Current Gold Price

[UndercoverElephant]

I believe you are correct in that and because you are correct ,and that effect is well known, there is no chance of the USA or any other large economy going back on the gold standard. There just isn't enough gold to do the job

That is myth/propaganda. It is a totally fallacious claim. If the price of gold is high enough then there's enough gold. PERIOD.

A return to a gold standard would be an economic disaster benefiting only those who control large amounts of gold - central banks, investment banks and very high nett worth individuals. You would be handing a huge amount of monetary power to the very people who are already fantastically wealthy.

I don't agree. For the banks, owning the gold isn't providing them with wealth, because they can't sell it. As for the individuals...most high net worth individuals today don't own any gold. They pay other people vast amounts of money to manage their wealth and they are accustomed to that pot getting bigger over time. Most of these large funds own little or no gold. A lot of currently high net worth individuals would actually lose an unimaginably vast amount of wealth. So would every pension fund.

There would be a massive transfer/destruction of wealth away from people who hold paper assets denominated in fiat currencies (including cash, bonds, credit default swaps and to some extent stocks/shares) towards people who own land, the right sorts of property, precious metals and futures contracts for commodities of various sorts.

Countries with large manufacturing bases or non-gold assets such as coal or oil would be unable to issue currency against the value of those endeavours. People who happened to own large lumps of shiny yellow metal would end up owning everything as only their money would be legal.

Those countries can exchange their coal/oil for gold, or use other people's gold-backed money.

[UndercoverElephant]

Countries with large manufacturing bases or non-gold assets such as coal or oil would be unable to issue currency against the value of those endeavours.

Nonsense! Countries NEED coal and oil - they would sell their gold for supplies of coal and oil. Ditto for manufactoring.

That abc capitalism which you don't appear to understand.

Actually, that's just trade. No capital (money) is required. You just swap gold for oil.

[JavaScriptDonkey]

Nonsense! Countries NEED coal and oil - they would sell their gold for supplies of coal and oil. Ditto for manufacturing.

That's the ABC of capitalism which you don't appear to understand.

To go back to Commerce 101, money is a medium of exchange. It replaces systems of barter where there must be a coincidence of wants in order for trade to occur.

In your system you expect the people who want to buy the oil and coal to already have substantial reserves of gold with which to buy it. They couldn't issue money backed by their huge tin reserves or their value adding manufacturing capability, only their tiny gold reserves.

We are not saying the end of paper currencies altogether, only that all currencies are backed by gold and that gold would be seen as legal money

It is immaterial whether you trade in gold backed money or actual gold - the result is the same as those scripts must be redeemable for the asset. I must be able to take possession of the physical gold otherwise it is just another fiat currency.

Of course, a standard with gold at its core but including silver, oil and other key commodities is more likely. Which also defeats your main point entirely.

So now you want individual commodity backed currencies and not just one international gold backed currency?

Will your gold standard have a fixed exchange rate for gold or will it's value be free floating? What about the relationship between the commodities?

[JavaScriptDonkey]

I don't agree. For the banks, owning the gold isn't providing them with wealth, because they can't sell it. As for the individuals...most high net worth individuals today don't own any gold. They pay other people vast amounts of money to manage their wealth and they are accustomed to that pot getting bigger over time. Most of these large funds own little or no gold. A lot of currently high net worth individuals would actually lose an unimaginably vast amount of wealth. So would every pension fund.

There would be a massive transfer/destruction of wealth away from people who hold paper assets denominated in fiat currencies (including cash, bonds, credit default swaps and to some extent stocks/shares) towards people who own land, the right sorts of property, precious metals and futures contracts for commodities of various sorts.

I think you are right about individuals certainly. I think the days of Mr Burns style hoards of gold sovereigns are mostly over.

As to the banks with gold though - if they can issue currency backed by their gold and indeed if all money must be backed by gold then those with gold can control the money supply. They can choose to restrict the amount of capital available for trade and so cause recessions within the borders of countries that do not have sufficient gold reserves of their own.

Relying on someone else's money is a dangerous thing.

I don't like the issuance of debt backed currency any more than you but I see no reason why national money can't be created into existence by national government without bothering with collecting piles of gold.

Not that I can't see the value of investing in an appreciating asset - it's just that I don't see the wisdom within a gold backed currency.

[UndercoverElephant]

http://www.thedailybell.com/2934/EU-Ban ... ion-Buying

Banks, Governments Move To Restrict Personal Gold Bullion Purchases ... The most alarming situation we identified is one relating to the purchase of gold coins and bullion – specifically in the country of Austria – but one that will likely make its way across the EU if it hasn't already. Unlike the United States, where gold and silver can be purchased through traditional methods like visiting a local dealer directly, or even placing an order on the internet, it is much more difficult to find a gold/silver dealer outside of Germany or Switzerland. As a result, those individuals interested in acquiring gold are left with purchasing directly from local bank branches. Had you visited an Austrian bank three months ago, you would have had absolutely no problem purchasing a large quantity of gold/silver from the bank. You'd simply call the bank about 24 - 48 hours in advance, let them know you're coming and how much you needed, and you'd personally pick up your order within a couple days. A new trend in Austrian (and perhaps the rest of Europe's) banking policies suggests that certain interested parties are attempting to control the sale and personal acquisition of gold/silver as safe haven assets. What we experienced first hand should be a wake up call for not just Europeans, but Americans as well. – SHTFplan/Mac Slavo

[continues...]

[JavaScriptDonkey]

http://www.thedailybell.com/2934/EU-Ban ... ion-Buying

[continues...]

Hell yeah it continues....

Free-Market Analysis: While we cannot vouch for this article by Mac Slavo at SHTFplan.com, if true, it certainly represents a ratcheting up of government resistance to the rising valuation of gold versus paper money.

Here's a different blog that calls the rumour baseless.

Sometimes to debunk a rumor, ya gotta go the source. I called the Vienna branches of two mainstream Austrian banks, Erste Bank and Bank Austria. According to representatives of the local branches of both banks, you can buy gold in any quantity you like. When I explained there was a rumor circulating about EU-mandated restrictions of gold purchases, they were incredulous

[Lord Beria3]

http://www.arabianmoney.net/gold-silver ... l-to-come/

Bullion vaults are almost full reported Bloomberg today in a sweeping survey of global gold depositories. These are the highly secure facilities that any serious investor should use to store their gold and silver. Keeping it at home is a very bad idea.

Apparently the Swiss Precious Metals Vault in Singapore is close to filling up, while Barclays is building a new facility and Brink’s, Deutsche Bank and Perth Mint are all considering adding new space for bullion.

Eurozone crisis

The European debt crisis is the latest reason for buying gold with the euro now falling in value against the US dollar in which gold is denominated. Gold and silver also have the benefit of being a monetary unit without counterparty risk or to be more frank: outside the clutches of any money-printing central bank.

European investors have also moved into US T-bonds but there is a widespread fear that what is happening to bonds in Italy, Spain, Portugal, Ireland and Greece will one day happen to US bonds. After all the US has amassed similar levels of indebtedness in its economy and continues to print money to finance it.

The flight to gold is not only happening in Europe. Trading of Dubai Gold Securities on Nasdaq Dubai more than doubled in August from July and that month’s total represented a 10-fold increase on the whole of the first half of the year. The DGS is a local ETF tracking the price of gold.

According to Goldmoney Asia buyers are buying massive amounts of physical gold every time the price dips below $1800, affectively making it a floor in terms of gold prices.

If this continues ( and I am sure it will), than the pressure upwards will explode at some point. I suspect that even if we see a Marc Faber style correction in gold to $1500 it will last only days because a wall of money will come in buying physical.

I think that 2012 will be the year that gold crashes through $2000 properly and heads towards $5,000 per ounce.

[UndercoverElephant]

Anything could happen. At the moment everybody is just waiting to see which wheel drops off the wagon next. I have no doubt that this ends with gold going much higher, but something tells me there are going to be a few more unexpected twists and turns on the way.

[Lord Beria3]

http://www.chathamhouse.org/publication ... iew/178249

Interesting article from Chatham House on gold.

[UndercoverElephant]

Bullion By Post are now saying "currently not taking orders." No reason is given. I presume it is because they don't want to sell stock they've recently bought at significantly higher prices than they can currently sell it for, and they think the price is going back up again sooner rather than later.

TaxFreeGold are still taking orders, but they have not lowered their prices to reflect the official price.

[lurker]

Are you goldbugs worried by the collapse in gold price or are you buying a load more now while its down?

Video for Beria:

http://www.youtube.com/watch?v=tj2s6vzErqY

"Debt Collapse - $20,000 Gold"

[UndercoverElephant]

Are you goldbugs worried by the collapse in gold price or are you buying a load more now while its down?

Due to personal circumstances, I don't have any more funds available to be converted into gold even if I wanted to. I may need my remaining cash savings in the next few months.

I'm certainly not worried by the collapse in precious metal prices because I don't think it reflects any major change in the underlying situation that drove prices high in the first place. The chance of the major western nations being able to pay off their debts without defaulting/devaluing is has not increased.

The last time precious metal prices dipped like this was in the Autumn of 2008, directly after the Lehman's collapse. In other words, a collapsing price of metals does not necessarily indicate that "all of the problems are going away." There are other possible reasons, including that major investors having to sell their metals to cover losses elsewhere, or to lock in the only profits they have been making, etc...

It seems to me that there is now nobody who believes that a Greek default can be avoided, and we already knew that nobody knows what the knock-on effect of that default will be. This can only be a temporary drop in prices.

[lurker]

http://live.bullionvault.com/front2/frontpage-1.html

I am kind of tempted to buy in due to the dip in price but not sure about wether owning physical gold coins & hiding them under the bed is best or is it better being kept in some bank like above.

Both seem too be risky

[UndercoverElephant]

http://live.bullionvault.com/front2/frontpage-1.html

I am kind of tempted to buy in due to the dip in price but not sure about wether owning physical gold coins & hiding them under the bed is best or is it better being kept in some bank like above.

Both seem too be risky

There are no zero-risk options, and what makes sense for you depends on your circumstances. If you're living in a housing association house and can't choose your housemates then "gold under the bed" may not be such a good idea. But gold sovereigns are quite small, and there are various more creative ways to hide them.

[Lord Beria3]

Marc Fabers correction in gold has finally come.

Good buying opportunity methinks.