jeff f
New Member
hunger never looked so good. michelle is probably jumping for joy as she chows down on some more ribs....
Gold Trend Explained...Very Simple
- Thread starter The Ruiner
- Start date
cannabisguru
Well-Known Member
Actually, I believe that the recent hikes in Gold is because of 2012. It's going to be the only form of currency if any of the severe 2012 events do happen to take place. You can forget about anything else.. Gold will be the currency if any of the possible, more severe upcoming events of 2012 do indeed happen to take place.. period.
I don't have much Gold.. but I have enough that I would be alright. I don't have millions of dollars worth... but its enough.
anyhow, that's just my opinion.
peace.
I don't have much Gold.. but I have enough that I would be alright. I don't have millions of dollars worth... but its enough.
anyhow, that's just my opinion.
peace.
jeff f
New Member
does columbian count? if so i am rich!
doc111
Well-Known Member
The barter system will always serve as a form of currency. If you posess a valuable skill then you will never go hungry..........and columbian definitely counts!
mame
Well-Known Member
If gold is just a useless rock and the USD is just useless paper, than doesn't that make gold just as fiat as the USD when used as a currency? I mean, in the event modern fiat currency fails gold loses it's perceived value as well, right? Say gold is $1500 an ounce but $1500 isn't worth anything... what's to say gold is worth anything?
jeff f
New Member
History.
A currency may fall but not all currencies fall at once. Unless I am missing something
The post drips with sarcasm, I figured you would have figured that out when I said it was a good idea to sell your gold to those scam artists.
Guess what Mame? The value of gold is expressed in ALL currencies, not just the dollar. In Europe gold is Priced in EURO'S. Not US Dollar$.
gold makes the best money because of :]
(1) It must be durable, which is why we don’t use wheat or corn.
(2) It must be divisible, which is why we don’t use a Picasso painting or jade statues.
(3) It must be convenient, which is why we don’t use lead or copper or real estate.
(4) It must have value in itself, which is why we don’t use paper.
(5) It must be transportable, which means that large values must be contained in a small area (a gold coin weighing only one ounce can be worth far more than fifteen hundred dollars).
(6) It must have a long history of being accepted as a store of value. Gold was considered valuable as long as 5,000 years ago in the age of the Egyptians.
(7) It cannot “disappear” or be used up in manufacturing as is copper and even silver. Thus, the gold coin that you have in your hand may have been part of Cleopatra’s earrings centuries ago. Almost all the gold that has ever been discovered is still available in one form or another.
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It must not be the liability of any sovereign nation, nor should it require governmental law to make it money. For instance Gold requires capital, talent, risk, sweat and courage to recover or to accumulate.
mame
Well-Known Member
It was a bit sarcastic.
What about this:
Say I make $10 an hour and bread costs $1 a loaf. What difference does it make if that $10 is payed in paper or gold or anything else as long as it costs me 1/10th of an hour of labor to buy a loaf of bread? Seems to me only actual useful assets(food, land, energy, labor) have any real value. I see your point that gold stands to be a good form of currency but even then, gold's value is determined by how much confidence we have in it's worth, right? If it's value is just determined by how many Euro's or w/e other foreign currency is stable in the event the USD falls than isn't it's value still determined by our confidence in a fiat currency? Just seems flawed IMHO. Doesn't seem to make any difference what currency we use as long as real commodities like labor can be traded for food and shelter.
What about this:
Say I make $10 an hour and bread costs $1 a loaf. What difference does it make if that $10 is payed in paper or gold or anything else as long as it costs me 1/10th of an hour of labor to buy a loaf of bread? Seems to me only actual useful assets(food, land, energy, labor) have any real value. I see your point that gold stands to be a good form of currency but even then, gold's value is determined by how much confidence we have in it's worth, right? If it's value is just determined by how many Euro's or w/e other foreign currency is stable in the event the USD falls than isn't it's value still determined by our confidence in a fiat currency? Just seems flawed IMHO. Doesn't seem to make any difference what currency we use as long as real commodities like labor can be traded for food and shelter.
Say you make $10 an hour and bread costs $1. you pay 1/10 of an hours labor to pay for it. Say tomorrow bread now costs $2, the price of gold has also doubled, but you still make $10 an hour, the next day bread cost $4 and gold has once again doubled in price. You still make $10 an hour. a week later Bread costs $100, gold is up 1000% and you still make $10.
Gold is the most stable asset in the entire world mame, it holds its purchasing power through thick and thin.
Go ahead and tell the bank you will now be paying off your loan in either labor hours or gold, no longer currency. See which one they choose to be paid in.
mame
Well-Known Member
See, what you're describing just isn't happening and wont be happening in the near future at the very least. Sure, bread costs a dollar the first day, maybe $2 the next day but at some point demand wont keep up with the price increases and downward pressure will come into play on said prices... They do not continue to rise into infinity as you suggest. What good is having a supply of 100 loaves at $4 a peice when you can't sell it? Supply and demand matter you know, and the laws of S&D say prices will always hit a ceiling at some point. Many economists and investors are looking at the recent crude oil prices and concluding that we've hit that ceiling... the most recent EIA report supports this assertion. Recent market movements support this assertion.
Wrong, there is unlimited demand that never goes away for food, its not an optional thing for 100% of the population. If there is 1 loaf and 100 starving people you can bet that the fella with the most to trade for that loaf will be the one who eats and lives.
thats funny thing you said about price ceilings, did you know that in 2001 in Zimbabwe you could buy a dozen eggs for $1, but 6 years later an egg cost $300 BILLION, or .1 g of Gold. A loaf of bread cost $1 TRILLION or 1/2gram of gold.
When you say NEAR future you mean what exactly? a day? 3? 20 years, 2 millennium?
mame
Well-Known Member
Just one problem,
There is NOT unlimited demand, see that is where you Austrian types are absolutely wrong! Demand side matters! Just because one guy can buy that loaf of bread doesn't mean the market will clear, in fact, it's because the market wont clear that prices will always go back down. Laws of supply and demand yo, market clearing price matters... always. just because there are still millions of hungry mouths to feed that doesn't mean that they'll all be able to actually buy that food that they need(because they simply can't afford it).
If you make $10 an hour and you can buy bread for a dollar - you can buy 10 peices. If Bread goes up to $5, you can buy 2. The rich guy isn't all of the sudden going to buy more bread to make up for the poor guys inability to buy 10 loafs, he is just going to continue to buy his normal amount. Suppliers aren't going to decrease supply when they can just drop the price (again, towards the market clearing price!) and sell all of their units. The starving guys who were previously left out are starving because they're poor - so they aren't likely to make up for the lack of demand. All of this does, in fact, create downward pressure. It's exactly what has finally happened with oil prices... The EIA released a report showing lack of demand and increased supplies and prices fell. Simple economics.
Of course demand matters, where did you ever get the idea that Austrian Economics says it doesn't? If no one will buy your product it really doesn't matter what the price is, but like I said food is not an option for anyone. If your theory were to be correct prices should now be lower than they were 20 years ago, but they aren't. A big mac costs like $4 now, I remember when they were $.30. So tell me Mame, what has caused the price of the big mac to rise so much? Demand? Supply? McDonald's speculators? Perhaps the supply of the sesame seed bun has been in decline for the last 20 years? Perhaps we no longer have as much hamburger? Lettuce, pickles? What exactly caused this huge 10 fold price increase?
mame
Well-Known Member
It doesn't, actually, but you wouldn't believe how often people who claim to follow Austrian economics are constantly ignoring demand side as if supply is all that matters. Your posts mostly assume demand for food stays constant but it really doesn't and can't as long as wages dont rise with prices. The reason Zimbabwe ran into this situation is because they were pursuing expansionary monetary policy (printing money!) beyond their NAIRU (which at the time was over 90%) because they thought that their NAIRU was much lower. The result was people's wages were increasing along with prices(so fast that workers were being paid daily so they could spend their money before it lost it's worth), and hyperinflation took hold. In our situation, wages haven't risen at all and we remain above our NAIRU (~6% unemployment rate). Until that point, wages wont increase even as prices do increase and it stops the whole scenario due to supply&demand - market clearing. This is one of the major flaws in the "hyperinflation is inevitable" argument... It completely ignores these principles.
The price of that McDonalds burger doesn't matter, the real price does. As long as that hamburger is worth 1/10 of my hourly income it's worth exactly the same. Example:
Burger is $.50. I get payed $5 an hour. Burger costs 1/10th of what I make an hour.
Several years later, burger is $1.00, and I'm payed $10 an hour. The burger costs 1/10th still.
Now, say the real cost of bread and meat increases... You might see a scenario like this:
Burger is $1.50 and I make $10 an hour. The burger is worth 3/20ths of my income and it's real price has increased.
Food demand is always increasing , unless there are less people in the world today than 20 years ago, oh wait there are a shit ton more people today than 20 years ago. I wonder if those people eat.....
Read http://www.census.gov/prod/2009pubs/p60-236.pdf
Over the last decade the median income has been going DOWN, yet prices have been going UP! The exact opposite of what you are saying.
Read http://www.census.gov/prod/2009pubs/p60-236.pdf
Over the last decade the median income has been going DOWN, yet prices have been going UP! The exact opposite of what you are saying.
mame
Well-Known Member
This can't be right,
looks like wages and prices are rising at about the same rate over the long term.
Trichy Bastard
Well-Known Member
Sounds like the ultimate game of rock, paper, scissors is brewing... Hehe dead people... I always think of the freaky dead guy on a stick a certain present day cult follows... Reality is better than anything Wes Craven could ever come up with...
adjust for inflation. If you make $70,000 now its the same as making $54,000 ten years ago. 30% difference, graph shows 20%. Discrepancy of 10%, or in other words, we are making 10% less than we did 10 years ago.