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JS
04-07-2006, 11:19 PM
I found this on a web site. What do you all think is it a pump and dump for gold&silver markets? Or is it another crazy person's ravings?





Hello Truth and Freedom Seekers!


This is NOT a Drill! Read and Heed this Notice! Get your assets liquid and move currency and electronic balances to Substance! Ride the metals up instead of watching your USD currency values crash and burn! SILVER!!! and GOLD!!!

Read Below! Share this info IMMEDIATELY!


PRK
###############################



TWO TRILLION $ USD

FEDERAL RESERVE ORDERS TWO TRILLION DOLLARS TO BE PRINTED AND PUT INTO CIRCULATION!



SOURCES WITHIN THE UNITED STATES TREASURY ARE FLABBERGASTED!

INFO CORROBORATED BY THREE SEPARATE U.S. TREASURY SOURCES

Six months ago, the Federal Reserve quietly announced that as of March 20, 2006, they would no longer publish "M3" Data. The "M3" was the amount of cash the government printed to put into circulation, propping-up the U.S. economy.

As of eight days ago, M3 data is no longer being reported, so there is no way for the public, investors or bond holders to know how much currency exists - and no way to gauge how much a "dollar" is truly worth.

Three separate sources in the U.S. Treasury have stated this week, the federal reserve ordered TWO TRILLION dollars to be printed! The U.S. Treasury is allegedly running printing presses 24/7 to accommodate that order. Treasury employees were specifically ORDERED not to talk about this to anyone because it could cause economic collapse.

Even worse, Monitors indicate that the whole Immigration Amnesty Debate (especially the well-funded well-attended protests) was deliberately scheduled to take place now, to divert attention from this massive
printing/devaluation of the U.S. Dollar. The feds allegedly figured that by the time anyone found out, they could smooth things over. They figured wrong. Surprise, boys, you've been exposed!

Watch for Gold and silver to skyrocket in price within days as the world wises up and begins dumping the U.S. Dollar.

UPDATE: As of 9:05 AM this morning 6 Apr. 06, Silver is at a ten year high and Gold is within a few dollars of a 25year high. The U.S. Dollar is falling against all major world currencies. . More details as they
become available.

Mcgyver
04-07-2006, 11:57 PM
sounds like a complete crock, just some good old fashioned fear mongering. (hey anything can happen, but this guy knows not of what he speaks). increasing the money supply has nothing to do with either printing money or "propping up" the economy, besides M3 has nothing to do with printed cash. M3 is M1 + M2 + some less liquid stuff - its the total money available (money NOT cash) in the country, nothing to do with printed cash. while many are bearish on the US$ its nothing to do with this turkey's reasons - the fed increases or decrease the money supply by buying/selling bonds. this guy must have been fired from his job of writing emails on behalf of some disposed Nigerian dictator :D

mochinist
04-07-2006, 11:58 PM
How bout a link

J Tiers
04-08-2006, 12:15 AM
When investigated, most of those are discovered to be put out by folks who sell the stuff recommended, or "how-to" books about getting rich with the stuff recommended.

Now, "helicopter Ben" DOES favor running the presses overtime....

And, international trade probably WILL soon be conducted exclusively in Euros and possibly someday in Yuan.


But that is another matter.

Rustybolt
04-08-2006, 12:34 AM
I've been hearing stuff like this off and on for the last 30 years.Go ahead and buy. but if you want to invest in something solid, buy real estate.

railfancwb
04-08-2006, 08:33 AM
In the United States, most money is electronic rather than paper currency. Overseas, I suspect the US Treasury is competing with other governments as to who can do the better job printing United States Currency. Who other than governments could counterfeit well enough to cause the increasingly frequent redesigns of US currency? Charles

TECHSHOP
04-08-2006, 09:08 AM
The thing to watch will be the Euro. A shift to international trade in Euros will definately hurt the USD value. In that import stuff (oil) will cost more and the USD will be worth less, a two for one bad situation for US. How soon and how fast this will happen is just a quess. But the possibility can not be totally dismissed. As for gold being the "safe and sure" hedge, believe whatever you want, I have never been very good at predicting the future.

Evan
04-08-2006, 10:46 AM
Gold is a terrible investment vehicle. I won't touch it. The intrinsic value of gold as an industrial commodity is far below the market price. The market price is determined not by supply and demand as with other commodities but by highly irrational speculation as to what other highly irrational speculators might pay for it. The actual gold is rarely ever traded except as an industrial metal. All that is traded is promises to deliver which are commonly not exercised. The market value of gold is not related in any way to the quantity of gold existing, produced or consumed.

Printing of money is/was a way for government to make money, literally. It's called seigniorage. It costs the US government a few cents to print a one dollar bill and the same to make a 100 dollar bill yet they sell it in the market at face value. This is a huge and irresistable source of income for governments, especially when they have huge and intractable deficits.

As for the US currency itself, the US government has largely lost control of it. The majority of US currency trades outside of the US and is not susceptible to being removed from circulation by US banks and returned to the government. As of 1998 the estimate by the government is that about 3/4 of $100 bills circulate outside of the USA (Note below) This poses a huge problem for the US central bank as it means they have only the proportion that does circulate in the US left to exercise monetary policy on. The market for US currency outside of the US is determined by those who trade it, not the US government. This is especially problematic since this value is highly susceptible to factors unrelated to economics but instead perception of value.

This perception is strongly influenced by US foreign policy. When US foreign policy is percieved in a negative way outside of the US the trading value of the US currency drops. Us foreign policy and the external value of the US dollar are now tightly coupled and cannot be decoupled. When the US government ignores this reality it does so at extreme risk to the economy, which is the case today.





Within that framework, our currency usage overseas has grown dramatically. Over the past ten years, demand has grown at about 5 percent a year for $100 bills. To the extent that now about 75 percent of our $100 bills, we believe are held overseas and, as Mr. Allison said, about two-thirds of our overall currency are held overseas.



http://commdocs.house.gov/committees/bank/hba51647.000/hba51647_0.HTM

Mcgyver
04-08-2006, 12:03 PM
regarding money supply, I don't think that's true, seigniorage is antiquated and is not part of the US's money supply formula. Monetary supply in the US comes from the Fed buying government bonds, this creates a fed deposit in a bank, considered cash to their reserve requirements, the money multiplier then as for every, say $.05 in fed deposits, a bank can loan out $1.00. the fed (central bank) buying bonds is the modern equivalent of "printing money"

Rustybolt
04-08-2006, 12:17 PM
the price of EVEYTHING is determined by supply and demand. It's just that some S/D isn't rational. Otherwise futures trading would be a sure thing.

Evan
04-08-2006, 02:20 PM
he price of EVEYTHING is determined by supply and demand.

Gold is an exception. Gold is rarely actually traded. Only pieces of paper that represent a promise to supply gold is the usual form of trading. Excepting the investors that actually hold the metal the only people that take delivery are those who actually have a use for the metal. This is far, far smaller than the supply which is why there are large reserves of gold around the world. The major exception to this is jewelery which accounts for the largest amount of gold used each year. However, this does not result in a reduction of supply as jewelery is also one of the largest sources of gold each year.

Since most of the gold ever mined still exists above ground in some recoverable form and much of it can be recovered very easily there is never a shortage of gold. Gold is not subject to supply and demand market economics in the usual way that other commodities are.

madman
04-08-2006, 07:59 PM
Money hm it does burns doesnt it. Also if you have money now buy guns and ammo just to be paranoid. Perhaps a few 300 gallon tanks of fuel also and some big dogs. How about a fence around youe shack. I honestly feel people worry too much and should perhaps stick to machining trivia and interesting anecdotes of the home shop type. This is a machinist board if nearly everyone with a computer and way too much time on there hands seem to have, Lets get machining stuff happening and less other useless stuff. Thanx

Dawai
04-08-2006, 11:51 PM
In a speech Adolph Hitler said: Do you want to buy cannons or bread? WITH GUNS, you can take food and bread, you can take land, you can take prosperity..

And the german public responded: GUNS GUNS GUNS..

Personally, I am currently so busy I hardly have time to eat and shower. I like it that way.
I did buy a new gun thou, a hideaway I can keep close for snakes, and vermin.

Gee, I can still vote and buy weapons. HURRAH for the American way..

Leigh
04-09-2006, 12:13 AM
Gold is an exception.

No, Evan... Gold is not an exception.

The irrational demand for gold on the part of speculators and erstwhile investors is what drives the price up. The reasons are irrelevant. What is relevant is the fact that the demand does exist.

speedy
04-09-2006, 12:56 AM
No, Evan... Gold is not an exception.
The irrational demand for gold on the part of speculators and erstwhile investors is what drives the price up. The reasons are irrelevant. What is relevant is the fact that the demand does exist.

I have heard that there is money to be made from personalised number plates? .......Due to an irrational demand?
Should I invest in this market?
Or should I just signwrite some name/number/remark on the rear of my vehicle and spend my $500 elsewhere??:D :D

Ken

gmatov
04-09-2006, 01:44 AM
Once upon a time, the Federal Government was only allowed to print dollars to the equivalent amount of gold they had in Fort Knox, and any other repositories of the Federal Government.

ie, one ounce of gold, 35 dollar bills.

That no longer applies. And to say the fed buys Treasury bonds to reduce the money supply, how does that work? I have 1,000 dollar bills in my matress, how does the Fed buying treasuries reduce my buying power? I have the dollars. I can spend the dollars. I may have to pay more to borrow dollars, but I am speaking of dollar bills that are out there, now. You cannot control that.

To print 2 trillion more of them, and put them in circulation would dilute the dollar just as surely as the counterfiet dollars that the Secret Service was originally set up to counter. The SS was just that, an anti counterfiet organization till about 1920, nothing to do with protecting the Pres and other Muckety-mucks.

Whatever else you want to say about the USD, it sucks, it is so low on the totem pole that everything costs more here, than it costs most anywhere else. I think that is the reason that oil has gotten so high in the US over the Bush admin's tenure. Put 50 bucks in my car this afternoon. Most likely would buy 20 to 30 bucks of anything outside the US with the same money.

Not to be political, but, man, there are a LOT of pipple who want the Repugnicans to keep control of all the branches of government. Kind of countrywide suicide. But, hey, your vote, do what you wish.

Here's another question. Once upon a time, if you made a counterfiet dollar, there was an extra dollar out there, no gold to back it up. Debased the currency. NOW, there is no such thing.

Print a million new dollar bills, buy stuff, the GDP has gone up by a million bucks, all good as far as the Government is concerned. Vote for me, next time, I raised the GDP. Dollar ain't worth a damn, but, boy, we're spending a lot of them.

I'd be happier to know what the others, English, Canadian, Australians, Germans, are paying per gallon of gas. If their's is the same as last year, and ours has doubled, then it is either the Bush admin, all oilmen, or the dollar. If the dollar sucks, and oil is priced in dollars, then the other countries with currency that has doubled in value against the dollar, it is the same for them, we are the only ones who suffer.

BUT, the oilmen make a lotta bucks, and I would bet very little of those bucks are planted in US banks or bonds.

Ah, well, it seems like you should be investing over there rather than over here..

Cheers,

George

tattoomike68
04-09-2006, 02:03 AM
Once upon a time, the Federal Government was only allowed to print dollars to the equivalent amount of gold they had in Fort Knox, and any other repositories of the Federal Government.

ie, one ounce of gold, 35 dollar bills.

That no longer applies. And to say the fed buys Treasury bonds to reduce the money supply, how does that work? I have 1,000 dollar bills in my matress, how does the Fed buying treasuries reduce my buying power? I have the dollars. I can spend the dollars. I may have to pay more to borrow dollars, but I am speaking of dollar bills that are out there, now. You cannot control that.

To print 2 trillion more of them, and put them in circulation would dilute the dollar just as surely as the counterfiet dollars that the Secret Service was originally set up to counter. The SS was just that, an anti counterfiet organization till about 1920, nothing to do with protecting the Pres and other Muckety-mucks.

Whatever else you want to say about the USD, it sucks, it is so low on the totem pole that everything costs more here, than it costs most anywhere else. I think that is the reason that oil has gotten so high in the US over the Bush admin's tenure. Put 50 bucks in my car this afternoon. Most likely would buy 20 to 30 bucks of anything outside the US with the same money.

Not to be political, but, man, there are a LOT of pipple who want the Repugnicans to keep control of all the branches of government. Kind of countrywide suicide. But, hey, your vote, do what you wish.

Here's another question. Once upon a time, if you made a counterfiet dollar, there was an extra dollar out there, no gold to back it up. Debased the currency. NOW, there is no such thing.

Print a million new dollar bills, buy stuff, the GDP has gone up by a million bucks, all good as far as the Government is concerned. Vote for me, next time, I raised the GDP. Dollar ain't worth a damn, but, boy, we're spending a lot of them.

I'd be happier to know what the others, English, Canadian, Australians, Germans, are paying per gallon of gas. If their's is the same as last year, and ours has doubled, then it is either the Bush admin, all oilmen, or the dollar. If the dollar sucks, and oil is priced in dollars, then the other countries with currency that has doubled in value against the dollar, it is the same for them, we are the only ones who suffer.

BUT, the oilmen make a lotta bucks, and I would bet very little of those bucks are planted in US banks or bonds.

Ah, well, it seems like you should be investing over there rather than over here..

Cheers,

George



the alien mother ship is coming for you.:rolleyes:
better take the tinfoil hat off for a moment so they can lock into the kumbaya-waves and home in.:rolleyes:

what are you brits and Europeans paying for gas?

speedy
04-09-2006, 02:40 AM
what are you brits and Europeans paying for gas?

Kiwis paying NZ$ 1.60/litre; it was something like NZ$0.80 two years ago. The oil companies lift and drop the price at a whim, it seems whatever they can screw out of the market.
I think that our dollar(peso?) is tied to the steenking yankee dollar.
We sold out our sovereignty in the 80`s when Douglas and his fat mate "rebuilt" our economy.

Evan
04-09-2006, 02:52 AM
No, Evan... Gold is not an exception.

The irrational demand for gold on the part of speculators and erstwhile investors is what drives the price up. The reasons are irrelevant. What is relevant is the fact that the demand does exist.

The demand for gold is far below the supply. The speculators don't want the gold at all, they want the profit of trading bits of paper that mention gold. The overwhelming majority of the gold never actually moves from the vaults that it sits in until a jeweler or electronics company buys it. It's all smoke and mirrors and the amount of gold that really is traded is tiny compared to the amount of "gold" that is bought and sold on paper. There are exceptions such as "bar hoarders" but if you really want to take delivery of any appreciable amount of physical gold you have to buy it on the London or Zurich OTC gold exchange and then the minimum buy is around 2/3 million dollars. The market for collectible and hard gold coins is small compared to the speculative market which never actually takes delivery.

Physical gold isn't traded on the regular exchanges and doesn't follow the same rules as buying futures, gold backed securities or mutual funds. Deals are made on a private basis between buyer and seller with no middleman or bid/ask system.

The area where I live is right in the middle of the where the great gold rush of 1858 happened. At one time the town of Barkerville, an hour and a half north of here, was the largest in North America west of the Mississippi and north of San Francisco. There is still a lot of gold in the hills around here and gold mining is still a very active business as well as a popular hobby. I have been tempted to do it myself but the only way to get a claim is to buy one. Every square inch of the country around here has been staked and over staked many times.

Peter N
04-09-2006, 03:33 AM
what are you brits and Europeans paying for gas?

I run diesel in my Land Rover. The price is around £0.93/litre, which works out to $7.47 for a UK gallon, or $6.23 per US gallon.
The worst part is that at least 80% if that price is tax here in the UK.

Peter

tattoomike68
04-09-2006, 03:50 AM
From the sounds of it americans should not whine about the price of fuel. I pay $2.50 a gallon.

speedy
04-09-2006, 04:00 AM
From the sounds of it americans should not whine about the price of fuel. I pay $2.50 a gallon.

When compared to others they shouldn`t, but I bet they will;)
ken

SJorgensen
04-09-2006, 05:02 AM
What surprises me is that no one has debunked this. I've looked, and I can't yet debunk this. Nothing can surprise me now. That my country would torture prisoners, spy on innocent Americans, spend more money than any government ever. The deficit is SO LARGE that only devaluing the dollar could make it possible to pay it down. I only heard a few moments of the new Treasury Secretary and I recall his warnings of an inflationary period, which of course they can directly cause by printing money. I haven't yet found that March 23, 2006 announcement of the cessation of publication of M3 data from the treasury on the level of currency printing. This would be an extremely bad sign. Hang on to your asses boys (or should I say assets?)

Bush's new Federal Reserve Chairman Ben S. Bernanke may be as effective in managing our economy as his man Michael Brown was in managing FEMA.

Locally I see a lot of activity in commercial rental property. Perhaps there is a trend into tangible assets and away from the stock markets, and away especially from currency assets.

Isn't Bush great!? He even authorised revealing the identity of a secret CIA agent for his own political revenge (Scooter Libby 4/6/06 testimony.) What a guy. If you take the word of his own father, any man that would do THAT is a traitor to the Nation.

It is nice to own tools. Man's most secure assets are well oiled tools. Including the guns required to keep them.

JCHannum
04-09-2006, 09:51 AM
Tinfoil hats, Bush bashing, gas, gold and guns aside, the article in question leaves out one important fact.

The Treasury is indeed printing enormous volumes of dollars, but it is also removing enormous volumes of dollars from circulation because of damaged bills and to replace the old style bills with the new. Until the difference between these two amounts is known, the article is meaningless.

Evan
04-09-2006, 10:40 AM
The Treasury is indeed printing enormous volumes of dollars, but it is also removing enormous volumes of dollars from circulation because of damaged bills and to replace the old style bills with the new. Until the difference between these two amounts is known, the article is meaningless.


Correct. However, as I pointed out the majority of US currency circulates outside of the US and is not susceptible to removal from circulation. That is the main problem and is why the US has effectively lost control of monetary policy. If 2/3 of your currency is leaving the country and not circulating in the country then monetary policy based on what you think the money supply is is worthless. This is one of the main reasons that the US no longer issues any denominations higher than $100.

Rustybolt
04-09-2006, 11:13 AM
"Deals are made on a private basis between buyer and seller with no middleman or bid/ask system."

This is, in a nutshell, a market. it represents both sides of the supply / demand equation. A buyer and a seller.It is how economics is supposed to work, does work. Theese people are setting the price of gold to their own satisfaction.

In 1898 the price of the daily newspaper in Chicago was 3 cents. That same paper one month later , but in Dawson Creek Yukon Territories, sold for $1.00 a sheet. Was the month old paper more valuable ,or was the gold worth less? There was an abundance of gold to the point where its value was meaningless.There was however a shortage of reading material.


The price of gold today is not a reflection on the rarity of gold, but on the worth of the currency used to purchase it.


I think a better example may be diamonds. They are still subject to the supply demand equation, but for years DeBeers has tried to monpolize the diamond trade by controlling supply. Controlling supply has become much more difficult since more and more producers of quality diamonds(Canada, Australia) are dealing directly with diamond buyers. In the end the marketplace will always determine the price of anyhing.

Economics,markets, are only peripherally about money.What they are about is how people interact. Economics. The only hard social science.LOL

TECHSHOP
04-09-2006, 03:28 PM
I still think there is plenty of room for concern. As with many things, the stage was set by the politicals of the past, usually the "damage" or "benefit" don't show up until they are gone from office.

Most of the Middle East oil goes to the European market, if Iran should "push" behind closed doors with its "like" minded neighbors to trade their oil in Euros, and then do so. The the "system" will "breakdown" from the USA point of view.

It is had to directly compare the "prices" of things across international borders, because the different taxes and tarrifs added on vary greatly from nation to nation.

I think Evan's observations are unfortunately true, that is the USA has "promised" more to the "world" than our economy will be able to "produce". This is compounded by the "bulge in the snake" of our populations age. Whatever the political winds of the next few years, the sailing is going to be rough.

Mcgyver
04-09-2006, 06:11 PM
JC, not necessarily, they can print cash in exchange for deposit receipts, no new money supply is added and no old bills are destroyed, cash replaces a note - ie if the fed tears up a note for $1m and gives a bank $1m cash, there is no net addition the money supply. other than coins where cash is added to the money supply via its physical creation, money as added to supply via the Fed buying government bonds and the ensuing multiplier effect NOT by printing cash.

in other words, the answer to you question is the difference between the two amounts, at least in countries like the US with a central bank, is nil

JCHannum
04-09-2006, 06:36 PM
I am merely pointing out that there is a lot more involved to the printing of money than is indicated in the initial post. Spence stated no one offered to debunk it. It does not need debunking, as it is a typical example of twisting a half truth to your own benefit.

Rustybolt
04-09-2006, 07:17 PM
The debt in relatioship to gnp is less than what it was during the Carter administration.

Evan
04-10-2006, 12:14 AM
This is, in a nutshell, a market. it represents both sides of the supply / demand equation. A buyer and a seller.It is how economics is supposed to work, does work. Theese people are setting the price of gold to their own satisfaction.


What it is not is an open market, specifically, an auction. That is how the rest of the commodity markets work. The only auction held for gold is by the four main banks that control the gold price, Bank of Nova Scotia, Deutche Bank, HSBC and a French bank. They auction twice a day to the dealers who make the deals with the sellers and buyers. This is what sets the price each day, not the deals made by the actual buyers and sellers. Those deals are confidential. Since the dealers take ownership (but never possesion) of the gold they are not brokers.

The actual market does not set the price, the banks and dealers do. The physical gold stays in a vault and never moves. If you were to take delivery of that gold you immediately incur a large loss as the gold must be re-refined and certified as to purity to re-enter that system. That is why the only people that take delivery are those that intend to make something out of the gold, mainly jewelery. Jewelery is of course a terrible way to invest in gold, as are coins.

gmatov
04-10-2006, 12:33 AM
Trading gold is just a movement of paper?

Well, yeah, you do not actually buy a 1000 or 10,000 ounces of gold. Else, when your contract came due, and you had the cash in your account to cover, they would dump the gold on your lawn.

Same with pork bellies. You control your contract of them, you don't wake up to see 16,000 pounds dumped on your lawn.

Same with gasoline, you trade futures, hope for the price to go up, or if you're a bear, to go down. You make money, hopefully, whichever way you "bet", if it goes your way.

Nothing in the market is an actual buy of anything. It is CONTROL of a quantity of that material. It is MINE, till my option expires. If nobody wants it, at my price, my option expires, worthless.

Very few people buy copper or platinum or anything else. If they do, it is because they need it. BUT, the options exchanges are there to try to make bucks off the stuff.

Hell, do you think it is the shortage of gasoline that has it up to 2.70 a gallon? Hell, no. It is speculators driving up crude, manipulators, ie..

Gotta rewrap my aluminum foil cap, they really ARE out to get us. You seem to think nobody, at least not a real Murrican, would do anything like that. Don't EVER trust a Murrican where money is concerned. You are TOAST.

Cheers,

George

gmatov
04-10-2006, 12:47 AM
And? When the prior admin left office, the national debt was being paid down.

The present admin has done as all the previous Repugnican admins have done, borrow and spend, and decry the Dems as tax and spend.

I would prefer that we tax and spend. You can militate against a tax, you have more trouble doing so against a borrow policy, raise the debt ceiling to 9 trillion bucks.

It took 12 years of Reagan-BushI to get to 7 trillion bucks, 8 years of Clinton to pare it back, balance the budget, less than a year of BushII to jack it back up.

ANd, you pays the difference.

Ah, well,

Cheers,

George

Evan
04-10-2006, 12:57 AM
Same with pork bellies. You control your contract of them, you don't wake up to see 16,000 pounds dumped on your lawn.


Not the same. Those pork bellies will be delivered somewhere, always, and soon. Same with gasoline. Also, there isn't always enough to satisfy actual demand.

Gold isn't sold on delivery contracts like other commodities except for the gold that will be used to make something. Other commodities are sold on delivery contracts. The expectation when buying and selling gold is that no delivery will take place. It just sits there. Saying it is a supply and demand market is inappropriate to say the least. The "supply" never falls, only grows, and always exceeds actual demand by a great deal.

Mad Scientist
04-10-2006, 01:48 AM
If I am not mistaken I believe that since we when off the gold standard as a backing for our currency it is now illegal for us peons to own gold. Yes you can have jewelry and coins and “even” a piece of paper that says you own gold, but having a gold brick sitting fireplace mantle is a no no.

The advantage of not having our money backed by gold is that it is easier for the government to manipulate its actual purchasing power. For example I can barrow a dollar from you today and then pay you back a few years from now with a dollar that might only be able to buy half of what it could today. But on paper ever thing balances out. Gee isn’t economics fun? I think I will go hid under the lathe.


[Under Republicans, man exploits man, under Democrats it is just the opposite.]

Rustybolt
04-10-2006, 10:28 AM
If there are no buyers and sellers there is no market. Markets are all about supplly and demand.

Just because your futures didn't sell at the assumed future price does not mean they're "worthless" . It simply means the market(buyers and sellers-supply/demand )are looking for a new level. There may be too little demand or too much supply, or vice versa. But the fact they are traded at all means there is a market.


A good example of how markets work is an absolute auction.No resderves, no commission.

JCHannum
04-10-2006, 11:45 AM
The restrictions on private ownership of gold were lifted in most countries in the early 70's.

Bullion and bullion coins can be purchased and owned directly by any individual. Bullion gold is marked and certified as to content and fineness, and can be bought and sold by weight.

Gold can provide a hedge against inflation, and as such can have a part in a person's portfolio.

Evan
04-10-2006, 12:29 PM
If there are no buyers and sellers there is no market. Markets are all about supplly and demand.

What makes gold different is that it isn't primarily a commodity. It doesn't get used up or disposed, eaten or burnt or thrown in the landfill, for the most part. Gold is a form of hard currency and the trade in gold is a trade in money which is almost never converted into tangible portable assets. As I said before, removing a 400 oz bar from the gold "trading" system ensures a loss on the trade as it reduces the effective value a lot. The cost of returning that gold to the trading system is high.

Unless you have millions of dollars to invest gold is a poor investment because of the associated costs of physical gold ownership. The other options are to invest in gold in an indirect manner such as mutual funds or mining stock etc. That is a pure crap shoot as the price of gold isn't driven by market realities or shortages/surpluses since that doesn't happen.

If you want to buy physical gold you will never be told "sorry, we're all out today, come back next week". Gold is never in short supply.

I manage my own portfolio and gold isn't in it. Sure, I could have made money on it lately but it isn't in the least predictable based on market realities. That's why I stay away from it. Gold is the classic example of a market where the price is set by the gnomes somewhere and not by the market itself. The gold market still operates in the same way it did 150 years ago when a few powerful special interests ran things. They still do.

Rustybolt
04-10-2006, 01:29 PM
Gold IS a commodity. It is bought and sold everyday.You're implying that there is a finite suppy of gold.That isn't be the case, because noone knows how much gold is in the ground. Gold is mined and produced every day.The supply most definately fluctuates as well as the demand.Even if you remove 400oz from circulation thereby driving the price of the rest up, at some point the price gets to the point where it becomes worthwhile to explore areas where gold production might have been marginal.
That gold has a historical emotional value only goes to keep the price high.The world political situation, government policies,El Nino,Y2K. All have an effect on the price of gold. They also have an effect on the price of corn and orange juice.The same might be said for land, or old master paintings.But " the value of a thing is what that thing will bring." Right now the value of an once of gold is around $592.00. It may go up. It may also go down.It all depends on what people do. Not what gold does.
As long as someone has something that someone else wants and they're willing to trade for it,there are markets. I don't care what that something is.

Evan
04-10-2006, 02:03 PM
Gold IS a commodity. It is bought and sold everyday.You're implying that there is a finite suppy of gold.

Taking the view that gold is a commodity will get you in trouble if you invest in it. A lot of people make the same mistake. Instead of trying to explain here I refer you to an article on this.




Gold, a commodity?

...
Gold, a commodity?
Most analysts today view gold as a commodity. As such, they try to make sense of the gold price the way one would approach, say copper, or nickel, by looking at changes in the physical supply and demand for the metal. This failed during the 90s, when analysts called for a higher gold price, and the gold price declined. Then, since the turn of the century, they have been calling for lower gold prices, yet the price of gold is rising.
...

So if the assumption that gold can be analyzed as a commodity is correct, there should be a correlation between net investment demand and the gold price. Does net investment demand have any effect on the gold price? Could the decline in the gold price between 1990 and 2000 have been a result of a decline in net investment demand?

...

It’s obvious (Figure 2) that there is absolutely no correlation between net investment demand and the gold price. It is also quite obvious that the increase in the gold price preceded the upturn in net investment demand by several years. Net investment demand is therefore not a good leading indicator for the gold price. If anything, it’s a reaction to the gold price.


see the rest at:

http://www.kitco.com/weekly/paulvaneeden/nov212003.html

Rustybolt
04-10-2006, 03:03 PM
I don't know what he means by "net investment demand" .He only peripherally mentions industrial demand.It is the market demand as a whole that we're interested in. I think if you place his gold spike graph in comparison tothe dollars devaluation you'll see a correlation. As the dollar dips the price of gold rises. It is still subject to market forces.It is still in demand industrially.If the price were to fall below,say $250.00 would he still claim that gold isn't a commodity? While he claims we'll see $1000.00 gold in the near future.It is just as good a chance we won't.
And I agree with you on this; A good mutual fund portfolio and some machine tools are a better investment.

uute
04-11-2006, 04:25 AM
Mad Scientist:

I think you got that one backwards. When we were on the gold standard, the Gov. set the price here at $35 an ounce (market price when we went on way back, i think) and never changed it. They had to make it illeagl to own much gold, because it traded at higher market price aoutside US.

Nixon ended the gold standard in 72?, and gold started trading at world market prices here too, thus it was no longer necessary to restrict ownership. You can now go to the "Pawn & Coin" and buy a hundred ounce ingot, chuck it under your couch if you like. Heard of one guy had one, painted it black and used it as a door stop, figured no one would ever steal a lead doorstop. :D

uute