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Thread: Why Did Ron Paul Say Gold Could Go To Infinity?

  1. #1

    Why Did Ron Paul Say Gold Could Go To Infinity?

    Why Did Ron Paul Say Gold Could Go To Infinity?

    By Keith Weiner

    Forbes.com

    August 4, 2014

    This week, former Congressman Ron Paul said gold could go to infinity. Many people will be tempted to buy gold based on his prediction. It’s certainly exciting to think about the upside, the profit potential. Who doesn’t want to buy whatever’s going up? However, in the case of gold, there is a serious error in this thinking.

    Dr. Paul has put his finger on something very important. The government is abusing its credit, and borrowing itself into oblivion. If this continues, then the value of the government’s debt and currency will drop, probably quite rapidly. This means the price of gold will skyrocket.

    Suppose you buy gold today at $1300, and then the price doubles. Should you rush out to sell the gold, to take profits? At $2600 an ounce, you have twice as many dollars for your ounce of gold.

    This is a phantom profit because each dollar is worth half as much. The rise in the gold price simply reflects the falling dollar. An analogy may help clarify this key point. Imagine being on a rowboat. The boat is tossing up and down on big waves, and at the same time the tide is going out. You look up at a lighthouse on a rocky peninsula jutting out into the sea. You wonder something.

    “Why is the lighthouse jerking up and down, and why is it rising?”

    Your friend is in a helicopter, a few hundred feet above you. He sees that the lighthouse isn’t going anywhere. It’s your boat that’s moving.

    Let’s use one more analogy to cement this important idea. A carpenter needs to measure the length of a board, so he stretches out some rubber bands. The board is 4 rubber bands long, and he cuts it. He comes back later, but finds that the board has increased in length. Now it’s 5 rubber bands long, and he wonders what’s happening.

    It’s easy to see that measuring a board with something stretchable is silly. To measure length, you need something rigid. Steel doesn’t stretch or compress, which is important in getting an objective measure of length. It’s the same in taking other measurements, such as weight, temperature—or economic value. We need the right unit of measure.


    http://www.lewrockwell.com/2014/08/n...o-to-infinity/

    Copyright © 2014 by LewRockwell.com. Permission to reprint in whole or in part is gladly granted, provided full credit and a live link are provided.



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  3. #2
    They are right. The price of gold is virtually worthless when converted to dollars

  4. #3
    I didn't read the rest of the article, but I think their point is Ron's point: As the value of the dollar approaches zero, the price of gold (and everything) goes to infinity, without the value of gold increasing at all necessarily.

  5. #4
    Quote Originally Posted by Vanguard101 View Post
    They are right. The price of gold is virtually worthless when converted to dollars
    More like the opposite. The price of dollars is worthless when converted to gold. Gold has seniority, as a medium of exchange, by about at least 7,000 years or so.

  6. #5
    Because he is really Buzz Lightyear. "To infinity and beyond!"
    “The spirits of darkness are now among us. We have to be on guard so that we may realize what is happening when we encounter them and gain a real idea of where they are to be found. The most dangerous thing you can do in the immediate future will be to give yourself up unconsciously to the influences which are definitely present.” ~ Rudolf Steiner

  7. #6
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    Why Did Ron Paul Say Gold Could Go To Infinity?

    Probably because the value of the dollar could go to 0.

    I can see a future where someone could offer me infinite stacks of worthless paper for gold and I would still say no.
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  8. #7

    Hyperinflation of the Weimar Republic in 1923 Germany
    www.usagold.com/germannightmare.html


    This report of Germany's hyperinflation originally published in 1970 by Scientific
    Market Analysis, could play an important part in your preparation process.
    //

  9. #8
    Something Karl Denninger mentions a lot, if you bet on the end of the world and win, how do you collect your winnings?

    In the event of Dollar hyper-inflation the price of everything will head to infinity. In the event of Dollar hyper-inflation America also becomes a very dodgy place to live for a while.

    Its a warning not to destroy the dollar, not investment advice.
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  11. #9
    Infinities are fun.

    RP's point obviously was not that gold would go to infinity compared to other commodities but that dollars could go to zero relative to gold.

    But infinity is a big number. At some point paper dollars would still have value as a heat source.
    Truth forever on the scaffold, Wrong forever on the throne,--
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    Standeth God within the shadow, keeping watch above his own.
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  12. #10
    If gold goes to infinity, your cities are probably rioting.

  13. #11
    Quote Originally Posted by axiomata View Post
    But infinity is a big number. At some point paper dollars would still have value as a heat source.
    ...or a more valuable commodity...

    All modern revolutions have ended in a reinforcement of the power of the State.
    -Albert Camus

  14. #12
    Should you rush out to sell the gold, to take profits?
    I understand the context, but the phrase "take profits" should be a bellweather to anyone looking for financial advice. "Taking profits" assumes converting gold into "money". It indicates a complete misapprehension of how money works. One does not take profits by selling precious metals, it is exchanging money for pieces of paper. A person can choose to spend their money on any number of things - some valuable and some worthless.

  15. #13
    Quote Originally Posted by axiomata View Post
    Infinities are fun.

    RP's point obviously was not that gold would go to infinity compared to other commodities but that dollars could go to zero relative to gold.

    But infinity is a big number. At some point paper dollars would still have value as a heat source.
    Good point. Physical money in the form of paper and metal will always have some value. The value of dollars in the form of journal entries or account balances can go to zero though.
    "Foreign aid is taking money from the poor people of a rich country, and giving it to the rich people of a poor country." - Ron Paul
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  16. #14
    Shaky math

    With a FRN value @ 0

    With a gold price @ X

    X / 0 = undefined, I suppose you could call it infinity. Stick to medicine, Ron.


    EveryTHING we know is finite. Infinity only works in mathematics. (Could it be that is math is really metaphysical?)

  17. #15
    Quote Originally Posted by Ronin Truth View Post
    Shaky math

    With a FRN value @ 0

    With a gold price @ X

    X / 0 = undefined, I suppose you could call it infinity. Stick to medicine, Ron.


    EveryTHING we know is finite. Infinity only works in mathematics. (Could it be that is math is really metaphysical?)
    "Mathematics is the language with which God wrote the universe." ~Gallileo
    Quote Originally Posted by Torchbearer
    what works can never be discussed online. there is only one language the government understands, and until the people start speaking it by the magazine full... things will remain the same.
    Hear/buy my music here "government is the enemy of liberty"-RP Support me on Patreon here Ephesians 6:12

  18. #16
    Quote Originally Posted by Ronin Truth View Post
    Shaky math

    With a FRN value @ 0

    With a gold price @ X

    X / 0 = undefined, I suppose you could call it infinity. Stick to medicine, Ron.


    EveryTHING we know is finite. Infinity only works in mathematics. (Could it be that is math is really metaphysical?)
    As the value of the dollar approaches zero, the value of gold in dollars approaches infinity.
    "Foreign aid is taking money from the poor people of a rich country, and giving it to the rich people of a poor country." - Ron Paul
    "Beware the Military-Industrial-Financial-Pharma-Corporate-Internet-Media-Government Complex." - B4L update of General Dwight D. Eisenhower
    "Debt is the drug, Wall St. Banksters are the dealers, and politicians are the addicts." - B4L
    "Totally free immigration? I've never taken that position. I believe in national sovereignty." - Ron Paul

    Proponent of real science.
    The views and opinions expressed here are solely my own, and do not represent this forum or any other entities or persons.



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  20. #17
    Quote Originally Posted by Brian4Liberty View Post
    As the value of the dollar approaches zero, the value of gold in dollars approaches infinity.
    Cost yes, value no.
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  21. #18
    Quote Originally Posted by TheCount View Post
    Cost yes, value no.
    Both. The market value of something is what it fetches (costs) end consumers in the market. As Brian pointed out, as inflation reaches infinity, the price of gold in dollars goes up accordingly. This is how markets work (assuming they aren't rigged).
    Quote Originally Posted by Torchbearer
    what works can never be discussed online. there is only one language the government understands, and until the people start speaking it by the magazine full... things will remain the same.
    Hear/buy my music here "government is the enemy of liberty"-RP Support me on Patreon here Ephesians 6:12

  22. #19
    Quote Originally Posted by heavenlyboy34 View Post
    "Mathematics is the language with which God wrote the universe." ~Gallileo


    He appears to have a very strong preference for integers.

  23. #20
    Quote Originally Posted by Ronin Truth View Post
    He appears to have a very strong preference for integers.
    IDK, man...pi and the Golden Ratio are everywhere...
    Quote Originally Posted by Torchbearer
    what works can never be discussed online. there is only one language the government understands, and until the people start speaking it by the magazine full... things will remain the same.
    Hear/buy my music here "government is the enemy of liberty"-RP Support me on Patreon here Ephesians 6:12

  24. #21
    Quote Originally Posted by heavenlyboy34 View Post
    IDK, man...pi and the Golden Ratio are everywhere...
    http://www.amazon.com/God-Created-Th.../dp/B008164Q5A

    "God created the integers, all the rest is the work of man." -- Leopold Kronecker
    Last edited by Ronin Truth; 09-06-2014 at 06:18 PM.

  25. #22

  26. #23
    Quote Originally Posted by Ronin Truth View Post
    http://www.amazon.com/God-Created-Th.../dp/B008164Q5A

    "God created the integers, all the rest is the work of man." -- Leopold Kronecker
    Looks like a neat book. The reviewers are upset that this edition doesn't have an index, though. I would want a later edition if I ever get this.
    Quote Originally Posted by Torchbearer
    what works can never be discussed online. there is only one language the government understands, and until the people start speaking it by the magazine full... things will remain the same.
    Hear/buy my music here "government is the enemy of liberty"-RP Support me on Patreon here Ephesians 6:12

  27. #24
    Division by zero should be defined as infinity.

    Just take one of the old mechanical calculators that does division by subtracting the denominator from the numerator and counting how many times it can do that before the numerator becomes less than zero. If you start it up and it keeps subtracting zero from the numerator, it will keep going until you either unplug it, turn it off or the machine wears out.



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  29. #25
    So FRNs worth .0000000000000000000000000000000000000000000000000 0000000001 will buy a whole lot more gold than FRNs worth 0?
    Hmmm? I think I slipped a cog somewhere. So approaching 0 is infinitely preferable to 0? No, that's not it. Dang!

    Who was it that advocated killing all of the mathematicians?

  30. #26
    Quote Originally Posted by Ronin Truth View Post
    He appears to have a very strong preference for integers.
    "Foreign aid is taking money from the poor people of a rich country, and giving it to the rich people of a poor country." - Ron Paul
    "Beware the Military-Industrial-Financial-Pharma-Corporate-Internet-Media-Government Complex." - B4L update of General Dwight D. Eisenhower
    "Debt is the drug, Wall St. Banksters are the dealers, and politicians are the addicts." - B4L
    "Totally free immigration? I've never taken that position. I believe in national sovereignty." - Ron Paul

    Proponent of real science.
    The views and opinions expressed here are solely my own, and do not represent this forum or any other entities or persons.

  31. #27
    Quote Originally Posted by Dr.3D View Post
    Division by zero should be defined as infinity.

    Just take one of the old mechanical calculators that does division by subtracting the denominator from the numerator and counting how many times it can do that before the numerator becomes less than zero. If you start it up and it keeps subtracting zero from the numerator, it will keep going until you either unplug it, turn it off or the machine wears out.
    As you know, almost all machines get boggled by other dimensions.

  32. #28
    Quote Originally Posted by Dr.3D View Post
    Division by zero should be defined as infinity.
    A tempting notion, but sadly, no. To wit:

    1. Infinity is not a real number, and even if it were, it wouldn't be the answer to dividing something by zero. There is no number that you can multiply by 0 to get a non-zero number. There is NO solution, so any non-zeronumber divided by 0 is undefined.
    This is different from taking the limit of 1/x as x --> infinity, written as


    Even though I quasi-sucked as a math major, I do hold a fair understanding of some of the fundamentals.
    Last edited by osan; 09-20-2014 at 07:19 PM.
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  33. #29
    Quote Originally Posted by Ronin Truth View Post
    So FRNs worth .0000000000000000000000000000000000000000000000000 0000000001 will buy a whole lot more gold than FRNs worth 0?
    Hmmm? I think I slipped a cog somewhere. So approaching 0 is infinitely preferable to 0? No, that's not it. Dang!

    Who was it that advocated killing all of the mathematicians?
    Only as long as price controls are maintained, Soviet style. The only way everyone can "win" a paper money-printing game is if at least one poor sap is forced to eat a major loss.
    Quote Originally Posted by Torchbearer
    what works can never be discussed online. there is only one language the government understands, and until the people start speaking it by the magazine full... things will remain the same.
    Hear/buy my music here "government is the enemy of liberty"-RP Support me on Patreon here Ephesians 6:12

  34. #30
    Quote Originally Posted by osan View Post
    A tempting notion, but sadly, no. To wit:



    This is different from taking the limit of 1/x as x --> infinity, written as




    Even though I quasi-sucked as a math major, I do hold a fair understanding of some of the fundamentals.
    Now just explain that to my mechanical calculator while it continuously subtracts zero from the numerator and adds to it's count. It will keep doing that till I either reset it, pull the plug or the motor burns out. It thinks it's counting to infinity.



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