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Old 05-14-2013, 06:46 PM
 
Location: North America
5,960 posts, read 5,529,197 times
Reputation: 1951

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Quote:
Originally Posted by MTAtech View Post
I didn't realize the currency has been debased.

This is the Dollar Index:

Now here is the REAL picture:

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Old 05-15-2013, 07:12 AM
 
Location: SE Arizona - FINALLY! :D
20,460 posts, read 26,245,231 times
Reputation: 7621
Quote:
Originally Posted by clb10 View Post
Banks hold gold because its "tradition".

Wow.

You've run out of steam in this thread...
Yes, tradition. Gold has simply been the TRADITIONAL sign of wealth.'

If you don't think it's tradition - tell my why they don't hold platinum instead. It's even MORE valuable than gold so it takes up less space - yet banks still choose to hold gold as their reserve - WHY GOLD?

The answer is simple - it's the TRADITIONAL sign of wealth.

Ken
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Old 05-15-2013, 07:17 AM
 
Location: Londonderry, NH
41,478 posts, read 59,590,047 times
Reputation: 24857
Why hold gold? if you have gold you can always buy bread.
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Old 05-15-2013, 07:34 AM
 
Location: SE Arizona - FINALLY! :D
20,460 posts, read 26,245,231 times
Reputation: 7621
Quote:
Originally Posted by clb10 View Post
Now here is the REAL picture:
So?
It sure hasn't hurt the dollar index has it?

NO ONE is denying that a lot of dollars have been printed - the debate is WHAT IS THE RESULT?
And the RESULT is that the dollar is still strong.

Rather than posting charts of the obvious, maybe you should be re-evaluating your dogma and asking yourself WHY is that what you're predicting isn't happening? - because CLEARLY something is wrong with your analysis.

A large chunk of the people who bet on gold and thus bet against the dollar did so not based on economic wisdom but on political opinion - it was a political-based decision rather than an economic-based one. They believed that there was no way Obama could turn the country around and that the result of his policies would be hyperinflation and the collapse of the US dollar (thus boosting gold) - and for a while, all those folks pouring into gold DID drive the price up in a bubble. Problem is, those economic "doom and gloom" scenarios are NOT what's happened - and now the more rational among those holding gold for political reasons (as well as those who were "simply along for the ride" with gold) are realizing that none of the "doom and gloom" scenario is GOING to happen, so they are bailing on gold. Lower-educated "mom & pop" investors and a few die-hard professional investors are still buying up gold on that "gloom and doom" scenario, but the smart money is getting out because the see the writing on the wall.

Just like in 1980, gold was/is a speculative bubble of a commodity that for most of the last 35 years really achieved no gains worth speaking of. Like tech stocks in the 1990s and housing in the 2000s it was the "hot" thing to own because "conventional wisdom" said it's just going to march higher - and like all such speculative bubbles do, it's now bursting.

Ken
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Old 05-15-2013, 07:36 AM
 
69,368 posts, read 63,901,626 times
Reputation: 9383
Quote:
Originally Posted by LordBalfor View Post
No, but a LOT of GOLD BUYERS do.

Ken
Where is this crashing dollar that you relied upon the thread to make a point out of?
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Old 05-15-2013, 07:42 AM
 
Location: Long Island, NY
19,792 posts, read 13,892,052 times
Reputation: 5661
Quote:
Originally Posted by LordBalfor View Post
So?
It sure hasn't hurt the dollar index has it?

NO ONE is denying that a lot of dollars have been printed - the debate is WHAT IS THE RESULT?
And the RESULT is that the dollar is still strong.

Rather than posting charts of the obvious, maybe you should be re-evaluating your dogma and asking yourself WHY is that what you're predicting isn't happening? - because CLEARLY something is wrong with your analysis.
...
That's the point. The Austrian crowd has been repeatedly wrong. They predicted years ago that the Fed increasing the money supply and the fiscal side of the government engaging in deficit spending would drive up interest rates, increase inflation, and debase the dollar. What does reality show us? Interest rates are low, inflation is small and the dollar is about where it started. If a theory can't hold up to what happens in the real world, the theory is wrong.

Unfortunately, those who believe the Austrians ran out and bought gold to cash-in on that wild inflation that never arrived.
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Old 05-15-2013, 07:51 AM
 
Location: SE Arizona - FINALLY! :D
20,460 posts, read 26,245,231 times
Reputation: 7621
Quote:
Originally Posted by MTAtech View Post
That's the point. The Austrian crowd has been repeatedly wrong. They predicted years ago that the Fed increasing the money supply and the fiscal side of the government engaging in deficit spending would drive up interest rates, increase inflation, and debase the dollar. What does reality show us? Interest rates are low, inflation is small and the dollar is about where it started. If a theory can't hold up to what happens in the real world, the theory is wrong.

Unfortunately, those who believe the Austrians ran out and bought gold to cash-in on that wild inflation that never arrived.
Yup - it's pure dogma on their part: "don't confuse me with REALITY - this what my economic religion says"

And consequently gold continues to tank - and WILL continue to tank - likely giving up all it's gains since the crash of 08.

Ken
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Old 05-15-2013, 07:56 AM
 
Location: SE Arizona - FINALLY! :D
20,460 posts, read 26,245,231 times
Reputation: 7621
Quote:
Originally Posted by pghquest View Post
Where is this crashing dollar that you relied upon the thread to make a point out of?
The IS no crashing dollar - THAT'S my point.


Ken
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Old 05-15-2013, 09:12 AM
 
Location: North America
5,960 posts, read 5,529,197 times
Reputation: 1951
Quote:
Originally Posted by MTAtech View Post
That's the point. The Austrian crowd has been repeatedly wrong. They predicted years ago that the Fed increasing the money supply and the fiscal side of the government engaging in deficit spending would drive up interest rates, increase inflation, and debase the dollar. What does reality show us? Interest rates are low, inflation is small and the dollar is about where it started. If a theory can't hold up to what happens in the real world, the theory is wrong.

Unfortunately, those who believe the Austrians ran out and bought gold to cash-in on that wild inflation that never arrived.
What? No mention of the Fed's over $1 TRILLION purchasing program and its relation to interest rates?

Interesting.

...and when the Fed needs to SELL bonds...what then?

Face it...the writing is on the wall. Understand THEN post.
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Old 05-15-2013, 09:20 AM
 
Location: North America
5,960 posts, read 5,529,197 times
Reputation: 1951
Quote:
Originally Posted by LordBalfor View Post
So?
It sure hasn't hurt the dollar index has it?

NO ONE is denying that a lot of dollars have been printed - the debate is WHAT IS THE RESULT?
And the RESULT is that the dollar is still strong.

Rather than posting charts of the obvious, maybe you should be re-evaluating your dogma and asking yourself WHY is that what you're predicting isn't happening? - because CLEARLY something is wrong with your analysis.

A large chunk of the people who bet on gold and thus bet against the dollar did so not based on economic wisdom but on political opinion - it was a political-based decision rather than an economic-based one. They believed that there was no way Obama could turn the country around and that the result of his policies would be hyperinflation and the collapse of the US dollar (thus boosting gold) - and for a while, all those folks pouring into gold DID drive the price up in a bubble. Problem is, those economic "doom and gloom" scenarios are NOT what's happened - and now the more rational among those holding gold for political reasons (as well as those who were "simply along for the ride" with gold) are realizing that none of the "doom and gloom" scenario is GOING to happen, so they are bailing on gold. Lower-educated "mom & pop" investors and a few die-hard professional investors are still buying up gold on that "gloom and doom" scenario, but the smart money is getting out because the see the writing on the wall.

Just like in 1980, gold was/is a speculative bubble of a commodity that for most of the last 35 years really achieved no gains worth speaking of. Like tech stocks in the 1990s and housing in the 2000s it was the "hot" thing to own because "conventional wisdom" said it's just going to march higher - and like all such speculative bubbles do, it's now bursting.

Ken
When you compare 1980 to 2013 regarding gold you REALLY look foolish!

The two situations could not be any more different.

Do you have any clue what the velocity of money was then versus now?

You guys who think that the government has discovered a magical money tree and that trillions of new dollars whipped up out of thin air has no consequences should take a basic economics course or something.

You guys sound like Internet stock bulls in 1999...they were quite smug...until the floor dropped out from beneath them.
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