Economy
Related: About this forumZero Hedge's most popular posts of 2011 includes this stomach dropping article:
The first runner up for most popular post of 2011, with 140,000 reads, was the announcement that "Trading Of Over The Counter Gold And Silver To Be Illegal Beginning July 15" -
while the argument given by the official entities was that this is to protect investors from predator brokers, many saw into this yet another attempt of capital controls, and a further limitation of how, where and why one can trade their precious metals.
And while executive order 6102: "the return" it was not, at least not yet, once the year end hedge fund liquidation phase ends, and PMs resume their surge ever higher, we would certainly not put it beyond our leaders to be forced to eventually confiscate all the freely held gold and silver in circulation. It has been done before; it will be done again.
http://www.zerohedge.com/news/2011-greatest-hits-presenting-most-popular-posts-past-year
( remember under new tax rules, the new 1099 requirements force gold/silver merchants to declare all precious metals transactions over $600.)
The "6102-the return" refers to:
Franklin D Roosevelt, under Presidential Executive Order number 6102, confiscated all privately held Gold in the United States on April 5, 1933.
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TheWraith
(24,331 posts)Paranoid conspiracy theorist gold-bug crap of the highest order, the kind that's one step away from talking about black helicopters and the New World Order.
dixiegrrrrl
(60,010 posts)To Wit:
5. Sidetrack opponents with name calling and ridicule. This is also known as the primary 'attack the messenger' ploy, though other methods qualify as variants of that approach. Associate opponents with unpopular titles such as 'kooks', 'right-wing', 'liberal', 'left-wing', 'terrorists', 'conspiracy buffs', 'radicals', 'militia', 'racists', 'religious fanatics', 'sexual deviates', and so forth. This makes others shrink from support out of fear of gaining the same label, and you avoid dealing with issues.
6. Hit and Run. In any public forum, make a brief attack of your opponent or the opponent position and then scamper off before an answer can be fielded, or simply ignore any answer.
Thank you for demonstrating these examples for us.
abelenkpe
(9,933 posts)avaistheone1
(14,626 posts)And yes, feds have taken gold and silver out of circulation before.
banned from Kos
(4,017 posts)Besides not containing a grain of truth it is falsifiable on pure logic. We are no longer on the gold standard so won't NEED gold.
We don't need the $400 billion of gold we have.
the other one
(1,499 posts)1) FDR didn't confiscate gold; he requested it voluntarily. Hoarding became illegal, but collecting did not.
2) The 2011 rule change applied only to transactions that are not completed within 28 days - iow contracts, not physical delivery.
You can still walk into your local coin dealer and buy as much gold as you want. Cash transactions over 10k must be reported.
dixiegrrrrl
(60,010 posts)Executive Order 6102 required U.S. citizens to deliver on or before May 1, 1933, all but a small amount of gold coin, gold bullion, and gold certificates owned by them to the Federal Reserve, in exchange for $20.67 (equivalent to $350.43 today[3]) per troy ounce.
Under the Trading With the Enemy Act of October 6, 1917, as amended on March 9, 1933, violation of the order was punishable by fine up to $10,000 ($167,700 if adjusted for inflation as of 2010) or up to ten years in prison, or both.
http://en.wikipedia.org/wiki/Executive_Order_6102
when you are under criminal and financial sanctions to act, this is not voluntary.
Plus, the government forced people to sell the gold at 20.67 an ounce, but afterwards set the price at 35.00 an ounce.
"The resulting profit that the government realized funded the Exchange Stabilization Fund established by the Gold Reserve Act in 1934".
"collecting" was limited to rare coins, and people were not allowed to own more than 5 troy ounces of gold.
Again, not much "voluntary" in that.
stockholmer
(3,751 posts)That is just a bald-faced untruth.
This same logical line of thinking leads, furthermore, (for but one example) to a copper who is smashing your head in 'requesting' your 'voluntary cooperation' by refusing to allow you to cover your face from the blows. Cover your face, you have 'assaulted' the boys in blue.
No point to saying much else.
AnneD
(15,774 posts)My grandfather had kept gold coins in a local bank safety deposit box. He gave one as a graduation gift to every grand child and great grandchild that graduated from high school. When the banks open up again from their holiday, the physical gold was removed from from the box and certificates (paper) were there. Not only that, but they were deemed worth about 20% less than before. So he got robbed twice. His gold was confiscated period. Yes he was 'compensated'-but with toilet paper. Anything else said is a lie.
The banker was his friend and they went to the same church, but Papa never spoke to or of him again. Papa drilled it into my mother that only gold and silver were real money. I think we will come back to that again but not before TBTB try to fleece us again. This is why I say...when there is a national bank holiday-you are either in or you are out. In, you are at their mercy, out, you retain some of your wealth. That is the bottom line, from a lesson learned several generations ago.
dixiegrrrrl
(60,010 posts)they lived thru, they raised 8 kids, my Mom was born in 1927.
And yes, the results of the bank holiday was one of lessons.
Which is one reason I see a similar pattern developing now.
and, as you say, you are either in or out.
Learning from history is so much better than not learning from it.
eridani
(51,907 posts)All forms of money are fiat money.
abowsh
(45 posts)Gold does not require a government or any authority to keep it's value. If the US government, or any government, goes bankrupt, their currency will likely be worthless, but gold will still hold value. It will hold value in the United States and throughout the world. The downside of not being backed is that it's value can drastically change in a short time. A fiat currency will have a central bank backing to make sure there are no wild swings that would cause chaos on the economy.
happyslug
(14,779 posts)People confuse the two concepts all the time, the purpose of a Medium of Exchange is that everyone is a society can use a some sort of Standard that everyone agrees on as standard of exchange. This can be Tobacco (The "Money of Colonial Virginia). Whiskey in Western Pennsylvania in the Post Revolutionary Period, Wampum among Native Americas. In Egypt prior to about 3000 BC, Silver and Gold held the same value (The Invasion of the Hykos seems to have brought with them, the concept that Gold was wroth more then Silver).
In the 1500s, due to the massive influx of gold from Mexico and Peru into Europe via Spain, what Gold could buy dropped in price. Many an English yeoman, found themselves worth less and less in terms of Gold (An "Gentleman in England in the 1500s was someone whose "value" exceeded 40 Pounds, below that number you had to practice archery with the rest of the peons, above that number your were a "Gentleman" and did NOT have to practice Archery. This increase in the number of "Gentleman" do to the increase in their value was one of the chief causes of the collapse of Archery in England in the 1500s. Queen Elizabeth replaced her last archers with Musket men in 1596, more do to the fact Archers were high end peasants and thus more likely to be Catholic, while Musket men were from the poorest of the poor and would do as the person who paid them told them to do, In the first battle of the English Civil War, in 1640 a unit of Archers appeared to fight on the King's side. appears to have been effective in the battle, but viewed as unreliable do to their religion, but they religion had less to do with religious dogma then Class and given the Nature of the English Civil War, the English Nobility, who supported the King, did not want to ally with the peasants against the what we would call the Upper Middle Class that controlled Parliament (yes, it is common to view the three sides of the English Civil War, as religious, Church of England for the Crown, Puritan/Reform Church for Parliament with the Peasants remaining Catholics, but the better view is that the three sides are three different class of people, those nobles that benefited under Henry VIII supporting Charles I, against the raising upper Middle Class, who also benefited by Henry VIII's confiscation of Church property who Supported Cromwell and Parliament, against the Peasants whose position in society was more secure when England was Catholic, but was caught in the middle between Parliament and Crown for both sides were fighting over who was to rule England, and thus neither wanted the support of the peasants who if they supported one side or the other would in effect rule England).
I bring up the English Archers for it shows how the decrease in the Value of Gold helped defined the sides of the English Civil War. Upper Class Peasants, due to the inflation of the 1500s in the value of Gold saw their Status improve so they no longer had to practice archery. This "decrease" in the number of Peasants and "increase" in the number of "Gentleman" was do more to the fact the value of GOLD declined as opposed the value of other things. Trade at that time period was Spanish and English wool to Flanders (During the 1200-1500s) then Netherlands (1400s onward). The main reason for the Hundred year war was control over Flanders, and when the mills moved to the Netherlands in the 1400s, the Hundred year war came to an end (But then started the fight between England and Spain over those mills, replacing the former fight between England and France over those mills).
The move to Spanish held Netherlands meant that Spanish Gold went to the Netherlands and then to England. In many ways the Protestant Reformation in the Netherlands and England reflected the Inflation of the early 1500s (The Netherlands, like the Reformation in Scotland, Switzerland, England, Hungary and France, was based on the raising Middle Class that embraced the Reform Church of John Calvin whose break with the Catholic Church started in 1530, not the Luther reforms of 1519). The Reform Church tend to gather strength as this inflation in Gold continued, and tended to reverse when the supply of gold from the New World dried up at the time of the Counter Reformation of 1565 onward).
Yes, a lot of the Reformation can be tied in with the decline in the Value of Gold and its later raise in value, and it just appeared on the surface to be a religious dispute.
Those areas of Europe that had NOT converted from feudal duties in the form of crops to one of coin (Most of France, Spain and Italy) saw little inflation for things most people used was sold in terms other then Gold. The Reform was most vigorous in those areas where the former practice of paying feudal duties and taxes in crops, labor etc had been converted to payment of Gold. These areas were the most affected by the inflation of gold and thus demanded solution to that problem, which given the dogma of the time period had to be the fault of the Church NOT that Gold was dropping in value do to the newly shipped in gold from the New World (then as now, the concept that Gold can have value that goes up and down was hard to conceive given that most other items were priced in term of Gold).
Another example of when Gold changed in value can be seen in at the end of the "Free Silver" Movement in the US. Gold was found in California in 1848, but most of it had been mined by the late 1850s (Gold was mined in California for decades afterward, but no where near the huge deposits of the 1850s. Thus the value of Gold stabilized in the 1860s, but only after leading to the boom of the 1850s do to the massive expansion of money do to the massive influx of Gold from California. This was followed by a massive discovery of Silver in Nevada in 1859, a mine the continued to produce Silver in huge qualities for decades afterwards. This silver influx was so high, the value of Silver in the Silver Dollar went from $1 in 1857 to 55 cents in 1896. For this reason framers and other working class people advocated minting of more and more Silver Dollars from the 1870s onward, to give the economy a huge kick in the form of inflation. By the 1896 election this push was so huge, the Democratic party embraced the concept and despite being outspend almost 10-1, still won 47.6% of the vote (46% as a Democrat, 1.6 % as the Populist Party Presidential candidate). By 1900, Free Silver was a dead issue, for in the late 1890s, South Africa, Australia and even Alaskan Gold came into the market, reducing the value of gold in relations to other items, including Silver. This new influx of Gold
acted like any influx of money into the economy, the economy expanded.
The key to the California gold influx and the late 1890s gold influx, was when both influxes started to dry up, the economy started to go under for the economy needed an expansion of money in boom times, just like it needs a destruction of money during bust times. It is easier to create and destroy money, if it is a fiat currency, and thus why from the 1930s till recently, the number and length of recessions have been low compared to the period of Gold. Gold is hard to increase in good times, when such an increase is needed, but it is also hard to destroy in bad times when such destruction is needed.
Thus, come the end of the increase of Gold, you see the economy stalling and people demanding action. In the 1540s onward it was a demand for "Reform" of the Catholic Church, in the late 1800s it was the demand for "Free Silver". Both were demands for more gold, in the case of the Reform Church Movement to melt down all of the Gold in the Churches and convert it to coins (Which is what Constantine had done in the 300s when it came to the Pagan temples, those Temples without gold idols were spared, those with gold idols were destroyed, converted to Christian Churches and the Gold given to Constantine for use as gold coins, Constantine used Gold coins to replace the old Silver Coins that the Roman Empire had used for Centuries, but whose source, the Silver Mines of Spain, had dried up in the early 200s do to excess water in the silver mines, but the solution to the Silver shortage in the 200s was massive drop in the Silver Content of the Silver Coins, till the time of Constantine such coins had little if any silver).
Now the above is a simplification of the Protestant Reformation and Constantine Conversion to Christianity, but it shows that GOLD dropping in value and then increasing in value does to an economy and how that affects how people view their society. It also shows how Gold is like any other commodity, it can and does lose and gain value for various reasons besides being a medium of exchange. That is also NOT true of Fiat currency, for Fiat Currency has no inherent value and thus the only value is that imposed on it by the market. IF the market believes the Currency will have no value, it becomes worthless, if the market thinks it will retain value, it will retain whatever value the market believes it will retain. Governments can thus increase or decrease the value of such currency by its own actions, including tax and spending rates. Given that fiat Currency has no inherent value, the only check on its value is those imposed by the issuing government, which if the Government is careful keeps the value of such currency up or down as needed by the economy. The Government can destroy such currency via inflation, or taxation AND increase the how such currency by printing more when it is needed.
One of the problems with Fiat Currency, is Governments may become tempted to overly inflate the currency, but generally that is only done when the Government does excessive borrowing and does NOT want to pay the debt back by raising taxes. The problem is that is as true with a Gold Standard as with Fiat Currency, all the Government has to do is said its debts are in its currency NOT gold, even of the debt was issued to be paid back in Gold (Which is what FDR did in the early 1930s, declared all debts, even debts that clearly said to be paid back in gold, to be paid back in Dollars). This Gold is NOT the safety net from Government excessive spending or defaulting on debts. Never has been, never will be. Talked about and in theory could control how much a government can borrow, but every time such a restriction is hit, any and all Government gives up the Gold Standard so they could borrow more money anyway (This is how Britain, France, Italy, Germany and the rest of Europe exited the Gold Standard during WWI, and again during WWII). Thus this "Check" on Government bad actions turns out NOT be a check at all.
Anyway, back to the topic, Gold's value has changed over time, sometimes up and sometimes down, but it has never been a base that everything else's value is based on. That is the same as Fiat Currency, whether we like that concept or not. Gold has value independent of its use as a currency, but Gold's value as a Currency is the same as Fiat Currency, depends on how much is out there AND how people value it independent of any inherent value of Gold independent of its use as a medium of exchange.
eridani
(51,907 posts)--is the same as Fiat Currency." Good summation. For those who think gold has some inherent value as currency, try buying a pound of tomatoes at your local farmers' market with it. Sure, gold can be a useful hedge against inflation, but in order to spend it, you MUST exchange it for currency. If you have to exchange it for currency in order to spend it, it is by definition NOT currency.
eridani
(51,907 posts)It has no inherent worth other than the value assigned by people, and that value does not depend on reason. Whether an assigned value is formal (from a government) or informal (sum total of irrational human opinion) is totally irrelevant.
girl gone mad
(20,634 posts)Pull the other one, why don't you?