the price of gold

[blatzer]

is reflected in the declining value of the dollar; the real story is not the rising value of gold, but the loss of value of the dollar; this is inflation- Is Anyone in DC concerned? What would their plan of action be?

[ruckman101]

Since I've been born inflation continues. True, fits and spurts amidst the steady. Sometimes after the economic raping and pillaging, the ramifications must be adjusted.

If you're in the market, I hear Glenn Beck can hook you up on that gold investment.


neal

[DjEep]

Gold is fairly worthless. The new standards are/will be energy and more "functional" metals.

[dtrumbo]

I'm thinking the plutonium market might be good to dabble in.

[glasseye]

Or many of the rare earth elements essential to modern electronics. China has a strangle hold on some of these.

[turk]

We probably have them too but don't mine them because of the tailing pollution.

[dingo]

The new standards are/will be energy and more "functional" metals.

..the bulk of which is behind the Chinese border

[MeyerII]

is reflected in the declining value of the dollar; the real story is not the rising value of gold, but the loss of value of the dollar; this is inflation- Is Anyone in DC concerned? What would their plan of action be?

What the hell? That didn't sound like a knee-jerk Faux Nooz-induced drivelfest. That there sounded more like an actual question. I'll be dipped in shit.

Well ... first of all we have to untangle the mess of things you put in just one sentence fragment. Three things: the value of gold, inflation, and the value of a dollar. The three are all part of an economy, but they may not be related in the way you think.

Gold. The value of the dollar is not defined by gold. Its just the opposite: the value of gold is expressed in terms of dollars, or yen, or euros. Gold is a commodity, just like pork bellies or wheat or durables ... its just a thing, and is no more important to the dollar (or yen, or euro) than are porker parts. Gold fluctuates, depending on how people feel about it. The reason more easily frightened people believe that gold is a better place to go in times of uncertainty than, say, pork bellies is because gold is more compact and easier to deal with. And I guess maybe because it is shiny, who knows? But saying anything about the value of the dollar relative to gold is no more meaningful than saying the same thing about the value of the dollar relative to porcine parts.

And like any commodity, gold can be shamelessly manipulated. Here's how:

http://motherjones.com/politics/2010/05 ... k-goldline

So as a commodity, gold can be seen to be going up largely because a bunch of crybaby dingbats thought the world was coming to an end, which of course, it wasn't.

Similarly, when President Obama was elected, suddenly I couldn't find bullets as easily and when I could I found that the going price had shot up considerably. And of course it did. This is supply and demand at its simplest: a bunch of blighted dingbats decided that the feds were going to barge into their homes any minute and take away their penises. Which of course, they weren't. So the more level-headed of us simply waited it out, and eventually things went back to normal.

So me, I saved my money while the idiots wasted theirs on ludicrously inflated ammo. Serves 'em right.

This is not to say that gold can't be a good inflation hedge if your timing is impeccable, but historically the market has outperformed it in the long run. You can always trust the Motley Fool:

http://www.fool.com/investing/mutual-fu ... p-500.aspx

And so much for gold, along with the incumbent dumbness of running with the herd on wildly speculative foolishness. The first two gold rushes in this country have apparently taught people nothing.

Next up: inflation.

[MeyerII]

It is hopefully clear by now that the price of gold is rooted speculation. It could be related to people's feelings about inflation, but could just as easily be explained by cynically manipulated hysteria.

As everybody knows, inflation is a rise in the general level of prices of goods and services in an economy over a period of time, often expressed in terms of the Consumer Price Index (CPI). As with everything, there are good things and bad things about inflation. The good is that modest inflation gives us wiggle room during a recession and also provides a modicum of debt relief over time. The negatives are many, and get worse as the rate of inflation gets higher. Generally,economists tend to feel that a rate of inflation rate between 2 and 5 percent is healthy and represents a growing economy.

So what is the current inflation rate for September of 2010? You want to guess?

How about 1.14%?

Does this sound a little lower than you expected? If so, then maybe you should consider shutting off your TV and Radio and stick to serious news sources for a while. Because the current rate of inflation is just about where most of us would expect it to be, and is perfectly representative of an economy that is struggling to get moving again.

My my, and here we are back to causes and effects. What does really cause inflation?

Money supply. The Spanish found out all about it when they imported tons of wealth backed by nothing a few centuries ago (and coincidentally, it was gold that they were importing). The money supply went through the roof, and suddenly you needed a wheelbarrow in order to cart enough money to do the weekly shopping.

And an interesting side note to the current anemic inflation rate is that this should tell you that the supposed jump in the money supply that you've been hearing about - this fest of the printing presses at the Treasury - may not actually be happening. Think about it.

Now right here in the discussion we have an opportunity to get into what can be done about the current economic situation, but unfortunately, it is too involved to discuss seriously at this time of the night. But the short version is this: in times of extreme recession, fuck the money supply and fuck the deficit until you get things rolling again, because the suffering you incur if you don't will be great and it will be swift and it will be terrible.

And bitch all you want about President Bush's TARP program (the bailouts) that was carried on a little bit more sanely by the current president, but this has saved millions of jobs and has kept us away from the brink for now.

So where does this leave us? Well, I hope that we've shown that a discussion of gold is for speculators (and currently for sheep and wolves only), and also that the inflation rate - far from being severe - is actually rather anemic.

I was going to discuss the value of a dollar in terms of foreign exchange (and in my thinking, the only two ways to discuss the value of a dollar is in terms of either historical value - inflation/deflation - or value relative to foreign currencies), then realized that not only does this bear little relevance to what you think you were trying to say ... but more importantly, I think we've sort of shown that what you initially said was irrelevant. Mostly.

Let's look at it again:

The value of gold is reflected in the declining value of the dollar; the real story is not the rising value of gold, but the loss of value of the dollar; this is inflation- Is Anyone in DC concerned? What would their plan of action be?

Well there you have it: the value of gold is not reflected in the so-called "declining value of the dollar". In terms of inflation, the dollar is actually not declining as much as it should be.

So if the pols in DC aren't concerned, I think they should be: a significant portion of the voting public doesn't seem to understand the first thing about economics, even though they seem to spend an uncommon amount of time and energy whining about it. So maybe the first thing we should do is strengthen the education system, and maybe get rid of corporate-sponsored propaganda outlets disguised as media.

That would be a good start. And while they're at it, I'd like a unicorn too.

[Amskeptic]

It is hopefully clear by now that the price of gold is rooted speculation. It could be related to people's feelings about inflation, but could just as easily be explained by cynically manipulated hysteria.

Now that was a satisfying read.

Perhaps our reading audience should brush up on the spectre of stagflation if not deflation . . . seeing as our posturing idiots in Congress, with their totally transparently hypocritical concern over debt only after tax cuts during wartime and that Medicare D gift to pharmaceuticals passed with nary a whimper under Bush, are doing their very damn best to strangle the money supply and dry up investment and refuse to actually prime the pump. We have Britain 1931, Japan 1990's, ourselves in 1937, and many othjer examples of inadequate stimulus caving in the economy for extended stagflation. Fools. Damn fools. Meanwhile, our infrastructure is crumbling and people are out of work.

[Bleyseng]

and the Tax benefits of shipping jobs and whole assembly lines to foreign countries was the Bush era policy. Where did that get us? Cheap foreign goods which we bought up so there was a huge trade imbalance with China and now we don't have those jobs either. That was a stroke of genius designed to benefit only the super rich who own the stock of those corporations.
Gold? over rated speculation.. Inflation in the USA has been explained beautifully and the Tea Party screaming about shows how idiotic they are..If we followed their wonderful advice for the last two years millions would be out of work as this is the policies of the GOP in 1929-32 that caused the recession to become the worst Depression. Strangle the money supply and cutting Government spending makes things worse.

[turk]

Since this has become a strawman of misleading comparisons,and rambling defense of bigger government stimuli spending, I challenge the principals to show how and when government created wealth and jobs of lasting significance.

[glasseye]

Jeezus, turk. It's like shooting fish in a barrel

How about the Interstate Highway System?

I could go on and on, but it'd be pretty pointless since you'd deny each one.

[turk]

The interstate highways. Okay that's something the government established that worked to stimulate the economy. I DON'T DENY IT. IT MADE SENSE TO do to bring the infrasttucture into the auto age - though some wilderness advocates would likely disagree. Okay, one public works project that made sense created the venue for expanding the economy. What other fish do you see in the barrel that created wealth and jobs, via gpvernment.

[Amskeptic]

The interstate highways. Okay that's something the government established that worked to stimulate the economy. I DON'T DENY IT. IT MADE SENSE TO do to bring the infrasttucture into the auto age - though some wilderness advocates would likely disagree. Okay, one public works project that made sense created the venue for expanding the economy. What other fish do you see in the barrel that created wealth and jobs, via gpvernment.

Turk, this country is in desperate need of repair.

The water system alone is an ancient mess that needs a serious overhaul. Current estimates of **savings won** by embarking upon an upgrade stands around six-to-one just in reduced water main breaks. Jobs right there, that would bring the investment right back into the economy.

The electrical grid needs a massive upgrade. We even could stand to build it up in the name of future demand. As important right now is the need to make the grid "smart" enough to incorporate alternative energy.

Our roads suck. We have more deficient bridges than any other industrialized country. Again, the investment would pay us back in improved productivity.

Our urban school buildings are by and large fucking awful run-down inefficient depressing places that do not help kids feel inspired to learn or participate in this stacked game after they graduate, if they graduate.

The United States government is not the enemy. It is a magnificent tool devised by brilliant people to coordinate a nation. It can be abused. Small-minded stupid self-centered greedy idiots who cannot think ahead and who do not give a damn about others, they are the problem and they are infecting the government like bedbugs. I despise the small fools who lobby with gobs of cash that they did not earn those in government who pander in the name of re-election. This election season is breaking all records for stupidity, and I am not speaking hyperbolically either, the nitwits out there are a tragic reflection of the price we pay for being intellectually lazy human beings who cannot be bothered to actually discern what is going on in this country right now. This country deserves mutual effort to solve these problems that are only growing day by day. I can see those who do not have a sense of American community from a mile off

You turk, I do not understand how it is that you do not SEE the infection. It is not "government".
Colin

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