Surprise...the game is rigged

[bombadil.360]

people exchange gold for money; hence why they want to stock-pile gold in the first place; the end-goal is paper money; which is what determines gold's value.

anyway, smart people bought swiss francs to try to save their dollars from being inflated, not gold.

but nowdays, it is pretty hard to find any swiss francs to do the same; but quite easy to find gold.

go figure.

once again, the kids got schooled.

 

[SpasticGramps]

anyway, smart people bought swiss francs to try to save their dollars from being inflated, not gold.

but nowdays, it is pretty hard to find any swiss francs to do the same; but quite easy to find gold.

go figure.

once again, the kids got schooled.

They did buy swiss francs and Canadian $ until the Swiss Central bank had to defacto peg their currency (ie print) in order to keep up in the global race to the bottom in currency devaluation.

See the article I just posted. Everyone is going to get schooled.

 

[SpasticGramps]

once again, the kids got schooled.

They sure did. Silly kids.

Swiss Franc Peg Called Into Question

In recent months the Swiss National Bank (SNB) has been facing growing criticism as a result of its attempts to suppress the value of the Swiss franc. The SNB has been buying euros in an effort to stabilise the euro at the 1.20 Swiss franc mark. Swiss parliamentarians have also started to question the auditing processes for the country’s gold reserves, while some conservative politicians are backing a private initiative promoting the introduction of a new gold franc.

Many Swiss are asking why the SNB is trying to prop up the euro. In Q1 alone the bank spent 1.7 billion francs on open market operations, buying the euro whenever it has looked like falling through 1.20. These measures are aimed at protecting the export and tourism sectors. The 2008 financial crisis also forced the SNB to engage in unprecedented money printing in an effort to prop up the country’s banking system. But critics say that this is destroying the country’s sound money reputation and undermining generations’ worth of hard-earned national prosperity.

“The Gold Initiative” led by Luzi Stamm's SVP party has also been attracting attention. This initiative is trying to promote greater disclosure about the status of the nation’s gold reserves, and – as with similar campaigns in Germany – is trying to get the SNB to repatriate gold held abroad. The initiative also wants to place strict limits (golden chains if you will) on the SNB’s ability to sell gold. Supporters of this campaign hope to collect at least 100,000 signatures from Swiss citizens in a push for a national referendum on the issue.

Another private initiative that is finding support among conservative politicians is calling for a prompt introduction of a new gold franc. This gold franc should function as a parallel currency to the Swiss franc and protect citizens from devaluation and the financial market risks. Yesterday the National Council's Committee for Economic Affairs discussed this issue, and supporters also hope that this idea can be put to a referendum.

Gold is slowly moving back into favour among Switzerland’s economic elite.

 

[bombadil.360]

it's no wonder why you're so confused, you read journalists' intrepretations of what's going on lol...

they swiss did not want every asshole and his grandma buying their francs, as it would ruin its strength... one golden coin for this clue you owe me lol...

 

[whodare]

http://http://seekingalpha.com/article/245824-mainstream-haters-deny-gold-its-fundamentals

By Jordan Roy-Byrne

Yesterday I came across a clip from one of the business channels. The discussion was about “king dollar” and Gold (NYSE:GLD). (The king dollar probably gives it away). Anyway, one of the guests quipped, “I’m on record that Gold is a dumb trade. It is rising based on fear and confusion and when that subsides, the Gold trade ends.”

First of all, Gold has been rising for ten years. It went down the twenty years prior. It is now in a structural bull market. This fact cannot be debated. There is no Gold “trade” unless you are trying to make a few points next week or month. It is a bull market. Repeatedly, the mainstream news makes this mistake. Moreover, find me a Gold bear that readily admits Gold is in a bull market. You can’t because every bear refers to Gold as a trade, as if its advance is an extended aberration that needs correcting or is unsustainable.

Secondly, there are real reasons for the bull market in Gold. Attributing “fear and confusion” to what is becoming a multi-decade bull market is borderline heretical. I understand that Wall Street stock jocks hate Gold. Fine. But let’s get one thing straight. There are real driving forces here which can be sustained into the future.

Sure Gold has been rising for 10 years but its outperformance since the start of the financial crisis must be explained. Currencies lose their value fastest when a nation cannot grow its way out of its debt burden. Western governments were already hugely indebted. Post-crisis, their debts have soared but their economies have struggled under the weight of those debts. As we’ve explained in past commentaries, marginal rises in interest rates will exacerbate these debt burdens.

Hence, we’ve already seen the beginnings of debt monetization in the US, Japan and Europe. There is no way to grow out of this situation. The debt burden is too burdensome and rising interest rates will only make it worse. More monetization is coming. This is how and why debt crisis’ become currency crisis.’ Ultimately governments cannot take in enough tax revenue, interest rates rise and they are forced to print money to stave off default.

Lost in the usual nonsense is the reasonable bearish argument for Gold. I’m not talking about the flimsy arguments like rising rates or deflation. I’m talking about how Gold is very much a speculation because in the present system, there is no need or use for it. Even though there are tremendously bullish driving forces at hand, the market is still “speculating” on the value of Gold and future value of various currencies. While the long-term trend is higher, if sentiment suddenly shifts, Gold could fall $200 or $300.

While mainstream suits, stock jocks and traders misunderstand and underestimate Gold, some of those in the highest ivory towers actually do not.

Last November, Robert Zoellick, the President of the World Bank said that leading economies should consider adopting a modified version of the gold standard. Among other things, Zoellick said:

“The system should also consider employing gold as an international reference point of market expectations about inflation, deflation and future currency values. Although textbooks may view gold as the old money, markets are using gold as an alternative monetary asset today.”

Furthermore, only days ago Fed Governor Thomas Hoenig called the gold standard “a legitimate system.”

In an interview with KingWorldNews.com, Jim Rickards who has worked with both the Fed & US Treasury responded to recent developments:

“What Hoenig has done, as Robert Zoellick did before him, is to legitimize the debate. This is not the last word on gold and there is a long way to go both intellectually and mechanically before we get to a gold standard. What is important is that the discussion is now out of the shadows and in the main arena and it will take on a life of its own from here with participation from many sides. Hoening may have lost his vote on FOMC but he has not lost his voice.”

There are those who dismiss Gold entirely (like the source of the very first quotation) and then there are those who are equally as ignorant and see Gold in a bull market but think it is just a fad that will end as all bull markets do.

That is simply not the case. The bull market in precious metals is one that will ultimately restore sound fundamentals and sound money to western economies. The bubble is in fiat currencies, consumer debt, government debt and persistent deficits. The bull market in precious metals is the correction to those bubbles. Yes, it will not rise forever and yes, mining companies will crash at the end of all this.

But it is still very early. The recent gains in junior miners are only a hint of what is to come. As the fundamentals become more and more obvious, the Gold “trade” will only become larger and stronger. Many more participants soon will come on board. The gains in the junior miners will become larger, more extreme and truly spectacular. Our subscribers benefited in 2009 and 2010, but we are even more excited about 2011 and 2012.

 

[FlowerFarmer]

people exchange gold for money; hence why they want to stock-pile gold in the first place; the end-goal is paper money; which is what determines gold's value.

People exchange gold for currency...not money. Fiat is not a store of wealth as previously stated..and because of this it can not be classified as money. You must save in something else that is a store of wealth - in this instance..gold. Thats real money...because it meets the 3 requirements I post previously.

There is a difference between money and currency. I prefer to save in money and convert to currency when I need to buy something. This helps protect me from an inflating currency.

they swiss did not want every asshole and his grandma buying their francs, as it would ruin its strength

How does it ruin its strength while in demand? Wouldn't the more people looking to purchase a limited supply of something create strength?


Sure..Paper money is what determines gold value - based on the amount of paper chasing it (a hard asset). Gold's USD price is higher not because anything has changed about gold..but simply because it takes more of our debased currency to purchase it. I'm not sure of any other way to put it.

Save/invest how you see fit, but rest assured any wealth you have in paper assets is devalued over time.

I'm out.. take care.

 

[SpasticGramps]

they swiss did not want every asshole and his grandma buying their francs, as it would ruin its strength... one golden coin for this clue you owe me lol...

 

[DiscoBiscuit]

The game is indeed rigged. Preferred stocks cost more than common but their returns are disproportionate. There are "gray markets" where in-the-know traders face less risk and earn disproportionate gains. There's every-day manipulation that constitutes fraud or gives the appearance of fraud. Markets are manipulated by man.

Gold is a market. Gold doesn't tell man what gold's worth. Gold doesn't mitigate inflation and inflation doesn't always work in favor of the consumer. Remember California miners paying the modern day equivalent of $1000 for a pickaxe, payable in gold? Commodities can go through the roof but it's no indication the value of gold will go along with it.

One thing gold hawks don't advertise is our current system better responds to inflation. You have to read history to get an idea about gilded age inflation and the fact we had nothing to mitigate it. Then you have to get the fundamentals of how fractional reserve works.


Gold hawks only emphasize the negative aspects of fractional reserve. If you're into the whole truth, these guys aren't giving it. Gold hawks also act like gold has no negatives and it's mind boggling that folks actually believe it because historically speaking it wasn't that long ago.

When I said the value of gold is denoted on paper, I wasn't talking about currency. I'm talking about the global amalgamate that registers the value of gold. When gold was more related to exchange, market forces determined gold's value. Now it's more like a cabal that has their own methods of valuation, the reason gold value no longer responds to related monetary swings.

Make it your vehicle of exchange and you're subject to the cabal. Don't like the Fed making decisions you don't understand? South Africa might be the new Fed.

Somebody mentioned the interpretation of news. That's a key observation. It's one thing for the viewer to come away from information one-sided, i.e. they've already made up their mind. When media hits only one nail, that's all the viewer has.

 

[SpasticGramps]

No one in here is saying that a gold standard is the perfect standard. Either way you may end up dealing with one cabal over the next, but if gold was allowed to serve as basis of exchange in conjunction with paper government currencies then the market would be a lot freer.

What a gold standard (or at least allowing it to compete with government currencies) does do is keep government spending in check. It forces fiscal responsibility and constrains growth to real productive economic growth not fiat fueled unsustainable fake growth.

Want to save the environment? Get off a fiat standard that allows government to print paper to over consume commodities and destroy our natural habitat. Anti-war? Make it where governments can't print money to go running around killing everyone.

It's not perfect, but it's better than the destructive system we have. Environmentalist should be anti-fiat IMO. There has been nothing so destructive to the environment and humanity than the global fiat currency system.

 

[DiscoBiscuit]

Rejecting fractional reserve might have something to do with not accepting particulars of it. Not accepting as in ideology rather than application. When math, statistics and history tell a particular story, ideology has fundamental discretion even where application says otherwise.

 

[DiscoBiscuit]

About this rigged game thing, educated humans have a natural proclivity for excess. The average CEO in the US makes $10 million every year. It would take the the average worker 3750 years to make the same amount of money.

Darwin was a scientist. Darwin wasn't a sociologist. It's interesting that (some of) those who oppose Darwinism as a science accept it as sociology.

Unless government takes possession and control of currency reserves, they don't know how to value what they can't quantify. Aside from the few who manipulate gold, the masses tend to hoard it. We have GDP as measure of worth and there's little reason to put our faith in something so few agree on how to implement. All we ever managed historically was more problems than justifications.

 

[whodare]

Gold is a market. Gold doesn't tell man what gold's worth. Gold doesn't mitigate inflation and inflation doesn't always work in favor of the consumer. Remember California miners paying the modern day equivalent of $1000 for a pickaxe, payable in gold? Commodities can go through the roof but it's no indication the value of gold will go along with it.

gold is a historical (for millenia, think maya, inca, india, spain, rome, ottoman empire etc etc...) symbol of power and affluence, along with being a valued vehicle for wealth preservation in times of inflation of any fiat. it absolutely does mitigate inflation.

i don't know how you can be serious when gold has returned 400% in the past decade, outpacing the gubs "2-3%'' inflation rate by over 100 fold... not to mention silver seeing 600% returns for the decade and platinum at 250%

One thing gold hawks don't advertise is our current system better responds to inflation. You have to read history to get an idea about gilded age inflation and the fact we had nothing to mitigate it. Then you have to get the fundamentals of how fractional reserve works.

yes low interest rates and and increase in base money supply from the fed cause the stock market to increase... a pretty logical reason is that all the bankers get to borrow the money for nearly free, then lend it out for 3-25% interest and wildly speculate in the stock market.

fractional reserve only compounds the problem, the bank takes a million from the fed but can now lend out 9 million leading to even more wild speculation and inflation in the markets.

as people wake up and begin to see the sham for what it is, wealth being stolen right out from under them just by putting their money in the bank, people will draw on their deposits, stocks, bonds etc.

the more that happens the more the central banks have to print to monetize the debt and continue the sham for those who haven't caught on yet...

Gold hawks only emphasize the negative aspects of fractional reserve. If you're into the whole truth, these guys aren't giving it.

what are the positives of fractional reserve?
i understand it frees banks up to lend money stimulating growth because business can get loans etc etc

but you can't say it wouldn't wouldn't happen without FR. would people not invest their money in business? yea the economy might grow a little slower but the wealth would be distributed among the people instead of the banks.

Gold hawks also act like gold has no negatives and it's mind boggling that folks actually believe it because historically speaking it wasn't that long ago.

give some negatives for me to refute, im not going to make your argument for you...

When I said the value of gold is denoted on paper, I wasn't talking about currency. I'm talking about the global amalgamate that registers the value of gold. When gold was more related to exchange, market forces determined gold's value. Now it's more like a cabal that has their own methods of valuation, the reason gold value no longer responds to related monetary swings.

yes gold is manipulated, it's being held down in value right now which is why its a great long term investment, though we may see some drops in price, if the central banks keep printing it will keep rising, there is a reason it's seen the growth it has since the dotcom and housing bubbles...

Make it your vehicle of exchange and you're subject to the cabal. Don't like the Fed making decisions you don't understand? South Africa might be the new Fed.

it's not being used as a vehicle of exchange as much as a vehicle of wealth protection and a hedge against inflation (quite successfully i might add).

currency is used as a vehicle of exchange, people are selling gold for cash to shop. having a gold backed paper vehicle was an update to carrying the gold around. although some communities and businesses in a few states have gone to metals as a method of exchange.

yes countries with an overwhelming percentage of gold production would become wealthy. America is full of gold though, and thats all the more reason for a basket of commodities to back the dollar.

 

[Drift13]

Being avaible only for the uber-rich...and this suprises y'all how???

 

[DiscoBiscuit]

gold is a historical (for millenia, think maya, inca, india, spain, rome, ottoman empire etc etc...) symbol of power and affluence, along with being a valued vehicle for wealth preservation in times of inflation of any fiat. it absolutely does mitigate inflation.


i don't know how you can be serious when gold has returned 400% in the past decade, outpacing the gubs "2-3%'' inflation rate by over 100 fold... not to mention silver seeing 600% returns for the decade and platinum at 250%




yes low interest rates and and increase in base money supply from the fed cause the stock market to increase... a pretty logical reason is that all the bankers get to borrow the money for nearly free, then lend it out for 3-25% interest and wildly speculate in the stock market.

fractional reserve only compounds the problem, the bank takes a million from the fed but can now lend out 9 million leading to even more wild speculation and inflation in the markets.

as people wake up and begin to see the sham for what it is, wealth being stolen right out from under them just by putting their money in the bank, people will draw on their deposits, stocks, bonds etc.

the more that happens the more the central banks have to print to monetize the debt and continue the sham for those who haven't caught on yet...









what are the positives of fractional reserve?
i understand it frees banks up to lend money stimulating growth because business can get loans etc etc

but you can't say it wouldn't wouldn't happen without FR. would people not invest their money in business? yea the economy might grow a little slower but the wealth would be distributed among the people instead of the banks.



give some negatives for me to refute, im not going to make your argument for you...




yes gold is manipulated, it's being held down in value right now which is why its a great long term investment, though we may see some drops in price, if the central banks keep printing it will keep rising, there is a reason it's seen the growth it has since the dotcom and housing bubbles...



it's not being used as a vehicle of exchange as much as a vehicle of wealth protection and a hedge against inflation (quite successfully i might add).

currency is used as a vehicle of exchange, people are selling gold for cash to shop. having a gold backed paper vehicle was an update to carrying the gold around. although some communities and businesses in a few states have gone to metals as a method of exchange.

yes countries with an overwhelming percentage of gold production would become wealthy. America is full of gold though, and thats all the more reason for a basket of commodities to back the dollar.

America is full of gold... your basket's full of baloney.

 

[whodare]

About this rigged game thing, educated humans have a natural proclivity for excess. The average CEO in the US makes $10 million every year. It would take the the average worker 3750 years to make the same amount of money.

should read successful people not educated.

Darwin was a scientist. Darwin wasn't a sociologist. It's interesting that (some of) those who oppose Darwinism as a science accept it as sociology.

sociology is a science but anyway...

Unless government takes possession and control of currency reserves, they don't know how to value what they can't quantify. Aside from the few who manipulate gold, the masses tend to hoard it. We have GDP as measure of worth and there's little reason to put our faith in something so few agree on how to implement. All we ever managed historically was more problems than justifications.

no one ever said a government cant have control of those things, but it would be nice if they were tied to something that is quantifiable, like gold in circulation, production, reserves etc...

imaginary paper poses a problem when too many people call in their loans, deposits and investments

and i dont know why you think holding gold as a method of wealth preservation is hoarding.

 

[whodare]

America is full of gold- your basket's full of baloney.

?????

im not talking at fort knox im talking people, and in the ground.

just because we don't mine it doesn't mean it's not there. many times cost of production in america isn't as appealing as foreign countries.

edit: what happen i supplied you with substance and you give me baloney in a basket?

 

[DiscoBiscuit]

should read successful people not educated.



sociology is a science but anyway...


Unless government takes possession and control of currency reserves, they don't know how to value what they can't quantify. Aside from the few who manipulate gold, the masses tend to hoard it. We have GDP as measure of worth and there's little reason to put our faith in something so few agree on how to implement. All we ever managed historically was more problems than justifications.

no one ever said a government cant have control of those things, but it would be nice if they were tied to something that is quantifiable, like gold in circulation, production, reserves etc...

imaginary paper poses a problem when too many people call in their loans, deposits and investments

and i dont know why you think holding gold as a method of wealth preservation is hoarding.

It's not what I think, it's the way you think. Hoarding doesn't have anything to do with my opinion, it's one of the cons of gold based monetary systems - you know, HISTORY?

Until one considers history they'll make the same mistakes others already made and learned from.

 

[DiscoBiscuit]

?????

im not talking at fort knox im talking people, and in the ground.

just because we don't mine it doesn't mean it's not there. many times cost of production in america isn't as appealing as foreign countries.

edit: what happen i supplied you with substance and you give me baloney in a basket?

It's in the ground. You better go stake a claim.

 

[HempKat]

Environmentalist should be anti-fiat IMO.

Now hold on there mister, don't the Italians have enough trouble without you giving their cars a bad rep?

 

[magiccannabus]

I'm not sure why we have to stick to just one metal to base our currency system on. Everyone talks about gold, and there's a lot of sense in that because of it's rarity and the fact that it does not corrode. Yet it also makes no sense in that gold is only of limited use, mostly in the electrical field(computers, connector plugs, etc.), and I suppose jewelry counts somewhat as actual use. At the end of the day though, copper, and aluminum, even iron are more important to our actual economy. Why can't we devise some system to base our currency systems on a variety of natural resources. Economies are dynamic, and metals are it's backbone, followed by energy sources, followed by food, followed by bond markets, and then by less important things(like stock trade). I think Wall Street has too much control over the money's value.