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  #91  
Old 05-17-2012, 08:43 PM
argentine argentine is offline
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Originally Posted by TheVision View Post
The US has had a negative balance of trade since the late 1960s. What do you do when all of the gold has left the country to pay for these imports?
Your comment is an insightful one.

Hence the reason Nixon closed the gold window.

He couched it by saying it was to rid the world gold market of speculators and protect our dollar - thereby preserving the purchasing power of the American people. Which to a degree was true. Nations were taking the gold for $35 and selling it at $42. (That, by the way, is what the gold window refers to: The window is the spread)

But in reality, it is because of what your comment implies.
If Nixon had not done what he did, the U.S. would have no gold.

Additionally, Nixon implemented petro dollars, which assured that gold would not have to be used as a backing and thereby making the U.S. dollar the world reserve currency.

There is a reason he is and was called, Tricky Dick.

Argentine

Last edited by argentine : 05-17-2012 at 08:50 PM.
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  #92  
Old 05-17-2012, 09:03 PM
AlbyVA AlbyVA is offline
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TheVision's comment hit the nail on the head to one of the problems with
Gold in a Globalized economy. When the money (aka: Gold) leaves your
shores for that Samsung Big Screen TV you just bought, what happens
when its all gone?

This is exactly why the Roman Empire failed. Because it imported all the
goods from the known world and exported all its gold. What happened next
is they started debasing their coins to compensate.

Gold only works well in Small Closed Economies. A 21st Century Global
Economy cannot run on Gold. Its not dynamic enough to keep the
demands of such an economy running. Why do you think the Swiss, the
last Gold Backed Currency eventually threw in the towel in the 1990s?
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  #93  
Old 05-17-2012, 09:10 PM
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iverson iverson is offline
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Quote:
Originally Posted by TheVision View Post
Citation needed. Nature magazine found that Wikipedia is at least as accurate (and more accurate, when article length is taken into account) as Encyclopaedia Britannica:

http://www.nature.com/nature/journal...l/438900a.html
Straight from the link you sent:

"Jimmy Wales' Wikipedia comes close to Britannica in terms of the accuracy of its science entries, a Nature investigation finds."

We're not exactly discussing science here, are we? Fail.
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  #94  
Old 05-17-2012, 09:14 PM
Silver and Gold Silver and Gold is online now
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According to a study of 775 fiat currencies by DollarDaze.org, there is no historical precedence for a fiat currency that has succeeded in holding its value. Twenty percent failed through hyperinflation, 21% were destroyed by war, 12% destroyed by independence, 24% were monetarily reformed, and 23% are still in circulation approaching one of the other outcomes.

The average life expectancy for a fiat currency is 27 years, with the shortest life span being one month. Founded in 1694, the British pound Sterling is the oldest fiat currency in existence. At a ripe old age of 317 years it must be considered a highly successful fiat currency. However, success is relative. The British pound was defined as 12 ounces of silver, so it's worth less than 1/200 or 0.5% of its original value. In other words, the most successful long standing currency in existence has lost 99.5% of its value.

Given the undeniable track record of currencies, it is clear that on a long enough timeline the survival rate of all fiat currencies drops to zero.
And Jeff Clark points out:


History has a message for us: No fiat currency has lasted forever. Eventually, they all fail


The Average Life Expectancy For A Fiat Currency Is 27 Years ... Every 30 To 40 Years The Reigning Monetary System Fails And Has To Be Retooled

Gold has been around since 600 BC


I dont think smart money will stay in something with a 100% failure rate......Gold is the clear choice

The gold specie standard was not designed, but rather arose out of a general acceptance that gold was useful as a universal currency.[1] When commodities compete for the role of money, the one that over time loses the least value, takes on the role.[2] The use of gold as money dates back thousands of years and the first known gold coins were minted in the kingdom of Lydia in Asia Minor around 610 BC. The first coins minted in China are thought to date around 600 BC


This Logic is too advanced for someone on this group to grasp but I hope these facts help

Last edited by Silver and Gold : 05-17-2012 at 09:29 PM.
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  #95  
Old 05-17-2012, 10:05 PM
argentine argentine is offline
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A little more to add to the gold as money facts:

As far back as 3100 B.C., we have evidence of a gold/silver value ratio in the code of Menes, the founder of the first Egyptian dynasty. In this code it is stated that "one part of gold is equal to two and one half parts of silver in value." This is our earliest of a value relationship between gold and silver.
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  #96  
Old 05-17-2012, 10:10 PM
argentine argentine is offline
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Quote:
Originally Posted by AlbyVA View Post
TheVision's comment hit the nail on the head to one of the problems with
Gold in a Globalized economy. When the money (aka: Gold) leaves your
shores for that Samsung Big Screen TV you just bought, what happens
when its all gone?

This is exactly why the Roman Empire failed. Because it imported all the
goods from the known world and exported all its gold. What happened next
is they started debasing their coins to compensate.

Gold only works well in Small Closed Economies. A 21st Century Global
Economy cannot run on Gold. Its not dynamic enough to keep the
demands of such an economy running. Why do you think the Swiss, the
last Gold Backed Currency eventually threw in the towel in the 1990s?
It's as dynamic as money should be. What it is not, is free; and there in lie the difference between fiat currency and money.

Last edited by argentine : 05-17-2012 at 10:58 PM.
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  #97  
Old 05-17-2012, 10:40 PM
nucky nucky is offline
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Quote:
Originally Posted by AlbyVA View Post
TheVision's comment hit the nail on the head to one of the problems with
Gold in a Globalized economy. When the money (aka: Gold) leaves your
shores for that Samsung Big Screen TV you just bought, what happens
when its all gone?

This is exactly why the Roman Empire failed. Because it imported all the
goods from the known world and exported all its gold. What happened next
is they started debasing their coins to compensate.

Gold only works well in Small Closed Economies. A 21st Century Global
Economy cannot run on Gold. Its not dynamic enough to keep the
demands of such an economy running. Why do you think the Swiss, the
last Gold Backed Currency eventually threw in the towel in the 1990s?
Dunno. What happens when you spend all your money? How did you get that money in the first place?

Rome had all the general issues any great and massive empire would. Debasement of money did actually delay collapse, yes, but at the cost of masking and encouraging destructive behaviors. You probably know the feeling by now.

You shouldn't study economics like a historian. That's walking a minefield of misinterpretations and you've been blown up on a few occasions I've seen. My exploration on different philosophies and ways of life have led me to believe that no economy is manageable when any form of exclusive power regarding such is bestowed on any person, groups or bodies of organization.

Quit defending central policies and start holding them accountable. Solutions are needed.
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  #98  
Old 05-18-2012, 12:08 AM
yellowsnow yellowsnow is offline
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Quote:
Originally Posted by AlbyVA View Post
Gold only works well in Small Closed Economies. A 21st Century Global
Economy cannot run on Gold. Its not dynamic enough to keep the
demands of such an economy running. Why do you think the Swiss, the
last Gold Backed Currency eventually threw in the towel in the 1990s?
only true if polynesian go back to using seashells as money, dutch go back to tulip trading, etc As i know it, practically every society and race on this world recognize gold and silver as precious and convertible to cash and vice versa. The economy is still closed but the borderline is the www.
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  #99  
Old 05-18-2012, 07:17 AM
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Carpenter Carpenter is offline
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Quote:
Originally Posted by AlbyVA View Post
TheVision's comment hit the nail on the head to one of the problems with
Gold in a Globalized economy. When the money (aka: Gold) leaves your
shores for that Samsung Big Screen TV you just bought, what happens
when its all gone?

This is exactly why the Roman Empire failed. Because it imported all the
goods from the known world and exported all its gold. What happened next
is they started debasing their coins to compensate.

Gold only works well in Small Closed Economies. A 21st Century Global
Economy cannot run on Gold. Its not dynamic enough to keep the
demands of such an economy running. Why do you think the Swiss, the
last Gold Backed Currency eventually threw in the towel in the 1990s?
That is exactly how money should work.

By what stretch of your imagination should a country be permitted to continually consume more than it produces?

What if your neighbor's counterfeiting allowed him to consume to the point of driving up the cost of life's necessities?

What if your neighbors counterfeiting destroyed the value of your savings?

What if your neighbor branched out, and loaned enough counterfeit money to collapse the system?

How would you feel?

A gold standard forces everyone to live within their means.
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"Like liberty, gold never stays were it is undervalued."

Limit politicians to two terms. One in office and one in jail.
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  #100  
Old 05-18-2012, 07:51 AM
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GoldmanSuchs GoldmanSuchs is offline
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Quote:
Originally Posted by AlbyVA View Post
TheVision's comment hit the nail on the head to one of the problems with
Gold in a Globalized economy. When the money (aka: Gold) leaves your
shores for that Samsung Big Screen TV you just bought, what happens
when its all gone?

This is exactly why the Roman Empire failed. Because it imported all the
goods from the known world and exported all its gold. What happened next
is they started debasing their coins to compensate.

Gold only works well in Small Closed Economies. A 21st Century Global
Economy cannot run on Gold. Its not dynamic enough to keep the
demands of such an economy running. Why do you think the Swiss, the
last Gold Backed Currency eventually threw in the towel in the 1990s?
There are two schools on thought on why the Swiss dropped the franc's link to gold. Ferdinand Lips, in his excellent book 'Gold Wars' asserts much the same as Alan Greenspan did, i.e. that "that gold and economic freedom are inseparable" and that the statists pressurised/forced Switzerland to come off the goal standard in order to stop putting into such sharp relief the continued & continual debasement of all other fiat currencies.

The more conventional explanation is that gold was too strong to tie a fiat currency to, and Switzerland risked turning from a strong net exporter into a deficit country as the price of their pharma, machines, watches & chocolate went to da moon along with gold.

Either way, completely different to Rome of course.

On what are you basing your assertion that the fall of the Roman Empire was due to their use of gold? That sounds completely made up. Do you have a link to any kind of research that backs up your assertion? http://en.wikipedia.org/wiki/The_His...Roman_E mpire
Quote:
According to Gibbon, the Roman Empire succumbed to barbarian invasions in large part due to the gradual loss of civic virtue among its citizens.[3] They had become weak, outsourcing their duties to defend their Empire to barbarian mercenaries, who then became so numerous and ingrained that they were able to take over the Empire. Romans, he believed, had become effeminate, unwilling to live a tougher, "manly" military lifestyle. He further blames the degeneracy of the Roman army and the Praetorian guards. In addition, Gibbon argued that Christianity created a belief that a better life existed after death, which fostered an indifference to the present among Roman citizens, thus sapping their desire to sacrifice for the Empire. He also believed its comparative pacifism tended to hamper the traditional Roman martial spirit. Finally, like other Enlightenment thinkers, Gibbon held in contempt the Middle Ages as a priest-ridden, superstitious, dark age. It was not until his own age of reason and rational thought, it was believed, that human history could resume its progress.
All this demonstrates is that countries operating under economic extremes fall out / apart / break. Like Greece is about to soon under a rigid fiat currency scheme. Or how Switzerland recently pegged their fiat franc to the fiat Euro. Or how one day the Dollar will probably fall apart when military enforcement of the petrodollar around the world finally stumbles.

So, not actually much to do with gold. These things happen under fiat currencies too - it is just easier to slow public realisation, to put off the end game, with fiat than it is with gold.

Last edited by GoldmanSuchs : 05-18-2012 at 08:01 AM. Reason: Added some facts about the Fall of the Roman Empire
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