gold, page-49243

You have an opinion, I have a different opinion.

My perspective is based around: it is not a case of who is right and who is wrong. Matters are far more complex than a simple correct/incorrect response.

As I see it, there are flaws in your argument about "can only lend to the extent of gold in possession".

1. That inherently assumes that gold is priced in a free market and therefore subject to the same risks as any other system. Humans can bid up the value of gold that banks must hold the same as it can $US. Ot are you suggesting that gold price is fixed? If so how would that fit with inflation? Or are you saying that inflation is bad? If so how does growth occur?

2. If one assumes that banks must stock up with more gold to enable more lending that would implicitly imply that the economy runs perfect. The production of goods and services is in perfect synch with the demand of goods and services. No recessions and no booms. No business cycles just serenity on a sustainable path of perfection.

3. Point 2 seems fantasy land to me, I cannot envisage any economy running perfectly there are too many moving parts. Therefore how would the economy break out of a slump when the inevitable lack of investment (due to lack of ready capital) occurs? Surely a recessionary situation feeds on itself - the more people unemployed the less demand - the less demand the more unemployment.

4. just an observation on the previous chart about debt to GDP. Obviously, that chart serves a sole purpose of deception. What else could one assume? It is feeding a worry about debt. It is no more than an extrapolation of today into the future - I say that holds no academic merit whatsover. I could also add, if one was to take credence in that chart it is actually saying that the system can cope with an increasing debt to GDP ratio indefinitely. It is a projection and therefore according to that chart GDP is not impacted by a growing debt as GDP continues on its merry (extrapolated) way. That is equally nonsense.

I'm not anti-gold. I have a reasonable holding in gold contracts from 1285 and I expect to put a few more runs on the board before declining back to the 1280 range. I just consider it dreadful that posters and internet blog writers/story tellers brainwash people into thinking that gold will make them incredibly rich. I don't believe gold is bad investment, I think it will keep its nose ahead of inflation indefinitely and not be subject to a catastrophic decline in value. By comparison as an investment it is no better a performer than fixed income. Trading it is a different matter if are of that persuasion, its ebbs and flows are fairly predictable for a swing trader.


p.s. a touch patronising to say read Austrian Economics. It is appropriate to assume I am well read unless you have something to prove otherwise. I assume others are well read. Though some of the throw away name-calling and low content responses bring that into question. Just because one writer gives an opinion or writes a book or ..... that doesn't make it unequivocally correct. Economics are dynamic common sense tells us that - an ever changing world of technological change.

As it stands today the overbearing with of opinion is with the status quo as that is what we have. It seems odd to me to call out all those in power around the world as not knowing what they are doing or corrupt or ..... and there is a better way just waiting to be implemented. Crazy. There are far too many checks and balances in the corridors of power to allow a mass deception on the world's population.

I won't change your mind or the other goldbug minds that is fine it is not my intent. In the spirit of a chat forum I'm putting it out there that there are alternative views to that of the few that dominate this thread.