Gatelynomics 101 Hard Currency part 01

[franzyland]

To the people who don't like the gold standard. Which would you trust more? A currency that has been around for thousands of years, or one that is controlled by idiots in Washington, who, by the way (since they're elected officials), aren't required to read nor understand ANY bills or laws they pass. It should scare the crap out of anyone who understands that our "leaders" don't need any qualifications to run the country, just votes.

[jgascoine011]

The gold standard based currency does bot work. Is our system we have now perfect? no of course not, but it works better than the gold standard.

Hell there is more money in the US alone than there is gold in the world

Also, pumping, as u said, 2 trillion dollars into the system does not necessarily reduce the dollar, the markets sets the worth of the dollar

Ur point of view is very right wing, as you are not allowing other counties to progress

[NGE0001]

Shawn you seem to have so much to personally say why not make another channel. You could even talk about Ron Paul on this new channel

[yoss1978]

Yep, slaughter house is about right. Invest in Pitchforks and Flaming Torches.

[tmafkap]

The value of everything - but especially of money - comes from believe, believing that something has value or believing that you can use an object for something that makes the thing valuable. But our monetary system has other aspects that stem from believe, namely religion, reading Rudolph Otto's "The Protestant Ethic and the Spirit of Capitalism" can shed some light on those connections.

[RexDogma]

@tmafkap You mean Max Weber's "The Protestant Ethic and the Spirit of Capitalism"

[tmafkap]

@RexDogma Right, thanks for correcting my mistake. Max Weber, Rudolph Otto, I always confuse them poor guys that only have first names...

[WiseChoices]

Just curious, to what extent should your political or economic views be presented on a separate channel distinct from wargaming and awesome miniatures? My friends and i play Warhammer to get AWAY from reality (which is a definition of "hobby"). If we wanted to hear this stuff, we can turn on the news or watch Max Keiser on Russia Today.

Will this sort of content turn away potential customers?

[bluetablepainting]

@WiseChoices We have of course given this consideration. BTP's channel is about more than just wargaming. The videos are clearly labeled and have a variety of subjects so I would imagine that someone not interested in "Gatelynomics" would simply not watch videos with that label. Just like you wouldn't click on a 40K video if that game didn't interest you. That said, I might create separate channels later on. PS- I think I actually get MORE customers.

[WiseChoices]

My friend carries a bag full of Citadel "Finecast", which costs more than most metals. So is he hedged against inflation, considering that GW increases its prices exponentially. So, when prices of GW miniatures go up, he should be laughing to the proverbial bank.

[timgeerdes]

of new gold as opposed to being increased due to changes in business cycles.

[timgeerdes]

2. Although increasing the money supply can cause inflation... an increase in consumption can cause inflation at a more rapid pace. Additionally, an increase in consumption is needed before an increase in the money supply can cause inflation. 3. Going back to the gold standard would, although not be more likely to CAUSE inflation, would be more likely to cause inflation at times when it would be worst for the economy because of the fact that the money supply would be increased with the discovery

[timgeerdes]

There are a couple of things that I would like to point out. 1. @ 5:59 your definition of inflation is backwards... The definition is; an increase in the general price level of goods and services within an economy. NOT an increase in the money supply. An increase in the money supply is one of the two main causal factors involved in creating inflation, the other being an increase in money velocity (functionally equivalent to a decrease in demand).

[franzyland]

This is why I have converted all my money into miniatures. They are assets, that have increased in value. Also, sometimes, if I need a washer, I just drill a hole in a quarter cause it's cheaper than driving to the store to buy one.

[WiseChoices]

@franzyland Haha, this is a good one :) Me too, I have invested in 5th edition Warhammer Fantasy metal miniatures. Pewter is so expensive now that GW has invented "Finecast" as a replacement, even though the price continues to rise. Maybe "Finecast" is the new metal??

[ImpudentInfidel]

I know the New York DMV won't take federal notes, you have to get a money order.

[strelor]

....umm and money keeps getting printed as well as destroyed and taken out of circulation...I hate speculation without education, but hell I cant blame anyone its what over 70% of the world does. They look at one side of the picture and make assumptions. Just thought for the future when you throw out numbers like 10% increase in bills printed each year do some research as to the estimated number of bills leaving circulation as well.

[owain1910]

with the melt down laws with india is it possible for them to send it to some other person in another country who melts it down for them as the laws on that currency aren't in effect in that country?

[maggoli67]

@owain1910 Some enterprising gents in Bangladesh did just that (I think it was Indian steel coins???)

[kevinmcd28]

Pennys prior to 1983 however are worth 1.73 cents a piece meltdown....So If you have 100 dollars in pennys prior to 2983 then you realistically could melt them down for 173 dollars in the future

[kevinmcd28]

@kevinmcd28 1983*

[kevinmcd28]

Well the federal reserve is backed by the gold in fort knox, which even though only seen by the public once, has thousands of gold bars in it.

Actually peeople are starting to buy pennies just in case the government, which apperently they might do, gets rid of the penny making thier meltdown legal...but current pennys are made of zince and only worth a tenth of a penny.

[orome21]

Btw I dont say all this stuff with inpunity, I know quite a bit because of the people I have talked to and the classes I have taken on the subject, I dont however pretend that I am the overall expert, But I do know enough to get by, I respect any opinions that have merit or backing and of coarse any voice that just wants to speak up by I might listen to it less if its just rallying just for rallying, There is an organized chaos to the world and we all play a part in how it turns and develops.

[orome21]

The problem with gold is nothing except ratio of growth, with gold you have a somewhat stable currency apart from gold shortages and shaving ( like you were saying in general). The real problem in this world is growth, in a world where if you are arnt constantly making a huge profit you are already falling behind, gold cannot meet that standard, what can is global economies ,overinfaltion, natural disasters,investments, production, wars, so much, the world isnt simply a large pie with slices now

[437cosimo]

In ancient times wealth was generally held by temples. The rich would take funds to the temple to be held. (not generally coins). The Romans started adding bankers to the mix, but temples were still there. Christians came along and destroyed that system. (to long to go into). The next rise of bankers was the 12th. century. To go to the U.S. Johnson took us off the gold standard to do the Great Society and The war. Thus we now have a currency worth nothing except belief. There is more but...

[MrDeadiron]

The problem with gold and silver is that they're classified as commodities and they're values change day to day with they stock market, originally gold silver and even oil weren't considered commodities, the problem with them being commodities is that they're value can taking like a $20 swing every day.

Also we are "herded" into using the dollar because if everyone was allowed to use different currencies there would be no standard, for example in early pre-civil war America every state had dif

[korona3103]

I think gold is a bit of a red herring. It is wise to put your long term savings into assets to guard against inflation. That's wise and prudent. But you'll want to spread them across lots of types of assets to stop price fluctuations from wiping out your savings.

Going to a gold standard just forces everyone to be a gold speculator. If you see how much the value of gold has been up and down over the last 50 years it's hardly a solid foundation for everyone's savings.

[bluetablepainting]

@korona3103 How was gold before fifty years ago? How about during the entire 1800s?

[maggoli67]

@bluetablepainting Let them go, man. Just keep buying ourselves. We can't save them all. Just emptied some near-zero percentage American and Canadian dollar accounts. Earned me nothing for the 6 years I had them. My metals are awesome in comparison. Not to mention the naked shorting by JP Morgan forcing silver down from where it should be.

[shamanores]

@bluetablepainting Wouldnt the more gold and silver found(mined) devalue it?

[korona3103]

@bluetablepainting Well pegging gold to the currency keeps the price pretty stable but it does make the economy very vulnerable to supply/demand shocks regarding the ability to mine gold at a steady rate. The purchasing power of gold did fluctuate a great deal even if the face value was the same.

Today we just can't mine it fast enough. Paper money has its own evils but in an ideal world with perfect governments it's a better system.

[MurrayHerts]

Also btw shawn, soon we will not have physical currency, it will be all electronic.. if you look at schools now kids pay with finger prints. Then governments can keep track of everyone and everything we do better, big borther.. great.

[MurrayHerts]

That silver bar will probably be worth 2 trillion dollars soon when the dollar collapses.

[shamanores]

On kind of a random note of the value of items/services. Ive only been in to miniatures for about a month mostly due to how awesome blue table painting is and I had no idea until watching this video how much inflation effects entire companies. If GW raises their prices 10 percent every year then blue table painting in turn has to raise their prices 10 percent a year to maintain the profit they had the year before.hmm...

[Arbie8327]

The rich lighting cigars with $100 bills ironically increases the value of all other money in circulation. Burn more of your money, please.

[ZeonAndOnly]

Hey Shawn and other posters. John Ralston Saul is good for apretty scathing critique of all things, financial, party political and ideological. The financial industry ( HA! What a joke title. ) Have been printing money and sucking the energy out of the value adding Western economy for 40 years. Guess what they devalued our entire economies. Check the index of house prices to average income. When this gets back to below average you're be at the bottom of the roller coaster.

[GwresYnKernow]

Well that was a melancholy ending to the vlog! Is Shawn going to be slaughtered~!? Find out next week (unless he is slaughtered, in which case we may never know!).

[themanmoore]

yes you are being forced to using dollars because the only value of the dollar is that everyone agrees it is worth x about of milk/whatever you want to buy

[ahhhh01]

shawn my understanding of macro economics after four years of study is that for the economy to get stronger everybody must get poorer first in real terms (lower purchasing power). QE will be reversed over time, at least that is the theory. If you are worried about GW over pricing read about the theory of monopoly in economics and you will realise that that their comfortable position in the war games market has lead to arrogance which we the gamers ultimately pay for

[eveplayer12]

fascinating

[newlyrisen]

Silver is PURELY speculative. Gold is seen as a safe haven for people who want to protect their savings (governments have huge gold reserves). But the gold market cannot be compared to any commodities market, or to any currency. People do usually not invest in it because they think that it will increase in value, but because they think their currency will depreciate.

[kbcrittenden]

I enjoy your videos and following along with your thought process. Here is a question for you to ponder. What is the intrinsic value of "precious" metals that make people willing to trade you something for them? I have my own ideas, but I would like to see/hear your thoughts on this.

[newlyrisen]

Inflation is either caused because of increased demand (more people want to buy, hence more money for same amount of goods, hence higher prices) or increased costs (higher wages mean higher costs for producers, hence higher prices). The government has been pumping money into the economy (through the banking system) to keep up demand and actually save the economy! You might whine at an increase in your daily living costs, but how would you react to a second recession?

[StygianBeach]

Having a low currency is not all bad though. It is half the reason why China is currently the worlds top exporter.

[peterbainyoung]

By the way, much of the increase value of Gold and Silver we see today is because of speculation. Gold has no real value. The value of gold is only based on how much other people in the market for gold think it's worth. The dollar has the US Gov't backing it (and other foreign governments) which in turn is backed by real labor, taxes, land, and natural resources.

[peterbainyoung]

Yes inflation does take down the value of your dollar, and this is a bad thing, but inflation also does a good thing as well. Inflation can reduce the burden of debt on both governments and consumers. Inflation could be a good thing considering how many people are underwater in their homes because of the housing bubble. It is not all good, but not all bad.

[JESTER588]

Weimar Republic was Germany form 1919 to 1933 

[pocketmaster100]

Two words: Bretten Woods, 1944. Keynes was right!

[DraskyVanderhoff]

I love the fact that Ron Paul support free curency creation, your gift certificate are very similar and i think that it would be far better rely only on one system. The money that you make for your service to be paid is would more valuable and secure as long as your product/service is the best and respect the agreement.

There is a lot of virtual currency that works great and is far more secure because it isn't printed by someone, it just exist. I would be nice that you talk more about them.

[mblythe21]

Where are you going to take your metal to get money for it? You will never get what it is actually worth if you ever want to get spendable money for it. Nor will it ever be completely what it is worth in trade. For instance, you take an ounce of 14k gold somewhere... it is 58.5% gold... at a good place you will get around $600 for it... much less at a less than stellar place... You wanna trade gold or silver, its gotta be tested hence the scrapes to make sure it is real.

[bluetablepainting]

@mblythe21 I am also interested in what's involved with spending it; actually acquiring goods and services for it as a commodity.

[mblythe21]

@bluetablepainting Its worth a monetary amount. You have an ounce of gold, you have 1700 WORTH of gold. What it is worth and what you can actually get for it are two totally different things. So an ounce of silver is 32 dollars... but how much can you really get for it? People will invest in gold and have their bars... but will a bank give them the appropriate worth for it? We buy broken jewelry all the time and we have to have it refined... hence never getting what it is worth.

[bluetablepainting]

@mblythe21 Thank you. Please speak on as you have an insight that I don't. I had a kid come into my game shop, plop down 4000 Magic "commons" in a flat, open the price guide saying each one was "worth" $0.25 and then proceed to ask me for $1000. I had to disabuse him of his notions of value. Anyway, how does one go about converting metal back into paper money? My idea, though, is to simply change it back into Goods hence precious metals as money (a medium of exchange).

[92bagder]

gather up your coins. types of coins like the nickle, dime , quarter and penny from a certain date the materials are worth more than what they are ex: a nickle year 1954 is worth about 8 cents. like i say the only worth paper money is wiping your ass

[TTstudioFilms]

I love these Videos. Keep making them. This stuff is gold dust for me.

[loluaremad]

Hey Shawn, did you know the copper in a penny is worth more then the penny itself

[bluetablepainting]

@loluaremad Yes.  There are websites devoted to meltdown values.

[maggoli67]

@bluetablepainting Newest Canadian pennies are just steel with a nickel and copper film. Maybe the yank ones are still copper, though?

[Ghaz3k]

@bluetablepainting its mostly older pennies to my knowledge, newer pennies are almost completely Zinc

[AugustusTheEmperor]

Continued... Gold has this value from a cultural and historical perspective. Legal Teneder currency gains it from the far better and securer method of legislative authority. Ultimately, no matter what physical object you use to trade, whether it is gold or paper or digital accounts the actual commodity being used is neither of these things, it is a confidence that the thing actually has value. The only two ways of assuring this are bartering and Legal Tender.

[AugustusTheEmperor]

The problem is, that at the base level both systems are exactly the same. If the currency is backed by precious metals (gold silver) then they are still subject to market variables. More importantly, however you are still relying on the fact other people think gold is valuable. Apart from a few specific uses it actually has little practical purpose. What you are trading on is the confidence that penetrates society that the thing you are offering is worth something....

[StygianBeach]

@AugustusTheEmperor Very true. When the Spanish conqured the Americas they had a huge influx of gold and silver. The problem was, they flodded the market with Gold and Silver which reduced their buying power. The advantage of having Gold backed currency is that it imposes actual limits on the creation of money.

[Danthemagicman22]

roman soldiers were payed with a solidus gold coin a few thousand years ago but they were almost immediately taxed. The only thing they could pay the tax with was the gold coin so the rulers at the time were always in control of the gold supply. Its been going on for thousands of years

[charlesmcguffy]

The reason miniatures are getting more expensive is because GW are a plc and need to make a profit for their shareholders.

[loluaremad]

@charlesmcguffy GWS products cost next to nothing to make so they make 1000%'s of profit they could afford to be reduced abit

[charlesmcguffy]

@loluaremad

Oh yes indeed, I agree with you entirely there. But GW needs to keep their share price high and increase profits every year.

[Digitalrecline]

Seems that hard currency is a good idea HOWEVER it simply means less people / governments can control the economy easier as their is a finite amount of gold etc. Also most countries will not go for it because it would decrease the worth of their economies and increase the worth of African countries. Just simple stop using money as a commodity and problems are solved. Money is a tool for trade but should never have been allowed to become a product.

[bluetablepainting]

@Digitalrecline Never mind other countries. What does hard currency mean for YOU? For me I just don't know yet. I don't have a lot of information at this point.

[breakinmedia]

I save in silver :) use it as my savings account. pretty sure JM bars have a design on the back of them or that cold be an older one.

[countchocula86]

Economics is one of those creepy things; it always feels like the deeper and deeper you go, the more flimsy you realize it really is. And the way that banks and the government can control the money is even more distressing.

[typoko]

As a note, i gotta say that i'm not trained in economics at all. I have just made observations how things work around. This is how i see the problem. The messages are a bit cryptic because of the 500 char limit per message.

My first step to solve this problem would be so that the countries would REALLY start to drop their costs and start paying the loans, instead of taking absurds amounts of it. But i guess the king with no clothes can run around naked when majority of the people are as insane.

[typoko]

The huge problem comes when you try to be cartain that the bank only loans gold that exist. Atm banks can loan more than ten times the money out that they hold to generate more money from interests... This is the point when there become more loans than there is money.

What you suggest would most likely end up the same way as we have things now. It's how this economic state has been started. Also as money, gold has it's devaluation as more of it is found, it's value drops.

[feargus96]

the weimar republic was the new German republic after World war one.

[typoko]

Atm the crisis here in Europe is about different countries being the people that the bank starts to gather gold back by force. This is pretty much losing the independency of the country by not losing a war, but having bad decisions made by the leaders. Many countries rely on getting more surplus to pay the last years debts, but it's just not happening. Asia is rising and others falling. Worst thing is that there are ALOT more loans than there is actual money to pay it...

[NLBoots]

Modern currency is kinda like organized religion. It's an artificial construct used to control the masses.

[typoko]

Someone holds gold for others. They then can loan it forward to generate more gold from themselves while not actually having any own gold with intersts. They give some of it back to you so you keep the gold in the bank. When everyone keeps their gold in the bank, it has loads of gold to loan out and gather profit. This would be somewhat ok, but the fact is that the bank can't be hold accountable for the gold as they can always start to ask gold back from the people that had made the loans...

[lostonexxx]

I have a hundred trillion zimbabwe dollar note here. That means I can buy some eggs and some bread, to make a sandwich :)

I do a lot of bartering in my work as an antiques restorer. I will fix grannys welh dresser and take the moth eaten dining suite as payment etc. when it gets repaired and converted into cold currency, I always end up much better off in the long run. Plus less taxes :)

[olddirtz]

I like ur vids shawn nice too see that u are awake.

Some info for u ur regular dollar from 60 years ago had the worth of 35 dollars or more of ur current money... That should explain enough^^

Now the herd need to lift there heads ^^ hope ur vids open the eyes of some people who wouldnt even look at that part .

More gately Nomics vids pls!

greetings from germany

[crazybear357]

Thanks for this vid!I like the sound of Hard Currency