Buy gold

[Strummer]

It would appear the 'Yard has found your hot-button.

Well, I really don't give a rat's ass about gold and the dollar, I just happen to have studied it here and there.

Facts on which all "economists" would agree:

The dollar has lost about 37% of it's value (according to official govt. stats) since 2000.

Since 2010 the Fed has printed 2.4 trillion dollars out of thin air (by buying bonds with ledger balances) and the Fed owns about 1/3 of the U.S. Bond market. They will be close to owning 1/2 by the end of this year.

Pretty much, you need a 7th grade education and an Internet connection to figure out how this ends, not a Ph.D. in macro economics.

But again, I don't care much anymore. I'm well positioned to deal with whatever comes, relative to most people, and my level of caring has gone down the sh1tter over the last few years. I just don't care much anymore about what happens to this country or this world. My kids are grown and independent. I really, really pity, however, the young in this country, as they are getting the largest economic shaft in history.

 

[elduderino]

During the end times, how does one actually make change for a $1200 maple leaf? I'd assume the answer to, "how much?" Is "how much you got?"

I'm banking that at some point during the apocalypse extraneous body hair becomes a valuable commodity. Then I'm all set.

 

[8893]

The New World Order will just take your gold anyway bro

Ronnie, Bobby, Ricky and Mike, if I love the girl who cares who you like.

Oh, wait, that's the New Edition.

Nevermind.

 

[pnete]

Problem with gold is that the govt. can seize it, and/or make it illegal. Ownership of gold bullion (coins and bars) was illegal in the U.S. from FDR through Nixon. The reason was that they were protecting the dollar. The dollar has lost 37% of its value since 2000. That's a really big number. Dollar devaluation appears to be hastening. Russia/China and others are getting out of the dollar and doing their energy deals in euros and Chinese renminbi. The U.S. Central Bank (Fed) is now printing money at a furious pace, with no end in site. Commercial bank outstanding debt to GDP ratio is now being slammed by the Fed's purchase of bonds.

And, as if the collapse of the dollar wasn't bad enough, oil prices are showing signs of spiking because of the unrest in Iraq. Oil prices have increased linearly from 2000 from less than 40/B WTI to 104/B WTI. This, while U.S. use has gone down and Texas is producing 3BBD more from shale (tight) oil, and total U.S. production on an upswing. Further, world production has been flat for 10 years, and there is no indication that production has anywhere to go but down.

Jist - dollar will go to zero, the decline appears to be accelerating, and energy prices are set to spike. That is a two handed bitch slap.

Buying metals and commodities in general will insulate a buyer, to some degree, from dollar devaluation. As I noted, however, it is myopic to depend on the metals, and particularly gold, because by executive order the president, like FDR, can simply tell Americans to swap their bullion for dollars, at whatever exchange rate the Prez sets.

In any case, it's all FUBAR, I don't care as much as I did, and I think we make a run at 5 next year, and I'll have my ass parked in the same Pub Seat that I sat in for all NCAA games this year,

BRING ON THE DOOMER MOJO B1TICHES!!

 

[elduderino]

Well, I really don't give a rat's ass about gold and the dollar, I just happen to have studied it here and there.

Facts on which all "economists" would agree:

The dollar has lost about 37% of it's value (according to official govt. stats) since 2000.

Since 2010 the Fed has printed 2.4 trillion dollars out of thin air (by buying bonds with ledger balances) and the Fed owns about 1/3 of the U.S. Bond market. They will be close to owning 1/2 by the end of this year.

Pretty much, you need a 7th grade education and an Internet connection to figure out how this ends, not a Ph.D. in macro economics.

But again, I don't care much anymore. I'm well positioned to deal with whatever comes, relative to most people, and my level of caring has gone down the sh1tter over the last few years. I just don't care much anymore about what happens to this country or this world. My kids are grown and independent. I really, really pity, however, the young in this country, as they are getting the largest economic shaft in history.

I'm not looking for a long debate here either, and Im not thumbing my nose at you or breaking your stones (maybe a little about the hot-button thing) but having spent the better part of a decade working in Fixed-Income Interest Rate markets (primarily US Gov't debt) I am certain no sober economist would agree that the balance-sheet bond buying that has occurred = printing $2.4 trillion out of thin air. "Printing money" is a politico, talking-head thing. There are also real advantages to having a cheaper currency at times, especially contractionary cycles, which is why the US, Japan, and obviously China, the 3 largest independent economies on the planet have engaged in such policies. That rarely gets any TV air time because its very inconvenient, yet entirely true, to both political houses and most people wouldnt understand the concepts in the slightest anyhow.

 

[Strummer]

I'm not looking for a long debate here . . . I am certain no sober economist would agree that the balance-sheet bond buying that has occurred = printing $2.4 trillion out of thin air.

I'm enjoying the back and forth. Not really debating here. Somebody out there reading this may benefit from our exchange.
Here's the process. You let me know if any step is essentially incorrect.

Fed creates a number in the positive (asset) side of their asset book for the purchase of US Debt (bonds) - this is the "money out of thin air" step. They don't actually have the money. They simply create a number on the books.

They then buy bonds (debt) with that created money from the Treasury.

The Treasury then provides that money to the government to spend from the general fund, from food stamps to housing to student loans to whatever - whatever the US Govt spends money on.


So the first step is - Fed creates an entry in their books.
And the last step is - U.S. govt spends the money created by the Fed.

You don't have to call that "money printing" if you don't want to, but that's exactly what it is. The Fed is creating money out of thin air for the Govt. to spend.

Now, of course, the filthy secret to this is that the Fed has primary banks do the bond buying - for a fee, of course. Which is asinine, but perfectly in keeping with the giant scam the bank run U.S. economy has become. The treasury could simply print the money itself, and hand it to the government, without the silly need for the Fed to fabricate asset numbers in its ledger and then have banks buy bonds from the treasury, which then hands the thin air money to the govt.

Ay. It's all so stupid. It's all so greedy. And we totally have it coming for letting the bankers and politicians who they own do this.

 

[Fishy]

If you don't know why then it won't matter anyway.

Thank you.

Memo to self - If the economy breaks down, find pnete. He has gold.

 

[TheRogers]

All I know is that I'll be laughing at each and everyone of you clowns when my stockpile of Valyrian Steel appreciates.

 

[sportsart]

 

[Gurleyman]

Gold, shmold. When the world's economies collapse, the most precious commodity will be drinking water. That's why I recently purchased Lake Superior. I'll need some of you to form a human barricade to protect it from marauders, of course - in exchange for "all you can drink" access. Just tell Bruno you're with the Boneyard and he'll hook you up with a bucket and some iodine tablets.

 

[I Bleed Blue]

wtf are you guys talking about? lmao

 

[elduderino]

I'm enjoying the back and forth. Not really debating here. Somebody out there reading this may benefit from our exchange.
Here's the process. You let me know if any step is essentially incorrect.

Fed creates a number in the positive (asset) side of their asset book for the purchase of US Debt (bonds) - this is the "money out of thin air" step. They don't actually have the money. They simply create a number on the books.

They then buy bonds (debt) with that created money from the Treasury.

The Treasury then provides that money to the government to spend from the general fund, from food stamps to housing to student loans to whatever - whatever the US Govt spends money on.


So the first step is - Fed creates an entry in their books.
And the last step is - U.S. govt spends the money created by the Fed.

You don't have to call that "money printing" if you don't want to, but that's exactly what it is. The Fed is creating money out of thin air for the Govt. to spend.

Now, of course, the filthy secret to this is that the Fed has primary banks do the bond buying - for a fee, of course. Which is asinine, but perfectly in keeping with the giant scam the bank run U.S. economy has become. The treasury could simply print the money itself, and hand it to the government, without the silly need for the Fed to fabricate asset numbers in its ledger and then have banks buy bonds from the treasury, which then hands the thin air money to the govt.

Ay. It's all so stupid. It's all so greedy. And we totally have it coming for letting the bankers and politicians who they own do this.

This is really a huge, very involved, multivariable, infinite pov topic so I don't want to really get into it but I can point out a few things. First, the US Gov't, acting principal of the nation, is one entity, with one corresponding credit rating whatever that may be. As such, although the Treasury and Fed. are not technically one in the same, for practical purposes, as the financing entities of the Gov't, they are (same or combined credit rating/debt/balance-sheet, etc.) Understanding this makes everything vastly simpler!

This is where your argument regarding the money out of thin air falls apart (in other far less publicized areas regarding unfunded Gov't obligations, pensions, health care, DoD contracts and especially the SSA, the money out of thin air argument still has some validity, as it has for decades). The Treasury and the Fed. are simply moving money from one pocket to another, crossing the open market in between. Although some of the money from debt sales may end up in the general fund, this will primarily be the proceeds from shorter duration asset sales, 5yr. notes and in, including mostly 2yrs, and the eternally redheaded 3yrs, but mostly Tbills (<1yr.). The longer duration asset classes, 5yrs. and out, are used for number of purposes but far less, and in the case of the 10's-30's, essentially never, for Gov't. general fund expenses.

The bond purchases that are and have occurred, are in the longer duration securities and are done to artificially depress long term interest rates in the credit and mortgage-backed markets, in which primary dealers use Treasury yields to price spreads off of. The Govt. doesn't have the money to buy all the MBS and credit stuff out there, but it can in turn buy its own debt, moral hazard-palooza, which in turn reduces barrowing costs for companies and home/mortgage buyers. This occurs because the credit and MBS assets' values/yields to Treasuries at equal duration is assumed to remain stable while its pricing reference point is decreased. All this can be called, dovish, QE-umpteen, expansionary policy or whatever is fashionable for the day.

Obviously theres a lot going on here, but the one last thing I would mention is that the primary dealer community you referenced is hardly a willing participant in this mess. Down from a high of around 50 in the '80's, theres only 20 or so left, in no small part because they are actually forced to buy at Gov't. auctions for barely any concessions in asset dealing down the line. Not to mention the glaring moral hazard involved in the whole mess.

Finally, it certainly wasn't just the bankers and politicians (I personally cant stand just about any politician of any persuasion any more) who pushed the whole thing downhill. Feel free to put boot-to-A_ of any dipsh_t who took out a loan/mortgage without bothering to read and understand the terms and defaulted, because youre looking at a person who would do it to you out of sheer greed and, IMO worse, ignorance.

That's all from me. Apologies to the 'Yard for the way-long OT post.

 

[Adios]

The Canadian dollar will probably become barter here when the US dollar collapses. And the B1G can join Canada. Imagine how great the hockey is going to be.

 

[Dove]

Problem with gold is that the govt. can seize it, and/or make it illegal. Ownership of gold bullion (coins and bars) was illegal in the U.S. from FDR through Nixon. The reason was that they were protecting the dollar. The dollar has lost 37% of its value since 2000. That's a really big number. Dollar devaluation appears to be hastening. Russia/China and others are getting out of the dollar and doing their energy deals in euros and Chinese renminbi. The U.S. Central Bank (Fed) is now printing money at a furious pace, with no end in site. Commercial bank outstanding debt to GDP ratio is now being slammed by the Fed's purchase of bonds.

And, as if the collapse of the dollar wasn't bad enough, oil prices are showing signs of spiking because of the unrest in Iraq. Oil prices have increased linearly from 2000 from less than 40/B WTI to 104/B WTI. This, while U.S. use has gone down and Texas is producing 3BBD more from shale (tight) oil, and total U.S. production on an upswing. Further, world production has been flat for 10 years, and there is no indication that production has anywhere to go but down.

Jist - dollar will go to zero, the decline appears to be accelerating, and energy prices are set to spike. That is a two handed bitch slap.

Buying metals and commodities in general will insulate a buyer, to some degree, from dollar devaluation. As I noted, however, it is myopic to depend on the metals, and particularly gold, because by executive order the president, like FDR, can simply tell Americans to swap their bullion for dollars, at whatever exchange rate the Prez sets.

In any case, it's all FUBAR, I don't care as much as I did, and I think we make a run at 5 next year, and I'll have my ass parked in the same Pub Seat that I sat in for all NCAA games this year,

BRING ON THE DOOMER MOJO B1TICHES!!

Yes, what's important is that we have the 'skies.

 

[UConnSwag11]

I'm enjoying the back and forth. Not really debating here. Somebody out there reading this may benefit from our exchange.
Here's the process. You let me know if any step is essentially incorrect.

Fed creates a number in the positive (asset) side of their asset book for the purchase of US Debt (bonds) - this is the "money out of thin air" step. They don't actually have the money. They simply create a number on the books.

They then buy bonds (debt) with that created money from the Treasury.

The Treasury then provides that money to the government to spend from the general fund, from food stamps to housing to student loans to whatever - whatever the US Govt spends money on.


So the first step is - Fed creates an entry in their books.
And the last step is - U.S. govt spends the money created by the Fed.

You don't have to call that "money printing" if you don't want to, but that's exactly what it is. The Fed is creating money out of thin air for the Govt. to spend.

Now, of course, the filthy secret to this is that the Fed has primary banks do the bond buying - for a fee, of course. Which is asinine, but perfectly in keeping with the giant scam the bank run U.S. economy has become. The treasury could simply print the money itself, and hand it to the government, without the silly need for the Fed to fabricate asset numbers in its ledger and then have banks buy bonds from the treasury, which then hands the thin air money to the govt.

Ay. It's all so stupid. It's all so greedy. And we totally have it coming for letting the bankers and politicians who they own do this.

another- https://www.youtube.com/watch?v=iP9H5fADC0E

 

[UConnSwag11]

Incorrect. The dollar was 100% backed by gold at that time, not "to a degree." Any person could walk in with dollars and walk out with gold, at a fixed rate.


Not sure what you're saying here, but I think we agree. FDR wanted the ability to inflate the currency without having the American people, recognizing the devaluation of the dollar, exchange their devaluing dollars for gold. Simple as that. FDR wanted the ability to "goose" the economy by having the Fed expand the money supply without dealing with the obvious consequence of money supply expansion - citizens converting the dollars to gold, thereby depleting the U.S. gold supply.


Incorrect. This had nothing to do with bank runs. It had nothing to do with "hoarding," which is the word that government stooges use when they want to take your stuff. It had to do with one thing, and one thing only: FDR wanted to expand the money supply, which he knew would devalue the dollar, which he knew would cause citizens to trade dollars for gold, which he knew would cause U.S. gold supplies to get used up. That was the whole point of the dollar/gold standard. The point was to prevent politicians and bureaucrats from expanding the money supply and/or printing money.

Agreed, other than to act as the anti-dollar, by which I mean to demonstrate through its rise in value the inverse loss of value in the dollar.

The motivation to seize gold would not be to prevent the dollar crash, which is now virtually unavoidable. The point would be to seize the asset for use by the government. The demand for dollars is shrinking around the world. The demand for gold is rising. If and when the politicians want more money, and printing dollars won't work, they will simply take assets. Gold is an obvious target.

In Greece, they simply took a % of every bank account for govt. use. In the EU, they are moving toward savings accounts that pay negative interest. In other countries, "one time" taxes are imposed on assets.

Point is this. Precious metals will be an easy target for confiscation by the govt. They can set whatever dollar to gold ratio they want, and then force you to turn in your gold. They can then use the gold as currency with countries that don't want any more dollar bill toilet paper. Conclusion - owning gold will not save you from a crashing dollar - it will simply make you a target of asset confiscation.

And before you say, "the govt. would never take your property," I distinctly remember 5 years ago hearing all the experts drone on about how the "govt. will never print dollars and devalue the currency." In fact, they're doing just that, and a lot of it. They'll do whatever they want, and you won't stop them.

 

[UConnSwag11]

I'm actually enjoying this... not a bad discussion and it seems almost civil for the time being... i do like the idea of stocking up on velveeta

 

[August_West]

The New World Order will just take your gold anyway bro

Hulk hogan is a bad mofo, he will slap you take your gold and spray paint it.

 

[intlzncster]

Incorrect. The dollar was 100% backed by gold at that time, not "to a degree." Any person could walk in with dollars and walk out with gold, at a fixed rate.

You are talking about "convertibility of" not being "backed by" gold, which are two diff things. Prior to FDR, the USD was "convertible" for gold, ie you could walk into a bank with dollars and exchange them for gold. Post FDR, you could not. The dollar was no longer convertible for private citizens by law.

That said, the dollar was backed by gold both before and after. It was still backed and convertible for international trade between govts at this stage, though citizens could no longer convert. The dollar was not fully removed from the gold standard until Nixon broke the Bretton Woods Agreement in 1971.

To be fair, I miswrote, poorly I might add, what I was trying to say as well. I was merely attempting to reference a 1:1 dollar/gold ratio (which it was obv not at the time). Shouldn't have even mentioned it as it was not really germane to the discussion anyway.

Not sure what you're saying here, but I think we agree. FDR wanted the ability to inflate the currency without having the American people, recognizing the devaluation of the dollar, exchange their devaluing dollars for gold. Simple as that. FDR wanted the ability to "goose" the economy by having the Fed expand the money supply without dealing with the obvious consequence of money supply expansion - citizens converting the dollars to gold, thereby depleting the U.S. gold supply.

Incorrect. This had nothing to do with bank runs. It had nothing to do with "hoarding," which is the word that government stooges use when they want to take your stuff. It had to do with one thing, and one thing only: FDR wanted to expand the money supply, which he knew would devalue the dollar, which he knew would cause citizens to trade dollars for gold, which he knew would cause U.S. gold supplies to get used up. That was the whole point of the dollar/gold standard. The point was to prevent politicians and bureaucrats from expanding the money supply and/or printing money.

This had everything to do with bank runs and hoarding. You even said as much in the first of the above 2 paragraphs.

FDR wanted to devalue the dollar. We know this. What would happen if he did this without making gold illegal? Citizens would simply go to the bank, exchange their dollars for gold, and then "hoard" that gold to preserve their purchasing power. There would be runs on the gold held in banks, and the dollar would effectively collapse. In order to stop people from doing that (ie stop runs and hoarding), he stripped convertibility of the dollar by making it illegal to own gold..

The reason he made it "illegal" to own gold (and confiscated it), as opposed to just simply severing convertibility by decree, was to increase, by govt 'hoarding' of all US gold, the 'power' of the American dollar and influence for international trade. He who holds the gold, makes the rules.

The motivation to seize gold would not be to prevent the dollar crash, which is now virtually unavoidable. The point would be to seize the asset for use by the government. The demand for dollars is shrinking around the world. The demand for gold is rising. If and when the politicians want more money, and printing dollars won't work, they will simply take assets. Gold is an obvious target.

Where this argument fails is that there is a massive difference between how much gold is held privately back then as compared to now. The vast majority of privately held gold in the world today is in Asia (specifically China and India). Hardly any private US citizens own gold at this point, in comparison to the total above ground supply worldwide.

The amount of gold held by the American public is minuscule. It would make zero difference to the bottom line were politicians wanting to use it for trade. It would require a colossal waste of time, money, and political power to try to seize public gold. Just wouldn't happen.

If the govt wanted to go after gold (which I don't believe they'll bother anyway), they would simply tax the hell out of it (cap gain of gold treated might be treated as a special category). However, if they think about doing things to cap gains, they'll do it to stocks/bonds first and foremost, as that's where the bulk of American investing wealth is (not incl property here). Gold isn't worth their time.

Point is this. Precious metals will be an easy target for confiscation by the govt. They can set whatever dollar to gold ratio they want, and then force you to turn in your gold. They can then use the gold as currency with countries that don't want any more dollar bill toilet paper. Conclusion - owning gold will not save you from a crashing dollar - it will simply make you a target of asset confiscation.

If they set a fixed price for gold in today's markets, they'd quickly lose all of it to the Chinese. Arbitrage opportunities would abound. And the price would be revalued much higher as a result. Wouldn't take long at all. Markets are too connected in todays day and age to pull off what you are talking about.

Again, it might be an easy target, but its completely worthless as far as the US public is concerned.

 

[AZHuskiePop]

Thank you.

Memo to self - If the economy breaks down, find pnete. He has gold.

Never mind gold ,cans of beans will have more value. Protein is king.

 

[Strummer]

You are talking about "convertibility of" not being "backed by" gold, which are two diff things. Prior to FDR, the USD was "convertible" for gold, ie you could walk into a bank with dollars and exchange them for gold. Post FDR, you could not. The dollar was no longer convertible for private citizens by law.

As respectfully as I can, I note that you write like an economist. Which is to say there are a lot of words, they allude to "complicated" matters that are implied to be beyond the reach of non-economists, and, for the most part, they are completely uninterpretable. Economics is a very, very simple subject. Only economists attempt to make it seem erudite and opaque.

It's really, really, really simple here as well. Being "backed" by gold MEANS you can convert dollars into gold if you want. That's the entire point! If you can't walk into a financial institution with your paper money and walk out with a FIXED amount of gold, then the currency isn't backed by gold.

FDR tried to pull a fast one by preventing U.S. citizens from converting their devaluing paper to gold. He allowed foreign countries to continue to convert dollars for gold because he didn't see that exchange as a threat and/or to keep foreign banks happy.

Nixon was FORCED to take us off of the gold standard because France, among others, knew the dollar was starting to crap out quickly, and they began buying dollars on the open market and then converting them into gold at the fixed price. Nixon know that the gold would be leaving our country in a steady stream if he didn't end gold backing, and so he did. The other option was to stop devaluing the dollar, but there is no way Nixon or Obama or any of these stooges will do that.

When FDR prevented citizens from holding the govt to the gold standard, he partially removed the gold backing from the dollar. When Nixon told the world that the U.S. would not longer honor its promise to pay a fixed amount of gold for a fixed amount of dollars, the partial gold backing ended, and we had a true paper currency. At that point the end had begun. 43 years later and the dollar is in free fall and the govt. has printed trillions of dollars out of thin air because there are no short term consequences to doing so.

It's really, really simple. Gold backing acted as a check on govt. inflating the dollar. If the govt. inflated the dollar, people would exchange weaker dollars for stronger gold, and the govt. would be forced to deflate the dollar to make it stronger. That was the point of gold backing.

As a final note, you wrote something about "bank runs" and banks running out of gold. It was the U.S. that had to pony up the gold - not banks. Your bank run comment is out of place and completely incorrect.

FDR made it illegal to own gold bullion for 1 reason and 1 reason only - he wanted to inflate the dollar and private ownership of gold would have made it much harder for him to do it, because back then people knew that paper currency always ended up being garbage without gold backing, and they would not have accepted lower value dollars.

This is exactly why there were "gold clauses" in long term contacts; so that those who were owed money would not get hosed by getting paid back with devalued money.

 

[UConnSwag11]

Gold Could Be The Next Libor Scandal

Anyone who doesn't know what the LIBOR scandal is...

You may have heard of the Libor scandal, in which at least three – and perhaps as many as 16 – of the name-brand too-big-to-fail banks have been manipulating global interest rates, in the process messing around with the prices of upward of $500 trillion (that's trillion, with a "t") worth of financial instruments. When that sprawling con burst into public view last year, it was easily the biggest financial scandal in history – MIT professor Andrew Lo even said it "dwarfs by orders of magnitude any financial scam in the history of markets."

 

[sledog]

I loaded up on Maple Leafs at the local maple sugar shop today. Hope I beat the rush.

 

[intlzncster]

As respectfully as I can, I note that you write like an economist. Which is to say there are a lot of words, they allude to "complicated" matters that are implied to be beyond the reach of non-economists, and, for the most part, they are completely uninterpretable. Economics is a very, very simple subject. Only economists attempt to make it seem erudite and opaque.

Sorry dude. I trade gold (and other commodities) for a living, so it's all the proverbial second nature to me. Though what I wrote really wasn't that convoluted for your average non economist.

I find that people who aren't economists are always the ones who say economics is very, very simple. It's not. I do feel a lot of economists are off base however, as the field is too vast to grasp properly. The financial system as it stands is an extraordinarily complex system that is governed more by chaos theory than any strict set of financial rules. By simplifying as you do, you miss out on, oh I don't know, thousands of variables that impact the particular point you are trying to make.

It's really, really, really simple here as well. Being "backed" by gold MEANS you can convert dollars into gold if you want. That's the entire point! If you can't walk into a financial institution with your paper money and walk out with a FIXED amount of gold, then the currency isn't backed by gold.

What I was trying to tell you is that this (bold above) is NOT the case. It is not a necessary condition to be able to trade your currency for gold straight up in order to have a gold standard. That's what I'm saying.

A currency can be backed by gold without citizens being able to go into a bank and trade currency for gold; all that is required is that there is a certain amount of gold in reserve that implicit stands for the currency in question. Heck, the currency might be pegged to another currency, which itself is backed by gold, and therefore the pegged currency is implicitly backed by gold (de facto). You could still go to a gold dealer and sell your gold for currency (as you can now), but it's not a necessary condition to be able to "trade it in" officially.

Nixon was FORCED to take us off of the gold standard because France, among others, knew the dollar was starting to crap out quickly, and they began buying dollars on the open market and then converting them into gold at the fixed price. Nixon know that the gold would be leaving our country in a steady stream if he didn't end gold backing, and so he did. The other option was to stop devaluing the dollar, but there is no way Nixon or Obama or any of these stooges will do that.

I had a bunch of stuff here but deleted it; this is totally extraneous stuff. I didn't say anything about why Nixon took us off the GS, as it wasn't part of the discussion. All I wrote was that, "The dollar was not fully removed from the gold standard until Nixon broke the Bretton Woods Agreement in 1971." Which is fact.

It's really, really simple. Gold backing acted as a check on govt. inflating the dollar. If the govt. inflated the dollar, people would exchange weaker dollars for stronger gold, and the govt. would be forced to deflate the dollar to make it stronger. That was the point of gold backing.

Yes, that's pretty basic. I said the same thing.

As a final note, you wrote something about "bank runs" and banks running out of gold. It was the U.S. that had to pony up the gold - not banks. Your bank run comment is out of place and completely incorrect.

You are wrong about this, and it's really not hard to verify with research. Where do you think people exchanged dollars for gold? Fort Knox?? They did it at banks man; that's where most people held their gold. The govt supplied the gold, but the exchange didn't occur in the White House. Here, from the article:

Here's the 1st hit on Google (i can't be bothered to do a bunch of primary source research): From Forbes

In April 1933 FDR and his allies at the Fed and Treasury attributed widespread bank runs and failures to private “gold hoarding.” Using the “Trading With the Enemy Act” (1917) as a precedent – an act that gave the president wide latitude to restrict exchanges and seize assets during “emergencies” – FDR declared that private gold should be seized and given over to the Fed, in return for irredeemable Federal Reserve Notes, to stem an emergency in the banking system. This was sanctified in the Gold Reserve Act (January 1934), which required that any gold held contrary to U. S. law must be forfeited to the U. S. government. Key parts of the “Trading With the Enemy Act” pertaining to gold seizures persist in the U.S. Code even today.

 

[Husky999]

If you don't know why then it won't matter anyway.

As someone that was an options market maker at the COMEX / NYMEX for 10 years, this is incorrect. Commodities / hard assets are cyclical and they reached the end of there super cycle in 2008, metals around 2011. Metals in particular might catch a bid in the short term, but interest rates cannot go any lower. We are far closer to easing than people realize, and once that happens the rug gets pulled from the fallacy that is US equity markets. Also, if the end of the world happens… like it almost did in 2008… everything will collapse, like gold did down to 650. In that scenario the money flows to the place with the strongest army and thats why the play is to put your money in US dollars. Play is to short gold long silver. Spread has been out of whack for the past 2 years.