Article: 60% of oil price is speculation

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Joined: Thu Sep 18, 2008 1:42 pm

Post by easyBob »

MSimon wrote:easyBob,

For some reason the value of all the gold on earth doesn't match the value of all the currency on earth. So unless you want a really bad collapse there is no turning back.
See, you can't just say it; there is no evidence that anything will collapse. What there is evidence of, is how pumping billions upon billions of dollars into the market over decades causes bubbles, and that they will always burst....Leaving regular Joe jobless, or worse: stuck with piles and piles of valueless money, not even good enough to wipe with.
And it is not a matter of saving and borrowing. If the central bank is reasonably good it can match the growth in currency to the growth in the economy and the currency has a reasonably constant value.

Thus we average about a 3% a year growth in the USA.

With a gold supply growing at 1% that would be the rate of growth you got.

A doubling in 70 years vs 24 years. So at the end of a human lifetime the economy would be 4X larger. It seems to me that it is a shame to give up that kind of growth to avoid a financial panic every 70 years or so. YMMV.
Since the 1940s, there have been at least one or more recessions every decade. Central banks are not good at following growth either, they always end up missing the mark, but that is only because they have no real target to aim at.

CPI: ... 30_378.png

PPI: ... 30_378.png

The whole idea of stable prices is kinda silly to me. To think that some secret group can keep prices stable (which, of course, they haven't) depending on the production of incomparable things, pre hoc, is something that has never been explained. Just how can they do it? The CPI and PPI history don't show a "Job Well Done."

"Since the general exchange-value, or PPM, of money cannot be quantitatively defined and isolated in any historical situation, and its changes cannot be defined or measured, it is obvious that it cannot be kept stable. If we do not know what something is, we cannot very well act to keep it constant."

Also, there is no evidence that growth rate is (or would be) any way even correlated to increases in gold supplies.


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