GOLD

[romans holiday]

Amen.

 

And for currencies, we simply need FREE markets and free competition. That would put things on checks and balances.

Guys... politics is not about what ought to be in an simple ideal world [or not be], but about what is, and managing the complexity of that.

 

As for far right libertarian ideology, it has taken a pretty bad blow. Expect more pragmatic government involvement... deal with it.

 

The "free" market you talk about... free from law and government.... is just barter. Extremely inefficient, and hardly the stuff for getting an economy going [people need price discovery and then will be much more willing to buy and sell]. For that you first need a currency... a currency enables a market to then form. A currency is always a social institution.

 

Gold is going mainstream and will be rehabilitated to the monetary system, salvaging economies.

 

 

Are you more interesting in where you want gold to go, or where gold is likely to go... no matter your preconceptions?

 

Edit.

[InternationalRockSuperstar]

As for far right libertarian ideology

 

free market is a methodology, not an ideology.

 

Expect more pragmatic government involvement... deal with it.

 

gov'ts are bankrupt. deal with it. expect much less gov't invovlment within only a few years. they simply can't afford otherwise.

 

The "free" market you talk about... free from law and government.... is just barter.

 

barter? what are you on about.

 

a free market in money would most likely involve privately-issued currencies, such as e-gold.

[InternationalRockSuperstar]

...

Guys... politics is not about what ought to be in an simple ideal world [or not be], but about what is, and managing the complexity of that.

 

politics is about wielding violence-derived-power over other human beings.

 

'complexity' does not justify initiating violence.

 

and central banking isn't even remotely complex - despite the mysticism the MSM likes to shroud it it - and this is something that people are awakening to.

 

A currency is always a social institution.

 

no gov't involvement is required to produce a liquid, widely accepted currency.

 

e-gold had 5 million accounts and growing, before the statists made their excuses and shut it down.

 

[GTG]

gov'ts are bankrupt. deal with it. expect much less gov't invovlment within only a few years. they simply can't afford otherwise.

 

That may be happening already. I wrote to the tax office on 9th March just gone to inform them of a change of address and circumstances. I always write to ensure my communication is recorded in black and white and I keep a copy. Not having received a reply I checked my copy letter to ensure their address, my NI and tax reference were all correct. These were in order so I wrote a follow up letter enclosing a copy of the original on 20 April. Now coming up to three months since my original letter and I still don't have a reply! I will ring them next week but it does make one wonder what is going on.

 

While I'm here IRS you wrote somewhere back I think in this thread that inflation can be created by those that have the money or words to that effect. Could you elaborate on that please.

[InternationalRockSuperstar]

...

While I'm here IRS you wrote somewhere back I think in this thread that inflation can be created by those that have the money or words to that effect. Could you elaborate on that please.

 

the inflation is not caused by those who have money (as in cash) but by those who create money i.e. the seignior(s), the people with the printing press.

 

however, the exact point in time at which the currency becomes worthless often depends on when those hoarding cash decide dump their cash holdings. in our case that would be the people hoarding £50 notes and the people hoarding £10 and £20 notes.

 

Mises' crack-up boom:

 

http://www.dailyreckoning.com.au/crack-up-boom/2007/06/26/

This first stage of the inflationary process may last for many years. While it lasts, the prices of many goods and services are not yet adjusted to the altered money relation. There are still people in the country who have not yet become aware of the fact that they are confronted with a price revolution which will finally result in a considerable rise of all prices, although the extent of this rise will not be the same in the various commodities and services. These people still believe that prices one day will drop. Waiting for this day, they restrict their purchases and concomitantly increase their cash holdings. As long as such ideas are still held by public opinion, it is not yet too late for the government to abandon its inflationary policy.'

"But then, finally, the masses wake up. They become suddenly aware of the fact that inflation is a deliberate policy and will go on endlessly. A breakdown occurs. The crack-up boom appears. Everybody is anxious to swap his money against 'real' goods, no matter whether he needs them or not, no matter how much money he has to pay for them. Within a very short time, within a few weeks or even days, the things which were used as money are no longer used as media of exchange. They become scrap paper. Nobody wants to give away anything against them.

[romans holiday]

the inflation is not caused by those who have money (as in cash) but by those who create money i.e. the seignior(s), the people with the printing press.

 

however, the exact point in time at which the currency becomes worthless often depends on when those hoarding cash decide dump their cash holdings. in our case that would be the people hoarding £50 notes and the people hoarding £10 and £20 notes.

 

Mises' crack-up boom:

Concerns about bank failures and hoarding money is deflationary!

 

We have already seen the hyper-inflation in credit. The extension of credit affects the behaviour of all borrowers and the exisitng stock of money. Think of credit as "anti-money" if you must insist that only cash can be money. Money created ex nihilo, on the willingness of debtors, is destroyed when it pays down debt. The existing stock of money is stuck in orbit around an increasingly unstable black hole of debt. It is this black hole of debt [credit being the other face of this Janus-like instrument] that is central in determining and shaping the behaviour of our monetary system... and whether that system expands or contracts, inflates or deflates. If credit is not a monetary phenomenon, then what on earth is it?

 

A purely cash-based economy, such as Weimar was, is capable of hyper-inflation.... if the authorities sufficiently lose the plot and have a death wish. But to compare that monetary system to our debt based monetary system... apples and oranges.

 

If the trillion dollar bailouts/ stimulus didn't work... what makes you think a few more hundred billion will?? Put your own axioms and theorems aside for the moment, go outside the cave of your own cogito, and observe what is going on in the real world. You might see the light.

[Jake]

Jake,

 

I was in Japan for years and will be back there one day. What do most people do for gold and silver investment there? Are there BoJ gold and silver coins? Or bars etc? Do people buy online or at stores? Are there many people interestsed in gold there?

 

Also, was talking to a US friend today about gold. Where could he buy gold coins in the US? Anyone know any reputable dealers online in the US?

 

Wanderer

Hi Wanderer, I nearly missed this. Japanese favor Philharmonics "harmonies" or Maples. Tanaka kikinzoku or Mitsubishi minted bars, same for Platinum bars or platinum eagles. There are some classy commemorative with fairly low mintages liked by numismatists and collectors (japan is collector obsessed), also a few nice silver pieces but frightfully overpriced. Some banks do savings in gold, monthly, but you don't get your gold for a long time. Others have ETF's but most take physical bars and coins.

Japanese love their gold and platinum, silver is passed by, largely. Though the 30 kilo bars are readily available and present the best value.

I rember the Brown bottom and even grannies walking out of shops with gold bars on TV. Faced with their choices of savings this was the logical thing to do.

[Wanderer]

Interesting, the front page of the FT website has a headlining story about Britons buying sovereigns and britannias in large numbers to avoid CGT. I can't access as I don't have a subscription?

 

Media interest and the start of the mania phase (early stage)? Or softening up public opinion to remove what is described as a CGT 'Loophole'?

[GatheringStorm]

Interesting, the front page of the FT website has a headlining story about Britons buying sovereigns and britannias in large numbers to avoid CGT. I can't access as I don't have a subscription?

 

Buying Brittannias and Sovereigns doesn't avoid cgt in itself. You have to sell at a (nominal) profit for any avoidance of cgt to take place.

 

I still doubt that "large numbers" of Brits are buying bullion of any sort.

 

Will there be a cgt allowance? Or will everyone selling anything for a profit be liable?

 

 

[G0ldfinger]

A purely cash-based economy, such as Weimar was, is capable of hyper-inflation....

This is factually wrong, as pointed out below. This also applies to general banking BTW. There were a lot of profiteers from the Weimar hyperinflation who had loaded up hard assets on credit. This is well-known, despite RH's repeatedly made wrong statements.

 

A purely cash-based economy, such as Weimar was, is capable of hyper-inflation.... if the authorities sufficiently lose the plot and have a death wish. But to compare that monetary system to our debt based monetary system... apples and oranges.

RH, I am not sure whether you understand that all cash in Weimar was created by credit. There is not much difference between Weimar and today, only that money creation today will be much faster. So, welcome to a brave new world!

 

Your theory seems to be based on false assumptions.

 

EDIT:

To back this up with some facts, taken from Weimar, 1918-1933: die Geschichte der ersten deutschen Demokratie by Heinrich August Winkler (in German):

http://books.google.de/books?id=C5qqLpiJNL...p;q&f=false

Dazu kam in hohem Mass die unsolide Geldpolitik der Reichsbank. Diese hatte schon im August 1914 Schatzanweisungen und Schatzwechsel, reine Finanzwechsel also, den Handelswechseln gleichgestellt, und neben Gold zur "Deckung" der Mark herangezogen. Der Geldschoepfung durch die Reichsbank waren seitdem faktisch keine Grenzen mehr gesetzt.

In short, since the Reichsbank was allowed to buy German treasuries (besides gold) to "back" the Mark (just like the Fed, BoE, or ECB) there were no limits to money creation. And so it took its course...

 

It's all about the responsible actions of the central banks. What do you need to know more?

[G0ldfinger]

I rember the Brown bottom and even grannies walking out of shops with gold bars on TV. Faced with their choices of savings this was the logical thing to do.

Those Japanese grannies!

[Jake]

Those Japanese grannies!

You got me. ?

[G0ldfinger]

http://gold.approximity.com/gold-silver_watch.html

[duckwomanloulou]

Interesting, the front page of the FT website has a headlining story about Britons buying sovereigns and britannias in large numbers to avoid CGT. I can't access as I don't have a subscription?

 

Media interest and the start of the mania phase (early stage)? Or softening up public opinion to remove what is described as a CGT 'Loophole'?

 

Scramble for gold coins to beat tax increase

By Javier Blas and Vanessa Houlder

Published: May 28 2010 21:08 | Last updated: May 28 2010 21:08

British investors are scrambling to buy sovereigns and Britannia gold coins in an attempt to use a tax loophole to avoid paying more capital gains tax.

 

Mark O’Byrne, of Gold Core, a London-based gold coins and small bars dealer, said it was selling sovereigns and Britannias “in the thousands”.

 

“This week we sold more than in any other one-week period,” he said. “The vast majority of the buying is related to CGT.”

 

The move comes as the government plans to raise CGT for items such as second homes and shares to rates “similar or close to those applied to income”, suggesting a rise from the current 18 per cent rate to nearer 40 or 50 per cent. The tax increase is likely to come into force next April but could be introduced on June 22 alongside the government’s planned emergency Budget.

 

UK-minted bullion coins are exempt from CGT as they are considered legal tender. Some investors are choosing to buy gold coins instead of other assets that would incur CGT.

 

Revenue & Customs says “sovereigns minted in 1837 and later years and Britannia gold coins are currency but, like all sterling currency, are exempt”. Coins that are currency but not sterling, such as South African krugerrands, are subject to CGT, the Revenue says.

 

Dealers said the rush by UK-based investors had pushed the premium of both coins above the spot gold price to about 7-8 per cent, up from 3.5 per cent at the beginning of May.

 

Spot gold in London traded on Friday at $1,215 a troy ounce, just below the nominal all-time high of $1,248.95 set this month.

 

The proposal to raise CGT was a concession to the Liberal Democrats after the Conservatives fell short of an overall majority in this month’s general election.

 

The plan has met with opposition from the Tory right. The Con-Lib coalition believes it will curb tax avoidance by people treating income as capital gains and will raise money to help fund a rise in income tax thresholds for low and middle earners.

 

Other countries have seen a rush into gold coins this month. After the €750bn (£638bn) eurozone bailout, German investors bought the most coins since the collapse of Lehman Brothers in 2008. The US Mint, which produces one the most popular gold coins, has sold 184,000 one-ounce American Eagles so far this month, the most since January 1999.

 

 

[DanF]

Just sold all my gold for tax reasons (I was at the limit of my current tax free allowance and the rate/allowance probably wont be favourable in the near future) and will buy back half in wife's name as soon possible and the other half at a later date... but I feel completely unprotected having no gold...

[G0ldfinger]

but I feel completely unprotected having no gold...

That's because you are...

[GTG]

the inflation is not caused by those who have money (as in cash) but by those who create money i.e. the seignior(s), the people with the printing press.

 

however, the exact point in time at which the currency becomes worthless often depends on when those hoarding cash decide dump their cash holdings. in our case that would be the people hoarding £50 notes and the people hoarding £10 and £20 notes.

 

Mises' crack-up boom:

 

http://www.dailyreckoning.com.au/crack-up-boom/2007/06/26/

 

 

Japanese people having been hoarding yen for many years in the "tansu ginko" (chest of draws bank) at the same time as the BOJ has been financing "bridges to no where", whilst it has had - as the worlds 3rd or is it 4th biggest exporting country? - a world outside it's borders in a debt fuelled boom. No crack up boom there. Japans' bubble burst about 20 years ago, how do you see it being any different in the west.

[romans holiday]

http://gold.approximity.com/gold-silver_watch.html

Hard to work out what that chart is predicting for the gold price this year. Correct me if I'm wrong but Pixel8r was predicting a new large up leg this year in US price of gold.... not a sideways consolidating move for the year.

 

http://www.greenenergyinvestors.com/index....st&p=154235

 

[romans holiday]

 

 

Time to consider gold your core currency? Many are wondering where to park their cash these days, and have often suggested the Aussie dollar. Yet comparing gold and the Aussie [against US dollar] gold has shown not only a lot more stability, but also a steady strengthening against the US dollar.

 

The beauty of having gold as your core position, is you're remaining liquid while seeing that liquidity strengthen against assets. The old rules of seeking out nominal gains in whatever currency perhaps no longer apply.

[Jake]

Japanese people having been hoarding yen for many years in the "tansu ginko" (chest of draws bank) at the same time as the BOJ has been financing "bridges to no where", whilst it has had - as the worlds 3rd or is it 4th biggest exporting country? - a world outside it's borders in a debt fuelled boom. No crack up boom there. Japans' bubble burst about 20 years ago, how do you see it being any different in the west.

In all fairness I think it has to be said that Japan had very favorable conditions to cushion itself from the full effects of their bubble burst. Japan had HUGE savings, very much depleted now. It also had the world gobbling up her exports thus leaving her status well intact and a huge credit surplus.

Last deleveraging exports fell off a cliff and that was pretty harrowing for Japan. It brought job losses and much fear and self reflection. My realization is that Japan is screwed if she can't export as the domestic market is in decline (population/demographics) and we now have deflation firmly engraved in our minds. Hoard cash, don't spend etc...chuck in higher oil prices or peak oil situation and Japan will go back to Meiji Period. It will have to.

 

Japan had the 'luxury' of being the first into recession, the only one at the time. Now all the world is joining in.

 

Japan also only owes herself for her debt, at least 94% is owned by Japanese people/banks/companies. UK, US others owe FOREIGN creditors. Best way to pay them is in devalued currencies. See pound and euro for details.

 

No ka poom here-for now. This June one third of the JGB's will be looking for a buyer. Maybe we can stutter along with that but into next year the other JGB's will be looking for a home and maybe unable to find aany buyers. The Japanese Pension funds, hitherto the largest buyers have turned sellers.

 

Ka Poom next year or 2012? Who knows.

[Happy Nihilist]

To the contrary, I "don't want to believe what he has to say re Gold" because there's no truth to what he says. He doesn't believe gold is a currency, otherwise he wouldn't treat it like any other commodity. Someone should take him to a Central Bank and show him they don't store copper or soya beans in their vaults. Gold is the currency of last resort.

 

There is no value in his opinion.

 

 

With the benefit of hindsight

 

Just to set the record straight. Yes, Prechter got the call on gold wrong, but I think it is important to put it in context. From FSN roundtable discussion November 1, 2003. MP3

 

Jim Puplava [40'40"]: What about some of the other investment aspects? We've seen a rise in Gold, I wonder if we can turn our attention to precious metals comments, and I know all of you have various opinions. What about Gold and silver?

 

Robert Prechter [42'03"]: First of all, I want everybody listening to this to realize I am a dedicated - philosophically speaking - gold bug. I think gold is real money, the only real money. I don't believe in monopolies of any kind, and certainly not in important things like money. I think fiat money is a disaster, and always will be. But I've also looked at the last Kondratieff cycle and I've seen that for example, silver which still traded freely at the time, had a strong rally in the middle of 1931, but eventually came down below its previous lows in late 1932 along with the end of the deflationary period. I think that now gold is traded freely, the real money of the realm here, is these green pieces of paper, now turning peach colour, called dollars. And in every classic deflation, whatever the currency you have is, the debt and credit levels out there that have been ballooned to extreme levels, and we now have a historical amount of credit, shrinks. So the remaining monetary units gain in value and you can buy more goods and services with it. This doesn't mean the dollar is going to go up against other currencies, it could even fall against them, but I think its already showing that it can buy more than a car for instance, than it could a few years ago. We're getting little hints to me that this deflation is beginning to bite. On the other hand, this is not - we talked about earlier about the stock market - I wrote a book recently called Conquer the Crash, and in there I said I'm a one armed economist when it comes to the economy and the market. I do not have a backup opinion or any other thoughts, I have only one opinion, and it's going to go way down and we're going into a depression, I don't see any evidence to the contrary. But in gold I don't feel that way. I could easily be wrong here, and I said in there that you need to have a core amount of this. It's real money, everybody should have some. I think you should have some outside the country if you possibly can, and I've got formations that will tell me "hey I better throw in the towel, its going up." It's been right though for 20 years to not waste your time in gold, and I think most gold bugs have worn out their fans by keeping them in something that's losing money against a dollar that itself was losing money, which is a pretty bad investment. But I'm watching it carefully, and I'll see, I guess I could be forced to change my mind.

 

Peter Eliades: So your current opinion is that gold has or has not seen its final low?

 

Robert Prechter: Well I tried to say there's a strong opinion and there's an opinion. My opinion is not that strong. I don't think its seen the final low, but I don't have the conviction that I have on these other things. In other words, if I'd want to get rich right now, I'd rather be short the stock market or long rydex ursa which is the same thing, rather than being long or short in the gold market. To me its a little too close to call, but I see too much optimism there, and I'm not certainly going to load up all my money in that basket right now.

 

And to help put it in perspective, these are the charts they would have been looking at:

 

 

 

 

 

 

[Crashman begins]

To avoid any possible CGT in future Id like to swap / sell some of my non UK Gold

for some UK Brits / Sovs.

 

What would be the best way to do this without losing out ? Sell to bullion dealer at a loss ?

 

 

 

[azazel]

To avoid any possible CGT in future Id like to swap / sell some of my non UK Gold

for some UK Brits / Sovs.

 

What would be the best way to do this without losing out ? Sell to bullion dealer at a loss ?

I spoke wiith coin invest about this and they were agreeable to do a deal. So you could send them your gold coins for sale and they would send you sovereigns in return hopefully on more favourable terms than if you sold for cash and then bought.

[G0ldfinger]

And to help put it in perspective, these are the charts they would have been looking at:

Hence he should have seen that gold was ridiculously undervalued...

[Errol]

Hence he should have seen that gold was ridiculously undervalued...

 

Indeed.

 

I certainly did.