Gold. GOLD!!!!! Gooooollllllllllddddddd!!!!!!!!

[tokeprep]

No, you are choosing to move to the filet because it went up in price LESS than the flank. So you are going from $30 to $32. Not $2 to $32, I never said that, but somehow you misunderstood it that way. The BLS Implicitly Assumes this, i.e it measures the inflation of the item that went up the least because it assumes you switched. It doesn't use the basis of the cost you switched from, it uses the basis of the item you switched to. Get it?

I have no issue understanding what you're saying. The only problem is that it doesn't reflect how the BLS calculates inflation in categories. Let's refresh this with a new example from the same document the filet and flank steak example came from.

A consumer buys 4 candy bars each week: two chocolate and two peanut, all for $1 each, for $4 total. The price of chocolate bars increases to $4 while the price of peanut bars remains the same. In order to buy exactly the same thing, the consumer would have to spend $10. This is where substitution comes into play. You're saying the BLS "measures the inflation of the item that went up the least," which means the BLS candy bar category would show no inflation, because the formula assumes that the consumer just switched to buying 4 peanut bars for $4 total and stopped buying chocolate bars altogether.

Except that isn't the result the BLS would calculate. In this example, the BLS formula would require $8 to maintain the same standard (1 chocolate bar and 4 peanut bars). The assumption is that the consumer bought 1 less chocolate bar, substituting the cheaper peanut bars, not that the consumer moved away from chocolate bars entirely. Likewise, the inflation rate isn't the rate of the lowest price increase (here, 0 for peanut bars). The inflation rate for this category would be $8 now - $4 last year = $4 / $4 = 100% inflation in the candy bar category.

Is Apple stock an asset class? Pretty sure its just a stock, so overall how did equities do vs precious metals? They didn't do anything, 0% return.

Is silver an asset class? Was the gain on precious metals as an asset class since 2003 500% in 2011?

Of course, the gain on equities since 2003 wasn't 0%, it was closer to 100%.

 

[NoDrama]

Your ignorance is on full display yet again. You're right that the FOMC has 12 members, but 7 of them are from the Board of Governors. Only 5 members come from the regional banks, which means that the Board of Governors has voting control over monetary policy and thus controls it.

Seriously, where did you get that finance degree from? The structure of the Federal Reserve System and the composition of the FOMC is something that should have come up in your introductory economics course.



Is Greenspan's quote supposed to be contradicting something I said? Because it doesn't.

Of the board of governors, 2 of them are from the Fed reserve System. Add the 5 from the Fed system that are on the FOMC, and you have 7. 5 plus 2=7

5+2 is not hard to understand, were you present for kindergarten class? Your ignorance of simple math is on full display for everyone to see.

Each Reserve Bank president is appointed for a five-year term by his/her Bank's board of directors, with the approval of the Board of Governors. Six of the nine directors, in turn, are chosen, not by politicians, but by the banks that belong to the Federal Reserve System, and three are chosen by the Board.

http://www.newyorkfed.org/aboutthefed/fedpoint/fed48.html

 

[NoDrama]

Is silver an asset class? Was the gain on precious metals as an asset class since 2003 500% in 2011?

Of course, the gain on equities since 2003 wasn't 0%, it was closer to 100%.

DJIA in Jan was at 8600
DJIA in Jan 2011 was at 11600

74% gain, not 0

Gold, Silver, platinum
Gold Jan 1 2003 $343 Price in Jan 2011 $1388 = 404%
Silver Jan 1 2003 $4.65 Price Jan 1, 2011 $31 = 666%
Platinum Jan 1, 2003 $608 Price jan 2011 $1750 = 288%

Average gain =452% Which is 6.1 times as much gain as the blue chip stocks.

 

[tokeprep]

Of the board of governors, 2 of them are from the Fed reserve System. Add the 5 from the Fed system that are on the FOMC, and you have 7. 5 plus 2=7

5+2 is not hard to understand, were you present for kindergarten class? Your ignorance of simple math is on full display for everyone to see.

What do you mean "2 of them are from the Fed"? All seven persons on the Board are appointed by the president and confirmed by the Senate; the banks don't get to have their people on the Board.

We all understand that the regional banks have 5 seats on the FOMC. The only issue is how the regional banks are getting these magic Board positions to somehow have 7 seats.

 

[tokeprep]

DJIA in Jan was at 8600
DJIA in Jan 2011 was at 11600

74% gain, not 0

Gold, Silver, platinum
Gold Jan 1 2003 $343 Price in Jan 2011 $1388 = 404%
Silver Jan 1 2003 $4.65 Price Jan 1, 2011 $31 = 666%
Platinum Jan 1, 2003 $608 Price jan 2011 $1750 = 288%

Average gain =452% Which is 6.1 times as much gain as the blue chip stocks.

That's very good investment performance from 2003 to the first day of 2011. No one is stating otherwise. But that doesn't mean the only way is up in the future.

You of all people know that your profits are much better without hundreds of millions of other people chasing the same returns. You should love the Fed! Of course, anyone could have bought and held precious metals in that time, so what is there to complain about? You want to have your assets in gold? Go do it. Anyone can.

 

[NoDrama]

What do you mean "2 of them are from the Fed"? All seven persons on the Board are appointed by the president and confirmed by the Senate; the banks don't get to have their people on the Board.

We all understand that the regional banks have 5 seats on the FOMC. The only issue is how the regional banks are getting these magic Board positions to somehow have 7 seats.

Right now, of the 7 members of the board, 2 of them are from a Fed Reserve bank. Ben Bernanke and Janet Yellen. Combine them with the 5 members from the Reserve districts and you have 7 total people from the Fed itself. That's what we call a majority vote.

 

[tokeprep]

Right now, of the 7 members of the board, 2 of them are from a Fed Reserve bank. Ben Bernanke and Janet Yellen. Combine them with the 5 members from the Reserve districts and you have 7 total people from the Fed itself. That's what we call a majority vote.

You mean they worked for the regional banks in the past? When did Ben Bernanke work for one of the banks? As for Yellen, yes, she did. But she stopped working for the bank when she was nominated to the Board. Her position on the Board has nothing to do with the bank she used to work for.

If you think Yellen is just a bank shill, you're saying that anyone who's worked in any industry cannot be a competent public servant afterward. That's ridiculous. Yellen was an economist and an academic, working as a professor and as the Chairman of the Council of Economic Advisers. That the regional bank chose her--not a banker--to serve as its president should say something about what that bank actually does.

 

[NoDrama]

That's very good investment performance from 2003 to the first day of 2011. No one is stating otherwise. But that doesn't mean the only way is up in the future.

You of all people know that your profits are much better without hundreds of millions of other people chasing the same returns. You should love the Fed! Of course, anyone could have bought and held precious metals in that time, so what is there to complain about? You want to have your assets in gold? Go do it. Anyone can.

You are arguing with me that silver (and PMs in general) are bad investments and that pieces of paper are good investments. All investments have risk, but your investments can go to a value of zero, while physically held gold can never do that.

Gold and silver are the best monetary insurance you can buy. We as citizens of this country have only been free to own gold for the last 40 years. In that time gold has never fallen anywhere near the price it was the day we got to legally hold some again.

FYI I bought the majority of my gold and silver in 2003,but had started stacking in 1999 when I lived in Idaho near the silver mines.

 

[NoDrama]

You mean they worked for the regional banks in the past? When did Ben Bernanke work for one of the banks? As for Yellen, yes, she did. But she stopped working for the bank when she was nominated to the Board. Her position on the Board has nothing to do with the bank she used to work for.

If you think Yellen is just a bank shill, you're saying that anyone who's worked in any industry cannot be a competent public servant afterward. That's ridiculous. Yellen was an economist and an academic, working as a professor and as the Chairman of the Council of Economic Advisers. That the regional bank chose her--not a banker--to serve as its president should say something about what that bank actually does.

Can you quote the part where I said that public servants can't be competent after serving in that regulated role?? I am quite sure I said no such thing at all. I will wait patiently while you show the proof where I said that. Otherwise you are just trying to make up a strawman and I don't fall for those tricks.

Yellen started working for the Fed way back in 1977. She wasn't just the President of the San Francisco Fed, she was also the CEO, which isn't a position that they put you in.

Bernanke's first gig with the Fed was in 1987

You don't think these people have any loyalties to the banks from which they owe their careers? You think they are actually concerned about the average man on the street? Do you see this country becoming more productive and richer everyday or do you see the opposite? Do you see the middle class growing or shrinking? How about the well connected banker elite class, are they getting poorer? Fuck no, FOMC policies are made to help the banks, not you or I.

 

[tokeprep]

You are arguing with me that silver (and PMs in general) are bad investments and that pieces of paper are good investments. All investments have risk, but your investments can go to a value of zero, while physically held gold can never do that.

Gold and silver are the best monetary insurance you can buy. We as citizens of this country have only been free to own gold for the last 40 years. In that time gold has never fallen anywhere near the price it was the day we got to legally hold some again.

FYI I bought the majority of my gold and silver in 2003,but had started stacking in 1999 when I lived in Idaho near the silver mines.

That isn't an accurate summation of what I said. I have no issue with saying they've performed well over a particular time period, only that other assets performed comparably or better. It's the future expectation you're preaching that I question.

 

[tokeprep]

Can you quote the part where I said that public servants can't be competent after serving in that regulated role?? I am quite sure I said no such thing at all. I will wait patiently while you show the proof where I said that. Otherwise you are just trying to make up a strawman and I don't fall for those tricks.

You just said Bernanke and Yellen are beholden to the banks and representing their interests in their service on the Board. What does that mean? That people who worked in the industry cannot be competent public servants. You leveled no special suspicions against Bernanke and Yellen, so I don't see why your sentiment wouldn't apply generally to any regulating position.

Yellen started working for the Fed way back in 1977. She wasn't just the President of the San Francisco Fed, she was also the CEO, which isn't a position that they put you in.

Yellen worked as an economist for the Board, spent decades as an academic and public servant, then worked at a regional bank. She doesn't "owe her career" to that bank--they hired her because of her career. After working there for a few years, Yellen became inextricably beholden to the bank's interests--overriding her decade of government and academic work--even though she never had any financial stake whatsoever in the bank? This story isn't even plausible.

Bernanke's first gig with the Fed was in 1987

Bernanke worked as a "visiting scholar" concurrently with some of his academic positions. He's never been a banker, probably never had any substantial financial interest relating to that work, and was never even involved in it full time for any meaningful period. But you think Bernanke is beholden to the regional banks, who own his vote? Once again, this is not a plausible case, that someone with such brief and ineffectual contact with an institution would become its servant, overriding their decades of other work.

You don't think these people have any loyalties to the banks from which they owe their careers? You think they are actually concerned about the average man on the street? Do you see this country becoming more productive and richer everyday or do you see the opposite? Do you see the middle class growing or shrinking? How about the well connected banker elite class, are they getting poorer? Fuck no, FOMC policies are made to help the banks, not you or I.

I already said Yellen doesn't owe her career to the regional bank, since she worked for the Board of Governors. Neither does Bernanke--he was as professor at Stanford before he ever did anything with one of the regional banks. Why would they have any loyalties whatsoever to the banks? What's in that for them?

 

[NoDrama]

That isn't an accurate summation of what I said. I have no issue with saying they've performed well over a particular time period, only that other assets performed comparably or better. It's the future expectation you're preaching that I question.

Well anyone can look back and specifically pick the perfect singular investment choice and say that means those assets went up the most, but as an overall class, PM's outdid just about everything.

You know what else I am going to invest in next?

Silver Miners.

They have taken a beating, some are down 80% from 3 years ago.

When I hear that housewives in China purchased 300 tons of gold in aggregate over the last month, I take notice. If China were to say, back their currency with gold, the dollar would be completely toppled overnight.

The central bank buying of gold is the highest ever, since 1964 anyway. But US citizens couldn't even legally own gold bullion in 1964.

China produces 400 tons of gold annually and imports a further 500-600 tons annually. If memory serves correctly, around 2007 the Chinese officials said their goal was 10,000 tons within 8 years. Basically 1/17 of all the gold ever mined on earth. More than the supposed 7800 tons of gold the USA has.

Remember the golden rule:

He who has the gold, makes the rules.

 

[tokeprep]

Well anyone can look back and specifically pick the perfect singular investment choice and say that means those assets went up the most, but as an overall class, PM's outdid just about everything.

You know what else I am going to invest in next?

Silver Miners.

They have taken a beating, some are down 80% from 3 years ago.

When I hear that housewives in China purchased 300 tons of gold in aggregate over the last month, I take notice. If China were to say, back their currency with gold, the dollar would be completely toppled overnight.

The central bank buying of gold is the highest ever, since 1964 anyway. But US citizens couldn't even legally own gold bullion in 1964.

China produces 400 tons of gold annually and imports a further 500-600 tons annually. If memory serves correctly, around 2007 the Chinese officials said their goal was 10,000 tons within 8 years. Basically 1/17 of all the gold ever mined on earth. More than the supposed 7800 tons of gold the USA has.

Remember the golden rule:

He who has the gold, makes the rules.

Perfect over the right period. If you had bought silver 200 years ago--and at any time in the centuries prior--you would be sitting on huge losses right now, in 2013. If you had bought it in 1980, you'd barely be ahead. You got your huge gains by taking one of the lowest prices and contrasting it with one of the highest recent prices. I'm talking about the long-term, not the short term. The fact that silver is worth less today than it was worth for so long should give pause about the long term. And as I keep repeating to everyone, silver prices are propped up by industrial demand, so on a purely precious metal basis, the price would be much lower in 2013.

That's why I keep saying gold is a better case. But if gold spends 10 or 20 years at a relatively flat price, it's not going to be the great performer in that period. Your expectations may or may not materialize. We all know why the Chinese central bank is buying gold, though. It's technically insolvent. When you're managing such a huge amount of foreign reserves, those low treasury returns are killer. That's why they've diversified their holdings. I assure you they won't be backing their currency with gold, though. That would just be foolish. The magic bank money is what transformed China from a starving backwater into one of the most thriving places on the planet.

 

[NoDrama]

The greatest reason why silver is such a great investment?

USGS says silver will be extinct by 2048

most of the silver mined has been destroyed, used in electronics and now sitting in landfills.

50 years ago the USA had 5 billion ounces of silver on hand, they haven't had any since the late 90's. We had to decommission the huge Uranium enrichment plant at the Oak Ridge facility for its 13,000 tons of silver in the calutrons and sent that silver to the UK. That was the absolute last bit of deep storage silver the government had.

 

[tokeprep]

The greatest reason why silver is such a great investment?

USGS says silver will be extinct by 2048

most of the silver mined has been destroyed, used in electronics and now sitting in landfills.

50 years ago the USA had 5 billion ounces of silver on hand, they haven't had any since the late 90's. We had to decommission the huge Uranium enrichment plant at the Oak Ridge facility for its 13,000 tons of silver in the calutrons and sent that silver to the UK. That was the absolute last bit of deep storage silver the government had.

Which USGS report is that? My searches found nothing, but I did find a forum post asking if anyone could provide a link to the report, and no one could.

Human beings are fond of saying that the last easily discoverable finds have already been discovered. When I got my start arguing about politics in forums, oil was the popular one--"Peak oil is coming! Peak oil is already here!" Now the United States is on the verge of an energy revolution, and the same resources will ultimately cause the same result in other places.

They could still make discoveries; they could do better recycling silver; they could find substitutes or reduce their use of it; they could start hauling it back from asteroids. When the price is high, it encourages the kind of innovative activities that can ultimately lead to the price crashing back down. No one really knows what's going to happen; your bet is just that.

 

[NoDrama]

Perfect over the right period. If you had bought silver 200 years ago--and at any time in the centuries prior--you would be sitting on huge losses right now, in 2013. If you had bought it in 1980, you'd barely be ahead. You got your huge gains by taking one of the lowest prices and contrasting it with one of the highest recent prices. I'm talking about the long-term, not the short term. The fact that silver is worth less today than it was worth for so long should give pause about the long term. And as I keep repeating to everyone, silver prices are propped up by industrial demand, so on a purely precious metal basis, the price would be much lower in 2013.

That's why I keep saying gold is a better case. But if gold spends 10 or 20 years at a relatively flat price, it's not going to be the great performer in that period. Your expectations may or may not materialize. We all know why the Chinese central bank is buying gold, though. It's technically insolvent. When you're managing such a huge amount of foreign reserves, those low treasury returns are killer. That's why they've diversified their holdings. I assure you they won't be backing their currency with gold, though. That would just be foolish. The magic bank money is what transformed China from a starving backwater into one of the most thriving places on the planet.

When you say the price of silver over the long period, you can only use the period starting in 1964, before that date silver WAS MONEY so other things changed in price according to silver, not the other way around. The US Dollar was defined as a 371.25 grains of fine silver way way back in 1792, before that they used what everyone else used, the Spanish Milled dollar, of which had an average weight of 371.25 grains of fine silver in them. When you define the dollar as a certain amount of silver, that dollar value will NEVER change. So, since 1964 a troy ounce of silver has increased by 2200%. Period.

A silver dollar in 1792 was worth EXACTLY the same as a silver dollar 1964. It was worth exactly 1 dollar and never wavered by even a fraction of a tenth of a 1% of a penny from that value in 172 years. A dollar was still 371.25 grains of silver.

We were on a metallic standard remember? Also the reason why gold never changed in price unless by government edict.

Gold went all the way to 1971 before they pulled the plug, but Silver was used in all Quarters, dimes, and half dollars in circulating coinage and was used up much faster by 1964. All circulating quarters, dimes and half dollar coinage since is made of cupronickle. Pennies stopped being made of copper in 1982, they are made of zinc now and have a "Copper" wash. Pre 82 pennies are worth approx 3 cents in copper value.

Do you know what the penalty is for debasing the money supply? Officially anyway?

Death.

 

[NoDrama]

Which USGS report is that? My searches found nothing, but I did find a forum post asking if anyone could provide a link to the report, and no one could.

Human beings are fond of saying that the last easily discoverable finds have already been discovered. When I got my start arguing about politics in forums, oil was the popular one--"Peak oil is coming! Peak oil is already here!" Now the United States is on the verge of an energy revolution, and the same resources will ultimately cause the same result in other places.

They could still make discoveries; they could do better recycling silver; they could find substitutes or reduce their use of it; they could start hauling it back from asteroids. When the price is high, it encourages the kind of innovative activities that can ultimately lead to the price crashing back down. No one really knows what's going to happen; your bet is just that.

They always knew the oil was there, it was just too costly or near impossible to get out until a new technology called horizontal drilling and fracking came along, without those 2 ingenious inventions, peak oil would have come and gone 10 years ago.

A huge find of silver? Possibly, but unless they come up with a new technology that allows them to do what they do, AND the price of silver/gold/pm stays high enough that makes it profitable to actually search for and mine. Considering a mine takes on average 7 years to get going at last in most developed countries. Of course all electronics are pretty much impossible to build without silver, as is most plastics, have good luck reducing demand by any huge amount.

The kind of tech that would make silver near worthless? A magic beam that strips all the silver from all the landfills with out having to sort through everything and treat it with acids to get the silver out.

I just don't see it happening.

Perhaps the new Graphene will replace silver in everything?

then it can just go back to being money instead of both an industrial metal and money.


As far as the USGS report, I don't have a copy on this PC, it came out years ago, but I am sure if you do a good search you can find it. The USGS later clarified that 'extinct' meant 'remaining deposits will not be economically mineable.

 

[tokeprep]

When you say the price of silver over the long period, you can only use the period starting in 1964, before that date silver WAS MONEY so other things changed in price according to silver, not the other way around. The US Dollar was defined as a 371.25 grains of fine silver way way back in 1792, before that they used what everyone else used, the Spanish Milled dollar, of which had an average weight of 371.25 grains of fine silver in them. When you define the dollar as a certain amount of silver, that dollar value will NEVER change. So, since 1964 a troy ounce of silver has increased by 2200%. Period.

A silver dollar in 1792 was worth EXACTLY the same as a silver dollar 1964. It was worth exactly 1 dollar and never wavered by even a fraction of a tenth of a 1% of a penny from that value in 172 years. A dollar was still 371.25 grains of silver.

The dollar's stated value never changes, but its relative value still changed. What was the purchasing power equivalent of $1 in 1792? Then in 1850? Then in 1900?

Obviously the 1792 silver dollar wasn't worth exactly the same as a 1964 silver dollar. The 1792 silver dollar bought far, far more than it's counterpart did. If you mean the face value of the coin was the same and that it contained the same amount of silver as the other coin, sure. But so what? That doesn't mean anything.

We were on a metallic standard remember? Also the reason why gold never changed in price unless by government edict.

Gold went all the way to 1971 before they pulled the plug, but Silver was used in all Quarters, dimes, and half dollars in circulating coinage and was used up much faster by 1964. All circulating quarters, dimes and half dollar coinage since is made of cupronickle. Pennies stopped being made of copper in 1982, they are made of zinc now and have a "Copper" wash. Pre 82 pennies are worth approx 3 cents in copper value.

Do you know what the penalty is for debasing the money supply? Officially anyway?

Death.[/QUOTE]

 

[NoDrama]

The dollar's stated value never changes, but its relative value still changed. What was the purchasing power equivalent of $1 in 1792? Then in 1850? Then in 1900?

Obviously the 1792 silver dollar wasn't worth exactly the same as a 1964 silver dollar. The 1792 silver dollar bought far, far more than it's counterpart did. If you mean the face value of the coin was the same and that it contained the same amount of silver as the other coin, sure. But so what? That doesn't mean anything.

Oh prices changed quite a bit did they? Can you show me some proof of this claim?

It will be my argument that prices actually DECREASED and silver GAINED in value over that period, not by much, but a little.

I know how this ends.

 

[tokeprep]

They always knew the oil was there, it was just too costly or near impossible to get out until a new technology called horizontal drilling and fracking came along, without those 2 ingenious inventions, peak oil would have come and gone 10 years ago.

A huge find of silver? Possibly, but unless they come up with a new technology that allows them to do what they do, AND the price of silver/gold/pm stays high enough that makes it profitable to actually search for and mine. Considering a mine takes on average 7 years to get going at last in most developed countries. Of course all electronics are pretty much impossible to build without silver, as is most plastics, have good luck reducing demand by any huge amount.

The kind of tech that would make silver near worthless? A magic beam that strips all the silver from all the landfills with out having to sort through everything and treat it with acids to get the silver out.

I just don't see it happening.

Perhaps the new Graphene will replace silver in everything?

then it can just go back to being money instead of both an industrial metal and money.


As far as the USGS report, I don't have a copy on this PC, it came out years ago, but I am sure if you do a good search you can find it. The USGS later clarified that 'extinct' meant 'remaining deposits will not be economically mineable.

When there's profit to be made in finding more of something, people will do it very well. You're doubting that for silver specifically, but people always doubt it about everything. You may be right that silver will remain necessary and more scare, but we cannot possibly know.

I searched both iterations and got nothing but rumors of such a report. No one has been able to identify it, and many have expressed doubts that it exists at all.