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"I am not really a gold bug either. Yeah, I know, I know there's tons of people out there who will talk your ear off about how gold is the only "real" money, blah, blah, blah. That may be true, but gold never disappears. Just about every ounce of gold that has ever been dug out of the ground that isn't sitting on the bottom of the ocean in sunken chests still exists. It has very few, real-world uses other than for jewelry, and the demand for that will likely be restrained for some time to come."

I am careful about thoughts upon gold because the value of Gold is not going to depend on things like logic. Gold can be a currency and like all currencies the value of Gold will somewhat depend on how much people believe in it as a currency.

Some people have all sorts of reasons for why Gold is not valuable and to that I say "What is valuable about a bunch of paper printed with all types of crazy symbols like a pyramid with a eye on it or other masonic symbols??? http://www.freemasons-freemasonry.com/masonic_dollar.html and various other stuff like dead president's or NOVUS ORDO SECLORUM which loosely translated means "A new order for the ages"."

What is the value of that paper if someone handed it to you? Is it more or less than some other paper that was printed in Brazil with the words Cruzado http://en.wikipedia.org/wiki/Brazilian_cruzado printed on it???

If you do value the dead US Presidents more then I ask why is something with Federal Reserve on it more valuable than something with Cruzado printed on it???

I figured this out long ago. It is the human brain that places the value on what different outside objects that it sees means to it. Much of the value people place on things is greatly influenced by what the collective society feels about it.

One might feel like Gold is worth less than cow dung (which can also be used as a currency) but if society as a whole feels that Gold holds the ultimate value then Gold will be very valuable indeed.

There was once long discussions about "faith" on these philosophy boards. One thing I learned long ago is the value of money is more ruled by "faith" than it is logic. It is the belief or faith in the currency where much of the value lies and not so much in what form the currency may take. As I said before Cow dung can be used as a currency.

There are some parts of the jungle of Indonesia or Brazil or Africa or in the outback in Australia that if you brought a dollar bill and tried to use it to buy something you might be killed because the "locals" might think you are trying to rip them off.

They obviously don't have the same "faith" in the dollar and it appears that neither does Moscow http://blog.foreignpolicy.com/posts/2006/07/27/introducing_t...

I would also be careful with predictions on inflation or not because inflation can happen even with high unemployment but in that case many people call it "Stagflation" http://en.wikipedia.org/wiki/Stagflation

Low growth and inflation are not mutually exclusive. The truth is no one really knows the exact time frame things will happen. Inflation can start 1 month from now or 5 years from now.......or some random event can happen and there will not be inflation at all.

There are some that believe in pre-1965 Silver dollars:

"Although many investors buy junk silver coins as bullion investments, other investors buy junk US silver coins for "survival purposes." These buyers fear the worst for the dollar, that it will be printed until it becomes worthless. If this "worst-case scenario" were to become reality, then US silver coins would be used the purpose they were originally minted: as money.

CMIGS hopes that Americans never see the day that their once proud dollar becomes worthless. Yet, we are aware that the history of paper currencies is that they are printed until they become worthless. (Actually, today the most dollars in circulation are not printed but are "electronic" or digital dollars, created by the Federal Reserve."

http://www.cmi-gold-silver.com/90circulated.html

"electronic dollars"......sounds like imaginary money to me....sort of like "Monopoly Money" which is why...

....others believe in putting their money in foreign banks of countries that have a lot of natural resources such as Brazil, Canada, Australia, etc...because their money value can be backed up with the particular natural resources that the particular country holds.

There are a lot of thoughts on these subjects. I read them all and I am not completely sure which scenario will pan out. I rather not have Gold as a currency because Gold is increasingly hoarded into a few hands. "He who has the Gold has the power" or something to that effect. Silver would be a better currency in the event of a "crash" because silver is more widely distributed and the power would be more "people power" than it would be under Gold where absolute power corrupts absolutely.



Starrob
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