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The Price of Gold: Does It Matter?

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Wade Hampton III

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Re: The Price of Gold: Does It Matter?

PostThu Dec 28, 2017 11:49 pm

Gordon Lillibridge, BA Mathematics, University of California, Los Angeles
wants to know..."Why did humans choose gold as a main thing in the economy
as there are lots of alternative to gold?"

Other things besides gold have been used for currency. In India, they have
used beans. Shells have been used in other parts of the world. Silver and
copper have both been used as currencies. The chief reasons for anything
being chosen as a form of currency are durability, unfakable (easily),
portability, and have little utilitarian value in themselves. In ancient
times, gold was chosen over metals, because it has two unique features:
It does not corrode and it has almost no utilitarian value beyond jewelry.
When it was first designated a a form of currency. Its chief competitor
as a currency, silver has some limited utilitarian values and does corrode.
Gold has another unique feature. It is rare. In a stable society, new
injections of gold are rare. When they have occurred, the results have
been disruptive, notably when Spanish brought large amounts of gold from
the Spanish main to Europe in the 16th and 17th century. When the supply
of currency is constant, then everybody will know its value and be able
to trust it.

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Paul Sutton, electrical engineer says...

Scarcity and color. Scarcity is obvious, it’s malleable and easily formed,
but color was equally important, since there are minerals that are more
scarce than gold. Gold’s color is unique, and because it doesn’t tarnish,
the color is just “always there.” There are other minerals that are,
arguably, equally scarce - platinum springs to mind - but weren’t initially
recognized as being unique until they were uniquely identified. Platinum,
for instance, has a color similar to silver, and is often found in silver
mines. The early Spanish silver miners, however, found that platinum is
a much harder mineral than silver, and much harder to fashion into trinkets,
so what do you think they did with the platinum? Threw it into the mining
tailings as being worthless silver, worth less than silver because it was
less malleable. Even though it was far more scarce, and remains so.

Geoffrey Widdison, investor, says...

Why we "chose" it is likely because ancient people found it to be both
beautiful and unique, to the point where they endowed it with mystical
powers. That made it desirable, which started people trading to get it,
which evolved into currency. The reason we kept on using it is because,
for the longest time, there were no alternatives that were as good. The
two basic requirements of currency are that it be scarce and fungible
(meaning that units of it are interchangeable). There are quite a few
things that meet these requirements, but there are a number of other
characteristics that make a currency especially practical. It should
be portable (and valuable in relatively small amounts), it should be
easily divisible (so you can set more specific prices), it should be
easy to identify and hard to counterfeit, and it should be durable.
Gold scores high on every one of those, and no other common substance
I can name does. The last, durability, is an especially big deal. A
currency that rots, rusts or otherwise loses value over time is
undesirable. The ideal currency should be capable of being buried
underground for ten years, dug back up, and be just as good as when
you first earned it. Few natural materials do that as well as gold,
and none that are particularly scarce. Silver and copper are okay in
that category (they do tarnish, but generally last a long time), which
is why they've also been used as currency, but they're less scarce than
gold and hence less valuable. If you can name another substance that's
found in the natural world, can be easily identified without special
equipment, and meets all of those requirements, I'd love to hear
about it.

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Wade Hampton III

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Re: The Price of Gold: Does It Matter?

PostSun Jan 21, 2018 3:36 pm

Jim Watkins, with only a layman's knowledge of economics, asks...

How did the USA gain so much gold that it seems that no country can surpass
USA's amount of gold reserves?

Back in 1933, the US government made it illegal for individual Americans to
own gold. Everyone sold their gold to the government for the going rate at
the time, which was $20.67/oz. Take a look at this chart showing the US gold
holdings from 1870 to 2010. Notice the big jump in 1938 from 8,000 tones to
almost 20,000 tones. Also notice that the US divested themselves of much of
that gold before ownership of gold by US citizens was made legal again in
the 1970s.

Bretton Woods At Work
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Now, let’s put this in perspective. A metric tonne of gold is about 32,150
Troy ounces, so the US gold reserves equal 8,000 x 32,150 or about 257,000,000
Troy ounces, which at today’s gold price is worth something like 310 Billion
dollars. Compare this with the current national debt of about 20 Trillion dollars.
So the US might have a lot of gold compared with other countries, but it really
isn't that significant.

New Deal At Work
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Wade says, "The greatest gold heist in history and is still relatively unknown even
down to this very day. After the heist, FDR raise the gold price to $35/oz! Smooth
operator, yes?"
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Wade Hampton III

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Re: The Price of Gold: Does It Matter?

PostFri Jan 26, 2018 8:37 pm

Jim Rickards: $10,000 Dollar Gold is Eight Grade Math!

I believe gold is ultimately heading to $10,000 an ounce, or higher.
Now, people often ask me, “How can you say gold prices will rise to
$10,000 without knowing developments in the world economy, or even
what actions will be taken by the Federal Reserve?” It’s not made up.
I don’t throw it out there to get headlines, et cetera. It’s the
implied non-deflationary price of gold. Everyone says you can’t have
a gold standard, because there’s not enough gold. There’s always enough
gold, you just have to get the price right. I’m not saying that we will
have a gold standard. I’m saying if you have anything like a gold standard,
it will be critical to get the price right. The analytical question is,
you can have a gold standard if you get the price right; what is the non
-deflationary price? What price would gold have to be in order to support
global trade and commerce, and bank balance sheets, without reducing the
money supply? The answer is, $10,000 an ounce.

Gold Certificate?
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I use a 40% backing of the M1 money supply. Some people argue for 100%
backing. Historically, it’s been as low as 20%, so 40% is my number. If
you take the global M1 of the major economies, times 40%, and divide that
by the amount of official gold in the world, the answer is approximately
$10,000 an ounce. There’s no mystery here. It’s not a made-up number.
The math is eighth grade math, it’s not calculus. That’s where I get the
$10,000 figure. It is also worth noting that you don’t have to have a gold
standard, but if you do, this will be the price. The now impending question
is, are we going to have a gold standard? That’s a function of collapse of
confidence in central bank money, which is already being seen. It’s happened
three times before, in 1914, 1939 and 1971. Let us not forget that in 1977,
the United States issued treasury bonds denominated in Swiss francs, because
no other country wanted dollars. The United States treasury then borrowed
in Swiss francs, because people didn’t want dollars, at least at an interest
rate that the treasury was willing to pay. That’s how bad things were, and
this type of crisis happens every 30 or 40 years. Again, we can look to
history and see what happened in 1998. Wall Street bailed out a hedge fund
to save the world. What happened in 2008? The central banks bailed out Wall
Street to save the world. What’s going to happen in 2018?

We don’t know for sure. But eventually a tipping point will be reached where
the dollar collapse suddenly accelerates as happened to sterling in 1931.
Investors should acquire gold and other hard assets before that happens.

- Source, Jim Rickards

Wade says, "After the gold heist of 1933, FDR should have revalued to $50/oz
instead of $35/oz, which would have stopped Great Depression I in its tracks.
But like many thieves, he had shenanigans!"
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Wade Hampton III

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Re: The Price of Gold: Does It Matter?

PostWed Feb 14, 2018 12:43 am

Expensive Things You Never Knew Existed!

For many centuries, lots of people have believed that gold is one of the
most expensive materials in the world. This, however, is absolutely wrong.

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Miners in Myanmar have found the world’s largest jade stone in a remote mine
in Kachin State, in the north of the country. The stone is 14ft high and 19ft
long, and weighs approximately 200 tons. This beautiful jade boulder will be
sent to China, where it will be carved up into expensive jewelry and sculptures. ... ld-188955/

53256.jpg (32.98 KiB) Viewed 725 times
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Wade Hampton III

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Re: The Price of Gold: Does It Matter?

PostWed Feb 21, 2018 8:30 pm

Russians No Fools!

Wade says, "They were snookered by (Jew) Jacob Schiff's NYC-exported Bolsheviks
in 1917. Seems now the tables are turning."

Gold remains stuck below $1,330 after yesterday’s smack-down. For the record, the
Central Bank of Russia is out with its monthly gold reserve figures. The Russians
keep stacking — to the tune of another 18.66 metric tons last month. Russia’s total
gold stash is up to 1,857 metric tons. Translated to ounces, that’s just shy of
60 million...

Wade says, "Sorry Jews...not 6 million."
Keep On Stackin'
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Russia’s gold stash is now more than 5.6% of GDP — a percentage three times that
of the United States.

“Russia is the world champion when it comes to the gold-to-GDP ratio,” Jim Rickards
told his readers earlier this month. “That’s the metric that really matters because
it reveals how much gold you have to back up your real economy in the event of a loss
of confidence in fiat currency.”
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Wade Hampton III

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Re: The Price of Gold: Does It Matter?

PostTue Mar 13, 2018 3:43 am

Gold: The Once and Future Money with James Rickards....

James Rickards joins Cambridge House International, where he discusses
how gold has dominated the financial scene throughout history and how
it will once again rise from the ashes and take back its rightful throne.
Gold is coming.

Golden Girl
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(Embedded video bypasses U-tube censorship.) ... james.html
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Wade Hampton III

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Re: The Price of Gold: Does It Matter?

PostTue May 08, 2018 11:47 pm

Jim says the reset of gold to $10,000 per ounce is coming, and it could play
out in one of two ways. Here’s the details…

by Jim Rickards via Daily Reckoning...

Following the Panic of 1907, John Pierpont Morgan was called to testify before
Congress in 1912 on the subject of Wall Street manipulations and what was then
called the “money trust” or banking monopoly of J. P. Morgan & Co. In the course
of his testimony, Morgan made one of the most profound and lasting remarks in
the history of finance. In reply to questions from the congressional committee
staff attorney, Samuel Untermyer, the following dialogue ensued as recorded
in the Congressional Record:
Girls & Gold - Beautiful!
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Untermyer: I want to ask you a few questions bearing on the subject that you have
touched upon this morning, as to the control of money. The control of credit
involves a control of money, does it not?

Morgan: A control of credit? No.

Untermyer: But the basis of banking is credit, is it not?

Morgan: Not always. That is an evidence of banking, but it is not the money itself.
Money is gold, and nothing else. ... ure-chaos/
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Wade Hampton III

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Re: The Price of Gold: Does It Matter?

PostWed May 23, 2018 12:59 am

Give It Back!

Sunday, May 20, 2018
The World Wants Its Gold Back From the U.S.

We’re all familiar with the so-called “run on the bank.” It usually begins quietly
with just a few depositors getting nervous about the solvency of the bank. They line
up to get their cash out before the bank closes its doors. Soon the word spreads and
the line gets longer. The bank projects an air of confidence and gives cash to depositors
who request it as long as they can, but pretty soon the cash runs out.

The classic image of this is the scene from the Christmas-season film It’s a Wonderful
Life, with Jimmy Stewart. We’ve all seen it. Now something similar is happening at the
Federal Reserve Bank of New York. What’s different is that the run on the bank involves
gold, not cash. The New York Fed will never run out of cash because they can print all
they need. But they could run out of gold.

Until recently, the New York Fed had about 6,000 tons of gold stored in its vaults on
Liberty Street in Lower Manhattan. Contrary to popular belief, the gold stored there
does not belong to the United States (the U.S. gold is stored in Fort Knox and West
Point). The Fed gold belongs to countries around the world and the International
Monetary Fund. Beginning a few years ago, central banks demanded the return of their
gold to their home countries. Germany was the most prominent example, but there were
others, including smaller holders such as Azerbaijan.

The process is difficult because the Fed bullion consists of old bars, some stacked up
since the 1920s, that don’t meet today’s standard for purity and size. This doesn’t
mean the gold is bad, just that the bars have to be melted down and re-refined to
meet the new standards. Now, one of the largest holders, Turkey, is reclaiming its
gold also. Turkey has had 220 tons stored in the U.S. And Turkish President Recep
Tayyip Erdoğan has recently suggested that international loans should be made in
gold instead of dollars.

Here’s what he told the Global Entrepreneurship Congress in Istanbul on April 16:

I made a suggestion at a G-20 meeting. I asked: Why do we make all loans in dollars?
Let’s use another currency. I suggest that the loans should be made based on gold…
With the dollar the world is always under exchange rate pressure. We should save
states and nations from this exchange rate pressure. Gold has never been a tool of
oppression throughout history. Meanwhile, Russia and China continue to amass gold.
The gold stash in New York is dwindling and global behavior is coming to resemble
a run on the gold bank. Skeptics claim not all of the gold is there. My own view
is that New York does have the gold, although a lot of it may be leased out to
support gold price manipulation by the big banks and China. Either way, we may
soon find out if New York has to shut its gold doors just like any other insolvent

And we may also find out how much patience the world has left with the dollar.

- Source, Jim Rickards
The Real Deal
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