hal9000

One quality of gold that sets it apart from commodities and makes it ideal money, besides rarity, is that it is a luxury item and is not consumed like oil or copper.

I was just reading this interesting article about gold re-monetisation (must be the theme this evening) and game theory:

http://unqualified-reservations.blogspot.c...ame-theory.html

Snippet:

This is a self-reinforcing feedback loop. The more gold the CBs buy, the more incentive they have to buy gold. Because if the game ends with gold winning, the game will be scored by how much gold you got for your dollars. This will be a consequence of how soon the CB exchanged its dollars for gold. Devil take the hindmost! A classic panic scenario. A melt-up for gold; a melt-down for the dollar.

 

In other words, when gold is remonetized, the numerator and denominator on the "gold price" are exchanged. The relevant price is now the "dollar price." What is a dollar worth? How many milligrams of gold can you trade it for? This piece of paper is a financial security, n'est ce pas? Does this security yield gold, own gold, redeem itself for gold, etc? No? If you want it to be worth anything, you might want to change that...

Hi all, I had this article bookmarked and finally got around to reading it. Not sure where it came from (itulip I think) or when it was written, I think it's a good read.

So when the bottom falls out will gold holders be seen as heros or villains? My guess would be villains (hoarders) making it easy for governments to wack a 90% cgt on it or outright confiscate it.

A return to the Bretton Woods international gold standard created in 1944 is inevitable

http://fourthcurrency.com/

Of particular interest to me was the snippet below:

Will gold re-monetization make me rich if I own gold?

 

Is gold re-monetization good for gold owners? We’ve seen calculations of potential future post re-monetization prices such as those suggested by Larry Edelson over at Money and Markets ranging from $5,300 to $53,000 per ounce. We have since 2001 forecast a $5,000 peak gold price, but that estimate is based on a set of metrics, such as the ratio of gold to the DOW that we anticipate at the top of a global currency crisis, not post re-monetization gold reserve ratios. Less important than the gold price to gold owners, however, is the ugly political and legal environment, not to mention the social atmosphere, that is likely to exist at the time that economic conditions drive international parties to the table to hammer out a new international gold standard.

 

The range of future popular opinion of private gold holders under those drastic circumstances ranges from villain or hero and everything in between. If gold owners are vilified, you can count on a less than friendly government policies on gold taxation and possession. The 1933 confiscation was strictly old school; the modern approach is more likely to take the form of a 90% capital gains tax on private gold sales with high penalties to encourage sales to the government at a fixed price and slow a popular rush to the metal, and of course create an enormous black market in the bargain. If that sounds paranoid, you haven’t been watching the news lately.

 

To time a new international gold standard you have to think in terms of the G-20 time-line. A year into the debt deflation, global leaders have yet to acknowledge it is the root problem, let alone do anything but issue vague “should do this” and “should do that” official statements, let alone propose a radical solution like gold re-monetization to bring the devastating effects of debt deflation under control. Our forecast two years ago of a severe post housing bubble recession was strictly tin foil hat at the time, as was our call of a bottom in the price of gold 2001, as this latest forecast will appear to many.

http://economicedge.blogspot.com/2009/11/m...ve-to-high.html

 

Martin Armstong – Forced to Move to a High Security Prison to Silence Him?

Something fishy about this. People get less time in jail for murder. Whatever this guy did pales in comparison to some of the swindles we've seen commited by the pillars of society in the last 2 years.

I've read some of his articles and they seem a bit rambling and I can't see much in them that would threaten TPTB.