United States Heading towards a Depression?

Example: New currency being "pound of rice". Sounds silly but why not. For the next 1,000 years that 1 POR bill will still be able to buy just that. One pound of rice.

Otherwise I do not see a way to create a currency which could be inflation and manipulation proof.

 

The gold price is about 6 times the production cost too. 10 years ago Gold value was about the production cost which was a true value and since production cost has not gone up, it should be at the same price if it was not for market manipulation and sheep mentality of may people.

Gold has some industrial use but for it is an established protection in third world countries since because the production cost could be calculated, the local currencies had to adjust to equal the production cost. Gold was acting as protection against inflation and political instability.
Today gold is sold over production cost and imaginary market value has no connection to the real value. On top of that there is huge market based on paper gold (gold certificates) that has no physical gold backing. The stock market game has been adapted to gold market to rob the people with sheep mentality.

 

I would tend to disagree, as I don't feel the whole economy is just an illusion. What I meant by not having 'real value' is that gold is just a metal, and is not particularly necessary, or even that useful in and of itself without the artificial value we've place upon it.

Do you remember the history of money, they had a money system based on barley.

I would agree about its market value being out of control. It looks like it has tripled since 2005, here is the price of gold by year in a PDF.

 

Why do you think people chose gold as substitute for money for 1000s of years, because they didn´t have your brain? LOL

There is no universal quality in rice or coffee, it varies all the time. Depending on moist, 1 pound of your rice or coffee can actually be only 420 grams. Some rice types are better than the other ones and more in demand. 1 pound of pure gold on the other hand is always 1 pound of pure gold with no weight or quality difference.

 

Discrimination based on the nationality Helvetti's #1 quality .

 

If you had to back a paper currency, with a commodity other than gold, what would it be?

 

Meh, just take this advice.

[video=youtube;jllJ-HeErjU]http://www.youtube.com/watch?v=jllJ-HeErjU[/video]

 

You can use almost any valuable metal such as silver, ....to back a paper currency. The reason Gold is preferred over silver is the simple fact that silver cost a lot less to produce than gold and in order to equal the same value you will need much more quantity of silver which is not practical.

 

So if being alive in society requires being a part of the monetary system, then why give a few individuals the power to control it unsupervised? Sure, gold may not be perfect and of course, if there was a food shortage, your pound of gold wouldn't feed your family. But in an advanced society to avoid inflation, what better way would there be to ensure that today's earnings will have buying power tomorrow?

 

All right, good luck.

So? Right now all that matters is that gold is going down and the dollar is going up, period. You can't buy gold at prices from 10 years ago.

And this is no "illusion" -- those are real people gaining/losing real money on real fluctuations of the price.

 

What is the basis of economy? What runs the economy? Do you think the value of money, lets say dollar, is real?

A consumable can not be a de-facto standard for money.. We tried it in ages ago, and it failed.

Let's say you you use coffee beans for money, how will you set the value of coffee beans? For example If you want to buy rice, how many beans for a pound of rice?
There are many qualities of Coffee beans, how will you determine which bean belongs to what quality?
What will you do the year when crops go bad?
And the most intriguing question of all - How will you control the flow of money and inflation when I can grow the money in my backyard?

Burr Burr

 

I had figured noone wanted to touch my point but glad you did. Whilst I 100% agree on your answer on prefering proper growth, wouldn't that mean we would need to go back to the right levels? and if so, how do we bring down an artificially-created economy without affecting every single person caught within it?

That's my major concern about allowing it to fall. I fear we'll all be back in the dark ages and many more of us will be living in tents if we were truly to go back to anywhere near real worths. I do like my plasma TV and can get by on less than minimum wage but if I then had-to help my family and friends (which I no-doubt would do anyway) then life's going to be a lot, lot tougher for us all imho.

We need a better plan than just letting it all fall down.

You didn't invest in gold?

As the mineral of last resort I believe it will hit the $5,000 mark they're being coy about. It seemed strange how our dollar fell below parity with the US the other day but it had something to do with Bernanke shifting 400b of short term debt into long-term debt from what i'm hearing. When the hubris wears off I think it will shoot gold back up, or America will be heading out of depression. Either way it should work well, though below parity $ means we will start buying from somewhere else now.

I heard the leaders saying last week Greece won't be allowed to fail, which I thought was a stunning admission, though I do believe it will have to in the end.

 

Sure, but during the last election, the gold price went down as well but the moment Barack went in office, it started skyrocketing like never before. My point is: Until gold goes down back to where it was, there is a steady increase of its value and a steady decrease of the buying power of the U.S. dollar, especially when it comes to international trade.

 

I'm torn. Should I go with Broccoli Man on this one, and buy the F*(#ing dip? Maybe I should take ATVKing's advice (he has some first hand knowledge of a collapsed economy) and stockpile food, guns, and assemble a small militia.

S&P Downgrades US credit and the dollar surges. The Euro is holding ground but, in the near short run, it looks like it is going to completely collapse. IMO not just a possibility, but actually highly probable.

Taking ATVKings analogy to a national level, I'm going to run with the country with the most guns and butter (Nation with the most powerful military, most natural resources and ability to exploit them). When the sh*t hits the fan, the poor, impoverished, US citizens can go right back to manufacturing their own crap at a higher price. Can China instantly pull several carrier battlegroups out of their ass?

 

Unless USA decide to only buy gold then the price of gold and the buying power of U.S. dollar have nothing to do with each other. Look at oil, the buying power of U.S. dollar has actually gone up from $150 dollar a barrel couple of years ago to half of that price today.
The problem here is that you and couple of other people mix different subjects that have nothing to do with each other and come up with nonsense conclusions.

 

Absolutely agree. Germany seems to be strong but gets drained by Greece, Portugal, Spain. If Germany managed to pull out, they may have a chance, but the anchor is too heavy for the ship to stay afloat.

The reason the buying power for oil has gone up has little to do with the value of the dollar, but international politics.

About the Wars in Libya and Iraq, Central Banks and the Tentacles of the Power Elite

 

Thank you for confirming what I said that buying power of U.S. dollar has nothing to do with price of Gold. The buying power of U.S. dollar is connected to the the value of currency that is used by supplier which is effected by many factors and also internal economy of USA. If you look at the price of Real estate in USA which is probably the biggest purchase an average person do in the life time, the purchase power has gone up because of all the bankruptcies.
Only a simple mind person will connect the price of Gold to purchasing power of U.S. dollar.

 

What, no cowrie shells?? j/k

I don't really have an alternative in mind. I'm just saying gold itself doesn't have a great deal of value, other than what we've placed on it. It's worth can fluctuate so widely. One could buy it at the inflated prices it's selling for now, and find it's worth half of what you paid at a later time. Or, of course it could be the exact opposite, and worth twice as much, depending on what happens in the market. I'm not against investing in gold at all, it's just that I don't really trust it. For you, it may be perfect, as you're probably more knowledgeable of when to buy and sell.

 

Some country in Africa, I do not know which one, uses cows for money. Money is what the public uses as a symbol of work or value. Some people mentioned other forms of money. Problems arise when small groups of people rise up and control the value of what the public uses for money. These small groups are essentially telling society what they think society is worth. When you have to work harder for the same dollar bill year after year, your life is slowly ruined.


Gold has been money for thousands of years. The spokesman for the privately owned US Central Bank does not believe that gold is money. Look for the page in this thread where Ron Paul asks the Fed chairman if he thinks gold is money. Here it is : ( Start at around the five minute mark. )

[video=youtube;2NJnL10vZ1Y]http://www.youtube.com/watch?v=2NJnL10vZ1Y[/video]​

 

Speaking of gold, this advertising company has hidden more than 2000 dollars worth
of gold. Their iPhone app gives hints on where it is. LINK