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Yellowcake or Golden Bomb?
#157675
05/14/06 06:18 AM
05/14/06 06:18 AM
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Joined: Jun 2004
Posts: 5,602
Yunkai
afsaneh77
OP
Mother of Dragons
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OP
Mother of Dragons
Joined: Jun 2004
Posts: 5,602
Yunkai
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While you are busy finding cheaper gas and worrying over a nuclear terrorist attack, and not with this intention to play any of these threats down, but to show an angle you are missing; have you noticed what's happening to the gold prices? Investing in gold is not constructive and never helps to bloom the economy to create more jobs, but at times like this, is inevitable for everyone around the world to change their dollar savings into gold. I found this speech by the US House rep. Dr. Paul of Texas (R). I'm quoting some interesting parts, which either I agree with or simply try to verify and get your opinion on this matter. I'm not sure what M3 report is, but I didn't need that to realize what's happening. The price of Gold being around $715 per ounce at the moment is expected go over $800 per ounce by the end of this year. So I did switch my savings from dollar into gold, and so that you know, it is nothing personal, it is all about business. 
HON. RON PAUL OF TEXAS
Before the U.S. House of Representatives
April 25, 2006
What the Price of Gold is Telling Us
...
The rise in gold prices from $250 per ounce in 2001 to over $600 today has drawn investors and speculators into the precious metals market. Though many already have made handsome profits, buying gold per se should not be touted as a good investment. After all, gold earns no interest and its quality never changes. It's static, and does not grow as sound investments should.
...
Holding gold is protection or insurance against government's proclivity to debase its currency. The purchasing power of gold goes up not because it's a so-called good investment; it goes up in value only because the paper currency goes down in value. In our current situation, that means the dollar.
One of the characteristics of commodity money-- one that originated naturally in the marketplace-- is that it must serve as a store of value. Gold and silver meet that test-- paper does not. Because of this profound difference, the incentive and wisdom of holding emergency funds in the form of gold becomes attractive when the official currency is being devalued. It's more attractive than trying to save wealth in the form of a fiat currency, even when earning some nominal interest. The lack of earned interest on gold is not a problem once people realize the purchasing power of their currency is declining faster than the interest rates they might earn. The purchasing power of gold can rise even faster than increases in the cost of living.
The point is that most who buy gold do so to protect against a depreciating currency rather than as an investment in the classical sense. Americans understand this less than citizens of other countries; some nations have suffered from severe monetary inflation that literally led to the destruction of their national currency. Though our inflation-- i.e. the depreciation of the U.S. dollar-- has been insidious, average Americans are unaware of how this occurs. For instance, few Americans know nor seem concerned that the 1913 pre-Federal Reserve dollar is now worth only four cents. Officially, our central bankers and our politicians express no fear that the course on which we are set is fraught with great danger to our economy and our political system. The belief that money created out of thin air can work economic miracles, if only properly “managed,” is pervasive in D.C.
...
In wartime, many nations actually operated counterfeiting programs to undermine our dollar, but never to a disastrous level. The enemy knew how harmful excessive creation of new money could be to the dollar and our economy. But it seems we never learned the dangers of creating new money out of thin air. We don't need an Arab nation or the Chinese to undermine our system with a counterfeiting operation. We do it ourselves, with all the disadvantages that would occur if others did it to us. Today we hear threats from some Arab, Muslim, and far Eastern countries about undermining the dollar system- not by dishonest counterfeiting, but by initiating an alternative monetary system based on gold. Wouldn't that be ironic? Such an event theoretically could do great harm to us. This day may well come, not so much as a direct political attack on the dollar system but out of necessity to restore confidence in money once again.
....
Since 2001 the dollar has been devalued by 60%.
In 1934 FDR devalued the dollar by 41%.
In 1971 Nixon devalued the dollar by 7.9%.
In 1973 Nixon devalued the dollar by 10%.
These were momentous monetary events, and every knowledgeable person worldwide paid close attention. Major changes were endured in 1979 and 1980 to save the dollar from disintegration. This involved a severe recession, interest rates over 21%, and general price inflation of 15%.
Today we face a 60% devaluation and counting, yet no one seems to care. It's of greater significance than the three events mentioned above. And yet the one measurement that best reflects the degree of inflation, the Fed and our government deny us. Since March, M3 reporting has been discontinued. For starters, I'd like to see Congress demand that this report be resumed. I fully believe the American people and Congress are entitled to this information. Will we one day complain about false intelligence, as we have with the Iraq war? Will we complain about not having enough information to address monetary policy after it's too late?
If ever there was a time to get a handle on what sound money is and what it means, that time is today.
"Fire cannot kill a dragon." -Daenerys Targaryen, Game of Thrones
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Re: Yellowcake or Golden Bomb?
#157676
05/14/06 07:38 AM
05/14/06 07:38 AM
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Joined: Aug 2002
Posts: 15,058
The Slippery Slope
plawrence
RIP StatMan
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RIP StatMan
Joined: Aug 2002
Posts: 15,058
The Slippery Slope
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I'm totally 100% unsure about this, but I believe that there's some type of prohibition about Americans holding gold or hoarding gold or something.
Maybe I'm thinking about the fact that the U.S. Monetary System is no longer on the "Gold Standard" (i.e there isn't an equal amount of gold in a vault at Fort Kox to equal the dollars out there, and we can't redeem our dollars for gold - or was it silver? - with the government like we once could.)
Maybe someone can fill us in on what I'm thinking of or talking about, or tell me if I'm totally off the wall or what.
"Difficult....not impossible"
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Re: Yellowcake or Golden Bomb?
#157677
05/14/06 07:49 AM
05/14/06 07:49 AM
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Joined: Jun 2004
Posts: 5,602
Yunkai
afsaneh77
OP
Mother of Dragons
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OP
Mother of Dragons
Joined: Jun 2004
Posts: 5,602
Yunkai
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I found an article about what you are saying: Presidential Executive Order 6102, April 5, 1933, made it illegal to "hoard" gold. The order exempted anyone whose "usual and customary" business required gold. (Dentists and jewelers come to mind. Electronic fabricators would come under this once electronics was invented.) Anyone could own up to $100 in gold coin. In 1933, $100 was two or three months wages for the average worker, about $6000 to $10,000 in today's money. But the threat isn't coming from within the US (aside from awful foreign policy leading to this problem), it actually comes from outsiders who have lost faith in the US dollar because of its constant devaluation. It is not illegal to buy and keep gold here. I don't think it is illegal in many countries either.
"Fire cannot kill a dragon." -Daenerys Targaryen, Game of Thrones
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Re: Yellowcake or Golden Bomb?
#157679
05/15/06 03:25 PM
05/15/06 03:25 PM
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Joined: Jun 2004
Posts: 5,602
Yunkai
afsaneh77
OP
Mother of Dragons
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OP
Mother of Dragons
Joined: Jun 2004
Posts: 5,602
Yunkai
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DS, Still with the price of $685 per ounce today, the devaluation of the dollar has reached to 63%, remember the article is dated back in April when gold was around $600 per ounce. Long story short, the US government has made paper money and shared or better say seized over 60% value of a dollar without notice with everyone whose funds was in the form of dollar, bluffing with no gold back up. As an example of what's happening around the world, stock market in the Persian Gulf region, which was based on dollar has come to halt and many have exchanged their funds for gold. They are calling the bluff of the US government and since the request for gold is actually more than what dollar can accommodate, the price has been rising each and everyday, and that could result in a reform in monetary system for trade across the world. After all, who wants a currency that drops in the value each and every day? But apparently no one in the US seems to be concerned. If it doesn't get much media attention, it is not important. 
"Fire cannot kill a dragon." -Daenerys Targaryen, Game of Thrones
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Re: Yellowcake or Golden Bomb?
#157680
05/15/06 06:09 PM
05/15/06 06:09 PM
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Joined: Oct 2001
Posts: 19,554
AZ
Turnbull
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Joined: Oct 2001
Posts: 19,554
AZ
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Originally posted by plawrence:
I'm totally 100% unsure about this, but I believe that there's some type of prohibition about Americans holding gold or hoarding gold or something.
Maybe I'm thinking about the fact that the U.S. Monetary System is no longer on the "Gold Standard" (i.e there isn't an equal amount of gold in a vault at Fort Kox to equal the dollars out there, and we can't redeem our dollars for gold - or was it silver? - with the government like we once could.)
Maybe someone can fill us in on what I'm thinking of or talking about, or tell me if I'm totally off the wall or what. Gold, as Ian Fleming wrote in "Goldfinger," is "the talismen of fear." Until 1933, all US paper currency was backed by gold. Anyone--private citizens and foreign governments--could redeem paper money for gold bars or gold coin at any time. When the banks failed, people began cashing in their gold certificates (as paper money was officially called) for bullion, undermining the value of the dollar abroad. That's why the law was passed taking gold coin and gold certificates (paper that could be redeemed for gold) out of circulation. The government also pegged the price of gold at $35/ounce, and decreed that anyone who wanted to sell gold had to sell it to the government at the official price. Numismatic users (collectors) were exempted. Gold continued to be the backing for international currencies. And foreign governments could redeem dollars (paper money, bank transfers, etc.) as gold bars from the Federal Reserve Bank of New York and the US Gold Depository at Fort Knox. In the mid-Sixties, as inflation took off in America, nervous overseas governments (led by France) started cashing in all their US currency for gold, which depleted our gold reserves and seriously weakened the dollar. In response, the US, through the International Monetary Fund, created a system of "Special Drawing Rights" that eased the immediate pressure on gold reserves. SDRs are based on gold, but don't have the same dollar-for-bullion redemptive rights. After that, US citizens were permitted to trade in gold again.
Ntra la porta tua lu sangu � sparsu,
E nun me mporta si ce muoru accisu...
E s'iddu muoru e vaju mparadisu
Si nun ce truovo a ttia, mancu ce trasu.
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Re: Yellowcake or Golden Bomb?
#157683
05/15/06 09:29 PM
05/15/06 09:29 PM
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Joined: Aug 2002
Posts: 17,300
New York
Sicilian Babe
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Joined: Aug 2002
Posts: 17,300
New York
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Apple, not to hijack the thread, but I have read a few books on the case. Hauptmann swore that Isidor Fisch, a friend and business associate, had left him some things before his return to Germany, where he had died. Hauptmann said that only after Fisch's death did he discover the ransom money amongst what Fisch had left in his care. Since Fisch had supposedly swindled him out of some money, he decided to spend it.
Violet Sharpe was a maid in the Morrow household that gave the police various alibis about the night of the kidnapping. Before she could be questioned further, she took her own life.
Hauptmann never admitted his guilt. He said that the police were desperate to convict someone. He brought up the rather valid point that, as a carpenter, why would he have ripped up floorboards from his attic floor (as the prosecution claimed) to construct a flimsy ladder to be used to climb to the Lindbergh baby's window, when he had access to new wood. And why did the rest of the ransom money never turn up?
And why did Dr. Condon, an allegedly uninvolved man who volunteered to help Lindbergh with no hidden agenda, advertise for the kidnappers in The Bronx Home News, a paper with a limited circulation, and virtually none outside the borough? Was it just coincidence that he and Hauptmann were both from the Bronx?
There was enough doubt. He may have been involved, but I don't think he acted alone. His wife swore he was innocent and fought to clear his name until his death.
President Emeritus of the Neal Pulcawer Fan Club
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Re: Yellowcake or Golden Bomb?
#157687
05/16/06 12:12 PM
05/16/06 12:12 PM
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Joined: Aug 2002
Posts: 17,300
New York
Sicilian Babe
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Joined: Aug 2002
Posts: 17,300
New York
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Interesting site, TB. I have read the Scaduto book. I found some points valid, some a bit far-fetched, but it's obvious that the police and prosecutors were looking for a scapegoat, and Hauptmann was it. Was he involved? Who knows, but I know he never would've been convicted today, given the same evidence. There is also speculation that the corpse found was not that of the Lindbergh baby. The baby had had a physical not long before his kidnapping, and the baby's length at the time of his doctor's visit do not match those of the corpse's. Also, the area had been searched extensively after the kidnapping. How was the corpse overlooked, yet found later by a truck driver?
Anyway, I apologize again for hijacking the thread. Back to gold!!
President Emeritus of the Neal Pulcawer Fan Club
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Re: Yellowcake or Golden Bomb?
#157688
05/17/06 06:36 AM
05/17/06 06:36 AM
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Joined: Jun 2004
Posts: 5,602
Yunkai
afsaneh77
OP
Mother of Dragons
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OP
Mother of Dragons
Joined: Jun 2004
Posts: 5,602
Yunkai
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Originally posted by Sicilian Babe:
Anyway, I apologize again for hijacking the thread. Back to gold!! Not sure who is this directed at, but it was a fascinating discussion. Besides, I do it all the time, and with not such interesting sidetracks. So No biggie, I'm actually glad you guys gave it a few bumps. I'm still amazed as how no one cares about this.
"Fire cannot kill a dragon." -Daenerys Targaryen, Game of Thrones
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Re: Yellowcake or Golden Bomb?
#157689
05/17/06 12:05 PM
05/17/06 12:05 PM
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Joined: Oct 2001
Posts: 19,554
AZ
Turnbull
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Joined: Oct 2001
Posts: 19,554
AZ
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Originally posted by afsaneh77:
I'm still amazed as how no one cares about this. afsaneh, I think there are several cultural issues here that might help you understand why no one seems to be excited about Dr. Paul and his speech: First, Americans have been off the gold standard since 1933. Before that, a lot of Americans saw the gold standard as a tool of the rich. Farmers, laborers and other working class people wanted "easy money" to lighten their debts. William Jennings Bryan, a three-time Presidential candidate around the turn of the century, in one of the most famous speeches in American political history, denounced the gold standard ("You shall not crucify mankind upon a cross of gold"). So, for most present day Americans, gold is an abstraction. Relatively few Americans speculate in gold. Speculation soared when our Congress lifted the ban on gold trading and allowed the price to float to the market. But prices quickly stabilized, and investors returned to securities rather than bullion. Second, inflation, while a serious problem that erodes wealth, has always been relatively mild in America compared with other countries. Americans have never experienced the wild inflation of currency that wrecked, say, Weimar Germany or is now destroying Zimbabwe. When inflation does become an issue here, most Americans think "rising prices," rather than "weak currency"--and those that do usually are Americans traveling or doing business abroad. Even fewer relate it to the price of gold. Third, Rep. Paul is a "libertarian," part of a small but vocal minority whose general philosophy advocates drastic reductions in the size, scope and spending of government at every level. Many libertarians also advocate, as does Dr. Paul, a return to the gold standard as a way to "discipline" government to stop borrowing and printing money to pay for government debts. Many millions of Americans like some of the ideas associated with libertarians (like lower taxes and less regulation), but are unwilling to make the sacrifices that would be required, because they need the services that government provides.
Ntra la porta tua lu sangu � sparsu,
E nun me mporta si ce muoru accisu...
E s'iddu muoru e vaju mparadisu
Si nun ce truovo a ttia, mancu ce trasu.
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Re: Yellowcake or Golden Bomb?
#157690
05/17/06 01:02 PM
05/17/06 01:02 PM
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Joined: Aug 2001
Posts: 18,238
The Ravenite Social Club
Don Cardi
Caporegime
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Caporegime
Joined: Aug 2001
Posts: 18,238
The Ravenite Social Club
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While Gold may be used as a standard for monetarty systems in many countires, it is used extensively for the use of Jewlery, decoration, plating, dentistry, automobile manufacturing, electricity. Even it's compounds are used for both photography and in the medical industry for the treatment of cancer. As Turnbull correctly stated, few Americans speculate in Gold, for the reasons that he mentions above. Those who are most involved in the Gold markets and the precious metals markets in general are producers, funds, and hedge managers. The average person no longer invests in precious metals, be it in the form of gold coins or certificates, like they did years ago. The "trade" and the "producers" are the major players in the world precious metals markets. Gold and other precious metals speculation began to gain popularity again in the 70's, but a silver scandal involving the infamous Hunt Brothers, which came to light in the 80's, scared the average American speculator right out of the metals markets, which affected the value of Siver, Gold, Copper and Platinum. Although it has taken many years to recover, and the interest in speculating in Precious Metals has seemed to make somewhat of a comeback, the public speculation is no where near what it was leading up to the Hunt brothers silver scandal. That seemed to really scare most average investors away from speculating in Precious Metals in general. For anyone wondering who and what the Hunt Brothers scandal was, here is an exerp from Wikipedia : Nelson Bunker and brother William Herbert Hunt, together with two wealthy Arab investors, formed a company called International Metals Investment Company Ltd. with the intent of cornering the world silver market. Through their brokers on the Commodity Exchange (COMEX), Alvin Brodsky and Mark Denberg, they quickly amassed more than 200 million ounces of silver, equivalent to half the world's deliverable supply. When the Hunt brothers began accumulating silver in 1973 the price was $1.95 per ounce. Early in 1979 the price was about $5, and in 1980 the price peaked at $49.45 per ounce[1].
Once the silver market was cornered, outsiders joined the chase. The officials at COMEX moved to check this cornering of the silver market by raising margin requirements. The highly leveraged Hunt Brothers were unable to meet their margin calls, and were forced to sell. A combination of changed trading rules on the New York Metals Market (COMEX) and the intervention of the Federal Reserve put an end to the silver run. The price began to slide, culminating in a 50% one-day decline, known as Silver Thursday, on March 27, 1980 as the price plummeted from $21.62 to $10.80.
The collapse of the silver market meant huge losses for speculators. The Hunt brothers declared bankruptcy. By 1987 their liabilities had grown to nearly $2.5 billion against assets of $1.5 billion. Nelson Bunker Hunt declared bankruptcy and was convicted in August 1988 of conspiring to manipulate the market . For anyone seriously interested in learning more about this infamous scandal, there is a book written called "Manipulation on Trial : The Hunt Silver Case in Economic Perspective" written by Jeffrey C. Williams. Don Cardi 
Don Cardi Five - ten years from now, they're gonna wish there was American Cosa Nostra. Five - ten years from now, they're gonna miss John Gotti.
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Re: Yellowcake or Golden Bomb?
#157692
05/18/06 04:47 AM
05/18/06 04:47 AM
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Joined: Jun 2004
Posts: 5,602
Yunkai
afsaneh77
OP
Mother of Dragons
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OP
Mother of Dragons
Joined: Jun 2004
Posts: 5,602
Yunkai
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Thanks Turnbull and DC for your comments.
Turnbull, didn't Americans go through the same thing after WWII? Back then all countries had more problems than the US, so it didn't affect the Americans to the point of their currency being replaced by another countries' currency worldwide. But right now, China seems to be going strong, they are not involved in any war and they have let the investments to flow in their country with lighter taxes than anywhere else.
I'm not sure how bad the inflation is, but since the reports have been stopped, I suspect it must be even worse than it seems. It really doesn't matter if dollar has been off the gold standard since 1933, what matters is that it used to be more stable than any other currency against gold. But right now it continues to decline in value on a weekly or daily basis.
"Fire cannot kill a dragon." -Daenerys Targaryen, Game of Thrones
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Re: Yellowcake or Golden Bomb?
#157693
05/18/06 09:17 AM
05/18/06 09:17 AM
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Joined: Oct 2001
Posts: 19,554
AZ
Turnbull
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Joined: Oct 2001
Posts: 19,554
AZ
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afsaneh, after WWII America had the only functioning economy in the West. The dollar was incredibly strong against the currencies of other nations. I'm sure that people on these boards remember their relatives telling them that American GI's could live like kings in Europe and Asia on Army salaries of $70 or $80 a month. The US generously helped other nations to rebuild their economies with grants, loans and other aid. We also allowed other nations to erect tariff barriers against our goods, the better to help them develop their own industries. By the Sixties, when other nations had fully recovered from the war, they began to supplant America, and inflation here rose sharply. That's when entire American industries--such as shoemaking, shipbuilding and consumer electronics--disappeared abroad.
Two ironies in the rise of European and Asian economies:
1. Because their factories and infrastructures were devastated during the war, they rebuilt using the most modern equipment and techniques, while American companies continued to use old, pre-war plants. Result: manufacturing overseas became far more efficient. Today, relatively little is manufactured in the US, which is predominantly a service economy. China is taking on an increasingly large part of global manufacturing.
2. An American invention--the transistor--gave rise to the "Information Age" and the service economy: computers, universal telecommunications, the Internet, etc. Unlike other manufactured goods that depend on a nation having natural resources like iron ore or coal, transistors and other microelectronic devices are made of silicon, the second-most-abundant element on earth. And the software that powers computers is a product of minds, not of nature. As a result, formerly "have-not" nations like Japan, Singapore, South Korea, India, Pakistan, etc., became "have" nations. We used to joke that "what Japan couldn't win with steel in World War II she won with silicon in the postwar era.
Ntra la porta tua lu sangu � sparsu,
E nun me mporta si ce muoru accisu...
E s'iddu muoru e vaju mparadisu
Si nun ce truovo a ttia, mancu ce trasu.
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