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AUTHORITY or POWER is money. He who has the AUTHORITY or POWER to dictate what is acceptable as money has all of the money. So Bernake is absolutely correct, gold is not money because AUTHORITY or POWER said so.
Last edited by dorado0359; 07-15-2011 at 06:42 PM..
Reason: ...
It has nothing to do with gold as such. Just think of what pennies are made of, and who would doubt they are money Would you say copper or zinc are money? The only thing that matters is that it's a coin, the material is irrelevant.
From absurd to utterly ridiculous.
The first point is that Gold Bars (not coins) are used by Central Banks to settle their obligations between them. Consequently, one can say that Gold is money ... at least in the opinion of Banks ... and who better to look to than a bank with regard to what is money? And "money" can be many things ... so long as it has intrinsic value.
Coins, on the other hand, are "currency" as opposed to being money .... just as paper notes are "currency". Currency doesn't need to have an intrinsic value in order serve as currency, nor is it relevant what material it is made of .. hence the existence of both paper and metal currency. It's the denomination that determines it's "value", and that value is by mandate or declaration from the issuer of the currency. This could be said of poker chips at the Trump Casino ... they have their particular chips ... they are coded for value, and used as a type of currency within the Casino. They can be made of clay or a plastic ... and usually incorporate anti-counterfeiting elements, just like regular circulated currencies do.
The best case scenario for maintaining the "value" of currency is when "Money" (something with intrinsic value) is used as Currency ... i.e. Gold or Silver coins .... which have a denominated value as well as an intrinsic value that may be either more or less than it's denominated value. If it has intrinsic value, then it can never be made worthless by the issuer ... such as can be done with simple currency that has no intrinsic value.
Let's use the Trump Casino Chip as an example .... a $20 Chip made of a clay round has only the value that Trump agrees to charge and pay for each chip in his Casino. You can't use it at another Casino ... only Trumps. (Of course most anyone would take it, knowing they could exchange it at Trumps for the 20 bucks). But what if you had $100 worth of Trump Chips .... your vacation was over, and you forgot to cash them in, and took them home with you to Boston? You're not likely to find anyone to give you anything at all for those chips, unless they were planning to go to Vegas soon, and then, they'd want a big discount on the face value. And if Trump goes out of business before you get back to Vegas ... you're out of luck. You have nothing but worthless clay chips.
However ... if Trump's Chips were made of 1 oz of Solid Silver .. you could go anywhere in the world, and a metals dealer would pay you the value of that metal regardless of whether Trump's Casino still existed, or was out of business. Now, if you purchased these Silver Chips a few years ago at $20 each, today, they'd be worth more than you paid, or the denomination of the chip. And that is why using real "money" as "currency" maintains the value of that currency, and prevents the "issuer" from devaluing that currency arbitrarily, or defaulting (going out of business).
So, the confusion you have is that you believe "currency" is the same as "money". (and this is the deception that you and most everyone else were convinced to accept as the truth ... but it was a scam). Currency can be money .... but it doesn't have to be. In our case now in America (and around the world), the currency now in circulation is not "money" at all. The currency that used to be in circulation ... mostly in the form of Silver Coins was in fact "Real Money" that also served as our "currency". ... and during that time, our "money" remained relatively stable and consistent in value .... it's only when that silver was removed from circulation, and Nixon (1971) ended the Gold Standard that the US "money" supply was no longer "money" ... but simple currency ... or tokens, with only the illusion of being money ... and since the 1960's, the dollar has lost most of it's value and only worth about 4 pennies ... a 96% loss of value.
Now, you don't have to take my word for this ... I can prove it. When I was born in 1957 ... you could buy a gallon of gas for 23 cents. So you go into the gas station, give the man a quarter, and get a gallon of gas, and get 2 pennies in change. Today, at $3.50 per gallon, you need 14 (fake) Quarters. But, if you have a "real" quarter dated 1932-1964 (silver) it's worth $7.10 ..... so with that real quarter, you could by 2 gallons of gas, and get 10 cents back in change today. So did the price of gas actually go up ... or did the value of the "currency" go down. The price of gas in real money is actually 50% cheaper today than it was in 1957 ... since you can now buy 2 gallons of gas for just 1 1957 quarter.
And you want to tell us WHAT .. again? That what a coin is made of is irrelevant? I done thin so Lucy. That may be true when it comes to currency ... or bus tokens ... or gift certificates or Casino poker chips .... but when it comes to money ... there are two historic materials that have been used as money for THOUSANDS of years ... Gold & Silver. It's the only "real" money ... the rest of the so-called money isn't money at all, and at any time the issuer chooses ... can be made worthless in an instant ... like these:
That's the difference between "money" and "currency" ... and why only coins made of precious metals can be both.
Last edited by GuyNTexas; 07-16-2011 at 01:26 AM..
Yes really. Couldn't plunk down my gold watch to buy a car nor my silver tea service to by a TV. It is like saying wood is a house because some houses are made of wood.
Well that's pretty much a cart before the mule kind of argument. The price of gold only goes up when the confidence in bonds and stocks diminishes it has little or nothing to do with the supply of gold.
No, I've got the horse and chart in the proper order .. both Gold and Silver prices have been suppressed for a long time. Fact is .. JP Morgan has been caught manipulating the Silver price by shorting silver, and by selling silver it doesn't have. The estimates are that for every 100 oz of silver allegedly being stored for buyers ... only 1 oz exists. That's how they've managed to keep silver prices suppressed ... and Gold is the same deal.
Gold & Silver prices rise and fall in relation to the value of the currency ... and the level of market manipulation that occurs (short selling, speculation .. and dumping). Without the market manipulation, Gold & Silver would remain on a steady rise in direct correlation to the steady decline in the value of the currency. This would make Gold & Silver both a short term and long term appreciating asset, making it a risk free, guaranteed investment, without the up and down swings. This would draw investors away from risky stocks and lower profit securities. That's a fact! Why would anyone buy US securities if Gold and Silver were just as safe, and offer better returns? They wouldn't ... which is why Gold and Silver are so grossly manipulated.
Quote:
Originally Posted by ovcatto
Gold is of so little importance that 80% of all gold in the U.S. is used for jewelry! And as any hapless gambler knows what was paid for the gold jewelry far exceeds the price of the gold used to make it.
You sure can come up with the doozies .. I'll hand you that.
But it's just not true. Countries and Banks all around the world have hoarded and stored thousands of tons of gold ... with only a small portion of the above ground gold being used as Jewelry. It is as much a store of a nation's wealth as are it's natural resources like Oil. In fact .. for those countries who have no oil, gold IS their wealth. And Gold jewelry is also a store of wealth, and symbol of status as an adornment. Same is true of Silver ... it was a common means for Native Americans to store wealth in Silver Jewelry ... which they may later sell .... this Jewelry is referred to as "Old Pawn" Silver.
Furthermore, you have no idea how much gold is being stored in the United States in bullion bars and coin ... so how could you possibly say what percentage is jewelry? You can't, and neither can anyone else.
The first point is that Gold Bars (not coins) are used by Central Banks to settle their obligations between them. Consequently, one can say that Gold is money ... at least in the opinion of Banks ... and who better to look to than a bank with regard to what is money? And "money" can be many things ... so long as it has intrinsic value.
Coins, on the other hand, are "currency" as opposed to being money .... just as paper notes are "currency". Currency doesn't need to have an intrinsic value in order serve as currency, nor is it relevant what material it is made of .. hence the existence of both paper and metal currency. It's the denomination that determines it's "value", and that value is by mandate or declaration from the issuer of the currency. This could be said of poker chips at the Trump Casino ... they have their particular chips ... they are coded for value, and used as a type of currency within the Casino. They can be made of clay or a plastic ... and usually incorporate anti-counterfeiting elements, just like regular circulated currencies do.
The best case scenario for maintaining the "value" of currency is when "Money" (something with intrinsic value) is used as Currency ... i.e. Gold or Silver coins .... which have a denominated value as well as an intrinsic value that may be either more or less than it's denominated value. If it has intrinsic value, then it can never be made worthless by the issuer ... such as can be done with simple currency that has no intrinsic value.
Let's use the Trump Casino Chip as an example .... a $20 Chip made of a clay round has only the value that Trump agrees to charge and pay for each chip in his Casino. You can't use it at another Casino ... only Trumps. (Of course most anyone would take it, knowing they could exchange it at Trumps for the 20 bucks). But what if you had $100 worth of Trump Chips .... your vacation was over, and you forgot to cash them in, and took them home with you to Boston? You're not likely to find anyone to give you anything at all for those chips, unless they were planning to go to Vegas soon, and then, they'd want a big discount on the face value. And if Trump goes out of business before you get back to Vegas ... you're out of luck. You have nothing but worthless clay chips.
However ... if Trump's Chips were made of 1 oz of Solid Silver .. you could go anywhere in the world, and a metals dealer would pay you the value of that metal regardless of whether Trump's Casino still existed, or was out of business. Now, if you purchased these Silver Chips a few years ago at $20 each, today, they'd be worth more than you paid, or the denomination of the chip. And that is why using real "money" as "currency" maintains the value of that currency, and prevents the "issuer" from devaluing that currency arbitrarily, or defaulting (going out of business).
So, the confusion you have is that you believe "currency" is the same as "money". (and this is the deception that you and most everyone else were convinced to accept as the truth ... but it was a scam). Currency can be money .... but it doesn't have to be. In our case now in America (and around the world), the currency now in circulation is not "money" at all. The currency that used to be in circulation ... mostly in the form of Silver Coins was in fact "Real Money" that also served as our "currency". ... and during that time, our "money" remained relatively stable and consistent in value .... it's only when that silver was removed from circulation, and Nixon (1971) ended the Gold Standard that the US "money" supply was no longer "money" ... but simple currency ... or tokens, with only the illusion of being money ... and since the 1960's, the dollar has lost most of it's value and only worth about 4 pennies ... a 96% loss of value.
Now, you don't have to take my word for this ... I can prove it. When I was born in 1957 ... you could buy a gallon of gas for 23 cents. So you go into the gas station, give the man a quarter, and get a gallon of gas, and get 2 pennies in change. Today, at $3.50 per gallon, you need 14 (fake) Quarters. But, if you have a "real" quarter dated 1932-1964 (silver) it's worth $7.10 ..... so with that real quarter, you could by 2 gallons of gas, and get 10 cents back in change today. So did the price of gas actually go up ... or did the value of the "currency" go down. The price of gas in real money is actually 50% cheaper today than it was in 1957 ... since you can now buy 2 gallons of gas for just 1 1957 quarter.
And you want to tell us WHAT .. again? That what a coin is made of is irrelevant? I done thin so Lucy. That may be true when it comes to currency ... or bus tokens ... or gift certificates or Casino poker chips .... but when it comes to money ... there are two historic materials that have been used as money for THOUSANDS of years ... Gold & Silver. It's the only "real" money ... the rest of the so-called money isn't money at all, and at any time the issuer chooses ... can be made worthless in an instant ... like these:
That's the difference between "money" and "currency" ... and why only coins made of precious metals can be both.
I see the relationship/difference between money and currency like this: in my view currency is just a kind of physical manifestation of money, based on the nation's money unit and fractions thereof.
Money today is usually fiat money, i.e. the value of its representations (coins, bills, documents, etc.) is independent of the physical material. The times of commodity money are mostly over except for a few pockets like remote islands. Regarding your precious metals, You can mint coins of pure platinum, but they won't worth any more than those made of zinc, actually they won't be money at all unless those responsible for your country's money declares them acceptable as money. You might use them among a group of people who all accept them as a means of exchange, though. It is probably illegal, like some of those "rebel currencies" that have been invented recently.
I don't now why any of this matters. The OP is obviously advocating going back on the gold standard. The next obvious question is, what if the U.S. does and the rest of the world does not?
Personally, I think it better for a nation to control its own currency instead of being at the mercy of all the factors that gold changes price that have nothing to do with the economy (e.g. mining, change in industrial use, futures manipulation).
Yes, but is it currency? Can you buy things with it or is gold a proxy for actual currency?
yes
if look at gold from another view like this.
dollars are traded to another for a service or goods.
gold is traded to another for good or a service.
gold is a currency just like any other commodity. bartering can also be used as a currency as well. my family and i use bartering quite a bit to get things we want.
When you use gold (not gold coins) for payments, you have to use some unit as well so that a) you know how much gold you have to give in order to get something in return, and b) your seller knows how much gold to demand. You might use g or kg or ounce or whatever as a unit, but those are also linked to official currencies such as the dollar when it comes to determining the value of gold. Gold has no absolute, independent value. The more gold there is, the less its value. So maybe you have to give 1g of gold to get a cow in return today, but tomorrow you might have to give 1.5g
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Would you say copper or zinc are money?
