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Must Read: Oaktree's Take On Gold - Howard Marks Discusses All That Glitters

Tyler Durden's picture




 

The topic of Howard Marks' latest letter is gold. The Oaktree Chairman presents one the better comprehensive pieces on the precious metal, laying out both the pros and cons. Presenting the current broad schizophrenia when debating the value of of gold, Marks, in a comparative allegory to 1952 opinion of Noah "Soggy" Sweat on whiskey, Marks states: "I have no doubt: gold is the ideal investment"...yet..."Gold has no financial value other than that which people accord it, and thus it should have no role in a serious investment  program. Of this I’m certain." Arguably one of the better two-sided presentations on gold's true value, we are nonetheless surprised that Marks did not reference the opinion of Dylan Grice (and others before him), who analyzes the price of gold in terms of the global monterey supply, which can be read in its entirety here.  Nonetheless, as Marks is always one of the most thoughtful observers on markets, this piece is a must read for everyone.

All that glitters (pdf)

 

 

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Sat, 12/18/2010 - 20:15 | 816100 cocoablini
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So the US dollar is accorded a value, and we hoard those as well.
Newsflash- all money is fiat. Gold and silver is fiat. Credit is fiat. Anything that acts like money IS money. Those can be derivatives, home equity, gold and little pebbles from the Loch Ness.
In defense of gold and other hard assets like real estate, at least you get something.
Unlike the fiat dollar, which is a total joke foisted on the world by banksters.
When the shit hits the fan, guns are going to have more value than gold. My BBQ has more inherent value to survival than gold.
Gold is the absolute last stand for fiat money- money being a unit of labor or barter storage.
Gold is the last firewall- and as such is the perfect storage vehicle for credits and barter.

Sat, 12/18/2010 - 20:23 | 816113 Bearster
Bearster's picture

I hope that was a type where you said gold and silver are "fiat".

Fiat means force, and there is certainly no gun aimed at anyone to hold or value or use gold.  Unlike paper, where one MUST accept paper as payment for all debts, whether one wants to or not.

Sat, 12/18/2010 - 21:42 | 816261 DosZap
DosZap's picture

Fiat is from Latin, and its meaning is "let it be done".

As for Fiat Money;

The term fiat money is used to mean:

  • any money declared by a government to be legal tender.[1]
  • state-issued money which is neither legally convertible to any other thing, nor fixed in value in terms of any objective standard.[2]
  • money without intrinsic value.[3]

The term derives from the Latin fiat, meaning "let it be done", as the money is established by government decree. Where fiat money is used as currency, the term fiat currency is used. Today, most national currencies are fiat currencies, including the US dollar, the euro, and all other reserve currencies, and have been since the Nixon Shock of 1971.

Sat, 12/18/2010 - 22:06 | 816292 Diogenes
Diogenes's picture

I thought they called it Fiat money because in value and rate of depreciation, it resembled a rusty Italian car.

Sat, 12/18/2010 - 22:12 | 816296 nmewn
nmewn's picture

LOL+++++++++

Sun, 12/19/2010 - 01:10 | 816556 Herd Redirectio...
Herd Redirection Committee's picture

So he doesn't think the political system exists purely to serve special interests, i.e. a corporatist Oligarchy?  No thanks, Howard, I'll pass.

Yes, Gold is a religion.  There is a reason Kings used to wear crowns made of gold,  it has tremendous visual impact (esp. in bright sunlight).  But gold also subconsciously reminds us of the sun.  Sun worship is analogous to Gold worship.

Gold has all the properties of money (transportable, divisible, does not erode meaning it by definition stores value) but how do you put a price on 'shiny' and reminiscent of the sun?  Throw in its scarcity, and you have gold's intrinsic value.

No one is saying gold's intrinsic value is infinite.  What is being argued is that gold's intrinsic value is greater than fiat money's intrinsic value!

http://psychonews.site90.net

Check out our latest PsychoNews story, "The Calm Before the Storm":

"Nigeria issued an arrest warrant for Dick Cheney, but ended up withdrawing it.  Oh, I'm sorry, let me rephrase.  They ended up withdrawing it AFTER Halliburton agreed to pay $250 million "in lieu of prosecution".  So basically Nigeria's Anti-Corruption Office just ran an extortion scheme on Dick Cheney and Halliburton, who have claimed they did nothing wrong.  Really?  So you did nothing wrong,  and decided not to contest the fine, and instead decided to pay $250 million out of the kindness of your heart? Or was it to make the problem go away? 

There are quite clearly two sets of rules on this planet, although it would be wise not to wager money on the two sets of rules remaining distinct in perpetuity.  In other words, never underestimate people's desire for justice, and don't be surprised to see the current state of affairs come abruptly to an end."

Sun, 12/19/2010 - 02:38 | 816639 Malcolm Tucker
Malcolm Tucker's picture

Watch Nigel Farage wish the EU a happy holiday lol. He says the euro crisis " is like watching a slow motion car crash"

http://fedupmontrealer.blogspot.com/2010/12/nigel-farage-euro-crisis-is-like.html

Long gold/euro...

Sun, 12/19/2010 - 12:24 | 816900 doolittlegeorge
doolittlegeorge's picture

and of course "here come's the cable TV special about a new gold rush."  i'm going long the advertisers.

Sat, 12/18/2010 - 23:52 | 816446 DaveyJones
DaveyJones's picture

eccellente

Sun, 12/19/2010 - 00:07 | 816464 cbaba
cbaba's picture

Well it depends what you call rusty,or what is more rusty.

US government is begging to that Rusty Italian to buy the Chrysler and invest in US.

 

Sun, 12/19/2010 - 00:24 | 816488 the mad hatter
the mad hatter's picture

FIAT does stand for Fix It Again Tony!

Sun, 12/19/2010 - 13:00 | 816938 indio007
indio007's picture

 No one has to accept FRN's as a payment for debt. Unfortunately most people form their contracts to do so without realizing it.

Money is whatever the parties agree to.

 

Sun, 12/19/2010 - 20:15 | 817547 DosZap
DosZap's picture

Correct, to a point.

If its between private individuals who decide to barter, your correct.

If its a mainstream store, business, etc, they MUST accept the FRN's.

As long as they are LEGAL TENDER, its against the law to not accept them for payment of goods and services.

Mon, 12/20/2010 - 05:43 | 818271 nathan1234
nathan1234's picture

Gold has no financial value !!!!

And paper money has financial value!!!

The author is talking through his bottom hole.

 

 

Sat, 12/18/2010 - 20:24 | 816115 traderjoe
traderjoe's picture

Well put.

I have read the interesting comment that at least gold and silver represent the production value to get them out of the ground and minted. And of course, as you reference, gold can be possessed, has no counter-parties, and no debt associated with it. 

Sat, 12/18/2010 - 20:37 | 816148 UninterestedObserver
UninterestedObserver's picture

Well printing presses, ink and paper aren't free either LOL

Sat, 12/18/2010 - 21:46 | 816264 DosZap
DosZap's picture

Anything that requires a unit of work, has intrinsic value.

What that is, is dependent on the agreement between the parties involved,and what the unit of work is worth.

Just about anything has intrinsic value, based on supply and demand, and thats abot the jist of it.

Sun, 12/19/2010 - 01:33 | 816576 Aristarchan
Aristarchan's picture

Something has a basis of intrinsic value only if there exists a perception that an underlying true value exists. True values only exist in the heart and buying power of man. And this can change in a heartbeat. Gold has intrinsic value because people are buying it, and people perceive it to be worth less than it will be in the future. People, as a group, in some given timeline, are always wrong. Gold will always be there, but it will not, in every age, be a speculative-driven commodity.

Sun, 12/19/2010 - 02:47 | 816648 Francis Dollarhyde
Francis Dollarhyde's picture

Digging a ditch and filling it again requires a unit of work. That ditch can be arbitrarily deep. By that measure, each square foot of undisturbed sod has nearly infinite value, since it is indistinguishable from an arbitrarily deep ditch that has been dug and refilled.

The value of a thing is what it will bring. Period.

Like anything else, gold only has value as long as you can find a greater fool to sell it to. Fortunately, gold has a 6,000 year history of making people foolish, so that's a fairly safe bet. There may be periods where fools foresake it for MBS or whatnot, but they always come back.

Sun, 12/19/2010 - 20:03 | 817529 Al Gorerhythm
Al Gorerhythm's picture

A unit of work doesn't necessarily produce an item of wealth. Wealth is connected work that provides assets that can be converted into providing the basic human needs.

Exter's pyramid provides an evaluation of assets according to counter party risk. As gold is the ultimate store of value, according to historic use, all derivatives attached to risk can be priced in gold. As long as gold holds its properties as a risk free asset, risk averse investors will turn to it. It is not a measurement of value, it is a measurement of risk that I study. When money is being manipulated beyond the possibility of fair return, investors will revert to an alternative to risk assets or a gold standard of their own. Everything is provided a value priced in the currency of use, according to risk of default. Your hole in the ground provides nothing other than wasted effort.

Sun, 12/19/2010 - 20:20 | 817561 DosZap
DosZap's picture

Well, if you want to go around the tree, and use  semantics, ok.

Your labor is (no matter the end result), is /has a negotiated value.

You can set it, agree to its worth, or do it for free.

The only thing the common man / woman has is the ability to perform a service, labor for something of value.(whatever that may be).

In which their efforts(units/of value),are the means by which they survive, or get ahead, eat, roof,cars, fuel etc.

Mon, 12/20/2010 - 01:03 | 818083 Al Gorerhythm
Al Gorerhythm's picture

What is semantic about my comments DZ?

I am simply saying, as are you, that labour has to be tied to productive service to be worthy of exchange. In answer to his post about digging holes, I was simply saying that I'm not going to hire someone to dig a series of arbitrarily placed holes on my property, if they serve no function. If we were to exchange time and labor on each other's property, I'm not going to exchange my day on his property in exchange for a mob of useless holes.  

Further to the argument, as I recently read somewhere, all labor is distilled into money (or words to that effect). Essentially the point was, wealth is brought into existence through productive labour. Labor distilled into gold makes labor divisible, enabling workers to balance inequitable exchanges of services or goods.

Money was invented as a representative credit of wealth through labor. It was found to be a useful means to transport title to wealth ownership between distant parties. The medium used as money had to be trustworthy for both parties. Paper can do the same thing but because of concerns over risk to honest exchange, its intrinsic defects as a derivative of labor, doesn't carry the safety of other rarer and desirable mediums.  The medium most universally used to establish trust in credit was gold. Universal recognition of its properties made it useful in establishing settlement. There is no dispute when gold is used as it can be on-traded.

What ever the medium employed as money, it must hold its value over time or lose its mantle as money. Low flow to production ratios, indestructibility, fungibility, divisibIlity are those properties. Gold fulfills all of these demands.

How? Simplistically, the effort of digging a post hole today will not change in output required in 10 or 100 years time. Gold's properties do not change  over time either making it a perfect yardstick for labor. If I save the payment for those holes dug today, I should be able to pull the savings out of storage when I'm old and feeble and contract someone younger to do it for the same price. If money can't be stored over time without losing value, it isn't money, having lost its storage property. 

Any excess wages that I earn, are stored as wealth protection assets. I am not a sophisticated investor and therefore rely on the veracity of the medium that is used as money to fulfill the functions of money in storing my labor. As the current fiat system provides little safety for my savings, it can't be relied on as money. Money saved is a call on honesty. Savings of paper always end up "Out of the money".  

The derivatives of gold (all other risk assets) are overvalued and the risk of further devaluations in other assets weighs heavily on my decision to be all in in PMs. As I said, I'm unsophisticated and avoid leverage as another way of eliminating risk. I suppose that a lot of people seem to read the same signals and hence the price of PMs. 

Remember, gold values all currencies, hence the purchasing power of dollars in all other assets.

 

Sat, 12/18/2010 - 20:56 | 816188 Worker Bee
Worker Bee's picture

Nothing outside of food,water,shelter and air...oh and possibly sex.. has any intrinsic value unless you assign a value, and the only reason things get assigned value is because they help you obtain those things I mentioned.

Sun, 12/19/2010 - 04:23 | 816691 Temporalist
Temporalist's picture

You left off drugs/alcohol/tobacco/medicine/caffeine, energy, tools, metal, wood, plastic, heat, wax, glue, duct tape, fire arms/defense/swords/knives, books/literature, seeds, knowledge...

Sun, 12/19/2010 - 08:35 | 816760 blindfaith
blindfaith's picture

gold has the same sort of intrinsic values as religions. 

Faith and trust is it's basis, it is enduring and can't be created or substituted by man.  It is tradeable yes but it is not absolutely necessary to trade it to have value. 

You can believe it it or not, it can give you comfort or pain.  Men kill for both.  Men can be controlled by both.  Men can turn their backs to both.

Sun, 12/19/2010 - 17:51 | 817325 UninterestedObserver
UninterestedObserver's picture

? you can die for your beliefs but I think you will have a real hard time selling them for $1400/oz....

Sat, 12/18/2010 - 21:52 | 816276 Urban Roman
Urban Roman's picture

That does it, I'm going to do it this time.

Monday morning, my 401K goes into stone wheels from the South Pacific.

Sat, 12/18/2010 - 23:10 | 816380 Argos
Argos's picture

Yap, yap, yap.  I'm long yap too.  They make a good fence.

Sat, 12/18/2010 - 23:12 | 816386 Billy Shears
Billy Shears's picture

What, no "Gold Bitchez"? C'mon, let me have a "Gold Bitchez", please!

Sun, 12/19/2010 - 01:52 | 816593 cheongwee
cheongwee's picture

So what so good about your gold if someday you found out that authority have outlaw it.

How much will your gold worth?

It is not the gold standard or whatever it is that dictate value or protect your year of labour, it is the honesty and uprighteousness of the authority that can protect your saving.

If people are not honest and want to manipulate a system, there is nothing we can do. They can always break the rules and go around.

So it actually come down to honesty and uprighteousness that is the matter. Not what so call gold standard. If poeple want to cheat and manipulate, there is nothing we can do.

Especially when that group of people hold high office.

But we can still ride on the trend, and take advantage of people fear and greed on this gold bull.

Make hay while the sun shines. And right now make money while gold shines(glitter).

Dont let the opportunity fly by.

Good luck.

 

Sun, 12/19/2010 - 04:23 | 816692 merehuman
merehuman's picture

lots of things are outlawed, pot and other drugs still get to the customer. Go figure

Sun, 12/19/2010 - 15:03 | 817111 Oracle of Kypseli
Oracle of Kypseli's picture

At a higher price.

The same will happen with Precious metals. Become a part time jewellerer and get an exemption.

Mon, 12/20/2010 - 06:12 | 818277 nathan1234
nathan1234's picture

During Wars cigarettes, food cans, chocolates etc command a premium too.

And normally there is a barter or payment in gold and or silver

Sun, 12/19/2010 - 11:33 | 816850 Calmyourself
Calmyourself's picture

I guess I did not think of that.. They could outlaw food next or perhaps the ingestion of oxygen.  Better yet they should outlaw alcohol.  Every Government has limits to its power and as legitimacy fades in the minds of people like us that power fades.  The sheeple are a side show, having both more and less power than we think.  The authoritahs have not done much to insure the value of my money or stored labor these past years. 

The argument stems from faith and is built upon sand and then degenerates into even less substance, collector plates vs Gold, ha.. 

Sun, 12/19/2010 - 17:52 | 817329 UninterestedObserver
UninterestedObserver's picture

They were working on that with the Carbon Credits scam

Sun, 12/19/2010 - 08:44 | 816765 blindfaith
blindfaith's picture

Friday on Marketplace, the editor of the Wall Street Journal said in an interview (and this is a quote) " Gold is what caused the great Depression of 1929".

Sure makes me want to subscribe to another Rupert Murdock propaganda rag.  How is it this Australian, this foreigner,  can rework America thinking into his so easy?

 

Sun, 12/19/2010 - 15:14 | 817128 robobbob
robobbob's picture

I have not seen the WSJ article, but according to "Conjuring Hitler",  after years of wild speculation and loose money in the USA, the BOE raised their rates leading to capital moving from the US to the UK, blowing out the buying on margin mania on Wall Steet.  According to Giacomo, the reason behind their rate change was an attempt by the BOE to attract foreign investment to use to increase their gold holdings in preparation in returning to a gold standard. The resulting US crash may or may not been intentional.

The name calling of your comment does nothing to persuade anyone of your view. I have far more problems with a certain Hungarian who is actively trying to rework American thinking. If you have issues with a tabloid owner pandering to an audience, where do you stand on a guy who pours hundreds of millions into directly undermining the country?

Sat, 12/18/2010 - 20:21 | 816108 TheGreatPonzi
TheGreatPonzi's picture

This PDF doesn't answer to any interesting question about gold.

The lenghty dissertation on gold's price is useless, as the price of gold doesn't matter. People don't buy gold as an "investment", but as a hedge against inflation and government defaults. Thus, if gold goes to $5,000 an ounce, $50,000 or $5,000,000,000,000,000,000, it doesn't really have a meaning.

In the last years of German hyperinflation, gold traded at a few centillion marks. Those who sold at a trillion marks lost money.

Funny enough, you always hear Bloomberg and CNBC call gold a bubble at $1,500, but they absolutely never branded a fiat currency "bubble".

Sat, 12/18/2010 - 20:29 | 816121 Bay of Pigs
Bay of Pigs's picture

Yes, I think you have it right, the USD is the bubble, not gold.

Sat, 12/18/2010 - 22:15 | 816302 DoctoRx
DoctoRx's picture

Cash in the US and UK is the bubble.  Two year notes up from 32 bps to a whopping 61 bps are bubbly.  It would have been appropriate for Mr Marks to have pointed that there is where the gross overvaluation lies.

As far as his mention of a foreigner maybe talking his book, there are innumerable ZH'ers who agree w him and who are not talking their book.  Just plain old fed up (Fed up?) people.

Sat, 12/18/2010 - 22:15 | 816305 DoctoRx
DoctoRx's picture

Cash in the US and UK is the bubble.  Two year notes up from 32 bps to a whopping 61 bps are bubbly.  It would have been appropriate for Mr Marks to have pointed that there is where the gross overvaluation lies.

As far as his mention of a foreigner maybe talking his book, there are innumerable ZH'ers who agree w him and who are not talking their book.  Just plain old fed up (Fed up?) people.

Sun, 12/19/2010 - 01:02 | 816546 macholatte
macholatte's picture

In the last years of German hyperinflation, gold traded at a few centillion marks. Those who sold at a trillion marks lost money.

 

yes. good point. apparently the thing to do for the wise German at that time would have been to trade his gold for another country's fiat so he could have had some cash to buy food and not lose value .... value in German currency, that is.  In fact, that is what many did. Considering the proximity of Germany to so many other countries it was easy..... if you had the gold, or diamonds or silver or copper or.......... anything but German fiat.

 

Sun, 12/19/2010 - 12:28 | 816904 doolittlegeorge
doolittlegeorge's picture

or "vote Hitler since the game is rigged."  yes, yes?

Sun, 12/19/2010 - 02:17 | 816619 Jay
Jay's picture

"In the last years of German hyperinflation, gold traded at a few centillion marks. Those who sold at a trillion marks lost money."

But what if the currency doesn't go into hyperinflation? If the object is to get as much bullion for your dollars as possible when do you buy? Those who paid >$800/oz in 1980, when price inflation was raging in the double digits, watched the value of gold in relation to dollars decline for 20 years!

Sun, 12/19/2010 - 12:00 | 816877 redpill
redpill's picture

The difference between then and now is that the US debt load can no longer withstand 18% interest rates, so our central banksters will simply not do it.

Sun, 12/19/2010 - 17:56 | 817337 UninterestedObserver
UninterestedObserver's picture

Exactly the next time I hear that retarded argument all we need to do is gently remind everyone what the interest payment 18% is on 14 Trillion and what the effects would be.

Sun, 12/19/2010 - 02:23 | 816624 A Nanny Moose
A Nanny Moose's picture

I think a more appriopriate comparison would be PoG in other goods. Does an once of gold still buy the same amount of some basket of goods (i.e. a hand made suit = 1oz AU)? If purchasing power doubles or triples in terms of those other goods, perhaps then we can call it a bubble?

Sun, 12/19/2010 - 02:41 | 816646 TheGreatPonzi
TheGreatPonzi's picture

Relative prices can also decrease. An ounce of gold can buy more goods than before (always relatively speaking) if these goods are better produced (usually thanks to technology).

Before the FED, prices were stable or decreasing.

Sun, 12/19/2010 - 12:30 | 816906 Don Birnam
Don Birnam's picture

+1

Sat, 12/18/2010 - 20:25 | 816117 Goldenballs
Goldenballs's picture

So if Gold has no value then everything in the history of humanity has had no value whatsoever.Therefore the great pyramid scheme goes back beyond ancient Egypt.Mankind has been duped forever !!!!!!!!!!!!!!!!!

Sat, 12/18/2010 - 21:05 | 816195 morkov
morkov's picture

the only value is people and their values. absorb a cliche to get wiser. LOL

Sun, 12/19/2010 - 14:29 | 817062 johan404
johan404's picture

Correct. Civilization is based on agriculture, and agriculture is a pyramid scheme because it's unsustainable. Thus everything since agriculture began 10,000 years ago has been a scam. Fortunately human history, unwritten history, spans back at least 1 million years.

Sat, 12/18/2010 - 20:25 | 816119 Bearster
Bearster's picture

Btw gold is not an "investment".  Gold is cash held in the only real kind of money.  Every portfolio should have a cash allocation of some level or another, right?  And the proportion of cash should be based on some assessment of risk, right?

Any assessments of gold as an "investment" are based on the flawed view that fiat paper is money, gold is a commodity, and one speculates on commodities hoping to make a profit in terms of fiat paper.

If it isn't obvious to this writer (and it should be!) they are printing the dollar (and all other fiat currencies) to death.

Sat, 12/18/2010 - 21:57 | 816283 DosZap
DosZap's picture

FWIW, Gold & Silver are not commodities, they are the only REAL money, have been money since mans appearance, and discovery of them.

Now, that said, money can be whatever a society decides it to be, if they are willing to trade work units for it.

In the Amazon rain forest, Gold and sliver could be worth zero.

A freshly killed monkey, a small fortune.

Fiat currency is/has NO value, except when ordained by the PTB.

Like I said earlier in another post, what costs .$04-.06 cents to make, be it a 1.00 face value, or 1000.00 face value, still costs $.04-.06 cents, until you add the amount, and start adding interest to the face values of  it.( Which is the sham known as the Fed).

The cost to make both is the same.Yet the PERCIEVED value far different.

Fiat, to me means WORTHLESS.

It has value simply because of law and CONfidence.

Lose the confidence, and the law is of no effect.

It may as well be shit wipe.

Sun, 12/19/2010 - 09:02 | 816774 Byte Me
Byte Me's picture

You are quite welcome to send all of your 'WORTHLESS' fiat to me and I'll be only too happy to look after it for you!

 

Address on request by PM

(But you won't do that will you?) The reason being an obvious one.

Sun, 12/19/2010 - 17:58 | 817339 UninterestedObserver
UninterestedObserver's picture

Yeah teh obvious reason being that fiat can still, at this time, be traded for GOLD

Sun, 12/19/2010 - 17:58 | 817340 UninterestedObserver
UninterestedObserver's picture

Yeah the obvious reason being that fiat can still, at this time, be traded for GOLD

Sat, 12/18/2010 - 22:12 | 816295 Diogenes
Diogenes's picture

Bingo. Gold is not an investment, it generates no income or growth. Gold is a store of value when every other investment is too risky, a safe haven in war, inflation, natural or political disaster.

Sun, 12/19/2010 - 08:16 | 816754 AGoldhamster
AGoldhamster's picture

-100, just filling space, bla, bla, bla - my PM holdings have doubled in last few years - almost no other asset produced the same gains. I can buy double of what I could have bought a few years ago - if that is not an investment or income (the moment i sell it) then you are still living 10K BC

Sun, 12/19/2010 - 13:40 | 816987 Diogenes
Diogenes's picture

It's not so much that gold is going up, as the dollar is going down.

What you describe is speculating, not investing.

Sun, 12/19/2010 - 14:34 | 817074 johan404
johan404's picture

Gold has gone up also.

Sun, 12/19/2010 - 12:35 | 816911 doolittlegeorge
doolittlegeorge's picture

no.  "Gold is gold, cash is cash."  Period.  The problem comes "when cash cannot be gold"--inevitably "we become debt."  Thus the problem is of course neither one of gold nor cash (since we have neither) but debt (which the Fed Chairman has said he is printing and NOT money which is indeed true and of course is ALL WE HAVE.)  So who benefits from not mere debts but deficits that cannot ever be repaid?  It's so obvious isn't it?  Just "start with the people who don't" and work your way back, right?

Sat, 12/18/2010 - 20:30 | 816127 gwar5
gwar5's picture

Valuing gold against dollars is backwards -- the dollar is being measured against gold. The dollar is a more convenient medium of exchange, that's about it.  

We're a gold superpower with 8100 tonnes so we should kick the private Fed to the curb and default to them and their FNRs for the last 100 years of misery foisted upon us. We owe them shitola.

Then, create our own gold-backed currency with an Apple on the back of all the bills. Then Wikileak their e-mails so everybody can see how they like them apples.

 

 

Sat, 12/18/2010 - 20:33 | 816132 cossack55
cossack55's picture

Don't forget "our" German gold.

Sat, 12/18/2010 - 21:56 | 816280 nmewn
nmewn's picture

"Valuing gold against dollars is backwards -- the dollar is being measured against gold. The dollar is a more convenient medium of exchange, that's about it." 

Exactly correct.

The rise in golds "price" in fiat currency is a product of currency devaluation.

As far as I can tell the same amount of gold buys the same amount of goods it always has.

If anyone cares to check...(I haven't in years)...the same amount of gold (in ounces) buys the same amount of gas or food or vehicle it always has. It tracks the price of "stuff" as any good store of wealth should.

My only issue is the gold to silver ratio to swap into more. It was in the 60's for awhile...then 50's...now 47.

How low can it go?...let's limbo...LOL. 

Sat, 12/18/2010 - 23:26 | 816406 Bearster
Bearster's picture

That would be truly odd, nmwen.  It takes less land to produce a ton of wheat than it did in 1910.  It takes less labor to produce a ton of wheat than it did in 1910.

Why would the price remain the same, if the process of producing it becomes far more efficient?

Sat, 12/18/2010 - 23:47 | 816435 spinone
spinone's picture

One gallon of gas does the equivalent of one person's hard labor for one month.

Sun, 12/19/2010 - 00:08 | 816455 DaveyJones
DaveyJones's picture

exactly. there's all that extra value and energy thrown into the land to get more out. value and energy that will get progressively scarce and expensive

Sun, 12/19/2010 - 00:25 | 816491 MrSteve
MrSteve's picture

Prices have remained stable for very long periods of time, when measured in metals. A good men's wool suit has cost one ounce of gold for centuries, ditto for the pound of copper and a loaf of bread. These are value identities, like 1 equals 1, most of the time.

Bringing modern efficiency into the picture as a factor in pricing is what Greenspan did in order to justify his inflationary tenure at the Fed, calling such increases "hedonic improvements". It was BS then and it is BS now.

 

It may take less labor and less land to produce a ton of wheat now compared to olden days, but might it also cost a vast amount more in capital? How many mules pulling plows and horses pulling banks of McCormack reapers equals the cost of one $350,000 John Deere combine and the maintenance and insurance to keep it running? Tax laws favor capital investment over shovel-ready labor, as Obama just found out after spending $75 billion to discover there are no shovel-ready jobs.

 

Think of gold as "fool-proof" money. If you have gold, the fools can't get your money, scamsters to the contrary of course.

Sun, 12/19/2010 - 08:18 | 816753 nmewn
nmewn's picture

Mornin Bearster,

"That would be truly odd, nmewn.  It takes less land to produce a ton of wheat than it did in 1910.  It takes less labor to produce a ton of wheat than it did in 1910."

I think minimum wage was around $1.50 when I was young. Rising (the price of labor in fiat terms) as we advance through time.

This is the same thing I'm talking about...devaluation of fiat...now it's what $7.25?...the amount of labor someone does (burger flipper or whatever) has not changed (gotten anymore laborious) to require more money for the same product or service...if anything at all, the process of making a hamburger has gotten easier, so one would think end consumer cost would come down, not go up...so it must be that the value of what you are paid has dropped, thus requiring more pieces of paper to compensate for the same amount or even less labor.

But we digress I think by even bringing payment for labor into this narrow discussion of "pricing" gold. Gold & silver are stores of past labor. They are accumulated wealth to equal the term "savings". It took me years to shake off thinking of pricing things in fiat.

I think your still using "price" in terms of fiat as a mechanism to value gold..."they" can only accomplish this by threat or use of force...another topic but relevant.

Look at it in terms of value, that is, in exchange for X.

When I was a kid I can remember gasoline @ 19 cents a gallon during what they called "gas wars"...usually it was around 27 cents.

The easiest way to understand my position is with a plain ole pre-65 quarter as the larger numbers like billions & trillions begin to lose meaning.

And we here at ZH are all about enlightening the reader who happen to stumble across our musings...I think we sometimes over complicate things.

The pre-65 quarter is 90% silver, 10% copper (we'll even leave the copper value out of it). Silver is 29 bucks & change an ounce. So just the silver alone comes to $5.27, even though it plainly has 25 cents in >fiat< stamped on it's face.

So just like when I was a kid...I have (with that particular quarter) the value of, a gallon of gas and a coke.

It's true value to me or anyone else has not changed much...gold & silver are stores of wealth (past labor) to be used later or passed down...no probate court or further taxing required...and that really pisses them off ;-)

Sat, 12/18/2010 - 23:59 | 816452 Dave
Dave's picture

In 1932 you could buy a Colt M1911 45 cal. pistol for 1 oz. of gold.

You can still do that today and have enough change for a box of ammo.

Sun, 12/19/2010 - 00:02 | 816457 bobert
bobert's picture

I'm enjoying the declining ratio between gold and silver.

Guess that means I'm a "poor man."

Don't feel poor though.

Actually getting concerned about where to store all the silver

I've been accumulating. Perhaps I'll start that barbecue

that a fellow ZH'er suggested.

I hold it as an inflation hedge and means of exchange in the

worst case scenario. It's not bad as an investment these

days either!

Sun, 12/19/2010 - 08:34 | 816759 nmewn
nmewn's picture

"I'm enjoying the declining ratio between gold and silver."

Me too.

With so much manipulation it's hard to imagine it can ever go to 16:1 again...but that's the hard part...historical perspective vs. the here and now.

Looking good Billy Ray!...feelin good Loius! ;-)

Sun, 12/19/2010 - 15:08 | 817121 Oracle of Kypseli
Oracle of Kypseli's picture

Are you suggesting sorting gold and going long silver?

Would that be a guarantee to make money?

Mon, 12/20/2010 - 07:21 | 818303 nmewn
nmewn's picture

No.

I don't play the paper games in the metals. With me it is about accumulation of physical...fiat price in exchange for it is of no concern.

Tue, 12/28/2010 - 16:42 | 834207 Oracle of Kypseli
Oracle of Kypseli's picture

Super! I do the same. But...... the weight of the silver bugs me.

Sun, 12/19/2010 - 12:39 | 816913 doolittlegeorge
doolittlegeorge's picture

we've always had gold--gasoline not so.  how about "other new commodities"?  thus "we have cash" because "it allows us to pay for things we didn't have before."  try that with gold.  what i hope we all agree on "we cannot pay for anything with debt...unless you're a country."

Sun, 12/19/2010 - 00:10 | 816467 Ray1968
Ray1968's picture

We have 8100 tonnes? When was the last time Ft. Knox was audited?

Sun, 12/19/2010 - 11:20 | 816845 Kyron95131
Kyron95131's picture

to my knowledge it was only audited once

and briefly and mostly for show at that

http://www.timesonline.co.uk/tol/news/world/us_and_americas/article5989271.ece

Sat, 12/18/2010 - 20:31 | 816128 cossack55
cossack55's picture

Tyler-

Methinks you may have overhyped this piece.  Nothing new, same ol' same ol'.  The whole absence of counterparty risk is enough for me.  I'll hold phys and pass on to my prodigies and sleep well on the route.

Sat, 12/18/2010 - 22:47 | 816354 Bob Sacamano
Bob Sacamano's picture

While there may truly only be 6 "must read" articles per year in all U.S. publications/websites, there is one-a-day labeled such here.  Just sayin' it is a very over-used term here - but understand the motivation to use it. 

Sat, 12/18/2010 - 20:33 | 816135 cetarro
cetarro's picture

To understand gold, read Whalen's book, Inflated. Gold is money, but money that only fully realizes value during periods in which fiat money runs amuck. Whether it be the greenbacks in the 1860s, or the dollar in the 1980s, people inherently trust other people; why? I'll never know, but they do. When they either stabilize the next currency, or they stabilize the dollar, gold will once again drift moribund in the wind waiting for the next mismanaged cycle to bring it back to glory. Watch real rates. Not fake cpi numbers, real inflation. Gold discounts the difference between nominal rates and natural rates. While the difference is negative gold will likely trend up.

Sat, 12/18/2010 - 20:36 | 816139 iota
iota's picture

Wow. Not content with being an international dope smuggler, the little welsh fucker is a hedge fund manager as well.

Sat, 12/18/2010 - 20:35 | 816142 UninterestedObserver
UninterestedObserver's picture

No sh*t gold is fiat? You must be an Alchemist.

 


While specie-backed representative money entails the legal requirement that the bank of issue redeem it in fixed weights of specie, fiat money's value is unrelated to the value of any physical quantity. Even a coin containing valuable metal may be considered fiat currency if its face value is higher than its market value as metal.

A feature of all fiat money is its (typically exclusive) acceptability to the government for payment of taxes and charges.

Fiat money is not essential for large countries, nor is it always used. An economy may function on banknotes issued by commercial banks, which are not legal tender, and hence not fiat money. Such was the case in the United States during periods prior to 1862, before the first United States Notes were created and declared by the government to be legal tender.

Sat, 12/18/2010 - 20:36 | 816143 Sean7k
Sean7k's picture

Waffles, waffles and more waffles.

No fiat currency is taken seriously without a gold reserve component. The US (supposedly) has the largest reserves. China is discounted as a reserve currency because it holds so little. Switzerland is lauded because of it's reserves versus currency in circulation. 

These actions and beliefs portray a commodity that has value- in the eyes of the very bankers that define the system. 

So, you make a bet (investment): the dollar or gold. The author may call it religion to discount it's validity, but every choice we make requires faith in the answer. So, do you want a god of gold or a god of dollars? Let's put it to a test of fire...

 

Sat, 12/18/2010 - 20:39 | 816151 UninterestedObserver
UninterestedObserver's picture

I bet that if Oaktree had a gold fund to sell he would be bullish on it.

Sat, 12/18/2010 - 22:36 | 816331 Arius
Arius's picture

hmmmm...smt to think about...

Sat, 12/18/2010 - 20:41 | 816154 Misean
Misean's picture

""Gold has no financial value other than that which people accord it..."

 

Huh...value is determined at the margin...by the interplay of market participants schedule of subjective values operating in a free and open market....huh...Gosh...

http://rationalargumentator.com/Menger_revivalofeconomics.html

Sat, 12/18/2010 - 22:14 | 816299 IQ 145
IQ 145's picture

 Yes, exactly; and this reveals the  post for what it is; propaganda; nothing had any value other than what "people", the market accord it. Nothing. Never has been. never will be. The phenomenon that we are witnessing is a great awakening, person by person from the drugged sleep of the 1980's and 1990's, when no-one noticed or paid proper attention to inflation and today; when people are waking up. Any talk about speculation or valuation is meaningless. Everything is a speculation; everything. get it straight for once. The great inflationary epoch is over and the only thing that remains is the death of the paper monetary units; as it has always been and as it shall always be.

Sat, 12/18/2010 - 20:42 | 816155 cocoablini
cocoablini's picture

Gold and silver were declared money by kings ,autocrats etc over the eons -by fiat. In the late 1800s the gold owners out-fiated silver ownership by declaring that gold x times more value than silver. That was a way for those banksters to wrestle "money" from the more common ownership of silver. Basically, gold owners fiated the silver owners. Its called the tragedy of 1868 or something.
Yes, it at least it represents the extraction value out of the ground- so what. Its a colossal waste of valuable labor and oil to extract gold and have it sit in the FED vaults doing jackdiddly.
In fact, oil has more value than gold- except somebody over the years said it has lots of value sitting in vaults looking pretty.
We easily have enough supply of gold for industrial use, so gold is mostly what we consider "money" storage with a stable purchase power.
I'm totally cool with gold being the gadfly in the banking system- if humanity was trustworthy at all levels, we wouldn't need this stupid dumb rock in the ground. But, of course, paper fiat is a fantasy of governments and corrupt banks and therefore gold exists.
Remember, most gold exists in vaults controlled by governments in the likely event of economic explosive decompression.
Silver is the people's money.
Both metals do horrible ecological harm for marginal utility.

Sat, 12/18/2010 - 20:51 | 816180 Misean
Misean's picture

Wow...to spout so much nonsence such force...incredible.

Why don't you do yourself a favor, and read a bit of history about money and money theory...at least more than you get off the backs of sugar packets at Denny's.  And further, you just MIGHT want to drop the labor theory of value...kinda been dropped for about 170 years at this point.  It would be more entertaining if you would parrot the physiocrats, as at least that would be somewhat obscure.

Sat, 12/18/2010 - 21:06 | 816201 cocoablini
cocoablini's picture

Nice, your intellect is overpowering.
In the depression 1893, banks as they are doing today, decided that the gold standard was better for them since they owned most of it. Silver, bimetalists, were "commoners" and antideflationists.
So, silver was basically the dollar of the 1890s since it was more available and not controlled by the hoarding class. Read soros, buffet of today.
If you can dictate by FIAT that silver is devalued because your book talks GOLD, then thats FIAT.
Control over money supply is inherent in depressions- and since we bailed the rich out in 2009, they rewarded us with destruction of the dollar, ruination of savings and hoarding of commodities and power monies like gold and silver. We get paper.
In the end, its all fiat because its out of your control and in the hands of the wealthy.
If rocks from the Loch Ness were considered valuable, then those would be money too. Somebody dictates something is money and has value, and that somebody enforces it by fiat.

Sat, 12/18/2010 - 22:17 | 816309 IQ 145
IQ 145's picture

 Totally and completely false. do your homework; fiat is a specific law for a specific reason; gold and silver were not fiat currencies in the great epoch of economic success.

Sun, 12/19/2010 - 02:44 | 816390 Rusty Shorts
Rusty Shorts's picture

Shell Money has been a currency far longer than Gold or Silver.

 

"Shell money is a medium of exchange that was once common. It consisted either of whole sea shells or pieces of them which were worked into beads or otherwise artificially shaped. The use of shells in trade began as direct commodity exchange ..."

 

http://en.wikipedia.org/wiki/Shell_money

 

Food is power.

Sat, 12/18/2010 - 22:30 | 816323 DoctoRx
DoctoRx's picture

Sorry Cocoablini, you miss the point.  Gold is the people's money, as was silver.  In the early years of the US, gold and silver circulated freely no matter what  mint made them.  Spanish pieces of eight were fine.  There was no legal tender law.  Kings had to obtain gold.  They wanted gold because gold was recognized as the store of wealth; they did not generally arbitrarily impose it upon the sheeple.

Rocks from Loch anywhere couldn't be money.  They are not portable or easily divisible.  They are not rare.  They also are not widely dispersed geographically, a characteristic that has made Au/Ag money in most of the world.  So they lack key characteristics of either transactional money or widely accepted store of wealth. 

Sat, 12/18/2010 - 22:37 | 816334 Arius
Arius's picture

"Gold is the people's money," - yeah right...people dont have money to pay their rent/mortgage...gold really?

Sun, 12/19/2010 - 01:36 | 816577 StychoKiller
StychoKiller's picture

Your statement:

"Gold is the people's money," - yeah right...people dont have money to pay their rent/mortgage...gold really?

 

Mine:  "Paper is the people's money," - yeah right...people don't have money to pay their rent/mortgage.  paper...really?

 

Check your premises, because anytime logic arrives at an illogical conclusion, the premises are incorrect.

Sat, 12/18/2010 - 20:47 | 816167 SelfishMan
SelfishMan's picture

This piece is a great food for thought. The author is spot on with the fact that gold itself has no other value than what people attribute to it. Extrapolating from that statement, what does? The debate on theory of value can only be held in the context of value to living organisms (this case humans).

It is true that while gold itself is no better than, say, lead when it comes to its position in universe, it just so happens that humans value gold more than lead. And by the way, it is instructive to notice that throughout human history gold remained the primary money, store of value (read, accepted by other humans as something of value to them), medium of exchange. It is also instructive to notice that there was at least one example in human history when gold was not valued very highly by a population of humans. That example is Azetcs and Maya before the European explorations began.

Is it possible that the gold will lose its status as the #1 money and commodity? Most certainly. Is it probable? Not very and in case of it happening, it would have to be considered one of those "black swan" events. Or would it be a black swan event stretched over a prolongued period of time?

 What could replace gold at its current throne? At this point we can only speculate (hmmm, here is that word again). Some energy crystals and minerals? Radioactive materials that would serve as energy sources? Some other substance? Maybe energy itself in whatever form it will come.

However, for now, I am betting that the crowd will religiously choose gold.

Sat, 12/18/2010 - 20:49 | 816177 TheGreatPonzi
TheGreatPonzi's picture

"However, for now, I am betting that the crowd will religiously choose gold."

Not so sure. I'd like it, but you have to be realistic.

I have a serious question for gold/silver bugs.

A money is a thing that nearly everybody in a given territory will accept. That's the definition given by Rothbard, and that's the definition supported by facts and history. Everybody accepts dollars, euros or francs suisses. Nobody accepts gold or silver as payment. And even if they wanted to, they could not because there are legal tender laws.

The general public does not care about the intrinsic value of gold. The general public wants a currency that everybody will accept.

If nobody accepts gold, gold loses its currency status, and its price is only driven by speculation and industrial demand. It's as simple as that. Really.

So most people assume here that gold will re-become a currency when the fiat system collapses. They usually say that Weimar germany is a good example. It is not. Here's why:

- The gold standard was dropped by Germany in 1919, and hyperinflation happened three years later. People were still accustomed to gold, and gold was everywhere. Every family had gold coins. So when the mark collapsed, they needed a stable currency, and most people went back to gold. Note that they could have chosen anything else. Some people used eggs. Some businessmen used US dollars. Gold didn't protect more from inflation than international fiat currencies. But gold was the most practical thing to use at hand, and the gold standard still existed in other big industrialized countries, so it was the equivalent of a foreign currency.

- If they could, people used fiat paper from other countries in priority. Why? Because it's far more practical to use than gold. You don't have to weigh it, to divide it, and it isn't heavy.

- Today, people are not accustomed to gold. Why would they turn back to it? Do you want a proof? In Argentina, when hyperinflation hit, people ignored gold. They turned to US dollars and Euros instead. The price of gold quoted in ARS (Argentinian pesos) never had a premium over the price of gold quoted in US dollars. There was absolutely no demand for gold in Argentina. Gold preserved value, but not more (and less, if you wanted to use it to make purchases) than the US dollar.

- Some will oppose the example of Zimbabwe, where gold has replaced the Zimbabwean dollar in some parts of the territory. But they don't use it as money for its intrinsic qualities. They use it because the White man in the USA will pay a lot of dollars for it, and because there is plenty in Africa.

If you believe gold is money, you believe that tomorrow, if hyperinflation hits America, your baker and your supermarket will start accepting gold as payment, and that 99% of American people will switch to gold for their transactions. If you do not believe that, just like me, then gold is not money. Look back to the definition of a money. It will only be a scarce commodity, with some value, but not as much as, say, francs suisses compared to the hyperinflated USD.

The most probable thing is that the American people will continue to use the USD during the hyperinflation, even if they are robbed (just like most Germans did), and they will wait like panicked sheep until the new US government issues a new fiat currency. Euros will be used in some parts of the territory. That's all.

No gold. No increase in gold value.

Sat, 12/18/2010 - 21:05 | 816200 TheProphet
TheProphet's picture

Generally, I agree. Euros? What if the Euro collapses first? Renminbis? What?

Sat, 12/18/2010 - 21:17 | 816225 TheGreatPonzi
TheGreatPonzi's picture

That's the second problem. The euro is the most fragile currency in the world. It will collapse before the dollar, or in synchrony. 

To be honest with you, I don't visualize the Americans using SGD, CHF or RMB as a currency.

And I don't even think SGD, CHF and RMB, the most likely to stay stable, will indeed stay stable.

No, the most probable scenario is a world hyperinflation, a big chaos, where shit really hits the fan. In this environment, what will preserve value will be necessary commodities. Gold? It is not necessary. If gold doesn't manage to be used as money by most people, or at least an entire country, it loses 99% of its interest.

Sat, 12/18/2010 - 21:27 | 816232 akak
akak's picture

Gold? It is not necessary. If gold doesn't manage to be used as money by most people, or at least an entire country, it loses 99% of its interest.

That statement is completely illogical and a complete non-sequitur.  As long as there are two people who are willing to exchange one item of value for another via the transactional medium of gold, then gold will be money, at least for them. 

You appear to be so inured to the fiat currency, government-enforced faux money paradigm that you evidently cannot grasp the concept of money as a medium that can be provided by free choices within a marketplace, just as any other good or service can be.

Sat, 12/18/2010 - 21:42 | 816260 TheGreatPonzi
TheGreatPonzi's picture

"That statement is completely illogical and a complete non-sequitur.  As long as there are two people who are willing to exchange one item of value for another via the transactional medium of gold, then gold will be money, at least for them. "

There is a tribe in Amazonia where shells are the money. I've tried to pay my San Francisco condo with shells, and it didn't work.

You don't seem to understand the point here. The man who'll do the best in an hyperinflation is the man who has what everybody wants. If you have what only 0.01% of the population wants, you'll do worse than the man you bought tons of rice and canned food. At least those are wanted by 100% of the population.

Sat, 12/18/2010 - 21:53 | 816277 akak
akak's picture

Nobody has every been financially injured by holding gold during a hyperinflation --- NOBODY.  They have all retained the value of their savings by doing so, in most cases better than those holding fiat currencies.

You go do what you want to do to prepare for a potential upcoming world monetary collapse or upheaval, and the rest of us will do what we see as best.  I have little doubt who will fare the better.

Sat, 12/18/2010 - 22:05 | 816291 TheGreatPonzi
TheGreatPonzi's picture

"Nobody has every been financially injured by holding gold during a hyperinflation --- NOBODY."

That's right. I won't contradict you on this. You are right. But hyperinflations are relatively rare events. Most of them happened before the gold standard was definitely dropped. People just switched from fiat to gold during the hard times, and from gold to fiat after. It was easy to do it. Gold was at hand, and in people's minds.

Maybe the trend will continue. Maybe gold will continue to be the best thing to have during an hyperinflation. Or maybe it wasn't an eternal law.

When Yugoslavia broke up in the 1990s, I don't remember people using gold. Instead, they used adjacent currencies or US dollars. Same thing in Argentina. Sure, gold kept its value. Because it was traded on the Comex and at London. And because the men who buy it are betting that gold will be used as a currency when the fiat paper pyramid in the West collapses.

Sat, 12/18/2010 - 22:35 | 816310 akak
akak's picture

But hyperinflations are relatively rare events. Most of them happened before the gold standard was definitely dropped.

Actually, neither "fact" is true --- hyperinflations are exceedingly COMMON events, with hundreds of examples in the last century, and the large majority of them happened SINCE the world left the already-corrupted gold exchange standard in the 1930s.  Just look through any multi-decade catalog of world coins since World War II if you do not believe me.

When Yugoslavia broke up in the 1990s, I don't remember people using gold.

Probably true.  And I am sure the fact that they had up to point lived under a communist system in which the ownership of gold was restricted or illegal had nothing to do with that fact, right?  Also, a hyperinflation by definition is an emergency and a relatively short-term effect, and so you are essentially making an argument analogous to the "lifeboat morality" fallacy, in which actions taken in extremis are extrapolated into more ordinary, everyday situations.

Given enough time, and most critically, the lack of government interference, I have little doubt that most such extreme monetary crises would evolve into gold and silver-based monetary systems, as they have innumerable times in the pre-central banking past.  It is only, ONLY the hostility and action of governments and the well-entrenched financial elites to prevent that from currently taking place that has forestalled such things happening naturally in today's world.

 

Sun, 12/19/2010 - 18:09 | 817351 UninterestedObserver
UninterestedObserver's picture

Sorry but if the USD collapses on what planet will the Euro be stable at the same time? All the primary Fiats are on the verge of collapse.

Sun, 12/19/2010 - 18:10 | 817352 UninterestedObserver
UninterestedObserver's picture

Sorry but if the USD collapses on what planet will the Euro be stable at the same time? All the primary Fiats are on the verge of collapse.

Sun, 12/19/2010 - 11:46 | 816860 Calmyourself
Calmyourself's picture

If the Dollar collapses and the Euro alongside it, what exactly do I take in trade for my canned good and rice?  You do not get it.  People turn to solid foundations when their world is shaken.  This crisis if it hits will be unprecedented, no other reserve currency has collapsed. You severely underrate the psychology of gold and silver and their place in the human psyche.

Sat, 12/18/2010 - 21:49 | 816268 merehuman
merehuman's picture

Ah we need local barter boards. Someone to bring the 2 sides together. Salesmens job of the century.  You will need a bycicle, lol, true.

 

 

Sun, 12/19/2010 - 00:29 | 816497 delacroix
delacroix's picture

craigslist

Sun, 12/19/2010 - 04:36 | 816695 merehuman
merehuman's picture

delacroix you assume electricity and internet. I see next years possibility of having neither

Sat, 12/18/2010 - 21:08 | 816207 trav7777
trav7777's picture

you seem to misunderstand legal tender laws.  They merely mandate that people ACCEPT cash, not that they cannot make in-kind contracts.  Although there were some prohibitions against gold contracts from the 30s.

At any rate, I have no clue why anyone would think you were going to trade with gold; that's absurd.

but, let's consult your examples:

Argentina.  USD or Euro, right?  So, that's all well and fucking good for Argentines who WERE ABLE to have USDs...what about those who didn't?  What about Americans or Europeans?  WTF do you suggest holding for a dollar collapse?  Pixie dust?  The Euro?  Pesos?  What?

Argentines TURNED to USD or Euros.  AFTER their peso holdings were completely wiped the fuck out.  So, fine, a person with gold will TURN to the CAD or AUD or CHF *after* their USD holdings get wiped out.  There was no ARS premium in gold...why WOULD there be??  Gold trades in each currency at whatever the forex is!  You could swap a piece of your necklace for ARS or USD or whatever paper you want.  WTF is the problem here?

If you believe that black people don't "value" gold and that only WHITE men's desire values it in Africa, then you are the stupidest idiot in history.  I mean, this notion is so fucking absurd that I marvel that you even suggested it.

As far as your nonsense about the CHF being worth "more" than gold, no it won't.  Let's suppose the CHF/USD was 1.0 and gold was $1400 and 1400 CHF.  Then the next day the USD collapses to 1/1000th of its previous value.  The CHF/USD will be 1000 and gold will still be 1400CHF!  However, POG in USD will be $1.4M

And when the USG issues new scrip, as has occurred a dozen times in Latin America just in the last 20 years or so, all the people holding the old scrip will be wiped out and transactions will proceed in the new one.  So fucking what?

I'm really not sure what the hell your point is...and as I have said a million effing times, stockpile for a paper collapse in WHATEVER floats your boat, oil, wheat, cotton, even pussies, any real asset that holds value.  It doesn't matter.

Those who think a paper collapse makes them "rich" are not totally correct.  They will certainly be better off than those who have only paper, but they won't suddenly fetch more cars or oil barrels on account of adding zeroes to the cost of everything.

Sat, 12/18/2010 - 21:36 | 816248 TheGreatPonzi
TheGreatPonzi's picture

"you seem to misunderstand legal tender laws.  They merely mandate that people ACCEPT cash, not that they cannot make in-kind contracts.  Although there were some prohibitions against gold contracts from the 30s."

Then can you remind me what happened to the liberty dollars project?

And can you explain to me why absolutely no online shop based in the US territory accepts egold?

"Argentina.  USD or Euro, right?  So, that's all well and fucking good for Argentines who WERE ABLE to have USDs...what about those who didn't?  What about Americans or Europeans?  WTF do you suggest holding for a dollar collapse?  Pixie dust?  The Euro?  Pesos?  What?"

Whatever wich is not gold. As I said, the people will go where other people are already. Gold is not used as a currency by a single country in the world. CHF, RMB or even Pesos are.

Let's say you're an Argentinian, and your currency just collapsed. What do you do?

You go for a currency no one accepts yet (gold), or for a currency already accepted by 500 million people (euros?)

"If you believe that black people don't "value" gold and that only WHITE men's desire values it in Africa, then you are the stupidest idiot in history.  I mean, this notion is so fucking absurd that I marvel that you even suggested it."

Then you probably never went to Africa. I've spent 6 years of my life in Brazzaville for an oil exploration company. The Africans are just like the Amerindians, they don't care about gold per se. It's just a shiny yellow metal. Only capitalists have historically cared about it.

"As far as your nonsense about the CHF being worth "more" than gold, no it won't.  Let's suppose the CHF/USD was 1.0 and gold was $1400 and 1400 CHF.  Then the next day the USD collapses to 1/1000th of its previous value.  The CHF/USD will be 1000 and gold will still be 1400CHF!  However, POG in USD will be $1.4M"

I've never said that. You extrapolate, you don't understand my point. I've said that people will turn to CHF before gold, if they ever turn to gold one day. Period.

"I'm really not sure what the hell your point is...and as I have said a million effing times, stockpile for a paper collapse in WHATEVER floats your boat, oil, wheat, cotton, even pussies, any real asset that holds value.  It doesn't matter."

Of course it does matter. I've just said that in an hyperinflation that targets one country, the man who'll do the best is the man you owns a stable foreign currency. In an hyperinflation that targets the world, the man who'll do the best is the man who owns necessary commodities. Gold is not a necessary commodity. If it is not used as money, and it will not, it's just a shiny yellow metal.

Sat, 12/18/2010 - 21:38 | 816252 akak
akak's picture

All I read here is bluster based on establishment propaganda and a profound ignorance of history and economics.  I suggest you do a little bit of reading in either subject, or both, before making wildly unsupported and embarrassing comments here.

Sat, 12/18/2010 - 21:47 | 816263 TheGreatPonzi
TheGreatPonzi's picture

Why can't gold bugs understand a thing a 5-year-old child can understand?

Seriously.

I've already said my point many times. Historically, yes, gold protected from hyperinflation. Historically, yes, people turned to gold when their fiat currency collapsed.

But what proves you it will be the same now?

And it isn't.

If you have something to say, argue with facts, and drop the insults.

Sat, 12/18/2010 - 22:00 | 816288 akak
akak's picture

Since you seem immune to the many facts already presented to you, what do I have to gain by figuratively beating my head against a wall trying to teach you 3000 years of monetary and financial history?

If nothing else, most of us assume that when the US dollar undergoes its inevitable devaluation or complete collapse, those holding gold will come out ahead of those holding  dollars or financial assets denominated in dollars.  Your argument against doing so rests on some unsupported and unargued "This time it's different!" rationale.  As such, it is in fact YOU upon whom the burden of proof rests to support your thesis, not us.

Sat, 12/18/2010 - 22:09 | 816293 TheGreatPonzi
TheGreatPonzi's picture

"If nothing else, most of us assume that when the US dollar undergoes its inevitable devaluation or complete collapse, those holding gold will come out ahead of those holding  dollars or financial assets denominated in dollars."

Which proves you refuse to understand what I say.

I agree completely, those holding gold will come out ahead of those holding dollars or financial assets denominated in dollars if the dollar crashes.

But will those holding gold come out ahead of those holding CHF, RMB, EUR? Or even rice or canned food?

Sat, 12/18/2010 - 22:26 | 816316 akak
akak's picture

As every other national currency is purely faith-based today, and has nothing to back it except the taxing power of its issuing government, it is illogical to assume that the collapse of any one of the major currencies would NOT adversely affect, if not equally drag down, the value of all the rest.  This also happened in the 1930s to the major European currencies and the US dollar, but not for the Swiss Franc, for which full gold backing (if not redeemability) was maintained.

Sat, 12/18/2010 - 22:35 | 816328 TheGreatPonzi
TheGreatPonzi's picture

I agree on the fact that world hyperinflation (i.e. worldwide death of fiat currencies) is the most likely outcome. Countries and banks are too mixed for any other thing to happen.

But what makes you think gold will replace them?

I wish it would. But most people don't see it my way, and don't see it your way.

Sat, 12/18/2010 - 22:39 | 816342 akak
akak's picture

I agree on the fact that world hyperinflation (i.e. worldwide death of fiat currencies) is the most likely outcome. Countries and banks are too mixed for any other thing to happen.

But what makes you think gold will replace them?

I hope, but do not necessarily think, that gold and silver will replace the fiat currencies of today.  Government power around the world has been growing, and harmonizing, for at least the last 100 years, and this depressing fact sometimes leaves me without much hope for our monetary future, or the future of mankind in general.

The main reason that I think gold (and silver) MAY replace the fiat currencies of today is historical precedent, combined with economic reality, i.e., fiat currencies have historicall always been abused by their issuing authorities and eventually collapsed.  But in truth, it must be noted that for the first time in history, ALL currencies today around the world, so in that sense at least, this time is IS different.  I just like to believe that sanity usually wins out in the end.

Sun, 12/19/2010 - 04:59 | 816707 DamnDirtyApe
DamnDirtyApe's picture

I think people would much rather run to some new bullshit fiat currency foisted by the worldwide "powers that be" than go to gold.  Look at how quickly they have always done so in the past. 

Humanity, on the whole, is now so indocrinated in the idea of familiar fiat money that will lap up anything they are told is safe and secure as long as it reminds them of their previous currency.

In the event of a global systemic meltdown, Gold bugs (which I am one of) may scream and shout and the top of our lungs "Wake up people!!!!  This new fiat system is a sham just like the old one!!!" But people will be too uneducated, weary, and frightened to care. Just give them an immediate promose of fake "stability" from the prez and its all over. THe nation lets out a collective sigh of relief, then back to the next fiat system for as long as it holds. Just like always.

Sun, 12/19/2010 - 01:11 | 816562 trav7777
trav7777's picture

what's the problem here, dude?  When the cruzeiro real melted down, did it affect the CHF gold price?  The USD price?  NO.

So, will gold holders come out ahead of those holding CHF?  No.  They'll come out the same.  Rice, canned food, no difference.  They're ALL commodities, so are paper money just commodities.  Subject to supply and demand.

As I am wont to say, stockpile whatever floats your boat.  If you have a large tank farm, stockpile crude or gasoline.  Whatever

Sun, 12/19/2010 - 12:08 | 816883 Nostradumbass
Nostradumbass's picture

.

.

What if those preserving wealth in gold also are smart enough to have food stores, cash, garden space, water filters, guns and ammunition and skills?

Won't they simply exchange gold for the currency being accepted as needed?

 

Sheesh!

Sun, 12/19/2010 - 18:13 | 817358 UninterestedObserver
UninterestedObserver's picture

Sorry I have read all of your posts and I keep reaching the same conclusion that you're a moron.

Sat, 12/18/2010 - 22:05 | 816290 Goldenballs
Goldenballs's picture

Historically Gold was The currency and still is.Fiat cash is measured against Gold because everything else is unstable and manipulated so not to show a true timescale value.Also historically you can see that times were stable when Gold was around and unstable when it was not,especially true in Roman times with Gold and Silver in quantity until the 3rd century when the empire started to fall apart in the west.Look at history fiat is nearly always a sign of an empire or economic system past its best.What proves it will be the same now is quite simply a total colapse in confidence in fiat and the financial system or have you been asleep the past few years.

Sat, 12/18/2010 - 22:35 | 816329 IQ 145
IQ 145's picture

 The stable foreign currency, is called gold and Silver. Your continual reference to systems that were able to have recourse to the relatively slowly devaluing dollar is idiotic. We will not have recourse to any other system. Capice?

Sat, 12/18/2010 - 22:49 | 816356 TheGreatPonzi
TheGreatPonzi's picture

"We"? Who are "we"? Your government? The American people? You?

Sun, 12/19/2010 - 01:09 | 816557 trav7777
trav7777's picture

Liberty dollars?  They are not legal tender.  If you want to contract for a cord of wood for some amount of liberty dollars, that is your prerogative, but they cannot be substituted as legal tender.  Everyone MUST accept FRNs.  I do not care why anyone online accepts eGold.  You're missing the point of what gold is and does.  It's not a currency.  It isn't "money," no matter what people say.

Are you aware that gold STILL has value in Argentina?  I mean, seriously?

As for whether people "turn" to the CHF, wtf difference does that make?  Seriously, I don't get what your point is...is your point that people will still use paper notes that still have moneyness BEFORE they start trading with gold?  Well, DUH.  Those who have wealth in dollars will be wiped out then start looking to acquire CHF.  Those who have wealth in gold or productive assets or oil or pussies or opium will start taking CHFs for their assets. 

As far as "who does best"...I gotta ask, nigga is you crazy?  The USD could collapse TOMORROW and the POG in CHF would remain the same.  Gold will be priced in CHF and exchangeable for CHF at the CHF price, just as it is today.  So will oil; so will silver, so will cocaine.  I mean, what is the difference?  If hyperinflation hits the world, real things will trade against other real things at whatever rate the market dictates.  Clear and flawless diamonds are as utterly USELESS as anything, yet I would not expect women to stop wanting them no matter what happens with paper.  I mean, goddamn, I've been to two nations working on their 3rd recent currency just in the last couple years.  People there still like gold, diamonds, iPods, and Nikes.

There are a fucking ASSLOAD of non-necessary commodities...wth does necessity have to do with ANYTHING?

Sun, 12/19/2010 - 01:57 | 816600 Stock-Paper-Silver
Stock-Paper-Silver's picture

I really think his only point is that when the SHTF, Gold will not be the medium of exchange easily. If the world fiats melt, if there is a well circulated fiat that somehow manages to remain unscathed or somewhat stable, the populous will attempt to use that before it used Gold because Gold has been so "phased out" of the normal American's consciousness.

Let's assume for a second that is plausible (which everyone here I think would assume not, as the world fiats would likely collapse chaotically and unevenly but more or less in unison) But, let's assume the Swiss Franc stays stable. I don't buy his argument or those Swiss Francs because the said currency is actually more scarce in this country than Gold. We offload dollars on everybody else, we don't import Renumbis, Euros, or Frans on any meaningful scale. Does anybody believe, when the SHTF, you're going to go down to the local Wal-Mart and they demand Swiss Francs as payment over the dollar in any scenario. Quite frankly, no. Where the hell is John Doe going to get Swiss Francs in any meaningful amount?

I think everybody agrees that in a hyper-inflationary scenario, the USD is a hot potato that other stores of wealth will be converted into and then the USD will be spent faster than a payday loan. In this collapse scenario the "money" conduit gets bifurcated into two. The USD are still used as premiere vehicle of exchange (although others will undoubltly be used on the side), but the USD will not the store of wealth.  Commodities perform the second function, and get converted to the USD and then the USD are offloaded quickly.  History gives us Wiemar as a model in that scenario.

But as you so illustrate, this is not a revelation, so what's the fucking point?

Seriously, if things get that bad, 50 years after the event is it really that relevant which store of wealth was the most fruitful? No. The relevant part of the story will be whoever was only holding paper of various sorts did not survive the "Darwinian flush".

 

P.S.  These definitions of money cited are definitions of "sound" money. Yes theoretically shells, or anything for that matter, can be used as money. But any said item used as money will have repercussions, and history tells us that very quickly only a few rise to the top and exhibit the 4 criteria of "sound" money at any given moment.

Sun, 12/19/2010 - 02:30 | 816630 TheGreatPonzi
TheGreatPonzi's picture

I acknowledge all this. And I agree with you on the most part. Joe Sixpack will not find Swiss Francs more easily than gold, and all fiat currencies will collapse in unison.

And I also confirm that everybody who holds paper (or even holdings based on law, because I'm even more apocalyptic than you) will be able to claim shortly a Darwin Award.

But as you said, any commodity will do the job. If gold is a commodity, and not money (i.e. adopted by the US population for everyday exchanges), it loses a lot of its potential value. Americans will prefer dumping their hyperinflated cash in rice and plasma TVs than in gold.

So will gold be only the money of the oligarchy, of those who bought gold before everybody else? Will gold be the money used for international exchanges? It is very probable.

That's why I hold gold and silver. It doesn't prevent me to keep a critic eye on my holdings.

Sun, 12/19/2010 - 03:07 | 816661 Stock-Paper-Silver
Stock-Paper-Silver's picture

I have to disagree with you on that one point.  No commoner is going to have 600 plasma TV's in their cellar as a hedge against inflation.  Nobody right now is taking a portion of their paycheck to add to their "stash" of Plasma TV's.  

"If gold is a commodity, and not money (i.e. adopted by the US population for everyday exchanges), it loses a lot of its potential value."

You have an underlying assumption that because a store of wealth is not a medium of exchange it will be seriously hindered.  These various functions of money can be mutually exclusive in a chaotic and hyperinflationary environment as well as in normal times.  A store of wealth does not need to be the primary exchange mechanism in order for it to be extremely profitable to the holder in a given time period.

Gold may or may not be the best store of wealth in the near future, but I fail to see how it will be hindered by not acting as the primary "exchange" part of money.  Just about any item can be an attempted store of wealth, and demand will decide how successful that attempt is.  Will Gold be in demand next year?  Make your own call.

Most right now are hedging their bets by not keeping 100% of the store of wealth in the present medium of exchange.

Sun, 12/19/2010 - 18:17 | 817363 UninterestedObserver
UninterestedObserver's picture

No you didn't - now you sound like a troll or a lying scumbag

 


by TheGreatPonzi 
on Sat, 12/18/2010 - 21:09
#816293

"If nothing else, most of us assume that when the US dollar undergoes its inevitable devaluation or complete collapse, those holding gold will come out ahead of those holding  dollars or financial assets denominated in dollars."

Which proves you refuse to understand what I say.

I agree completely, those holding gold will come out ahead of those holding dollars or financial assets denominated in dollars if the dollar crashes.

But will those holding gold come out ahead of those holding CHF, RMB, EUR? Or even rice or canned food?

Sat, 12/18/2010 - 21:17 | 816224 SelfishMan
SelfishMan's picture

First of all, the Rothbard's definition of money is that its a commodity. I refer you to first chapters of What Has Gov-t Done to Our Money to see that for yourself.

"A money is a thing that nearly everybody in a given territory will accept"

Besides that, money is also a thing that stores value. It is important not to dismiss that quality of money.

Everybody accepts dollars, euros or francs suisses. Nobody accepts gold or silver as payment. And even if they wanted to, they could not because there are legal tender laws. 

While the first sentence is true, it does not mean that it will be true in the future and neither does it show why it came to be true. In fact, your mention of legal tender laws provides the answer to the universal acceptability of "dollars, euros or francs suisses." Simply said, the public was conned into accepting those papers by the overlords at different points of the corresponding countries' development.

The general public does not care about the intrinsic value of gold. The general public wants a currency that everybody will accept.

Gold does not have an intrinsic value. For that matter, water has more intrinsic value (from human perspective) as it is vital to our survival. The value of gold is strictly in what humans perceive its value to be subjectively. 

- The gold standard was dropped by Germany in 1919, and hyperinflation happened three years later. People were still accustomed to gold, and gold was everywhere. Every family had gold coins. So when the mark collapsed, they needed a stable currency, and most people went back to gold. Note that they could have chosen anything else. Some people used eggs. Some businessmen used US dollars. Gold didn't protect more from inflation than international fiat currencies. But gold was the most practical thing to use at hand, and the gold standard still existed in other big industrialized countries, so it was the equivalent of a foreign currency.

I refer you to read the book called Golden Rule and especially its first chapter that provides a real life story of how possession of gold in fascist occupied Europe saved lives and allowed people to exchange for vital goods (yes, using those gold coins).

If they could, people used fiat paper from other countries in priority. Why? Because it's far more practical to use than gold. You don't have to weigh it, to divide it, and it isn't heavy.

This is false. They used it because they perceived it as a better store of value than their respective currency at the time and most likely because the gold was outlawed (very common practice by various gov-ts in 20th century, hello FDR !!!) / impossible to get a hold of (because of its value). 

- Some will oppose the example of Zimbabwe, where gold has replaced the Zimbabwean dollar in some parts of the territory. But they don't use it as money for its intrinsic qualities. They use it because the White man in the USA will pay a lot of dollars for it, and because there is plenty in Africa.

In other words, they use gold because other people value it and they will be able to exchange it for the goods they want/need. We are singing unison on this one.

If you believe gold is money, you believe that tomorrow, if hyperinflation hits America, your baker and your supermarket will start accepting gold as payment, and that 99% of American people will switch to gold for their transactions. If you do not believe that, just like me, then gold is not money. Look back to the definition of a money. It will only be a scarce commodity, with some value, but not as much as, say, francs suisses compared to the hyperinflated USD.

No, what I do believe is that in case of hyperinflation, the baker and supermarket will be less willing to accept USD. As to what will become a more desirable exchange unit? Who knows. I have lived through an economic collapse and hyperinflation in one of post Soviet countries in 1990's and the common exchange units were Deutsche Mark, USD, gold, sugar, flour, meat. 

 The most probable thing is that the American people will continue to use the USD during the hyperinflation, even if they are robbed (just like most Germans did), and they will wait like panicked sheep until the new US government issues a new fiat currency. Euros will be used in some parts of the territory. That's all.

What is probable is that the Americans will treat USD like hot potatoes in event of hyperinflation. Everyone will be trying to offload them for something tangible. Now, something tangible will quickly emerge as a common unit of exchange. Chances are, it will be gold all over again. :) 

Sat, 12/18/2010 - 21:50 | 816271 TheGreatPonzi
TheGreatPonzi's picture

"Chances are, it will be gold all over again. :)"

Or it may not. During WWII, gold was omnipresent in people's lives only a decade ago. This is not the same now.

"I have lived through an economic collapse and hyperinflation in one of post Soviet countries in 1990's and the common exchange units were Deutsche Mark, USD, gold, sugar, flour, meat. "

Deutsche Mark, USD, gold, in that order.

Sat, 12/18/2010 - 22:27 | 816318 dogbreath
dogbreath's picture

the 1990's slavistan is not 2010 1st world nations.  might as well stock pile cigarettes according to you

Sat, 12/18/2010 - 22:59 | 816367 SelfishMan
SelfishMan's picture

actually, cigarettes served as medium of exchange in Gulag and Nazi camps :)

Sun, 12/19/2010 - 18:28 | 817378 dogbreath
dogbreath's picture

they are a medium of exchange in a world without cash or metals.  But you can't get the wet.  if you have to run how many can you carry.  they go stale and will burn if accidentally lit on fire.  there goes your savings, up in smoke.   So what was my point. 

Sun, 12/19/2010 - 00:37 | 816507 penisouraus erecti
penisouraus erecti's picture

 Dieser Mann ist ein Arschloch - nicht wert, diskutiert mit ihm

Sun, 12/19/2010 - 02:35 | 816635 trav7777
trav7777's picture

You've convinced me man...I will become a CHF smuggler during the madmax.

Beats roaming the highways in a turbine-powered car searching for more gas in order to roam the highways more

Sun, 12/19/2010 - 18:22 | 817369 UninterestedObserver
UninterestedObserver's picture

WTF is your point? If the USD collapses there are no DM and the Euro is closer to falling apart than the dollar. 

Sat, 12/18/2010 - 22:22 | 816312 IQ 145
IQ 145's picture

 The most probable thing is that us citizens will continue to use USD even if they are robbed.? Oh, really ? that seems "most probable to you"; what a wanker. It's never happened in human history.

Sat, 12/18/2010 - 22:38 | 816336 TheGreatPonzi
TheGreatPonzi's picture

Really? If you are aware of what happened in 1922-1923 Germany, you'll notice that most people continued to use the deutsche mark until it became totally impossible to use it -- because there was only 1 minute before you get your pay at the factory and the price of bread doubles. That only happened in the last months of the inflation. Until the end, most businesses continued to have confidence in the dying mark.

Most people accepted to be robbed. And I don't know why, but I feel that Americans today are even more servile than the 1920s Germans.

Sun, 12/19/2010 - 00:24 | 816463 penisouraus erecti
penisouraus erecti's picture

This could be the most uninformed post I've see on ZH yet. Congratulations.

Are you even vaguely aware of the situation in the Wiemar in the early 1920? Reparations having to be paid in GOLD - NOT marks or USD's, people desiring to buy USD's due to lack of faith in the mark but unable due to the exchange rates, no gold available for the general population, crime rampant as this became the only way for many to survive? 1919 GDP 42% of 1913, enormous and growing welfare state, municipalities printing their own money?

 

Geez.......

 

Sun, 12/19/2010 - 00:36 | 816505 TheGreatPonzi
TheGreatPonzi's picture

You are a fucking idiot and an arrogant douchebag. You don't know shit. So shut your mouth.

I've neen nothing in your post that is relevant to the point discussed here.

"people desiring to buy USD's due to lack of faith in the mark but unable due to the exchange rates"

Who? The people? Your dog? Your ass?

Sun, 12/19/2010 - 00:38 | 816511 penisouraus erecti
penisouraus erecti's picture

Germans, you ignorant fucking douchbag know nothing. Why the fuck do you post your ignorant shit here you troll. Nice grasp of history assbag.

Sun, 12/19/2010 - 00:43 | 816515 TheGreatPonzi
TheGreatPonzi's picture

Fuck you, cocksucker. I know more about gold and silver that you'll ever learn.

I was extracting gold from a Syrian mine when your mother was still changing your diapers.

Sun, 12/19/2010 - 00:45 | 816516 penisouraus erecti
penisouraus erecti's picture

HAHA - now that IS precious!

Sun, 12/19/2010 - 20:44 | 817621 Calmyourself
Calmyourself's picture

"You are a fucking idiot and an arrogant douchebag. You don't know shit. So shut your mouth."

I see Fat Ass Willy is back with a new moniker, his famous rhetorical flourishes intact, illustrating his keen intellect and discerning eye for value..

Sun, 12/19/2010 - 01:18 | 816565 cosmictrainwreck
cosmictrainwreck's picture

boys! boys! now, let's be nice.... go on kiss & make up

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