Fiat fails, but Gold and Silver are Money. (But? Well?)

tneig

Anytime I see a common term used over and over again, a red (George Carlin Bullsxxt) flag appears in my head.
We've heard this so often, Gold and Silver are Money, phased in so many articles and stories. I call BS (even if slightly).

I start to question Silver specifically. Its not in money anymore, or backing money. Sure you can find past example of this,
but today, its not. Gold I believe is embedded in people's thinking as the equivalent of money and most readily exchangeable.

Silver is a few steps further away in that thinking. I think if you had a Bucket of gold, and a rail car of silver, and another of heating oil,
Silver might be the last most people pick if offered for free.

You don't have to understand gold or know its exact value, if the opportunity arose, anyone would drool over the gold, take the bucket and run.
The heating oil is simple and clear to understand. For Silver, most would have that flat look, having not the slightest idea what to do
with it other than related it to jewelry and pick the other choice, even if the oil and silver were the last two choices.

"Silver is poor man's gold." Written by a silver salesman I bet. A poor man can buy a gram of gold as easy as several silver ounces these days.

jmski52

Depends on your understanding of, and definition of money.

derryb

long term picture is not the same as the short term picture. History shows gold and silver are the lasting money.

roadrunner

I think if you had a Bucket of gold, and a rail car of silver, and another of heating oil

I don't want to have to worry about moving around (or guarding) a 2 ton pickup truck worth of silver or a 250,000 gallon tank of oil. Make mine the "bucket."

cohodk

I would take the bucket also, even though a 5 gallon full would weigh about 800 pounds.

jmski52

A drum of fuel oil would only weigh about 400 lbs.

OPA

<< <i>A drum of fuel oil would only weigh about 400 lbs. >>



did u mean to say "a barrel?"

jmski52

did u mean to say "a barrel?"

No, but it's a moot point either way because fuel oil isn't sold in drums or barrels.

roadrunner

I figured on a bucket of gold that I could lift (60-80 lbs) and then leveraged that up to equivalent values in silver or oil. Only one of those stashes can be easily moved around with you. I used to handle 55 gall drums of lube
oils at work. Those were not easy to maneuver, even with a cart dolly.

FRN's don't meet the true definition of what money should be imo. The important missing ingredient is a "debt extinguisher." You can't extinguish debt with another debt instrument. That's just another shell game.

cohodk

A typical 50 ft railcar could hold about 55 million oz of silver worth about $1.1 billion.

The 5 gallon bucket of gold would be worth about $15 million.

You sure you couldnt afford the security?

jmski52

FRN's don't meet the true definition of what money should be imo. The important missing ingredient is a "debt extinguisher." You can't extinguish debt with another debt instrument. That's just another shell game.

They pretty much suck as a store of value as well.

cohodk

<< <i>FRN's don't meet the true definition of what money should be imo. The important missing ingredient is a "debt extinguisher." You can't extinguish debt with another debt instrument. That's just another shell game.

They pretty much suck as a store of value as well. >>



Do you think that is by design?

roadrunner

<< <i>

<< <i>FRN's don't meet the true definition of what money should be imo. The important missing ingredient is a "debt extinguisher." You can't extinguish debt with another debt instrument. That's just another shell game.
They pretty much suck as a store of value as well. >>



Do you think that is by design? >>




The original design of the FRN's were notes backed by gold. I believe that was their original intention though I don't know how long past 1913 they had intended to honor that original design. Today's "backless" notes are surely by design as well.

derryb

1964 or 1965 quarter. Which one is the "money" coin?

BBN

<< <i> Gold I believe is embedded in people's thinking as the equivalent of money and most readily exchangeable.

Silver is a few steps further away in that thinking. I think if you had a Bucket of gold, and a rail car of silver, and another of heating oil,
Silver might be the last most people pick if offered for free. >>



The only people whose minds have "gold is money" embedded in their minds also have "but silver is an acceptable substitute" also embedded in their minds. The overwhelming majority of this country recognizes gold as jewelry or a collectible coin and not a medium of exchange or barter. That the kooks like us that believe that and experienced investors that recognize it and the average investor with a 401k don't even know what the hell they are invested in. They just let the advisors that show up at their work every quarter do that work for them.

It would take a SHTF situation (a year plus after an event like a catastrophic EMP) for it re be recognized and the remaining survivors adapting to the new way of life. Right now gold is only traded amongst those that truly recognize its value and that is very few of us.

Immediately after a catastrophic "end of the world as we know it" water, diapers, booze, and rice will be more valuable than gold. Then, fiat and clad would be acceptable for a long time due to our culture that accepts it.

I'm not over the edge like some prepper or expecting these situations. Just drawing an image that shows what the immediate reaction and mentality of the general public.

rawteam1

<< <i>1964 or 1965 quarter. Which one is the "money" coin? >>


My motha n your motha , they both motha's...
Curly

jmski52

Do you think that is by design?

And the point of your question is?

Baley

They (FRNs) pretty much suck as a store of value as well. >>

Do you think that is by design?

"hiding and hoarding" FRNs is a really unproductive use of the capital, with an expected real return over time that is negative.

"storing value" in PM bullion has a better chance of keeping up with inflation, but is subject to market fluctuations that can add to or subtract from returns. Over certain time periods (the past 3 years, for example) it has been worse than cash at being a store of value; the long-long term outlook isn't much better than break-even vs inflation, but handpicked time periods can paint the metals in a very favorable light vs some alternatives.

Best long term stores of value and sources of capital growth, historically, are quality real estate in good locations, and shares of stock of stable, profitable companies.

Quality collectibles haven't done too badly, and of course at the high end, fine and modern art have seen spectacular returns.

FRN's don't meet the true definition of what money should be imo. The important missing ingredient is a "debt extinguisher." You can't extinguish debt with another debt instrument. That's just another shell game.

Gonna have to disagree with this. I sure can extinguish my debts with FRNs, in fact that is the only thing my creditors will take, US dollars in cash or check form.

The fact that those dollars represent "debt" of the government or fed or whatever, is a technical abstraction that has no practical value in day to day life.

rawteam1

gold

cohodk

<< <i>Do you think that is by design?

And the point of your question is? >>



"Money" just sitting around is useless. There are always new people entering an economy, it is fluid. Money must meet the needs of the economy.

jmski52

"Money" just sitting around is useless. There are always new people entering an economy, it is fluid. Money must meet the needs of the economy.

BS, I say. Money just sitting around has every right to sit around until I need it for something. Savings used to be a virtue, now savings have been redefined (and Baley & cohodk have taken the bait), since banks are no longer savings & lending institutions and have simply become dispensers of social engineering policies.

I understand that when society gets too big, regulations are needed but the regulations aren't being used to regulate anything. They're simply funnels being used to fund our version of Putin & his henchmen.

I hope you all realize that the laws about bank accounts have been changed. Your "money" on deposit is now a credit with the bank. It's not your money now - it's "available credit". Sinclair has followed these developments ever since the Cyprus banking fiasco. The US laws were just changed this past year to make depositors into unsecured creditors. Yesterday, I noticed right on my deposit slip that my bank balance is now "available credit".

Available credit? What about "on deposit"? Watch your backside. We are being set up. With this kind of crap going on in government and banking, you'd have to be certifiably crazy to go along with it.


Rawteam1, that's a good article on gold.

OPA

cohodk & bailey....add me to your camp of "certifiably crazy." I get a chuckle whenever I read the bs posted by some of our paranoid conspiracy advocates. Although there is some truth behind their concerns, but most are either misinterpreted or grossly exaggerated. It's always a pleasure to read your voice of reasoning and in most cases based on facts and not personal interpretations.

jmski52

OPA, okay - maybe not certifiable. But tell me - do you really trust the banks and gov.com?

It's great to make money in the stock market, and I get it that that's where you're coming from. I also know that stocks aren't rising due to fundamentals.

roadrunner

FRN's don't meet the true definition of what money should be imo. The important missing ingredient is a "debt extinguisher." You can't extinguish debt with another debt instrument. That's just another shell game.

Gonna have to disagree with this. I sure can extinguish my debts with FRNs, in fact that is the only thing my creditors will take, US dollars in cash or check form.

The fact that those dollars represent "debt" of the government or fed or whatever, is a technical abstraction that has no practical value in day to day life.


Yes. You can extinguish your personal debts. But the system still has the same amount of debts, just transferred to a new "host." In the post-1913 FED period debt only increases....never decreases. Regardless of who owns those FRN's it's someone's liability and risk. FRN's never extinguish the system debt. The "debt" of the govt is a huge determinant on the costs of goods and services, even if you don't see a line item for it on what you purchased today. And that's just the way the govt and FED wants it. The rising capital markets that makes money for stock investors and traders has basically risen on the backs of sovereign, corporate, state, municipal, and personal debts. It sure does look like it affects day to day life on numerous levels.

jmski52

The rising capital markets that makes money for stock investors and traders has basically risen on the backs of sovereign, corporate, state, municipal, and personal debts.

At the risk of "grossly exaggerating or misinterpreting" your post roadrunner, it appears to be a wealth re-distribution scheme. You either play the stock market game or get drummed out of the middle class while your savings earn 0.1% and your taxes multiply to fund socialized debt of these various entities.

OPA

<< <i>OPA, okay - maybe not certifiable. But tell me - do you really trust the banks and gov.com?

It's great to make money in the stock market, and I get it that that's where you're coming from. I also know that stocks aren't rising due to fundamentals. >>



Yes, I've done very well over the last 45+ years being in the market via employee profit sharing funds, 401k's or personal stock investment and to some degree, PM's for the last 15 years. However, I also realize that we do not live in a Utopian World. Yes, there is some manipulation in every aspect of your life from the time you are conceived to your death, but not to the extend that you make us to believe. I trust the financial entities that my savings and checking accounts are maintained accurately. I trust the govt, that those accounts are insured to the maximum allowed. Of course there is manipulation involved in order to accomplish some ones goal whether it's in banking, government, private or corporate sector. Some form of manipulation is not always evil as some conspiracy advocated would make us to believe. We'd all be speaking German, if Roosevelt and Churchill did not manipulate the public and Congress prior to our involvement in WWII.

jmski52

We'd all be speaking German, if Roosevelt and Churchill did not manipulate the public and Congress prior to our involvement in WWII.

Huh? Let's remember that Britain was about to get their behinds kicked if not for the RAF and that London was being bombed. Churchill had warned about Hitler long before becoming Prime Minister and his warnings weren't manipulation. Pearl Harbor did more to galvanize the US than FDR ever did. FDR's ambassador to Britain was pro-Nazi until the Brits threw him out. (You might remember him as Joe Kennedy, stock manipulator and bootlegger extraordinaire). FDR did what he had to do, thankfully.

cohodk

Money just sitting around has every right to sit around until I need it for something

I have no problem with that. Lets suppose we are all millionaires with our money sitting in the bank, not being spent or invested. What would the economy look like?

Your "money" on deposit is now a credit with the bank

Not true. YOUR money on deposit with the bank is a DEBIT to the bank. Always was and will be. Sinclair is a fear monger.

Yesterday, I noticed right on my deposit slip that my bank balance is now "available credit"

Yes exactly. YOUR money is a credit. This is your available credit.


I also know that stocks aren't rising due to fundamentals.

Really? Do you know that corporate balance sheets are stronger than ever? And companies are making profits? I see crowded roadways. I see crowded airports. Try getting a hotel in the middle of Nevada during the week. These are fundamentals. And maybe the economy isnt as strong as when we had a perfect baby boomer storm, but it really isnt that bad. Now please dont start with any "artificial" crap. Nothing is artificial. Everything IS. Just because the FED is providing liquidity does not mean things are artificial. Just because you do not agree with policy (i dont) doesnt mean it isnt real. The stock market is higher because US companies are the envy of the world. Our companies are the most dynamic and innovative on the planet. Stocks are also a good inflation hedge. Many provide a good income stream. Can we say the same of bonds, real estate, commodities, or gold?

cohodk

Citing a 166 year old British court case?

ARCO

<< <i>1964 or 1965 quarter. Which one is the "money" coin? >>

At Wal-Mart, Target, Gap, Starbucks, McDonalds...etc etc etc, they have exactly the same value.

OPA

<< <i>

<< <i>1964 or 1965 quarter. Which one is the "money" coin? >>

At Wal-Mart, Target, Gap, Starbucks, McDonalds...etc etc etc, they have exactly the same value. >>



How true

They have the same value everywhere except to those of us, a very small minority who know better, and coin or bullion dealers.

jmski52

Not true. YOUR money on deposit with the bank is a DEBIT to the bank. Always was and will be. Sinclair is a fear monger.

In Corzine you trust? Sinclair has already documented the actual changes to US Banking Regs, btw. Call him whatever you want.

cohodk

Sinclair is certainly much more intelligent, pragmatic and logical than I, so whatever he writes must be true. I am just a simple ignorant man who knows how to interpret hubris.

Purveyors of misinformation must stay strong, lest apathy assert its grip.

OPA

<< <i>Sinclair is certainly much more intelligent, pragmatic and logical than I, so whatever he writes must be true. I am just a simple ignorant man who knows how to interpret hubris.

Purveyors of misinformation must stay strong, lest apathy assert its grip. >>





I suspect P. Heller falls into the same group as JS

jmski52

I watched "Gone with the Wind" last night. In order to keep the military hospital open, Mellie graciously accepted a bag of coins from Belle, the owner of the local house of ill-repute. When Mellie opened the bag, she exclaimed "Why, there's a lot of money here! Not the worthless paper money, but gold! Real gold!!"

I defer to your expertise.

Baley

see also: Ragnar Danneskjöld

One of the original strikers, he is now world famous as a pirate. Ragnar attended Patrick Henry University and became friends with John Galt and Francisco d'Anconia while studying under Hugh Akston and Robert Stadler. Danneskjöld seizes relief ships that are being sent from the United States to The People's States of Europe. As the novel progresses, Danneskjöld begins to become active in American waters. Danneskjöld's action is to restore to other creative people the money, in gold, which was unjustly taken away from them—specifically, their income tax payments. He explains this is not altruism; his motivation is to ensure that once those espousing Galt's philosophy are restored to their rightful place in society, they will have enough capital to rebuild the world.

Kept in the background for much of the book, Danneskjöld makes a personal appearance when he risks his life to meet Hank Rearden in the night and hand him a bar of gold as an "advance payment" to encourage Rearden to persevere in his increasingly difficult situation. Danneskjöld is married to the actress Kay Ludlow; their relationship is kept hidden from the outside world, which only knows of Ludlow as a film star who retired and dropped out of sight. It is mentioned that some of the strikers have strong reservations about his way of "conducting the common struggle."

cohodk

<< <i>I watched "Gone with the Wind" last night. In order to keep the military hospital open, Mellie graciously accepted a bag of coins from Belle, the owner of the local house of ill-repute. When Mellie opened the bag, she exclaimed "Why, there's a lot of money here! Not the worthless paper money, but gold! Real gold!!"

I defer to your expertise. >>



Definition of apathy...."frankly my dear, I don't give a damn."

jmski52

Oh Rhett! Oh, Rhett!! What shall I do?

derryb

My lips are truely parched. I do believe I'll take a break from the forum and have another mint julip.