Well, THAT Was Interesting

227
Wed, Apr 25, 2012 - 4:45pm

What a day, huh? First we saw some May silver call-sellers get squeezed. Then, the FOMC statement caused a sharp selloff. Unfortunately for The Cartel, no waterfall ensued as price quickly rebounded. We now look to be on the verge of a rally. Let's get started!

I know that many folks come here only to read my blogs or to visit Pailin's Corner. In doing so, many miss out on the terrific information that is shared in the comments. Rather than re-type my thoughts from earlier, here are some C&Ps of my comments from the previous thread:

Submitted by Turd Ferguson on April 25, 2012 - 10:46am.
If anyone is willing to gamble in the casino, now would be the time. This reeks of a screwing of put sellers ahead of option expiry. The final beatdown before the reversal.

Submitted by Turd Ferguson on April 25, 2012 - 11:17am.
The summer is going to be hot and explosive, though, so anyone gambling should be sure to buy time, too.
Maybe (buy) the Oct or Dec (silver) $40s?
All I know is that today's action is bullshit. May call sellers have been forced to hedge by shorting futures. Just like the action we saw in late March prior to April gold option expiry. Recall that after dropping to 1630, price rallied sharply back toward 1700. Same shit here.
I expect silver back to 32 or even 33 relatively quickly, The Bernank notwithstanding.

Submitted by Turd Ferguson on April 25, 2012 - 11:21am.
A drop to 30 or just below is possible but I firmly believe that that is it.
Physical demand is very strong and there are literally tonnes waiting and hoping to be filled at $30.
EVERYTHING points to a bottom here. Longterm holders WILL NOT be disappointed.

Submitted by Turd Ferguson on April 25, 2012 - 11:48am.
And most should NOT (be trading).
However, this action reminds me of the day in early November 2010 when QE2 was announced. A beatdown headfake occurred that day prior to the announcement.
Again, if you are willing to risk a loss in the casino, this looks like an excellent opportunity to give it a whirl.

Obviously, I believe today's low was the bottom. Maybe there will be a retest but $30 silver is going to be a very difficult barrier for the permabears to break. I would still be looking to put on a speculative position here with money you are fully content to lose if you are wrong or if it is stolen from you. That said, if you absolutely feel compelled to trade in the casino, this would be a good time to give it a try.

Gold is basing above what appears to be solid support between 1625 and 1635. As our pal, Winston, pointed out earlier today, physical demand is so strong and consistent here that further, sustained drops in paper price are highly unlikely. Gold will show signs of life when it trades back above 1650 and then 1660. Let's go into more detail and begin to get excited then. For now, let's just be happy to be building such a strong base from which we can, eventually, catapult forward.

Clearly, I'm excited about silver here, too. $30 silver completes the right shoulder of our massive, reverse H&S formation and Winston has informed us about incredible demand for physical silver at that level. I am nearly 100% certain that silver won't fall again much below today's lows. As it bases here, it is preparing for Battle Royale II. Of course you remember Battle Royale I at $36 in late February and the ensuing crush. Well, Battle Royale II now lies near our old nemesis of $33. What will happen next time? I can't say for sure but I'm quite certain we won't have to wait too long to find out.

Just a quick word about open interest and the next CoT. Today's OI (basis yesterday) came in at a new low of 395,389 in gold and 122,325 in silver. Recall that yesterday, price rose by about $10 so what we clearly saw was short-covering ahead of The Bernank. No doubt many of those same shorts were put back on this morning and are now, once again, waiting to be covered. While silver rose 22c yesterday, OI fell by about 400. Clearly this was a short-covering bump, too. Please allow me to emphasize this again:

Since March 15, paper silver has fallen in price by over almost $2 yet total Comex open interest has expanded by almost 15%. There is no question in my mind that this is the result of short contracts being added. Just as the EE fleeced the over-excited longs in February, they will soon fleece the over-indulgent shorts. Just be patient.

For the CoT reporting week, gold fell about $9 while shedding 3200 in OI. Silver fell $1.22 while adding about 1000 contracts. Here's why both are ultimately positive: Gold liquidity has been wrung out and now sits patiently in the sideline, waiting to return as the charts improve. The much smaller silver market has swung from speculative long excess in late Feb to speculative short excess in late April. The EE, playing both sides of the specs for profit, will soon close the trap on the foolish spec shorts.

Finally, this short video about government debt. Not much new here for the average Turdite but, since it's presented in such a brief and simple manner, perhaps you can C&P the url and email it to your friends.

Does Government Have a Revenue or Spending Problem?

About the Author

Founder
turd [at] tfmetalsreport [dot] com ()

  227 Comments

sixdollarsilver
Apr 26, 2012 - 3:03am

yo atarangi

Just been moseying around... flat price periods are the only time the six shooters get a rest ;)

Don't worry, I get the feeling you'll be sick of me and my horse chiming in all the time pretty soon!

Driven81
Apr 26, 2012 - 3:25am

@ Victor, why wouldn't S&G go into circulation as money?

It already is brother....

Dinar & Dirham: A Halal Transaction

Fiat money can always be manipulated, but short-term, more and more people worldwide are waking up to the problems of the current fiat money system and its real solution. With respect to silver, it has always been the people's money, and the poor man's gold. Just because further exploits have been found doesn't mean any of that should change. Silver is "still" rare man. And is still valuable.

"If you don’t think that’s bad news for the Central Banking criminals, check this out. Dean reports that exchanging physical silver for everyday goods is simple, and one ounce of silver – while still representing a ridiculous 50 to 1 silver to gold ratio – goes FAR. There are 31.1 grams of silver in one troy ounce, so 1/10th of an ounce, around $3.10 in silver value (USD) will buy 5 loaves of organic wholewheat bread.

1 dirham (2.975g of 999 silver) =
1 whole organic, free-range chicken
5kg of brown rice
10kg of unbleached flour
5 loaf, organic wholewheat bread, etc.

1 dinar (4.25g of 917 gold) =
1 goat
1 sheep
1 month apartment rent

Dean writes, “Suddenly, we see true freedom on a whole new level as more and more people awaken to the nature of “divide-and-conquer” paper currencies!”

Once again we say, take THAT criminal Banksters. Good luck trying to put the genie back in the bottle now."

https://sgtreport.com/2012/04/free-people-of-the-world-unite-the-use-of-...

And haven't you heard of Peter Schiff's very trendy idea (and implementation) of creating savings accounts for physical gold, and even issuing debit cards for transactions? No difference there.

sixdollarsilver
Apr 26, 2012 - 3:36am

go london

woohoo!

TeaDrinker
Apr 26, 2012 - 3:55am

Sovereigns and Brittanias

Here in the UK it is easy to purchase gold and silver in either round or bar form however dealers are required to inform Her Majesty's Revenue and Customs (HMRC) of any transactions that add up to £9k over a given year.

This can have consequences that should be obvious not only regarding confiscation but also the fact that Capital Gains Tax (30something%) can be levied on any profit if sold.

CG Tax does not apply to 'coins of the realm'. There are many gold coins of the realm but only one silver that being a 1oz Brittania that has on nominal value if £2.

Just to confuse the matter further we have a tax known as Value Added Tax (VAT) that was originally brought in to pay for our membership of the European Union this is set at 20% at the moment. Gold is not subject to VAT, silver however is.

I buy gold Sovereigns as I see this metal as the ultimate store of value.

I buy Brittanias not because I see silver being monetised but on its fundamentals as a depleting resource. It is a tough call though knowing that 20% of my hard come by green and folding goes 'poof' and disappears into Her Maj's coffers never to be seen again.

I hear VAT on silver in Germany is set at 8%. I must go there and check it out as it is only a couple of hours on the Eurostar train.

Did Brussels a while ago, boy does that train go, nearly 200mph. It makes cars on the motorway look like they are stood still.

Great work Turd.

koan
Apr 26, 2012 - 4:20am

Bankster kryptonite!

Can't recall seeing this Bankster’s Dictionary around here before (sorry if old):

US Federal Reserve = European controlled private bank.
Savings Account = Devaluation Account, Cash Advance for Gambling Division
Gambling = Banking Primary Business Line
Fraud = Banking Secondary Business Line
Las Vegas, Macau, Atlantic City = Model for running business operations.
Inflation = Currency Devaluation through anti-free market manipulation of interest rates.
Fractional Reserve System = Fractional Expansion Citizen Bankruptcy System, BSE (Biggest Scam Ever)
Futures Markets = Manipulation Casino, SkyNet Three-Card Monte Scam
Pablo Escobar, Joaquín ‘El Chapo’ Guzmán, The Ochoa Hermanos, Yakuza = Cash Cows
El Subcomandante Marcos aka Delegado Zero = Anti-poverty activist that must be wacked and shut up
Independent Media = Terrorist
Mass Media = Allies
Allen Stanford, Bernie Madoff = Occasional Patsies and Necessary Fall Guys to appease the public’s ire at us.
Stock Markets = Manipulation Casino, SkyNet Three-Card Monte Scam
Commercial Investment Firm Rating of “Buy” and Hold” = Contrarian Indicator to SELL!
Commercial Investment Firm Rating of “Sell” = Contrarian Indicator to “BUY!”
Barbarous Relic = USD, Euro, Yen
Beta = Empty Statistic meant to impress naïve investors
Loan = Usury
USD, Euro, Yen, etc. = Fantasy Digital Idea made real by banksters to control humanity
Women’s Liberation Movement = Expansion of Tax Base from only men to men AND women
Income Taxes = Wealth Transfer from citizens to owners of central banks.
Gold = Bankster Kryptonite
Silver = Bankster Kryptonite
Truth = Banker Kyrptonite
Lies & Deception = Bankster Standard M.O.
Free Markets = Fairytale story like Santa Claus, Easter Bunny and Tooth Fairy to be taught in business schools worldwide.
Drug Lords and Underground Crime Syndicates = Provider of global banking liquidity and huge year-end bonuses
Parasite = Favorite insect
Capitalism = Dead system that was killed by Central Banking but false scapegoat we can blame when we cause economic crashes and despair
Miscellaneous Charges = Small Monthly Charges to siphon off money from bank accounts that customers will never notice or complain about
Computer = Vehicle to rig all stock markets and commodity markets with HFT programs that execute trades not possible if executed by humans and if executed in a clear and transparent market.
Boom = Unsustainable price distortions caused by interest-rate manipulation and market rigging.
Bust = Opportunity to make money twice as quickly as in a boom!
Market Crash = Engineered event to ensure the peasants will never accumulate enough wealth to rebel against us.
Rising Markets on Mondays or Tuesdays into OpEx Fridays: Ruse to sucker more people to go long in order to fleece them by the time Friday arrives.
Declining Markets on Mondays or Tuesdays into OpEx Fridays: Ruse to sucker more people to go short in order to fleece them by the time Friday arrives.
Presidents and PMs = Best puppet and marionette allies to be rewarded handsomely after they leave office (see Tony Blair and the current POTUS)
Superior Judges, SCOTUS = Made Men
War = Double Bonus! Opportunity to devalue money at faster rate than during peace time and opportunity to accumulate more wealth from interest charged on war appropriations.
Universities, Colleges and MBA programs = Re-education camps to indoctrinate students into fairytales of non-existent free markets, non-existent capitalism, and lies about how stock markets, real estate markets and economic cycles really work.
Economic Journals and University Tenure = Carrot dangled in front of economic professors to ensure that they repeat to the world the “official” party line.
Key Economic Indicators = False manipulated statistics designed to dumb down citizens into believing economy is recovering even as we increase their economic suffering
Ben Bernarnke = Shakespearean clown.
Conspiracy = Best Word to Discredit Truth about the global monetary system when the truth somehow escapes our censorship algorithms and makes it to the mainstream media we control.
Machiavelli = Role Model
Ivy League Schools = Indoctrination Camps for media representatives and professors we will send to brainwash other global regions into believing our propaganda
CNBC = The Cartoon Network.
Goldman Sachs = Rookie Farm Camp for global criminal banking syndicate.
World Bank & IMF = Banks used by Western countries to impose crushing debt on developing nations to stunt their growth.
Bailout = Transfer of Wealth from citizens to us.
TBTF = Lie used to ensure we can perpetuate fraud.
Quantitative Easing = Currency Devaluation.
Fiat Currency = Worst Possible Idea
Propaganda = Daily Financial News Feed
Compartamentalization = Process to keep good people working as cogs in the machine within the banking industry ignorant of the fact that they are inflicting massive harm upon society.

src: https://www.theundergroundinvestor.com/2012/04/the-official-bankster-dictionary/

victorthecleaner
Apr 26, 2012 - 4:35am

Never

Driven81,

Why gold will never go into circulation voluntarily is rather obvious. Assume the U.S. returns to a gold standard as Rickards proposes, say at $7000/ounce. You have a one ounce gold coin in your purse, and in addition your bank account has a balance of $7000 (which your government claims is now backed by gold). You need to pay for furniture which costs $7000. How do you pay?

Do you pay cash (using your coin) and keep the money in your bank account? Or do you pay by credit card from your bank account and keep the coin?

That's the answer to your question: Gresham's Law. Gold will not circulate as long as there is something else that can circulate.

Excalibur,

Could you explain what you wrote earlier?

This refers to the hypothetical situation in which Rickards is elected president and puts the U.S. back onto a gold standard. (Gold standard almost always means that gold is undervalued by government decree - if gold were fairly valued or even overvalued, nobody would care about the redemption option. You need gold backing only if you want to undervalue gold).

In this case, since the ECB does not back the Euro with gold, the Euro would circulate for transactions only, but everyone who wanted to save something, would simply buy the real stuff: physical gold. Then you have a paper dollar (which your government claims is backed by gold) in the U.S. compete with physical gold owned by every single saver in Europe.

Who do you think is better off in the long run?

Victor

worldend666
Apr 26, 2012 - 4:45am

Hi Victor I am more in the

Hi Victor

I am more in the FOFOA camp also but here is one thought about silver. If there are only something like 1 billion ounces of investment silver and the whole world decides to start using gold to store value and silver to transact, then 1 billion ounces is not a whole lot. It's basically 1/6th of an ounce per person or 5$ worth.

I don't know about you but I usually walk about with about 200$ in my wallet, and I guess at least 1 billion people do the same. Let's say Mr average has 30$ in his wallet. That's 5 billion adults with 150 billion$ worth of transactional money. doesn't this imply these 1 billion ounces could be worth 150$ per ounce?

Of course more silver will get mined and there would be dilution as is usually the case when silver becomes currency, but at least at the outset 150$ looks like a decent place to start.

El Gordo worldend666
Apr 26, 2012 - 5:02am

Hard to measure silver value in fiat

It's hard to contemplate the value of PM's when the fiat currencies are gone. It's more likely to value them in the number of chickens or loaves of bread they will trade for. Trying to figure out how much to carry to represent some currency value is almost impossible to contemplate, but as a measure of value for trading purposes, it will have value determined in goods and services rather than fiat. Obviously, barter will be the order of the day in the absence of a viable currency as well.

koan
Apr 26, 2012 - 5:37am

Doug Casey, well said sir, well said...

Doug: That saying about death and taxes is both evil and stupid; it's a soul-destroying and mind-destroying perversion of reality. It's evil, because it makes people reflexively accept the worst things in the world as permanent and inevitable.

https://www.zerohedge.com/news/doug-casey-taxes-and-freedom

worldend666
Apr 26, 2012 - 5:43am

@driven81

Why are you assuming under a gold standard the world will be poor? Quite the opposite I would say. A fiat regime misallocates capital in favour of the government and we know what that means.

Owtovit
Apr 26, 2012 - 5:44am
Driven81 worldend666
Apr 26, 2012 - 5:48am

@ worldend666 please reread the post

That is not my assumption.

50sQuiff
Apr 26, 2012 - 5:54am

Silver and FreeGold

Hi Victor,

I'm very much in the FreeGold camp when it comes to my metal preference, but I think we have to consider the evolving role of silver for us shrimps and ants of the world. I don't see people of modest means saving milligrams of gold. Instead, they may turn to an inferior, more volatile alternative. Much as they do now really, by choosing to save in fiat currencies. I can foresee the human superorganism redefining the role of silver and stabilizing - at least somewhat - its stock-to-flow ratio.

Of course silver has its own interesting supply and demand fundamentals, which I think makes it a very worthwhile speculation. It's also been the most manipulated commodity in history over the last 150 years or so. So I don't think a dogmatic anti-silver perspective is justified.

Will all that said, 95% of my metal buys will continue to be gold.

Excalibur
Apr 26, 2012 - 5:56am

Victor

Victor wrote

This refers to the hypothetical situation in which Rickards is elected president and puts the U.S. back onto a gold standard. (Gold standard almost always means that gold is undervalued by government decree - if gold were fairly valued or even overvalued, nobody would care about the redemption option. You need gold backing only if you want to undervalue gold).

In this case, since the ECB does not back the Euro with gold, the Euro would circulate for transactions only, but everyone who wanted to save something, would simply buy the real stuff: physical gold. Then you have a paper dollar (which your government claims is backed by gold) in the U.S. compete with physical gold owned by every single saver in Europe.

Who do you think is better off in the long run

OK talking hypothetically we can play with that scenario with Pres Rickards (PR), and let's adjust some of your assumptions. Let's assume that PR fixes the dollar to a price of gold that reflects the fair price of gold. This is a very reasonable assumption, as his current position is that this would have to a happen after a currency crisis to bring back confidence. Let's assume that PR has checked that the US does indeed have still have the gold that he believes they do. There would no need for gold to be redeemable if the confidence is there. The crisis will have wiped out old debt with the death of the fiat dollar. Tough on countries/savers holding the old dollar. Spending now has to be brought into line with revenue. We are back to a reserve currency that people have confidence in.

As for the Euro, I am going to assume that it won't exist in its current form and that it has collapsed along with the dollar. Countries that have a lot of gold in proportion to GDP (like Portugal) will have a windfall in their reserves which they can loan out to those that do not (like Ireland and UK) . The latter will have to work hard and start making things that the world wants to create wealth and pay off the loans. Every country will have to pay their way. More people than now will have to start paying their way in those countries. They will save and get a real return. That is a return to economic sanity.

As for China, well that's a whole new set of hypothetical scenarios.

That's the problem with the future, it just hasn't happened yet.

worldend666
Apr 26, 2012 - 6:03am

Driven81 sorry for misreading your

Ok, sorry for misreading your post.

Incidentally I think the reason gold is diluted in coinage is longevity of the coin more than anything else.

For gold to be circulated in coinage the world over with 7 billion people it would have to be in impracticably weak dilutions. With about 1 ounce of gold above ground for every person on the planet, producing enough coins to allow decent granularity to allow commerce to work properly would mean the lower value coins would have only a few percent of gold in them at most. These would be easy to counterfeit.

ClinkinKY
Apr 26, 2012 - 6:07am
ClinkinKY
Apr 26, 2012 - 6:08am
ClinkinKY
Apr 26, 2012 - 6:09am
Driven81 worldend666
Apr 26, 2012 - 6:10am

@Worldend666 Hey no problem

I see what you are saying...keep in mind the amount of gold and silver to go around isn't going to be determined by the amount of people on earth, but by the wealth of the nation one resides in. China is going to have a lot more gold and silver to go around than we probably will. Just like Paraguay, arguably the poorest country in the world, owns fewer dollars than the United States does.

ClinkinKY
Apr 26, 2012 - 6:11am
Driven81 victorthecleaner
Apr 26, 2012 - 6:18am

@ Victor: Gresham's law

Victor: That's the answer to your question: Gresham's Law. Gold will not circulate as long as there is something else that can circulate.

Your answer is partially true: Gold will not circulate as long as there is somethign else that can circulate......but only when a government compusorily overvalues one type of money and undervalues another. When they are not doing this, gold and silver can freely be circulated and has been countless times, for all kinds of transactions. See this wikipedia article for more information on that:

https://en.wikipedia.org/wiki/Gold_coin

Now.....the full definition of Gresham's law: "When a government compulsorily overvalues one type of money and undervalues another, the undervalued money will leave the country or disappear from circulation into hoards, while the overvalued money will flood into circulation."

https://en.wikipedia.org/wiki/Greshams_law

Note the beginning "When a government complusorily overvalues one type of money and undervalues another" Specifically in this scenario, this is what happens. Value disappears. But when the problems of fiat money are solved and a sound money policy is implemented, Gresham's law will no longer apply. People will have a sound money that they can put their confidence in. There is a growing number of nations now pressing for real value to be minted in their coins and circulated alongside their fiat.

Now, concerning this present (and temporary) situation 1st world countries find themselves in, it will indeed be difficult for someone to make such purchases of furniture in such hyperinfationary scenarios as gold being in the $7,000 range. However, that is only becasue modern mintage has not allowed for such transactions. Silver and Gold have been minted with Bullion in mind, rather than simple, ever day coinage transactions. The reason for this is because everyone has gotten so used to the stability of the dollar that there has been no need to mint coins with such amazing purity levels, for such base and seemingly inconsequential transactions like a pack of cigarrettes or a cup of coffee.

Believe me, couches to be bought and sold have been around much longer than the dollar, and longer than paper money in general. What do you think was used to purchase them with?

In my previous post, I cited the present use of precious metals coins for every day transactions, expressly done so with the abolishment of fiat money and the poverty it brings in mind. The dirham and the dinar are brought about to head off at the pass the banking cartel which seeks to destroy everyone. Indeed, even some states in the U.S. are now lobbying for sound money to be minted for the people.

Finally, notice the gold dinar is not an entire ounce of gold. It is 4.25 grams of......count it.....91.7% gold. Not even pure gold. Why? Because it doesn't have to be. It is extremely valuable on its own and the costs to purify it large scale are not justifiable. Not for base transactions like a cup of coffee or a pack of cigarrettes, or even for a fancy new couch. I would wager to say that if gold and silver are reminted for circulation, it will not be of pure form, just like the pre 64 quarters and other coins are 90% silver or less. Pure coinage will probably be reserved for precisely what it is now...as either collectibles, investments, or wealth storage. But in order for a sound monetary policy to be reenacted, valuable metal will have to be reintroduced into the money supply. The people will not be content unless that is done. Ask the Argentinian people who are to this day, still hoarding coins because they think they have more value than the bills which the banks press for usage. They went through a nasty time of inflation from 1975 to 1991.

The silver dirham buys:

1 dirham (2.975g of 999 silver) =
1 whole organic, free-range chicken
5kg of brown rice
10kg of unbleached flour
5 loaf, organic wholewheat bread, etc.

The gold dinar buys:

1 dinar (4.25g of 917 gold) =
1 goat
1 sheep
1 month apartment rent

Note, that this list is not intended to be a comprehensive list.

All this in mind, when gold gets to $7,000, I sincerely doubt people will be concerned with adding fancy new furniture to their homes. If you are fortunate enough, and rich enough to be buying fancy new furniture for your home when gold gets to that price range, you will be kicking homeless beggars away as you approach the store which is somehow still in business to sell it to you.

It seems to me that you believe, a little too much, in the stability of fiat currencies.

Be Prepared
Apr 26, 2012 - 6:49am
Be Prepared
Apr 26, 2012 - 6:54am
Be Prepared
Apr 26, 2012 - 6:55am
Tabberto
Apr 26, 2012 - 6:57am

Victor you pick your battles i note...

You are no 'troll', this much is obvious, but despite replying to a number of people on this thread you are yet to come back to me after our ping-pong on last friday's thread. What say you sir about your comments on the JPM class-action suit you described as BS etc etc?

I have no problem with you preferring Gold to Silver.... but

a. The China angle is relevant. They are the world's creditor and as such their view on what money is does matter. The Chinese word for bank or ledger movt is Silver and last year alone the Chinese public put 1bn ounces worth of Silver demand into their banks in 'silver savings accounts'. The fact their banks didn't actually buy any but instead offset it with just a paper long is just a further reflection of pent-up real investment demand for Silver as money, let alone all the other indications such as westerners buying 40x more silver by weight than Gold in physical form.

b. You also ignore the fact that Gold is probably far MORE abundant in Bullion form than the data suggests, if you have the knowledge you appear to have you must know this by now. Will this hoard of hidden Gold bullion be an issue in a freegold environment which to me seems like a Randian unrealistic utopian idea? There comes a point when the fact that Gold will/could back a future currency system and silver won't is totally irrelevant to price which is what we are all here for. All over the world people know SILVER as money and they don't know or care for your well-researched stats about what money SHOULD be in its pure intellectual sense. They want a HEDGE against loss of purchasing power, not just MONEY, and Silver has all the History on its side as well as a growing actual and price-inelastic use which many many people will prefer as they will perceive it to have more value as such. They love the bull case of Silver Depletion which you don't and remember that UNLIKE gold which is growing above ground Picassos ARE NOT - and therefore are actually materially depleting like silver inventories versus the fiat in which they are valued.

Q Milton Friedman: The greater monetary metal in history is Silver not Gold

Arjen
Apr 26, 2012 - 6:57am

fred hayek / freegold

You write something about the market deciding the valeu of the euro vs gold. And then gold and euros can be traded on the market instead of with the ECB or whatever.

What then is the main difference with the situation as it is now ?

Be Prepared
Apr 26, 2012 - 6:59am

More Real People fall off the list of the Unemployed....

It's great when Government controls the statistics to make people disappear on paper..... It won't be so great when they make people disappear for real.


Apr 26, 2012 - 6:59am

College? Did someone mention college?

I gave a presentation last week on online college classes. I thought I would open with a joke so I searched the internet for a good one and was surprised at what I found--blogs and discussion boards that said online college IS the joke. Very instructive, I thought. I finally found one:

Q: How many online college students dos it take to change a light bulb?

A: Only one, but she gets 3 credits for it.

I teach at a branch campus of a Big 10 University. Some of the faculty, including me, began offering online classes a decade ago. They were popular and always filled up. It caught on, and it took over. Now, over 50% of our students take their classes online. We have strived to keep the classes rigorous and effective--wary of the danger suggested in the joke above.

I attended an online seminar last year and the "guru" told us of a college in India offering MBA degrees online. they have 100 K English-speaking students. Online courses are the future of education. No buildings needed. Students live at home, no commuting .... and unlimited seating. If an administration likes, they can just add more students to meet the demand. Poor teachers! Yesterday, in response to my objections of adding too many students to classes, my department chair that said, "You must consider the potential larger numbers that you will experience while you construct your course. You should balance the objectives of the courses with methods which will create an appropriate workload."

In other words, make the course easier to grade so we can put more students in. My colleagues that oppose online teaching are being cleverly pushed out the door. The newbies are falling in line to keep their jobs. I see the writing on the wall.

We are forced to go online to hold our ground against online diploma mills, then the administration of the big 10 university sees the potential profits, gets greedy, and adds more students per class. At some point, WE become another diploma mill. We crossed that line this summer when my chair doubled the size of my course. Maybe I'll go back to being an electrician.

So all the above points made about the value of a college education? Its getting worse than you think.

But the growth isn't all bad. <sarc> At least our branch has an NAIA basketball team now! <sarc/> Academics? A lower priority. Now we teach you pointless classes for useless degrees AND we water down the classes AND we charge you more money than ever.

In fairness, not all programs are headed this way--but they certainly feel the same pressures. And people do have to get an education. The last thing we need is more citizens who cannot read or think. but this current educational system has it problems.

I am curious what pressures Pining is experiencing at his institution? Other college teachers out there?

ClinkinKY Doctor J
Apr 26, 2012 - 7:10am

@ Dr Jerome

Speaking of "online" universities:

Cincinnati Police Chief Asks To Skip Certification Exam

read more:https://www.local12.com/mostpopular/story/Cincinnati-Police-Chief-Asks-To-Skip/oWhwNrIrS0C28wsXFYIueg.cspx

Cincinnati Police Chief James Craig stars in University of Phoenix commercial

read more:https://news.cincinnati.com/article/20120122/NEWS01/301220074/Cincinnati-Police-Chief-James-Craig-stars-University-Phoenix-commercial


Apr 26, 2012 - 7:18am

Victor

you wrote:


Xty, concerning the gold/silver ratio, can you give me an economic argument or an arbitrage that would force the GSR to a specific value or even to revert to some historic mean? I don't know any. The reason why there is no such argument is that the gold price is arbitrary. By this, I mean that the gold price is not determined by some economic process. In order to understand this argument, you can think about tulip bulbs. If tulip bulbs cost $10000 each, everyone will grow some in his garden which will soon drive down the price. If tulip bulbs cost $0.0001 each, there will be a lot of demand from flower shops and gardening companies which is going to get the price back into some reasonable range, say $0.10 to $2.00 each. The price of gold, in contrast, is not subject to any such economic consideration. It is arbitrary. If the price of gold is arbitrary, then so is the GSR. So why care about the GSR?

I reply:

I find it odd that you say the gold price is arbitrary. It too responds to supply and demand. The price discovery may be murky, but it basically works - the price of the gold is roughly the same the world over. How can that be arbitrary? And gold, like tulips, does get more attractive to mine when the price goes up. Now as to an economic argument or arbitrage that would 'force' the gsr to approach an historic mean, I fall back on silver's use as money, which you do not believe in.:

You wrote:

Xty, Silver was/is used as a common medium of exchange Don't confuse medium of exchange with store of value. The medium of exchange, i.e. how you perform transactions, just needs to be convenient. Printed paper, ledger entries, or electronic credit all work fine. What matters is the store of value. The problem with the present dollar world is that everyone uses the debt of others in order to save for their retirement. This is what fails - for the reason everyone of you knows. So you need to try to find out what is the best store of value, and what will dominate the store of value use globally once the dollar has been retired. The same argument applies to all the historical examples of the use of silver as a medium of exchange. Yes, fine, use silver for your coins, I don't care - this is not what matters. What matters is the store of value. Even the U.S. government understand this. They have some 8000 tons of gold in the vault and no silver. They, too, know what will come after the dollar. Hint: not silver.

Victor - I am not confusing a medium of exchange with a store of value. A medium of exchange has to have the confidence of the people. I am actually so confused by your argument about the Euro, that I think it is relevant here. How can you have the the (assuming for sake of argument) the government of Europe issue a paper currency that everyone uses, while the people save in gold, but the government in America has to issue a gold backed currency? Why would the Euro be used at all? Talk about arbitrary - everyone would want dollars it seems to me in that scenario.

But back to store of value - silver has always been a store of value - why did people own elaborate silver place settings, and silver jewelry? Handing down the family silver is not just a nice way to let your children serve tea. Not trying to be facetious, but perhaps you could assume a slightly more well-thought out crowd might hang here than what you seem to fear.

And as SRS pointed out above, the mints are still minting silver coins. I find it odd that people believe all transactions will be digital in the future - that is very first-world, to quote my son, who has happily dropped out of his fancy university and is making music most of you would hate - but he is happy and is not costing us an arm and a leg any more. I think people are desperate for money they can trust - and silver has been both a currency AND a store of value for millennia. And I would have the tea set to prove it, but it sank like a meteor made of solid gold.

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