The coming Gold crash

[Wonger]

30 minutes ago, HawkHybrid said:

no additional currency was printed by the banks?

so now personal iou's counts as currency creation?

 

let's use a simple example of farmer grows wheat and sells a bag of wheat to

the miller for £20. miller turns wheat into flour and sells a bag of flour to the

baker for £20. baker bakes bread and sells a loaf to the farmer for £20. £60 gdp.

this time instead of using an iou each person sells half what they sold before for

the same £20 but does it once, waits for the £20 to circulate and then does it

a second time.

eg £20 is receive by:

farmer > baker > miller, (half of goods sold) and then

farmer > baker > miller again. (the remaining half of goods sold)

now total gdp for the same goods traded is £120(inflation)

the inflation is due to the velocity increasing using the same £20 currency and

no iou's were created.

 

HH

Complete and utter nonsense GDP does not affect Inflation whatsoever, because GDP does not create Currency, Central Banks and Commercial Banks Create Currency, if this is all you have my friend our conversation ends real soon! 

[Wonger]

32 minutes ago, HawkHybrid said:

read the thread in the link.

 

HH

Ive read the thread and you posted the below with no explanation of whats needed, when asked again on this thread you refuse to answer, conversation over my Friend! 😁 

I'm on the motorway, and miss my turn.

do I immediately make a u turn(endangering the lives of many) to fix the problem?

or do I continue going down the wrong path until I get to the next junction and then

take the opportunity to turn around?

 

there is a time and a way for things to happen?

[Wonger]

20 minutes ago, Sparrow said:

Here is a graph depicting central bank purchases of gold over the last two years.  Suffice to say, I am not convinced by Wonger's arguments.

Why would a private group of people who do not have anyone's best interest in mind (completely opposite actually) expose the truth regarding what they are actually doing considering this would reduce the effectiveness of not having anyone's best interests in mind? Also why does this graph mean Gold is going to rise? 

[HawkHybrid]

26 minutes ago, Wonger said:

Ive read the thread and you posted the below with no explanation of whats needed, when asked again on this thread you refuse to answer, conversation over my Friend! 😁 

I'm on the motorway, and miss my turn.

do I immediately make a u turn(endangering the lives of many) to fix the problem?

or do I continue going down the wrong path until I get to the next junction and then

take the opportunity to turn around?

 

there is a time and a way for things to happen?

 

do you drive?

what should you do if you miss your junction exit on a motorway?

 

what should you be doing if you miss the equivalence of the junction exit

on a financial motorway?(the answer is pretty clear for all to see, hardly

what I would call refusing to answer. I even spell it out for you)

Quote

there is a time and a way for things to happen?

 

HH

Edited June 4, 2020 by HawkHybrid

[HawkHybrid]

34 minutes ago, Wonger said:

Complete and utter nonsense GDP does not affect Inflation whatsoever, because GDP does not create Currency, Central Banks and Commercial Banks Create Currency, if this is all you have my friend our conversation ends real soon! 

 

in my example did they not pay £20 for half a bag of wheat etc?

up from £20 per bag of wheat? is that not inflation?

(for the record i didn't say gdp affects inflation. I said that the

doubling of gdp in the that example was due to inflation)

Quote

Central Banks and Commercial Banks Create Currency,

and apparently making personal iou's also create currency?

 

HH

Edited June 4, 2020 by HawkHybrid

[sixgun]

3 hours ago, Wonger said:

Complete and utter nonsense GDP does not affect Inflation whatsoever, because GDP does not create Currency, Central Banks and Commercial Banks Create Currency, if this is all you have my friend our conversation ends real soon! 

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.

Edited June 4, 2020 by sixgun

[TheApe]

Forget about Gold, is there no end to the stock market bubble.

When that thing pops it will be loud, could be years though.

[Wonger]

42 minutes ago, sixgun said:

i uncovered this post as i appeared as a recent post on the front of the website.
The money supply can increase with their 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. It 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.

I think others reading this will notice Ive stated that the Definition of Inflation is a increase in the Currency supply and the Definition of Deflation is a decrease in the Currency supply, no where did I state that if you have the Currency supply rising inline with population growth and available Goods and Services then Inflation would be created, I think you may need the under 12's playing in the Sunday football league to explain this to you, as you clearly have a problem understanding the most basic principles of Finance and it seems also you have trouble reading what Ive actually posted!

Try yet again My Friend Armchair Spectator Sixgun 😁 

[Wonger]

2 hours ago, HawkHybrid said:

 

in my example did they not pay £20 for half a bag of wheat etc?

up from £20 per bag of wheat? is that not inflation?

(for the record i didn't say gdp affects inflation. I said that the

doubling of gdp in the that example was due to inflation)

and apparently making personal iou's also create currency?

 

HH

In the example yes it sure does as its Credit, so try harder next time!

[HawkHybrid]

2 minutes ago, Wonger said:

In the example yes it sure does as its Credit, so try harder next time!

 

so you are saying that personal iou's are currency?

so currency does not have to be printed by banks?

(so much for only banks breaking the rules by creating currency. normal

people can break the rules and create currency too.)

so now there's no difference between 'credit' and 'currency creation'?

 

HH

[Wonger]

2 minutes ago, HawkHybrid said:

 

so you are saying that personal iou's are currency?

so currency does not have to be printed by banks?

(so much for only banks breaking the rules by creating currency. normal

people can break the rules and create currency too.)

so now there's no difference between 'credit' and 'currency creation'?

 

HH

You can raise the prices of your Farmers, Millers and bakers to whatever you wish, however the price of other Goods and Services will reduce by exact same amount to compensate unless Currency is created, Currency gets borrowed into existence Its by definition Credit!

[Wonger]

1 hour ago, TheApe said:

Forget about Gold, is there no end to the stock market bubble.

When that thing pops it will be loud, could be years though.

Keep watching, not long now

[HawkHybrid]

35 minutes ago, Wonger said:

You can raise the prices of your Farmers, Millers and bakers to whatever you wish, however the price of other Goods and Services will reduce by exact same amount to compensate unless Currency is created, Currency gets borrowed into existence Its by definition Credit!

 

they are using the same circulating £20 currency. no additional currency is required.

no other good and services are affected(let's for arguments sake say that no other

good sand service exist).

this is inflation due to increase in velocity of currency.

 

HH

[Wonger]

36 minutes ago, HawkHybrid said:

 

they are using the same circulating £20 currency. no additional currency is required.

no other good and services are affected(let's for arguments sake say that no other

good sand service exist).

this is inflation due to increase in velocity of currency.

 

HH

No it is not, its an increase in Inflation by 100% by reducing the available Goods and Services by 50% without reducing the Currency supply, this can not happen in a Credit based Currency system only in your Fantasy Theory, to test your Theory why don't you pass £20 between your left hand and right hand and create as much Velocity and GDP as you wish and then count your wealth created, it will be zero because you still only have £20!

But I advise not doing this while you are driving up the Freeway after missing your turn off as that would be as dangerous as abolishing Private Central Banks and Fractional Reserve Banking 

Edited June 4, 2020 by Wonger

[Prophecy]

1 hour ago, HawkHybrid said:

 

so you are saying that personal iou's are currency?

so currency does not have to be printed by banks?

(so much for only banks breaking the rules by creating currency. normal

people can break the rules and create currency too.)

so now there's no difference between 'credit' and 'currency creation'?

 

HH

TBH he is correct. For example, when you spend on your credit card, that currency did not exist until that happened. The same with any form of IOU; if its obligation can be packaged and sold on it becomes currency. Currency is itself is an IOU. A gordian ponzi knot

[Martlet]

So according after a day of further circular debate, we learn that if inflation is 10%, currency supply increased by 10% in the past year.  no more no less.  I wonder if there is any data to prove this? 

[Wonger]

Why don't we discuss the most critical influence on Gold future price and that is will the Central Banks create enough Currency to offset the Currency destruction from Debt defaults? If not Gold investors are in a World of pain from Deflation, I say they will not

[sixgun]

22 minutes ago, Prophecy said:

TBH he is correct. For example, when you spend on your credit card, that currency did not exist until that happened. The same with any form of IOU; if its obligation can be packaged and sold on it becomes currency. Currency is itself is an IOU. A gordian ponzi knot

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....

[5huggy]

2 minutes ago, Wonger said:

Why don't we discuss the most critical influence on Gold future price and that is will the Central Banks create enough Currency to offset the Currency destruction from Debt defaults? If not Gold investors are in a World of pain from Deflation, I say they will not

Im FAR happier having Au/Ag than holding "FIAT" devaluing faster than a rat up a drain pipe in a rain storm!

[Wonger]

4 minutes ago, 5huggy said:

Im FAR happier having Au/Ag than holding "FIAT" devaluing faster than a rat up a drain pipe in a rain storm!

Ok fair enough, but can you explain why "Fiat" will devalue from here? I was a PM Stacker until very recently and know where your coming from, but I consider times have changed very quickly, so i sold out

Edited June 4, 2020 by Wonger

[sixgun]

9 minutes ago, Wonger said:

Why don't we discuss the most critical influence on Gold future price and that is will the Central Banks create enough Currency to offset the Currency destruction from Debt defaults? If not Gold investors are in a World of pain from Deflation, I say they will not

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.

Edited June 4, 2020 by sixgun

[5huggy]

1 minute ago, Wonger said:

Ok fair enough, but can you explain why "Fiat" will devalue from here? 

yes - @Wonger its relatively straightforward - read ALL ABOUT "The Wiemar republic history  and subsequent MEGA devaluation of currency!

and relate it to what ALL world governments are doing RIGHT NOW! 😉

hers an assist for the BASIC STARTER - - - >>>https://www.history.com/topics/germany/weimar-republic#:~:text=The%20Weimar%20Republic%20was%20Germany's,after%20Kaiser%20Wilhelm%20II%20abdicated.

[Wonger]

4 minutes ago, sixgun said:

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.

But the preservation of your purchasing power is based only on Gold not dropping in price, why can Gold not drop?

[Wonger]

2 minutes ago, 5huggy said:

yes - @Wonger its relatively straightforward - read ALL ABOUT "The Wiemar republic history  and subsequent MEGA devaluation of currency!

and relate it to what ALL world governments are doing RIGHT NOW! 😉

hers an assist for the BASIC STARTER - - - >>>https://www.history.com/topics/germany/weimar-republic#:~:text=The%20Weimar%20Republic%20was%20Germany's,after%20Kaiser%20Wilhelm%20II%20abdicated.

Were not in the Wiemar republic, so how is that situation going to come about?

[TheApe]

1 hour ago, Wonger said:

Keep watching, not long now

I do hope so Wonger.

Its one scenario I'm not very well positioned for, stock markets booming to new all time highs and beyond without a big pullback from here.