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The US dollar and Gold - where things currently stand vs. Asia and Europe.
roadrunner
Posts: 28,303 ✭✭✭✭✭
https://www.goldmoney.com/research/goldmoney-insights/gold-crossing-the-rubicon?gmrefcode=dollarc
Interesting how much gold the US needed to sell from Bretton Woods (1944) to August 1971 to help "manage" the dollar vs. gold. China, India, Russia are still buying while the west is still selling. It's been said that under their 18th and 19th century gold standard regimes....capital and labor gravitated towards Great Britain, and then the US. Apparently, China wants to be next on that list.
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When I was younger, it seemed that I couldn't really get a straight story about why governments held gold. Gold wasn't used as money (anymore) when it "used to be" just that. Harry Browne set my thinking in the direction that it is now.
The fact that gold is a money of last resort when governments get their butts in a sling - should tell you all you need to know about gold. It's sad but true - governments lie all the time and demonetization of gold is just another governmental lie. I used to look through the Red Book and fantasize about owning a gold coin, but I never knew anyone who had ever owned one - until I became a coin collector and started hanging around coin shops in my early 20s. I didn't own a gold coin until about 1977.
Nobody ever talks about "where the gold went", and if you do, there's a chance you get tagged as a conspiracy nut, but I'm not so sure that's a bad thing anymore. I'm sure this is true in every other country, including the ones who had large stashes of gold that clearly disappeared during war. So, where does the gold go when it's taken during war, such as the Congo, Libya, Ukraine, and I'm sure I've forgotten a few others. Gordon Browne is about the only leader who ever publicized where his country's gold was going, and he clearly takes the prize as making the dumbest move a finance minister could ever make.
China and Russia are putting as much gold into storage as they can get their hands on. There's a reason for this. When a currency event happens, a government has to have the ability to promise that a "new" currency will have official and legal backing of "something". After Weimar's hyperinflation event, the new currency was backed by promises of land and other assets, a small amount of gold was in the mix as well. Whether or not a currency is convertible into gold, there is always a promise made to back the currency with "something" tangible. In the beginning, that promise has to be real.
My assumption is that if and when a currency event occurs this time around, the complete lack of confidence in the lying, corrupt bunch of parasites in DC will weigh heavily enough on the population that people won't accept anything much besides convertibility into something, and that something could certainly include precious metals as all, or part of the mix.
Convertibility will become a known term in finance. My opinion.
I knew it would happen.
@jmski52 ...well stated....Gold is money, always will be. It will never be worth nothing. Cheers, RickO
Wondering....do you think gold has ever been turned down because someone wanted something else in exchange?
Knowledge is the enemy of fear
A while back (approx. 20 years ago), someone I know was selling a building. One of the potential buyer wanted to buy said building with gold bricks. The seller turned it down saying "what am I going to do with all the gold? I can't deposit it in the bank." Eventually the building was exchanged in US dollars.
Successful BST transactions:
Buy and sold to Wondercoin,
Buy from: mbogoman, sol15g
A coupla Christmases ago, I offered to partially pay for a piece of jewelry for my wife from a jeweler I knew, with a gold eagle.
She asked what it was. I told her it was a gold coin, an ounce of gold. She wouldn't take it. A JEWELER, for chrissake!
Here's a warning parable for coin collectors...
While the US dollar index (dollar's value compared to other major currencies) continues to carry an inverse relationship with the price of gold, the primary long term mover for the price of gold is faith that central banks have things under control.
Keep an open mind, or get financially repressed -Zoltan Pozsar
Faith...... yup, that's an investment strategy.
I don't know why people try to make this more complicated than it is... arrogance....ignorance?
Knowledge is the enemy of fear
. . . says the man who has faith the grocery store will accept his dollars and that the banking system is safekeeping those dollars for him.
Keep an open mind, or get financially repressed -Zoltan Pozsar
Yup..
Never had anyone turn down a dollar and ain't no grocery store accepting gold...at leat not at inflated values over face.
You keep doing what you are derryb....you're making this very easy for "us".
Knowledge is the enemy of fear
I've owned gold and silver far longer than any other asset, yet they are the worst long term performer. Go figure.
Liberty: Parent of Science & Industry
Several years ago, I watched a skid on youtube, where a coin dealer or bullion dealer tried to exchange a gold $20 double eagle for a $20 bill. No takers....Unfortunately, I was not in the area to accept his generous offer.
Because we always hold on to our losers. Pride keeps us from admitting failure. Hope keeps us from moving forward.
Knowledge is the enemy of fear
Gold is gold and keeps value. Practicality rules the roost. Any time is a time to play. Who wants to go on a ride ?
That, and need something to offer the Sky Brother for a ride to the stars. They don't take. FRNs
Liberty: Parent of Science & Industry
I've owned gold and silver far longer than any other asset, yet they are the worst long term performer. Go figure.
I figure that there's a reason you have held gold and silver all this time. Care to expound on the reason, or do you agree with cohodk that it's been a bad move all these years?
It's pretty much one or the other.
I knew it would happen.
I enjoy my collection. That's the reason.
Liberty: Parent of Science & Industry
I didn't say it has ever been a bad move, but certainly hasn't been the best.
Knowledge is the enemy of fear
insurance is always a bad expense. . . until you need it.
Keep an open mind, or get financially repressed -Zoltan Pozsar
Insurance has alway been the ultimate scam...
Gold is for kingdom/nation builders...
True dat
Keep an open mind, or get financially repressed -Zoltan Pozsar
How do you think Warren Buffett got sooooo rich?
Knowledge is the enemy of fear
Yeah, every 500 years or so this stuff happens
Knowledge is the enemy of fear