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Chris Martenson Warns "There Is Nothing More Important Than Understanding This..."

Tyler Durden's picture




 

Having watched Mike Maloney's "Secrets Of Money" series (Part 1, Part 2, Part 3, and Part 4 here), Chris Martenson discusses the critical aspects of the must-watch episodes. Crucially, as we enter a period of apparent Nirvanic equity markets (and dystopian 'real' economics), Martenson's points on the "unnecessarily complex monetary system" that we have today are summed up by his statement that "there is nothing more important that understanding how our money system operates... and why it will fail us."

 

 

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Sat, 11/09/2013 - 23:08 | 4139632 SpykerSpeed
SpykerSpeed's picture

What's funny to me is how many ZeroHedgers understand intimately how the US Federal Reserve system works, but they couldn't tell you the first damn thing about how Bitcoin works.

I understand gold.  I understand USD and other fiat currencies.  Now please, if you're going to criticize Bitcoin, at least first understand it.

Sat, 11/09/2013 - 23:27 | 4139638 Pladizow
Pladizow's picture

“It's all well that the people of the nation do not understand our banking and monetary system, for If they did, there would be a revolution before tomorrow morning.”  - Henry Ford.

“The process by which banks create money is so simple that the mind is repelled.” - John Kenneth Galbraith


“Money is a new form of slavery, and is distinguishable from the old simply by the fact that it is impersonal, there is no human relation between master and slave.” – Leo Tolstoy

“Whenever destroyers appear among men, they start by destroying money, for money is men's protection and the base of a moral existence. Destroyers seize gold and leave to its owners a counterfeit pile of paper. This kills all objective standards and delivers men into the arbitrary power of an arbitrary setter of values. Gold was an objective value, an equivalent of wealth produced. Paper is a mortgage on wealth that does not exist, backed by a gun aimed at those who are expected to produce it. Paper is a check drawn by legal looters upon an account which is not theirs: upon the virtue of the victims. Watch for the day when it bounces, marked: 'Account overdrawn.'”  - Ayn Rand

“In our time, the curse is monetary illiteracy, just as inability to read plain print was the curse of earlier centuries.” - Ezra Pound

"The few who understand the system, will either be so interested in its profits, or so dependent on its favours that there will be no opposition from that class, while on the other hand, the great body of the people mentally incapable of comprehending the tremendous advantage that capital derives from the system, will bear its burdens without complaint, and perhaps without even suspecting that the system is inimical to their interests." – John Sherman - Protégée of the Rothschild Family


“All the perplexities, confusion and distress in America arise not from defects in the constitution or confederation, nor from want of honor or virtue, as much from the downright ignorance of the nature of coin and circulation.” - John Adams in a letter to Thomas Jefferson.

"The study of money, above all other fields in economics, is one in which complexity is used to disguise or to evade truth, not to reveal it.” - John Kenneth Galbraith

Sun, 11/10/2013 - 01:31 | 4139789 markmotive
markmotive's picture

F@ck dropping 100 grand on school. If there's one course you're going to take, make sure it's Chris Martenson's 'Crash Course'

http://www.planbeconomics.com/2013/09/chris-martenson-presents-crash-cou...

Sun, 11/10/2013 - 03:41 | 4139908 Chief Kessler
Chief Kessler's picture

I can't buy Christmas presents for my kids because John Kerry is coming for my guns-ex-Chief Kessler

 

Sun, 11/10/2013 - 08:14 | 4140043 GetZeeGold
GetZeeGold's picture

 

 

but they couldn't tell you the first damn thing about how Bitcoin works.

 

I can tell you how gold works.....it doesn't......it just sits there.

 

I'd love to join the cult......it you could spot me......that would be super cool!

Sun, 11/10/2013 - 09:54 | 4140156 Eeyores Enigma
Eeyores Enigma's picture

Bitcoin is the Mana from Tecnoheaven.

All who worship at the alter of Technology shall accept the Devine value of Bitcoin.

Sun, 11/10/2013 - 10:30 | 4140216 mvsjcl
mvsjcl's picture

I'll just say it and get it over with: I think Bitcoin is a gold (price) control scheme. It's the only thing that makes sense to me.

Sun, 11/10/2013 - 16:41 | 4141056 ebworthen
ebworthen's picture

Agree.

The thinking processes and tone are identical to those in a cult.

Sun, 11/10/2013 - 09:42 | 4140131 Eeyores Enigma
Eeyores Enigma's picture

Money as with anything only has value if there is a perceived shortage which is why we need more and more poor people as money is debased.

Sun, 11/10/2013 - 12:37 | 4140476 War_is_Peace
War_is_Peace's picture

I posted the link to episode 4 but then realized it's embedded in the text above. Oops. 

Mon, 11/11/2013 - 10:52 | 4142551 czardas
czardas's picture

Pladizow,

We should remember that those running the current systems are not evil - they believe they are doing the right thing. They think, for exampe, that they can invest and use wealth better than hordes of zombies. It's easy to say, "They're rotten SOBs who want to destory the currency and take over the world" but it's not that simplistic.  The sad truth is that we act alike - advocating politicies with good intentions.  It's like the Obamacare nuts who truly think this fiasco is for the best.  Or those who think masssive regulation is for the best. 

It's taken years to accept the fact that folks I ideologically disagree with 100% think they are doing the moral thing.  Their convictions are just as strong and rooted as ours. I respond with, "Look at the evidence.  We've tried your way for decades and the result is a society with growing massive debt, lowered expectations and no hope of future prosperity."  Let us try for a while. 

Sat, 11/09/2013 - 23:16 | 4139640 XenoFrog
XenoFrog's picture

Try to keep your bullshit scams in their own threads. Thanks.

Sat, 11/09/2013 - 23:27 | 4139651 SpykerSpeed
SpykerSpeed's picture

I think by "bullshit scam" you meant to say "the world's first decentralized consensus protocol".

Sat, 11/09/2013 - 23:42 | 4139667 DoChenRollingBearing
DoChenRollingBearing's picture

Do you have a good reference (link) to Bitcoin for beginners, you know, for clueless Bearings without a brain the middle, thanks!

Sun, 11/10/2013 - 00:01 | 4139688 SafelyGraze
SafelyGraze's picture

one reference is the source code

https://github.com/bitcoin/bitcoin/tree/master/src

where you can find, in main.h

https://github.com/bitcoin/bitcoin/blob/master/src/main.h

line number 48 which says

static const int64 MAX_MONEY = 21000000 * COIN;

and that is one of the lines of code that can be changed at any time

for example, the max number of coins can be increased by a factor of a thousand or a million or whatever

kind of like the balance sheet of the fed

which is pretty cool, because somewhere down the road there probably "won't be enough bitcoins", so the number will need to be increased

 

Sun, 11/10/2013 - 00:37 | 4139717 DoChenRollingBearing
DoChenRollingBearing's picture

Beginner Bearing only knows just enough SQL to get himself into trouble.  I had a feeling when I clicked your links that I would be plunged into the Raw Computer Code River, where I would be lost forever.

Does that 21,000,000 business REALLY MEAN that they (whoever "they" are) can increase the quantities of Bitcoins whenever they want?

Sun, 11/10/2013 - 00:47 | 4139735 SafelyGraze
SafelyGraze's picture

shh

don't tell

Sun, 11/10/2013 - 00:50 | 4139741 DoChenRollingBearing
DoChenRollingBearing's picture

Amazing!  Your secret is safe with me!

Sun, 11/10/2013 - 01:01 | 4139753 Harlequin001
Harlequin001's picture

I won't tell anyone either... promise...

Sun, 11/10/2013 - 01:06 | 4139760 prains
prains's picture

you mean to say Bitcoin is hackable and easily manipulated for evil self serving means?

 

shocked, say it isn't so, i thought christians were better than that?

Sun, 11/10/2013 - 03:30 | 4139902 Scarlett
Scarlett's picture

yeah, like you only have to convince all miners and your own computer to accept dishones bernanke blocks... 

 

the ignorance is repelling

Sun, 11/10/2013 - 10:49 | 4140242 Bendromeda Strain
Bendromeda Strain's picture

Listen and see your own bountiful ignorance on display. This revelation is news to me, I thought that there was a FIXED mathematical impediment to the quantity of BTC. Finding that it is pinky swear arbitrary, based on promises, cooperation and coercion seals it for me. Frickin paper money was sold on the exact same bullshit AT THE BEGINNING.

 

Go back in time dipstick, and tell them that QE is on it's third iteration. Enjoy the scorn and ridicule.

Sun, 11/10/2013 - 01:55 | 4139827 OpenThePodBayDoorHAL
OpenThePodBayDoorHAL's picture

 

The Bitcoin network is governed in the same way the web itself is governed. As Professor Charles Vincent from Harvard University has pointed out, “The Internet offers a very successful model of minimal governance to create network standards in a decentralized decision-making environment. This is because the process relies on transparency, inclusiveness, & accountability”. Maintenance and improvements to Bitcoin follow a Proposal, Review, Consensus, Testing, and Deployment process. Any changes to the protocol must be agreed by both the consensus of the users and by the operators of the thousands of computers in the miner network that are responsible for transaction processing. Both of these large groups have a direct economic interest in maintaining network integrity and keeping the supply limited.

It's amazing to me that there are so many ZH'ers who are haters. Yes buy some more gold, but get yourself educated and you'll see the reason you hold gold may be the same reason you would hold XBT.

Sun, 11/10/2013 - 07:19 | 4139944 Oracle of Kypseli
Oracle of Kypseli's picture

ZHers understand the difference between physical limited supply and agreed by concensus limited supply which is governed by opinions, emotions and math formulae not well understood by  most.

If man can create precious metals, then I for one will give up on money and settle with a farm 

Sun, 11/10/2013 - 10:18 | 4140196 quasimodo
quasimodo's picture

Many of the precious metals man creates I am happy to purchase at the shooting supply store I visit often.

Sun, 11/10/2013 - 10:44 | 4140233 BurningFuld
BurningFuld's picture

Bitcoin will soon be governed by the same thing that governs everything else......GREED.

Mon, 11/11/2013 - 10:55 | 4142561 czardas
czardas's picture

Oracle,

The day is coming (and quite soon) when we will be able to create gold (or diamonds or silver or any element) with atomic manipulation. I've wondered what would then be a true backup for currency - it HAS to be something besides trust in a failed State.

Thu, 11/14/2013 - 05:39 | 4153282 Doña K
Doña K's picture

That is correct. But there will be a cost associate with it. And if gold, then oil as well. better days ahead.

But the ultimate is still a farm in an agrarian friendly country

Sun, 11/10/2013 - 10:23 | 4140208 SafelyGraze
SafelyGraze's picture

"Got an account on a site like Github? Hackers may know your e-mail address"

http://arstechnica.com/security/2013/07/got-an-account-on-a-site-like-gi...

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

there is nothing magical about github to make it the only website that can't be hacked

there is nothing magical about a particular github project that makes it more hack-proof than other ones

there is nothing magical about a particular project's owners that make them more anonymous and incorruptible than other people

there is nothing magical about lines of code in a particular project that keep them immutable

there is nothing magical about a project that would prevent some cloned variant from being preferred and adopted intead of, or in addition, to the original

except for a patent of course

http://www.google.com/?tbm=pts#q=digital+currency&tbm=pts

 

Sun, 11/10/2013 - 00:37 | 4139718 Running On Bing...
Running On Bingo Fuel's picture

include < sstream >
do { std::stringstream s; s << (BITCOINS);
OutputDebugString(s.str().c_str());
} while(0)

Ctl-P bitches.

Over.

Sun, 11/10/2013 - 03:01 | 4139880 SolarSystem1932
SolarSystem1932's picture

while(0) ???

Single iteration, then quit?

I prefer

while(true)

Infinity and beyond!

Sun, 11/10/2013 - 06:16 | 4139980 Running On Bing...
Running On Bingo Fuel's picture

Hey bro, what are you Professor C++ from Tel Aviv? The home of BitCoin.

Over.

Sun, 11/10/2013 - 04:13 | 4139924 digi
digi's picture

I'm gonna modify the source code of zerohedge and make my own new version where you can edit peoples comments to correct them to your liking. You guys will all use my new version, right? ...RIGHT?

Sun, 11/10/2013 - 06:21 | 4139981 Running On Bing...
Running On Bingo Fuel's picture

Right Alice!? Right!

mv 'your comment' /dev/null

Over.

Sun, 11/10/2013 - 16:30 | 4141029 digi
digi's picture

Looks like the troll is in on my new ZeroHedge 2.0. Any other takers? I am thinking about also adding the ability for everyone to have unlimited up and down arrows for any post, junk to your hearts content.

Sun, 11/10/2013 - 21:16 | 4141679 BigJim
BigJim's picture

You do that, you'll be overwriting /dev/null with the file called 'your comment' (assuming the latter exists).

Is this a bit like your previous 'while(0)' statement?

 

Sun, 11/10/2013 - 21:48 | 4141768 Trucker Glock
Trucker Glock's picture

"line number 48 which says

static const int64 MAX_MONEY = 21000000 * COIN;"

Limited to a mere 64-bit integer.  Ultra-rare.

Mon, 11/11/2013 - 11:17 | 4142613 kjj
kjj's picture

MAX_MONEY has no control over the bitcoin limit.  It is used for sanity checking values.  MAX_MONEY is greater than the number of bitcoins that will exist, so any transaction or other value claiming to have more bitcoins than that is invalid and can be discarded without any further computation.

The real bitcoin limit comes from the subsidy function, GetBlockValue() in main.cpp.  The first blocks had a subsidy of 50 BTC each.  After 210,000 blocks, the subsidy was cut in half (actually, right-shifted by 1 bit in binary, which is almost, but not quite, the same thing), and will continue to be cut in half each 210,000 blocks until it reaches zero.  The sum of the subsidies from genesis block until it reaches zero gives a value a bit under 21 million BTC.

When a miner produces a new block, each node on the network checks that the subsidy claimed is not more than what they calculate in that function.  So, if someone tries to inflate the currency by creating more of it than they are allowed to, the whole network will reject their work.  Miners are allowed to claim less than the subsidy amount, and they have a few times, so the actual bitcoin limit will be somewhat lower than what it could have been.

Inflating bitcoin will require essentially everyone to agree to it, which doesn't seem very likely.

The solution to "not enough bitcoins" is for the bitcoin value to increase, and for people to use smaller fractions of them.  Fortunately, the system is already designed to operate on units of 0.000 000 01 BTC, and the precision could be changed without economic effect if 8 places turns out to be not enough.

Sun, 11/10/2013 - 00:07 | 4139694 NoDebt
NoDebt's picture

Do a Google search.  There are many good articles.  How it works is not as important as why it works.  On that subject, you won't find any articles.

BTW- Bitcoin is now at 333.  It didn't hit 400.  Not yet, anyway.

 

Sun, 11/10/2013 - 00:34 | 4139720 DoChenRollingBearing
DoChenRollingBearing's picture

Well, my problem with a Google search is that I would likely find LOTS of hard to understand stuff like Safely Graze sent me to.

I find that informed ZH-ers are often a good source of info...

Sun, 11/10/2013 - 00:49 | 4139739 DoChenRollingBearing
DoChenRollingBearing's picture

Thanks, seek!  Normally if I have to start a search for new (to me) knowledge, I go to wikipedia, which I do understand is not particularly reliable, but, it is written for the masses:

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

where I found this interesting little link:

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

Sun, 11/10/2013 - 01:31 | 4139791 SpykerSpeed
SpykerSpeed's picture

This is the Bitcoin wiki, it's better for answering your questions related to Bitcoin:  https://en.bitcoin.it/wiki/Main_Page

Sun, 11/10/2013 - 01:56 | 4139826 DoChenRollingBearing
DoChenRollingBearing's picture

Thank you as well Spyker.  Even having looked at all the above "easy" ones, it is still a little hard for me to understand.

I need to find someone around here (you know, where I live and has a computer or whatever) who has some BTC and can show me how it works.

But, I really appreciate the links, everyone, thank you again.

Sun, 11/10/2013 - 02:07 | 4139838 seek
seek's picture

Go here: http://bitcoin.org/en/choose-your-wallet

Download wallet software. You  want a software wallet, trust me, not a web service.

Multibit is probably best at the moment (I don't use it, but bitcoin-qt will days hours to days to sync up.)

Once you have wallet software installed, generate wallet/keys per instructions (or it'll happen automatically.)

Create an address to receive bitcoins, and paste it in thread, I'll make sure you have at least a small bit to play with.

Sun, 11/10/2013 - 02:41 | 4139867 DoChenRollingBearing
DoChenRollingBearing's picture

Thank you again, seek.  I copied and pasted your post above into an email to me for use tomorrow.  

We just had a Peruvian "Fiesta Criolla" (just two of us (of 10) "Made in USA"), anyone who has partied with Peruvians knows that these kinds of things can go on for many hours, and it is late...

Very kind.  Let me get set-up and I'll catch you on a thread in the near future.

***

Does this mean I can go to Starbuck's soon, wave around my flash drive (or iPhone), and say fill-er up (16 oz blonde roast) with my shiny new 0.01 BTCs?

:)

***

Slightly O/T, it is very simple to find my blog, make a comment on an old thread (you know, like your email address), and then delete it right away.  FOFOA told me that little trick.  I get the message at my own email even though your comment was deleted!  Kind of cool, perhaps not super-secure, way of sending out secret messages, but good enough for most applications.  I do have a hushmail account as well, FWIW.

 

Sun, 11/10/2013 - 08:23 | 4140053 s2man
s2man's picture

Its also very simple to find with google;

http://robertmixblog.blogspot.com/

Sun, 11/10/2013 - 13:55 | 4140654 old naughty
old naughty's picture

@DCRB

please check this out also: http://www.roadtoroota.com/public/1296.cfm

interesting that he believed bitcoin would die overnight while it might go to $million per coin.

Sun, 11/10/2013 - 00:17 | 4139704 DoChenRollingBearing
DoChenRollingBearing's picture

Thanks, guys, time for some homework.

Sun, 11/10/2013 - 04:34 | 4139941 CrashisOptimistic
CrashisOptimistic's picture

The first comment was badly off topic.

Several comments above this one someone points out how such things should be kept to their own threads.

Sounds good to me, but the gold nazis are far more offensive in that regard than bitcoin people.  You can go into any comment thread on ZH about money and someone will decide it's about "PMs".  Mention of Bitcoin, conversely, is pretty rare on non bitcoin threads -- and let's define rare as 1 off topic violation per the 20 or so that happens with gold.

Sun, 11/10/2013 - 08:45 | 4140051 GetZeeGold
GetZeeGold's picture

 

 

gold nazis are far more offensive in that regard than bitcoin people.

 

Here.....have some more candy.....and a cell phone......and some healthcare....and an EBT to swipe for some free Doritos.

 

It's all free.....it you want some gold, here's a shovel. Good luck.

Sun, 11/10/2013 - 08:59 | 4140077 grid-b-gone
grid-b-gone's picture

Gold has survived a couple thousand years of human tinkering and scheming. Bitcoin is working on its first decade.

It seems that even if bitcoin proves itself as fungible, portable, durable, divisible, etc., at best, it can only eventually be proven to be as good as gold.

It also seems that if one needs to research a form of money to understand it, it will have a difficult time competing with the learning curve of gold.

 

Sun, 11/10/2013 - 09:18 | 4140100 GetZeeGold
GetZeeGold's picture

 

 

When I see a mass exodus of people moving across an entire continent under great danger and hardship in search of Bitcoins....I'll be a believer.

 

Let me know when that happens.

Sun, 11/10/2013 - 12:57 | 4140513 Bay of Pigs
Bay of Pigs's picture

Notice they don't touch this post? Telling.

Maybe uncle bigs (our newest gold troll) will join in with Spyker now and yank our collective chain?

 

Sun, 11/10/2013 - 21:54 | 4141782 Trucker Glock
Trucker Glock's picture

My tummy is full of gold and silver, but I'm still hungry.  Can I eat Bitcoins?

Sun, 11/10/2013 - 11:17 | 4140284 greatbeard
greatbeard's picture

>> but the gold nazis are far more offensive in that regard

Hey, the gold Nazis are just as bad to the gold bugs.  If you aren't effervescent enough about gold, whether the price goes up or down, you will be held accountable by the gold Nazis.  If you want to get along with the GN, all you have to do is cheer all things gold and forecast an imminent move to the moon for gold after every smash down.  Of course, to ever attain status in the inner clique, you must have a bulging bag of coins bought sub $300.

Sun, 11/10/2013 - 06:36 | 4139988 Running On Bing...
Running On Bingo Fuel's picture

Here's your first lesson:

1) Bitcoin is a cryptocurrency created by israeli zionists for the globalists so all of your transactions can be monitored and ultimately controlled. Crucially, .gov can take all of your Bitcoin if you do not obey.

Here is your first multiple choice test.

If I use Bitcoin:
a) Eventually I will be FUCKED.
b) I will contribute to israel owning the global currency.
c) I will be a servant of israel.
d) .gov will have ultimate power over me.
e) All of the above.

Sun, 11/10/2013 - 08:57 | 4140076 GetZeeGold
GetZeeGold's picture

 

 

You forgot to say over......are you done?

Sun, 11/10/2013 - 09:10 | 4140088 Running On Bing...
Running On Bingo Fuel's picture

Gold Tower, Warrior three five foxtrot, holding short of two two right.

Over!

Sun, 11/10/2013 - 09:29 | 4140117 GetZeeGold
GetZeeGold's picture

 

 

This is why I left the YHOO stockboards.......to get away from all the damn chartjockies.

Those guys all think they're fighter pilots.....why that is I'm not really sure.

Sun, 11/10/2013 - 09:46 | 4140139 kaiserhoff
kaiserhoff's picture

Copy that, foxtrot, Have you on visual.

We're downwind, cattywampus off two niner, clearing as we speak.

Have a nice day, Cap'n;)

 

Sun, 11/10/2013 - 11:41 | 4140338 MontgomeryScott
MontgomeryScott's picture

Trying to understand how threads get hijacked, K.

It appears as though the Bitcoiners are here again.

A few observations:

If I hold 2 silver ounces and one gold ounce in my right hand, and 3 bitcoins in the other, which one weighs more?

To access my silver and gold coins, I reach in to my pocket. To access by bitcoins, I turn on a computer, log on to the web, go to a site somewhere in the world, give them my information (and the old NSA is looking every time), request a transfer, and all kinds of other shit.

in order to access my silver and gold coins, I expend about one and a half calories through muscle movement. To access my Bitcoins, I use electricity generated from:A) hydroelectric (Nestle), B) thermonuclear (TEPCO?), or C) oil and/or gas-fired generation (read 'big oil') (not mentioning the greenie bullshits...); as well as expending a few calories typing shit in to a Communist Chinese slave labor-manufactured technothingie (thus supporting enslavement further).

If the power supply is cut off for me, I reach in to my pocket and pull out my silver and gold coins, using them to purchase FOOD. If the power supply is cut off, I DON'T access my bitcoins, and therefore DO NOT EAT.

Bitcoin is a digital, computer-generated currency. Federal Reserve Notes are a digitally-generated computer currency (but at least you get to hold shiny pieces of paper saying that you 'have' them). Bitcoins and Fed notes are theoretically infinite in number, therefore theoretically able to be debased infinitely until the value approaches ZERO (much like the title of a popular website that I visit from time to time).

I am looking at my gold and silver coins in my hand, feeling them, knowing that they are tangible, real, physically able to be proven to exist, and somewhat rare; with a finite supply in existence and therefore unable to be debased in the fashion of digital fiat currencies.

In a sense, Bitcoins remind me of Lehman Brothers stock. Bubble, bubble, bubble...

Do gold and silver dealers accept Bitcoin for payment? How about the local grocery stores?

 

Sun, 11/10/2013 - 11:52 | 4140366 Running On Bing...
Running On Bingo Fuel's picture

It could be The Gay Nigger Association of America, taking control.
http://en.wikipedia.org/wiki/Gay_Nigger_Association_of_America

They get blogging!

Over.

Sun, 11/10/2013 - 13:09 | 4140554 balanced
Sun, 11/10/2013 - 10:40 | 4140226 tvdog
tvdog's picture

a) You're spouting bullshit.

b) Anti-Semitism can't cover bullshit.

c) (Not that there's anything wrong with anti-Semitism.)

Sun, 11/10/2013 - 13:03 | 4140532 balanced
balanced's picture

Talking to most ZeroHedgers about Bitcoin is like talking to the average American about gold - they don't understand it, think it's a scam by default, and respond with fear and anger. The wise educate themselves and diversify.

Sun, 11/10/2013 - 04:10 | 4139922 Trimmed Hedge
Trimmed Hedge's picture

"Do you have a good reference (link) to Bitcoin for beginners, you know, for clueless Bearings without a brain the middle, thanks!"

Just go buy some Washington Mutual and take that yield...

Sat, 11/09/2013 - 23:50 | 4139673 Groundhog Day
Groundhog Day's picture

where can i learn how bitcoin really works... and not a sight that is trying to sell it but a site that explains the pros and cons...

I mean i am supposed to convert usd @ 400 when bitcoin is so volatile

Sun, 11/10/2013 - 08:50 | 4140073 msmith9962
msmith9962's picture

I'm no expert, in fact I find it damn confusing.  First you have to send money between 2-3 services with wierd names before you can actually buy some and there are about 400 of these services.  You can't use paypal or a credit card or anything other than a bankwire.  Now is probably not a great time to go through this process.  And saw a ticker on RT last night saying some thieves stole like a million worth of BTC.

Sun, 11/10/2013 - 00:14 | 4139680 Running On Bing...
Running On Bingo Fuel's picture

We're Space Monkey's. Suspicious by nature. What do you think the guys at Intel(chip maker) are doing in their Underground Lab in Oregon? Playing Rubik's Cube my friend?

http://cryptome.org/2013-info/11/intel-ug-lab/intel-ug-lab.htm

Look at the size of those chillers and the liquid nitrogen silos. They are keeping something cool down there. Lol. Do I have to spell it out for you or do you understand what's going on here?

Good luck with your blockchains and moreover everyone's privacy.

Keep it local Space Monkey's. Fuck these Globalists!

Over

Sun, 11/10/2013 - 16:47 | 4141071 css1971
css1971's picture

Bitcoin doesn't scale, will be bought out by the big players, centralised  and controlled if it ever becomes significant.

i.e What's your point?

Sun, 11/10/2013 - 00:52 | 4139742 Carl Popper
Carl Popper's picture

Ouch. Watch out for xenofrog. She is a beautiful but very worthy zionist adversary.

I think she has Francis Sawyer captive in her basement.

Sun, 11/10/2013 - 00:39 | 4139729 prains
prains's picture

ALL YOU HAVE TO UNDERSTAND ABOUT BITCOIN IS THAT IT'S ELECTRONIC AND IT'S MADE OF 1'S AND 0'S, if you're too stoopid to figure out the rest then you're AMERICAN!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

 

 

nuff said

Sun, 11/10/2013 - 01:33 | 4139795 SpykerSpeed
SpykerSpeed's picture

Gold is made out of protons, neutrons, and electrons - just like everything else.  That doesn't make it worthless.

Sun, 11/10/2013 - 01:41 | 4139807 prains
prains's picture

.....never said gold WASN't above it's manipulated flaws either. PLUS it's really heavy when you have to choose to run with it or a child......fuck.... will that be a tough day in the life of a gold hoarder...to choose between his stash and his child when it comes down to the run

 

there's many flaws to gold as well but at least it doesn't suck the BALLS of 1's and 0's....think my friend

Sun, 11/10/2013 - 04:57 | 4139950 Oracle of Kypseli
Oracle of Kypseli's picture

If you have to run it's too late for the world as we know it, and too late to revolt

Sun, 11/10/2013 - 07:14 | 4140002 negative rates
negative rates's picture

He won't have, but he will. For you can run, but you can not hide.

Sun, 11/10/2013 - 09:52 | 4140154 Keyser
Keyser's picture

No one has bothered to address the point of what happens to your bitcoins when the grid goes offline. No electricity, no bitcoin. Meh, I prefer to fondle my stacks. 

 

Sun, 11/10/2013 - 11:10 | 4140268 the tower
the tower's picture

the coins are stored in your wallet till the power comes back on... the least of your worries is your stack of bitcoins when globally power goes down.. that's called armageddon

Sun, 11/10/2013 - 09:48 | 4140143 Agstacker
Agstacker's picture

As long as you purchase some Pb with your Au or Ag you should be fine.

Sun, 11/10/2013 - 02:48 | 4139871 graspAU
graspAU's picture

Just a bit more rare to make gold than write some data to a drive or memory card:

“The relative average abundance (of gold) in our Solar System appears higher than can be made in the early universe, in stars, and even in typical supernova explosions. Some astronomers have recently suggested that neutron-rich heavy elements such as gold might be most easily made in rare neutron-rich explosions such as the collision of neutron stars."

http://apod.nasa.gov/apod/ap080518.html

“Only in a supernova is it possible to create atoms with 30 protons, 40 protons, 50 protons or even 60 protons. Nature prefers even numbers for stability, but every so often, the star will forge an odd-numbered atom, a real rarity: gold! Gold is a rare, odd-numbered atom with 79 protons. For every single gold atom in the universe, there are 1 million iron atoms..."

-http://www.npr.org/templates/story/story.php?storyId=7397200

 

Sun, 11/10/2013 - 10:51 | 4140247 Brand_New_Investor
Brand_New_Investor's picture

Everything in the entire universe is a nested 1 or 0. Everything.

Sun, 11/10/2013 - 00:45 | 4139734 threeputting
threeputting's picture

Gold > Bitcoin > USD

Sun, 11/10/2013 - 01:01 | 4139754 DaveyJones
DaveyJones's picture

I seem to have lost my toilet paper somewhere in that chain

Sun, 11/10/2013 - 08:08 | 4140034 Running On Bing...
Running On Bingo Fuel's picture

It's here bro:

Gold <> ( ( Bitcoin == USD ) = TOILET_PAPER );

flush();

Over.

Sun, 11/10/2013 - 01:33 | 4139796 SpykerSpeed
SpykerSpeed's picture

Which businesses have announced they're accepting gold lately?

Sun, 11/10/2013 - 04:59 | 4139951 Oracle of Kypseli
Oracle of Kypseli's picture

The are thousands of stores everywhere with big signs that would exchange gold for fiat 

Sun, 11/10/2013 - 08:07 | 4140038 Running On Bing...
Running On Bingo Fuel's picture

That's in the US, Spiker is asking about his hometown tel aviv.

Over.

Sun, 11/10/2013 - 07:22 | 4140005 Rubicon
Rubicon's picture

Iran

Sun, 11/10/2013 - 10:52 | 4140249 BurningFuld
BurningFuld's picture

Boom...best answer...right before Libya (Momar's Libya that was)

Sun, 11/10/2013 - 09:50 | 4140150 Ace Ventura
Ace Ventura's picture

Probably not many. Pesky legal tender laws enforced at the end of government guns, dontcha know.

Sun, 11/10/2013 - 03:40 | 4139906 chindit13
chindit13's picture

Many like to point out that the dollar has fallen in value (purchasing power) by 97% since 1913.  Far fewer like to point out, or be reminded, that gold fell by 97% in value (purchasing power) between 1869 and right now, November 2013.  That massive tumble, 144 years old, is also part of its "5000 year history".

The saving grace of the dollar (silk purse out of a sow's ear) is that since it is the official money, wages are paid in it, and wages have adjusted considerably, albeit not completely, since 1913.  An average day's labor, as represented in dollars paid, has not fallen anywhere near 97%.  Nobody gets paid in 1913 dollars, and similarly nobody just sat with a stack of dollars since 1913.  Dollar holders, until recently, received interest on their holdings.  Even 1913 dollars threw off a return.

One ounce of gold in September 1869 is still one ounce of gold today, no more, no less, but what one can purchase with it has declined by 97%.  At least that beats 1999, when the drop equalled 99%.  The fact that such a decline occurred is why many people rightly see gold as just another asset choice, and they use the Ecclesiastes Method in their purchase or sell decisions:  a time to castaway stones, a time to gather stones together.

 

Sun, 11/10/2013 - 05:20 | 4139932 akak
akak's picture

 

Many like to point out that the dollar has fallen in value (purchasing power) by 97% since 1913.  Far fewer like to point out, or be reminded, that gold fell by 97% in value (purchasing power) between 1869 and right now, November 2013.

Chindit, with all due respect, what the fuck are you talking about?

Are you posting drunk on a Saturday night?  To say that gold has fallen by 97% in purchasing power since 1869, or EVER, is simply mindless and nonfactual nonsense.  And why pick the random year of 1869 --- because of the artificial, extremely brief and largely irrelevant "Black Friday" corner in the gold market? Even given that gold momentarily reached $162 per ounce on ONE HOUR OF ONE DAY that year (and only on the New York market), that still only equates to roughly $4000 in today's dollars, hardly representing a drop of 97% in value, or even anything remotely close that to figure, even if one were to ludicrously take that artificial and momentary price as a legitimate and meaningful benchmark from which to measure.

I really have no idea where the Hell you are coming from with that pointless lie; it is so ridiculous as to almost defy rebuttal.  We get it: you hate gold, and those associated with gold.  But spreading mistruths and outright lies does your side no service.

PS: Please say "Hello" to Jon Nadler for me, as I am guessing that you are now keeping company with the former anti-gold spokesman from Kitco, given that your absurd and specious comment above so neatly dovetails with the typical modus operandi of his former gold-bashing daily diatribes.

Sun, 11/10/2013 - 05:57 | 4139969 Urban Redneck
Urban Redneck's picture

Akak,
I think he's doing drunk math (closer to 87% than 97% on a much shorter timeline by my yet-to-be-caffeinated calculation), but Chindit has a point (if you accept the the intraday high of gold of $887 as a valid number) - BLACK FRIDAY (Gould & Fisk edition).

Sun, 11/10/2013 - 06:02 | 4139973 chindit13
chindit13's picture

Well, I'll explain.  I did some research on the price of gold over time.  In September 1869, during the Panic of 1869, the intraday price of gold hit $162 in New York.  That seemed rather high, given the price structure of goods and services back then.  Finding a means of comparison is not easy, but I arrived at a metric that gave the price of gold in "days of per capita GDP production".  From numerous sources, including but not limited to Balke and Gordon, I got a number for US GDP in 1869.  From other sources I got US population, so that I could determine a per capita GDP. The methodology I used is quite similar to what those who point out the decline in purchasing power of a dollar since 1913 use.  If it's good for the goose, it's good for the golden gander.

The resulting figures show that at a price of $162 per ounce, gold "cost" the equivalent of just under 283 days of per capita GDP.  Today, at a price of $1289, gold represents just under 9 days of per capita GDP.  A remunerated worker, or a producer of per capita GDP, has a choice between a basket of goods and services, or an ounce of gold.  It takes a lot less of his effort today, or demands much less in other goods and services forgone, to acquire an ounce of gold today than it did in 1869.  Put another way, an ounce of gold can buy a heck of a lot less of the goods and services on offer in society than it could in 1869.  That is loss of value, undeniable loss of value.

Even if I use the "official" price of gold in 1869 ($20.67), rather than the free market price of $162, it required 36 days of per capita GDP to reach the equivalent value of gold.  That most generous case still represents a 75% drop in gold's purchasing power.

Though I'm continuing to gather data, I can say with a fair degree of certainty that the gold price in 1999 (around $250) most probably represents the lowest value of an ounce of gold in human history, in terms of its purchasing power.  I conclude from that, for me personally, that gold really is just another asset choice, sometimes to be bought, sometimes to be sold or avoided altogether.

The plus side of all this is that gold still currently has close to its lowest value, in terms of purchasing power, that it has ever had.  Thus, it is either a screaming bargain, or it has merely dead cat bounced from 1999 on a longer term trend to actually becoming a barbarous relic.  Everyone is free to make up his or her own mind, but the claims that gold always holds its value are simply false.  A 97% drop in its relative purchasing power, or a 75% drop if one insists on using the non-free market "official" price of $20.67, would not seem to be a good definition for holding value.

I fully expect this to be attacked, because it flies in the face of everything so many have convinced themselves to believe.  Just step back a moment, however, and think without emotion, and it is undeniably true.  Imagine being an average US worker in 1869. You've saved $162 (or $20.67 for those who insist).  What could you buy in that society in goods and services with those savings, which could also buy you an ounce of gold?  At prevailing 1869 wage rates, how many days of labor would it have taken you to earn, much less save, that dollar amount?  Now how many days, at 2013 prevailing average wage rates, would it take for you to accumulate the $1289 dollars required to buy an ounce of gold?  Nine days vs 283, or 9 days vs 36 (using the non-free market official price of $20.67) both say loss of value over 144 years.

 

Sun, 11/10/2013 - 06:53 | 4139977 Urban Redneck
Urban Redneck's picture

I stand corrected, that's way more sophisticated than drunk math. However, neither GDP, nor wages, as a measure of purchasing power is constant. Perhaps measuring purchasing power against certain commodities would be a simpler calculation (before BLSing the data to come up with an average across a basket of commodities).

EDIT: The math's a nightmare regardless, complicated by the various market prices just for gold as well as the on-again-off-again gold standard in the US and dollar intermediation.

Sun, 11/10/2013 - 10:20 | 4140181 chindit13
chindit13's picture

That's why I used labor/production on a per capita basis.  It seemed the best way to negate the other non-constant variables.

Sun, 11/10/2013 - 11:02 | 4140258 overmedicatedun...
overmedicatedundersexed's picture

Chindit, labor/production is a fine idea and fits in with a value for PM's. I was interested in how you ran the numbers on this and liked it..now for the however. However, .gov and CBanks, have an interest in valuation of PMs (gold).

the progression of the unity of c banks and international banks, the FED,IMF, BIS, and the push for NWO, is not a part of your equation. Presidents have set the price of gold with the stroke of an executive order, Nixon nixed the gold backed fiat in use, up until his time. The modern lords of money then made fiat out of magic and mostly hidden from public knowledge. Pm's remain, even under this attack of fiat lords.

PM's value to the person who holds them, is they are outside of taxation, or control, even if outlawed by a franklin or obuma, the ave person can hold a hidden amount with out great cunning. PM's remain untraceable wealth. once melted they have no history..this will always be of value to men who will not bend a knee to the over lords of what ever stripe. That makes them unique and cannot be valued. as long as the PM's retain this characteristic, valuation based solely on comparisons to cost of production, or value vs GDP, misses the Y function of the value of hidden assets. Today that value to many is prime. and today for many on ZH, having control of our assets has become prime.

Sun, 11/10/2013 - 09:13 | 4140095 overmedicatedun...
overmedicatedundersexed's picture

chindit, did you adjust your valuation per US$ over the same time frame? what was the buying power of a nominal $1 as back then we had USnotes, gold certs, silver certs and now FRN's? I think you mixed apples with oranges, and all you have shown is that gold does vary in currency value, as today we see daily moves in values most common being the FRN. but does that then explode the truth that gold is a store of value? The elite need the FRN to be seen as having value and so the need gold to be held in check, even though the central banks keep tons held in secure vaults for no reason other then a store of wealth, seems they are contradictory does it not?

Sun, 11/10/2013 - 10:04 | 4140164 chindit13
chindit13's picture

The constant, at least the best one I could determine, was the amount of labor required by the average "capita" to produce the equivalent of the market price of an ounce of gold.  That eliminates the need for dollars, or trying to value greenbacks vs. FRNs.  All I use is per capita output relative to gold's price.  In other words, "work" is the money.  It surprised me, to be honest, how the numbers turned out.  Given the per capita GDP in 1869, it took 283 days of production to reach the price of an ounce of gold.  Today, it only takes a shade less than nine.  That is the 97% drop.  Gold is wildly more accessible to the average person today, whereas the basket of goods and services the average person purchases is, at best, only equally accessible vs an 1869 person.  Someone who chooses to purchase gold today needs to forego very little consumption in terms of other goods and services relative to 1869.  There is no other way to say this than that gold's value (what an ounce of it can buy) has tumbled over those 144 years. 

Thus, those who champion gold are not buying something that "always holds it value", but rather (and perhaps better), they are buying something that is trading near the lowest value it has held since the dawn of civilization.  That doesn't mean its value must rise, but unless the move since all time value low in 1999 is just a dead cat bounce, gold is a value (especially if one can wait 144 years).

Unquestioned assumptions have a tendency to bite people on their arses.  It also has them searching for excuses as to why their investments turned out wrong.  No sacred cows!

Sun, 11/10/2013 - 11:47 | 4140351 Pareto
Pareto's picture

Unquestioned assumptions have a tendency to bite people on their arses.  It also has them searching for excuses as to why their investments turned out wrong.  No sacred cows!

 

So does retarded math.

Sun, 11/10/2013 - 11:58 | 4140380 chindit13
chindit13's picture

Please show how it is incorrect.  The data is out there.  If you must produce (assuming you are an average person) only for nine days in 2013 to generate the value equivalent of one ounce of gold, where you would have had to produce for 283 days in 1869 to generate the value equivalent of an ounce of gold, how is that not a massive decline in gold's value?  "Stacker" is not a word an average producer in 1869 would have known;  it required far too much of his output to acquire.

Perhaps the "math" just gets in the way of your carefully constructed false reality. 

Sun, 11/10/2013 - 12:01 | 4140386 Pareto
Pareto's picture

ummmmm.  productivity?

Sun, 11/10/2013 - 17:17 | 4141131 akak
akak's picture

Chindit, you are obviously a firm believer in the maxim "If you can't win them over with facts, then bamboozle them with bullshit".

I will quite simply and directly tell you why your argument here is wrong: because people spend dollars (whether gold-backed or purely fiat), they do not spend GDP.

You are clearly determined to willfully spread disinformation regarding gold.  It would be interesting to know why.

Sun, 11/10/2013 - 23:40 | 4142013 chindit13
chindit13's picture

As I stated somewhere in here, I don't dislike gold.  I do admit to getting puzzled, however, by the religion that has grown up around it, and am equally puzzled that otherwise intelligent people are so easily bamboozled by those with a vested interest in promoting it.  An honest look at the promoters shows two things:  gold is most always a buy about to break out any second now, and it never drops because of real selling, but instead just manipulation.  Of course every rise is good, honest buying, too.  That is bullshit, as wrong and one sided as the equity shills on CNBC.  It is two sides of the same coin, but those wedded to one asset or the other (gold or equities) are apparently incapable of seeing that they are merely another species of sheep.

I suspect I have, at one time or another, owned more physical gold than most of those on Zerohedge.  I also suspect I have sold more physical gold than perhaps anyone on this site, since I tend not to marry positions.  A number of factors have contributed to that which are irrelevant here except in that I use those statements to back up the fact I do not dislike gold.  Unlike most of the faithful here, however, I consider it just another asset choice, sometimes worth buying, sometimes worth selling.  I found it worth selling when it got a bit frothy in 2011, and like everyone else on Zerohedge and the internet, I had found it worth buying in 1999 (I actually did, but I'll repeat the caveat that this is the internet.).

In my analysis I looked to find some proxy for purchasing power or economic output, so that I could deduce a relative value for gold at various points in history.  Per capita GDP is a pretty good proxy for a society's general degree of wealth and its members' ability to consume.  This is especially true in the modern world, and in democracies (as opposed to monarchies where there tended to be heavily skewed distributions of wealth and little need for a consumer class, but just a subject class).

You can do the research yourself (or just stick with calling it bullshit...up to you), though be careful to get nominal, and not adjusted numbers (for some reason, a good deal of the literature uses "1982 dollars" as a benchmark).  Using nominal figures equates the price of gold directly to prevailing economic output and price levels in the historical economy, making it an apples to apples comparison.  You can jump on it all you like and pander to the faithful (your '+' count on your original comment illustrates perfectly why most people have been gobsmacked by the PM tumble and have to resort to finding scapegoats or else using the equity holder's meme of 'at least I'm still up on the investment because I bought at $xxx'), but it is undeniable that gold is far more accessible today to the average citizen than it was in 1869.  I attempted to quantify that.  The only explanation is that gold's value, relative to the value of labor and other goods and services available in the economy, has declined substantially since the mid 1800s.  Who would have thought labor's value, in our globalized and outsourced world, has actually risen with respect to gold's value, especially since labor's value with everything save for perhaps computers and TVs has dropped markedly over the last few decades?

I went about trying to determine the degree to which gold's relative value had declined.  What the data suggested surprised me, as it appeared to be so large that it would seem almost impossible for it to be ignored and those whose livelihood depends on getting the faithful to recite their prayers (gold IS money; gold always holds its value), and they shouldn't have been able to get away with what they say.  I rechecked the data, and the answer came up the same.  I then wrote to a rather (in)famous collector of cyclic and historical data to see if he agreed or if I had made logic or data collection errors.  His view was that my conclusion was spot on.

Of course I knew that stating my results would bring out the barbs, because I know I am dealing with a religion.  People here like to fancy themselves 'awake' and iconoclasts, but they tend to limit their targets;  I think everything is fair game.  I've often said it is safer to be a Danish cartoonist than to dare offend the Golden Hoarders. (The cyclic researcher to whom I wrote joked that his office has a pool to guess who will assassinate him first:  the bankers, the NSA, or the gold stackers.)  I might have thought, however, that some would actually take comfort in the data, since it indicates today, in 2013, gold's value remains at one of the lowest points (in terms of purchasing power) in human history.  I thought people liked buying cheap.

I think gold will become even more cheap.  There will be a point in the next few years when I will again take the plunge, though for me it will be an asset play and not a pilgrimage or a receiving of the sacrament.

Mon, 11/11/2013 - 00:12 | 4142058 akak
akak's picture

Chindit, I continue to lose respect for you as an intelligent, or at least honest, person, as you not only failed to address even slightly any of my counterarguments to yours, but you continue to dig yourself deeper into the pit of denial and obfuscation.  I am very nearly done with trying to debate or reason with you.  Your numerous ad hominem, strawman and red herring arguments are consistent with your failures in not only logic but in both personal and intellectual integrity.  I can now see that in your specious and bitter anti-gold rants you ARE, in fact, just another captive and defender of the corrupt status-quo.

You bring up the gold pumpers as some kind of evidence of the blindness, greed and implicit guilt-by-association of ALL those who hold or advocate the holding of gold.  If that is not both a strawman AND an ad hominem attack, I don't think I have ever seen either.

Your supposed prior ownership of gold is utterly irrevelant to the conversation and to the (fallacious) arguments you have made, and continue to make.  Regardless, your repeated Nadleresque condemnation of the 'goldbugs' as "religious" and "fanatical", combined with your assertions that gold is "just another asset class" is ignorant of both historical fact and contemporary reality.  Like Nadler, in the midst of the greatest monetary and financial upheavel of the last 80 or 90 years, and in the face of the very real possibility (if not arguably the inevitability) of a complete collapse of the worldwide fait monetary regime, you blithely try to convince us that the status-quo is fundamentally sound, this is just another "bump" in the economy, and all those who are worried about maintaining their savings in this time of unprecedented events are just "doomsayers" and "extremists".  I find your smugness and refusal to face reality here contemptible.

You continue to outright assert that "in 2013, gold's value remains at one of the lowest points (in terms of purchasing power) in human history", when anyone with ANY knowledge of monetary history can see that claim for what it is: a bald-faced LIE.  Both in relative incomes (as I pointed out in another post above) and in comparison to a representative basket of commodities and goods from almost any point in the 19th or first third of the 20th century, gold's purchasing power today is equal or GREATER than it was at those times, yet you continue to spout your outrageous distortion of reality as truth. 

Honestly, Chindit, what motivates you to propagate such falsehoods and misrepresentations as fact?  I would love to get inside the skin of somebody such as yourself to understand the mind of a Quisling and lackey for authority such as I am coming to see you to be, much like the Leo Kolivakis whom I so despised here and for very similar reasons.

Mon, 11/11/2013 - 00:44 | 4142100 chindit13
chindit13's picture

You have your wonders, and I have mine.  I wonder why you choose not to take a look at reality and try to determine the relative value of gold (in terms of what basket of goods and services it could be used to obtain at various points in history).  I wonder what prevents you from seeing how much more accessible gold is today to the average consumer than it was in the period I noted, or frankly at most any period in all of human history?  Why, I wonder, is it not some comfort to you that if you are acquiring gold today, you are acquiring it at an historical value low (or nearly so, as 1999 was most likely the ATL)?  Do you really think the average consumer could so easily acquire physical gold in 1869 or 1750 or 1500 as he can today in 2013?  Labor's value, in terms of gold, is near its historical high.  Gold's value, relative to most other asset classes, remains near an historical low.  If you like gold, those facts should excite you, rather than get your dander up.  The data is there.  All it requires is an open mind.  Looking at it might even make you pick up the pace of your stacking.

If I were going to make my living as a gold promoter, a la the Jim's or Turd, I would be stressing gold as a relative value play rather than as an object of worship.  I would be honest about it, and I would welcome debate over adoration.  Maybe I am wrong in thinking that would be an easier sell.  By the way, there will be a point, probably within the next two years, where I will again begin to load up on that asset class known as gold.  Remaining objective about it, rather than worshiping it, has always seemed to work for me.  Your experience may be different.

Mon, 11/11/2013 - 01:11 | 4142122 akak
akak's picture

 

I wonder why you choose not to take a look at reality and try to determine the relative value of gold (in terms of what basket of goods and services it could be used to obtain at various points in history).

Actually, Chindit, it is YOU who has not only refused to do exactly that, but you digressed into an obfuscational and irrelevant line of argument attempting to use GDP per capita instead of a direct inflation-adjusted price of gold, or some other such simple and direct measure of gold's purchasing power.  As I stated earlier, people do not and can not spend GDP-per-capita, they spend dollars (today) or gold and gold-backed dollars (yesterday).

And I will never, NEVER forget or forgive your wildly disingenuous argument that gold has lost 97% of its purchasing power in the last century and a half by using an extremely transitory, highly contrived and essentially meaningless price spike on ONE HOUR OF ONE DAY back in September of 1869 as some putative benchmark.  That was egregiously dishonest and outrageously misleading, and you should be ashamed for having even attempted to make such a ridiculous argument.

Do you really think the average consumer could so easily acquire physical gold in 1869 or 1750 or 1500 as he can today in 2013?

You keep making this same lame assertion, without a shred of either evidence or logical argument to bolster it.  In fact, the average consumer can NOT easily acquire physical gold in any meaningful quantity today --- only a tiny and unrepresentative fraction of them can, or could.  Again, as I argued before, and you pointedly ignored, we know enough about the quantities of gold mined worldwide on an annual basis, and available on the market today, that I can confidently state that if even 10% of the public were to try to buy even a single ounce of gold today, the available stock of coins and bars would not only be instantly snatched up, but many of those trying to buy gold would be left empty-handed.  Simply because gold is no longer widely held or used as money, you claim that it is "widely available", but it is no more widely available than it was 100 or 200 years ago, and perhaps even less so.

Gold's value, relative to most other asset classes, remains near an historical low.

You have not only offered no proof of this assertion, but it flies in the face of all evidence to the contrary.  I might point out silver and copper, both of which are historically cheap compared to gold.  I do not have the exact figures for commodities such as wheat, cotton, corn or beef, but I know from past research that they are all roughly comparable to, or cheaper than, their 'price in gold' over most or all of the last 200 years.

If I were going to make my living as a gold promoter, a la the Jim's or Turd, I would be stressing gold as a relative value play rather than as an object of worship.

Again with the arrogant and specious ad hominem attack on gold owners as fanatics and religious in their advocacy or ownership of gold.  I could equally, in fact with FAR greater relevance and accuracy, accuse you and all you conventional, conformist traders and paper pushers of religious devotion to both fiat currency as well as to the corrupt and criminal sociopaths who enforce the fiat monopoly on us and who increasingly dominate our lives.

 

Mon, 11/11/2013 - 18:32 | 4143831 Miffed Microbio...
Miffed Microbiologist's picture

Wow. I will say I believe your argument won the day but I have to admit tremulously scrolling down to see your final response. I believe using religion as a taunt borders a bit on personal attack but this may have been unintentional. Religiosity seems to be the favorite pejorative term for those who hold physical. Worshiping a Golden Calf? This is a far from truth one can get.

One a personal note, I am having a very tough time getting physical any more. My coins on order should be in tomorrow and there were many people in line with me when I went last Friday. Considering I represent a minority, I shudder to imagine what would happen if there is an awakening of the average person. I selfishly hope the status quo remains.

Miffed;-)

Tue, 11/12/2013 - 01:37 | 4145019 chindit13
chindit13's picture

Here’s the argument, lost amongst his outrage:

At any time, one has a host of goods and services available for acquisition.  Some are necessities, some luxuries, some conveniences, and some are stores of value or a means of exchange.  Their values and interrelationships are not constant, but rather fluctuate over time relative to each other, and this for a host of reasons including things such as availability, current fad, substitutes, etc.

The one amongst this collection we all know only too well is currency.  One that we forget belongs in this group is our own labor.

The data I collected looks at these interrelationships over an extended period of time.  For reasons known only to those who favor gold over all other asset classes or means of exchange, the poster to whom you responded refuses to accept that gold has any relationship to anything other than currency.

I found through my research (and I am hardly the first to take this look) that gold’s value has fluctuated wildly with respect to other economic goods, services and inputs.  Labor is one of these things.  Using per capita GDP as a proxy for per capita value receipt (people get paid), I found that its takes far less per capita labor input in 2013 to earn the value of an ounce of gold than it did in 1869, whether one uses the then-free market price of $162 or the government dictated price of $20.67.  Next, I tried to ascertain the basket of goods and services a typical citizen would acquire at those two points in time, and what that basket cost in terms of gold.  I found that an ounce of gold could be used to acquire a considerably greater amount of goods and services demanded by the typical consumer in 1869 than in 2013.  For an ounce of gold, one could have lived the "per capita" life for anywhere from 5+ weeks to 40 weeks (depending on the use of the free market or government dictated gold price) using a single ounce of gold.  Try that today, at $1278/oz.  It doesn't go quite as far, does it?

Now the conclusion should be obvious.  Let’s say your wages stay constant.  Over a period of time you find you can acquire much more of your necessities and wants with your constant wage than you could previously.  You would say that relative to prevailing price levels, your wages have increased in value.  Conversely, if you found your wages could not keep up with price increases, you would say that either the value of your means of exchange (wages) has fallen, or else the value of your labor has fallen.

Substitute gold for your wages, and then consider your “wealth” (ability to purchase goods and services) in 1869 and in 2013.  The only possible conclusion is that relative to both labor and to the basket of goods and services acquired by a typical consumer, gold’s value fell.  If you obtain the data that gives you labor rates and goods prices, you can come up with a figure of just how much gold’s relative value has fallen.  By using labor and goods prices, you remove the dollar---greenback or FRN---from the equation, and you end up with apples vs apples.

The positive conclusion---obviously lost on many here---is that even if you are the typical “per capita” member of society, an ounce of gold is far more accessible to you today, in 2013, than it would have been in 1869.  Why that should upset some people to hear that is a puzzle, and I can only conclude that they are so caught up in the gold meme and the ubiquitous sermons of the gold promoters about how gold “always holds its value”, that they are unwilling to see reality, even if seeing it is to their emotional advantage (because it tells them they are buying their preferred asset as an historical bargain price).

Finally, the reason I compare the affection for gold to religion is because in every way its champions resemble a religious cult, unable to accept anything that suggests their chosen one is not eternally omnipotent.  Doubt that?  Utter a discouraging word and see what you get.  Not accepting the eternal and unwavering omnipotence of gold somehow makes one a Quisling, lackey of authority, etc., which is the Zerohedge equivalent of a fatwa.

Tue, 11/12/2013 - 15:01 | 4146812 Miffed Microbio...
Miffed Microbiologist's picture

Thanks Chindit for taking the time to expound on your thesis to me. I have thought about what you said and will try and respond adequately.

First of all, I have to reject your use of GDP as a metric for analysis. GDP has been corrupted because of government spending which I believe has skewed output erroneously high. Just using my own work loading analysis in my lab, my personal revenue generating labor went from 35 min/hr five years ago to 23 min/ hr today. Part of this can be explained by the purchase of more efficient instrumentation. However, the biggest reason was the implementation of mandated government policies that require more of my attention. I can hardly pretend producing a government report is in the same league as running a Hep C test on a patient but it still is comsidered " productive". I am still working full time and am getting a historical average of 3% raise every year. Perhaps gold comparison to GDP is more accurate in 1869 but I hardly think it is today. However the majority of people at that time were leading a subsistence life without modern technology. When worries of death from starvation and exposure to the elements are of primary concern, acquisition of gold is not contemplated or attempted.

" I found that an ounce of gold could be used to acquire a considerably greater amount of goods and services demanded by the typical consumer in 1869 than in 2013.  For an ounce of gold, one could have lived the "per capita" life for anywhere from 5+ weeks to 40 weeks (depending on the use of the free market or government dictated gold price) using a single ounce of gold.  Try that today, at $1278/oz.  It doesn't go quite as far, does it?"

This is pivotal because of the conclusion one can make here. Either you are right, gold HAS lost value or the true value of gold in dollars has been skewed in some manner. This is seen as well using wages. In 1986 my wage was $11.23/hr for a newly licensed inexperienced microbiologist. This was the rate in my area of residence. Today my wage is $47/hr. So my wage has gone up roughly four times but my purchasing power for my " basket of essential goods " has dramatically fallen. Mainly due to increased taxation on our labor, purchases and property, food and energy costs. Gold, at least during this time frame, has gone up roughly 4x as well.

I think our main divergence is how we use benchmarks to determine value. This is difficult because of the valuations in currencies fluctuate so much at a given time. Any one can prove their case by citing different points in history so when someone tries to do this I tend to view it as sophistry. I look at gold as the benchmark to judge all valuations. You use things such as baskets of goods, wages or commodities to value gold.

Part of my reasoning stems from my education. Clinical chemistry is done through calibration to a known therefore one can determine an unknown value ( glucose in a patient's blood for example). If my Calibrator is in error, I may report out an erroneous result and kill a patient. Everything in my lab world is known to unknown comparisons to provided meaningful relevant data. So I use gold as a standard because it has thousands of years of history and relative rarity. It is my calibrator, a fixed known to judge. If the ratio of its value in fiat has changed I look to the fiat as suspect. Fiat always runs the risk being devalued to zero but I know you would acknowledge gold could never do so. However,I will grant you if I were in the Philippines now I would appreciate the value of clean water and food over my gold holdings so may be I must admit gold can change in one's personal value due to one's circumstances. :-)

I think you are primarily an investor and are simply uninterested in gold except as a possible trade for profit. I don't personally have a problem with this but it is not what I wish to do for myself. I am extremely nervous with the precarious position the global financial elites have placed us and am trying find away to survive a disaster. This, for me, has been a flight into commodities, food growing methods, solar energy production and PMs. I don't consider myself a prepper in the fanatical sense, just pragmatic facing a possible economic collapse. Gold is seen to me as a value holder in this type of scenario if or when people return to the tangible.

As for the fervent religious side of things, I think that comes out when there are passionate feelings about the subject being discussed.I personally don't mind questioning the value of anything because this can lead to greater truth and understanding. I do appreciate your discussion because it made me review my personal perspective though I still think my approach to gold has validity.

Miffed;-)

Tue, 11/12/2013 - 19:58 | 4148068 chindit13
chindit13's picture

Now there's a blue moon at ZH....reasoned debate.  Thanks for that.

Since I tend to suffer from prolixity, I'll reduce what I found to a bottom line (or two):

---One could afford the average American existence a heck of a lot longer with one ounce of gold in 1869 than 2013

---One had to work a heck of a lot more time in 1869 to earn one ounce of gold equivalent than in 2013

We can agree to disagree on what to call that reality.  Though it obviously offends many, I call it loss of value.  I also might have thought folks would take comfort in realizing they could buy something they desire more cheaply than pretty much ever.  Why that is not the case is an interesting question, since buying on the cheap in everything else is a goal of most all consumers.

Wed, 11/13/2013 - 01:06 | 4148746 Miffed Microbio...
Miffed Microbiologist's picture

Well, I had responded to you but when I posted it, my iPad crashed and logged me off of ZH. Now I will try to painfully recreate it! :-(

I realize I tend towards verbosity myself and coming from a family that loved to debate and a father who often turned into a pontificating pedant after a bit much to drink, you seem quite normal to me. ;-)

I think if you are distilling your arguements down to these two points, I can find areas of agreement. I acknowledge there has been a drop in price for gold. I am using this to my advantage.To me this signals a discordance between fiat and gold because I don't judge it's value by the monetary price. I am not saying you are incorrect saying for you this is a loss of value because you are trading it to make a profit. I see gold as having an inherent value due to its rarity as opposed to tulips or beany babies ( which in a buying frenzy may exceed the price of PMs at a given time). I am using gold myself in the hopes that during a global economic collapse it will hold value when or if the world turns back to the tangible. I admit to you this may not benefit me personally during my life time. Perhaps only my kids will benefit and, hopefully, they won't buy beany babies with it. At least I won't be around to care.

Thank you for taking the time to respond to me. I am passionate about many subjects and do love to debate but my approach tends to be more cautious and contemplative rather than spirited like the rabble rousers who truely embrace the Zero Hedge meme. I'm glad you posted your thoughts to shake things up and get the dialog going though probably not pleasant for you. Though we aren't sympatico on this subject I do value your comments in that I need to question my view and avoid complacency. It's been a pleasure and perhaps we shall have the opportunity to "fight" in the future.

Miffed;-)

Wed, 11/13/2013 - 01:41 | 4148923 chindit13
chindit13's picture

Miffed,

Oh, I don't mind the brickbats.  I would never want to belong to a groupthink that would accept me as a member.

Back in May 2011 a new member here put up what might have been his first post.  He announced he had just gone all-in silver at something like $47.  I was tempted to ask him what in the almost two decades and 1100% price rise had finally convinced him silver was in a bull market.  The fellow had gotten all caught up in the echo chamber of ZH where only encomiums are allowed with regard to PMs.

Perhaps it’s the pedant, or maybe the cynic, in me that prompts me to question absolutes.  I see no difference between equity shills and PM shills, as both rely on spurious analysis, sophistry and a simple lack of logic.  The fellow I noted in the first paragraph had fallen prey to the sales pitch, just as many small investors fall prey to the equity shills.  He only heard one song because this site only sang with one voice.  Of course it’s his own fault, but he might have benefitted from debate.

Now I’ll state again that it is some combination of pedantry and cynicism (plus a career as a trader who has studied about every market ever and has seen every possible rationalization for why something MUST happen), and not some public service, that has me responding to what I see as false or deceptive notions about different asset classes.  When I see someone try to “prove” manipulation or the existence of something called a "paper price", because he cannot actually buy at spot price, my teeth hurt.  Try telling the wait staff at IHOP that they’re gouging you on your side of bacon because you know the spot price of pork bellies.  Of course that is an extreme.  What got me to taking an historical look at gold’s value was seeing repeated comments about it “always holding its value”.  I knew that statement was never meant to be precise, but I decided to try to determine just how much the value of gold had varied over time.  For some, just asking that question seems to border on heresy, similar to questioning the Virgin Birth.  I’ve already noted one of the things I found.  As for manipulation, I know it can be done for a short time period, but long term, no.  There are simply too many players hell bent on finding an advantage and exploiting it.

Years ago, when I was still in fund management (and gold was trading below $300), I did something that lots of my colleagues and industry fellows did:  I put about 10% of my NW into physical gold.  The combined buying of lots of HNW individuals ignited the twelve year bull market in gold.  Like many, I had good delivery bars, so I could quite accurately hedge as I felt necessary, selling contracts on COMEX.  I can assure you that the “paper” price and the physical price were exactly equal, save for the spread.  When it finally came time to unload the position, future’s contracts were the way to lock in the sale’s price.  It wasn’t “naked selling”, it was simply taking advantage of the most efficient means of closing a trade.  No, I didn’t top-tick the market, but if I was so inclined to buy back today, I’d have $500 worth of fat to play with.  Lucky is good, and it spends just as well as anything.  Making a study of market behavior also helps, as does reading blogs where comments are allowed, as that gives the direction of the wind.

I know that a great many of the people who had loaded up in 1999-2000 began to leg out of their positions, via COMEX, as the market became frothy and as retail piled in.  These folks were moving into other asset classes, which they thought represented greater value than PMs.  Though this will undoubtedly outrage some, I also know that many producers began hedging their expected production through the commodity desks of the major banks, which includes Blythe Masters’ desk at JPM.  I cannot tell you if she also took proprietary positions on behalf of JPM, but those who attribute JPM’s position solely to Blythe are simply wrong (or lying).  The “Crash JPM” idea was pure idiocy, because she was hedged to a large extent (miner’s production, long term holders’ stash).  That talk reminded me of a trade many years ago in Japan.  There was a publicly traded company that had issued many warrants.  One major IB had been running a trade where they bought undervalued warrants, and shorted the equity against it.  A group of Yakuza (who were big traders in the Japanese stock market) saw the short position and assumed it was naked.  The Yakuza borrowed heavily from a major Japanese bank to start ramping the equity, hoping to force short covering.  What they did was to drive the warrants deep into the money.  The IB then exercised its warrants.  Overnight the short position vanished (stock received via warrant exercise was returned to the Prime desk).  The stock then crashed.  Fortunately for the Yakuza, they are not required to repay loans, so the bank took the loss (the lesser of two evils for the loan officer).  Anyone who actually understands how markets work, and is honest about it, knows why JPM did not get “crushed” in PMs.  Of course, reality doesn’t sell as well.  Besides, the dawn of the internet has given us a new equation, which is 3 cross links = 1 "fact".  The explosion of PM Gurus has resulted in the narrative being taken over by a vocal few, and while long term those who fell under the spell might do okay, the lack of debate has resulted in lots of pain, as buyers only saw pie-in-the-sky gains on the immediate horizon.  How long that pain lasts is unclear, but given that all of us have an expiration date (Zerohedge’s Logline), it is no small matter.

Personally, I think we will see higher gold prices in the next two years, but not before another washout.  It will again become a favored asset class, though nothing lasts forever.  There will be a time to buy, and later there will be a time to sell again and move back into then-undervalued assets.  I seriously doubt the world will ever see a “gold standard” again, but the “why” of that is too long even for me to explain.  I also doubt China will even consider it, but if they did, I suspect the rest of the world would say “So what?”  Those now selling gold won’t much care if China then backed its currency by something sellers don’t want, and there is no way China would ever go to all the trouble of accumulating gold, only to then allow New Yuan holders to exchange their paper for that gold.  Plus, who believes China now?  Someone would believe their gold holdings and paper issued against it?  I don’t think so.

I have a view that the value of gold to an individual is a function of the importance of his or her country to the world economy.  If one’s country were to disappear, what would that do to the world?  The lesser the impact, the greater the value of gold to a citizen of the fallen nation.  That is why gold has value in India.  ( I happen to spend most of my time in India and Burma---long story---so I am quite familiar with SAsian and SEAsian economies.)   If the US collapsed in the near future, on the other hand, the world would be severely impacted.  That would give birth to the Mad Max scenario, where I doubt anyone could care less about gold or silver (think the sad tale of the Philippines this week).  For Americans, gold’s value is maximized if the US faces severe, but not debilitating economic difficulties.  That would result in both high inflation and a dollar devaluation.  Thus, gold is a hedge or an insurance policy, but going “all-in” is a bet, and should be recognized as such.  The promoters do not sell it that way, and to date that has no doubt led many to the world of pain if not personal financial, even marital, calamity.

A few lessons I learned as a trader continue to serve me well.  The first is to admit that anything can happen, even if one cannot imagine it (did anyone ever think we’d see ZIRP for years on end?).  The second is to accept that one can be wrong, and that success depends on being able to admit that.  Question everything, and reassess (or mark to market) regularly.

It is silly, if not offensive, how many here react to contrary opinions.  Apparently there is a platform, or a sole way of thinking about everything, and anyone who fails to accept all planks of the platform must be championing all the planks of the “bad guys” platform.  It's all or none.  You can see evidence of that thinking in this tangent I began.  That mindset is to the detriment of Zerohedge, as is the regular effort to quash debate.

I’ll end my heresy here.  Good luck to you.

Wed, 11/13/2013 - 18:59 | 4152082 Miffed Microbio...
Miffed Microbiologist's picture

Chindit,

Thank you for such a detailed and candid response to my post. You have brought up many memories, good and bad, of my own personal trading history and I appreciate the clarity that has ensued.

In the early 1990s, my husband and a few of his work associates started to trade tech stocks because they had an intimate knowledge in that area and could spot companies that would be key players in that growing industry. I got fascinated with it as well and helped in the research. First we just traded stocks but we quickly branched into options to hedge our positions. Trades were expensive at the time so we would pool our money to keep trade costs down ( that nearly killed us once when a call was in the money and the only person who could exercise it was out of the country. Yes, we were that dumb and almost lost $60k, a fortune for us at the time).

I was totally hooked and my husband gave me $10k out of his profits for me to trade on my own. I followed much of their lead and made money in Lucent, Nortel,Intel and JDSU but decided I needed to niche in my area of knowledge and focus in biotechnology. At the height of my ridiculous exuberance I got in the ground floor of Celera and bet the farm. I did quite well at first but I did the typical rookie move and married my position. The slapdown was tremendous. Thank god I didn't trade on margin or short or I would have lost every last penny.

Afterwards I realized I was a complete idiot and the only reason I had made anything was I was riding a massive bubble. For crying out loud, I was trading stocks with P/E s in the hundreds!My only defense was I lost money that was not required for our livelyhood. I took the remaining 30k, parked it in Fidelity and walked away. I was a fool and the adage held true.

Your stories showed me the errors of my actions so long ago.I wish I had known you, or someone with your knowledge and experience to have shown me how to look at markets correctly and make proper impartial analysis. I would have been in heaven. I am inquisitive, moderately intellegent and love the art and science involved. Of course, as in all things, there is a certain amount of luck. That just makes me more attracted. ;-)

It's funny, when I started reading ZH, my husband really had a laugh. He knew this is where my true interest always had been and once again I was participating, albeit in a safer way. I do love PMs but, learning from my painful past, I drink responsibly. I am acutely aware of the danger I am facing today. I am a professional facing an onslaught of exploding technology. My profession may become superfluous before I can figure out a way to survive. The policies of this country and ZIRP have hamstrung me. I am frightened in so many ways and though I'm not stupid or ignorant I am having trouble seeing a path out of this mess.

Thank you for talking with me. I am honored. Especially for taking the time to communicate at such length with someone so far beneath you in terms of knowledge and experience in this area. As a clinical microbiologist at the peak of my career, I can say I have saved many lives with my skills and enjoy sharing my wisdom and experience with those that ask. I am fortunate to have found someone who's willing to share their expertise and perspective as well. I hope to do this again sometime.

Miffed;-)

Tue, 11/12/2013 - 02:46 | 4145117 akak
akak's picture

Miffed, it is quite pathetic that our own ZH Jon Nadler just keeps spouting the same discredited and laughable lies over and over, as if they had not been repeatedly addressed and demolished, like a neurotic dog endlessly chasing his own tail.  One can almost feel pity here, mixed of course with the much greater degree of contempt.

Tue, 11/12/2013 - 04:46 | 4145206 chindit13
chindit13's picture

akak, I’m a little hazy on what this “done with you” thing means.  Is it kind of like the untaper?

Miffed is a little brighter than you are, so perhaps you will let her read the post before you tell her what to think.  She may well agree with you, but since nobody elected you Gatekeeper to the One Truth, you might want to let her make up her own mind, if you can summon the patience and endure the flutter that is disturbing your comfortable little echo chamber world.

Oh, and check the time stamps again to see who was first to resort to ad hominems. Yup, it's that guy in the mirror.

Tue, 11/12/2013 - 15:31 | 4146988 Miffed Microbio...
Miffed Microbiologist's picture

Chindit,
Please realize, though akak is a friend and I highly respect his views, I will always read what you say and try to understand your point of view for myself. I will not negate you solely for not spouting a party line. Please grant me this. I honestly wish to be challenged so don't feel the necessity for restraint.

Akak has been here much longer and has far greater experience in these matters than I. I have watched him debate this issue with numerous people for many years and am indebted to him for helping me to understand gold's innate value. I believe his strong defensiveness stems from these, often vicious, attacks defending himself. I understand his passion and exuberance. But I know in my heart he would not respect me for simply following his lead in such matters without careful consideration. I am many things but never a sycophant. Though I must admit my husband does wish I would occasionally entertain the idea. :-)

Miffed;-)

Tue, 11/12/2013 - 19:10 | 4147867 Miffed Microbio...
Miffed Microbiologist's picture

Akak, I do agree with your assessment in that it is an attempt to validate ones view of the world and, therefore, a mental maintenance of the status quo. I lean more to the pity side because it does seem to be grabbing for straws to gain any sort or purchase on reality. I face this myself in a way. My field is exploding in technological advances. I may not have a job or at least face a radically different job. Do I succumb to Luddism and fight to keep my field as it has been for the last 27 years? Believe me it is tempting. I am discomfited by the thought of reinventing myself at my age. I believe this is where Chindit is coming from( though I am a bit loathe to speak for another). Perhaps I will get lucky and Obamacare will smash the labor destroying textile machinery for me. ;-)

Miffed;-)

Tue, 11/12/2013 - 19:47 | 4148001 akak
akak's picture

Miffed, I understand your point and concerns here, and in fact I share them, as I am facing the very real possibility of the probable death of my own self-employment niche within this declining and dying economy, which, let's face it, may very possibly NEVER improve during either of our lifetimes, but most likely will only continue to degrade as government comes to intrude into and destroy more and more facets of the remaining REAL economy is this country. 

I have even given serious thought to leaving hellhole Police State USA, as I can speak a couple of other languages and have traveled and seen a fair amount of the world outside the borders of the USA, but as the trend of increasing statism and authoritarianism seems to be a worldwide plague, what is the point of jumping from the frying pan into the fire?  I battle with this thought every day now, now that the nightmare of Obamacare is infecting our waking lives for real.

Tue, 11/12/2013 - 23:07 | 4148578 Miffed Microbio...
Miffed Microbiologist's picture

It's funny, a few days ago my husband said he felt like a Jew in Germany in the 1930s. An unshakable feeling to run and GET OUT. Of course, back then there were places to go. Now, I'm hard pressed to come up with a safe place to reside. I was most impressed with the north island of New Zealand where we stayed on a farm for a week. The rugged individualism and freedom was so refreshing. I truly felt like i had gone back in time to the 1950s and was seeing USA in a simpler time.But we don't have the funds of James Cameron to relocate.

But facing life in Cali is just more horrible every year. I don't think we can financially EVER retire here. Everything we have done to properly fund our retirement years has been stripped by the Oligarchs and I share your vehement anger. I want them DEAD DEAD DEAD! I want justice! I want what they have stripped from me returned. Nothing will change until this sewage is flushed and the longer it goes the less likely we will be able to recover. I fully expect to live in poverty at some point. At least I know how to live simply.

I am sad to hear your self employment is threatened but not surprised. I had always thought Alaska was the last bastion of rugged American life. Obviously I was immersed in fantasy. Perhaps I shouldn't be so harsh on those who view all Californians as Ivy Tower Liberals. Everyone in my sphere is suffering except for public servants. Self employed are being eaten alive. My husbands medical coverage dramatically spiked but thanks to me being at a non profit hospital with an exemption we dodged a bullet. How long can that last? Yes, I must admit I am frightened and really don't know the best course of action.

Just realize there is a crazy Californian that does share your views and is experiencing life in reality not regaling over .99 chicken breasts. We have an understanding the real economy is dead. We are awake enough to understand a storm is coming and won't be among the foolish who pick up the flapping fish on the beach. There is some comfort in that dont you think?

Miffed;-)

Tue, 11/12/2013 - 02:03 | 4145056 The_Prisoner
The_Prisoner's picture

Although it is hard to question Chindit's intelligence and eloquence. His honesty, however, has been shown to be lacking repeated times.

Perhaps purposeful disonesty is due to his allegiance to the State. Some people are naturally deceitful, though.

Tue, 11/12/2013 - 04:49 | 4145122 akak
akak's picture

I suspect that his allegiance is not so much to the State (although there is almost certainly a strong element of that involved), but more to the corrupt financial and monetary status-quo in which he operates and makes his trading profits.  As gold is the direct enemy of fiat currency, and more generally of the rotten monetary and financial structure that is supported and enabled by fiat currency, he therefore, whether consciously or subconsciously, MUST be an enemy of every aspect of gold as well, both its former (and potential future) role as a foundation of the monetary system, as well as its ownership by the 'peons' who dare (gasp!) evade the monetary machinations and depredations of the overlords who control that system by saving their wealth outside of the fiat system.  He knows who butters his bread, and it most certainly is NOT anything or anyone associated with sound money!

This same automatic hatred and loathing of gold (and more especially, of the owners of gold) can be seen in Karl Denninger, another person who made his fortune through gaming the corrupt fiat-based financial system, and for exactly the same reasons.  In the latter case, his deep and manifest hatred for gold, and for the advocates of gold, is off the charts, beyond irrational and quite literally pathological.

Sun, 11/10/2013 - 13:01 | 4140515 Erus Unius
Erus Unius's picture

I value the information you compiled; however, I do think a argument could be made reasoning that the value of production itself has been in decline.

During the 50s' it was possible for a family to buy a house and support a family on a single wage. A 30 year morgage did not exist at that time.

 

Sun, 11/10/2013 - 13:57 | 4140661 chindit13
chindit13's picture

I did not say that either the dollar has been stable or that average wages have generated stable purchasing power.  Obviously they haven't.  The value of labor input, relative to a basket of goods and services, has declined.  As you point out, relative to a standard unit of housing, labor's value has declined.  What is clear from the long term data, however, is that the labor input, if valued in gold rather than in houses, has actually increased substantially over my 144 period in question.  An ounce of gold was well out of reach of the "one per capita of GDP" generator in 1869, whether one uses the free market price or official price.  Today, most members of ZH own ounces, pounds, or kilos, etc. of gold.  Thus, relative to gold---and even with outsourcing and globalization---labor's value has increased over 144 years. 

Sun, 11/10/2013 - 15:25 | 4140909 Erus Unius
Erus Unius's picture

I understand the math, and I see what you're doing. I was trying to find numbers on gold ownership per capita based on time-period, but I wasn't able to find anything with pertinant information.

My suspicion is that thought that math is correct; gold ownership, per capita, was much greater back then than it is today. I can't substantiate that suspicion with anything concrete, unfortunately. At least that I can find.

 

 

Sun, 11/10/2013 - 10:17 | 4140182 Urban Redneck
Urban Redneck's picture

That just demonstrates truthiness of the great Rinse, Repeat machine. To smack down gold from $162 and protect the greenback, the Treasury Secretary (pre-FED days) announced that he was dumping millions of dollars of gold on the 19th century CRIMEX, and the price got monkey hammered 20% in one day and drove speculators and (Paulson-like) "unfriendly" banksters into bankruptcy. When confronted with the fact that the US Treasury didn't actually have the millions of physical gold to dump on the market there was some politi-shit excuse about being off by a zero (aka an order of magnitude), but the fact is they didn't actually offload physical gold to end Jay & Diamond Jim's market cornering adventure and prop up the greenback ponzi just a little longer...

Also important is the fact that the gold debate has the same type of muppets playing the home game as the Twitter IPO. When you hear "on a long enough timeline" ask what happened to the purchasing power of a contract for delivery of 1 ounce of gold ($20 eagle) bought on September 24, 1869... if you tried to exit that position 130 years later... the entry at 162 greenbacks/$20 gold/1oz is only convertible to 268 FRNs/$20 gold/1oz physical/12 shares ABX (Homestake post stock splits), that's a huge loss of purchasing power extending over multiple generations, unless you're pulling a Slick Willie and talking about a geological or astronomical timeline...

Sun, 11/10/2013 - 13:13 | 4140508 chindit13
chindit13's picture

No, akak, I don't hate gold.  At the same time, I do not worship it.  It is an asset, one whose value changes markedly over time just like all assets.  Sometimes it is a buy, sometimes it is a sell.  Apparently you find history uncomfortable, and rather than take a look at the numbers and the methodology, you just resort to verbally killing the messenger.  I do believe, however, that you are intelligent enough to realize that gold is far far more accessible to the average person today than it was in 1869, even if that $162 number bothers you.  You may know that it did not go from $20.67 to $162 in one hour;  it traded above the official price for extended periods.  As I noted, however, even at the official 1869 price of $20.67, gold is still far more accessible today than back then.  Note that with each market thrashing, posters here are always "backing up the truck" and "buying with both hands".  Do you think the average citizen in 1869 had so much extra cash that he could stack ounces of gold---at a price of $162 or even $20.67?  I'll answer that question for you.  He couldn't.  That means golds purchasing power value is less today than what it was then. 

How much less?

The numbers and the data---what you call a "lie"---are there.  You can find data for the average wage, the cost of living, the per capita GDP.  You can then see what a man's production could buy back then and compare it to what an ounce of gold could buy back then.  An ounce of gold had a heck of a lot more value, in terms of the goods and services for which it could be traded, back then vs today.  If you could go back to 1869 and give the average person this choice:  work a few months and receive your salary, or take an ounce of gold today and stay home for a few months and buy life's necessities with the gold coin, what would he choose?  Now present the same choice to the average worker today.  See the difference?  That's called loss of value.

It seems your world stays more comfortable if you ignore that reality and instead call it a lie or mindless and nonfactual nonsense.

Sun, 11/10/2013 - 16:35 | 4140986 akak
akak's picture

Chindit, thank you for elaborating here on your argument above.

In response, however, I must tell you that I still find your arguments and implicit anti-gold sentiments to be illogical, inconsistent, historically ignorant and downright disingenuous.  As is typical of those who attack gold, and who attack the idea of holding gold as a means of savings, and who attack those who hold and advocate saving in gold.

I will be the first person to admit that gold does NOT hold a perfectly consistent value over time; I have never made such a claim myself, and have at times countered those who have made that claim.  However, to try to use the VERY brief and artificial spike in the price of gold on September 24, 1869 as some kind of benchmark to calculate the putative "decline in the value of gold" over the years or over the centuries is both laughable and insulting.  Gold did NOT "trade above the official price for extended periods", as you claim --- that rise in price, culminating in the $162 figure, occurred only over a three or four day period in total, with the $162 price pertaining to LESS THAN ONE HOUR.  That little episode had no meaningful impact on the international or even the domestic US monetary system.  It was merely the "flash crash" of its time, and it would be as specious to use it as a benchmark as it would be to use the prices of stocks during the few seconds of the flash crash of 2011 as a benchmark to calculate the rise or fall in overall stock values before or since that equally transitory and fundamentally (financially) meaningless event.

Furthermore, I challenge your assumption that gold is "more accessible" today than it was during the era when it was used as money.  Aside from lacking any quantitative measure on your part in ascertaining and defining "more accessible", you are in any case comparing apples to oranges here, as gold was MONEY then, whereas gold is NOT money (or, to be more precise, circulating money and legal tender) today, so naturally it may look "more accessible" to you in its demonetized market of today.   You attempt to use the rhetoric and motivations of current gold buyers (a tiny and highly unrepresentative fraction of the US population today) to paint gold as commonplace and readily available, but when the majority of Americans have less than a few thousand dollars in total savings, with a significant fraction having no savings at all, just how "accessible" is gold to them?

In the latter part of the 19th century or the early 1900s, the average grunt laborer made approximately $1 per day, or $300 per year (remember, a six-day work week), which at the official gold price of $20.67/oz translated to around 14.5 ounces of gold per year.  Today, the average Wal-Mart employee or minimum wage worker makes around $20,000 per year, or at today's gold price around 15.3 ounces of gold.  I don't know about you, but those look pretty comparable to me.

In 1850 or 1900, the average person never held or owned a gold coin.  Today, the overwhelming majority of people have never held or owned a gold coin.  It is ludicrous to hold up the very small fraction of 'stackers' as proof that gold is "more accessible" today, merely because it is relatively accessible to them, due to it being utterly spurned by the vast majority.  Let even 10% of the population decide to purchase one ounce of gold, and you would really see just how (in)accessible gold would be in that case.

In addition, you fail to take the most meaningful direct measure of gold's value over time, purchasing power, attempting instead to make some convoluted and dubious comparisons of GDP per capita.  But when one compares the prices of basic items such as food, clothing and shelter (data which I have seen before, but have no direct access to at this moment), and translates those into gold, one will see that gold has in fact roughly maintained its purchasing power over the last century or two, or even INCREASED in relative purchasing power, at today's prices (but granted, not at the 2001 price bottom; but only dishonest and dissembling fools use price tops or price bottoms to make relative valuation comparisons).

In short, an ounce of gold did NOT have "a heck of a lot more value, in terms of the goods and services for which it could be traded, back then vs today."  I know that to be the case, even if I cannot supply that data here at this very moment.  What is YOUR basis for making such a claim?  I will aver that it is nothing but a lie.

As for your ad hominem attack on the advocates of gold as "worshippers" of it, well, I can only shake my head in amusement and contempt.  I guess countering half-truths and lies with honest figures and historical fact makes one a "worshipper" of the truth, eh?  I could point out the vastly greater number of "worshippers" of the corrupt and unsustainable fiat status-quo, and the vastly greater depth of their religious trust in paper promises and in the lies of central planners and poltical sociopaths, as evidence of where the REAL and misplaced monetary "worship" in today's society lies.

In sum, Chindit, your arguments against gold here are shallow, irrelevant, and intellectually insulting.  If you believe that you are very knowledgeable and honest about monetary history, then you failed in a spectacular manner to convince me of that here.  I find your comments on gold to be little more than a rehashing of all the ridiculous and fallacious anti-gold bashing of Jon Nadler, perhaps with just a little less of the snark.

 

Sun, 11/10/2013 - 18:54 | 4141330 Miffed Microbio...
Miffed Microbiologist's picture

Thanks for your response akak. As one who certainly is no expert in this area, I truly appreciate debate and discussion. For me, I simply look at gold as a store of weath/value. I think gold and precious metals are generally favored because of their demand and rarity in nature, which reduces the risk of devaluation associated with increased production and supply. I realize there are other stores of value. In many parts of Africa, holding cattle is seen as wealth rather than currency.

Of course, the question always remains if at any time I try to convert my gold to the monetary unit du jour, will I be able to extract the full value? No guarantee, obviously. I hope never to be forced do so at a time that would be a loss.

I think most here would agree that gold is highly manipulated now.How can it be then compared to anything; GDP, purchasing power or the price of chèvre and have any meaningful, relevant analysis?

Miffed;-)

Sun, 11/10/2013 - 04:42 | 4139942 badewann
badewann's picture

Please...where did you get those numbers, chindit? Gold losing 97% of its purchasing value since 1869?? Come on...

Germany around 1900:

a 10-Mark-goldcoin, consisting of 3,5 grams gold, bought you around 43 kilograms of ryebread (at 23 pence per kg)

Germany 2013:

a 1kg-loaf of ryebread costs around EUR 4,00 / EUR 172,00 per 3,5 grams/gold or 43kg/bread / around EUR 1.500 per oz/gold or 370kg/bread.

Todays (manipulated) goldprice stands around EUR 1.000 per ounce... 

 

http://wiki-de.genealogy.net/Geld_und_Kaufkraft_ab_1871

Sun, 11/10/2013 - 11:43 | 4140346 Meat Hammer
Meat Hammer's picture

chindit, if you found out that you won $100,000 that you had to keep in a lock box for 30 years and could be paid to you in your choice of paper USD or gold eagles, which would you choose?

Sun, 11/10/2013 - 21:44 | 4141752 BigJim
BigJim's picture

Silly Hammer! He'd park it in a 3 x leveraged ETF of whatever stock was going to appreciate the most over the coming period.

Mon, 11/11/2013 - 00:19 | 4142065 chindit13
chindit13's picture

Make yourself feel good.  Drops in wealth have to hurt, so projecting might help the ego.  Post it twice for good measure!  Double the relief, yes?

On the other hand, you might want to look at everything as an asset, sometimes worth buying, sometimes worth selling or shorting, and sometimes worth ignoring.  Hammer's question is pointless for a number of reasons, but most significant is why should any person wish to hamstring himself in one asset for 30 years?  People who get wedded to one belief system, whether it is equities, real estate, PMs or something else, miss opportunities.  As one who has been on this site since the start (and a retired former member of that scorned class of people in the fund management field---which this site's founder also once inhabited---albeit when we owned our losses), I have seen how opinion became so entrenched that people have had to resort to name calling and the same sort of bogus "logic" used by equity shills ("The price has fallen, but I'm still okay because I bought way below here.")  A sheeple is a sheeple, no matter its flock.

The fact is everyone tries to make money.  PM aficianados think PMs are always the answer.  Equity aficianados always choose equities.  Since March 2009 equity holders have been right.  Since 2011 PM holders have been wrong.  Dommsters have been wrong.  Whoops!  I mean early.  (Early is wrong.)  The ones who lost seem to be upset that others who tried to do the exact same thing as PM holders (preserve or grow wealth) have done it much better.  Rather than self assess, they project their failings on to others, and gather in groups of like minded souls so as to soothe the ego.  The nimble, and the unwedded, constantly reassess.

Here's a simple question back to you (and Hammer):  who is better off, the ones who sold heavily and took out maybe 2-3% of the bid side when he sold, or those who have held and hoped and watched the value of their PMs fall by anywhere from 33-60% since 2011?  If you are one of those who can say with a straight face "Nobody who really wanted to sell would sell like that", while you yourself held from $1925 Au and $48.50 Ag, then you are a rationalizing sheeple.

Here's another question:  whom do you think drove the price from ~$250 in 1999 to well above $1000 before retail got excited and joined in?  Why should you be surprised when some of those large holders close their trades?  Bonus question:  how is it that when Central Banks sell (Gordon Brown, the Swiss National Bank) gold is a buy, but when Central Banks buy (China, India) gold is a buy?

Mon, 11/11/2013 - 00:41 | 4142087 akak
akak's picture

Chindit, as soon as the topic of gold is ever breached here, you consistently strike me as a conventionalist, conformist, blinkered center-thinker who cannot or will not admit or acknowledge the fact that we are facing the gravest crisis in world financial and monetary history, that it is NOT "business as usual" any longer, and that it is possibly if not definitely prudent to take steps to safeguard one's wealth and savings today by means which may have been "radical" or unconventional (by Western standards, at least) in years or decades past.

You seem to believe that everyone here is or should be a short-term-obsessed, momo-chasing trader like you, but most are not, and more to the point, do not WANT to be, nor have the ability, knowledge or education to be.  To disparage them for "battening down the hatches" and holding precious metals in order to make their savings as secure as they know how --- the most prudent of steps to take in such circumstances, based on all of monetary history --- while the winds of the financial and monetary hurricane continue to strengthen is not only arrogant and condescending. but simply insulting and foolish.

Go ahead and pick up your nickels in front of the steamroller, if that is what makes you happy.  Most others here have more meaningful and satisfying goals in life than the never-ending, shallow and venal grasping for ever more lucre to feed an empty soul.

Mon, 11/11/2013 - 08:00 | 4141753 BigJim
BigJim's picture

dup

Sun, 11/10/2013 - 12:04 | 4140388 wisehiney
wisehiney's picture

Cool, more for me.

Sun, 11/10/2013 - 16:00 | 4140967 TORNasunder
TORNasunder's picture

What you also must consider in your time window is a few historic facts that have skewed the perceived value of gold.

1913 Creation of the Federal Reserve and FRNs
1933 US gold confiscation
1944 Bretton Woods (US$ becomes world reserve currency)
1971 Nixon terminates dollar convertibility to gold
1975 Petrodollar agreement

All of these leads us to today where it is the US$ that defines the value of commodities in the world markets. In particular the relationship of gold to the US$ is important because it defines what 1 US$ is worth. Therefore the less dollars it takes to buy 1oz of gold the more valuable each dollar is.

However, with the printing of more dollars what 'should' occur is that it takes more dollars to buy 1 oz of gold. Therefore in order to maintain the illusion of the dollar retaining its value the price of gold must be manipulated down. Which ironically has been happening since 1971, well you could argue since 1935.

Gold is a store of value and it's value or purchasing power, when not manipulated, has stayed relatively constant over millenniums. Currencies are created and fail, Gold is the constant.

Sun, 11/10/2013 - 17:11 | 4141090 Urban Redneck
Urban Redneck's picture

Gold's value is NOT constant, that's pure bullshit that it has stayed "relatively stable" over the milleniums. Sure, you can find countless convenient examples where between two points in time the price of a product (priced in gold) is the same, but that does not mean the purchasing power is actually or relatively constant. You are simply picking convenient examples (which are a minority) which support an support an argument, all while neglecting the majority.

I think most people would agree that that gold is under priced on a historical basis. However, despite it being under priced and implicitly having a lower purchasing power now than it should have- I have come across accounts of the Warunga silent gold-salt trade where gold traded at PARITY with salt. This is not a one day spike, this is a trade that occurred for CENTURIES in an area that was the largest gold producing region in the world at the time and that produced so much gold that years later when a King traveled to Mecca for the Hadj (1324), he single-handedly crashed the gold price 25% and the Cairo price depression (arbitrage opportunity) lasted ~5 years.

If gold's purchasing power was anywhere stable or constant, one ounce of gold would not purchase 4,128,000% more salt today* (or for the last CENTURY) than it did at points during the Malian Empire, all while gold's current purchasing power is depressed.

There is a world of difference between gold always having some purchasing power, and gold having a relatively constant purchasing power. The former is true, the latter is false. The only way one can argue "relative" constancy over millennia is in comparison to a currency (any currency, even a gold coin currency) since there isn't any currency that has lasted a thousand years.

* $2 for 4lbs of Mortons on Google (3.1 CENTS per oz)

Edit: yes that's an outlier example but even if you knock a few hundred thousand percent off, the larger truth holds between the largest global producers and largest global traders over a period significantly longer than an intra-day price swing.

Sun, 11/10/2013 - 20:46 | 4141619 TORNasunder
TORNasunder's picture

I'm not referring to prices staying stable over a period of time. I'm talking about the value of goods, relative to one another, that gold is valued against. Yes there will be deviations and exceptions. Yes prices will go up and down. It is the relative value. The relative wealth of say 10 1oz gold coins today, should be if gold were not suppressed, equal to what they could purchase in 1800.

I must disagree with your salt example as salt at the time period was arguably the most valuable commodity in the world. Obviously that is not the case today, however it is still extremely important to the functioning of our society.

Mon, 11/11/2013 - 11:01 | 4142572 Urban Redneck
Urban Redneck's picture

That "there will be deviations and exceptions" is an understatement. What separates gold from other investments is that has NO 1) depreciable life 2) shelf-life or 3) half-life. The same cannot be said for futures & options, debt, currencies, soft commodities, other hard commodities, or equities. (land is toss-up but once you put an improvement on it most certainly fails the litmus test also). BTW - if you review the equities that were traded in NY on Black Friday well over 90% of those companies are DEAD. However, if purchasing power of gold were constant than a graph of CPI-adjusted gold would be FLAT (except to the extent that CPI is manipulated or fails to reflect purchasing power). If you look at the 200 year chart, the aggravation and amplification of cycles caused the presence of the FED is obvious, but just as obvious is that a standard deviations of purchasing power are is about of 50% of the price (eyeballed), furthermore the recovery period for a ill-timed purchase can be measured in decades (or roughly a single 2.0-2.5 decade generation).

http://goldsilverworlds.com/wp-content/uploads/2012/07/cpi_inflation_adj...

Mon, 11/11/2013 - 00:57 | 4142113 chindit13
chindit13's picture

Good post, and a reminder that history did not begin in 1999.

Relationships and interrelationships change all the time.  The study of history lets us see these changes and marvel at what once was is no more.  There are no constants.  Needs and preferences, as well as fads, change.

My favorite current chart is plotting US Federal Debt levels vs the S&P and vs Au since 1980.  One can see why equity shills project that trend into an unending future.  Also interesting is the divergence between gold and debt since 2011, or even gold and central bank printing.  Many call that manipulation.  I think it is far more useful to try to determine the triggers that might change all of those trends:  debt, the S&P, and gold.

Sun, 11/10/2013 - 21:52 | 4141774 BigJim
BigJim's picture

 Nobody gets paid in 1913 dollars, and similarly nobody just sat with a stack of dollars since 1913.  Dollar holders, until recently, received interest on their holdings.  Even 1913 dollars threw off a return.

Really? What, they reproduce?

You're a disingenuous cunt, aren't you, Chindit? Up until 1933 (in the US, or 1971 internationally), dollars were gold. Yes, if you lent your gold/dollars to a bank (and faced the real possibility of losing them in a bankruptcy) you got interest. Otherwise... you got nada.

And if gold has lost 97% of its purchasing power, then the USD has lost even more, hasn't it, because back then it took only $20 to buy an ounce of gold... and now takes around $1300.

You really are a prize wanker.

Sun, 11/10/2013 - 23:07 | 4141934 akak
akak's picture

I have to say that I have lost a lot of the former respect I used to have for Chindit after having read several such dishonest and willfully misleading posts on gold like those above.  He seems to have an intense and kneejerk hatred and a deep-seated intellectual blind spot when it comes to the subject of gold.

Mon, 11/11/2013 - 01:13 | 4142125 chindit13
chindit13's picture

I prefer serial blasphemer to prize wanker.  Good luck with that closed mind of yours.  I'm sure it really makes your cash register ring.

Perhaps your dander got in the way of seeing that in no way do I champion the dollar, and that I described gold's value in terms of what it could be used to purchase, whether that purchase is labor or a basket of goods and services. You are stuck with one metric; I prefer judging all assets against each other so as to ascertain relative values.

If you are an average citizen of a developed nation, ask yourself how long it takes you to earn the equivalent of an ounce of gold.  Then try to imagine how long it would have taken you at other times in history.  Think of what you could get in exchange for one ounce of gold today.  Then imagine what you could exchange it for at other times in history.

Do you find that your labor has greater value today, in terms of gold?  Do you find that what you can exchange your gold for today gets you a lot less than at other historical moments?  Do you have another term for that, other than "relative loss of value"?

No, ignore reality.  Stick with name calling, but please note I prefer serial blasphemer. I'm not a Commonwealth citizen and I don't speak the King's English.

 

Mon, 11/11/2013 - 01:49 | 4142152 akak
akak's picture

 

If you are an average citizen of a developed nation, ask yourself how long it takes you to earn the equivalent of an ounce of gold.  Then try to imagine how long it would have taken you at other times in history.

As I pointed out earlier in another post, but which you refused to acknowledge:  In the latter part of the 19th century or the early 1900s, the average grunt laborer made approximately $1 per day, or $300 per year (remember, a six-day work week), which at the official gold price of $20.67/oz translated to around 14.5 ounces of gold per year.  Today, the average Wal-Mart employee or minimum wage worker makes around $20,000 per year, or at today's gold price around 15.3 ounces of gold.  I don't know about you, but those look pretty comparable to me.

Think of what you could get in exchange for one ounce of gold today.  Then imagine what you could exchange it for at other times in history.

We don't need to imagine it, those facts and comparisons are available for those willing to search for them, and they show that gold has roughly held its value, relative to many commodities, between the averages of the 19th century to today.  While there were of course periods of divergence, such as when gold as artificially priced (to the low side) at $35 per ounce prior to 1971, or in the 1990s and early 2000s, even a cursory comparison will show that in the long term (that which you will not recognize) gold has roughly held its value over the past two or three centuries, and that despite an industrial revolution and a quintupling of the world's population.

Do you find that what you can exchange your gold for today gets you a lot less than at other historical moments?

No, I do not, nor despite your many lies regarding gold and its historical context, do you.

Mon, 11/11/2013 - 07:56 | 4142284 BigJim
BigJim's picture

I don't know about you, Akak, but I wasn't around in 1869, or 1913 to decide where to park my excess capital. These two points in history are completely arbitrary and - it seems to me - chosen with deliberate disingenuousness by paperbugs like Chindit to make specious arguments. To make sense of where we are now we have to look at periods of history that seem to correspond with where we're at now. And the two that seem to 'rhyme' most are the great depression just before FDR came to power, and the London Gold Pool shenanigans in the sixties. ie, when the monetary system was being strained to breaking point and gold's value looked absurdly low. In both periods, people who held (or, in the case of 1933, managed to hold) onto gold, did very nicely once gold's value had been corrected by market forces finally overwhelming government suppression.

Chindit completely (deliberately, I'm sure) overlooks the risk paperbugs have with their counterparty-ridden investments. His gloating works very well in hindsight, after TPTB rescued him and his FIRE friends from the consequences of their risk-taking... what's he suggesting now, though? Sell Au and buy NASDAQ? No thanks. My (allocated) shiny is sitting in a vault in lien... I doubt very much any of his savings are as secure.

Mon, 11/11/2013 - 23:08 | 4144675 chindit13
chindit13's picture

You're such a delicate little flower, Big guy.  So is your new buddy akak, or so it seems, which is a little surprising.  I thought he had more substance.  In my post I note an historical fact, which actually should make rational gold fans happy (buying an asset near an all-time historical low value in terms of purchasing power), but instead all it elicits is bruised little egos because somebody suggested your god was less than omnipotent.  Frankly, it's a sorry ass bunch of clowns that have come to inhabit the comment pages here, turning debate into echo chamber, as unwilling to consider, or even allow, contrary opinion as an Imam in a Wahabi madrassah.  They have their gods, and absolutely cannot accept a dissonant note.  It's thahab hua akbar or it's fatwa. 

Again, and let me repeat this for the remedial class:  the research I did indicates gold is now at or near an all time historical low in terms of purchasing power and in terms of its value relative to labor.  What, you don't like buying cheap?  I appreciate that you're retail, but at least pretend.

Ironically, or perhaps the more correct term is hypocritically, the very same people who feel free and righteous criticizing everything done by the PTB, simply cannot accept an ounce of criticism---or even elucidation of the historical record---of anything they hold near and dear.  As the last two years of shrinkage have emasculated them, suddenly they have all become "long term holders", albeit ones who need to hear the congregation recite its prayers five times a week or more on Zerohedge.  Anyone who doesn't buy the dogma or take the sacrament is a heretic, who "is a lackey for authority", a "Quisling", "a Leo" (okay, akak, that one is a little funny) "has none of his savings secure", etc. 

Where the hell does that flow from the post I made about the relative value of gold over the last 150 years?  Is it that I haven't sipped from your same cup of Kool Aid and absorbed 100% of your groupthink?

Charles Mackay nailed it better than anyone.  You are caught up in the middle of the maddening crowd, yet fancy yourselves open minded free thinkers.  You're always a day late, scrambling to catch up or swept away in the maelstrom.  Because you do not question everything, because you try to prevent any questioning, you open yourselves up to becoming an anonymous victim.

All of this planning, stacking, prepping, etc., should have been started twenty years ago: set up your overseas corp, set up your foreign accounts, get your redoubt, stay flexible and anticipate the next favored asset class, accumulate as much wealth and protection as possible given the opportunities available at the time.  The signs were all there, even twenty years ago.  Now you are lost in the symptoms and cannot even see the real underlying cause.  A little open mindedness and a little study of history might have told you things you could have done along the way.  Of course, because you are a sheeple, who prefers the comfort of belonging to a group who thinks exactly as you do, you missed out.  You failed.  You have to scramble now, closer to the potential end, because you fritted away the previous decades when the writing was already on the wall. 

Now you get upset when you see others have done it better.  You salve your envy by imagining "they" will get theirs, ignoring the fact that "they" are not only way more prepared than you can imagine, but that they are inherently superior in a Darwinian sense and will come out on top no matter what comes next (I'm not referring to myself here; I'll let subsequent events be the judge).

Here's a hint:  there is a continuum, or spectrum of possibilities coming out of our current crisis.  At either end of that spectrum your precious shiny rocks are worth less or even worthless.  In the middle the graph is not symmetrical; there are points where it peaks.  If you find we're in the middle, you will have a very small window of opportunity to shift your asset allocation.  Assess and assign the probabilities, and position yourself accordingly.

Or just continue to shoot the messenger and chant your prayers among the congregational clowns.

Mon, 11/11/2013 - 23:26 | 4144699 akak
akak's picture

More bloviation and hot air saying precisely nothing.

Chindit, your lies and bullshit are no longer worthy of polite or considered response, as your mind is far more closed than those whom you arrogantly and mistakenly castigate here. 

Your repeated and pointed refusals (inability, actually) to address ANY of the counterarguments I made to your insulting and laughable gold-bashing theses, as well as your repeated, Nadleresque broadbrush personal attacks against gold owners and advocates, both speak volumes about your motives and your lack of intellectual and personal integrity.

I am done with you.

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