6 ms·

> Gold is money, which is based on physical ownership, not on trust in the willingness and ability of another party to honor their promises. If you have gold, b

by erikb 10y ago

> Gold is money, which is based on physical ownership, not on trust in the willingness and ability of another party to honor their promises. If you have gold, but you do not have it under your control, it is almost pointless to have gold. Really digging this one. That's why I proactively not listen to investors/consultants who suggest to buy some gold derivates for savety purposes. In other regards: What's the point of the author? That's how the "king's peace" works since forever. Having the biggest stick and control over the valuable stuff makes you the king. And as long as you provide a stable leadership live of people is mostly peaceful. That's why people are willing to accept this trade. It's unfair but we actually want it that way. And what should the others do? Say "yeah, we totally accept that he has us by the balls"? No they act like it would be their decision so that they also keep some of their own power. It seems the author is smart enough to know all this, so seriously: What's he attempting to achieve here?

dualogy 10y ago
Well, for one he has some books to sell ;)
- erikb 10y ago
  Yeah after reading more from his side, that's also what I'm guessing.
sandworm101 10y ago
Gold is no longer tied to power. Real estate now defines who is to be king. Look to the wealth funds of the middle east. They dont trade oil for gold these days. They buy land, the real international currency. The man with the most diversified land across many countries is king.
- b5u 10y ago
  Land may be valuable at the moment, but that will likely change in the future when fresh, clean water will be more scarce and climate changes will render parts of Earth uninhabitable. I'd recommend you reading this interview with M. Burry (guy who foresaw the real-estate crises in '08): http://nymag.com/daily/intelligencer/2015/12/big-short-genius-says-another-crisis-is-coming.html http://nymag.com/daily/intelligencer/2015/12/big-short-geniu...
  - gumby 10y ago
    That's still a real estate issue; you're just saying that the three important factors in real estate are "location, location, and location" and that those factors aren't stable over time. Tell that to the Carthaginians.
  - sandworm101 10y ago
    >> fresh, clean water will be more scarce and climate changes will render parts of Earth uninhabitable. If one wants to get all conspiracy-minded: Vancouver, Toronto ... not the warmest of cities. Neither are they in red zones for rising sea levels. And, being in Canada, have more fresh water per person than most anywhere on the planet.
- comicjk 10y ago
  In the past, diversified land holdings across many countries haven't been a great strategy, because they're too difficult for the foreign owner to hold on to politically and military. Land is expensive to protect.
  - sandworm101 10y ago
    >> Land is expensive to protect. So you use your wealth to ensure that local authorities protect your interests. You setup people in power, vassal kings, to protect land interests above all others. Who is in charge now? Who are their friends? Do they own property scattered all over the globe? Do any of them care about a box of gold?
    - xyzzyz 10y ago
      Again, as the previous poster suggested, in the past it didn't work so well. The local authorities might want to own your land too, and you will clearly not pay more for its protection than it is worth. There's no need to theorize when the history provides so many examples of wealthy people losing their vast land holdings as a result of change in the political climate.
- erikb 10y ago
  So... McDonalds and the Pope? I wouldn't agree with what you say completely. I wouldn't say gold is replaced by real estate. That doesn't mean that real estate can't be a source of power, though.
- baursak 10y ago
  As long as you can protect it when challenged.
JumpCrisscross 10y ago
Gold sort of works for sovereigns. It's crap for individuals. Any situation where you need to rely on physical gold is a situation where someone else will take it from you by force.
- erikb 10y ago
  Yes, the value is much smaller since your power to keep it is smaller. But the amount will also be smaller. And I would say there are still quite a few situations where having something of trade value is better than having nothing.
  - ComradeTaco 10y ago
    If we're in the kind of crisis where all fiat money is useless, gold will be useless too. The only kind of thing that will have value are things that help you survive. A crate full of gauze pads and bandaids would be better than a whole stack of gold bullion in that situation.
    - trhway 10y ago
      You've never been through a country scale crisis.
      - ComradeTaco 10y ago
        In a country scale crisis people would be selling all their valuables for fire sale prices to pay for essentials, including gold. A fiat reserve currency, like the Swiss Franc or the Pound would be easier to use, less likely to be stolen and more valuable then gold shavings.
        wintersFright 10y ago
        Gold isn't going to save you from a zombie apocalypse, nor can you eat it. It will however transport your wealth from one side of a currency crisis to the other while retaining value - as opposed to plastic notes with arbitrary numbers of zeros printed on them.
easilyBored 10y ago
It seems the author is smart enough to know all this, so seriously: What's he attempting to achieve here? Telling the truth. If there's a doomsday scenario USA might refuse to hand you the gold. He's saying that gold not in your hand is not really gold, because when you might need it everyone else will and they have it.
ChuckMcM 10y ago
My read on it was that the Author is saying that maybe there is more truth to the conspiracy theories that America has looted everyone's gold out of the Fed for its own purposes than you might think. His reasoning appears to be, "If the world is, as the Fed presents it, then we should be able get our gold back. But we can't." and then notes agencies that the auditing agency that was aggressively pushing even an accounting of the available gold has gone silent implying they have been made complicit somehow in the conspiracy. Here on the outside we can't really know what is going on of course. And frankly if it got out that 1200 tons of gold was on the move I could imagine that would be a tasty target even for nation-state level thieves. But I also found it interesting when the Economist and others reported that the Fed was refusing to let auditors verify their gold deposits. That is a question that really needs an answer and we haven't gotten it yet.
- maxander 10y ago
  Even if the Fed "lost" some of the gold (which would be a hilarious story), does it really matter? There has to be some liability clause in whatever agreement put the gold in the Fed's hands to begin with- if they lose track of Germany's property (or claim to have, or whatever), they're obligated to pay Germany back for it. Revealing that would be a gigantic embarrassment, sure, but primarily only concerning the American financial system's competence in running vaults. The U.S. budget could handle the payout in dollars, and Germany could take their payment and use it to buy another pile of gold if they like. Contrary to the ideas of the article author, ownership isn't a physical process, so all the speculation as to where some particular collection of element 79 resides should be irrelevant to the economic situation.
  - BatFastard 10y ago
    1200 tons of gold is worth around 44 Billion, a trivial amount of money as far the US government is worth. So the idea that it would be stolen by the government is ludicrous.
    - mcbits 10y ago
      $44 billion current US dollars worth of gold can back 10 to 100 times that amount of "money" (depending on how far you stretch the definition of money) in a fractional reserve banking system. It's no trivial amount.
portent 10y ago
I have been to the NY Federal Reserve Building and seen much of the gold - from the outside of the open door of the vault. This is the highlight of the public tour of the FRB in lower Manhattan. There are many different cages inside the vault - some containing just a handful of bars, and some with gold stacked near to the roof. But we are not told which cage corresponds to which country - that information is secret. All the bars look identical, to me anyway - there are no stacks of coins or goblets etc. that I could see. (Not all the cages are visible from the vault entrance). The Fed states in the tour that sovereign nations can keep their gold in the vault, virtually free of charge. And take it back at any time. This is basically a service to the world that the US has provided since the second world war, when much of Europe wanted - for obvious reasons - to move their gold to a safe haven. As the Federal Reserve is a very secure place, and great value for money, I think most nations have been fine to use that - much cheaper and easier than building a facility that is equally secure. So personally I'm not sure about the conspiracy theories saying that the Fed refuses to release the gold; to me that is easy for any nation to test - just ask for it, it could be done publicly except that you signal to any thief the date/time of when to attack :-)
- coredog64 10y ago
  > the Federal Reserve is a very secure place Until Simon Gruber shows up

by erikb 10y ago

dualogy 10y ago

Well, for one he has some books to sell ;)

erikb 10y ago
Yeah after reading more from his side, that's also what I'm guessing.

sandworm101 10y ago

Gold is no longer tied to power. Real estate now defines who is to be king. Look to the wealth funds of the middle east. They dont trade oil for gold these days. They buy land, the real international currency. The man with the most diversified land across many countries is king.

b5u 10y ago
Land may be valuable at the moment, but that will likely change in the future when fresh, clean water will be more scarce and climate changes will render parts of Earth uninhabitable. I'd recommend you reading this interview with M. Burry (guy who foresaw the real-estate crises in '08): http://nymag.com/daily/intelligencer/2015/12/big-short-genius-says-another-crisis-is-coming.html http://nymag.com/daily/intelligencer/2015/12/big-short-geniu...
- gumby 10y ago
  That's still a real estate issue; you're just saying that the three important factors in real estate are "location, location, and location" and that those factors aren't stable over time. Tell that to the Carthaginians.
- sandworm101 10y ago
  >> fresh, clean water will be more scarce and climate changes will render parts of Earth uninhabitable. If one wants to get all conspiracy-minded: Vancouver, Toronto ... not the warmest of cities. Neither are they in red zones for rising sea levels. And, being in Canada, have more fresh water per person than most anywhere on the planet.
comicjk 10y ago
In the past, diversified land holdings across many countries haven't been a great strategy, because they're too difficult for the foreign owner to hold on to politically and military. Land is expensive to protect.
- sandworm101 10y ago
  >> Land is expensive to protect. So you use your wealth to ensure that local authorities protect your interests. You setup people in power, vassal kings, to protect land interests above all others. Who is in charge now? Who are their friends? Do they own property scattered all over the globe? Do any of them care about a box of gold?
  - xyzzyz 10y ago
    Again, as the previous poster suggested, in the past it didn't work so well. The local authorities might want to own your land too, and you will clearly not pay more for its protection than it is worth. There's no need to theorize when the history provides so many examples of wealthy people losing their vast land holdings as a result of change in the political climate.
erikb 10y ago
So... McDonalds and the Pope? I wouldn't agree with what you say completely. I wouldn't say gold is replaced by real estate. That doesn't mean that real estate can't be a source of power, though.
baursak 10y ago
As long as you can protect it when challenged.

JumpCrisscross 10y ago

Gold sort of works for sovereigns. It's crap for individuals. Any situation where you need to rely on physical gold is a situation where someone else will take it from you by force.

erikb 10y ago
Yes, the value is much smaller since your power to keep it is smaller. But the amount will also be smaller. And I would say there are still quite a few situations where having something of trade value is better than having nothing.
- ComradeTaco 10y ago
  If we're in the kind of crisis where all fiat money is useless, gold will be useless too. The only kind of thing that will have value are things that help you survive. A crate full of gauze pads and bandaids would be better than a whole stack of gold bullion in that situation.
  - trhway 10y ago
    You've never been through a country scale crisis.
    - ComradeTaco 10y ago
      In a country scale crisis people would be selling all their valuables for fire sale prices to pay for essentials, including gold. A fiat reserve currency, like the Swiss Franc or the Pound would be easier to use, less likely to be stolen and more valuable then gold shavings.
      - wintersFright 10y ago
        Gold isn't going to save you from a zombie apocalypse, nor can you eat it. It will however transport your wealth from one side of a currency crisis to the other while retaining value - as opposed to plastic notes with arbitrary numbers of zeros printed on them.

easilyBored 10y ago

It seems the author is smart enough to know all this, so seriously: What's he attempting to achieve here? Telling the truth. If there's a doomsday scenario USA might refuse to hand you the gold. He's saying that gold not in your hand is not really gold, because when you might need it everyone else will and they have it.

ChuckMcM 10y ago

My read on it was that the Author is saying that maybe there is more truth to the conspiracy theories that America has looted everyone's gold out of the Fed for its own purposes than you might think. His reasoning appears to be, "If the world is, as the Fed presents it, then we should be able get our gold back. But we can't." and then notes agencies that the auditing agency that was aggressively pushing even an accounting of the available gold has gone silent implying they have been made complicit somehow in the conspiracy. Here on the outside we can't really know what is going on of course. And frankly if it got out that 1200 tons of gold was on the move I could imagine that would be a tasty target even for nation-state level thieves. But I also found it interesting when the Economist and others reported that the Fed was refusing to let auditors verify their gold deposits. That is a question that really needs an answer and we haven't gotten it yet.

maxander 10y ago
Even if the Fed "lost" some of the gold (which would be a hilarious story), does it really matter? There has to be some liability clause in whatever agreement put the gold in the Fed's hands to begin with- if they lose track of Germany's property (or claim to have, or whatever), they're obligated to pay Germany back for it. Revealing that would be a gigantic embarrassment, sure, but primarily only concerning the American financial system's competence in running vaults. The U.S. budget could handle the payout in dollars, and Germany could take their payment and use it to buy another pile of gold if they like. Contrary to the ideas of the article author, ownership isn't a physical process, so all the speculation as to where some particular collection of element 79 resides should be irrelevant to the economic situation.
- BatFastard 10y ago
  1200 tons of gold is worth around 44 Billion, a trivial amount of money as far the US government is worth. So the idea that it would be stolen by the government is ludicrous.
  - mcbits 10y ago
    $44 billion current US dollars worth of gold can back 10 to 100 times that amount of "money" (depending on how far you stretch the definition of money) in a fractional reserve banking system. It's no trivial amount.

portent 10y ago

I have been to the NY Federal Reserve Building and seen much of the gold - from the outside of the open door of the vault. This is the highlight of the public tour of the FRB in lower Manhattan. There are many different cages inside the vault - some containing just a handful of bars, and some with gold stacked near to the roof. But we are not told which cage corresponds to which country - that information is secret. All the bars look identical, to me anyway - there are no stacks of coins or goblets etc. that I could see. (Not all the cages are visible from the vault entrance). The Fed states in the tour that sovereign nations can keep their gold in the vault, virtually free of charge. And take it back at any time. This is basically a service to the world that the US has provided since the second world war, when much of Europe wanted - for obvious reasons - to move their gold to a safe haven. As the Federal Reserve is a very secure place, and great value for money, I think most nations have been fine to use that - much cheaper and easier than building a facility that is equally secure. So personally I'm not sure about the conspiracy theories saying that the Fed refuses to release the gold; to me that is easy for any nation to test - just ask for it, it could be done publicly except that you signal to any thief the date/time of when to attack :-)

coredog64 10y ago
> the Federal Reserve is a very secure place Until Simon Gruber shows up