By: RS Janes

RS Janes — Thu, 19 May 2011 12:57:26 +0000

Just to add to db’s wisdom on the subject of gold: gold is an essentially useless commodity except for some technological and cosmetic applications and, just like other commodities, it fluctuates in price according to demand. In other words, if all of those people buying gold as a hedge against a future collapse were to suddenly try and sell it, as they would in a golbal financial emergency, the price would drop drastically. Consequently, you’d be stuck with some lumps of metal that you could only sell at a steep loss, if you could sell it at all. If your method of exchange, such as the dollar, were tied to the price of gold, that too would drop in value, inflating the price of everything you need to survive in the process. Libertarians like to call gold ‘real money’ but they’re kidding themselves — it’s just a commodity and its price is set by the demand of the market.

I’m reminded of possibly apocryphal tale of the Russian princess who was trying to get out of the country after the Bolsheviks took over during the Russian Revolution and offered to exchange all of her expensive gold jewelry for horsecart passage to Finland. None of the starving peasants wanted her jewelry — as one told her: “What good is it if you can’t eat it?”

As to this: “why aren’t we all raucously demanding a future like this instead of demanding the hellish nightmares currently being peddled to us by America’s oligarchs, Wall Street and Fox News?”

Most of us are demanding this in our own way — look at the polls — but the corporate media doesn’t usually report such stories. As it is, the MSM have almost completely ignored the record number of people gathering in Madison, Wisconsin, every weekend to protest Walker and the GOP. They’re more interested in Schwarzenfluffer, Trump and Newtie. Besides, most Americans are busy just trying to raise their families and hang on to what they have — it’s going to have to get much worse before they’ll raucously take to the streets.

By: db

db — Wed, 18 May 2011 10:06:44 +0000

Ms. Stillwater,

The idea of a gold based currency has been around (usually Right Wing sites) for a while.

There is a huge problem with the system that seems to be lost in the teaching of history in our schools. In short: there is only so much gold in the world, a cube about 67 FEET on a side. Ditto, silver, though I don’t know the amount, though I’d guess about 16 times that
of gold.

In the world, we are constantly producing more “stuff”. Goods, services, things or every shape, form, & nature. Things to buy. And there are ever more people making those things. The amount of “stuff” is outgrowing the amount of gold & the disparity is only getting worse.

Thus in a gold currency system, the price of “stuff” is constantly shrinking. This may sound good but there are massive problems. Why manufacture something when the price you get will have dropped? Why plant crops when the price of food is dropping? Why borrow? In short the economic system is prone to deflationary panics as hit the US in 1837, 1857, 1873, 1893, & 1929. Too much “stuff” chasing too little gold.

Then the problem comes that a gold backed currency can not inflate in times of emergency (like World War One) which is why many countries dropped the gold standard in the first place. Now, I’m not advocating another WWI, & I don’t see how that one can happen again, but I do foresee some sort of emergency that may need to be met. I’d hate to see the economy not be able to respond.

And yes, I know you’ve got gold sellers as advertisers. Sorry.

Comments on: Protesting the Federal Reserve: Yet another good reason to buy gold (and silver)

By: RS Janes

By: db