Gold price manipulated since longer than assumed?

[Skybird]

Originally Posted by Jimbuna

Send it over to me and I'll put it to good use

Back OT...any tradeable commodity is used for profitable gain and always will do as long as there is a buyer and a seller within the marketplace.

That is why it is of paramount importance to have a currency that is indeed a freely traded commodity just like any other and that has its value not regulated and fixed by governments, but market participants. Only then the "value" of the money actually has a meaning. And only then prices have a meaning. And only then businessmen and traders can make reliable calculations on their cost-gains-balances. In other words, the general status of an economy is reflected ion the price fixing on a free market, and the value of its currencies. And when you want to hide the real status of a desolate economy, you have to prevent all that and command which price the currency should have - by that, you distort all, precent all, disguise all.

But such a commodity currency that is decided about by market and private people, would mean that politicians have limited means available only to finance their spending frenzies by which they bribe the masses to vote for them. So they always will move all heaven and earth and tell just any lie to prevent such a currency and make people believe in paper money instead.

Also, paper money is a precondition for the giant redistribution scheme of real values from bottom to top that is happening today. The word to watch out for is "Cantillon effect". It makes sure that the rich get richer and the poor get poorer just by printing more FIAT money and pumping it into the system.

That gold has been used as such a widely accepted commodity money, is only because of past markets decided so and people made good experiences with the physical availability and ability to manage it. It is practical to handle, can be turned into smaller or bigger coins, and if a symbol on a thaler is declared invalid and the currency changes to another name, you melt your thaler and still have gold that has not lost one bit of its bartering power than if it were not a necklace but the same amount of gold pressed into the form of a coin, also, it cannot rot and does not corrode. It could as well be plant seeds, or seashells or bones, or tobacco, pieces of dried bacon and whatever else man has used as token for a currency system. But people found out that all these things were not as practical and valuable to them as precious metals turned out to be, and that they did not offer the practical advantages of using metal instead of furs or dried bacon. And so, gold it was.

The Chinese were the first to try a paper money system, I think in the 12th century. It collapsed. And since then, ALL paper money system tried in any part of the world have collapsed. The inflation of paper money is nothing else than what ancient kins did when they reduced the amount of precious metals in their gold and silver thalers, and replaced them with inferior iron, to increase the amount of thalers and give the illusion of having more wealth that they then spend. It is betrayal, theft, and always it is snowballing.

[MH]

The Chinese were the first to try a paper money system, I think in the 12th century. It collapsed. And since then, ALL paper money system tried in any part of the world have collapsed. The inflation of paper money is nothing else than what ancient kins did when they reduced the amount of precious metals in their gold and silver thalers, and replaced them with inferior iron, to increase the amount of thalers and give the illusion of having more wealth that they then spend. It is betrayal, theft, and always it is snowballing.

So how economy with relatively fixed amount of gold can deal with growing wealth.?
...after all people create wealth as well.

[Skybird]

Originally Posted by MH

So how economy with relatively fixed amount of gold can deal with growing wealth.?
...after all people create wealth as well.

It is totally unimportant how much quantity of a currency is in circulation. The Central banks' self-legitimation in parts is that "somebody must control the amount of money in circulation".

Nonsense.

If you increase the number of currency units in the system by - for the easiness of calculation in this example - by a factor of ten, then you see that prices adapt by moving the decimal one digit to the right. What costed you 1 thaler before, now will cost you ten thalers. If you reduce the number of currency units in circulation by let's say one half, you will sooner or later see that prices half as well.

If there are many gold coins in circulation, their price will drop on the market. When there are fewer gold coins in circulation, their value rises. But if you have some criminal mind called "politician" giving it a fixed value that the market is not to negotiate freely, then you are in a nightmare of deep troubles. Such a currency no longer represents and reflects true market events. And that is what politicians want with their control of the currency - to hide how they are abusing and ruining the system.

Wealth cannot be produced on the basis of fictional value (=credit). Already von Mises showed in all stunning logic, that wealth can only be founded (if you want it to last) on the basis of real value that you have saved before - and then investing this saved value. There are no shortcuts. You need to go the longer and more difficult way. You must save a little bit, and then invest that. Using credits for your investments only founds or increases the snowball system and its longterm devastating effects.

There is no way to generate value out of nothing. It's an illusion, and it destroys us like the happy dreams of constant heavy drug abuse destroys the consumer. But he grins until the bitter end.

[MH]

There is no way to generate value out of nothing. It's an illusion, and it destroys us like the happy dreams of constant heavy drug abuse destroys the consumer. But he grins until the bitter end.

Creating new technologies is creating value from nothing.
Software you using is the same...value from nothing - an idea.
It is not about exchanging relatively fixed amount of goods for relatively fixed amount of metal anymore.
We would have value rise of gold coins till it was impractical to use them again.

Wealth is not about how many gold bars you own anymore.
Not saying that current system is perfect but gold based one is crazy...

[Skybird]

Originally Posted by MH

Creating new technologies is creating value from nothing.
Software you using is the same...value from nothing - an idea.
It is not about exchanging relatively fixed amount of goods for relatively fixed amount of metal anymore.
We would have value rise of gold coins till it was impractical to use them again.

Wealth is not about how many gold bars you own anymore.
Not saying that current system is perfect but gold based one is crazy...

Ideas you newly deveklope and form into inventions, base on intellctual work invested before, and the fruits of intzellectual work done before. They do not come form nothing. And you need financial wealth to materilaise the idea you had, to make profit from it. Like the farmer needs seeds in spring to be able to harvest in autumn - and save some for the seeds he needs again next spring.

Fee market bartering is nopt about "fixed" prices as yoiu suggested above. It is about prices freeely negotiate by market participants.

Handling heaps of gold, and how impractical that is. If there were just one ton of gold in a country, the ammount of gold you would need to carry to buy a house, would be almost microscopic. Anyhow, nothing speaks against storing yopur gold bars in a safe place, say a bank, and be given a receipt for that - as long as the bank does and miust store all that gold in full material volume all the time. Originally, that is where banknotes are coming from! But then the other of the two archsins of modern fincial corruption was implemented: the fracional reserve system that allows banks to not store all gold given to them by the owner, but just a fraction of it, trading with the major part of it. I have explained that problem in a thread two or three weeks ago. Fractional reserve banking systems and FIAT paper money without true commodity-coverage are the death sentence for any responsible, reasonable fiscal system. Because on the very first occasion you allow a bank to not withhold all material value given to it for storage against a paper receipt, means that this bank already is bancrupt because if people come and want back all their store gold, the bank cannot meet the demand.

So you can use paper banknotes as long as there is not more currency units represented by them as there is in real commodity, saved and stored away in some secure location. The sin is if you use this system - and then intruduce a fractional reserve system. Then you know that you have let the ghosts out of pandora's box.

Money is like any commodity, good, item, that people are interested to trade with or to barter. Prices for these items must be allowed to be freely negotiated. A need for FIAT money of any form does not exist except for politicians who will always dislike that there are unsurpassable limits defined by a solid money to their unlimited spending fantasies. It is always the kings, the feudal elites, later the governments and politicians in republics and the fans of socialist planned economies that have corrupted and ruined currencies and thus destroyed economies. And they all bred corruption and plundering en masse.

Central Banks are not needed. State control of currency is not needed. Fractional reserve banking is not needed. Each of these three alone already is utmost destructive. Together, they are apocalyptic.

What states need to do is to be as little and small as possible, to tax and to spend almost nothing, and to be as non-existing as can be achieved. Democracy always must lead to socialism and planned economy and bureaucratic totalitarianism. The opposite to democracy - is freedom.

[Tchocky]

If everyone got into a car accident on the same day then insurance companies would collapse.

[Skybird]

Originally Posted by Tchocky

If everyone got into a car accident on the same day then insurance companies would collapse.

But if a meteor hits Earth, they would not need to care.

Serious, you get the very same reply by me that you have already gotten from me some weeks ago on the same issue. I just edited the typos out of it, and changed a phrase here and there.

Originally Posted by Skybird

When you have a person going to the bank and paying in 1000 bucks, and the bank is allowed to hold only one tenth of that in real reserves, and pay out the other 9/10 as new credit, then you create more money, new money, from nothing. Which devalues the money in circulation. Which essentially is inflation. Because: the bank gives that money as a credit to a new debtor, who uses it to invest into something, do usual bank deals, and pays at least major parts of it to other banks - who again hand out most of that money to other debtors, because it must hold only one tenth of that sum as reserve.

If you do not see that as an essential and vital problem, then nothing will ever make you waking up: Somebody paid 1000 bucks to bank as credit, and the bank uses that to increase the amount of money in existence - WITHOUT THAT NEW ADDITIONAL MONEY REPRESENTING ANY NEWLY CREATED MATERIAL VALUE. And the ratio is intimidating:

After the first paying-in (forgive my probably inapt English here, I am not familiar with precise business English and the German terminology probably would not help here) by a customer of let'S say 1000 bucks, the bank can hand out nine tenths of that money to other customers, as new credit, because it must hold only a fractional reserve. That would be new money worth 900 bucks. Comparing assets and liabilities, the amount of money in circulation (digitally or paper, it does not matter), has grown by 900 bucks.

But it does not end here. The debtor of the bank who has taken those 900 bucks as a credit, uses it to mind his businesses and in the end the money ends on banking accounts of other banks, employees he paid, bills he paid, and so forth. These banks again can use this money they got to just keep one tenth in reserve, and hand out nine tenths of it again. From 900 bucks, the bank hands out 810 bucks, and only keeps 90 bucks in reserve. Adding together the increase in money from the first (900) and second (810) iteration of this game, the original, materialistically value-covered 1000 bucks, have grown to a total of 2710 bucks. But only 1000 bucks of that sum is real value. The remaining 1710 bucks are - "uncovered", value-less. They are FIAT indeed. 1000 bucks have been blown up to 2710 bucks. And that devaluation of money. And we have had just two iterations here! In reality, things do not stop here.

So now go to the next iteration, and do your math.

I do not think you know what fractional reserve banking really means in its desastrous consequences, since you ignore all its destructive implications that some wiser men have warned of already 50, 70 years ago, and earlier. And the basis of these men'S thinking already has been laid out decades before them. What you know is the colour of sand when the head sticks deep in it. One should rememeber that none of the established economic schools was able to warn in time of the fiscal disaster becoming apparent in 2007, and that none of these schools has forseen and predicted correctly the general trend of the erosion of the currency and economy from the 1970s on - none except one, the so-called "Austrians". And not only did modern Austrians almost completely rang the alarm bells before 2007, but earlier Austrians predicted these developments already in the 1930s and 40s - and explained clear and straight why these developments would be unavoidable. It seems that is more competence and healthy reason and insight into human psychology, than any of the recent years' and decades' Nobel prize winners in economics can show up with. The only Austrian ever given the Nobel, was Hayek - and to minimize that recognition for highly unpopular, reasonable concepts at the same time and to give politics an alibi for why to ignore him after that like they ignored him before the Nobel,, he had to share it with another guy, a socialist, who represented exactly the opposite in thinking and argument than Hayek, and supported insane spending frenzies and money devaluation.

In 2009, Germany was close to a bank run, and Merkel had to tell a now famous lie: that the state would guarantee all private savings on bank accounts, of all people in Germany. That there simply is not sufficient "money"to allow the paying out of all savers who want their "value" back from the bank that just a tiny fraction of savings could be payed back to their former owner, she did not say. Savers do not know the contexts and backgrounds, and believed it. The mioeny was left were it was. Cold progression in 2013 costed German private citizens 53 billions of their total savings, money that was stolen from them intentionally by and deliberately by the state, by implementing according policies via the ECB.

And it does not stop there.

What we see with in this precious paper money and fractional reserve system today - in reality simply is the biggest predatory raid in the history of mankind. In its dimension, it is without precedence in human history.

And what is all that paper money, in the end? Only a very tiny fraction of it still represents a material value. The lions share of it, the overwhelmingly biggest share of it: is debts, Value that is not there. Is nothing. And this tiny remains of real value, gets constantly eroded further. By printing more money.

Brilliant.

At the same time, due to the Cantillon effect, real property and value gets constantly transferred from the bottom to the top of the communal hierarchy. Here is where Penguin and me maybe would meet and share the same opinion in our criticism (saying that by the image I have of him). In a nutshell, the Cantillon effect means that new printed money that gets injected into the system, gets injected at the top of the banking industry. The first hands using it have a price advantage in using it to buy stuff, becasue when there now is more money, that money ciruclating is devalued accordingly, and prices will adapt by rising. But that takes time, and in the beginning, the first hands can buy with devalued money - but for the old prices. The next hands using that money, already have to deal with slightly adapted prices, and ther third hands will deal with a market where prices have adapted even more. And so the effect tickels through the hierarchic pyramide, from top to bottom. When the new money reaches the level of the ordinary man in the street, prices have adapte din full, and Jiohn Smith has slightly more money, but also has to pay for higher prices, nullifying the effect for private consummation. At the top of the pyrmade however, real material welath and püroperty has been added to the already existing ones, for the firts buyers were able to avoid the effects of rising prices and thus for some time had more buying power than by the monbey'S value they indeed had. It is a time-limited money cheat, so to speak. It erxplains why all these fincial stimulus programs to stimulate porivate consumeerism by injecting newly printed money into the system, have so little and most of the time no lasting effects.

Originally Posted by Skybird

There is no way to generate value out of nothing. It's an illusion, and it destroys us like the happy dreams of constant heavy drug abuse destroys the consumer. But he grins until the bitter end.

Of course you can, say for example you get some muppet like Beck to hype the value of gold and get some mises fanatics to further spread the gospel of hype then you can generate a completely false value which doesn't really exist.