The end of commerce

Re: The end of commerce

PostBy: lsayre On: Wed Jun 04, 2014 8:49 pm

The Coinage Act of 1792 defines the Dollar as a distinct weight unit of silver, and in fact real Dollars were minted of silver itself (at about 90% purity, as it is too soft to be durable otherwise). The gold standard was about as short lived as the current fiat system, and virtually no one understands this because the current buzz is to clamor for a return to the "age old tried and true gold standard". As I have shown, what is really meant by a gold standard is a scam (confidence game) to push paper, digital, dross, or any other form of "currency" off as being linked to gold (I,E., "money", as opposed to currency) "fractionally" (with the temptation for the backing to be in ever smaller fractions). This is a crime, or at least should be. But instead we call it banking. It quite logically leads to (devolves into) the current fiat system of zero backing. Most people if asked today would probably still think the Dollar is backed by gold.
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Re: The end of commerce

PostBy: samhill On: Thu Jun 05, 2014 9:04 am

Seems like to me anyhow that everyone chooses to ignore the fact that there are some in the world that would be capable of pulling a stunt like the Hunt brothers did except this time perhaps knowing just when to sell rather than hold. The saddest thing is even if the penalties seem so high to the average man they don't do all that much harm to the doers. The Hunt's aren't doing too shabby today & I may be wrong but I don't recall any jail time & a sad result was that many silver antiques & works of art were destroyed.
http://www.bloomberg.com/news/2013-03-2 ... uptcy.html
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Re: The end of commerce

PostBy: lsayre On: Thu Jun 05, 2014 3:50 pm

This is essentially an irrelevant diversion (can you say Saul Alinsky) to the topic at hand, but it sure would be interesting to see the Hunt Brothers corner a silver market where money was silver, and as such it sat in the pockets, purses, piggy banks, bank accounts, mattresses, walls, etc... of each and every one of us.

Now of course there was once a real Hunt Brother, and his name was President Franklin D. Roosevelt, and by the power of his Government gun (fines of $10,000 and imprisonment up to 10 years) he absolutely 100% cornered the gold market in 1934.
Last edited by lsayre on Thu Jun 05, 2014 5:33 pm, edited 1 time in total.
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Re: The end of commerce

PostBy: jpete On: Thu Jun 05, 2014 5:21 pm

Don't worry, this will fix everything.

http://bastiat.mises.org/2014/06/the-er ... has-begun/

The European Central Bank (ECB) took the unprecedented step Thursday by imposing a negative interest rate on banks for their deposits—in effect charging lenders to park money with it.


You thought keeping money in the bank was pointless now? Wait until they start charging you to do it!

Guys like Sam always remind me of the opening to the Rocky and Bullwinkle Show...they are always convinced the NEXT thing is what is going to work for sure! :)

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Re: The end of commerce

PostBy: lsayre On: Thu Jun 05, 2014 7:27 pm

That would make a good poll topic: "Would you keep your money in the bank if charged monthly to do so?"

Surprisingly enough though, the very first banks did just exactly this. They charged you to keep your deposited gold and silver safe and secure in their guarded vaults.

It's even better today though, as many of the places that sell you gold and silver and then offer to store it for you (with monthly fees due for this service of course) actually have nothing in their vaults.

Here's an example (actually two examples):
http://www.washingtonsblog.com/2012/07/ ... there.html

But wait, there's more:
http://seekingalpha.com/article/260171- ... red-silver
lsayre
 
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Re: The end of commerce

PostBy: samhill On: Thu Jun 05, 2014 7:49 pm

Nope not waiting for the next thing to be better, just don't see why we should go back & do something we already had & it failed but this time it might be better, somewhere there is a definition that fits that scenario.
The gold system requires a short set of guidelines for honest men to follow & you think they are actually here in this age. First off you have to have gold & even if it was there & belonged to us it then would help tremendously if we had manufactured goods to sell. No use going past that point but if we did & then China demands gold our gold would be gone now wouldn't it.
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Re: The end of commerce

PostBy: jpete On: Thu Jun 05, 2014 8:20 pm

samhill wrote:Nope not waiting for the next thing to be better, just don't see why we should go back & do something we already had & it failed but this time it might be better, somewhere there is a definition that fits that scenario.
The gold system requires a short set of guidelines for honest men to follow & you think they are actually here in this age. First off you have to have gold & even if it was there & belonged to us it then would help tremendously if we had manufactured goods to sell. No use going past that point but if we did & then China demands gold our gold would be gone now wouldn't it.


Saying the "gold system failed" is like saying "JFK passed away".

You stubbornly cling to a system designed by thieves and liars and then act outraged when you're stolen from and lied to.

You make no sense Sam.
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Re: The end of commerce

PostBy: samhill On: Thu Jun 05, 2014 9:04 pm

There is plenty of proof to me that the gold system failed, way lot easier to screw with asking banks to be responsible. When did I express outrage, I just don't protect & encourage those stealing from me & I've learned that politicians all lie (heck over half are liars/lawyers). By the way JFK did pass away it's the cause of death that at least never used to be all that common.
If your talking about the gold standard that was, it failed. If your talking about some new dreamt up gold system then explain things like where all the gold would come from & what would prevent all that gold from being demanded as payment providing your using gold notes rather than actual gold & what value would be put on a troy ounce.
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Re: The end of commerce

PostBy: jpete On: Thu Jun 05, 2014 9:08 pm

It didn't fail. Like JFK, it had it's brains blown out.

You can argue with me until the cows come home but you can't argue with the entire history of human civilization. You're just wrong. End of story.
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Re: The end of commerce

PostBy: lsayre On: Thu Jun 05, 2014 9:38 pm

Many of the Wall Street pundits are already clamoring for DOW 20,000, using the Fed's monetary pumping and zero interest rates as their only required justification. The Federal Reserve makes no secret of the fact that it is running "Open Market Operations", whereby QE is finding its way straight to stocks. This is the evolution of Ronald Reagan's PPT ( Plunge Protection Team) which pumped when the market declined to prevent a market plunge. But the new method (which naysayers and doomsayers have termed "POMO", meaning 'Permanent Open Market Operations') is clearly not preventing a plunge, it is endlessly blowing a huge bubble.

But don't worry. This time it will be different. They were amateurs back in the 20's. We won't make their mistakes again. Ben Bernamke proclaimed as much when he said:

Let me end my talk by abusing slightly my status as an official representative of the Federal Reserve. I would like to say to Milton and Anna: Regarding the Great Depression. You’re right, we did it. We’re very sorry. But thanks to you, we won’t do it again.


My comment on this quote is: "I'm not too sure of that Ben."
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Re: The end of commerce

PostBy: jpete On: Thu Jun 05, 2014 10:37 pm

http://money.msn.com/top-stocks/post--e ... and-silver

After months of dithering, the European Central Bank finally announced new monetary policy stimulus on Thursday designed to reverse the eurozone's slide toward economic stagnation and deflation.


There was, however, a tinge of disappointment as no open-ended bond-purchase program -- or quantitative easing -- was announced. But the move was enough to light a fire beneath gold and silver, as well as related mining stocks, for the best one-day gain in these areas since early May.


I wonder how a failed monetary system is the antidote for a failed monetary system?
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Re: The end of commerce

PostBy: rberq On: Fri Jun 06, 2014 7:31 am

jpete wrote:You're just wrong. End of story.

Hmmmm. Sounds a bit like a religion.

I'm with you and Larry that the monetary system is broken, but only because it is a powerful tool handed to those without the knowledge and integrity to use it properly. The gold standard is not the way to fix it, for the reasons Sam has listed.
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Re: The end of commerce

PostBy: lsayre On: Fri Jun 06, 2014 9:13 am

rberq wrote:I'm with you and Larry that the monetary system is broken, but only because it is a powerful tool handed to those without the knowledge and integrity to use it properly. The gold standard is not the way to fix it, for the reasons Sam has listed.


Jpete and myself have never advocated the gold standard. We advocate silver and gold as money. The "gold standard" itself never advocated that gold would be money. It merely advocated that paper dollars would purportedly be backed "fractionally" by 10% gold and 90% thin air. From there to 100% thin air (such as we have had since late 1971) is but a small jump.

The current fiat system (merely a 43 year long experiment in its current form, though its tentacles go back 100 years) is broken because there is no way to make it work, and good people would not make it work much better than bad people. It can not bring economic and monetary stability, as it must endlessly inflate, and stability obviously means no overall measure of inflation or deflation. It's Congressional charter said it would bring stability, but by its very nature this is impossible. And history has shown us just how impossible it really is, as the Dollar has lost 97% to 98% of its buying power since 1913 (and 83% since just 1971). That is anything but the definition of monetary stability.

Given the choice between deflation and inflation, I would opt for deflation. Deflation rewards saving, and inflation punishes saving.
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Re: The end of commerce

PostBy: lsayre On: Fri Jun 06, 2014 2:11 pm

DOW Jones Industrials, 1971 close = 890 points
DOW Jones Industrials, 2014 present = 16,919 points

16,919 / 890 = 19.0

Gold, 1971 : $40.62
Gold, 2014 : $1,250

1,250 / 40.62 = 30.77

If you had ignored any form of investment risk and merely bought and held gold you would have done 62% better than the stock market. And the catch here is that every time a company fails to perform up to expectations it is ejected from the DOW Jones Industrials averages club and replaced with a company that is on the rise and looking good. So the average itself is merely a fraudulent face for the stock market. The bottom line is that many people lose their shirts speculating (gambling?) in stocks, and all of that could have been avoided if they had invested in gold instead.
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Re: The end of commerce

PostBy: lsayre On: Fri Jun 06, 2014 2:38 pm

I just looked it up, and the average "All In" cost to mine gold is $1,246 per ounce. Jpete is right. The value of gold is directly imbedded within the total cost required to mine, refine, and bring it to market. The price has no fantasy component. There is currently zero profit to be had in mining gold, meaning that it is clearly undervalued at present. If the typical company strives for margins (profit margins) ranging from 25% to 50%, then gold should be worth roughly 25% to 50% more than it is selling for right now on that basis alone.

http://seekingalpha.com/article/1916941 ... heir-mines

And for silver the situation is as follows:

Average mines "All In" cost to mine, refine, etc... = ~$21.50
Current price = $19.00

A reasonable profit expectation of 25% would dictate a silver price of 1.25 x $21.50 = $26.88 per ounce

Gold is undervalued, and silver is clearly way undervalued.

Does this mean that gold and silver can't fall from here. Of course not. They can fall a bunch from here. 99% or more of the price action in gold and silver are in the trading of imaginary paper gold and paper silver. The prices of these metals can easily go much lower as a consequence, but that will cause the mines to begin to go out of business. They are at rock bottom right now, and I'm sure that some are teetering on the edge of closing their doors. Compound this with the banks refusing to loan money to the mines, and closing down is inevitable for many of them.
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