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Old 10-16-2010, 18:48   #81
Big Bird
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Quote:
Originally Posted by VBG23 View Post
How exactly do you reconcile those two statements? There is no correlation between inflation and gold, but gold is a good hedge against decline in the value of the dollar?

in·fla·tion
NOUN:

-The act of inflating or the state of being inflated.
-A persistent increase in the level of consumer prices or a persistent decline in the purchasing power of money, caused by an increase in available currency and credit beyond the proportion of available goods and services.



I actually agre 100% with you, but this statement seems contrary to your other arguments so I am a bit confused. A decline in the value of the dollar is a major cause of inflation. So either gold is a good hedge against inflation or it is not.
Inflation in economic terms deals with the supply of money and the increase in prices related to that money supply. (or not)

The value of the dollar relative to other currencies is a different matter. For example the Chinese maintain a weak Yuan exchange rate to support their economies reliance on exports. But the relationship in price of the Yuan to the dollar has little to do with inflation. Likewise, the value of the Euro relative to the dollar has dropped--again less to do with the money supply and more a reflection of relative economic strength...

If you look at it a different way, gold is a proxy currency that is perceived to be a better risk than the dollar right now. When the dollar sags on the international markets gold increases in price and vice versa. While monetary inflation can certainly affect the pricing of money on the international markets there are a ton of other economic factors that will influence the price movement of currencies relative to each other. And again, if you consider that the dollar has moved a great deal over the last 32 years relative to other currencies then the fact that gold didn't move when we had periods of high inflation during that same period should tell you that inflation doesn't move the relative value of the dollar to other currencies.
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Old 10-17-2010, 07:49   #82
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[QUOTE=ElPasoGlock;16152964] Silver has some uses but gold has very few. It is difficult and expensive to mine, process, and extracting the gold produces tons of toxic waste.



You can't eat gold or silver and if there was no more economy I certainly wouldn't accept it as payment. The new currency of a devastated economy will be ammunition, food, water, weapons, antibiotics, or barter skills like blacksmithing, dentistry, medicine, etc. QUOTE]

The first statement is why is does have perceived value.

In the second statement, untill 1964, it was the basis used to make all payments in the US! There are many businesses and people out there today that have a green American dollar price and another one for pre64 silver.

I do agree with what you said in the balance of the second statement.
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Old 10-17-2010, 13:57   #83
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I really must laugh when I read stories of people pouring tons of investment money into gold and silver, which by the way, are intrinsically worthless. Silver has some uses but gold has very few. It is difficult and expensive to mine, process, and extracting the gold produces tons of toxic waste.

It is artificial demand that makes the value, just like diamonds whose value is tightly controlled by one major cartel (Debeers).

You can't eat gold or silver and if there was no more economy I certainly wouldn't accept it as payment. The new currency of a devastated economy will be ammunition, food, water, weapons, antibiotics, or barter skills like blacksmithing, dentistry, medicine, etc.

You lawyers out there are screwed! So keep buying that precious metal and I'll keep buying some lead.
I will. Thanks!
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Old 10-17-2010, 17:15   #84
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Something I was thinking about today and I figured I'd ask...

Does inflation exist with PM's? That is...if a suit cost one ounce of gold in 1900...should it still cost an ounce of gold today? Or do things get more expensive even if using PM's?

Furthermore, on an international level. Would the same suit cost the same ounce world-wide or would a suit be less and more depending on the location for some reason?

Thanks!

-Emt1581

Anyone?

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Old 10-17-2010, 18:21   #85
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Anyone?

Thanks!

-Emt1581
I think that all products are adjusting their value every day. Like a cotton shirt that got better in quality and cheaper to purchase do to advances in technologies. Compared to gold over time it would have changed it's reletive value. I think that it's like that for just about everything. There are a lot of other things that would change a products relative value, such as when they have competition from from a newly developed product.

So IMHO PM's are what they are and like all products they will change in relative value when compared to anything else and that would mean inflation and deflation depending what you compare it to and at what time.
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Old 10-17-2010, 18:40   #86
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Anyone?

Thanks!

-Emt1581

In the early 1900's when gold was $20 a ounce that was about 1/2 weeks pay. Till a few years ago gold was $200 also 1/2 weeks pay. Today, at $1374 it is obviously way past that.
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Old 10-17-2010, 18:42   #87
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Originally Posted by ElPasoGlock View Post
I really must laugh when I read stories of people pouring tons of investment money into gold and silver, which by the way, are intrinsically worthless. Silver has some uses but gold has very few. It is difficult and expensive to mine, process, and extracting the gold produces tons of toxic waste.

It is artificial demand that makes the value, just like diamonds whose value is tightly controlled by one major cartel (Debeers).

You can't eat gold or silver and if there was no more economy I certainly wouldn't accept it as payment. The new currency of a devastated economy will be ammunition, food, water, weapons, antibiotics, or barter skills like blacksmithing, dentistry, medicine, etc.

You lawyers out there are screwed! So keep buying that precious metal and I'll keep buying some lead.
For TEOTWAWKI, maybe. But for transitory SHTF events, even if they cover a decade or two, if theres a recovery cycle where we come back online with a stable fiat currency to trade in again, pms will certainly be an excellent holding tank to later convert into working paper that people recognize and trade in. foolish to not have at least a small chunk for backup.
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Old 10-17-2010, 19:51   #88
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GOLD AND SILVER ARE WORTHLESS* AND YOU CAN'T EAT GOLD.






*this statement is true only if you ignore the last 5000 years. Gold and silver ARE money. The toilet paper we are forced to use currently for the exchange of goods and services is the invention of the demonic Federal Reserve.
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Old 10-17-2010, 19:54   #89
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GOLD AND SILVER ARE WORTHLESS* AND YOU CAN'T EAT GOLD.






*this statement is true only if you ignore the last 5000 years. Gold and silver ARE money. The toilet paper we are forced to use currently for the exchange of goods and services is the invention of the demonic Federal Reserve.
Actually I think Gold is edible.

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Old 10-17-2010, 20:57   #90
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Anyone?

Thanks!

-Emt1581
For informational purposes...

In 1873 when Sam Colt introcuded his Colt Peacemaker, you could buy one for 1 $20 Double Eagle (.9675 Troy Oz gold), today you can buy one for one $50 US Gold Eagle (one Troy Oz gold) and have a little change left over.

Just say'n....

Last edited by RKB2A; 10-17-2010 at 20:58.. Reason: Edit for spelling...
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Old 10-17-2010, 23:12   #91
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Quote:
Originally Posted by ElPasoGlock View Post

You can't eat gold or silver and if there was no more economy I certainly wouldn't accept it as payment. The new currency of a devastated economy will be ammunition, food, water, weapons, antibiotics, or barter skills like blacksmithing, dentistry, medicine, etc.

There will be folks that have over stocked with the purpose of starting a barter economy,if one has no need of manual skills offered how will the market work,PMs.Would I trade a gold coin for a loaf of bread,no I wouldn't,I'd be far more willing ta part with a silver dime.'08.
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Old 10-18-2010, 09:03   #92
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I think that all products are adjusting their value every day. Like a cotton shirt that got better in quality and cheaper to purchase do to advances in technologies. Compared to gold over time it would have changed it's reletive value. I think that it's like that for just about everything. There are a lot of other things that would change a products relative value, such as when they have competition from from a newly developed product.

So IMHO PM's are what they are and like all products they will change in relative value when compared to anything else and that would mean inflation and deflation depending what you compare it to and at what time.
I sort of see what you mean but at the same time it seems like some things cancel each other out...

Quality improves but it gets cheaper to produce...shouldn't the price go down?

New products are released but there's competition in the marketplace...again..shouldn't the price go down?

But overall, I can see a LOT of things that haven't changed (much) in the last 50 years and yet the prices aren't what they used to be exponentially speaking.

Thanks!

-Emt1581
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Old 10-18-2010, 09:06   #93
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In the early 1900's when gold was $20 a ounce that was about 1/2 weeks pay. Till a few years ago gold was $200 also 1/2 weeks pay. Today, at $1374 it is obviously way past that.
But there you are comparing something steady/constant (gold) to the USD. I mean I see what you're saying but I'm saying if you take the USD out of the equation and just return to PM's for currency.

It is interesting to think about though. There's a video on youtube where someone took the average weekly paycheck and showed how much silver you could have bought with it. Sometimes it was PILES of silver, right now, it's a few pieces. But still worth looking at!

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Old 10-18-2010, 09:10   #94
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Originally Posted by RKB2A View Post
For informational purposes...

In 1873 when Sam Colt introcuded his Colt Peacemaker, you could buy one for 1 $20 Double Eagle (.9675 Troy Oz gold), today you can buy one for one $50 US Gold Eagle (one Troy Oz gold) and have a little change left over.

Just say'n....
Now that is interesting...because you're using something with collectible value to it.

I wonder if this could be said....? In 1873 you could buy the best gun on the market for an ounce of Gold and today the same is true. I mean back in the day the peacemaker was pretty much the Glock/1911 of it's time...no? And today $1200 will buy you a VERY nice pistol.

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Old 10-18-2010, 09:13   #95
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There will be folks that have over stocked with the purpose of starting a barter economy,if one has no need of manual skills offered how will the market work,PMs.Would I trade a gold coin for a loaf of bread,no I wouldn't,I'd be far more willing ta part with a silver dime.'08.
Right, this is the concept I just accepted...that PM's are a univerally accepted storage of value/wealth.

The part I still don't accept is that there will be no gougers in life/death situations...regardless of there being a free market.

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Old 10-19-2010, 00:12   #96
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Right, this is the concept I just accepted...that PM's are a universally accepted storage of value/wealth.

The part I still don't accept is that there will be no gougers in life/death situations...regardless of there being a free market.

-Emt1581
Your missing the point,in a shtf "scenario" there is really no "free" market.There is a "barter" economy that is unknown.What is the base and what is the pillar.The barter economy can go 2 ways,either a FTF type or a "market" type,the "FTF" is neighbors trading,the "market" type is always at risk for a single entity ta control.'08.
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Old 10-19-2010, 06:17   #97
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Your missing the point,in a shtf "scenario" there is really no "free" market.There is a "barter" economy that is unknown.What is the base and what is the pillar.The barter economy can go 2 ways,either a FTF type or a "market" type,the "FTF" is neighbors trading,the "market" type is always at risk for a single entity ta control.'08.
FTF= Face To Face?

It sounds like my concerns are not unfounded because you said there is a chance it could happen...and sounds like a 50/50 chance at that. Either people will do good business or they won't, and going a step further, if they won't...who's going to stop them?

-Emt1581
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Old 10-19-2010, 06:29   #98
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Barter is always based on the needs of the parties. Let's say I'm a hungry old man with a stockpile of .22LR ammo. A young man with a rifle may be willing to trade me rabbits for ammo. How many rounds of ammo is a rabbit worth? Certainly more than one, since it takes one to shoot the rabbit. Two would allow the hunter to shoot one rabbit for me and one for his family, but wouldn't allow for misses or practice. We'll eventually agree on an exchange rate that works for both of us. If there is more than one hunter or more than one ammo trader in town we'll have to be competitive. Neither of us will have any real need for silver unless and until it becomes accepted as money in our local economy, as it probably will as time goes on.

(The moral of the story is no matter how much silver you have, always have a pile of ammo, too.)
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Old 10-19-2010, 06:43   #99
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Oh, and pertaining to market manipulation:

http://www.zerohedge.com/article/vis...-400-points-sp
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Old 10-19-2010, 06:57   #100
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Barter is always based on the needs of the parties. Let's say I'm a hungry old man with a stockpile of .22LR ammo. A young man with a rifle may be willing to trade me rabbits for ammo. How many rounds of ammo is a rabbit worth? Certainly more than one, since it takes one to shoot the rabbit. Two would allow the hunter to shoot one rabbit for me and one for his family, but wouldn't allow for misses or practice. We'll eventually agree on an exchange rate that works for both of us. If there is more than one hunter or more than one ammo trader in town we'll have to be competitive. Neither of us will have any real need for silver unless and until it becomes accepted as money in our local economy, as it probably will as time goes on.

(The moral of the story is no matter how much silver you have, always have a pile of ammo, too.)
Interesting comparison about the rabbit/ammo. But it sounded a little too easy going for my liking. What if a box or two is the going rate? What if you don't have that kid's caliber? I know everyone thinks that come TEOTWAWKI, everyone will have a .22lr gun...but what if they don't? They hunt everything with a .460S&W but will accept .45Colt and .454 Casull as well...

I just like playing devil's advocate and throwing wrenches in the works sometimes. But mainly because you specified .22lr. I'm not a believer in the idea that post SHTF, we'll be bartering with .22lr...even though I'm sitting on a mountain of it.

-Emt1581
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