This page has been archived and commenting is disabled.
Guest Post: Gold & The Keynesian Elixir
»
- 6451 reads
- Printer-friendly version
- Send to friend
- advertisements -
Contact Information:
Tips: tips [ at ] zerohedge.com
General: info [ at ] zerohedge.com
Legal: legal [ at ] zerohedge.com
Advertising: ads [ at ] zerohedge.com
Abuse/Complaints: abuse [ at ] zerohedge.com
Suggested Reading:
Make sure to read our "How To [Read/Tip Off] Zero Hedge Without Attracting The Interest Of [Human Resources/The Treasury/Black Helicopters]" Guide
It would be very wise of you to study our disclaimer, our privacy policy and our (non)policy on conflicts / full disclosure. Here's our Cookie Policy.
After the hyperinflation of the Continental,
our Republic was on a domestic Constitutional
gold standard until 1933, and a trade gold
standard until 1971. Yes, there were
depressions, and maintaining financial integrity
helped the USA become a superpower.
Volcker and Greenspan may have used gold
prices implicitly for monetary discipline,
which 1966 Ayn Rand Gold Bug Greenspan
later chucked out the window after his
irrational exuberance humiliation, along with
the financial future of America.
Until we have productive jobs with real savings,
there will be no real recovery.
The Feds can't create and distribute
neoKeynesian debt usury dollars fast
enough to offset the credit implosion
and debt defaults.
Even Keynes, an astute portfolio manager,
believed in balancing budgets. Central
Banks are still the largest gold holders,
despite what they say. They hedged their
gold by selling it short in record numbers.
Gold has become a greater fool accident
waiting to happen.
People currently long gold without dividends,
fundamentals or income may be praying for the
hallelujah triumph of hope over sad experience...
http://www.jubileeprosperity.com/
you have been tiring on Gold speeches, talk about something else and leave gold alone from parroting
The system needs value.... enter Gold.
...and protection from political alchemists...enter Gold.
I like that. Political alchemists.
But it seems I saw a recent listing of minerals and the years they had left before extinct. And it was funny because lead was less abundandt than gold. Well, it was an ad from Dr. Stephen Leeb. It has a chart and it says lead had 8 years left and silver 9. It didn't list gold.
Well, it goes without saying.
The system needs credibility.
... enter http://www.catsforgold.com/
ORLY?
Times may change, but standards must remain...
I stopped reading after about the third paragraph, which stated that increasing the money supply leads to a stronger currency, increasing the importing of goods. Uhm....what school of economic thought is this?
Good read, thanks.
Wow. Another bullish piece about gold. I thought I would never see that on a site with advertisements from gold retailers all over it...
And when there's a bearish report reprinted it's like "Here's some douchebag that wants you to sell your gold... to them."
Oh wait... errr ummm.... Gold Bitches!!!
So why are you still here?
Because you are my brother, and I am my brother's keeper. ; p
CAPSLOCK ON!!!
Although this is a battle cry, so it's to be expected from a paperbug.
If Newton had had gold he wouldn't have worried about the madness of crowds.
I've noticed your perspective is m$n$y m$k$ng, which is to be admired if done legally. And as I have always tried to sincerely reevaluate my own mindset, it remains firmly in the goldbug camp. I am more concerned with psychopathic behavior manifesting itself in every sphere of influence these days, and how to ultimately protect the little I have for future use. The general sentiment among us goldbugs, in my opinion, is that we are playing musical chairs with puppetmasters.
Hence our love for Au, Ag, and FMJ. If it ain't tangible you'll look stupid when the music stops.
Well that's definitely admirable, and I agree about the definite trends toward psychopathic behavior in society. I think most of that stems from a general anti-intellectualism and ignorance, but what do I know?
I just like to rile the goldbugs here. Although I disagree with the extreme bullish sentiments about gold, I also don't see much of a downside to the investment either. I do think it'll be under 1000 again though!
Buy the dips - just like that ancient and wise Chinese.
Personally, I would love to see 700 FRNs before the music stops.
How much is the Fed paying you?
85 million dollars, this year alone.
Make sure you put at least 4 percent of that in Au,
Master Bates! And read the article, it is excellent..
Do you include China and India in with the people that like gold? China keeps buying every single natural resource company it can. China wants more gold. China uses its state tv to advertise to its citizens to buy gold/silver as its a good investment.
Do yourself a favor and check out whats going on in the rest of the world besides just the USA. Its bad out there, you know? UK had a 2.9% inflation number this morning. Yeah, keep printing those pounds Mr Brown. Obviously theres no consequence to printing unlimited amounts of money. Call your buddy Ben and pass the news along...
+1
I like what Ben Franklin said once: JOIN, or DIE.
He liked CAPSLOCK. Seriously:
http://2.bp.blogspot.com/_PYaxybu6Ncs/Sj5Xh4l2GPI/AAAAAAAABPU/o0TPcN5p0D...
Yes. China sure is capitalist for being communist. Hell, they're more capitalist than we are, and they've even achieved the fascism that we can only dream of.
Capitalistic fruit does not come from despotic trees.
Yeah, cuz gold cares if the person buying is communist or capitalist.
And seriously, I think you may want to look up the actual definition of facism. We're already there. Govt operating for the benefit and promotion of big business. In that respect we are exactly the same as China. Again though, how being communist or capitalist has any bearing on gold I have no idea. Protection of capital is the same everywhere.
Political systems are merely the way for groups to achieve control and they will call themselves whatever they need to in order to win/sustain control.
While I will agree that we are trending on a fascist path, you can't get shot here for relatively small things... yet...
yet...
I think gold will always have its place and its moments of glory, but right now my hunch is it will see 700 before it sees 2,000.
Ya and I bet we see 1990 again before we see 2011.
This is why I'll stick to my gold. A hunch? Based on what? Historical record? Supply demand curve? Central banks being net buyers?
A coin flip?
I'm in based on feasibility reports with miners on $650/oz price to make money. Im in based on the size of the gdp today relative to the 70's gdp and the way larger debt and future debt to figure out (relative to current gdp). Im in based on thousands of years history of govts debasing currency. Im in based on the maount of paper relative to the gold stock being so much larger this time than in the 70's. Im in on CB dishoarding of reserves through primary dealers to keep the price down when demand surges. Im in based on the four largest commercial positions being more oz's than they can possible deliver in physical. There's lots more, but its a good start as to why gold bulls are where they are.
And your hunch tells you what? That just because it went up it has to go down because it happened to the housing and tech before?
Good luck with that...
good, reasons, but don't neglect golds pretty little sister, she's gonna be way hotter IMO
not to worry. I LOVE the silver. But it will have its real push later in the cycle - the blowoff top phase - not even close to that yet. Get all the economies humming again and using lots of raw materials - then Silver will really perform.
Why, that's blasphemy here! Burn your tounge!
No, actually, I agree totally. Don't tell that to the people who believe gold is the one asset that can oly go up though. I don't know if it'll see as low as 700, although I do agree that it'll be less than 1000...
Have a nice day!
US$ 700/oz.? Sure. Why not?
Hey, guys, buying opportunity!!
this author has no knowledge of economics whatsoever. there are contradictions every other paragraph.
My thoughts exactly. Seeing piss poor articles like this on ZH is pretty depressing.
That's pretty lazy. But since that's not your intent, you are obviously not an economist.
Any time I read a person's postion on gold and they use the phrase "yellow metal" I stop reading. A person who is stupid enough to use that phrase is not a thinker but is a follower.
Who cares what a follower thinks?
Ya it's no trouble having 1 man in a million able to diagnose the problem, until you get 7,000 teachers able to make sense when you can't and you're not trusted.
Sorry Lenin.
Gold has outpaced consumer prices because of technological inovation, not because people always think inflation is around the corner and they should go buy gold. I don't know a single person in real life other than my father who gives two shits about gold so I doubt that the value is increasing because of "consumer" demand.
It trades 20 billion dollars a day out of London. For a tiny market nobody gives a shit about it sure is one busy little fucking beaver.
And what would happen were people to actually, you know, give two shits about gold? Its gone from 200's to 1,100's on no one giving two shits so far...
Wait til it hits 2,000. Theres gonna be a lot of people that cant even spell gold right now that will give three, or even four shits, about it.
Thats right. The Gold market is tiny and all the world will be attempting to get on board or sink. Gold is a victory for the people.
yeah, and the gold miners are even smaller in size. Something like all together is smaller than the market cap of WMT. Wait til the liquidity flows into miners. Lights out.
Wow - really? $20b a day trades in gold?
That's about 0.12% of Global GDP that trades in real money.
Sooooo - 99.88% of other trades happen with fiat toilet paper.
Yep gold as real money is really busy.
It takes nearly 17 trillion dollars a day to conduct business. Sounds like the stuff is pretty worthless. I think someone needs to go back to school and learn equations for how to convert a year to a day.
Im not knocking gold dude, far from it.
"In the absence of a gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. If there were, the government would have to make its holding illegal, as was done in the case of gold. If everyone decided, for example, to convert all his bank deposits to silver or copper or any other good and thereafter decline to accept checks as payment for goods, bank deposits would lose their purchasing power and government-created bank credit would be worthless as claims on goods. The financial policy of the welfare state requires that there be no way for the owners of wealth to be able to protect themselves.
This is the shabby secret of the welfare statists' tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists' antagonism toward the gold standard."
--- Alan Greenspan, 'Gold and Economic Freedom' (1966).
He got that one in the article. Worth repeating given the source and probably one of my favorites.
Wonder what the CB gave Greenspan for his soul?
he's now known as sir allen greenspan
access and power baby, access and power.
He gets limited use of the FED skull fucking monkey. Since he's not entirely bald you can tell he doesn't abuse the privelage.
“Bubbles are best identified by credit excesses not valuation excesses.” - Jim Chanos
The best quote there, in my humble opinion. It can even be applied to gold itself - specifically, to the gold-mining sector.
on Tue, 01/19/2010 - 15:26
#198662
this author has no knowledge of economics whatsoever. there are contradictions every other paragraph.
*********************************
Yep--and his reasons for having gold "future inflation" are fucked up as well--
Gold sucks in inflation and further more--his definition of inflation/deflation are really fucked--
Poor story--in fact--sad
on a tangentially related note gata published an interesting article noting that gold is by far the largest "commodity" market...much bigger than its nearest rival oil....thus those who dismiss the moneyness of gold continue to misunderstand its continuing importance and value to traders and to financial solvency....
gold is the mortal enemy to totalitarianism and to banksters....
Great post on FOFOA on gold as the ultimate hedge, very interesting points on paper gold being used as a derivative/hedge on the dollar and the need to hold physical:
http://fofoa.blogspot.com/2010/01/gold-ultimate-hedge-fund.html
I also just read his post. Excellent stuff as always from FOFOA. I'm fully hedged!
Looking at the official and unofficial goverment debt ratios as illustrated on the above charts you would believe that the Spanish people are more fiscally conservative then the French - nothing could be further from the truth however.
What you spend your deficit on is just as important as the size of the deficit. Travel to Spain and you will be see the products of their "investments" - surplus houses which are often in the wrong areas and roads to nowhere while in France they spend their money on coherent energy infrastructure and towns that are built in a compact fashion.
Also Spain has been the Beneficiary of significant transfer payments from the core EU countries which enables it to waste money on those roads to nowhere and these payments further erode the goverment coffers of the core EU countries