US / International weight

Discussion of the Stock portion of the Permanent Portfolio

Moderator: Global Moderator

User avatar
I Shrugged
Executive Member
Executive Member
Posts: 1857
Joined: Tue Dec 18, 2012 6:35 pm

Re: US / International weight

Post by I Shrugged » Thu Jul 21, 2022 7:02 pm

How about the fact that they made you turn in the gold at 20.67 dollars, and then revalued to 33 and then 35 dollars? That had to smart.
Jack Jones
Executive Member
Executive Member
Posts: 434
Joined: Mon Aug 24, 2015 3:12 pm

Re: US / International weight

Post by Jack Jones » Fri Jul 22, 2022 11:22 am

Kbg wrote:
Thu Jul 21, 2022 2:40 pm
Jack Jones wrote:
Thu Jul 21, 2022 10:42 am
Retrospectively, how do we feel about executive order 6102? It seems like financial repression. Perhaps they needed a captive audience for the government bonds being issued w/out backing:
With gold and paper money now separated, FDR was able to increase the federal deficit by issuing bonds (debt) in exchange for paper money. He used the paper money raised through government bond issues to pay for the many government programs he initiated as part of his New Deal program.
You can't own yellow rocks, you can't grow certain plants: the war on nature.
Do you know why the government wanted it that way? And do you know the seriously negative effects a fixed monetary system (pick gold, BTC, rare seashells, whatever) has during a severe economic decline? FDR was not the first leader of a country or empire to dump the metal standard when crap seriously hit the fan. The difference between now and way back is that anyone with a decent economic/monetary background wouldn't take such a system seriously as why it sucks and the mechanics of why it sucks is quite well known.

With very few exceptions people who are gold fanboys or girls start with "it was bad and heinous" but they don't know actually why it was done and what damage was being done BY a gold based monetary system.

Did it give government more control over the monetary system, yes sir. Was that a bad thing given the problems going on, not necessarily.
Why don't you enlighten us then? It seems like you're dangling the jewels of your mind in front of us but not sharing them. You just want us to know of the jewels' existence?

You seem to be implying that prior to FDR, the government didn't have enough power to deal with economic downturns. My understanding is that even prior to FDR, the government had enough power to cause economic downturns.

How about Harry Browne? Does he qualify as someone with a decent economic/monetary background?
...the passage of the Federal Reserve Act in 1913. It was designed to end the banking panics caused by the National Banking Act. It provided for a uniform system of bank inflation throughout the country.

...Again, the cost of the war was financed largely by inflating the currency. In 1921, when the Federal Reserve System attempted to withdraw some of the excess currency, a recession ensued. Having learned its lesson, the FRS inflated the dollar with a vengeance through the bulk of the 1920s.

By 1928, the inflation was causing a run on the government's gold supply, so the money managers felt compelled to deflate. The deflation started at the end of 1928, the General Market began to reassert itself, and resources were shifting during 1929. The stock market crash in October merely confirmed what was already visible: A depression was in progress.

By 1921, the government's powers had been greater than ever. The period of the 1920s had seen more government involvement in the economy than ever before. It felt it could keep an inflationary boom going indefinitely - "fine-tuning" the economy with public works programs, farm subsidies, hundreds of other federal spending projects, and monetary management.

Thus, when the crash came in 1929, it was a gigantic crash. The Federal Reserve Act had been hailed as a way to end such depressions, but it merely helped make them larger.
It seems like government meddling w/ the money is how we got into the situation that FDR found himself in. So tell us, how did FDR's further meddling fix things for us?
Kbg
Executive Member
Executive Member
Posts: 2504
Joined: Fri May 23, 2014 4:18 pm

Re: US / International weight

Post by Kbg » Fri Jul 22, 2022 11:12 pm

Sorry Jack, not going to do your homework. Try reading actual economists and outside the gold fan world.
Jack Jones
Executive Member
Executive Member
Posts: 434
Joined: Mon Aug 24, 2015 3:12 pm

Re: US / International weight

Post by Jack Jones » Sun Jul 24, 2022 6:37 am

Jack Jones wrote:
Fri Jul 22, 2022 11:22 am
Why don't you enlighten us then? It seems like you're dangling the jewels of your mind in front of us but not sharing them. You just want us to know of the jewels' existence?
Kbg wrote:
Fri Jul 22, 2022 11:12 pm
Sorry Jack, not going to do your homework. Try reading actual economists and outside the gold fan world.
Ah, so indeed, you're keeping the jewels to yourself. That's fine, but I'm walking away doubting their existence.

Harry Browne applied his economic wisdom to the real world, and got wealthy doing so. He put his money where his mouth is. Not only that, he shared his jewels! In 1974 he advised people that:
Harry Browne, You Can Profit From a Monetary Crisis wrote:There's really no way to determine the upside potential of gold, but a conservative estimate would be $300-$500 per ounce within five years
Screen Shot 2022-07-24 at 7.26.14 AM.png
Screen Shot 2022-07-24 at 7.26.14 AM.png (551.19 KiB) Viewed 629 times
Is this not a feat of economic prowess? Seems more impressive to me than the backwards-looking economists whose job it is to fudge the CPI numbers.
https://larouchepub.com/other/editorials/2021/4824-when_arthur_burns_burned_throu.html wrote:Burns was so determined to prove that Fed monetary policy had nothing to do with the growing inflation—rather, that it was “transitory factors”—that he demanded the removal from the price indexes of, first energy, then food, then homes, then cars, etc., until only 35% of the original Consumer Price Index was left, the “core,” free of “transitory factors.”
And besides, we're just talking history here, right? The events of the past. Was there anything in Harry's account of the past that you disagree with?
User avatar
Smith1776
Executive Member
Executive Member
Posts: 2638
Joined: Fri Apr 21, 2017 6:01 pm

Re: US / International weight

Post by Smith1776 » Mon Jul 25, 2022 4:39 pm

Jack Jones wrote:
Sun Jul 24, 2022 6:37 am
Jack Jones wrote:
Fri Jul 22, 2022 11:22 am
Why don't you enlighten us then? It seems like you're dangling the jewels of your mind in front of us but not sharing them. You just want us to know of the jewels' existence?
Kbg wrote:
Fri Jul 22, 2022 11:12 pm
Sorry Jack, not going to do your homework. Try reading actual economists and outside the gold fan world.
Ah, so indeed, you're keeping the jewels to yourself. That's fine, but I'm walking away doubting their existence.

Harry Browne applied his economic wisdom to the real world, and got wealthy doing so. He put his money where his mouth is. Not only that, he shared his jewels! In 1974 he advised people that:
Harry Browne, You Can Profit From a Monetary Crisis wrote:There's really no way to determine the upside potential of gold, but a conservative estimate would be $300-$500 per ounce within five years

Screen Shot 2022-07-24 at 7.26.14 AM.png

Is this not a feat of economic prowess? Seems more impressive to me than the backwards-looking economists whose job it is to fudge the CPI numbers.
https://larouchepub.com/other/editorials/2021/4824-when_arthur_burns_burned_throu.html wrote:Burns was so determined to prove that Fed monetary policy had nothing to do with the growing inflation—rather, that it was “transitory factors”—that he demanded the removal from the price indexes of, first energy, then food, then homes, then cars, etc., until only 35% of the original Consumer Price Index was left, the “core,” free of “transitory factors.”
And besides, we're just talking history here, right? The events of the past. Was there anything in Harry's account of the past that you disagree with?
Good stuff.
The only dogma I follow is diversification.
Kbg
Executive Member
Executive Member
Posts: 2504
Joined: Fri May 23, 2014 4:18 pm

Re: US / International weight

Post by Kbg » Wed Jul 27, 2022 2:04 pm

Here ya go...homework on a platter.

1933: https://www.nber.org/system/files/worki ... w28015.pdf (sorry, you just get the synopsis)

1982: https://www.brookings.edu/wp-content/up ... h_hall.pdf

2020: https://www.nber.org/system/files/worki ... w28015.pdf

Test Question: In two words, state why all three papers conclude that the gold standard is a bad idea to be used as a monetary system

Guaranteed A+ in the course for a correct answer: In one sentence, state the big lie modern day gold standard advocates promulgate regarding inflation.

Bonus Question: What did Harry Browne do with his gold when the Fed started cutting interest rates after the Greenspan run up? (Hint: Harry saw the writing on the wall and followed the natural reaction of gold to a growing body of Fed evidence. Editorial observation...it appears Harry liked greenbacks better than gold when it came to "his" money. Truth in writing...I can't confirm Harry actually did what is purported to have been done.)

Bonus Question: Can Jack admit he's wrong when presented with evidence to the contrary of his belief system?
Last edited by Kbg on Wed Jul 27, 2022 2:16 pm, edited 1 time in total.
Kbg
Executive Member
Executive Member
Posts: 2504
Joined: Fri May 23, 2014 4:18 pm

Re: US / International weight

Post by Kbg » Wed Jul 27, 2022 2:11 pm

What the heck, let's make this a full up test.

What was the CPI yoy rate in 2021?

What was the real return of gold in 2021?

What is the CPI annualized yoy rate in 2022?

What is the real return of gold in 2022?

Please show your math for full credit.

If CPI is nothing but a big fat lie and undercounts inflation, please adjust the above gold real return numbers for the undercount.

Again, please show your math for full credit.

Interpretative Question: Is gold working as an inflation hedge recently?
Jack Jones
Executive Member
Executive Member
Posts: 434
Joined: Mon Aug 24, 2015 3:12 pm

Re: US / International weight

Post by Jack Jones » Wed Jul 27, 2022 4:17 pm

Kbg wrote:
Wed Jul 27, 2022 2:04 pm
Here ya go...homework on a platter.
That’s a lot of reading for me to do in order for you to make a point. Have you read those papers in their entirety?

Why don't you just make your point. What's with the student/teacher posturing?
User avatar
Xan
Administrator
Administrator
Posts: 4038
Joined: Tue Mar 13, 2012 1:51 pm

Re: US / International weight

Post by Xan » Wed Jul 27, 2022 5:36 pm

Jack Jones wrote:
Wed Jul 27, 2022 4:17 pm
Kbg wrote:
Wed Jul 27, 2022 2:04 pm
Here ya go...homework on a platter.
That’s a lot of reading for me to do in order for you to make a point. Have you read those papers in their entirety?

Why don't you just make your point. What's with the student/teacher posturing?
That's a great question. Could you just tell us what you think, Kbg, and ideally why? Parsing your Socratic posts is an exercise in frustration.
Kbg
Executive Member
Executive Member
Posts: 2504
Joined: Fri May 23, 2014 4:18 pm

Re: US / International weight

Post by Kbg » Wed Jul 27, 2022 6:01 pm

Xan wrote:
Wed Jul 27, 2022 5:36 pm
Jack Jones wrote:
Wed Jul 27, 2022 4:17 pm
Kbg wrote:
Wed Jul 27, 2022 2:04 pm
Here ya go...homework on a platter.
That’s a lot of reading for me to do in order for you to make a point. Have you read those papers in their entirety?

Why don't you just make your point. What's with the student/teacher posturing?
That's a great question. Could you just tell us what you think, Kbg, and ideally why? Parsing your Socratic posts is an exercise in frustration.
Xan,

Debating in the Covid world hardened me. I wasted way too much of my life rebutting pure BS only to be confronted with "well whattabout." I just refuse to play that game anymore nor do I think I owe anyone a summary of anything. You either want to challenge your thinking or you do not. If someone does then they'll take the time to do so. If they don't then they are just wasting my time (and theirs).

However, in order to not be a complete curmudgeon I suggest the 1982 paper. It's not a difficult read and goes into a couple hundred years of history...and the bottom line is pretty much accepted economic wisdom. (Please spare me the I don't like your expert(s) attack in any follow on replies).

I completely don't mind being challenged in any of my views and will reverse/change my thoughts pretty quickly...but I expect some decent supporting counterevidence and Jack provided an anecdote of when Harry made a good timing call on gold. It didn't address what I brought up at all.
Kbg
Executive Member
Executive Member
Posts: 2504
Joined: Fri May 23, 2014 4:18 pm

Re: US / International weight

Post by Kbg » Wed Jul 27, 2022 6:03 pm

And I read two fully...and skimmed the 2020 paper which has the same bottom line.
User avatar
vnatale
Executive Member
Executive Member
Posts: 7246
Joined: Fri Apr 12, 2019 8:56 pm
Location: Massachusetts
Contact:

Re: US / International weight

Post by vnatale » Wed Jul 27, 2022 9:50 pm

Kbg wrote:
Wed Jul 27, 2022 2:04 pm

Here ya go...homework on a platter.

1933: https://www.nber.org/system/files/worki ... w28015.pdf (sorry, you just get the synopsis)

1982: https://www.brookings.edu/wp-content/up ... h_hall.pdf

2020: https://www.nber.org/system/files/worki ... w28015.pdf

Test Question: In two words, state why all three papers conclude that the gold standard is a bad idea to be used as a monetary system

Guaranteed A+ in the course for a correct answer: In one sentence, state the big lie modern day gold standard advocates promulgate regarding inflation.

Bonus Question: What did Harry Browne do with his gold when the Fed started cutting interest rates after the Greenspan run up? (Hint: Harry saw the writing on the wall and followed the natural reaction of gold to a growing body of Fed evidence. Editorial observation...it appears Harry liked greenbacks better than gold when it came to "his" money. Truth in writing...I can't confirm Harry actually did what is purported to have been done.)

Bonus Question: Can Jack admit he's wrong when presented with evidence to the contrary of his belief system?


After having gone through the 56 page 1982 paper quite quickly:

Test Question (and not in two words): "the purchasing power of gold is so unstable that fixing the gold content of the dollar
is undesirable."

Guranteed A+: Would eliminate inflation and preserve a noninflationary environment. However, this is not supported by examining what occurred during periods of the historical gold standard. "Price stability was not attained, either in the short run or in the long run, either during the period of the gold standard proper or over a longer period during which gold held dominant influence."

By the way did you notice this footnote which cites "Lawrence Summers" which is presumably our current day "Larry Summers"?

Capturee.JPG
Capturee.JPG (100.67 KiB) Viewed 465 times
Above provided by: Vinny, who always says: "I only regret that I have but one lap to give to my cats." AND "I'm a more-is-more person."
Kbg
Executive Member
Executive Member
Posts: 2504
Joined: Fri May 23, 2014 4:18 pm

Re: US / International weight

Post by Kbg » Wed Jul 27, 2022 11:31 pm

A+ Vinny.

Gold fans have a view of the past that is pure fiction when it comes to what gold does and doesn’t do monetarily. OBTW, this also applies to BTC.

I’m not a gold hater, I’ve got some accounts with as much as 20% dedicated to paper gold but it isn’t because I think it’s a great USD replacement.
User avatar
I Shrugged
Executive Member
Executive Member
Posts: 1857
Joined: Tue Dec 18, 2012 6:35 pm

Re: US / International weight

Post by I Shrugged » Thu Jul 28, 2022 4:29 pm

Banks create money through fractional reserve lending. They did that during the gold eras too. Sure, it’s not perfect. Maybe the present system is better. It’s better for inflating when you need to pay someone without having the means to pay. Temporarily of course! I mean, we’d never let it snowball….

There’s a lot that was good about the gold system(s). Much prosperity was achieved under them.

One of these days the current system will be discredited too. Deservedly so. I’m seeing more Fed bashing in mainstream places than ever before. But hey, maybe it’s the best horse in the glue factory.
User avatar
I Shrugged
Executive Member
Executive Member
Posts: 1857
Joined: Tue Dec 18, 2012 6:35 pm

Re: US / International weight

Post by I Shrugged » Thu Jul 28, 2022 4:42 pm

If anyone ever wants to hear the pro gold standard argument, watch just about any interview of Jim Grant on YouTube. He doesn’t do a ton but he’s there.

Edit, well I’ll be damned, he’s gotten modern, he has a channel. It looks to have long form episodes on various economic topics.
https://youtube.com/channel/UCftwhto5Dp5fmQK0t5ZAJSw
User avatar
vnatale
Executive Member
Executive Member
Posts: 7246
Joined: Fri Apr 12, 2019 8:56 pm
Location: Massachusetts
Contact:

Re: US / International weight

Post by vnatale » Thu Jul 28, 2022 6:42 pm

I Shrugged wrote:
Thu Jul 28, 2022 4:29 pm

Banks create money through fractional reserve lending. They did that during the gold eras too. Sure, it’s not perfect. Maybe the present system is better. It’s better for inflating when you need to pay someone without having the means to pay. Temporarily of course! I mean, we’d never let it snowball….

There’s a lot that was good about the gold system(s). Much prosperity was achieved under them.

One of these days the current system will be discredited too. Deservedly so. I’m seeing more Fed bashing in mainstream places than ever before. But hey, maybe it’s the best horse in the glue factory.


I believe that that 56 page 1982 article above provides abundant evidence that the historical record does not support that assertion.
Above provided by: Vinny, who always says: "I only regret that I have but one lap to give to my cats." AND "I'm a more-is-more person."
User avatar
I Shrugged
Executive Member
Executive Member
Posts: 1857
Joined: Tue Dec 18, 2012 6:35 pm

Re: US / International weight

Post by I Shrugged » Thu Jul 28, 2022 7:43 pm

vnatale wrote:
Thu Jul 28, 2022 6:42 pm
I Shrugged wrote:
Thu Jul 28, 2022 4:29 pm
Banks create money through fractional reserve lending. They did that during the gold eras too. Sure, it’s not perfect. Maybe the present system is better. It’s better for inflating when you need to pay someone without having the means to pay. Temporarily of course! I mean, we’d never let it snowball….

There’s a lot that was good about the gold system(s). Much prosperity was achieved under them.
I believe that that 56 page 1982 article above provides abundant evidence that the historical record does not support that assertion.
The whole of the Industrial Revolution occurred on gold standards. Doesn’t mean causation, but much progress and prosperity was achieved.
User avatar
vnatale
Executive Member
Executive Member
Posts: 7246
Joined: Fri Apr 12, 2019 8:56 pm
Location: Massachusetts
Contact:

Re: US / International weight

Post by vnatale » Thu Jul 28, 2022 8:26 pm

I Shrugged wrote:
Thu Jul 28, 2022 7:43 pm

vnatale wrote:
Thu Jul 28, 2022 6:42 pm

I Shrugged wrote:
Thu Jul 28, 2022 4:29 pm

Banks create money through fractional reserve lending. They did that during the gold eras too. Sure, it’s not perfect. Maybe the present system is better. It’s better for inflating when you need to pay someone without having the means to pay. Temporarily of course! I mean, we’d never let it snowball….

There’s a lot that was good about the gold system(s). Much prosperity was achieved under them.


I believe that that 56 page 1982 article above provides abundant evidence that the historical record does not support that assertion.


The whole of the Industrial Revolution occurred on gold standards. Doesn’t mean causation, but much progress and prosperity was achieved.


What period of time do you define as the Industrial Revolution? I assume you include both England and the United States as being part of it?

This is page 5 from the 56 page paper. Does anything in it conform with your beliefs?

Capture.JPG
Capture.JPG (90.25 KiB) Viewed 375 times
Above provided by: Vinny, who always says: "I only regret that I have but one lap to give to my cats." AND "I'm a more-is-more person."
Kbg
Executive Member
Executive Member
Posts: 2504
Joined: Fri May 23, 2014 4:18 pm

Re: US / International weight

Post by Kbg » Thu Jul 28, 2022 10:03 pm

I Shrugged wrote:
Thu Jul 28, 2022 7:43 pm
vnatale wrote:
Thu Jul 28, 2022 6:42 pm
I Shrugged wrote:
Thu Jul 28, 2022 4:29 pm
Banks create money through fractional reserve lending. They did that during the gold eras too. Sure, it’s not perfect. Maybe the present system is better. It’s better for inflating when you need to pay someone without having the means to pay. Temporarily of course! I mean, we’d never let it snowball….

There’s a lot that was good about the gold system(s). Much prosperity was achieved under them.
I believe that that 56 page 1982 article above provides abundant evidence that the historical record does not support that assertion.
The whole of the Industrial Revolution occurred on gold standards. Doesn’t mean causation, but much progress and prosperity was achieved.
And we've kept on progressing and are MORE prosperous in every wealth measure than ever before with a fiat system.

Here's the thing, money is nothing more than a derivative for everything purchasable or payoffable.
Let that one sink in for a bit, but I will help accelerate the brain registration process.

Derivatives at the end of the day are going to follow the thing they represent fundamentally and always which means inflation and deflation are going to be primarily driven by the basic surplus or shortage of all goods in aggregate. The economy is the dog and money is the tail...always. This does not mean the tail doesn't matter some...but it is not the dog.

Here's the dog...https://corporatefinanceinstitute.com/r ... -real-gdp/

A mild exasperation on my part is I'm pretty sure every person on this board was an adult and alive from 2008-2019 a period of unprecedented monetary growth and the Fed could not force inflation to occur no matter how much money they printed...and then of course there is the going on 3 decade case of Japan which is the poster child for printing money != inflation. And, why can't the Bank of Japan get inflation to take off? Because several things in the "dog equation" are shrinking and those things are real, not derivatives...and the derivative (the Yen) is following.

Three decades of proof in one country and 12 years in ours. Come on folks...just...look...around.
Jack Jones
Executive Member
Executive Member
Posts: 434
Joined: Mon Aug 24, 2015 3:12 pm

Re: US / International weight

Post by Jack Jones » Fri Jul 29, 2022 1:39 pm

Jack Jones wrote:
Fri May 20, 2022 6:22 pm
Kbg wrote:
Thu May 12, 2022 8:26 am
Side comment and slightly snarky remark...I love it when folks assert that gold is great due to lack of government control. That's an idea that started in the 1970s and is a shill point made by purveyors of gold.
Gold is great due to lack of government control!
Kbg wrote:
Thu May 12, 2022 11:29 pm
When I wrote the above I was specifically referring to governments can regulate anything they want when they want (assuming the powers that be want to). Gold has been no exception.
They cannot regulate more gold into existence, so gold holders are protected from devaluation due to lack of government control on the gold supply.

Consider Executive Order 6102. The government had to ask nicely for everyone to turn in their gold.
People actually turned in 21.9 (Nabers & Chongchua, 2009) of the gold that was antecedently in circulation. The government wrote off the rest as lost or destroyed. However a couple of years later once gold possession was allowed again, an equivalent amount of gold was miraculously found and created. In rare coin shops all across the country, you could notice gold coins that were dated 1933 or earlier. This can be proof that proves that there have been many citizens that didn’t fall prey to those that were attempting to get something for nothing.
It was estimated that 50% of the gold in private citizen’s hands was collected. The rest was either buried or illegally sent out of the country. An estimated 500 tons of gold were taken over as a result of this Executive Order. Executive Order 6102 made it illegitimate for Americans to possess gold. (RCW Financial, 2012).
If the government wants to seize your digital $USD money, it just happens. You just wake up, and the numbers are gone from your bank account. This is government control. With gold, you can instead quietly pass it down to your children until saner times prevail.

https://www.investitin.com/history-of-g ... fiscation/
Kbg wrote:
Mon May 23, 2022 12:22 pm
Jack,

Read up on people who held gold in the 1930s when the government confiscated it/made it basically useless. There's plenty to be found googleing. You can pick totalitarian Germany or democratic US. Between your theory and historical reality, I know what I'm going with.

I have a decent chunk of paper gold, but for anyone willing to really put their gold beliefs under a microscope most of the stuff you think and read about gold just doesn't hold up historically. Gold IS marketed...don't believe the hype.

If you are a doomer, be a serious doomer...land, knowing how to farm, guns and food storage.

Sorry I missed a line...thanks for the info...now do tell what actual use the gold was (assuming you wanted to buy stuff)
Probably as useful as a pound of cannabis was in the 90's. In other words, it was an illegal commodity that still had a market.

Past this point, Kbg began steering the discussion towards the gold standard, but I think the points above still stand:
  • The government cannot print more gold.
  • The government cannot seize the gold they don't know about. See Rule #13 (Keep some Assets Outside Your Own Country)

P.S. I'm still working on your reading assignments.
Jack Jones
Executive Member
Executive Member
Posts: 434
Joined: Mon Aug 24, 2015 3:12 pm

Re: US / International weight

Post by Jack Jones » Fri Jul 29, 2022 2:19 pm

Kbg wrote:
Thu Jul 28, 2022 10:03 pm
Derivatives at the end of the day are going to follow the thing they represent fundamentally and always which means inflation and deflation are going to be primarily driven by the basic surplus or shortage of all goods in aggregate. The economy is the dog and money is the tail...always. This does not mean the tail doesn't matter some...but it is not the dog.

Here's the dog...https://corporatefinanceinstitute.com/r ... -real-gdp/

A mild exasperation on my part is I'm pretty sure every person on this board was an adult and alive from 2008-2019 a period of unprecedented monetary growth and the Fed could not force inflation to occur no matter how much money they printed...and then of course there is the going on 3 decade case of Japan which is the poster child for printing money != inflation. And, why can't the Bank of Japan get inflation to take off? Because several things in the "dog equation" are shrinking and those things are real, not derivatives...and the derivative (the Yen) is following.

Three decades of proof in one country and 12 years in ours. Come on folks...just...look...around.
It seems like your point is that printing money does not always lead to inflation. The economy is a bigger factor in the inflation equation. Seems reasonable. However, even you point out that the tail matters some.

All other things being equal, a dollar printed means that all other dollars are worth less, right?

Even if the money is a smaller factor in the equation, can't the stewards of the economy fudge that factor so badly that things get out of whack?

M2 Money Supply
Screen Shot 2022-07-29 at 3.22.25 PM.png
Screen Shot 2022-07-29 at 3.22.25 PM.png (222.7 KiB) Viewed 330 times
Kbg
Executive Member
Executive Member
Posts: 2504
Joined: Fri May 23, 2014 4:18 pm

Re: US / International weight

Post by Kbg » Sat Jul 30, 2022 2:04 pm

Jack,

Legit question; why should anyone care what derivative they use to purchase something?

My personal second fave involves plastic and a chip. My absolute fave is when I tap my phone on a plastic box and I walk out of the store with stuff.

Try doing that with gold outside a precious metals store or a pawn shop.

I’ll be super clear on the basic facts…gold is in the periodic table and is shiny. End of story. It was used successfully and unsuccessfully as money. It isn’t anymore and is a very poor form of money and in today’s world a highly inconvenient one (assuming anyone would use it as such.)
Kbg
Executive Member
Executive Member
Posts: 2504
Joined: Fri May 23, 2014 4:18 pm

Re: US / International weight

Post by Kbg » Sat Jul 30, 2022 3:19 pm

Jack Jones wrote:
Fri Jul 29, 2022 2:19 pm
Kbg wrote:
Thu Jul 28, 2022 10:03 pm
Derivatives at the end of the day are going to follow the thing they represent fundamentally and always which means inflation and deflation are going to be primarily driven by the basic surplus or shortage of all goods in aggregate. The economy is the dog and money is the tail...always. This does not mean the tail doesn't matter some...but it is not the dog.

Here's the dog...https://corporatefinanceinstitute.com/r ... -real-gdp/

A mild exasperation on my part is I'm pretty sure every person on this board was an adult and alive from 2008-2019 a period of unprecedented monetary growth and the Fed could not force inflation to occur no matter how much money they printed...and then of course there is the going on 3 decade case of Japan which is the poster child for printing money != inflation. And, why can't the Bank of Japan get inflation to take off? Because several things in the "dog equation" are shrinking and those things are real, not derivatives...and the derivative (the Yen) is following.

Three decades of proof in one country and 12 years in ours. Come on folks...just...look...around.
It seems like your point is that printing money does not always lead to inflation. The economy is a bigger factor in the inflation equation. Seems reasonable. However, even you point out that the tail matters some.

All other things being equal, a dollar printed means that all other dollars are worth less, right?

Even if the money is a smaller factor in the equation, can't the stewards of the economy fudge that factor so badly that things get out of whack?

M2 Money Supply
Screen Shot 2022-07-29 at 3.22.25 PM.png
Not super compelling, you should post a graph of M2 velocity. Money supply alone is a pretty useless statistic.

The main précis of your argument is you don’t like government control over money. If owning gold as a form of expressing your political beliefs is something you feel good about, who am I to dissuade you?

But recognize you are making a political argument and it has not much to do with whether or not gold is a good form of money…which it isn’t.
Jack Jones
Executive Member
Executive Member
Posts: 434
Joined: Mon Aug 24, 2015 3:12 pm

Re: US / International weight

Post by Jack Jones » Sat Jul 30, 2022 4:51 pm

Kbg wrote:
Sat Jul 30, 2022 2:04 pm
Jack,

Legit question; why should anyone care what derivative they use to purchase something?
You didn't answer my questions, but sure. People obviously care. There's a law about it:

https://en.wikipedia.org/wiki/Gresham%27s_law

So for example, in a hyperinflationary environment you're going to spend the derivative that is most subject to inflation. E.g. you'll spend your Venezuelan currency and hoard $USD.
Last edited by Jack Jones on Sat Jul 30, 2022 5:55 pm, edited 1 time in total.
Jack Jones
Executive Member
Executive Member
Posts: 434
Joined: Mon Aug 24, 2015 3:12 pm

Re: US / International weight

Post by Jack Jones » Sat Jul 30, 2022 5:01 pm

Kbg wrote:
Sat Jul 30, 2022 3:19 pm
The main précis of your argument is you don’t like government control over money. If owning gold as a form of expressing your political beliefs is something you feel good about, who am I to dissuade you?

But recognize you are making a political argument and it has not much to do with whether or not gold is a good form of money…which it isn’t.
I was never making an argument that gold is a good form of money. You steered the discussion in that direction for some reason.
Kbg wrote:
Thu May 12, 2022 8:26 am
Side comment and slightly snarky remark...I love it when folks assert that gold is great due to lack of government control. That's an idea that started in the 1970s and is a shill point made by purveyors of gold. Having said this...I have a decent allocation in paper gold because of it's behavior as an asset class since the 1970s has been useful in a portfolio...but one can make a good argument against it and not be wrong either.
Jack Jones wrote:
Fri May 20, 2022 6:22 pm
Kbg wrote:
Thu May 12, 2022 8:26 am
Side comment and slightly snarky remark...I love it when folks assert that gold is great due to lack of government control. That's an idea that started in the 1970s and is a shill point made by purveyors of gold.
Gold is great due to lack of government control!
Kbg wrote:
Thu May 12, 2022 11:29 pm
When I wrote the above I was specifically referring to governments can regulate anything they want when they want (assuming the powers that be want to). Gold has been no exception.
They cannot regulate more gold into existence, so gold holders are protected from devaluation due to lack of government control on the gold supply.

Consider Executive Order 6102. The government had to ask nicely for everyone to turn in their gold.
People actually turned in 21.9 (Nabers & Chongchua, 2009) of the gold that was antecedently in circulation. The government wrote off the rest as lost or destroyed. However a couple of years later once gold possession was allowed again, an equivalent amount of gold was miraculously found and created. In rare coin shops all across the country, you could notice gold coins that were dated 1933 or earlier. This can be proof that proves that there have been many citizens that didn’t fall prey to those that were attempting to get something for nothing.
It was estimated that 50% of the gold in private citizen’s hands was collected. The rest was either buried or illegally sent out of the country. An estimated 500 tons of gold were taken over as a result of this Executive Order. Executive Order 6102 made it illegitimate for Americans to possess gold. (RCW Financial, 2012).
If the government wants to seize your digital $USD money, it just happens. You just wake up, and the numbers are gone from your bank account. This is government control. With gold, you can instead quietly pass it down to your children until saner times prevail.

https://www.investitin.com/history-of-g ... fiscation/
I was talking about gold being great from the standpoint of someone who owns it as an asset. However, it seems I inadvertently stepped into the role of the gold standard shill that you so desperately wanted to argue with.

Just curious, have you ever owned physical gold?
Post Reply