Even Greenspan talked alot of crap but when he was at the fed...yep he stfu and stayed in line like a good boy!
Why is gold rising so steeply?
- Thread starter TreasureHunter
- Start date
Oh wait I forgot...its different this time.
Correction yes, collapse no.
Maybe we need to define "collapse" and "correction"? For me a correction is a fall in a market/markets. A collapse is the meltdown of our financial/economic and democratic system. I'm into gold for the first reason, though I'll admit that in my early naive days it was the second reason that got me into gold. Now I think I know better.
History is largely irrelevant when it comes to fiat currency cycles though it does have a place in examining financial cycles because every other fiat system has been commodity based. We are living in unique times, sovereign states have a monopoly on the creation of a fiat currency that doesn't create a future debt burden. QE causes asset inflation and destroys the purchasing power of our $, which is a strong case to hold gold but negative interest rates won't happen in Australia.
Probably the same reason they're buying stocks. To make money.
The people with the big bucks exposed don't read the news to help them make their financial decisions.
And governments have fiscal policy at their disposal, a tool that has been rarely used in most Western countries. Look at what Japan has managed to do for the last 40 years.
Explain to me why you believe a collapse cannot happen? We are already seeing China, Russia, India, South Africa and Brazil (to name a few) seeking to abandon their dependence on the USD. A collapse could simply be a result of the erosion of faith in the USD as the reserve currency. This isn't some tin foiled hat - the truth is out There - style assumption..it's already happening today.
What? How is fiat history irrelevant when it comes to cycles? It's a mathematical certainty that Fiat currency systems collapse. This is not my opinion, this is fact. The Denarius was diluted to the point of having nearly no silver in it (0.02%) and the people began to lose faith in the currency of the Roman Empire.
Look at the fiat monetary experiment in 11th century China. What about the french with the Livres and Assignats? That didn't end too well. Now fast forward to the modern era:
Argentina
Turkey
Zimbabwe
Venezuela
These are perfect examples of failing fiat currencies and the impacts on local economies.
The fiat monetary system is extremely flawed as it allows currency to be created beyond the productive capacity of the economy/governmemt from which it's issued. Take a look around, that's exactly whats happening on a global scale today.
You think negative rates won't happen in Australia? That's laughable.
Bail-in laws - tick
0.75% cash rate - tick
Cash ban - coming soon
Where do we go from here when we have a recession? What tools does the RBA or any central bank have at their disposal? You're kidding yourself if you believe with any level of certainty that we won't go to negative rates. Our path is being paved before our very eyes, if you care to take a look around.
I think your naivety is making a comeback.
STKR said:
A potential collapse and the USD as the world's reserve currency are two different topics.
Furthermore, it's a fallacy that countries are seeking to abandon the USD. 90% of the world's forex trade is done in USD, 40% of the world's debt is issued in USD so countries (and corporations) need USD to pay down that debt, and the % of worldwide reserves held as USD has remained pretty consistent over the past 60 years or so. With the lowest point being back in the 90's!! Which means the world's reliance on USD has actually increased because demand for USD has increased.
STKR said:
Because they were commodity backed systems. The rules changed in 1972. It's just that goldbugs haven't caught up yet with the new rules so their understanding of the implications of a monopoly government issued fiat is still stuck in the 1930's.
STKR said:
What? Comparing socialist countries with dictators at the helm to nations with democratically elected governments, the rule of law and central banks? Please.
STKR said:
Because the effective zero rate or whatever they call it is 0.25%.
Edit to add: zero lower bound or ZLB.
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A potential collapse and the USD as the world's reserve currency are two different topics.
Furthermore, it's a fallacy that countries are seeking to abandon the USD. 90% of the world's forex trade is done in USD, 40% of the world's debt is issued in USD so countries (and corporations) need USD to pay down that debt, and the % of worldwide reserves held as USD has remained pretty consistent over the past 60 years or so. With the lowest point being back in the 90's!! Which means the world's reliance on USD has actually increased because demand for USD has increased.
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Because they were commodity backed systems. The rules changed in 1972. It's just that goldbugs haven't caught up yet with the new rules so their understanding of the implications of a monopoly government issued fiat is still stuck in the 1930's.
What? Comparing socialist countries with dictators at the helm to nations with democratically elected governments, the rule of law and central banks? Please.
Because the effective zero rate or whatever they call it is 0.25%.
Edit to add: zero lower bound or ZLB.
Agree with your view on the USD, and it's reserve status. In fact, it's actually a double edged sword for the US. That's why Trump wants it devalued.
But I couldn't disagree more regarding Fiat. What makes the contemporary Fiat currencies any more special, than the numerous failed examples listed below ( History section) ?
https://en.m.wikipedia.org/wiki/Fiat_money
Edit : Other than blind faith that we won't / aren't doing the same.
MMT
MMT is untested and blind faith. Gold has stood the test of time. The problem is for most Westerner's that have lived their lives in developed countries, they have never seen the effects of rapid inflation and forcibly induced poverty. When a Somali shepherd sells his lamb for $100 Shillings instead of a gold dinar, he thought his life was easy as he didnt have to lug the gold around anymore. But when he went the next month to buy feed for his flock, his $100 Shillings were not even enough for 1kg of rice. Immigrants understand the true reason fiat has replaced the gold standard and thats why they keep their wealth in gold and silver.
Thought you might say that
And you trust Democratically Elected Governments to manage inflation?
Thought you might say that
And you trust Democratically Elected Governments to manage inflation?
No. Inflation is the the elephant in the room. We won’t know it’s a problem until it is.
It’s unpredictable.
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It’s not a theory to be tested, it’s just an observation of the current reality.
I don’t like it but then I don’t like some things that are real, like nationalism or Ford Mustangs for instance.
I’m an anarcho-capitalist. I crave free-markets, wage labour and the absence of the State. But that doesn’t mean I can’t accept the fundamentals of MMT. After all, under a state imposed monopolistic fiat monetary system I have no choice.
I respect both your acceptance of reality and your desire for true free markets, not the rubbish that gets thrown around as free markets these days.It’s not a theory to be tested, it’s just an observation of the current reality.
I don’t like it but then I don’t like some things that are real, like nationalism or Ford Mustangs for instance.
I’m an anarcho-capitalist. I crave free-markets, wage labour and the absence of the State. But that doesn’t mean I can’t accept the fundamentals of MMT. After all, under a state imposed monopolistic fiat monetary system I have no choice.
TreasureHunter
Well-Known Member
Who owns most of GLD/paper gold? Because if paper could crash for some reason, it will impact overall spot price.
We need to understand more about the paper gold market. After all, that moves the market, not physical buying.
The problem is if GLD gets into trouble, everyone will want physical gold and there's no physical gold. What will happen?
Side note. I just checked the kilobar and 100g gold inventory on a couple of dealers in Singapore, it has drawn down since early this month.
There will be alot more bailouts next time. There will be pensions to bail out, private businesses, states, banks, most investments and tons more.
The bail outs will be more public and it will be heralded as being important and heroic and much needed "to save jobs."
It's not whether it will ever end.
It CANT end or the system will collapse. The only thing propping up the markets since 08 has been massive currency printing.
The collapse began long ago.
The bail outs will be more public and it will be heralded as being important and heroic and much needed "to save jobs."
It's not whether it will ever end.
It CANT end or the system will collapse. The only thing propping up the markets since 08 has been massive currency printing.
The collapse began long ago.
Yes it's becoming an issue now here.
The flights are still coming in and there is no real containment or quarantine.
We can stop muslims from coming to America but not sick people haha.
Good job!
The flights are still coming in and there is no real containment or quarantine.
We can stop muslims from coming to America but not sick people haha.
Good job!
The good news, it's in california now! That's a great place for any pandemic to have its way.