Inflation in Recent Monetary History | Joseph T. Salerno

[AFRIKTODAY]

At the end of the day; with the system showing incremental weaknesses and the obvious incapacity of the technocrats in charge to provide satisfactory solutions, the masses of people will rediscover the value of gold and other hard metals. Those of us who have understood the monetary system will be have to deal with a panicked " crowd" looking for a hide out. Buy gold now before the " crowd" comes in a raise price. Gold is still cheap and I will buy, buy, and buy. And burry it somewhere far!

[zoroab]

What about the last 30 years? Average people don't live thousand years they simply want to save money for their retirement. Someone who bought gold in 1980 at a time of oil depletion, commodity inflation new hard times, peak living standards..... still hasn't made any profit from his investement. Even real estate and stocks have had real returns.

[Swish123ABC]

What if they bought the Nasdaq in 2000? A house in San Diego in 2005? Dow in Oct 2008? Yes "uninformed" guy who bought in the *one* month that gold spiked over $800, held onto it since 1980 (who does that?) he didn't do so well. Gold is an alternative to fiat money, not a get rich quick scheme.

[teewillis1981]

They have now. The spot price of gold is 990.

[campelofep]

You should invest in Dow Jones during good-for-market presidencies and on gold during the others...

[jaffijoe]

Gold is not an investment, it is money. There are many mechanisms in place to induce downward pressure upon the actual price of gold as a commodity, but it has for centuries held its value over time. An investment requires profit. That is why gold is not an investment, it is just money that retains value. If it were used as money in an unhampered market, its real value would increase in relation to increased efficiency in production. The entire length of production would thrive.

[stealthswimmer]

I don't think gold is ever meant to grant real profit. It's just a way to hedge against expected inflation.

[AFRIKTODAY]

@stealthswimmer

Wrong! Gold is money, real hard sound money! Holding Gold is holding 5000 years of monetary history in comparison to 200 years of FIAT INFLATION! That's a basic paradigm very people have been able to recognize!

[stealthswimmer]

@AFRIKTODAY

"Gold is money"

And there is not really any profit in holding money...

Nothing you said contradicts what i said. Oh and money is just a medium of exchange, so yes fiat currency is money - it's just that it's money that is imposed on people by force of law instead of voluntary interactions.

[AFRIKTODAY]

@stealthswimmer

There is a lot of benefit in holding real money like Gold: You are protecting yourself from governmental distortion of the price system caused by its perpetual push for monetary inflation. By holding gold, you are securing a real Natural market purchasing power as opposed to the artificial governmental led Fractional reserve monetary system we live in. Natural money, Gold, always wins at the end of the day.

[stealthswimmer]

@AFRIKTODAY

holding gold does not protect you from government interference. During the Great Depression, Americans had their gold confiscated. Central banks also buy gold so the price of gold is still interfered with from time to time.

it only has purchasing power as long as people are willing to accept it. Today there's an increasing number of people willing to accept it.

Also "the end of the day" may be in 10 years, or 30 years, or 100 years. We can never tell when the "end of the day" is.

[AFRIKTODAY]

@stealthswimmer

You are not serious my friend!

Uno, people rushed to recover their gold deposit after the crash of 1929 which led to thousands of bank runs across the country and the bankruptcy of many overextended banks that had lent far above their gold deposits. FDR interference was merely a bailout of the banking system and a major destructive action on Free market capitalism in America. His subsequent cartelizing policies will WORSEN a crash into a GREAT DEPRESSION.

[stealthswimmer]

@AFRIKTODAY

Yes, there were plenty of bank runs in the 30s, and FDR bailed out the banks *and* he stole people's gold. So this proves that holding gold will not necessarily protect you since the government can just steal it from you.

[AFRIKTODAY]

@stealthswimmer

Actually, most people did not relinquish their Gold to the government, the fools did! Look, no government can compete with Natural economic laws and value financial investment. In the long run, during a period of heavy monetization, commodities and Natural monies always come on top far ahead of other asset classes. That's the basic issue here!

[stealthswimmer]

@AFRIKTODAY

Interesting, i didn't know most of them didn't give their gold. As for economic laws - governments don't have to compete at all, they just oppress people and it usually works.

[AFRIKTODAY]

@stealthswimmer

The issue hand therefore is not so much that gold protect you but rather that GOVERNMENT robs YOU! The FDR wall street gangs had managed to turn a relatively " healthy market correction", caused by the 20s excesses, into a centralized fascist and corporatist wealth transfer operation and the creation of many institutions that are still alive today. The people who " kept" their gold benefited; those who were foolish enough to give it to the robbers in charge lost. I KEEP MY GOLD

[stealthswimmer]

@AFRIKTODAY

Just because you *want* to keep gold doesn't mean you actually can in some cases. Again - if your gold is stolen then you're not really better off. Anyways, it's possible the people who initially gave their gold to the government actually gained because the government paid them more than the market price...but of course if they didn't spend it before inflation came then they lost out (there was inflation in World War II)

[AFRIKTODAY]

@stealthswimmer

You perfectly stated: "If your gold is stolen"! Being aware of that, you must take your precautions!

You got to be joking! In 1933, FDR demonitized gold in the US and pegged its value at a subjective $30/ounce. After the confiscation, he reset the gold at $34/ounce! The people who gave their gold away LOST, and the government INSIDERS AND GANGSTERS GAINED!

[stealthswimmer]

@AFRIKTODAY

$30/ounce was, at the time, ABOVE the market price of gold. Later when it was $34 though, if I remember correctly, the market price changed and so after a period of time, it became below the market price of gold.

As for "subjective $30/ounce" - value is subjective. Market prices are determined by the subjective valuations of individuals.

[AFRIKTODAY]

@stealthswimmer

Bro, you are kidding yourself! The government confiscated people's gold at 30/ounce later to alter the price $4 upward in order to profit from it! Classic case of government thievery! By the way, the price of gold was fixed, not the result of market valuation.

[stealthswimmer]

@AFRIKTODAY

Yes it was thievery, but people did get more than the market price, just sayin...

And yeah the price was fixed...at ABOVE the market price...

[adrianaJacobs]

For thousands of years, in good times and bad, precious metals have offered investors a solid, long-term and tangible way to hold and protect wealth with relative safety. Unlike paper investments (like stocks, bonds and currencies) that can and have become worthless overnight, precious metals have true intrinsic value...and, hence, will always be valuable.

[Sepero1]

Actually paper stocks are tied to real value. Most companies own hard assets like real estate, buildings, etc.

Metals and stocks, both move up and down.

I think that paper stocks are simply more often over and under valued, and for a variety of reasons.

-Paper assets have more liquidity

-Companies have potential for faster growth in value

-Speculators prefer faster growth, so they are more likely to invest in stocks, and that causes greater fluctuations

[ball4thegame]

i like it firefox, you have a link to the full congressional record of that speech? im lookin around for a more official-looking version if i wanna print it

[firefox8192]

BALL4THEGAME READ, READ US CONGRESSIONAL RECORD MARCH 17, 1993 VOL.33 PAGE H-1303

SPEAKER-REP. JAMES TRAFFICANTE, Jr. (OHIO) ADDRESSING THE HOUSE. AND WILL OWN UR MONEY AND BANKING PROFESSOR.

[djsherin]

The greatest myth is that the fed tries to "balance" inflation and growth as if the 2 necessarily go together. Keynesian economics is still wreaking havoc in academia and economic reality.

End the fed!

[ball4thegame]

...this speech by Greenspan that Prof. Solerno is quoting...was this a CFR meeting?

[ball4thegame]

im bringing this to my "money and banking" professor.