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02-19-17, 06:37 PM | #31 | |
Ocean Warrior
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If this is not the case and people in the country in question understand what USD banknotes are (and we have to assume that for the experiment to be fair) then the person with cash is more likely to be better off, simply because it is more convenient to use money instead of the physical gold. I mean 3 grams is like a 1/6th of a cubic milimeter of gold, it is pretty hard to split it into 100 units to exchange it. Regarding the rationality of that choice (apart from the convenience factor which is quite clearly there) - assuming that the USD is not hyperinflating and maintains it's buying power, then in that specific scenario there is little difference (apart from convenience, which is on the side of the USD banknotes), as what the person in question cares about is the value others assighn to the USD (and hence - it's purchasing power) which, the last time I checked, was quite good. In fact in real hyperinflating situations (ie Russia in the 90s) foreighn currences were prefered to the gold and other such means. Regarding gold - it's value is a subjective construct, if it was used just a regular good it would hold little value as there are few practical applications for it. The only difference between gold and cash (and other forms of money - I mean apart from metal and paper and now digintal money there were many, many others) is that it's value has been assighned by people for longer (which means little) and the money mass tends to not change rapidly (though we did see that happen with the other kinds of metal money - ie copper coins). One could argue that this lack of change in the monetary mass (and the lack of convenience) is highly detrimental, as the money mass could not expand after the expansion of the economy, precluding the consumers from buying goods that they are otherwise capable of buying, as their demand is not supported by their liquid reserves.
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Grumpy as always. Last edited by ikalugin; 02-19-17 at 06:51 PM. |
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02-19-17, 06:51 PM | #32 |
Stowaway
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"10 thousand years of history of mankind"? You are simply making things up.
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02-19-17, 07:23 PM | #33 |
Soaring
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Gold digging done by humans since ~5500 before Christ, maybe even earlier - plus 2000 years since Christ, makes 7600 years.
Plus minus some more or less. Big deal. Its one of the earliest metals man learned to work on.
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02-19-17, 07:27 PM | #34 | |
Soaring
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500,000 and 5,000,000 and 10,000,000 and 50,000,000 Reichmsark notes. 5,000,000,000 Mark. 100,000,000,000,000 Mark. My apology if you got dizzy from the many zeros. Imagine the taste of a leaf of bread costing several million Mark, maybe that helps you to get back your balance.
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02-19-17, 07:56 PM | #35 |
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Yup. People have dug for gold for a long time. They have also whittled wood, weaved baskets and climbed trees to get coconuts. Big deal. Proves precisely nothing about the value ascribed to such things as being 'natural' or 'inherent'. Because it isn't. If gold has 'value', it is because people think it does. And because they believe in an abstraction called 'value'. Ask a physicist. If he wants to know the mass of something, he can measure it. Likewise the density. Or the coefficient of expansion. 'Value' though? All he can do is look up the price - which simply tells him what other people will swap it for. Don't need a physicist to do that, because it isn't a physical attribute.
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02-20-17, 02:12 AM | #36 | |
Dipped Squirrel Operative
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Like .. money.
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02-20-17, 04:48 AM | #37 |
Soaring
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You guys are a kind of a gang, I tell you.
http://www.sbcgold.com/blog/the-intr...ld-and-silver/ https://en.wikipedia.org/wiki/Intrin...e_(numismatics)
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02-20-17, 05:12 AM | #38 | ||
Ocean Warrior
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The subjective value attribution is the important bit, because if you call that process natural then you view humans as objects rather than subjects and thus deny them agency.
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02-20-17, 05:23 AM | #39 | |
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*I assume a man as well-read as you is familiar with Winnie the Pooh? If not, I recommend the tale of the honey-pot gift as a lesson in value as a social construct. Constructed on the fly by a bear of little (but sufficient) brain with a sweet tooth and no self-control. |
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02-20-17, 06:33 AM | #40 | |
Dipped Squirrel Operative
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@Skybird we certainly know what you mean. Plutonium in purest form is even more worth, but also difficult to handle. Gold is the quasi-standard, of course. But when aliens from a planet of pure gold landed here, the price would fall. If more gold is being excavated and cast, the price will also fall. It is with gold, as it is with diamonds. DeBeers owns all resource sites, and punishes everyone who interferes. It is an artificial rareness, because there are so much diamonds in the world, all women of the world would break down trying to wear them. There is also more than enough gold. If there was a real worldwide crisis, affecting all (really all), you can then try to eat your gold, or try to sell it. Good luck. I just can advise you, if you want to buy gold, buy it in bullion form. No necklaces, no Krugerrand. Gold is not worth that much, unless it is cast bullion form, with the exact weight and the casting institution stamped on it. Don't try to resell gold in other form, or a diamond. Even worse than buying a new car, considering the loss of value within the first year.
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02-20-17, 06:39 AM | #41 |
Ocean Warrior
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Both diamonds and gold have -some- industrial uses.
But what I am more interested is - does anyone have any good insights into the recent security conference? I mean it is a decade after the historic speach:
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02-20-17, 06:43 AM | #42 |
Soaring
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Since world war 2, there have been over 50 hyperinflations in several nations worldwide. Hyperinflation if defined as a yearly inflation rate above 50%.
Smaller high-inflations not counted. Then you would be in the three-digit range. Deeply. Where there are paper money regimes, there are inflations. That is the purpose of why politicians have enforced paper money regimes, the only reason why paper money was enforced. So that politicians no longer get limited in their spending frenzies by market inhibitions and limited availability of tradable quantities of something (money in this case). If our money would be based on - for example - gold instead of toilet paper, we would not have the insane debts there are today - it is not possible to raise such debts with limited quantities of money. At least if people do not endlessly accept mere claims without securities as a payment. The point is that limited availability is what raises the market value of something's intrinsic value, and huge availability reduces its intrinsic/market value. Thats is why paper money is worth nothing. It can get inflated in quantity as you pleases. Single grains of sand are worth nothign for the same reason.The hyperinflation money in the picture at least has had the intrinsic value to be used to fire ovens. That precious metals trader got it right. That he uses the definition of intrinsic value correctly for his advertising does not change the fact that he correctly explains the term as it is being used and understood in economics. Because that is what it is: a known term used in economics. You cannot just stroll along in this form and redefine it and distort it so that it suddenly fits your queer worldviews. "Up" still ranks above "bottom" and "front" before "back" - even if you claim that it would be better if it would not mean this, but something different. --- And now back to the topic. German politics.
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02-20-17, 06:47 AM | #43 | |
Ocean Warrior
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Any interesting political developments comming up?
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02-20-17, 06:47 AM | #44 |
Lucky Jack
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Well...it is Ger-money...
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02-20-17, 06:52 AM | #45 |
Dipped Squirrel Operative
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Russian cyber interference in the next german elections?
Just trolling . But act wisely.. Trump wants to destroy the EU because it is the only organisation that has the economical power to compete with the US. And he's of course using the UK 'brexit'.. I do not know whether it is really in Russia's interest to hurt the EU, but if Trump does not want to trade anymore.. there is always Russia.
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