finally gold getting some respect

[DcifrThs]

[ QUOTE ]
World central banks admit to 300 billion liquidity injection. Who knows how much will be injected next week. Gold should benefit from this greatly. Might have to revise my 2010-2012 target from $2000/oz to $5000/oz at this pace.

http://www.canada.com/nationalpost/finan...6c71&k=4187

[/ QUOTE ]

i will bet you any amount of money that gold will not reach $5,000 between now and 2012.

name your price.

Barron

[gonebroke2]

[ QUOTE ]
[ QUOTE ]
World central banks admit to 300 billion liquidity injection. Who knows how much will be injected next week. Gold should benefit from this greatly. Might have to revise my 2010-2012 target from $2000/oz to $5000/oz at this pace.

http://www.canada.com/nationalpost/finan...6c71&k=4187

[/ QUOTE ]

i will bet you any amount of money that gold will not reach $5,000 between now and 2012.

name your price.

Barron

[/ QUOTE ]

Barron,

First I want to know what your thoughts are on the poll you conducted. I hope you learned a few things and that the tulip mania was based on monetary expansion, not cause some queen said they were pretty.

You are going to have to give me huge odds on Gold 5000 by 2012, otherwise I can put the money directly into the market and beat your 1:1 payout. Give me some great odds and I might place that bet.

Keep in mind, I am saying Gold 2000, not 5000. I said I will revise my target if they keep on pumping away like crazy.

[gonebroke2]

Barron,

Also, to answer your other question about the FED. It is of my opinion that if the FED creates a bubble via their loose monetary policy, then they are responsible for the inenvitable bust that must follow.

So I am saying they are responsible for the Great Depression as well as the boom and subsequent bust of the dot com and housing market. This was my position from the beginning, just trying to clarify it.

[Jason Strasser (strassa2)]

I would just like to reiterate here that blaming the fed for the current trouble in the market is downright silly.

1) Rich people are supposed to sometimes lose money in hedge funds.

2) People who shouldn't have home loans, got them because of dumb lenders.

3) People take on much riskier assets now with the rise of CMO, CDOs, and markets like the CDS market available to hedge out risk. Just cause risk is being diffused doesn't mean the risks aren't there. So a few dumb americans who cant pay their mortgages cause french banks trouble... It's likely people were not receiving high enough yields on certain debt obligations to justify their investments. The fact very few people have a clue how some of these instruments work (they are relatively new) plays a role in all this...

I think all this will sort itself out just like it should. It will probably get uglier, but I have no idea really. I think that people who scream at the Fed and point at them and say "YOU ARE JUST A DUMB ACADEMIC WHO HAS NO IDEA WHAT IS GOING ON ACTUALLY" are off because this just seems like human evolution. Investments which are fundamentally flawed are failing.... The fed just needs to make sure everything holds together while the problem works its way out of the system.

[Fishhead24]

[ QUOTE ]
Barron,

Also, to answer your other question about the FED. It is of my opinion that if the FED creates a bubble via their loose monetary policy, then they are responsible for the inenvitable bust that must follow.

So I am saying they are responsible for the Great Depression as well as the boom and subsequent bust of the dot com and housing market. This was my position from the beginning, just trying to clarify it.

[/ QUOTE ]

What's your call on Silver?

[DcifrThs]

[ QUOTE ]
[ QUOTE ]
[ QUOTE ]
World central banks admit to 300 billion liquidity injection. Who knows how much will be injected next week. Gold should benefit from this greatly. Might have to revise my 2010-2012 target from $2000/oz to $5000/oz at this pace.

http://www.canada.com/nationalpost/finan...6c71&k=4187

[/ QUOTE ]

i will bet you any amount of money that gold will not reach $5,000 between now and 2012.

name your price.

Barron

[/ QUOTE ]

Barron,

First I want to know what your thoughts are on the poll you conducted. I hope you learned a few things and that the tulip mania was based on monetary expansion, not cause some queen said they were pretty.

[/ QUOTE ]

i didn't read the piece on the tulips yet.

overall, the thread was very illuminating. i've been reading a lot on AC (i assume that is soem abbreviation for Austrian economic thought...if not, when i say AC i mean austrian economics).

what i've seen though, and this is obviously my opinion, is that radical and fairly silly people tend to use AC as a backing for their views. i think the theory has some merit, but it isn't the end all and be all as some of its backers and purporters seem to think it is.

further, i specifically do not want to hate on the people who don't use AC as a backing for insane theories.

the problem, obviously, is that basically everybody i've seen post who believes in AC fully also believes that the fed is the main problem and that the affect of distortions caused by the fed are way more costly than distortions caused by NOT having the fed.

i believe in a lot of what AC says, but the fed is another institution not responsible to the US Govt and is only connected in so far as its initial funding and the appointments to the board.

i definitely believe that i (and all others) shouldn't be paying for US sugar producers to survive and all other US govt. subsidies and all other market interventions, with a few exceptions. AC believers i think (correct me if i'm wrong) believe that when the cost/benefit analysis of clean fuels and green business become attractive, that participants will act accordingly. so, the govt. shouldn't subsidize anything (i.e. just stay completely out of hte market) that would force them to do that (or make laws accordingly).

personally, i think enforcing laws (like carbon emissions etc.) and issueing subsidies that make companies do this now before it is too late is a necessary "evil" of govt intervention in the markets.

in all other aspects (aside from the fed and the "necessary" interventions of the govt), i think AC is very well founded in that the govt, in almost every case, shouldn't hamper markets as govt interventions always have a) unintended concequences, and b) not been able to even accomplish the final goal of the intervention (currency pegs etc. etc...they all fall apart). protectionism is attrocious etc. etc.

i do hold universal judgement aside and make statements like "almost every" because i think there are times and places for govt intervention. i.e. when a new or small country wants to remove obstacles from its until then closed economy, a peg may be necessary to ensure stability and reduce frictions on businesses not used to a floating peg initially. then it might make sense to have a peg.

also, i firmly and wholeheartedly believe that almost any theory that believes in solid absolutes is too strict, and most likely wrong in that firm belief. as humans, we have been proven wrong in our most highly regarded beliefs time and time again. so anything that says "THIS IS IT" i hold to an exceptionally high standard of proof. there are, of course, exceptions (theory of evolution in my mind can say for sure etc.)

anywyas, thats another topic for another time.

[ QUOTE ]
You are going to have to give me huge odds on Gold 5000 by 2012, otherwise I can put the money directly into the market and beat your 1:1 payout. Give me some great odds and I might place that bet.

[/ QUOTE ]

well fair odds are simply based on the probabilty of gold going to 5k. so what is your view on that? i won't give you my view on that as odds because that isn't the bet. i want to bet against YOUR view of the probability of gold going to 5k by 2012.

[ QUOTE ]

Keep in mind, I am saying Gold 2000, not 5000. I said I will revise my target if they keep on pumping away like crazy.

[/ QUOTE ]

thats all well and good, so also include your view on gold going to 2k and i'll bet against you on that as well.

Barron

[DcifrThs]

[ QUOTE ]
Barron,

Also, to answer your other question about the FED. It is of my opinion that if the FED creates a bubble via their loose monetary policy, then they are responsible for the inenvitable bust that must follow.

So I am saying they are responsible for the Great Depression as well as the boom and subsequent bust of the dot com and housing market. This was my position from the beginning, just trying to clarify it.

[/ QUOTE ]

now i see your point. AC firmly holds that the fed, no matter WHAT it does, is responsible for anything that comes out of its existance. the fed as an institution is wrong because it is distorting the economy etc.

obviously i was therefore wrong in my conclusion that you can't hold the fed responsible for A as well as B where A and B are opposite sides of an error when the whole issue is that there is an underlying belief that says the fed is wrong.

obviously i still think you are completely wrong in that belief as i think the fed does FAR more good than harm to the economy via its management. sure it has made mistakes in the past, but the benefit imo is way greater.

but, you can hold that belief as you wish. just know i think that you sound absolutely retarded in asserting it.

Barron

[hlacheen]

[ QUOTE ]


i didn't read the piece on the tulips yet.


[/ QUOTE ]

Oooooh snap! he went there

[The once and future king]

[ QUOTE ]
[ QUOTE ]
Barron,

Also, to answer your other question about the FED. It is of my opinion that if the FED creates a bubble via their loose monetary policy, then they are responsible for the inenvitable bust that must follow.

So I am saying they are responsible for the Great Depression as well as the boom and subsequent bust of the dot com and housing market. This was my position from the beginning, just trying to clarify it.

[/ QUOTE ]

now i see your point. AC firmly holds that the fed, no matter WHAT it does, is responsible for anything that comes out of its existance. the fed as an institution is wrong because it is distorting the economy etc.

obviously i was therefore wrong in my conclusion that you can't hold the fed responsible for A as well as B where A and B are opposite sides of an error when the whole issue is that there is an underlying belief that says the fed is wrong.

obviously i still think you are completely wrong in that belief as i think the fed does FAR more good than harm to the economy via its management. sure it has made mistakes in the past, but the benefit imo is way greater.

but, you can hold that belief as you wish. just know i think that you sound absolutely retarded in asserting it.

Barron

[/ QUOTE ]

Barron. You are looking at the Fed in isolation. Austrians (I am not one btw) are chiefly opponents of FIAT money systems, of which the FED is the chief institution. They propose a return to money backed by gold rather than a system of debt backed by debt (which is in essence is what fiat is).

If the Fed has a binary switch of either more or less, how can it be retarded of accusing it of pushing the switch the wrong way on two different occasions. Surely the only absurd situation is to accuse it of pushing it in both directions at the same time.

As I said I am not Austrian (I am not a gold bug), but as I learn more about the mechanisms of Fiat money, I am becoming increasingly concerned about the social and economic power of those that control it. For example, the Fed is a non elected private organisation that has never been audited. It has more power than the elected government imo. If the Fed decided to raise interest rates by 2% tomorrow for example this would have much more effect on joe public than any legislation of the government. Also who has more power the debtor or the lender?

I dont see how anyone can deny that central banks have created a situation that is unsustainable in regards fiat money as concerns levels of debt.

Debt levels have grown exponentially in recent times, and of course interest is allways increasing the level of this debt.

However of course debt has increased massively recently, because debt = money. Without debt there would be no money and as a consequence we have a financial system where debt>money supply to pay debt due to interest on the principle.

I dont think many understand how fiat money and the banking system actually work in practise. It is possible for any given bank to show that its deposits outweigh its liability's but the system as a whole is able to create debt backed by debt backed by debt. Here is an example of how that works.

Say someone takes a car loan of 10K, they buy a car and someone deposits that 10K at a bank.

Bank A 10000 Lends 9000 Then someone spends that 9K and it is deposited at bank B

Bank A 10000, Lends 9000
Bank B 9000 Lends 8100

Now let us see what would happen if that process is repeated 10 times.

10000> 9000
9000 > 8100
8100 > 7290
7290 > 6561
6561 > 5904
5904 > 5314
5314 > 4782
4682 > 4304
4304 > 3874
3874 > 3486

As you can see each bank can show that its assets outweigh its liabilities, but we can see that from an initial debt of 10K another 58,616 worth of debt has been created in just 10 transactions.

This is also just from standard consumer deposits. Banks can lend at much greater ratios from deposits secured against the central bank.