m630

no not at all, if we balanced our own budget and cut out all the theft, whether legal or not, we'd not have to worry about the Chinese or any other country buying our debt...my point was only highlighting that our relationship with China is mutual as it is with many countries, if we arent buying, the rest of the world is hurting, so yes, it is certainly a global economy

as for the gold, its just fear that drives it, and no one that owns it is selling it, but more is being produced which should be deflating the value, but for other market reasons its not coming down.

v_therussian

If someone is buying anything - especiallly gold - you better believe there is someone getting paid for it!

skelevirus

Random fact:

a matchbook size piece of gold can be flattened into a sheet as big as a tennis court

v_therussian

At Hagwart's they do all kinda crazy shit!

v_therussian

Greece got downgraded, Euro went down. This was being expected for a while - perhaps the buying of gold was a hedge against debt that these countries are holding in Euros. Or - particularly in Kazakhstan's case - since their exports are mainly going to Europe, perhaps a hedge against devaluation of the products they export. Just a theory.

Bob525D

I was talking about this with a colleague at work, from what was said here is a summary. My take on it is this, countries are buying gold to protect their currencies. The reason i think this is gold like other commodites will always have a monetary value, dollars or pounds are merely a promise to pay but they are actually worthless if there is nothing backing it like gold or oil (or something of value someone else wants). If for example you look at a Ten pound note it reads Royal Bank Of Scotland promise to pay the bearer on demand at their office, so in actual fact cash is only a promise to pay.

The financial crisis has caused major panics world wide with governments desparately trying to stabilise the their currencies, some countries have opted to devalue their currencies by printing money to avoid cutting spending. So how can a country just decide to print money if we at home are not allowed to, the reason the government is able to do is that they are can back it with a commodity or offset it against future growth. This is risky though and can lead to hyper inflation like what is happening in Zimbabwe, people using trolleys of cash to buy bread etc.. In difficult times most government resort back to what they know and historically it has alway been gold, it is no accident that in the UK you have to register any gold you have with the government if it is worth more than ?10K. This is so that they can sieze it if the country ends up in a depression like the 1930'd where in the US the government ordered the siezure of all privately owned gold. How much has the US and the UK spent saving the banks and giving everyone with clunkers money towards new cars? Were did the money come from, quick answer is the printing press has been on overtime. Now all the major countries of the world are trying to grab as much gold as they can to offset the printing, the funny thing is they are probably using the money they printed to buy it.

I might be taking crap, but it sort of makes sense.

danzanchy

lol, just now im looking at an ad for goldline on this page TFF

v_therussian

I did NOT know about this Is this a fact?!?!

PS I think it is a very solid opinion and you make a couple of very interesting points - you're not taking a crap. But I sort of feel that this move to buy gold may signify someone actually selling their gold. This would mean that the currency of that country - if it is indeed a country selling - has to come down significantly in the short term. As a trader, who hedges fx many times a day, I get fascinated with such events.

Bob525D

Have a looky here, re the US's 1933 gold confiscation:-

1933 Executive order Gold Confiscation

People often use the phrase "cash is king", in actual fact Gold is king in real terms. Cash is only worth what is actually backing it, as long as everyone uses cash then it is worth something. With the trouble the banks were in recently, is the money they print backed by anything in their vaults (hence the gold grab)?

The funny thing is that when i discussed this with my work mate I thought it was nonsense but then the penny began to drop and i realised it actually makes sense. What worries me is the talk of a new world order i keep hearing, rumours around a single global currency to avoid the issue of currency devaluation and the turmoil it causes in the global market place. For example recently when the UK pound was worth two US Dollars, this made things very difficult for UK shops and suppliers to keep cusotmers from the both the UK and the US. Mainly due to the fact that someone in the UK could buy the same item for half the price in the US than in the UK, this also worked the other way where US customers wouldnt want to pay double the price for anything bought from the UK rather than in the US.

v_therussian

I thought the new world order is kind of a foregone conclusion - I mean, I've heard all kinds of rumors that people in power for the past several decades - if not centuries - were all a part of it... I don't know though - kind of far-fetched. I think there is a good dose if idiots out there who don't wanna admit they have no idea what to do, so as not to lose their handsome incomes and powers. In the meantime, things aren't getting better - that's for sure...

I'll definitely check out the gold confiscation thing when I have some time, but let me ask you - wasn't the dollar already divorced from the gold standard by 1933? Didn't they do it in the teens almost immediately after the Federal Reserve was created? Or right after the 1929 crash or something like that? I need to brush up on my history otherwise I'll get owned like global warming protester hahaha