Gold - Commodity or currency?

[new_trader]

I would have thought my prior post made clear my view on any/all of them. Great if you're doing a PhD on comparative economic theories, you could hang it out for months if not years, and even make a career of it and get invited onto CNBC etc. But none of it has any direct relevance to trading.

Not that this thread pretended to have any and that’s fair enough. Given the Ops question, it was never going to be cut & dried. But it is interesting to see how bods hypothesise their latest Wikipedia trawls into plausible economic theory. Shows you just how easy it is. Politics and Economics. The last of the great soft sciences still being taken seriously.

I guess you don't own any gold then. Good luck.

 

[TheBramble]

I guess you don't own any gold then. Good luck.

You're exhibiting the same behaviour with me that you have been with Martin.

Your responses are not exactly unrelated to the comment that you appear to respond to, but your reasoning is so fuzzy to non-existent and your conclusions so illogical and often at odds with whatever reasoning that you have managed to bring forth into the daylight to the extent that we end up wondering precisely what it was you thought you were responding to and if we’ve missed a post or two.

I know what it is. You’re an economist aren’t you?

My views on the validity of any economic theory do not preclude me from assessing the basis for considering accumulating that which others will also likely wish to accumulate thus exacerbating diminishing available supply and increasing demand. And divesting myself and even selling short that which is likely to be less attractive to others and of which they may also wish to divest themselves exacerbating increasing available supply and diminishing demand.

Gold may have and may continue to be something worth accumulating. But in relation to the OPs question, rather than a rambling and disjointed discourse which takes us nowhere in particular, perhaps a more utilitarian response would be: OK Brambs, given you thought/think Gold was/is a buy, do you want to own the physical commodity or do you want to have dibs, by way of futures, options and other related financial instruments, on an equivalent amount of the commodity?

My answer is that I can easily buy/sell my financial derivatives on the physical commodity as easily as using currency, but I would likely find it somewhat harder to trade my physical holdings of Gold in any similarly practicable and timely manner.

It’s a commodity.

 

[bonker]

It's turning into the mother of all bubbles... give it a reason and it'll pop like a hindenburg

 

[Martinghoul]

Is that your reasoning process? You want to pleey games? :cheesy:

Man eats to live since the beginning of time - does that mean we should stop eating now? (I don't understand relevance of slavery to gold or fiat currencies). I know it is confusing but I hope someone catches my drift...

Exchanging currencies is a form of barter too. Just more efficient than exchanging eggs and potatoes. How many currencies exist in the world today. Why not just have one to stop all this process of bartering currencies.


I'm afraid your logic is flawed. Need to consider gold and fiat currencies based on evidence, experience - input and output results etc etc.


I reckon man is smart enough and if required gold could easily be used to base national currencies -> perhaps eventually leading to a single gold currency.

The future is the yellow stuff.

No, my logic isn't flawed, yours is...

You have made a categorical statement regarding the viability of the gold standard going fwd. A counterexample (which I provided) is a valid argument against your statement. You cannot refute my counterexample with one of yours, as that's logically incorrect.

My point is simply this. While I fully acknowledge and agree with both you and new_trader that the "gold standard" has its advantages, I have suggested and explained in detail a particular flaw that makes it totally unsuitable for today's competitive global economy. Instead of addressing my point, you both keep going on about history etc.

So let me reiterate. For a single country to unilaterally adopt the gold standard and stick with it is equivalent to bringing a knife to a gunfight. And yes, I agree, a knife is a wonderful thing, it's sharp and you can do all sorts of useful things with it and it doesn't jam, etc. Moreover, everyone's been using knives for years and years and they've always worked great. However, the other guys got guns now. Do you seriously wanna go play with them armed with your little Leatherman?

 

[new_trader]

OK Brambs, given you thought/think Gold was/is a buy, do you want to own the physical commodity or do you want to have dibs, by way of futures, options and other related financial instruments, on an equivalent amount of the commodity?

Are you serious? I couldn’t care less what you think, never have and never will. But for some strange reason you think I do and that is why you keep following me wherever I post.

 

[Martinghoul]

Does anyone here think that the US founding fathers were naïve or clueless about “Modern Economics” (Whatever that is)?

http://www.kwaves.com/fiat.htm

The founding fathers were concerned about the unrestrained control of the money supply. One thing they all agreed upon was the limitation on the issuance of money. Thomas Jefferson warned of the damage that would be caused if the people assigned control of the money supply to the banking sector. Many of the founding fathers experienced the damage caused by fiat currency. Most of the revolutionary war was financed by worthless currency called "Continentals".

Nice impartial website you got there... Is that the same one that has all the "more informed" experts suggesting China is going to adopt the gold standard?

As to the Constitution, the point of the clause (as should be abundantly clear from the language) is not to prevent issuance of money. Its point is to deny that right to the individual States and make sure that the printing of money is solely the privilege of the Federal government (with the goal of creating the USA as a currency union, rather than a collection of independent states). In fact, wouldn't you agree that the fact there's nothing in the Constitution about a Federal gold standard speaks volumes? Especially given how supposedly "concerned" the founding fathers were about the loss of control over money supply. I'd guess that, having led a fledgling country through a war, they have experienced just how useful expansion of money supply can be when you got sh1t hitting the fan.

 

[new_trader]

Is that the same one that has all the "more informed" experts suggesting China is going to adopt the gold standard?

No.

 

[new_trader]

I have suggested and explained in detail a particular flaw that makes it totally unsuitable for today's competitive global economy. Instead of addressing my point, you both keep going on about history etc.

I think the flaw is your belief that currency debasement is a competitive advantage....and around in circles we go...

 

[Martinghoul]

I think the flaw is your belief that currency debasement is a competitive advantage....and around in circles we go...

This ain't a belief, mate... It's called empirical evidence. Look arnd you and you should be able to see what I mean.

 

[new_trader]

Nice impartial website you got there... Is that the same one that has all the "more informed" experts suggesting China is going to adopt the gold standard?

As to the Constitution, the point of the clause (as should be abundantly clear from the language) is not to prevent issuance of money. Its point is to deny that right to the individual States and make sure that the printing of money is solely the privilege of the Federal government (with the goal of creating the USA as a currency union, rather than a collection of independent states). In fact, wouldn't you agree that the fact there's nothing in the Constitution about a Federal gold standard speaks volumes? Especially given how supposedly "concerned" the founding fathers were about the loss of control over money supply. I'd guess that, having led a fledgling country through a war, they have experienced just how useful expansion of money supply can be when you got sh1t hitting the fan.

Coinage Act of 1792?

 

[TheBramble]

This ain't a belief, mate... It's called empirical evidence. Look arnd you and you should be able to see what I mean.

Martin, you're assuming young NT possesses a basic and prerequisite skill which while taken for granted among the thinking classes is in dire short supply generally.

 

[new_trader]

UNSUBSCRIBED

 

[Atilla]

Martin, you're assuming young NT possesses a basic and prerequisite skill which while taken for granted among the thinking classes is in dire short supply generally.

Taken for granted in the thinking classes - you kidding right... Class and thinking holding hands in the same sentence.


When the end of the dollar standard was suggested alongside the war in Iraq many laughed.

Now gold standard is being predicted and no doubt same self inflated bodies laugh out loud.


I do believe gold standard will be re-introduced. As the way we are going national debt and currencies becoming worthless is the only solution to the crises the thinking classes have on offer.

1. Managed / pegged exchange rates
2. Managed / free floating exhange rates
3. Another solution ???

Take your pick.

Very elaborate and enjoyable paragraphs with literally rich content but of little or no substance at all. Abusive self indulgence - I'd see a shrink if I were you...


I'm a simple man off the streets and finding great difficulty comprehending your write ups. I have to read it 2 or 3 times and I'm still none the wiser - What is wrong with me Bramble?

 

[TheBramble]

UNSUBSCRIBED

Does anyone else have a ball we can carry on the game with?

 

[TheBramble]

Very elaborate and enjoyable paragraphs with literally rich content but of little or no substance at all. Abusive self indulgence - I'd see a shrink if I were you...


I'm a simple man off the streets and finding great difficulty comprehending your write ups. I have to read it 2 or 3 times and I'm still none the wiser - What is wrong with me Bramble?

There’s nothing wrong with you.

Rich content – little or no substance. Abusive self indulgence.

Yes, that sounds about right.

 

[TheBramble]

How did NT manage to rep Atilla's post after he had dramtically "UNSUBSCRIBED"? LOL

 

[Atilla]

There’s nothing wrong with you.

Rich content – little or no substance. Abusive self indulgence.

Yes, that sounds about right.

I always like your posts Bramble... That's why I try and understand them by reading them over and over again. I do like puzzles... I say that sincerely and I am very glad you are back.

You are also right in this case - as I have had a health check and I got a good slap on the back.

 

[Atilla]

How did NT manage to rep Atilla's post after he had dramtically "UNSUBSCRIBED"? LOL

He is my twin and we are telepathic...

Also - that little man next to his text says he was thinking about it...

Come on Bramble keep up...

 

[TheBramble]

He is my twin and we are telepathic...

Must be pretty lonely out there.

 

[Atilla]

Must be pretty lonely out there.

Nope not at all.

We've got people like you and Martin to keep us entertained...

He called me names though I'm not talking to him. He called me silly. :-0