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* - galaxy

The Law of Inverse Consequences - Part Two

Posted on 2011.06.20 at 13:27

Apparently, the China hackers are rolling out a whole new slew of IP's. And I don't know about you, but I am now receiving ZERO hits on LJ from non-LJ viewers...?!?! And I couldn't go to my "Guests" (stats) page. So LJ is up to something here, I just hope I'm not the only jnl they're dealing with. I have enough trouble dealing with THEM. My brain is going through some bizarre changes today. I hope it's healing-type, but it's powerful. And yet I can talk, looking normal. Some kids came by and axed if I wanted to buy a cat. No. But I gave them a bunch of electronic stuff for them to sell and they were all happy. If things I do can, in any way, also help someone else, it is not time wasted. Damn my brain feels weird.

So - to the damn theme here: From the great land of insurance and banks, the Dodd-Frank Bill is being quietly introduced, saying that it will be illegal to buy/sell gold, over-counter, by July 15. Do any of you know how perverse this is? They print fake money out of thin air, they rob our taxes and pensions, they destroy the economy and now INFLATION of our PAPER dollar currency looms - but if people try to hang on to their wealth by buying gold, THEY are somehow the "counterfeiters" - because they are dealing in TRUE money.

So, they want to take the gold and send it cheap to Goldman-Sachs, et al, because we owe them one, yes? Bizarro World - where the parasites become "too big to fail" and WE THE PEOPLE fall into their control - we, the new "parasites" - we, the "worthless eaters."

Introducing: The Law of Inverse Consequences. More later. I'm dyin' here...


sechilles at 2011-06-22 19:02 (UTC) (Lien)
Not that I'm disagreeing with your disagreement, but how is gold real money? Or, let me say, how is it more real than paper money? It's only as valuable as the masses perceive them to be, just like paper money.

Which would beg the question; what is real money anyway?

Whoa. Those were like, PROFOUND questions. I should go watch three episodes of Gossip Girl to get back to my true self.
where hypotheses come to die
madman101 at 2011-06-23 00:07 (UTC) (Lien)
excellent question

gold and paper are both the same and different - and you are correct and not

they are both based on perceptions. gold, however is rare, and valued as jewelry and such, whereas paper is abundant.

gold has been a standard basic money since civilisation began. paper dollars are basically checks which have acquired, now, a reputation of being basic money. the FED, &/or, the gov't can take advantage of this assumption by making paper overly abundant, helping banksters and others at the top, but this messes with perceptions of value, in a way that gold, in stable quantity, does not. the value of paper money can therefore plummet, (inflation), but gold, relative to paper, then goes up in value.

when paper money loses its backing, like checks backed by, and promising, payment in gold, or silver, or even oil, and when the perception of the value of paper money is messed with by irresponsible printers, etc., then paper becomes far less a true money than gold.

gold may similarly be used as a kind of check, backed by, or promising, payment of land, oxen, etc., but less so, due to transportation problems, etc. gold - by perceptions - holds a more stable value in its own right. originally, coins were made from gold, and the separation of values of gold and "paper" was not visible.

i made a post(s) on this in the past. i'll put you in my econ filter so you can search for it via my tags, should you want to do that for some bizarre reason.

the question of "what is real money" is extremely important. real money is basically trust incarnate - but that becomes forgotten by ponzi schemers, or capitalists exploiting labour (contracts) or gambling it mortgages away into hyperspace, putting the cart before the horse and seeing it as a value unto itself - or as power or authority beyond what society agrees it is, in a free market place. in that case, trust becomes converted into FORCE.
sechilles at 2011-06-23 00:31 (UTC) (Lien)
I of course know all that (I majored in Mathematics and kind of minored in Econometrics). I didn't expect you to take my question seriously and type this somewhat long reply (which is my bad, of course, and for which I apologize), which is why I failed to phrase my premise as I ought to.

So, here we go: Your post indicates that (and please correct me if I'm wrong) that because paper money is open to human manipulation, the Dodd-Frank Bill will potentially not only deprive the masses from investing in a safer commodity, it will give a certain minority (banks, ie Goldman) monopoly over it.

I am not familiar with said bill, and I will of course take your word for it.

My point was, or would be if I were more succinct with my comment; that yes, while gold is more resilient against manipulation, it is far from immune. In fact, up until the 70ies, gold manipulation was far more frequent than paper money manipulation, especially in Europe.

Not that this negates your argument or has anything to do with it. So I hereby put forward that gold is comparatively more secure than paper money only in times of certain type of economic downturns, high inflation being the most obvious type, which has not been a big problem in this current crisis, not to say that it won't become one.

Not that our (and by our I mean your, since I'm not an American or live in America) investment options should be taken away and monopolized; I completely agree with you there.
where hypotheses come to die
madman101 at 2011-06-23 02:46 (UTC) (Lien)

You are correct. Thank you.

However, gold may not be immune to manipulation because its solid value is generally improperly pegged to its market price, where the manipulation mainly occurs. (Bank certificates, futures speculations, gold stocks, and even currencies). The market price can be widely unrelated to what would be the true value of gold, based on actual supply, and demand. Gold was greatly "mainipulated" prior to these days of futures and bubbles mainly when a huge new supply was found and introduced into the economy, which is what undid the Spanish empire.

Similarly, I believe gold was partly manipulated in 1970-1971 because it was still pegged to an inflating dollar, and until it was unpegged, manipulation may also have occurred through manipulation of claims and/or quantities in Fort Knox, as well as, of course, via gold futures. It is now speculated that that gold, in Fort Knox, is entirely depleted. And now the dollar is based more on oil, and in turn it is the dollar which is manipulating the price of gold, upwards. When a country such as Libya attempts to move it's oil from the dollar to a gold-backed Dinar, we invade. The dollar is more backed by military might and threats than anything else. We are apparently gold poor, which is why we seek to invade the privacy of those U.S. citizens who own gold. Gold has become a competing economy to those in power.

I am not as versed as to how gold has been manipulated in other times, as during deflations. I do know that one manipulation was via FDR, again, acquiring some supply from citizens, and then, I believe, devaluing the dollar relative to it. Perhaps I am mistaken. I am in a relapse. But I do agree with, gold is not immune, and I thought I sort of suggested that. And, like economic crashes, similar to gold as a stabiliser, a central bank can both help prevent crashes, or "panics" pre-1913, or can help cause them, which the Fed is tending to do these days. It's all a balancing act straight on down history.

My main point was that, while similar, gold tends to be more stable than paper, and I think we both agree on that. When paper inflates, when wars occur, when goods are scarce, there are always gold fillings to hunt. After cremation, neither paper nor dentists remain, but gold continues the game.

Please forgive if I cease responding now. Rain storms are making it virtually impossible to log on and stay logged on. Thanks.
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