussed in the video.

thanks

ps, if you're just going to say he's only trying to sell his book, please don't bother answering, I have been following him for the best part of 4 years now, long before any books, and he hasnt changed any of the things he says lately or anything.

the book is also already a runaway success, top 5 in the finance part of Amazon and like #38 in the global everything charts, (pre-release) he doesnt need to pimp it, he is as I said, highly respected in general.

 

[kevsta]

Terrible. But I've been right for 52 years, so I kind of like my track record.

Fascinating. Please tell us more.

ok, now Im really asking for it, but lets play anyway. pretty simple really, its a modern digital gold standard.

preface: I believe that despite what the mainstream consensus says, that gold is money, that it is a superior form of money, it is already the unofficial global reserve currency, and becoming (back) more so every day, and that over the forseeable future it will continue to be better money in terms of preserving it's value than any of the paper alternatives.

therefore I have implemented my own personal gold standard, as below.

From various previous labours, (and bailing from property in 2006 in the UK because I saw the crash coming, early, but correct) I have amassed a little "wealth" or "value" which had been originally paid to me by way of government digital numbers or "tax tokens" which I have converted to (lets call it high powered money - 70/30 fully allocated gold/silver in 2009) within a vaulted exchange system in Zurich, which is directly connected into the LMBA (during trading hours) this is my own private central bank.

my central bank, like most of the others these days is a buyer of Gold.

inside the iPrivateFED™ system (made up name, not plugging anything) there is also a Forex desk, real money can be instantly traded for the most popular government tax tokens at any time, and so can also hedge FX currency reserves if ever required.

iPrivateFED™ is 100% metals backed, and then interfaces with my clearing house (current account/s) which deal with all the low level token trading matters, holding the bare minimum required for token transactions.

iPrivateFED™ runs at reverse leverage of 100:1 with the clearing house, ie tax tokens are backed up by approx 100x the amount of metals at current token prices.

tax tokens also flow directly into the clearing house (from other ongoing endeavors) some are immediately re-issued at token level, excess is swept across weekly to become high powered money.

things I want to buy are continually deflating (priced in iPrivateFED™) money, faster than their owners can put up the prices (priced in govt tax tokens)

I believe this will continue until the global financial system is all fixed and well again and this is not going to be any time soon, assets that require debt to own, down, things we need all the time, up.

some time prior to everything being fixed and wonderful again (Dow:Gold 1:1 kinda thing) there will be bargains to be had, if you have real money left to spend, I am sure I'll get out of my private banking business one day.

In the meantime, if I do need to spend any real money on substantial purchases, all I have to do is transfer it from privateFED™ to the vendor via the clearing house, but this is all online and takes seconds.

just very occasionally I might need a few actual paper tax tokens to hand to a primitive paperbug with no digital transfer facilities for something or other but really paper "money" is the barbarous relic now IMO.

so, if anybody can explain how having that money assigned in government tokens in any kind of normal bank account would benefit me anything like the 100+% devaluation of the tokens against my real money has in the last few years?

well lets face it, they cant. Gold and silver could both halve in "price" and im still ahead. and doubling and doubling again in the next decade is way more likely than heading lower and staying there IMO.

ok, let rip..

 

[The Central Scrutinizer]

Tell us even more. There's so much I feel like I need to learn.

 

[Pulvinar]

well lets face it, they cant. Gold and silver could both halve in "price" and im still ahead. and doubling and doubling again in the next decade is way more likely than heading lower and staying there IMO.

I'll keep it simple: did you hold any gold in 1980?

 

[The Central Scrutinizer]

I'll keep it simple: did you hold any gold in 1980?

Game, set, match.

It's 1980 all over again, for those playing along at home.

 

[RVM45]

Friends, one of the main ideas of having a Gold standard, is to prevent Politicians from being able to influence the market by controlling money flow.

Everyone will not agree that limiting the Government's tools of Control is desirable, but most hard money folks believe in a strictly limited Government.

.....RVM45

 

[ZouPrime]

Friends, one of the main ideas of having a Gold standard, is to prevent Politicians from being able to influence the market by controlling money flow.

It's also the main idea behind having a national bank independent of the government.

 

[kevsta]

Originally Posted by Pulvinar
I'll keep it simple: did you hold any gold in 1980?
Game, set, match.

It's 1980 all over again, for those playing along at home.

simple answer, no, I didn't.

and sorry, I don't follow your logic exactly, yes, we are going to enter a mania, but it hasn't even started yet.

I'm sure I don't have to explain to you why the gold price dropped the last time round, but please do explain to me how they are going to raise real interest rates to a positive level without detonating the entire insolvent system?

and what exactly does "1980 all over again" mean? for the record, you are predicting prices to do what exactly? up then down? level then down? over what timescale? ending up where? (roughly)

Im wondering how long until I can ask you here, in this thread why you think you were wrong?

 

[The Central Scrutinizer]

Friends, one of the main ideas of having a Gold standard, is to prevent Politicians from being able to influence the market by controlling money flow.

Everyone will not agree that limiting the Government's tools of Control is desirable, but most hard money folks believe in a strictly limited Government.

.....RVM45

They can control gold flow instead.

 

[The Central Scrutinizer]

simple answer, no, I didn't.

and sorry, I don't follow your logic exactly, yes, we are going to enter a mania, but it hasn't even started yet.

If by "hasn't even started yet" means "started about 5 years ago", then we are in agreement.

 

[kevsta]

If by "hasn't even started yet" means "started about 5 years ago", then we are in agreement.

well then we are not in agreement my friend.

the amount of institutional money invested into the gold and silver markets is tiny. the percentage ownership of metals by the western public at large is tiny.

even small reallocation by a few percent from big (dumb) money catching on will cause major movement, you haven't seen anything yet, IMO.

 

[Pulvinar]

simple answer, no, I didn't.

and sorry, I don't follow your logic exactly, yes, we are going to enter a mania, but it hasn't even started yet.

Put yourself in Jan 1, 1980. Use your current reasoning but no historical data after that date. How would you know you were in a mania then, and not just taking part in a quite rational move to gold to guard against the evil of the day, inflation?

 

[kevsta]

Put yourself in Jan 1, 1980. Use your current reasoning but no historical data after that date. How would you know you were in a mania then, and not just taking part in a quite rational move to gold to guard against the evil of the day, inflation?

because we are not in 1980, and politicians are unable to reproduce the actions they took then. the economic and social consequences would be too great.

they are faced worldwide with the options of print or let it all collapse and chips fall where they may. the shadow banking system is gradually imploding as we speak, PrimeX is the new Subprime (short) Europe is going to get way worse before it gets better.

so do you really, seriously think they will choose the second option?

do you even seriously think that with the utter incompetence and ineptness of the US political system they could ever even elect anybody who could and would take painful choices against the financial powers that be for the good of the people? Europe prove more every passing day that they dont have a clue how to deal with it.

I will take the opposite side of that bet all day long.

ps, this is how I would know. ie the polar opposite of the general public and media's perception now.

 

[kevsta]

So I have a question for you? a thought experiment.

At what price would gold have to get to, for you to reconsider your thesis?

how would this work, would you watch the bull run the whole way up, scared to get involved? so at some distant point it rolls over and collapses and then you would feel vindicated?

would you capitulate and buy in higher with the idea of attempting to pick a top?

what exactly would you do, if in another year gold was at 2650? then $3200? then $3800 in 2 years?

or what else would have to happen for you to question your thesis'?