Topic: The Real Story of Gold - page 6. (Read 6736 times)
Gold HAD his time. Now it's over, along with the fiat scam. Sure, Gold back them made sense, but right now Bitcoin deprecates it on every single aspect you can ask for. And no, there's no inherit value to Gold or any money. Money is is money if people will value it, period. The rest are the characteristics of said money, and nothing, nothing ever has been as good as Bitcoin at being money. Bitcoin takes the best of both worlds from gold and credit and twists it into a new paradigm of unknown unknowns. The possibilities are endless.
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I would not announce the Death of Gold so quickly just because a great new set of technologies has been invented. Gold has been valued by humanity -- by almost all cultures -- for 5000 - 6000 years. I doubt that 5000 years of historical value for gold will disappear just because Bitcoin has come along. Through the millennia, gold has proven itself hundreds of times as the best Store of Value around, beating EVERY fiat currency. Why would people who really understand wealth (like the central bankers and the Rothschild family) hold so much gold?
My *guess* is that Bitcoin will be a game changer. But, "technology often eats its children..."
My other guess is that gold will always be expensive, and always held in much esteem.
Gold and Bitcoin are quite complementary. It's just smart to hold some of each.
I would not announce the Death of Gold so quickly just because a great new set of technologies has been invented. Gold has been valued by humanity -- by almost all cultures -- for 5000 - 6000 years. I doubt that 5000 years of historical value for gold will disappear just because Bitcoin has come along. Through the millennia, gold has proven itself hundreds of times as the best Store of Value around, beating EVERY fiat currency. Why would people who really understand wealth (like the central bankers and the Rothschild family) hold so much gold?
My *guess* is that Bitcoin will be a game changer. But, "technology often eats its children..."
My other guess is that gold will always be expensive, and always held in much esteem.
Gold and Bitcoin are quite complementary. It's just smart to hold some of each.
Alot of people like gold because it is fungible and has been the long term standard store of value. It is a reference point however, and intrinsically has no additional value over bitcoin. In fact, it can be argued that Bitcoin has more intrinsic value, that is in itself another debate.
Gold is just going through the market cycle, none of its fundamentals have changed and no other commodities have entered the space to relatively de-value Gold. So, really its not a problem, just buy when its blood on the streets.
Gold is just going through the market cycle, none of its fundamentals have changed and no other commodities have entered the space to relatively de-value Gold. So, really its not a problem, just buy when its blood on the streets.
Gold (or any other metal) may not be a perfect monetary system, but given the nature of the elites that humanity must deal with, it may be humanity's best hope. With the possible exception of Bitcoin, of course.
Gold and all metals are inferior to bitcoin. As you point out, gold never stands on its own, it always requires a currency that is backed by gold, and no matter how much they swear and promise they will uphold this standard, they always end up printing more notes than there is actual gold and they have to come off the gold standard and back to fiat.
This cycle is impossible to stop because gold NEEDS a currency to work, and currency ALWAYS gets printed too much. The only thing that stops this is the invention of bitcoin. Bitcoin needs no currency because it is already easy to exchange, and it has all of the scarcity and controlled supply of gold that makes it a good store of value.
Gold will get eaten up by bitcoin and will be just another metal like nickel or titanium that is used for industry and jewelry, not money.
If you think that gold is in trouble because it hit a five-year low, read on!
Serious books were recently published, detailing evidence of central bank suppression of gold prices. If you think about it, this changes everything. We have been led implicitly to believe that gold is just a shiny object, obsessed over by gold bugs, and even they can get tired of it.
But this news means that central banks' own assessment is that they must suppress the price of gold in order to maintain public confidence in paper. And their intelligence on global sentiment is probably better than ours.
To get a full understanding of the issues, we must start with the gold standard era. Why did central banks swear up and down about upholding their "moral commitment" to redeem paper currency for a fixed amount of gold? The stated reason was that they wanted to safeguard the stability of paper money and thus the economy.
The metallic standards of the past are of course considered mistakes by modern mainstream economists and central banks, though one has to wonder why the "mistake" dominated the Western monetary system for about three hundred years that were littered with periodic and severe financial crises, and was only abandoned when states were about to run out of gold for redeeming paper at the official price.
Given this history, we could be forgiven for a little skepticism. It's hard to avoid concluding that the real reason for gold standards was to prop up the value of paper currency (or, equivalently, to suppress the market price of gold in paper currency) so that top politicians and banks could continue to receive benefits by issuing paper money and debt.
The way it worked was that the system ensured that it didn't make sense for savers to hold gold. Gold earned no interest, while paper money was guaranteed by the authorities to redeem a fixed amount of gold, and this promise was credible while the state had enough gold in the vaults. Meanwhile, holders of gold lived under the same price inflation as everyone else, due to the expansion of the money supply from currency and debt issuance.
However, the incentives for the elites were to issue maximal money and debt, so the system was never fundamenatally stable. Aside from periodic bank debt crises that came with major economic pain for citizens, in 1890, even the core of the global system, the Bank of England, experienced a run on its gold that needed help from other major countries to restore confidence. By 1931, Britain had to give up its peg against gold.
Given that the essence of the gold standard was to suppress the "market" price of gold, that system was not very different from what we have today, even though the techniques of suppression are more sophisticated (ie by trading derivatives) and the "target" prices of gold more flexible.
The final unpegging of the dollar from gold in 1971 was a change from explicit to hidden suppression of gold. The hidden nature of the suppression also made gold price rises (in effect, devaluation of paper against gold when the authorities had no choice) less embarassing. Between $35 and $1000 per ounce, the dollar has lost 97% of its value. Armed with the evidence, the Great De-monitisation of Gold has now been discovered to be the Great Devaluation of Paper.
All of this points to the reality that is the polar opposite of conventional wisdom, that the gradual weakening, and then the abandonment of the gold standard were *good* news for people who believe in state-free money. These events signaled the gradual loss of control by the authorities in suppressing gold. They made gold more like money and paper currency more like debt.
So, hopefully, we are waking up to a hidden reality that money is not what the elites make it, but what people make it, in the long run. The elites may have been granted a lot of power by the system, when they first establish a mechanism of manipulation. But that very power gives these elites the irresistible incentives to undermine their own system, so that the long arm of nature always catches them, in the end.
This power of nature was made clear when China had to punish by death those who transacted with anything other than the state paper money, and then had to go back to physical silver anyway, in the 1500s. (BTW, China was no Zimbabwe -- the paper money was not poorly run and had lasted for a few centuries, like our own.)
Gold (or any other metal) may not be a perfect monetary system, but given the nature of the elites that humanity must deal with, it may be humanity's best hope. With the possible exception of Bitcoin, of course.
Serious books were recently published, detailing evidence of central bank suppression of gold prices. If you think about it, this changes everything. We have been led implicitly to believe that gold is just a shiny object, obsessed over by gold bugs, and even they can get tired of it.
But this news means that central banks' own assessment is that they must suppress the price of gold in order to maintain public confidence in paper. And their intelligence on global sentiment is probably better than ours.
To get a full understanding of the issues, we must start with the gold standard era. Why did central banks swear up and down about upholding their "moral commitment" to redeem paper currency for a fixed amount of gold? The stated reason was that they wanted to safeguard the stability of paper money and thus the economy.
The metallic standards of the past are of course considered mistakes by modern mainstream economists and central banks, though one has to wonder why the "mistake" dominated the Western monetary system for about three hundred years that were littered with periodic and severe financial crises, and was only abandoned when states were about to run out of gold for redeeming paper at the official price.
Given this history, we could be forgiven for a little skepticism. It's hard to avoid concluding that the real reason for gold standards was to prop up the value of paper currency (or, equivalently, to suppress the market price of gold in paper currency) so that top politicians and banks could continue to receive benefits by issuing paper money and debt.
The way it worked was that the system ensured that it didn't make sense for savers to hold gold. Gold earned no interest, while paper money was guaranteed by the authorities to redeem a fixed amount of gold, and this promise was credible while the state had enough gold in the vaults. Meanwhile, holders of gold lived under the same price inflation as everyone else, due to the expansion of the money supply from currency and debt issuance.
However, the incentives for the elites were to issue maximal money and debt, so the system was never fundamenatally stable. Aside from periodic bank debt crises that came with major economic pain for citizens, in 1890, even the core of the global system, the Bank of England, experienced a run on its gold that needed help from other major countries to restore confidence. By 1931, Britain had to give up its peg against gold.
Given that the essence of the gold standard was to suppress the "market" price of gold, that system was not very different from what we have today, even though the techniques of suppression are more sophisticated (ie by trading derivatives) and the "target" prices of gold more flexible.
The final unpegging of the dollar from gold in 1971 was a change from explicit to hidden suppression of gold. The hidden nature of the suppression also made gold price rises (in effect, devaluation of paper against gold when the authorities had no choice) less embarassing. Between $35 and $1000 per ounce, the dollar has lost 97% of its value. Armed with the evidence, the Great De-monitisation of Gold has now been discovered to be the Great Devaluation of Paper.
All of this points to the reality that is the polar opposite of conventional wisdom, that the gradual weakening, and then the abandonment of the gold standard were *good* news for people who believe in state-free money. These events signaled the gradual loss of control by the authorities in suppressing gold. They made gold more like money and paper currency more like debt.
So, hopefully, we are waking up to a hidden reality that money is not what the elites make it, but what people make it, in the long run. The elites may have been granted a lot of power by the system, when they first establish a mechanism of manipulation. But that very power gives these elites the irresistible incentives to undermine their own system, so that the long arm of nature always catches them, in the end.
This power of nature was made clear when China had to punish by death those who transacted with anything other than the state paper money, and then had to go back to physical silver anyway, in the 1500s. (BTW, China was no Zimbabwe -- the paper money was not poorly run and had lasted for a few centuries, like our own.)
Gold (or any other metal) may not be a perfect monetary system, but given the nature of the elites that humanity must deal with, it may be humanity's best hope. With the possible exception of Bitcoin, of course.
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