AndersB

Gold

2030 posts in this topic

theres a big doifference , back in 1930 the money was backed by gold, ie when people demanded payment they took gold. now money is backed by ink and plastic, when people demand payment , they get more pretty colored plastic.

there is a big diff between how a great depression runs when money is backed by gold and backed by ink and plastic.

we wont follow the GD1 into the GD2 exactly the same because things are so different.

exactly how will it pan out? i dont know i aint a uni educated economist without a clue. im stock standard guy without a clue.

but as long as money can be created out of nothing and people are wiling to take it as payment, we wont have a GD2

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theres a big doifference , back in 1930 the money was backed by gold, ie when people demanded payment they took gold. now money is backed by ink and plastic, when people demand payment , they get more pretty colored plastic.

there is a big diff between how a great depression runs when money is backed by gold and backed by ink and plastic.

we wont follow the GD1 into the GD2 exactly the same because things are so different.

exactly how will it pan out? i dont know i aint a uni educated economist without a clue. im stock standard guy without a clue.

but as long as money can be created out of nothing and people are wiling to take it as payment, we wont have a GD2

Histories a little out Goose. Even in the 19th century most money was paper. In the British Empire the BOE bank note was the standard and had unofficially become the national banknote long before the 19th century. In the 1830's it was declared legal tender. Not even the gold reserves existed to fully cover the issue and even most of that was leased to jewelers for a profit. However as long as convertibility existed the value of paper money didn't become too inflated. Britain actually left the gold standard during the Napoleonic wars and gold coins sold way over their face value. Wellington's troops refused to fight on the continent unless they were paid in gold, this actually forced the Treasury to mint some gold coin during the war. Of course prices became inflated, mill workmen where getting 15 shillings a week during the war. Prior to the war they got less than 10 shillings a week, and after the war when gold convertibility was restored with wages falling to 5 shillings a week.

Silver coin never seemed to present a difficulty and was always available. The common man rarely saw a gold coin and if he did often kept it as a lucky piece.

The US left the gold standard in 1861 and began printing the notorious Greenback. Any actual gold coin sold for many times it's face, 1869 saw it reach 8x face value. If you watch Eastwards "fistful of dollars", you'll find an echo of this. His price for a "hit" was $100 in gold or $500 in paper. The US withdrew currency during the 1870's and re pegged to gold in 1879, with the gold issue that year being still a very common coin today.

Most nations began running down their gold reserves during the armaments race lead up to WW1. Australia actually had some of the largest gold reserves in the world at the time, but these got spent during the war.

After the war gold coin was really only available in France and the US. The US typically backed it's greenbacks with 40% gold reserves. Actually the demand for gold coin by US citizens doubled through out the 1920's. Typically if you asked for gold coin the banks gave you the run around and told you to come back tomorrow.

Even though gold coin was made illegal, people hung onto them even when the price was almost doubled for it. You can tell that because there's still heaps of pre confiscation coins that can be purchased at gold content prices. Perversely it's often American silver dollars in top nick from the i9th century that can outsell an equivalent gold coin.

The middle class getting gold coinage kept that at home in a jar in preference to paper money. Basically gold coin was the hoarders choice and perversely gold coinage like sovereigns from the 1880's onwards are easy to find today.

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LMAO when I saw this (hey the Aussie gov is buying MBS'):

caveman_2.jpg

Bullsh*t man! Cavemen know what real value is.....rocks!

Actually cavemen generally had larger brains than modern men, he was a product of the days when you were either the quick or the dead.

They are a bit slow these days!

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i was really commenting on the " we will repeat the great depression " mantra that some people spout. I feel we wont repeat it as now money is now backed by What eva the f*ck gov says its backed by, not gold.

sure there have been incidents in history, that you have faithfully listed here, that didnt have gold backed money.

but im just focussing on the "now will follow great depression" comparison.

but hey you're the expert, ill leave research to you. i cant be arsed looking anything up

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i was really commenting on the " we will repeat the great depression " mantra that some people spout. I feel we wont repeat it as now money is now backed by What eva the f*ck gov says its backed by, not gold.

sure there have been incidents in history, that you have faithfully listed here, that didnt have gold backed money.

but im just focussing on the "now will follow great depression" comparison.

but hey you're the expert, ill leave research to you. i cant be arsed looking anything up

I wouldn't agree with that one. Money is abstract form of receipt that governs trade, distribution of goods and services and the redistribution. It is the latter which is the real capital. You supply goods or services to the general market and expect to receive in return.

That system can break down no matter what it is backed by. A fiat system aims to redistribute from the prudent to the impudent. With the end result that the more stupid the policy the better it seems to work. Until finally one day the ugly nature of it's reality overflows from the sewers and drowns it.

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I'm pretty skeptical as to how gold could be prevented from becoming the world reserve. For the last few generations black gold supplanted it, the world has always been on a commodity standard.

For a commodity to function as money then there must a surplus. Peak oil has killed the surplus.

Gold on the other hand is in perpetual surplus because it can be recycled almost indefinitely.

The long term validity of gold is easily demonstrated. Take Australia for example.

In 1901 there was the equivalent of $17 per capita in Australia in circulation. That was equal in value to two ounces.

Today there is $2,360 in circulation per capita. Divide by two = $1,180

So even after all this time the currency in circulation buys a similar amount of gold.

For the past 108 years AUD in circulation per capita has increased in quantity 4.65% per annum on average. One wonders about the value of nominal interest rates which get taxed while the principle amount loses purchase power.

Governments love the public debt or printing swipey card so much and only the restraint of gold can put this in order.

If we look at the last decade for the AUD. Then there was $1370 in circulation per capita exactly ten years ago. So the AUD has increased in quantity at 5.6% per capita. The average bank bill rate for the last decade has been 5.52% and of course you pay tax on the supposed gain. Which as we can see is no gain at all.

10 years ago gold was $450 an ounce, so currency per capita bought you 3 ounces. Much more than the historical average, but this was at the very height of the Fed short on gold. What are they desperate to hide? The fact that gold is money and a form of money safe from government rapacity.

Gold isn't a great money spinner, but certainly it is an excellent safe haven for preserving value come Hell or high water. It is the money that can't have its value diluted until the alchemists finally succeed.

If we go back to 1980 at the time of the Central Bank long on gold. There was $345 in circulation per capita and at the height of the last gold craze AUD per capita could only buy half an ounce. I expect we might see something similar in 2013.

Certainly gold is in no bubble, it is really only at fair valuation and that won't stop it becoming more popular.

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From todays Age

My link

<h1 class="cN-headingPage prepend-5 span-11 last">Miners: We're running out of gold</h1> November 25, 2009 - 1:49PM Gold production will continue to fall, despite a brief boost in 2009 and soaring prices, as deposits are exhausted and new discoveries remain elusive, say miners.

In terms of production, "2009 is the outlier as far as the trend," Omar Jabara, spokesman for US-based Newmont Mining, the second-largest gold producer in the world, told AFP.

Overall, "it's a fact that gold production from mines has been in decline since 2001 and has gone roughly from 85 million ounces to about 75 million ounces a year," said Vincent Borg, spokesman for number one producer Barrick Gold.

"It sort of goes down about one million ounces every year and our forecast is that it will continue to decline despite the higher price" for gold nowadays, he said.

Almost everywhere, mineral deposits are being exhausted and new deposits are not being found fast enough to replace them, these experts explain.

South Africa, which was once at the vanguard of world production, saw a 9.3-percent drop in production year-over-year in the second quarter, according to its Chamber of Mines.

Globally, "it's just that the assets are not there anymore," Tonya Todd, a spokeswoman for Goldcorp, Canada's second biggest gold mining firm.

"Just because gold reached a new high today doesn't mean we can send a message to our 26 mines saying produce as much gold as you can today because they are already," said Borg.

"It's not like a water tap you can turn on and it comes right away."

Barrick and Newmont expect nevertheless to continue increasing production next year by seven percent and five to 10 percent, respectively. But long-term, it's downhill.

Omar Jabara explained that it takes from seven to 10 years to start production of a mine after finding an economically viable gold deposit.

And "no significant new discoveries have been found in recent years, despite the higher gold prices and despite higher exploration budgets," said Borg.

What is already happening and is likely to continue is that the grade or quality of deposits industry-wide will be "on average lower than deposits discovered in the past," opined Jabara.

The global gold mine production is forecast to rise by 3.7 percent in 2009 to about 2,500 tonnes, but will satisfy only two-thirds of demand, which soared this year amid the global financial crisis to 3,800 tonnes, according to the World Gold Council.

Historically, gold recycling or the sale of central bank stockpiles made up for supply shortages.

But during the latest financial crisis, banks have been buying up gold in large quantities to protect monetary reserves against weakness in the US dollar.

Since the start of November, for example, India's central bank has scooped up 200 tonnes of gold from the International Monetary Fund, at market value for about 6.7 billion dollars.

Amid uncertainty in the stock market, small investors and hedge funds are also coveting gold, driving up demand for the precious metal.

With mine production sloping downwards, an increasing supply of gold must come from existing supplies -- such as coins, bullion or jewelry -- but it will be very limited.

"All the gold ever produced through history amounts to about 165,000 tonnes, which would barely fill two Olympic-size swimming pools," said Jabara.

The price of gold, after reaching new highs over the past year, on Monday hit 1.174 dollars per ounce.

AFP

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$1192,30

Another new high by Gold in $ and in €. :clap:

The sad thing is, I intended to order another small physical amount soon...probably going to wait until next year now.

From the news front:

UPDATE 1-US Mint to suspend American Eagle gold 1-oz coins

NEW YORK, Nov 25 (Reuters) - The U.S. Mint said on Wednesday it will suspend sales of the popular American Eagle 1-ounce bullion coins as rising demand depleted its inventory.

"The United States Mint has depleted its current inventory of 2009 American Eagle 1-ounce gold bullion coins due to the continued strong demand for this product," the Mint told its authorized dealers in a memorandum on Wednesday. November sales to date were at 124,000 ounces, higher than the 115,500 ounces sold in each month of September and October, the Mint said. The Mint said it expects to resume sales in early December.

Increasing worries about inflation, a falling U.S. dollar and geopolitical tensions are prompting individual investors to take physical possession of gold coins and other bullion products due to the metal's appeal as a safe haven in financial and political crises.

Gold XAU= hit a record high at just under $1,190 an ounce on Wednesday due to a broadly lower dollar and renewed interest from central banks. Year to date, the metal has risen more than 35 percent. [GOL/] Last year, the Mint had also briefly suspended sales of its American Eagle gold and silver coins due to high demand and a lack of coin blanks.

http://www.reuters.c...536556520091125

Wasn't me. I only purchased some Silver Eagles, recently. :D

Greetings

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I'm looking at buying some silver.

But not sure in what physical sizes to buy in......

any preference why I should choose larger or smaller sizes?

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I'm looking at buying some silver.

But not sure in what physical sizes to buy in......

any preference why I should choose larger or smaller sizes?

I'd choose bar sizes from 1 kg to 5 kg. Quite a large spread on silver however. Ohay if you plan to hold for a few years.

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The U.S. Mint said on Wednesday it will suspend sales of the popular American Eagle 1-ounce bullion coins as rising demand depleted its inventory.

In normal language that means they don't wish to order gold and drive the price up.

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I'd choose bar sizes from 1 kg to 5 kg. Quite a large spread on silver however. Ohay if you plan to hold for a few years.

smaller spread on gold?

size for that?

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In normal language that means they don't wish to order gold and drive the price up.

And it does seem to happen every few months.

Each time a bunch of people promise that _this_ time is the time to be rocking with the guns and sealed rice.

Well pshaw I say to them, rice is bland and boring, I keep soup. Oh the flavours! Pepper Steak, Chicken & Corn. Man, what a future that will be...

Oh and Stagg Chilli, I figures when Mad Max comes to the door if I make him a nice plate of nachos (sorry about the lack of guacamole - that nuke strike buggered them) he'll be all "okay tubby, you can ride with us and we're gonna call you old cooky".

Then who'll be laughing? Me that's who! all those gold talking freaks will be dying to join the band and get some of my famous tex mex in a tin.

Of course when I run out of tins of stag I am going to have to learn to make nachos using kangaroos or something and I guess the abundance of cumin will be woeful and chillis don't grow on trees you know[1]. Hopefully by then I will have figured something out.

[1] it is bushes they grow on I think.

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$1192,30

Another new high by Gold in $ and in €. clap.gif

The sad thing is, I intended to order another small physical amount soon...probably going to wait until next year now.

From the news front:

[/font]Wasn't me. I only purchased some Silver Eagles, recently. biggrin.gif

Greetings

A bit of historical perspective...

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The Precious has began a very steep climb. IMO, it will most likely need to take a rest. But on the other hand, if it does what the base metals did in 2005-6 (like Zinc), it could rise to US$2K. Gold in $A (which is what really matters to the locals) is also rising steeply.

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A consolidation would be healthy, agreed. Charts look toppy for the moment. However, Gold in USD produced a fairly strong buy signal after leaving the wedge to the upside. Confirmation is in progress.

What concerns me most is the forex market. Yesterday's evening action was quite impressive, Dollar plunged heavily against the Euro and yet carry-trade currencies went down as well.

For the last two weeks it's been the other way round, possibly closure of carry-trades. Therefore, EUR/USD generated a new buy signal, yesterday. That can't be good...

My guess is that it's a false signal. Sharemarkets will reverse after Thanksgiving and the Dollar will rise again. Watch the 1,50$/€ area for confirmation.

Greetings

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Gold in $A (which is what really matters to the locals) is also rising steeply.

13% in a month... spot is current 1309 AUD. sad.gif It's up around 4% YoY so has fared reasonably well against deposit rates in that time (up almost 50% in USD YoY, much better than their deposit rates!).

I can't see myself buying any more precious this year. RBA statement of Assets and Liabilities out this arvo, will be interested to see how much Christmas paper Stevens has been printing.

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13% in a month... spot is current 1309 AUD. sad.gif It's up around 4% YoY so has fared reasonably well against deposit rates in that time (up almost 50% in USD YoY, much better than their deposit rates!).

I can't see myself buying any more precious this year. RBA statement of Assets and Liabilities out this arvo, will be interested to see how much Christmas paper Stevens has been printing.

Well it appears to be taking off. The best I knew it was going to happen time between the middle of this year and middle of the next. All that QE is just putting fire under the rocket, it was going explode at some point. If the Fed raises interest rates, then that will stop gold dead in its tracks.

If they don't raise, gold will continue heading to 1500 or 1600 USD. And it looks like this will be before easter at this rate.

With Gold it's the rates you watch.

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