Oil prices have not increased since Bush took office.....

[louis c]

now that I have your attention, here's the explanation.

Roughly speaking, the price of gold (the only true price index) was about $235 an ounce when the incompetent asshole took office. The price of oil was about $24 a barrel. Sooooo...one ounce of gold purchased about ten barrels of oil. Now, gold is about $1,000 an ounce and oil is about $100 a barrel. That same ounce of gold still buys the same amount of oil.

The difference is that the dollar is nearly worthless. This nit-wit and his conniving henchmen decided to run up a deficit to feed tax cuts for the wealthy, ship our jobs overseas, break unions at home, pay for a needless war, and just print paper money to pay for all of this. It didn't work in 1925 Germany, and it won't work here. Now, those high oil prices (in relation to dollars) are reverberating throughout our economy, including food.

Just printing worthless paper to cover a nation's debt has never worked. The chickens are coming home to roost.

[ThomWV]

1. So, you ascribe some inherent value to gold?

"the price of gold (the only true price index)"

You might want to give that statement some more thought.

[louis c]

4. What do they keep in Fort Knox?

I know there are many more dollars in circulation now than ounces of gold when we were on a gold standard, but every currency is judge by its strength (or weakness) in relation to gold.

[ThomWV]

6. What makes you think there's any gold at Fort Knox?

They won't so much as let a camera into the valuts.

Besdies that, the only reason we keep any stockpile at all is for show. In fact there is much more gold used in jewelery in this country than there is in all the vaults the Government has, far more than enough to back up every dollar in circulation. Doesn't that gold count for anything? By the way, the largest pool of gold held by any nation is in India, and its in the form of personally held jewlery. The mines keep on cranking out more of the stuff every day too. So why is the price of gold never thought of as being inflated, even though it pours onto the market day after day, year after year?

[louis c]

9. I remember when I was in school

From about 1960 to 1970 (graduated high school in 1970), that the price of gold was about $32 an ounce, every year.

gold is used for two things, as a commodity (gold bars) which makes up about two thirds of its market and commercial use (jewelry and industrial).

You are correct that it is mined, but it cannot by produced, duplicated or consumed.

No measure of currency valuation is perfect, but gold is the closest thing to it.

[SpiralHawk]

10. "Gold drives men man. Always has." - Alinta, keeper of Wollimbin

"But the gold has a key spiritual function, anchoring the protective energy grid to the earth. When the gold is gone, and the grid dissolved further, chaos will increase. This we have known since the beginning."

- Alinta (Lorraine Mafi-Williams, Aboriginal elder and keeper of Wollimbin, now in Spirit)

[Wizard777]

17. The Nations supply of opium.

There is more opium in Ft. Knox than gold and silver combined.

[DFW]

12. Although gold as a store of value should be an anachronism

It isn't, and the old adage that "something is worth what someone will pay for it" stands.
China and India are cultures far older than ours, and they have always valued gold. Couple
that with their wealth increasing by leaps and bounds, and you have a ready market of takers
with 17th century views on gold and 21st century views on how to acquire the wealth to buy it.
While it remains that gold pays no interest, you can't eat it, you can't live in it, you
can't heat your house with it, and it won't make your car run, there are two billion people
out there that still value it for more or less the sole reason that their cultures have valued
it for the last four thousand years. They aren't going to stop now due to some massive influx
of western-induced rationality.

[Art_from_Ark]

15. "Western-based rationality"?

And what would that be? Spending more than one takes in, both at the individual and government level? Printing up mounds of paper that are backed by nothing more than blind faith in the issuing authority? Conjuring up derivatives and other dubious financial instruments that can lose all "value" in the blink of an eye?

[DFW]

22. You missed my point totally.

By "western-based rationality," I meant that some look at gold from
a purely "practical" point of view (pays no interest, can't be eaten,
etc.), and discount the historical practice of honoring gold as as store
of value despite it's apparent lack of consumer usefulness from a 21st
century western viewpoint.

[Art_from_Ark]

24. OK, I think I see what you're saying

Although in the case of China, I think the interest in gold is relatively recent. As late as the early 20th century, silver was actually the preferred medium of international exchange, and various countries, including the United States, Great Britain, France, and even Japan made special silver coins at one time or another for trade with China.

[DFW]

27. Your numismatics are well researched

The French Piastres were mostly intended for their Indochina (Vietnam)
colonies, and the British trade dollars were mostly intended for their
India trade, but the American and Japanese trade dollars were indeed
intended for China trade, as visible by the huge number of them that
survive today with Chinese "chop" marks, which were private stamps of
approval of silver content.

"Tai Pan" made famous the Chinese acceptance of silver as currency, but
gold in the 19th century was virtually unaffordable for any but the
highest aristocracy. Gold "taels" of 19th century (and before) China still
show up in Central Bank holdings, as well as private hoards and collections,
though, granted, infrequently (copies abound--gold, but recently made).
They valued it all the same, and now that it is accessible to millions of
nouveau-riches, they are buying it up en masse.

The newly created Shanghai commodity exchange trades gold, and the Chinese
who are looking at this today don't remember the days of $250 gold, because
that is the ancient past to them, days when owning any was out of the
question for them. South Koreans, on the other hand, are foregoing the
long-standing tradition of handing out golden rings to people at weddings
(not just the bride and groom) because the families just can't afford it
at today's gold prices. This mass gold hysteria will end, I'd bet, before
the oil price drops--if it ever does. People will still need to spend their
liquidity, such as it is, on housing, food and heating, and will give up
what gold they may be hoarding way before they starve or freeze. Sane ones,
that is. There will always be a few with the King Midas syndrome, but their
numbers dwindle when they have to choose between making payments on their
houses or contemplating their Krugerrands in the cold under a bridge somewhere.

[louis c]

28. Well,

I just came back from work and I am impressed with the intelligence of my DU friends.

It sure is a refreshing change from the the fox news informed folks I tend to converse with.

[Art_from_Ark]

31. Actually, the British trade dollars were mostly destined for China

Some of them were made in India, but the biggest destination was China (and to a lesser extent, the Straits Settlements, which had a large Chinese population). India had its own coinage under the Empire.

The French trade dollar ("piastre de commerce") was minted for French Indochina in large part to facilitate its trade with Hong Kong and China.

[louis c]

18. The end is near........

Gold is only a measuring stick. It is consistent throughout civilizations and it has been for centuries.

It is the only financial measure that the "powers that be" in this country can't fix. It can't be fooled, and it is difficult (but not impossible) to manipulate. It would take a world wide conspiracy, with untrusting partners with conflicting interests, to do so.

I do not worship Gold. It just so happens that it is much more trustworthy than those assholes who print the dollars or extend the credit or manipulate the M-3.

[Art_from_Ark]

21. I agree about paper money

I have a paper money collection that I like to show to people-- it contains Intis from Peru, Cruzados (some rechristened as "New Cruzados") from Brazil, Pesos from Argentina, Rubles from the Soviet Union, 1-million Mark notes from Germany, and 500-billion Dinar notes from the former Yugoslavia. And what is the combined monetary value of all those notes today? It is a big Zero. Zip. Zilch. All of those notes have been demonetized. They are worthless as anything but collector items.

Another item is a worn 100-dollar bill from 1928. In its day, it represented a value equivalent to five $20 gold pieces. Today, its value is equivalant to little more than 1/10 the gold in one $20 gold piece.

[EmperorHasNoClothes]

2. Although

the dollar has not dropped as much relative to other currencies as the price of oil has increased. I agree with the rest of your post, though.

[louis c]

8. Gold is the only thing...........

that keeps governments from just printing paper to cover its debts.

That's why it is the commodity by which all currencies are judged.

If we want to decrease the cost of gold (and by extension food and fuel) we have to balance our budget. Just as Bill Clinton did in 1997-2000.

[TheCowsCameHome]

3. I'll think of that the next time I fill my tank. Maybe even leave a tip.

Very comforting.

[louis c]

5. Over the last two months, Americans have consumed less oil

...yet the price keeps increasing. The price increase nearly mirrors the increase in gold.

here's the way to look at it. Gold is the constant. It neither increases in value or decreases. Every currency increases or decreases in relation to it. We have to have a standard. If we judge our dollar to the yen, pound or euro, we are dependent on their assholes determining the value of our dollar. If they have incompetence there and we have incompetence here, it's a wash.

But gold, on the other hand, has no government. You can't fool the gold market, and that has been known for centuries.

[trof]

7. Interesting. Just saw a similar chart this morning.

'Price' of S&P 500 charted as amount of gold rather than dollars.
Down, down, down.

[louis c]

14. That's the story...

The Dow Jones would have to be about 40,000 to break even with gold.

[DFW]

11. That's one way to look at it, but there's more to the story

Actually, by late January 2001, the price of gold was already around $260, but you're in the right range.
I had been summoned by a Central Bank in Latin America to help them out with a matter involving just that,
and it was in January, 2001, so I remember it clearly. The run up in the price of gold and oil is due, besides
Cheneybush's criminal economic activity, also in part to the tremendous increase in development in China,
India, and Russia. The development in Russia is skewed, as the wealth concentration is nearly in the hands
of less than 1% of the population, but they have it and don't even try to hide it. But the huge advance in
wealthy Chinese and Indians, countries that have had a long tradition of valuing gold, will be a major
factor for a while, and the enormous increase in the industrial development of both countries means that
there will be a physical demand for petroleum products that will not decline in the forseeable future, even if
we manage to decrease our consumption by a huge 10% or more. We may still be the largest consumer of oilm but
not for long if the present rate of development in China and India continues.

Even if the Fed stopped printing dollars altogether, the fact remains that the Cheneybush administration
will continure to spend way more than they take in, since they are effectively transferring wealth from
the American public to themselves and their financial backers. The Iraq fiasco was the most blatant example
of all, and the only reason I figure we are still there is to perpetuate the "terrrrists" and WMD myths
long enough to get McCain in there to continue the bleeding of the US treasury into the pockets of Halliburton
et al long enough to either really get a hand on the Iraqi oil, or else to make sure that all the companies
that have gotten rich off this deadly farce have made off with all there is make off with before the well
runs dry. They paper it over with patriotic mumbo jumbo until their residences in Dubai are built, and then
adios. Then, if we want a Democrat to take over an empty Treasury and an angry population out for blood, well
what do they care?

[louis c]

13. You get my point

and I thank you for your insight.

[JackRiddler]

20. um...

"The development in Russia is skewed, as the wealth concentration is nearly in the hands
of less than 1% of the population, but they have it and don't even try to hide it."

Sounds familiar.

Just saying.

[DFW]

23. Not at all.

Look at Halliburton, Exxon and all those big conglomerates.

With us, it's at least 2%. Maybe even 3%.........

[JackRiddler]

25. Second 2 percent...

is very wealthy in the US and many of them are in the power elite. But their wealth is already peanuts compared to the top 1/2 percent, or the top 10,000 barons, families and empires. The curve would look exponential. I say how it "would look," because you're forgetting OFFSHORE and FOUNDATIONS, where the established money has most of their assets! The ones on the richest people lists are recent conquerors who haven't had a chance to offshore and "foundation" their money (Gates and Buffett just started the time-honored process of going from barons to "philanthropists.") Or else they're showboats who want to be known, which is the exception among the rich. Do you think most of the richest people want you to know what they have?! Just by the open, legal measurement, the top 1 percent in the US exceed the bottom 90. No one knows what they have, not even their peers. I'm not just talking about what's in accounts in Aruba, Switzerland etc., but all the stuff owned THROUGH Aruba et al. in the form of assets controlled covertly through holding companies. And even then, we're not counting what's controlled through the means of mafia/drug trade, the spook-world complex, and churches. Concentration of wealth is global and as complete in the U.S. as anywhere else.

[JackRiddler]

26. kick, heh.

[Selatius]

29. It's a wealth gap that would make France 1789 look equitable.

In Russia, the industrialists are simply called oligarchs by common folks because they wield power far and beyond their small numbers.

[JackRiddler]

30. In the United States...

the robber barons are called philanthropists because the common folk are suckers.

[Rosemary2205]

16. Um

the dollars required to buy every commodity EXCEPT American labor have gone up.

For some reason we have gotten cheaper......... sigh.

[lonestarnot]

19. And the people on the chicken coop floor are getting kind of messy.

[Junkdrawer]

32. Crude (no pun intended), but more true than false. n/t