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Offline g

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Re: Gold & Silver News
« Reply #135 on: October 23, 2012, 01:59:36 AM »
Quote Uncle Bob "It looks like China is Stockpiling all gold  available (which is why Perth Mint can not supply coins now, Kalgoorlie gold mines have been majority bought out by Chinese so they ship it out instead of to the mint.)
So with China stockpiling all this gold we have to ask WHY? What is the game-plan."


A most interesting question that gets very little of the attention that it deserves Unc.

Having thought quite a few years about it and after questioning many friends in the gold community it becomes more of  puzzle as time goes on.

They are the largest producers now domestically and continue to buy on the market in excess of their own domestic consumption, and publicaly announce their intention to keep doing so. Most unusual

Even more fantastic is their open exhortations to their people to buy all the gold they can, they ACTUALLY advise them to do so on TV and in the press. An unheard of proposal for a government with a paper currency.

You will kindly note that Russia, India, South Korea and even very poor Bangladesh join the Chinese in this endevour, albeit in a lesser amount and without the urging of the citizenry to buy.

Many experts in the currency arena feel China is preparing to assume the role of reserve currency for the world and will soon make an announcement, by soon I mean within the decade, that their currency will be backed by gold, convertible, and trade freely.

While I certainly agree with that view my idea is that it is a lot more than that. The Chinese nation just went through one of the worst hyperinflations in history during the 1940's, and have apparently learned a valuable lesson about Fiat. They are most likely hedging themselves from the same disaster they see coming to the US dollar, which is still currently the reserve currency of the world. This, at least to me, explains their concern for their citizens as well as the government treasury.

Enclosing a picture of a stamp from my collection which shows clearly how far the madness went in  China.  Remember China a nation of over a billion people as recent as 1947 is when this happened. Not Zimbabwe or some Banana Republic!

                                           
China 1948 Airmail 50,000 on 1$ Peking Full og nh Suprb Gem Chan A59
China 1948 Airmail 50,000 on 1$ Peking Full og nh Suprb Gem Chan A59

Offline RE

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Re: Gold & Silver News
« Reply #136 on: October 23, 2012, 02:05:45 AM »
Many experts in the currency arena feel China is preparing to assume the role of reserve currency for the world and will soon make an announcement, by soon I mean within the decade, that their currency will be backed by gold, convertible, and trade freely.

The Chinese are...


RE
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Offline Petty Tyrant

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Re: Gold & Silver News
« Reply #137 on: October 23, 2012, 02:34:45 AM »
RE
Lets assume China and Russia Dont step in with Iran and all their warnings are a bluff, The only thing that would make them toast is shipping cost which at the moment is really cheap. There are plenty of emerging markets with large populations of potential middle class polluters to buy imitation honda and yamaha dirtbikes and everything else. Its not the case that they really need european and american consumer markets to stay strong.
Lets say that 7.8% growth for now is over-optimistic, lets say its really 5%, well thats healthy in a transition period. They have gone all around the world slipping their hand into everyones pocket with trade partnerships, but everyone is waking up to find that hand in their pocket has them by the balls.

On top of this, the more various states and countries can not deliver on their budget black holes the happier they are to sell off assets to the chinese. Bill Clinton bent his own country over way worse than the fort knox heist when he sold all the component contratcts for the miltary to chinese suppliers, mostly for bribes.
Unless the US has some excellent shadow systems immune to ching chong hackers, the weapon systems they have are all russian roullette.

« Last Edit: October 23, 2012, 02:38:24 AM by Uncle Bob »
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Offline monsta666

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Re: Gold & Silver News
« Reply #138 on: October 23, 2012, 05:17:36 PM »
Lets assume China and Russia Dont step in with Iran and all their warnings are a bluff, The only thing that would make them toast is shipping cost which at the moment is really cheap. There are plenty of emerging markets with large populations of potential middle class polluters to buy imitation honda and yamaha dirtbikes and everything else. Its not the case that they really need european and american consumer markets to stay strong.
Lets say that 7.8% growth for now is over-optimistic, lets say its really 5%, well thats healthy in a transition period. They have gone all around the world slipping their hand into everyones pocket with trade partnerships, but everyone is waking up to find that hand in their pocket has them by the balls.

A lot of talk is given to the fact that if the US or Europe fail then China, Russia or other nations can still keep expanding by selling their products to other developing nations. Let us look at the maths to see how feasible this theory could be. For sake of argument let us assume the economies of the US and the EU are $16 trillion in nominal terms. 70% of this total GDP figure goes toward consumption, that is $11.2 trillion each or $22.4 trillion. So China and other exporting nation have the potential to tap into a $22.4 trillion market.

Let us suppose due to the West failing economy this market drops by 2% per annum. That 2% would equate to $448 billion dollars. Now consider the biggest economy outside the EU/US would be China with a GDP of $7.2 trillion. Of this $7.2 trillion figure about 34% is devoted to consumption (one of the lowest on record btw). This 34% would equate to $2.45 trillion. As you can see to make up the 2% short fall in Europe and the US the Chinese economy would need to boost consumption by $448 billion per annum or 18%. That is a colossal increase. This is especially so if you consider that China is a mercantilist economy and part of its success derives from the following the export model namely undervalued currency, negative real interest rates, subsidies to various business operations and few welfare benefits to employees. All these factors while great for encouraging exports and investments is terrible to promoting consumption spending habits.

Now off course the question you would say ask is consumption could grow in other developing regions. If you add all the other major economies around the Asian block you get a total close to around $5 trillion (this is excluding Japan who should not be counted on for future growth). Off this let total we can say the consumption rate for this region averages around 50% which is somewhat typical of most countries in the world. Although it should be noted it is probably lower than this figure since many of these economies follow an export model but let us be generous and say it is 50%. That would give another $2.5 trillion. So in total the possible export market for this region including China would be $5 trillion. To make up the short fall in Europe and the US would require this market to rise by almost 10%. This total seems rather ambitious when one thinks most of these Asian tigers all follow the export model that promotes investment at the expense of consumption.

In short I don't think it is going to happen. To me it is a pipe dream that the Asian economies can continue growing while the US/Europe contract. It would be a mighty struggle to maintain 0% growth nevermind 5%. Oh and all this talk ignores the possibility of the whole banking sectors going into meltdown which is a distinct possibility should the Western economies continually contract. Once that happens then the writing would be on the wall for any nation.

Offline g

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Re: Gold & Silver News
« Reply #139 on: October 23, 2012, 06:24:58 PM »
Quote
Monsta666 "In short I don't think it is going to happen. To me it is a pipe dream that the Asian economies can continue growing while the US/Europe contract. It would be a mighty struggle to maintain 0% growth nevermind 5%. Oh and all this talk ignores the possibility of the whole banking sectors going into meltdown which is a distinct possibility should the Western economies continually contract. Once that happens then the writing would be on the wall for any nation."

Bulls eye Monsta, the down side of Globalization the great planners forgot about.

Why else would China buy ourworthless debt endlessly, but to keep their export game alive.

Dr Fu Manchu learned to play chess thousands of years ago, he's no dummy. Keep your eyes on the Precious Yellow, he has acquired an insatiable thirst for it lately.
Dr Fu Manchu
Dr Fu Manchu

Offline Snowleopard

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Re: Gold & Silver News
« Reply #140 on: October 23, 2012, 09:37:08 PM »
Monsta, My understanding is its a theory based on the fact they will not allow an audit of fort knox since 1970 or so, but dont quote me on that.

The story I got is that the replacement with counterfeit bars started in the mid-70s but accelerated greatly under the Clinton Administration in the 80s.

Recently the Swiss National Bank found numerous 100oz Tungsten Cored bars in their Basement Safe.

As the value of Gold increases, the rewards for Counterfeiting increase as well, so there are increasingly more coutnterfeit coins and bars circulating.  Unless you drill them you can't tell the difference.  Since Coin Dealers won't let you drill a coin you won't know until after you buy it and only if you choose to drill it, which will take some value away from the numismatic collectibles of course.

Count on it, it Da Goobermint went to a Gold Standard, Gold coins would be cored with Tungsten all the time.  This is an old Playbook the Romans did, though not with Tungsten.  It's just as possible to debase metal coinage as Fiat, and certainly easier to counterfeit than the complex paper notes with special papers.

Gold has about ZERO chance of working as currency, but Gold Bugs can't grasp reality.  Sad.

RE

I'm wondering what is the chance some government is allready there? 

Who drills their new one ounce Gold Eagles to check for tungsten?

Are Maples or Pandas inherently safer?
"A man sees what he wants to see and disregards the rest." -  Simon and Garfunkel

Offline Petty Tyrant

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Re: Gold & Silver News
« Reply #141 on: October 24, 2012, 12:15:31 AM »
Lets assume China and Russia Dont step in with Iran and all their warnings are a bluff, The only thing that would make them toast is shipping cost which at the moment is really cheap. There are plenty of emerging markets with large populations of potential middle class polluters to buy imitation honda and yamaha dirtbikes and everything else. Its not the case that they really need european and american consumer markets to stay strong.
Lets say that 7.8% growth for now is over-optimistic, lets say its really 5%, well thats healthy in a transition period. They have gone all around the world slipping their hand into everyones pocket with trade partnerships, but everyone is waking up to find that hand in their pocket has them by the balls.

A lot of talk is given to the fact that if the US or Europe fail then China, Russia or other nations can still keep expanding by selling their products to other developing nations. Let us look at the maths to see how feasible this theory could be. For sake of argument let us assume the economies of the US and the EU are $16 trillion in nominal terms. 70% of this total GDP figure goes toward consumption, that is $11.2 trillion each or $22.4 trillion. So China and other exporting nation have the potential to tap into a $22.4 trillion market.

Let us suppose due to the West failing economy this market drops by 2% per annum. That 2% would equate to $448 billion dollars. Now consider the biggest economy outside the EU/US would be China with a GDP of $7.2 trillion. Of this $7.2 trillion figure about 34% is devoted to consumption (one of the lowest on record btw). This 34% would equate to $2.45 trillion. As you can see to make up the 2% short fall in Europe and the US the Chinese economy would need to boost consumption by $448 billion per annum or 18%. That is a colossal increase. This is especially so if you consider that China is a mercantilist economy and part of its success derives from the following the export model namely undervalued currency, negative real interest rates, subsidies to various business operations and few welfare benefits to employees. All these factors while great for encouraging exports and investments is terrible to promoting consumption spending habits.

Now off course the question you would say ask is consumption could grow in other developing regions. If you add all the other major economies around the Asian block you get a total close to around $5 trillion (this is excluding Japan who should not be counted on for future growth). Off this let total we can say the consumption rate for this region averages around 50% which is somewhat typical of most countries in the world. Although it should be noted it is probably lower than this figure since many of these economies follow an export model but let us be generous and say it is 50%. That would give another $2.5 trillion. So in total the possible export market for this region including China would be $5 trillion. To make up the short fall in Europe and the US would require this market to rise by almost 10%. This total seems rather ambitious when one thinks most of these Asian tigers all follow the export model that promotes investment at the expense of consumption.

In short I don't think it is going to happen. To me it is a pipe dream that the Asian economies can continue growing while the US/Europe contract. It would be a mighty struggle to maintain 0% growth nevermind 5%. Oh and all this talk ignores the possibility of the whole banking sectors going into meltdown which is a distinct possibility should the Western economies continually contract. Once that happens then the writing would be on the wall for any nation.

It is the size of the populations of countries like India, Indonesia, and Brazil, and their growing consumer markets, not just nearby asian countries that makes it seem feasible. Im just throwing the idea up, I dont actually believe in it.

My own sense is these are brightly burning but burning out shooting stars, because 1, there isnt enough cheap oil and resources for them all to drive cars and run aircons. 2, They are destroying their rivers and forests so fast, while displacing villagers that it can not continue without some major upheaval.

The chinese Honda plant alone produces almost a million cars a year and most of those are sold domestically. They are betting their food future on owning massive farms in the US, Australia, and Africa, French wineries etc. I think as tensions and conflicts escalate Their access to all this property and ports will have problems of basically being unwelcome and sabotaged in various ways. That is not even taking into account shipping costs screwing their u-name-it export and food import, rising from middle east oil disruption.
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Offline RE

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The Golden Blind Spot
« Reply #142 on: October 24, 2012, 02:41:09 AM »
The Golden Blind Spot by Diner Monsta666 now UP on the Diner Blog!

Graphics courtesy of RE as usual, in this case chosen to emphasize the COUNTERFEITING problem that occurs with all PM coinage and debases it as readily as printing paper does.  GO never responds to the counterfeiting problem when I detail it in my responses to him, so I figured I would stick it to him with the graphics in this article.  :icon_mrgreen:

Meanwhile in the text, Monsta covers many of the main areas of difficulty with PM based systems, though by no means complete and I don't agree with everything he wrote there either.  However, I will wait a bit to see what this flushes out in terms of argument from other Players before I Pontificate further on the issue.  :icon_mrgreen:

RE
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Offline RE

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Re: Gold & Silver News
« Reply #143 on: October 24, 2012, 03:07:52 AM »

I'm wondering what is the chance some government is allready there? 

Who drills their new one ounce Gold Eagles to check for tungsten?

Are Maples or Pandas inherently safer?

I am assuming "Pandas" are Chinese Minted Gold Coins.

Anybody who trusts ANYTHING the Chinese produce as "Pure" needs their head examined.  Elite chinese are evacuating China and taking whatever they can with them.  Same folks run the Chinese Mint.  If you Mint 1M Pandas, all you gotta do to be filthy Rich leaving the country is to drill out 1% of the coin and slip in a tungsten rod to replace what you drilled out, then cover over with Gold on the ends.  Even if you DRILL the coin, unless you happen to drill exactly where the Tungsten Rod inside is, you won't detect it.

With Gold valued now at around $1700/oz, the Profit to be made if you buy say 1000 100 oz Gold bars and core them with say 10% Tungsten is FANTASTIC return on Risk.  For little investment you instantly have 10% more bars to sell than you originally bought. Your chances of being caught are pretty small.  You don't think the Chinese got that figured out?  Or anybody else with access to large quantities of gold bars?  This is older than the hills stuff.

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Offline g

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Re: The Golden Blind Spot
« Reply #144 on: October 24, 2012, 05:36:27 AM »
The Golden Blind Spot by Diner Monsta666 now UP on the Diner Blog!

Graphics courtesy of RE as usual, in this case chosen to emphasize the COUNTERFEITING problem that occurs with all PM coinage and debases it as readily as printing paper does.  GO never responds to the counterfeiting problem when I detail it in my responses to him, so I figured I would stick it to him with the graphics in this article.  :icon_mrgreen:

Meanwhile in the text, Monsta covers many of the main areas of difficulty with PM based systems, though by no means complete and I don't agree with everything he wrote there either.  However, I will wait a bit to see what this flushes out in terms of argument from other Players before I Pontificate further on the issue.  :icon_mrgreen:

RE

I responded in depth to your absurd views on gold counterfeiting and sent you three videos explaining why your views were in error. Like the statement "you have never called Gold tungsten" was not true, so is this one.

Monsta666 is a great poster, well intentioned and a valued contributor, but like you, he knows very little about Gold. His article is another muddy the waters, although well intentioned, your rantings about Gold are just silly bull shit with no validity whatsoever.

Not having the ability, as others who are smarter than you, Karl Denninger, James Quinn, and others, to just remove you from their presence, I will in the future, as my right of self censorship allows me, no longer comment. or rather should I say lower myself to your level of drivel in comments regarding the Noble Metal.
I have done all I can to try and help and was a complete failure in my efforts, the thickness of your skull is just too much for me to handle. Forgive me, I tried my best, it is just impenetrable.   
 
Confucius say " A FOOL AND HIS GOLD ARE SOON PARTED "
                                   
                                         
2746257 976033 Chinese statue of Confucius with bamboo background
2746257 976033 Chinese statue of Confucius with bamboo background


Offline Petty Tyrant

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Re: The Golden Blind Spot
« Reply #145 on: October 24, 2012, 06:34:13 AM »
The Golden Blind Spot by Diner Monsta666 now UP on the Diner Blog!

Graphics courtesy of RE as usual, in this case chosen to emphasize the COUNTERFEITING problem that occurs with all PM coinage and debases it as readily as printing paper does.  GO never responds to the counterfeiting problem when I detail it in my responses to him, so I figured I would stick it to him with the graphics in this article.  :icon_mrgreen:

Meanwhile in the text, Monsta covers many of the main areas of difficulty with PM based systems, though by no means complete and I don't agree with everything he wrote there either.  However, I will wait a bit to see what this flushes out in terms of argument from other Players before I Pontificate further on the issue.  :icon_mrgreen:

RE


Ok, I will have flushed out of me the plain obvious.

1/You call counterfeiting "old as the hills" in debasing the currency/value. Trading at 1700-1800$ oz up from 350$oz a decade ago, that level of debasement is one we can wear.

2/Using gold as trade on a small scale, Nobody has access to tungsten or technology to take it off the tip of their Kinchrome screwdrivers to put it in gold.

3/ Even if you could do it. Trading in gold for goods means melting tiny amounts out to be weighed on small scales, hard to hide tungsten in these.

Simple solution;Get caught get killed.
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Offline g

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Re: Gold & Silver News: The Dow Jones In Relation to Real Money
« Reply #146 on: October 24, 2012, 06:47:05 AM »
dow gold ratio 1900 to 2009
dow gold ratio 1900 to 2009

Offline RE

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Re: Gold & Silver News
« Reply #147 on: October 24, 2012, 07:06:14 AM »
Gimmee a break GO.  That was a lame response/insult  even for you.  EVERYBODY KNOWS the reason I got banned from TBP & Ticker is because I squashed the Admins like bugs.  :icon_mrgreen:

RE
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Offline g

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Re: Gold & Silver News
« Reply #148 on: October 24, 2012, 07:18:31 AM »
Gimmee a break GO.  That was a lame response/insult  even for you.  EVERYBODY KNOWS the reason I got banned from TBP & Ticker is because I squashed the Admins like bugs.  :icon_mrgreen:

RE
                                               
                                         
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Offline Petty Tyrant

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Re: Gold & Silver News
« Reply #149 on: October 24, 2012, 03:27:02 PM »
The 3 initial points re the Tungsten Counterfeiting I put forward above deal with the pictorial side of the article as supplied by RE.

With regard to Monsta's main arguments,
Firstly the "long depression" of 1870's following the American civil War is not well known at least I had not heard of it, the 1890's depression is generally more recognized. I would say Monsta was being ethnocentric if he was not a Pom  ;). Secondly Im still not convinced the Chicken/Egg conundrum with war/depression is settled in favour of war first because there is no depression following WW2. Then again despite the whole idea being somehow missed except in very brief passing by Obama "2 wars on a chinese credit card" in the 3 presidential debates on firstly the economy, then another one on foreign policy, the connection right now with War first was never recognised.

Thirdly, Fractional reserve lending of gold backed money does not mean that the value of actually HOLDING the gold does not make sense. I see this as a case FOR gold not AGAINST it. As Monsta points out, they did this in the first place because they realised people were NOT taking their physical gold out of safe deposit in the bank.

The only problem against HOLDING gold is confiscation, which happened in the 1930's depression. Lets say you have it confiscated are recompensed at a dollar value then the dollar hyperinflates, you are screwed.
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