An education on gold, the Bank of England and the dollar

[Carolab]

Lots of people talking about gold and the buck here lately. Also, thought it would help to understand Soros' role in all this.

http://www.skolnicksreport.com/england.html

Also interesting stuff about BCCI and the Bushes in other articles on Skolnick's site, if you haven't visited it.

[Maple]

1. Please don't believe

any of that. It's all nonsense.

No one is on the gold standard anymore, and all countries have sold off large chunks of their gold reserves...because nowadays it makes nice jewellery, and that's about it.

[Art_from_Ark]

5. You really shoud educate yourself about gold

It's been more than just a jewelry metal for the last 6000 years.

[Maple]

6. I'm an economist

and gold is no longer useful for anything but jewellery. In spite of all the sales pitches now occurring on chatsites...by people pitching gold.

[CHIMO]

7. Interesting

If everybody decides that gold is a good measure of security would it change things?

[Art_from_Ark]

8. Yeah, I guess that's why all your mining companies are so eager to mine it

because at $440+ an ounce, it just doesn't have any use!

[Maple]

9. It's useful to sell

to the gullible.

And to 'talk it up' on chatsites so more people will buy it, and raise the market price, so others can sell and profit.

We will never be on the gold standard again however.

Jewellery.

[Art_from_Ark]

10. Yeah, what a USELESS metal!

Forget about it being one of the most corrosion-resistant and stable metals, about its ductility, its malleability, its excellent conductivity, and its uses in aerospace and telecommunications equipment, satellite shielding, dentistry, electronic equipment, and a host of other applications-- it's a useless metal! Not good for anything!

LOL!

[Cleita]

12. You are right.

I'm trying to figure out what we should be stashing for a rainy day in safe deposit boxes however. Jewelry is worth nothing when you try to sell it, even the quality gold and gems.

[Art_from_Ark]

13. Jewelry is worth "nothing"

because most of its value comes from the workmanship, not from the gold and/or stones. The total gold in your average 14-K ring, for example, is just a couple of grams-- maybe $30. If you're considering gold as an investment, you really should forget about jewelry and focus on the bullion side, coins and bars, but especially American coins. But that means doing your homework beforehand, because, like any investment, you can get burned if you don't know what you're doing.

[barb162]

11. so why do we have Fort Knox and other gold depositories?

[Art_from_Ark]

14. Someone should tell the guards at the Ft. Knox and West Point depositories

that they are guarding a USELESS metal! No value whatsoever! Heck, they could leave all that gold out in the open because it is so useless, and no one would touch it!

[Maple]

16. People have short memories

Gold did the same thing some years ago. Went up and up, and people bought like crazy. Major crash supposedly coming, and they were told over and over again they just HAD to have gold.

There were line-ups to buy it.

Went to over $800.00 an ounce.

Silver skyrocketed too.

Then they crashed.

People ended up with very expensive doorstops.

You create your own bubble by listening to all this nonsense about gold. And eventually the bubble bursts.

So I will say it one more time.

We are not going back on the gold standard.

It is not possible in a global economy with trillions zapping around the world everyday. There simply isn't enough gold. Here's the quickest online explanation of that I could find.

"let's figure that the world has been producing gold at 50 million ounces a year for 200 years. That number is probably a little high, but when you figure that the Aztecs and the Egyptians produced a fair amount of gold for a long time, it's probably not too far off. Fifty million ounces * 200 years = 10 billion ounces. Ten billion ounces of gold would fit into a cube roughly 25 meters (about 82 feet) on a side. Consider that the Washington Monument measures 55 feet by 55 feet at its base and is 555 feet tall (17 x 17 x 170 m). That means that if you could somehow gather every scrap of gold that man has ever mined into one place, you could only build about one-third of the Washington Monument."

http://www.howstuffworks.com/question213.htm


So I'll simply say, you are being stampeded into buying something you don't need, and that itself boosts the price. The sellers then make a killing by dumping it...and you end up with expensive doorstops.

The US govt has been selling off gold for years, as have all other governments. That's why the price dropped for so long. Massive supply available.

So, the minute you can convince people there is a crisis coming, voila...your oversupply is taken care of. People will line up for the stuff.

So, if you want to do something useful with your money, buying gold is not it.

Now if you want expensive doorstops...go buy all you want.

[CHIMO]

18. One Third

Of the washington monument in gold buys the whole world!
Guess that gold is really underpriced!

[Art_from_Ark]

19. I never said anything about going back to a gold standard

However, it would be foolish to assert that such an event could never occur. The fact is that in your part of the world, gold might not be thought of as money at this point in time, but that doesn't make it a universal concept. In fact, lots of people in Third World countries would have a completely different opinion. For example,

Who came out better, Mexicans who bought gold as a hedge, or Mexicans who held on to their paper pesos in 1994?

Who came out better, Argentinians who bought gold in the 1990s, or Argentinians who held on to their paper pesos?

Who came out better, Serbians who bought gold, or those who held on to their paper dinars in the 1990s?

Who came out better, Soviets who bought gold, or those who held on top their paper rubles in 1991?

Who came out better, Brazilians who bought gold, or those who held on to their paper reis, cruzeiros, cruzados, new cruzeiros, or whatever the currency du jour happened to be?

The problem with paper, as people in most of the abovementioned countries can tell you, is that it can be printed up in any quantity the issuing authority wants. The value is determined by confidence in the issuing authority. If confidence fades, or if the issuing authority is flooding the market with paper, you have the makings for monetary disaster.

Up to now, the US dollar has been seen as a haven, but no longer. The past couple of years have seen an unprecedented decline in the value of the dollar against several major currencies at the same time. There is uneasiness about the direction the dollar, and the United States, are headed, and foreigners are hedging their bets.

The beauty of gold is that it is NOT just a jewelry metal. It is scarce, but not rare. It is ductile, malleable, highly corrosion-resistant, and keeps a shine for thousands of years. As such, it has attacted the attention of humans for at least the past 6000 years as an ideal medium for money. And it is still highly desired, regardless of what you may believe. Sure, it has had its ups and downs, and it may go down from here. However, it foolish to write it off, since a large part of the world, probably the majority, still regards it as money.

[barb162]

20. avoiding my question. How come it is the only metal that we guard

so carefully? Other than uranium type elements (energy/danger) which are also guarded carefully

[Tandalayo_Scheisskopf]

2. Urrmmm...

Ol' Sherm is a bit of a crank.

A bit? Nah...He's a complete crank. But in these times, what he says sounds deliciously plausible.

[CHIMO]

3. Perhaps You

Could clarify what Soros has to do with this. It seems like a bunch of hooey to me, to put it politely.
In other words. Bulshit baffels brains!

[whistle]

4. $200 billion eh, that's a nice chunk of change for the U.S.

...tax payers to be coughing up. Why would we want to bail out the British again? Because they were part of our coalition for bringing Saddam down? Gee, the job is not completed yet, do we still have to pay up? The deficit for FY2005 is going to be another whooping $450+billion, and there will be another $87 billion or more going to fight Iraq insurgency, bring about free elections and rebuild Iraq, plus we will have to cough up the $200 billion to save the Brits from financial embarrassment. My math says that will total $837 billion more spending then Bush has budgeted for, uhmmm and Bush wants to send another tax reduction bill through which probably will be as sweet as the last one, which lowered tax revenues by $385 billion. WOW! Thats $1.222 trillion!!! How much Social Security surplus do we have left? Approaching zero, you say. Oh my, well, I guess this is the year of the big one, no more social security checks for the elderly. Let's flood the labor market with granny nannies. How about gramps tramps?

[The Magistrate]

15. Ah, Mr. Skolnick, Ma'am

Have not seen anyone cite the old comedian seriously here in ages....

[BigAlex]

17. No grounding in reality

Skolnick has no real grounding in reality... He has claimed in the past that gold had a $410 "trip point", that when reached, the government would start up all sorts of activities to depress the price of gold.

Gold hit $410 quite a while ago, and has been comfortably trading in the range of $400 to $450 for the past couple of months. No big gold sales have been announced, no government intervention has taken place -- aside from a small but constant increase in price, the gold market has been quite boring ever since it reached the $400 price level.

Gold is a very valuable commodity, but it is not valuable as money, and hasn't been since 1970 when Nixon closed the gold window and severed the dollar's convertability into gold. Gold will never again back a currency, mainly because there isn't enough of the stuff to go around, and because governments have a penchant for spending more money than they take in...

If you look at the amount of US Dollars currently in circulation, and divide that by the gold that the US is storing at Fort Knox (ignoring for the moment the groundless rumors that the "evil bankers" have sold off all of the gold without telling anyone), you would determine that gold would have to rise to a whopping $75,000 per OUNCE in order to properly back currency that is ALREADY IN EXISTENCE!

We've simply created far too much money to go back to a gold standard....

[barb162]

21. money is money is money

The dollar and any other currency, including gold, silver, has value simply because everyone agrees they do. Money is really just a simple way for us to trade real stuff, like food, houses, energy, etc. And the world thinks the dollar is losing its value now because _______ fill in the blank.