Couldn't quite fit the entire sentence in the subject header It is worth a read. Billionaire Frank Giustra: Gold Is The Mother Of All Bubbles, Which Is Why You Should Buy It http://www.businessinsider.com/frank-giustra-bullish-gold-2012-10
The moveable across borders thing I don't get - how easy is it to move say $50k worth of PMs across borders? I don't imagine THAT easy.
Very easy, that'd just be a few coins if the price of gold goes up some more. Shove em in your wallet among regular fiat coins and to an X-ray machine they'd just look like a bit of loose change.
On an academic note, his comment that "The only reason you haven't seen inflation hyperinflation yet" with all the cheap money flooding markets is because the velocity of money" is a common misconception but it has absolutely nothing to do with inflation. The velocity is a concept dreamed up by Fisher in the early 1900's to make his maths agree with his statistics. Money is always traded for good and services so the "velocity" is simply the rate of exchange of good and services throughout the economy which has nothing to with inflation and the rate of consumption can only move within comparatively minor limits. As numerous authors have pointed out, price inflation always lags the change in the money stock principally due to psychological reasons. Inflation will happen when people change their valuation of money versus goods and services. It's probably fair to say that the vast majority of the freshly printed money to date has not gone into chasing goods and services and instead has been used to repair nominal balance sheets. Once the balance shifts towards using the additional stock of money to buy real goods and services then we will see the inflation kick in. As the inflation kicks in and potentially becomes accelerative, the present fears of people about the future purchasing power of their money is what will kick in and result in people bidding up the prices of the real goods and services - hence there will be a flight from money into goods and if the flight is strong enough will create the hyperinflation everybody is worried about. It doesn't really change most of the points in the article except to change the mechanism.
Yeah airline travel is more what I'm referring to, not just walking over a European border. Coins yeah, what about all that bullion though?
If each dollar in existence is spent 3 times per year, this is going to be a lot different to if each dollar was spent 10 times per year, yes? In the second scenario it will appear as though there is a lot more money fighting over the same number of goods and services!
Sorry what's your point? There are the same number of goods and services. There's the same amount of money. So no inflation. Money (in this example) is simply the grease that gets the goods and services to the final consumer. How many times they changed hands to get there is irrelevant (assuming no net productivity loss in the process of course).
Do you think that prices will act differently in the following two economies: Country A) The money supply is doubled, but each dollar is spent half as often as before. Country B) The money supply is doubled, and each dollar is spent just as often as before. ?
If consumers preferences are the same as well (especially RE savings) then nominal prices will double in both economies. Quoting Frank Shoshtak: http://mises.org/daily/918 Or Henry Hazlitt http://mises.org/daily/2916 PS This makes me happy to see good Q's on like this. Thanks.
Bump. This 'velocity of money' has been playing on my mind since this discussion. I have gone back and re-read the above link ( http://mises.org/daily/2916 ) posted by bordsilver and think it deserves to be read by others here. It is a great piece of writing with some gems: I concur.
That's $5K currency (face value). Most countries have around a $10K limit before you need to report, so it shouldn't be that hard if you DYODD beforehand.
Some have argued that what is taken into account is the value itself rather than the face value? However as Willrocks has pointed out the Australian outgoing passenger card makes only mention of Australian or foreign currencies - see the card at the link below: http://upload.wikimedia.org/wikipedia/commons/f/fb/Outgoing_Passenger_Card_Australia.jpg I know the topic has been debated many times, but would be interesting to see if anyone has been faced with the situation in real life.
