Posted on 09/08/2011 6:24:42 PM PDT by billflax
Another month and another lackluster employment figure. Both parties profess to be fixated on job creation. Where are they? In normal recoveries GDP booms and firms invest in exciting concepts that spur new hiring. Why not now?
Despite corporate profits exceeding $1.5 trillion in the recent period, which elevated corporate cash balances over $2 trillion – both records – few firms dare expand. Uncertainty paralyzes both those with capital to invest and those with investments seeking capital.
Several probable causes catalyze this economic confusion: looming tax increases, time-wasting regulatory demands and anti-business rhetoric emanating from Washington. All have merit, but not spoken of enough is a more effective economic cure, which would be to reform our monetary system.
Money is so fundamental to investment that bolstering the dollar represents the surest route to prosperity. Unfortunately, the dollar glides downhill as if on a rollercoaster. It suffers new lows against a host of currencies. Gold poises for $2,000/oz.
(Excerpt) Read more at forbes.com ...
I think you misunderstand your own question. No, I do NOT think the price of gold is arbitrary. That’s what I just said. Are you incapable of having a conversation without trying to insult your listener? Good grief.
Ain’t that the truth!
No, cowturd, I don’t know a lot about it. That’s why I posed that question. But not to you. You see, people like you are just online to insult others and look terribly, terribly small. I asked a civilized question and am awaiting the answer from the person I was speaking with.
The crown was coining money like it was going out of style and cheapening the alloy.
This happened in France, too, if you read The Wealth of Nations by Adam Smith. However, cheapening the alloy is a matter of currency more than money. If a country actually produces gold coins, yes, the example would hold, but if a dollar were always guaranteed to be backed by 24ct gold in a bank, then this wouldn't happen.
There are a lot of problems with gold, such as tying a currency to mining luck, but tying it to government faith has been a disaster. I've heard (and haven't verified) if you look at how much gold it takes to buy a suit now, it takes about as much as it did 200 years ago. A suit costs a lot more now, indicating that the government has devalued the currency by a great deal. Throughout the 1700s and 1800s, an era ruled by gold, prices actually fell steadily, which makes sense given a stable currency. Increasing efficiencies dictate more goods should be produced per person, thus lowering the cost.
Yes, I understand margins very well, thank you. I don’t understand what the person I was talking with meant. That person, is not you, so good night.
“There isn’t enough gold in the world to back the world’s economies”
Gold is relatively fixed in quantity. About 10 billion ounces over the last 200 years.
Gold based economies have been in existence for quite a while.
The price just needs to change to fit the economies. If you don’t get that, you shouldn’t make such comments as you did above.
Government price-fixing is always a disaster eventually. It’s as dishonest and arbitrary as the FED manipulations of the dollar. You would become that which you hate?
"At the margin" is a standard economics term. What he's trying to say is, let the price of gold find its natural level and fix the dollar there. It might be $2,000/oz; it might be $5,000. Only the market knows for sure: I've found out the hard way.
With regard to your comment about "not enough gold," you seem a little behind the times. Have you heard of digital gold? It's made gold fungible down to thousandths of a gram.
This outfit's the best-known vendor of digital gold.
Bizarre comment
Has nothing to do with any previous comment
That’s what I thought about your comment.
Great comeback
Thanks
Not quite. It settles when supply and demand come roughly into balance over time. Think of a stock trading sideways; you'll get the idea. Then, someone can can be decided that "okay, today is the day."
I'm glad to issue the clarification. You'll find that many Freepers are well-versed in economics, so they use terms like "at the margin" like they're part of ordinary English. I'm sure you'll pick it up as you go along.
As far as digital gold and whatever...wow. Yeah, I'm behind the times, and from what I hear, I don't like the idea at all.
Even if Rick Perry get behind it? :)
Hello,
Yes, I meant that via the gold window, the market would settle on the right dollar price of gold as people exchange their gold for dollars or vice versa. I do believe if this were established today, many would come to the gold window and exchange dollars for gold, thus settling on a price of gold under 1,000 per ounce. I say this because gold above 1,000/oz is a recent phenomenon, and that we haven’t seen the inflation across all goods/services yet (it starts in commodities and acts like a wave). This is the reason the banks were in so much trouble in 08 and now, because they rely on lending (lender gets screwed when money is devalued). Also, dollar stays weak because of 0bama’s (AKA Zer0) crap economic policies.
You'll recall that FDR called in all of the gold and set an arbitrary price of $35/ounce.
That worked out quite well. For the government.
Why the populace stood for it I'll never understand.
Thanks
A couple notes:
Gold’s current price is below the all time high adjusted for inflation
Inflation is actually about 4% currently. MIT runs a study on this based on billions of items
http://bpp.mit.edu/
Small chance of that happening now
Global markets makes it preposterous
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