Gold and silver as panacea?

[FreeEnergy]

I wanted to start another thread to get opinions here. This is gold and silver forum, so I am going to get a bit off here, but bare with me.

I for one do not believe that gold or silver is panacea - cure for the fiat and usury disease.

The problem with gold and silver is that it is still in international banker's hands. They control it. Gold and silver may prevent you from loosing your shirt and everything when fiat collapses. But it will not be THE solution.

Gold and silver IMHO is a place where bankers will restart a perpetual fiat+usury circle. Everyone will fall to PMs, their price will go up significantly, fiat bankers will fall, same bankers, disguised as "good" bankers will come in and offer gold currency or some stuff. Everyone will cheer up. Bankers, having now expensive PMs, will buy up industries and land, and will print another "gold" fiat. Then for 5-10 years it will look like it was a solution, everyone would "buy" in. Then bankers will start inflating that fiat. It is a perpetual circle.

Gold and silver is not the answer.

Opinions, please.

[Fudup]

I thought gold and silver were means of preserving wealth when fiat currencies collapse? They are just like prepping of food or water or ammo, only buying power instead.

[FreeEnergy]

Yes they are. My point is that the banks will restart the fiat circle (same banks, same fiat, different names). And it will continue business as usual. Somewhere in the middle, you may be able to convert little gold that you have to new fiat. Maybe. If you've got enough food.

[Ponce]

Silver and gold have been used as "real" money about just for ever.........I would say that they are more than prep, even if now I do hold it as such.

[Libertarian_Guard]

FreeEnergy

Are you fimilar with Friedrich von Hayek the author of The Road to Serfdom?

I've posted this three times now, and I don't know if anyone is reading it.

Reason: To avoid inflation, your prescription has been to advocate that monetary policy be pursued with the goal of maintaining stability in the value of money. Is it necessary to trust the politicians to regulate the money supply? Can't market forces adjust to correct for a gradual deflation?

Hayek: Yes, they do occasionallv. The trouble is, in the mechanical system what forces politicians is the gold standard. The gold standard, even if it were nominally adopted now, would never work because people are not willing to play by the rules of the game. The rules of the game that the gold standard requires [say] that if you have an unfavorable balance of trade, you contract your currency. That's what no government can do--they'd rather go off the gold standard. In fact, I'm con- vinced that if we restored the gold standard now, within six months the first country would be off it and, within three years. it would completely disappear.

The gold standard was based on what was essentially an irrational superstition. As long as people believed there was no salvation but the gold standard, the thing could work. That illusion or superstition has been lost. We now can never successfully run a gold standard. I wish we could. Its largely as a result of this that I have been thinking of alternatives.

Reason: You have, at various times, championed a commodity-reserve monetary system and competition in the money supply. Are these practical alternatives to a govemment con- trolled central banking system?

Hayek: Yes. I have been convinced that while the idea of the commodity-reserve system is a good one, practically it is unmanageable. The idea of accumulating actual stocks of com- modities as reserves is so complex and impractical that it just cannot be done.

Then I came to the conclusion that the necessity of actual redemption of the real commodities is only necessary if you have to place a discipline on an authority which otherwise has no interest in keeping its currency stable. If you place the issue of money in the hands of firms whose business depends upon their success in keeping the money they issue stable, the situation changes completely. In that case, there is no necessity of depending upon their obligation to redeem in commoditei: it depends on the fact that they must so regulate the supply of their money that the public will accept the money for its stability. This is better than anything else.

http://reason.com/archives/1992/07/01/the-road-from-serfdom/2

[FreeEnergy]

Libertarian_Guard, never heard of the man, but thanks.


If you place the issue of money in the hands of firms whose business depends upon their success in keeping the money they issue stable, the situation changes completely. In that case, there is no necessity of depending upon their obligation to redeem in commoditei

herein lies a problem. if it is a firm and it has a business, it is there to make profit. the best way to make a profit is to print money. His concept is completely flawed at the root.

[FreeEnergy]

Oh, I really don't like the guy. I think he creates a theory behind the "private federal reserve banks" structure, to "prove" that it's the best structure there is.

However, current problems can be resolved without giving money press to private firms, which IS THE ROOT OF ALL PROBLEMS.

Here's the logic he presents "the government is corrupt, so we can have these uncorrupted private firms, and make them print money". great, that's what we have NOW. The truth, however, is that GOVERNMENT IS ALWAYS CORRUPT. The whole point of government is to get POWER and MONEY and CONTROL over population. So, corruption there is a given.

Now, but URUSY, and PRIVATE MONEY WITH DEBT ATTACHED - these 2 are not given, it is invention of international bankers.

If we can:
1) eliminated ALL DEBT that is attached to money, and
2) remove money printing from the hands of private international bankers and give it to government, and
3) forbid government from inflation.
4) severely limit, or eliminate usury via LAWS. Attach life in prison, or death sentence to those who break these laws

then we'll be alright economically. Corrupted folks in the government, no doubt, will still find ways to counterfeight, to add fiat. Historically so far nobody found a way out of it. But we will eliminate virtually ALL "government debt". We will eliminate most private debt as it would be illegal.

[Gknowmx]

I wanted to start another thread to get opinions here. This is gold and silver forum, so I am going to get a bit off here, but bare with me.

I for one do not believe that gold or silver is panacea - cure for the fiat and usury disease.

The problem with gold and silver is that it is still in international banker's hands. They control it. Gold and silver may prevent you from loosing your shirt and everything when fiat collapses. But it will not be THE solution.

Gold and silver IMHO is a place where bankers will restart a perpetual fiat+usury circle. Everyone will fall to PMs, their price will go up significantly, fiat bankers will fall, same bankers, disguised as "good" bankers will come in and offer gold currency or some stuff. Everyone will cheer up. Bankers, having now expensive PMs, will buy up industries and land, and will print another "gold" fiat. Then for 5-10 years it will look like it was a solution, everyone would "buy" in. Then bankers will start inflating that fiat. It is a perpetual circle.

Gold and silver is not the answer.

Opinions, please.


there is no "cure" until folks start to own the underlying concept of money to begin with. If you don't have a clear idea of the concept of money, then gold and silver are useless to you.

Understanding monetary concepts is the beginning of the answer. So, tell me, how do you define money (without reference to usury, please).

[FreeEnergy]

So, tell me, how do you define money

This is a darn good question.

Money is something accepted by general consent as a medium of economic exchange. It is the medium in which prices are expressed.

--
Money has no concept of "wealth storage", it has no concept of "Value", it has no intrinsic value unless specifically attached (like to gold and silver). It has no value in terms of human work hour either, because you cannot possibly attach value to that (think ditch digger vs. CEO). It is more or less a medium that facilitates trade. It is energy.
--

Now how do YOU define it?

[sunshine05]

I don't think a currency collapse will result in everyone buying gold and silver. By then it will be too late, IMO. I think the dollar will crash, maybe they will devalue it or maybe they will create a new currency....maybe a NAU currency modeled after the Euro. I could totally see that happening but what do I know? It's just a guess. However, I think those holding the metals will be at a huge advantage because they will not decrease in value in a currency crisis. Right now the metals are securing my wealth. I think having everything in cash would be a huge mistake so I'm going with my gut on this one. Fingers crossed. :)

[SLV^GLD]

I think FreeEnergy's definition is more applicable to the term "currency".
Money is a universally recognized concept while currency is a locally recognized construct that operates as a form of money.

Money is nothing more than the concept that wealth can be made fungible and distributed in part or whole.
Wealth is nothing more than the realization of adequate or excess resources.

If you can take a form of wealth, say an unneeded bushel of corn and manage to convert the corn into a resource you otherwise could not produce on your own, say a repair job on your tractor that you use to farm corn, then the corn has become money. In barter, the objects of barter are money. If the person who can repair your tractor cares not for your bushel of corn but would have accepted a couple of chickens then you need to either have several forms of money (such as chickens) or you need to have a contact who can convert your corn to chickens so you can get your tractor repaired.

Or....... the interested trading parties can construct a locally recognized and utilized currency so that you can pay the tractor repairman who can then buy some chickens. The farmer is then free to find a buyer for the corn so that he can replace the missing currency (if he so chooses) and the barter triangle is made complete without the unnecessary pains the farmer would have needed to take to trade chickens for repairs when he did not originally have any chickens to trade but surplus corn.