Gold...$300?

[gregpet]

Please Cotton tell us the first thing about economic history!

[Hopperbin]

Classic guy you just said what I was thinking but could not find the words.
I believe if ever the USA currency ever has crazy devaluation that gold will be first, but gold is not like any other commodity, people invest in gold because they can, people buy grain because they have to. Everything else is in between depending on how much you need everything else or food. Ever notice how a lot of people are sticking everything they have into the stock market and it is still dropping. That is scaring me more than anything, the lower it goes the more money is shoved into the bottomless pit, at what point do people say to themselves that doing nothing will make them rich?

[TOM4CWB]

c.p.;

I heard about $50/bu flax...

Flax is really good for everyone... we all should eat it every day... but don't. If we did... it would be $50/bu!

Human nature is an interesting study... the only thing we know for certain... is that there is nothing new in human nature... under the sun!!!

[cottonpicken]

Flax will hit 50.

Lets go back an astonishing 4 years ago.

What should the people of zimbabwe have done with any savings?
Bought buckets of wheat that would spoil?
Bought us dollars that were also collapsing?
Or bought 375 gold that went to over a thousand?

Anybody see the light YET?

[cottonpicken]

And somebody please explain to me the direction the m3 numbers will take with 60 trillion of unfunded liabilities that are on the books for the us.Let alone trillion dollar deficits.

And just because a few of you guys dont understand the value of gold about 5.99999999 billion other people do.

And the mathmatical models that are used to put value on "it" are now in the 5 digit range.

[cottonpicken]

more short history



http://charts3.barchart.com/chart.asp?vol=Y&jav=adv&grid=Y&divd=Y&org=stk&sym= DXH9&data=H&code=BSTK&evnt=adv

http://charts3.barchart.com/chart.asp?vol=Y&jav=adv&grid=Y&divd=Y&org=stk&sym= GCG9&data=H&code=BSTK&evnt=adv

Take the graph out a hundred years and you would really puke.

[TOM4CWB]

C.P.;

The changes in value, needed to have monetary 'liquidity' replace lost value.

Real estate worth $1M on Jan 1/07... became worth $500K on June 1/08.

1/2 the investment is gone.

Banks normally are required to have their 'balance statement' balance... to remain 'solvent'.

If a bank lost funds... that came from the fed... and it is forgiven and just counted as a retraction in monetary supply... that is one thing.

It is quite another issue when Wall Street investment banks created the currency... with investors as the back stop.

When the investment bank... looses 1/2 the value through deflation and losses in the real estate market... and then the investor asks for their money back from wall street investment banks...

Bingo... half of their money is missing... and the investment bank is bankrupt.

The 'TARP' and fed loans... are just trying to balance banks balance sheets... so they can remain solvent.

The money supply available to the general public has shrunk by 90% in some cases in reports I saw.

Canada is VERY different.

In our own farms case... we doubled our credit lines over this past spring and summer. If this credit had not been available... we would have either had to stop doing business... or liquidate assets. In the normal case of business... our loans are all paid back... and the Bank of Canada... gets the monetary supply back... or it goes to another business that needs the credit.

If there is no credit... we are up the creek. In the US... that is the problem... the banks need the bailout money to balance the losses caused in the real estate markets... to maintain solvency.

C.P.;

I really think the monetary supply will be sopped back up (by the fed)... when confidence returns to the financial system... and real estate markets stabilise.

Money is simply a fluid tool... to lubricate the economy... if there is no lubrication... when it is required... it seizes up!

C.P.; If all your credit lines were pulled... and you couldn't borrow any money (even though you had $10M of assets)... would your business continue to function if you needed $500K to put the crop in 2009?

What is actually wrong with creating the $500K to allow you to put the crop in this spring?

In turn... why should this cause Gold to be worth $2000 instead of $300?

[cottonpicken]

Good points.

But the value of a house does not change money supply.Somebody paid a million and that million is in the system.

The fed ultimatley does not want to soak up that money.The system needs to be continually inflated or it will completely collapse.

The real "problem"is that it needs ever increasing rates of inflation.It is geometrical growth.

Einstein even said the most powerful force in the universe was compound interest.

Now we come to the prediction part,what will happen?
Do we implode now with deflation?
Or a little while from now with inflation?

[classicalliberal]

I know that gold has been used as a currency standard in the past but why has it? Isn't it just an arbitrary commodity like coal or wheat (tell that to the CWB). I am just wondering why the significance in gold? The point is that people think it is valuable which is the same as money. People think it is valuable. Actually, it is illegal for anyone to refuse coin or paper dollars in Canada as payment of debt.

[jensend]

two reasons gold is used as a standard - relatively rare, not inflationary and physically stable, doesn't deteriorate over time. no more intrinsically valuable than tulip bulbs but people have determined it will be used. it's just as big a hoax as fiat currencies except that people generally accept it as valuable.