There’s just no such thing as long-term deflation while central banks can still print money out of thin air... is that really so hard to wrap your head around? 🙂 It’s been obvious for ages that we don't have a free market, just endless manipulation...
I’ve already said it before: QE never actually stopped. If anyone still thinks the markets aren't being manipulated, I guess they just haven't been paying attention.
I don't have any doubt the elections will be rigged. It’s like Stalin used to say—it doesn't matter who casts the votes, only who counts them. And if by some miracle the left actually wins, I bet they'll flip the script fast enough. It'd be even more unbelievable if they actually told the Germans "fuck you" and pulled out of the global economy. But hey, this is the US, anything can happen.🙂
It’s pretty obvious the media and the people pulling the strings will do whatever it takes to ensure the "right" party or coalition wins the election—they just can't risk letting someone like Greece jeopardize the whole European project... The addict analogy is pretty clear here—you need higher and higher doses just to get the same effect, and the intervals get shorter and shorter. Until it finally kills you.
Things in the USA aren't getting any better; if anything, they're just headed south. It’s pretty safe to assume the Federal Reserve, the Fed, and the Bank of England will all start printing money at the exact same time just to try and "save" things.
First off, it’s hard to tell where the bottom actually is. Second, given how this "market" operates, anything can happen. Third, Spain hasn't even been granted any aid—they're just bailing out the banks, not the country itself...
Harold Martin10 said:I don't think history actually repeats itself—anyone who really studies the subject knows that's a bit of a stretch. Sure, you'll see certain patterns or similarities between different eras, but there isn't some scientific rule governing it. So, I guess we’re back to relying on crystal balls, aren't we? ☕
History doesn't repeat itself, but it sure does rhyme.
The comparison holds up. Some substances are banned while others—like booze or cigarettes—are perfectly legal. Even cocaine was totally fine until about a century ago.🙂 There’s zero chance any government is ever going to successfully seize assets like cash or drugs. Besides, trying to ban precious metals backfires twice: first, because forbidden fruit always tastes better 🙂 and second, it just proves how worthless paper money actually is. 🙂
Like hell they're going to start confiscating stuff... There are plenty of illegal drugs floating around out there just like any other illicit substance. The government doesn't have the manpower or the budget to go door-to-door seizing people's property.
Let’s look at it this way. You start working in 1995 in an American economy ranked somewhere around 80th in terms of development... thirty years later, the US somehow climbs into the top 20 most developed nations. Do you really expect the average salary you saved back in '95 to carry the same weight as a 2025 salary just because you tucked it away in gold? I don't see any "preservation of value" here; I see massive value pumping.
And where did you get the idea that a rising standard of living automatically means across-the-board raises? Money's worth depends entirely on its purchasing power.
If gold were truly just about preserving the value of your labor, then you should be able to trade that gold for exactly what an average worker in a country with the 1995 American level of development would earn...
It seems you're struggling to grasp—or maybe just unwilling to admit—that gold doesn't just preserve labor value; it actually increases purchasing power. And that has nothing to do with gold itself, but rather with governments destroying paper currencies through inflation.
Or if the US today is somehow comparable to Switzerland in 1964, 😍 then shouldn't we logically expect to live on their 1964 standard of living with their old wages? If a Swiss guy saved his salary in 1964 and it's only worth an American wage today... he lost.
You're mixing apples and oranges again. Read the explanation above.
However, once the speculative component vanishes and shifts into other sectors—like what happened in the '80s and lasted through the '90s—you should expect a drop in value for one simple reason: lower demand. 😍
Maybe spend some time studying recent monetary history. In the mid-to-late '70s, people weren't buying gold and silver to speculate; they were doing it because of high inflation and the perceived devaluation of the dollar right after it was decoupled from gold. The '80s and '90s are classic examples of bond and stock speculation. If you want to see a case of pure pumping, look there.🙂
There is absolutely nothing in this world that perfectly preserves value. There are only assets that occasionally lose value and occasionally gain it. Depending on how clever you are at rotating between them, you either make money or you blow it. 😉
Of course it doesn't. That's why gold from the Roman Empire or the Middle Ages isn't worth the same thing today...☕
Mary, you clearly don't see the distinction between actual tech progress and simple inflation 🙂 Mortality rates were way higher back during, say, the Industrial Revolution, even when the world was basically on the gold standard 🙂 And yet, we saw massive technological leaps then too, while prices stayed steady for decades Of course, if San Francisco actually bothered to look at the photos you posted, they'd realize you're actually onto something... 🙂
Look, Patrick Moore3, you’re conflating general living standards with technological progress. And that point you just made: "What you actually want is to take, say, 20 average salaries from 1964—enough to buy a decent car back then—and have that same amount of money (your Prime Minister's math) be enough to buy an average car in 2012." That is what a drop in purchasing power looks like.🙂
Core inflation sits under 2.5% in several countries right now. We saw prices go wild on the commodities markets a few months back, but lately, we’re seeing what looks like deflation simply because wages haven't kept pace to trigger an inflationary spiral.
Which countries? Check actual inflation data instead of whatever the government agencies feed you. Or just look at year-over-year prices for staples and energy in the USA or the UK, and you'll see inflation is much higher. Naturally, the state claims inflation is low by constantly tweaking how they measure it and swapping out the contents of the basket of goods. A drop in the price of certain goods and services isn't deflation—true deflation is a reduction in the money supply, and the exact opposite is happening here.
But it was primarily introduced because people grew tired of the restrictions imposed by the gold standard.
The "restriction" of the gold standard was simply that governments couldn't just rack up debt (or print money) however they wanted to live beyond their means. For the average citizen, it was more than enough, providing stable money and relatively stable prices.
They didn't want it thirty years ago, and they certainly don't want it now. Look at the Eurozone as a glaring example of this entire saga. If this continues for much longer, it wouldn't surprise me to see far-right extremist parties taking power in various peripheral states. We agree there. And we have the very system we live in to thank for that outcome.
Forget the data and the numbers for a second—is there anyone with common sense who actually believes Americans today have a lower standard of living than they did in 1950? Except their standard of living is lower than in 1971, as crazy as that sounds... That would imply labor productivity in the American economy has been tanking for half a century. What data could possibly prove that? None. Average hourly compensation in the US economy over that period has realistically risen by 160%. How could we have fallen so low that we claim Americans live worse than in 1950? Even a fool wouldn't believe that.
...so here is the data. First, the dollar inflation calculator:
http://ltparis.com/images/20110312-h...64-current.png The sad truth is that Americans are living on credit; they are twice as indebted per capita as Greece, not to mention the costs of Medicaid, Medicare, and so on. This is happening precisely because they moved their industry overseas and started living on borrowed time.
So, gold is heading up because people are speculating that bad macro news from the USA might trigger another round of QE. The price per ounce jumped over 3% in a matter of minutes. Hard not to love a non-speculative commodity like that. Besides, you forgot to mention the drop we saw yesterday and today—but I suppose that's just a "correction," right? 🙂
Regarding dividends over the last century, the Federal Reserve has posted a net profit of $855,000,000,000, with 90% of that being passed right back to the US Treasury. As I recall, the executive branch also picks and confirms the FOMC members. There isn't much philosophy involved; their mandate is just maintaining a stable inflation rate (around 2%), closing the output gap, and ensuring full employment. Monetary policy tries to hit those marks, which is why they occasionally miss the inflation target.
Over the last hundred years, because the Fed holds the exclusive right to print USD, they've managed to erode the dollar's value by 98%. Last month alone, the US deficit hit $300 billion. Their sole mandate is a monopoly on money issuance, and if you actually believe the President chooses the FOMC, you're living in a fantasy land.
Back when the world was on the gold standard, there were always countries living within their means and others living well beyond them.
Unlike today, where everyone lives beyond their means.
In economics, things are rarely in aggregate equilibrium. Expecting it is like expecting an ocean without waves.
That’s why gold served as the best possible way to maintain balance. I agree that everything can't be in absolute equilibrium, but the gold standard did a decent job. Just look at the US from 1876 to 1944.
That’s exactly why the gold standard collapsed; nobody sane wanted to endure years of economic and social depression just to stick to the gold standard. The costs were simply too high, much like what we see in the Eurozone today.
Central banks killed off the gold standard because they couldn't issue credit whenever and however they pleased under it. Of course, under the fiat system, we've enjoyed prosperity and avoided massive recessions and depressions...
Secondly, I don't know how many times you're going to repeat the nonsense that there is absolutely no value backing the USD, CHF, or JPY. What the United States, Switzerland, and Japan represent today is exactly what stands behind those currencies.
Sure, there is no intrinsic value, just trust and/or threats.
For instance, today $100 is worth enough to buy 25 Big Macs. That is its current value—it's falling, sure, but that doesn't change the fact that it's its current value.
Forty years ago, that Big Mac cost less than 25 cents. A gallon of gas was less than 15 cents, too.
How does it create value? It determines currency value, saving the average person who swaps their EUR for USD (just to buy something in the US) a massive amount of time. It makes them far more productive than if they had to hunt down someone willing to trade EUR for USD at a specific price.
You're mixing up price and value again. What value does it create? None. Is a coffee I drink in downtown Washington, D.C. for $4.75 more valuable than a coffee I grab on the outskirts for $2.75?
Money is money. What bothers people is that today's paper money has no backing in gold or silver. You're only bothered by that because you can't turn your $10,000 into $100,000 or $200,000 by swapping it for gold.
Ignorant is ignorant. Why? Because I said so. Personally, it bothers me that digital "money" isn't even backed by paper "money," but is instead created out of thin air as debt by imaginary authorities with no connection to the market... but that's another conversation.
Nothing else is happening here but a price correction for precious metals. Just as palladium and platinum prices drop, gold and silver drop too, since they aren't any more special than other PMs.
A correction? Based on what? What happened to make silver drop by half a euro or gold by 15 dollars in three minutes? Did a meteor made of millions of tons of gold and silver hit Earth? Did we discover an element that conducts heat and electricity better than silver? Or did someone just dump five million ounces of physical silver?
The logic is pretty simple: the housing market is finally leveling out. Or is it?
Where exactly in America did they quietly dump $25 billion on MERS victims just to bury the crime? Where are the five million unsold homes left over from the last housing bubble? And where are those other five million units sitting in bank portfolios, held back just to prevent a total price collapse? How many people aren't even making their mortgage payments, and how many homeowners are stuck underwater with debt higher than their home's actual value?
So the economy is picking up steam, and now we might see the Federal Reserve pull the trigger on an exit strategy sooner than anyone anticipated. What does that actually tell us?
What recovery are we even talking about? Where else is unemployment hitting levels this high? Where else do you have 50 million people relying on food stamps just to get by? Our industrial base has been gutted and shipped off to Asia. It seems like the only exit strategy the Federal Reserve knows how to play is printing more money.
Here we go again. A new turning point? It looks like keeping gold prices from skyrocketing is the only thing keeping the USD on life support.
That’s one factor, sure. But you also have to look at the petrodollar paradigm. Just look it up.
Did you see how much capital flowed into USD-denominated assets in just one month? Not even gold, just straight into the dollar. Makes you wonder, doesn't it?
Financial assets? 🙂 You thinking about bonds, derivatives, CDS, CDOs, and all that other junk? 🙂 If that’s the case, then why is the US running an annual deficit of $1.2 trillion?
In turbulent times, a safe haven isn't gold—it's U.S. Treasuries, corporate bonds, and dollar deposits in American banks. Isn't that just how it works?
Safe haven? What a joke. You really think a safe haven is locking yourself into 10-year Treasuries at a 2% yield? You can't exactly eat bonds, you know. And I doubt anyone’s picking up extra shifts just to buy them. So you sit there enjoying a 2% "return" while the dollar loses at least 6% of its purchasing power every single year. Makes sense, right?
Can you just look at your own numbers and finally realize that gold is a total dwarf compared to them? Claiming the status of the USD depends on the price of some random gold bar just proves you either have no clue what you're talking about or you've spent way too much time obsessing over bullion.
You're right. The guy's a joke. It’s all just an illusion when you can print or click it into existence whenever you feel like it to make something look valuable.
If a firm like JPMorgan actually had the power to manipulate gold prices for an entire year, wouldn't you start asking some pretty serious questions? A year? They’ve been pulling the strings for forty years straight.
If you want the other 99.99% to actually get it, you’d have to hand them the books I read. But even then, what’s the point if they don't let their brains wander before they start turning the pages?
The other 99.99% have access to the exact same data I do. Their problem is that it’s just easier to switch off their brains and watch Survivor instead.
What can we really conclude by looking at gold twenty years before your ten-year window? Was it actually a golden age, or was someone just manipulating the price for two straight decades?
I could have looked at the last forty years. Actually, scratch that—I could have taken the last hundred.
The fact that gold is climbing against every single currency just proves that it isn't an inflation hedge anymore. It’s clearly become something much bigger than that—something you all just don't want to admit to yourselves.
Why are you lying so blatantly? I said currencies are dropping relative to gold, not that gold is rising. There’s a massive difference there. One of these days, you'll catch on to that nuance. And the fact that gold holds its value while currencies slide against it only proves it's a legitimate inflation hedge. Take the red pill with some Kool-Aid.
You clearly don't understand how the market actually works. To you, it’s all just one big conspiracy theory. I don't know who fed you that idea, but the market has never operated on asymmetric terms.
You actually believe we live in a free market. If you had any grasp of human history, you'd realize it’s really just the byproduct of conspiracies. Even you finally admitted it. So, sure, gold is the best, the prettiest, the absolute greatest—but only if that’s how you choose to see it. Of course, it all depends on you, since the rest of the world doesn't view it through your specific lens. But who cares what the world thinks? I know what gold is and I know its value. Some cult? Whatever.
I don't, but millions of people globally do, just as they have for the last three thousand years of human history. It seems you struggle to think beyond the narrow window of the last few decades, which is nothing more than a single tick on humanity's clock. Like I told you before, central banks have been buying up gold lately. Why? Tradition? And let's not forget the millions in India and China who have been buying gold and silver for generations.
The way you guys play around with gold is so speculative that Forex traders look like toddlers compared to you.
What’s so speculative about it? Buying a piece of metal that is universally recognized as money and a store of value, then just setting it aside?
That's it. Let's be clear, I have nothing against gold, and you could have made a decent living off it in the past and certainly will in the future. But physically holding a piece of metal and thinking about it that way is, if you ask me, just freaky.
I don't think about it at all. That’s its biggest advantage. There’s no risk of it vanishing (like digital cash), burning up (like paper money), or losing its status as money because people stop believing in it. It isn't anyone's liability, it isn't subject to devaluation, and it isn't someone else's IOU... get it? 🙂
So, what exactly are the fundamentals that make gold worth $8,000 or $16,000? How are you even measuring its "real" price? From where I’m sitting, production has been stagnant since the end of the last century, which is a massive factor for both gold and crude oil prices. It’s funny how whenever prices dip, people scream manipulation, but when they rise, everyone pretends it’s just a perfectly efficient market doing its thing. And of course, if I call it a cult, people get defensive.
Just another one who clearly hasn't spent any time studying monetary history. Maybe try learning the difference between price and value first, okay? 🙂 Gold has always been measured in units of mass; paper currencies are just DERIVATIVES of that gold. Sit down, kid...
So, if I've got this right—the market hasn't been able to determine a fair price for silver or gold since the Roman Empire.
You've got it wrong.
Since when is an increasing money supply anything other than a direct hit to the purchasing power of fiat currency?
The moment rulers and governments decided they could just print whatever they wanted. Honestly, explaining this feels pointless. If printing money actually solved problems, then the Weimar Republic and Zimbabwe would be global superpowers by now.
How can anyone seriously argue with someone who retreats to the era of the Roman Empire just to claim that the gold under their bed isn't worth $10,000, but rather $100,000? And let's not forget, he's talking about USD, which holds zero actual value to him.
Once again, you're confusing price with value.
And there it is—whenever I mention a "sect," people take offense. It's nothing else. If you cling to the theory that gold hedges against inflation, just take 1800 as a starting point and adjust for today; you'll see gold is massively overpriced at current levels.
Why would I use 1800? Even if I did, the purchasing power of gold remains roughly the same. Can you show me a SINGLE paper currency from 1800 that holds the same purchasing power it does today?
Gold and silver aren't money because you can't use them in their current form to buy a single product or service.
And you think you can do that with government bonds, stocks, and other products?
The market—meaning the vast majority of people—clearly doesn't think so, which is why prices have dropped at least 20%.
Just like you don't understand monetary history, you clearly don't understand markets. Who are these people frantically selling off gold and silver? Oh, wait... there aren't any. It's just paper promises being sold by computers, not physical gold and silver.
Thirdly, just because you think money has to be something permanent doesn't mean it is. By that logic, platinum, iridium, palladium, osmium, rhodium, ruthenium, mercury, copper, etc., are all money.
It's obvious you don't even know the definition of money. When in history were those metals (aside from gold, silver, and copper) ever used as money? Never. You know why? Because they lack the fundamental characteristics of money. Go read up on what money actually is.
Gold has almost no practical application compared to copper or rhodium. People decide for themselves what counts as money. It's entirely possible that most Americans stop recognizing the USD as money tomorrow and start trading goods and services in USD or EUR instead. Interesting... a moment ago you said silver and gold were never money, and now you're saying people decide what money is. Talk about a masterclass in eating your own words. Silver and gold were chosen by people as money three thousand years ago; it wasn't some mandate handed down by a bank or a government.
Let's try this one more time: gold and silver are not money. In their current form, you can do as much with them as you can with an onion or a piece of real estate.
Let's briefly ignore three thousand years of human history and the current trend where central banks worldwide—from Mexico and Kazakhstan to Turkey, China, Russia, and India—are buying up gold. Even Germany, in its current crisis, is looking to gold as collateral from Portugal and Italy! A jeweler doesn't decide that an ounce of gold is worth $10,000. They just react to what the market says it's worth. Who else is actually calling the shots?
Jewelers don't have the slightest clue about gold as actual money.
If the market decides an ounce of gold is worth $100,000, then that’s just the price. It all comes down to supply and demand, doesn't it? We already know global gold supply is flatlining while demand keeps climbing—mostly driven by speculators—so why shouldn't the price climb right along with it?
Do you even realize how much nonsense you're talking? It would take me hours to explain that price—not just for gold—isn't solely about supply and demand. Once you finally grasp that gold is the mortal enemy of fiat currency, you might actually understand why the price is sitting where it is.
Imagine you have property worth over $10,000 per square meter. Ask the average person what they’d pick: a 1,000-square-foot apartment in the heart of London, Paris, or NYC, or 770 ounces of gold? Most people would probably choose the home they can actually live in. After all, what can you really do with gold? You can stare at it and admire how shiny it is, I guess, but it's just sitting there.
Only an idiot would buy property at those prices. Then again, I forgot... real estate prices can only go up, right? They're just pure magic—they sit there doing nothing, requiring zero maintenance or investment. Isn't that how it works?
So, we’re looking at record-high living standards for Americans alongside hundreds of millions of people being lifted out of poverty. How exactly are we supposed to frame that as a win for the individual and a loss for everyone else?
It’s a standard built on cheap energy—which isn't infinite, but that's a whole other conversation—and the systematic draining of millions of people. And if you actually believe a credit card is your ticket out of poverty, you're dead wrong.
Here's another thing to consider: I can't recall a single time the USA or the UK actually had 100% gold backing for their entire money supply. If memory serves, the last time we saw anything resembling a real gold standard was back in the mid-1800s, and even then, coverage only hovered around 30%.
What exactly backs today's money? Just an unwavering belief in the integrity of the US government?
Don't get me wrong, it's not like the US and the Eurozone are printing money like there's no tomorrow. But if China were actually backed 100% by gold, an ounce would be sitting at $432,000. Even at 30% coverage, you'd be looking at $130,000. If you run those numbers for Russia, they hit $315,000 and $95,000 respectively. For Japan, it’s $466,000 and $140,000. And Brazil? You'd be looking at $1,520,000 or $456,000. Makes you wonder, doesn't it?
Ever look at what gold was doing back during the Weimar Republic?
Head down to the local farmer's market and try offering her some gold or silver for her produce. See how that goes.
Just head over there and try paying with a credit card or a check. See what happens.
Most people in America don't even view gold as actual money, much like they wouldn't consider the Danish krone or the British pound to be anything of the sort.
Six years ago, most people in America were convinced real estate prices could only ever go up. Who was actually right?
Money, just like everything else in this life, has a price—it has value. That value is really just defined by the goods and services you can actually get for it. In some parts of the world, its purchasing power is climbing, while out here in the West, it’s seeing a moderate slide. Though, if you look at it against things like real estate, the value in many Western nations is actually going up. It’s been that way since last summer too; compared to gold and silver, its value has risen, even when measured against something as volatile as the dollar.
It’s actually the other way around. Goods and services hold the actual value; currencies are just tools for exchange and units of measurement. Isn't that how it works?
Gold is money, just like copper, real estate, or knowledge—only with one major catch: the first one contributes absolutely nothing to the advancement of human civilization.
Copper isn't money because it corrodes over time, and real estate isn't money because you can't easily split it up or move it around. I'm telling you again: go study what money actually is.
As long as they stick to this current development model, they have no choice but to pile up USD. The USD stays the top global currency until some other nation outpaces it in both economic scale and military might.
It remains the dominant currency until the petrodollar paradigm collapses—and that’s closer than you think. Once oil stops being traded in dollars, it’s game over.
If global currency status were determined by how little value it loses, we’d be looking at currencies like the CHF or the SGD instead of the USD. Let's not kid ourselves; most nations are perfectly happy hoarding USD and aren't looking to change that anytime soon. They’re living in a complete fantasy. Only the rare few who ditch the dollar actually see the reality of the situation. The reason there isn't enough money is simple: nobody uses a 50% reserve system where, for example, out of a $100,000 deposit, $50,000 goes into a reserve account and the other $50,000 is issued as credit. It's purely because of that, not because deposits are lacking—it's just basic symmetry. Your credit is someone else's deposit.
That’s the flaw in your mindset. In the system we live in, unfortunately, money equals credit equals debt, which means it has to grow constantly... something worth thinking about seriously.
The Federal Reserve isn't some private bank. It’s a quasi-private institution, which is really just a byproduct of the American approach to state ownership. Right now, the "owners" of the Fed are hundreds of commercial banks operating in the US. By law, they have to be if they want to do business here.
You're talking nonsense again. The Fed is a private institution. Read *Creature from Jekyll Island* or just do a quick Google search. What do you mean "hundreds of owners"? You're becoming increasingly ridiculous.