sixgun

Why should gold fall in purchasing power? Why on Earth would gold fall to $385? - the GC positions chart shows the open interest is not that high. What are you saying XAU/GBP or XAU/EUR will be? Are you talking about the Dollar Milk Shake Theory? The Fed and US administration are creating huge amounts of fiat and huge amounts of it are entering general circulation - this will be inflationary. It will only site as zero velocity currency on bank balance sheets - it will enter Main Street at a time the GDP is crashing. If you think velocity and a nation's GDP play no role in inflation then you are sorely wrong - and it will be your problem when you find out you didn't really understand gold.

Gold investors are not going to be in a world of pain from deflation. In a worse case scenario the fiat value of gold might decline but the purchasing power with be preserved. If your gold buys you 3 sheep and a sack of corn, it will likely still buy to 3 sheep and a sack of corn in a time of deflation. Gold is not primarily about making a fiat profit b/c most of us 'invest' in gold with the mindset that fiat is depreciating and will ultimately be worthless. So we swap out fiat for gold so we preserve the value we have. With a bit of luck that value will appreciate b/c gold and especially silver are undervalued. If gold goes to $50k an ounce that implies fiat has become almost worthless - $50k simply becomes a number, it might as well be $50 million or billion.

A judgement by the late Lord Denning held that a Bill of Exchange, once tendered, shall be treated as cash . . . The principle being a bill, cheque or [promissory] note is given and taken in payment as so much cash....

i uncovered this post as it appeared as a recent post on the front of the website. The money supply can increase with there being no inflation if the GDP increases inline with the money supply. So let's imagine some fictional numbers and dates but let's imagine the 1800 USA - the money supply is $50 million and inflation is 1% Now let's imagine 1900 USA the money supply is $1 billion and the money velocity is the same. The money supply is 20 x higher. What if i were to say the inflation is still 1%. How could that be? The money supply is 20 x higher! By Wonger logic inflation would be massively higher. But sixgun will point out from his armchair that the GDP of 1900 USA is 20x larger - the GDP and money supply have moved up symmetrically and money velocity has stayed the same - so no inflation. Wonker fails again - tripping over his boot laces, he scores another own goal in the village under 12's Sunday football league game. Poor Wonker.

But Wonky - inflation is not a function of money velocity according to you. So if it is not a function of velocity, then how come you just said inflation cannot be measured when money velocity is zero? i did not fall on my sword - i ran you through with it - figuratively you are now a dead man. i had misconfigured my ignore of the Winker - i was letting posts through. i have corrected my error - silence is golden. i can now rest comfortably in my armchair without the annoyance of a yapping dog.

An interesting video about the conspiracies of the large 'charitable' foundations which if you catch the sentence are coordinated through London and are taking the USA [and the world no doubt] down the pathway to the One World government - a Totalitarian state. Not a fast moving video interview but important.

It has been stated by the Federal Reserve - you say the Fed is lying and then present some strawman argument. You are not even in a village under 12's Sunday league Wongie. Let's use a simply example so you might grasp it. If there is $100 million money supply and zero money velocity with X% inflation. Then there is 10 x $100 million money supply and zero money velocity - does this 10 fold money supply increase inflation? i will say it does not. There could be 1000 x the money supply and it will not increase inflation. But according to you velocity play no role whatsoever in inflation.

Debt 'money' from its very conception is designed to create inflation and the confiscation of property. When 'money' is created with interest payable but no money to pay that interest, requires more money creation and so inflation. There will never be enough money to repay this debt so there will be defaults and the confiscation of property until the whole world has been stolen by the banks.

What are you talking about Winger? i thought you were busy this morning selling 100 quadrillion GC contracts and causing gold to crash From The Fed itself: https://fredblog.stlouisfed.org/2014/08/m2-velocity-and-inflation/

https://thismatter.com/money/banking/money-growth-money-velocity-inflation.htm The formulae are laid out in the referenced webpage article. Clearly for the Wanger it can[not] easily be seen....

i won't be buying in the UK so i have no dog in this price fight. Just posting what is obvious - many people will not be able to pay their rents. Now whether the Nation takes over rental payments or people have to downsize and there are many vacant properties - time will tell. i am sure there will always be a market to rent to asylum seekers.

i see the Joseph Rowntree Foundation did some recent research. Our research shows 37% of furloughed private renters are worried about paying their rent when #lockdown ends. To help renters weather the storm, we're calling for an increase in Local Housing Allowance to cover median rents in all areas, and a removal of the national cap on LHA. https://www.thesun.co.uk/money/11766876/renting-furlough-pay-help/

The argument being put forward by the Wonger is that prices cannot rise until and unless there is more currency to support those higher prices. So if the amount of currency in circulation is fixed, if one price goes up, others must go down. He ignores money velocity. Following the 2007/08 financial crisis the Fed went into several rounds of QE and dropped interest rates. Gold is real money and as such is a zero risk asset. Gold is gold - it has no liabilities. When you hold physical gold it cannot be defaulted on. A company might go bust and its shares become worthless, a government or corporation might default on their bonds - but gold is gold. If you listen to Ned Naylor-Layland, who in my estimation is a proper gold/silver expert, he is at pains to point out that the price of gold is determined by what fiat and bonds are worth and what the market thinks they will be worth in the future. So what we are looking at is purchasing power and real interest rates - the difference between the headline interest rate and inflation. The falling interest rates following the financial crisis and the spectre of massive QE indicated to the market that real interest rates would be very low - as a result the price of gold and silver went up. As it was, the published inflation rates did not shoot up. What happened was this new currency from QE did not enter the general circulation. It sat on and propped up bank balance sheets - it did not appear on Main Street. There wasn't more cash in circulation and prices did not go up. What happened in effect was this new money sat on balance sheets and was not lent out - it had zero velocity. If cash is hidden under the mattress and never comes out it might as well not exist. If people hoard and do not spend their cash, it might as well not exist. It has zero velocity, it cannot contribute to the economy or cause inflation. There is often an assumption that money velocity is a constant and so more cash pushed out will lead to more inflation and less cash will result in deflation. This is not necessarily the case. Currency that is circulating 10 x a day purchases 10 x as much as the same amount of currency that circulates once a day. Prices can go up with the same amount of currency if its velocity is higher. When people stop spending, you may well see prices start to fall as sellers drop their prices. No-one is buying - their cash is under the mattress. This is not because there is less currency in the system, it is because the velocity of money has dropped. There is a view that there is a dollar shortage. That a large amount of debt held in the world is denominated in dollars. A lot of this is in the Euro-Dollar system. Dollars created outside the US, outside the control of the Fed - some people say this is what is the actual world reserve currency. How many Euro dollars there are is not clear but estimates i have heard are around $12 trillion. The thesis is there are not enough dollars to pay this off and as borrowers go chasing dollars, the value of the dollar will get bought up and up against other currencies. This is the Dollar Milk Shake Theory of Brent Johnson. Now it does seem there is a shortage of dollars - but what will happen is foreigners will sell dollar denominated assets such as Treasuries. The demand for Treasuries outside the US, which is low as it is, will evaporate. US stocks held by foreigners will get sold off. All to raise dollars. These dollars all end up back in the US - more currency in circulation which will likely end up causing inflation. US stocks and other bonds sold off. The world will divest dollar assets and de-dollarisation will accelerate. There is already increasing real world de-dollarisation going on, where trade does not involve US entities, payments will avoids the dollar. The outcome is not good for the US. Products and services in the US would become overpriced. As USD assets are divested and dollars come back home, inflation takes off. Steps would be needed to devalue the dollar. To fill the dollar shortage. The Fed is and would do currency swaps - putting dollars out into the world in exchange for other currencies. What is different from 2008 is that currency is not just sitting on bank balance sheets. It is being paid out to people. The US Treasury has a cash account at the Fed which normally had around $400 billion in - this balance recently grew to $1.45 billion - it is now being spent. It sits there to be spent into the circulation. It is likely this account will be topped up. This will cause inflation as we see the US economy rapidly shrinking - GDP falling heavily. The US government is splashing the cash in support cheques - a helicopter money - i expect there will be more splashing with the recent riots. More cash in circulation with falling GDP. This is by definition - inflation. There are deflationary and inflationary forces in play. Central banks really, really hate deflation. In all this turmoil there is real money. i go with real money. There is another factor which of course will not get officially discussed and that is the missing money - the money stolen away. The Missing $21 trillion that the US Department of Defence and the Department of Housing and Urban Development cannot account for. Catherine Austin Fitts talks about this a lot. i have heard there is another $10 trillion missing. There is probably more cash that has been sequestered. At some point this will reappear - it will enter the system. When and how is anyone's guess. It is not going to sit in the Cayman Islands or Jersey or wherever forever. That is a lot of wongo to reappear. It would be hard for that not to be inflationary.

What like the average SJW Liberal type?

The whole event is a divide and rule operation being run by the controlled media and the Deep State. i hope everyone is going out on Thursday night to bend the knee. Try to make it in a prominent position there might be film cameras, you never know. Remember to anti-social distance and have a big banner to wave. @silenceissilver - i saw that video on Twitter this afternoon - dear God - pathetic is not strong enough a word - i think these people actually have a mind virus. What goes around comes around....