Deregulating the banks?

[WilliamC]

No, exactly opposite.

Clarity and specific definitions.

It neither clarifies nor specifies, it obfuscates and muddles.

Not true - since value changes over time, so how can you possibly store it?

Gold and silver, for instance, have been both valuable and stores of value since before human history.

So for them at least there is an intrinsic value, so long as there have been humans that is.

Do you really believe gold holds its value?

I don't have to 'believe' it, it is demonstrably true.

Gold and silver have been valued throughout recorded human history, since before Homer and before the Bible waswritten, do you deny this is correct?.

Now, as I stated, in the absence of humans, well there is no reason to any discussion of economics, so of course any discussion of value becomes irrelevant.

Well, in 1980 it was traded 850 FRN per oz, and in 1999 it traded 250 FRN per oz. - it's "store of value" sucked.

I tend to take a slightly longer view, like thousands of years. But if you wish to base your entire argument on the value of gold on these two specific dates then by all means do so, I just don't accept your timeframe.

So we must discard such a concept - and replace it with a description of reality - "it is a valuable thing to store".

Semantics. By definition a valuable thing to store is a store of value.

Why would one wish to store things that are not valuable, or that lose their value over time?

So no, I'll not discard the concept.

No, it is not.

Value is imputed by the individual to the object.

So how can there be something intrinsic if it must be imputed???

Why is this concept important?

Because it brings our gaze to a point for our attention - not the object, but the individual as the source of defining value.

That means what another man demands is valuable DOES NOT MEAN it must be forced upon other men who do not see such value.

I have no desire to force you to believe gold and silver, for instance, are valuable.

If you do not wish to own any then don't.

But most of humans throughout most of human history would tend to disagree with you.

Without humans, as I said, the entire discussion is irrelevant.

And that simple concept changes a lot in our world.

But not the fact that gold and silver, for instance, are intrinsically valuable precisely because humans have valued them since before recorded history.

[Domalais]

The only explaination for a flat price of gold between 1983 and 2003 is that no inflation or devaluation of the dollar occured over those two decades. Otherwise, gold did not maintain its value.

I'll leave it up to you to pick which possibility is true.

[WilliamC]

Poppycock!

This explains a lot methinks.

I am sorry to tell you, but exponential growth rates in the presence of finite resources will always end in population in population crashes and instabilities for all biological populations, human or otherwise. It is simply not possible to expand forever with limited resources.

This has been a claim since Malthus in the 17th Century and it remains as untrue then as now.

Everyone dies, all species become extinct, and humans are not different than bacteria in a petri dish when it comes to reproducing and consuming resources, it's simple mathematics.

If we don't figure a way to either expand off of the Earth or to voluntarily manage our birth rate there will continue to be mass starvation, epidemics, wars and genocides just have there always been in human history, and they will get worse as time goes on instead of better.

Holland is one of the most densely populated places - ever been to Holland?

Yes.

They have vast farms, they are rich, and they are mostly pretty happy.

Not really a problem in my mind.

Yet the world is much bigger, and much poorer than Holland.

My point is that, despite the fact that we haven't done so yet we will reach our ultimate carrying capacity, we can easily see it coming.

People - human beings - are the greatest problem solvers in the known Universe. Frankly, we are utterly amazing at it.

Oh I have no doubt that humans must solve our own problems and are capable of doing so, but I am less than optimistic that we actually will.

We have wasted most of our resources so far on war and preparation for war and perhaps don't have enough left to begin the serious work of long-term space colonization and long-term survival of the species.

One needs only to look outside and marvel at how good we do it.

The more people - the more problems solved.

We are vastly more rich today because there are more people solving problems - because, sir, that is what wealth is - successful solutions to human problems

I'm not arguing against human ingenuity, but simply that it won't be enough to overcome the simple mathematical fact that exponential growth with limited resources always leads to population crashes, and sometimes those crashes result in extinction of the species involved.

I'd rather that not happen, at least not for a few more million years, and I don't see this as possible as long as we are constrained to living on a single planet.

As far as living space.....

Remember Star Wars, and the planet got destroyed, and Obi Wan was so impacted by the screams of billions of beings dying....

..then remember that "little moon" that was a death star and it blew up - and nobody felt the impact of the screams of the dying?

Well, that huge planet had a few billion living on its surface...

...but that little death star had a few hundred billion trillion people living inside it.

Even if 99.9% of that death star was engine and infrastructure - there would be hundred trillion people inside of it.

3D space is amazingly larger than 2D space...

Don't worry much about "where we will live or go" - we have lots of room still left on ol' planet earth.

Oh I don't doubt the possibility, but I don't see us as going in that direction at this point, and a big part of the reason is that the wealth of our humanity is being squandered on war and killing, and part of that is the monetary system that supports the elite at the expense of the many.

A free-market in currency, which includes but is not forcibly limited to using gold and silver, would help us reach these goals.

[Black Flag]

It is the only thing in the past few millenia that has maintained its value.

Sir, your graph shows only that its price in reference to the US$ changes regularly.

This has NOTHING to do with value.

Not to mention the only reason that boom happened was because of the high inflation in 1980.

Hmm... which actually was a consequence of Nixon closing the gold window in 1971.
Your graph does not go back to when gold was $35/oz....

[Black Flag]

Gold and silver, for instance, have been both valuable and stores of value since before human history.

They have been valuable to store - but again, they do not store value.

How can you explain that gold was $35, now $1700, was $850 and $250... while at the same time, claiming it is storing such value?

What does "storing value" mean?

I store my grain in a bin - I expect to have the same grain when I open my bin at a point in the future.
So if I store value - I expect to have the same value at a point in the future.

But value changes all time - every second depending on your personal circumstance.

So how can you possibly say that you are storing value - keeping it the same for the future - when it is never the same in the future?

You have a conceptual contradiction.

[Black Flag]

The only explaination for a flat price of gold between 1983 and 2003 is that no inflation or devaluation of the dollar occured over those two decades. Otherwise, gold did not maintain its value.

I'll leave it up to you to pick which possibility is true.

So let's test your claim that no inflation occurred of the dollar.

Inflation = "increase in the money supply", therefore it is a simple exercise to go and get the facts about whether the money supply increased over that time.

http://upload.wikimedia.org/wikipedi...supply.svg.png

A review between 1980 toward the present shows a near-linear increase in the money supply.
Therefore the claim regarding inflation "not occurring" doesn't seem right.

To check our work, let's look at the CPI inflation rate ...yes it is flawed, but we can essentially discount its flaws by comparing it to itself - compare a rotten apple to a rotten apple and note what changes .... the rot cancels itself out....

Ok, CPI of 1980
1980-01-01 78.000

2003-01-01 182.600

...so, confirming our money supply data that indeed inflation was fully engaged.

But as you noted the price of gold was flat.

Therefore, the price of gold was FLAT so it had to be losing its buying power relative to the entire market! or, in the misused lingo of the posters here

..it was losing value....

Hell of "store" huh?

[WilliamC]

They have been valuable to store - but again, they do not store value.

That which is valuable to store is by definition a store of value.

If you don't accept the premise then I suppose we won't be able to communicate very well.

How can you explain that gold was $35, now $1700, was $850 and $250... while at the same time, claiming it is storing such value?

The time frames I'm looking at are far longer than those you are.

does "storing value" mean?

Store--to put away for an indefinite period of time

Value--an object that humans find useful for trade.

Of course I just made that up, but it seems to fit.

How do you define it?

I store my grain in a bin - I expect to have the same grain when I open my bin at a point in the future.

How far in the future? IF you are talking weeks or months perhaps. But years or decades and you'd be foolish to entrust your wealth to grain for so long a period of time.

Gold and silver are unique in that they can remain unchanged and store value over all of recorded human history. Nothing else comes close.

So if I store value - I expect to have the same value at a point in the future.

Why? The quantity may change depending on you medium of storage.

Which gets back to why gold and silver are pretty much unique, no matter what else has been used as such throughout history. They don't change over time.

But value changes all time - every second depending on your personal circumstance.

Value is an abstract concept but objects which retain value can be constant. Gold and silver being the prime examples in human history. The exact amount that they will be valued may change, but they will almost always have value in any realistic human economy, as they always have throughout human history.

So how can you possibly say that you are storing value - keeping it the same for the future - when it is never the same in the future?

Well based on all of recorded human history, (i.e., the past) I predict that humans in the future will continue to value gold and silver and will assign to discreet physical pieces of gold and silver a value when measured in other physical objects. The precise quantity of that value will change, indeed the objects themselves will change as humans create new technology, but there is nothing to suggest that gold and silver will somehow loose their value as all paper money throughout history has done in the past.

You have a conceptual contradiction.

No, I merely recognize the fact that gold and silver are the definition of wealth and value throughout recorded human history more than any other physical object.

They aren't the only stores of value, just the most enduring.

[Black Flag]

I am sorry to tell you, but exponential growth rates in the presence of finite resources will always end in population in population crashes and instabilities for all biological populations, human or otherwise. It is simply not possible to expand forever with limited resources.

The flaw in your thinking:
You see the earth with your very flawed eyes and understanding and do a calculation.

You cannot see, comprehend or calculate the future innovation, tools, technology, knowledge or capacity of the human race- so you ignore this.

You run your calculator and it gives you a number to which you compare to something you ignored and discount, and become fearful.

You take this fear and demand solutions to solve this fear that must come from the very arena you discounted above:
future innovation, tools, technology, knowledge or capacity of the human race

[Black Flag]

That which is valuable to store is by definition a store of value.

If you don't accept the premise then I suppose we won't be able to communicate very well.

You have not provided any premise.

You are confusing concepts.

You are trying to equate, two, exclusive concepts to be the same.

Something valuable to store is NOT the same as a store of value.

I think my letters home to my wife are valuable, so I store them.
They do not store any value, because if one day I have to decide between them and my wife's life - they will burn.
So the value they have changes - and therefore, you cannot store it (see grain example)

[Travlyr]

The flaw in your thinking:
You see the earth with your very flawed eyes and understanding and do a calculation.

You cannot see, comprehend or calculate the future innovation, tools, technology, knowledge or capacity of the human race- so you ignore this.

You run your calculator and it gives you a number to which you compare to something you ignored and discount, and become fearful.

You take this fear and demand solutions to solve this fear that must come from the very arena you discounted above:
future innovation, tools, technology, knowledge or capacity of the human race

WilliamC is not flawed in this thinking my friend. He makes a lot of sense.