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[bobf <bobford79 AT yahoo.com>]

Your analysis is excellent.  And historians will debate whether parts of your 
premise are correct, just as they do now.  Peak oil?  who knows.  You 
referenced LTCM throughout; the greatest number of Nobel scientists ever put 
togther, the greatest mathematicians putting together the smartest data and 
making unfailable models -- and they were wrong.  Who knows?  Both sides of 
the argument has merit.  You are very smart. 

-------------------------------------------------------------------


--- On Tue, 12/23/08, Leslie <cayadopi AT yahoo.com> wrote:

> From: Leslie <cayadopi AT yahoo.com>
> Subject: Re: [Homestead] More on Gold
> To: homestead AT lists.ibiblio.org
> Date: Tuesday, December 23, 2008, 8:09 PM
> Yes, it's the fiat currency that is debased.
>  
> As far as innate value of gold - I believe James definition
> of innate is more accurate.  Humans perceive gold to have
> value.  Gold isn't "born" with the value -
> the value is defined by humans.  But aside from that that,
> I understand the point you intend.  Humans for thousands of
> years have perceive it to have value and therefore use it as
> one way to store of wealth.
>  
> Hoarding to me implies instantly a means of storing wealth
> (no matter what is hoarded - gold, oil, rice, sugar) - even
> if not for the current owner's benefit but for an heir
> in the next generation or many generations down the
> road.    Gold being hoarded is an attempt to preserve
> wealth in the face of the possibility of wealth destruction.
>  
> The people that contribute to "FS".com contribute
> to many sites and I like that they don't limit one point
> of view - there are many on different sides of arguments. 
> As there are on other sites.  Each with their own areas of
> expertise also, a nice cross section.
>  
> As far as me drifting somewhere... no.  I try to explore
> all areas, and think about probabilities and the bell
> curve.  I've never understood why they call the lower
> statistical ends of the probability curve the "fat
> ends" btw...... because the ends look
> "skinny" and the middle is the part that looks fat
> to me.  
>  
> Dark Ages II should be towards the skinny end of one end.
>  
> Government can fix alld and people will live happily ever
> after should be on the opposite skinny end.
>  
> You know the history of LTCM.  The brightest of
> mathemeticians got together and created their mathematical
> programs, only they did not include the "skinny
> ends" on the probability curve, feeling they were too
> rare of an event to include.  You know the outcome - they
> blew up because of that error.  What they thought
> was statistically insignificant became critical in their
> modeling.  The human factor undid all their fancy math.
>  
> History (which I'm definitely not well educated in) has
> shown us civilizations come and fade away, empires rise and
> collapse, power shifts from one continent to another,
> knowledge is gained and lost, and history repeats with new
> twists and variations in the minute detail.
>  
> Knowing the story about LTCM, I don't think it is wise
> to ignore the possibility that the "skinny ends"
> include a Dark Ages II scenario.
>  
> Rather than ignore the possibility, I'd rather do the
> "what if" thing.  That way if things change while
> I'm still alive, I'll have at least thought about
> it, and maybe even have a contingency plant.
>  
> In history, I don't know if there was ever a time when
> a significant number of the world's
> civilizations/currencies collapsed simultaneously.  On a
> multiple choice test, I would guess no - because the world
> was not as connected together as it has become over the last
> few hundred years.  If one country collapses due to their
> foolishnesssss, others are strong, or power shifts from the
> collapsing country/empire elsewhere.
>  
> That is not the case now.  Productivity has been divided
> up all over the place, where countries are more dependent on
> each other.  With all embarking on the non-asset based
> currency inflation game.  This is probably a unique time
> in history, with the human element ignored by LTCM
> mathemeticians coming into play all over the world.  I
> would guess that the risks of disaster are definititely
> highly elevated.  Time frame?  Unknown.  Human element? 
> Hope and ignoring the "skinny" ends.  :-)
>  
> What concerns me more actually is the possibility of peak
> oil being around the corner.  Gold affects people in an
> invisible way.  Oil price is very visible.  It looks like
> we'll know in the next 2-10 years whether peak oil is
> here or not.  That will affect everyone.  If the IEA data
> is is anywhere near correct, the clock is ticking, and a
> tectonic shift is underfoot in energy.  
>  
> I wonder if alternative energies will come on line fast
> enough to prevent a world disaster and could over time lead
> to Dark Ages II.  
>  
> Meanwhile, I go about my days hoping that they are
> developed soon enough.  And actively have started on a
> contingency plan in the event the skinny ends get too close
> for comfort.
>  
>  
>  
>  
>  
>  
>  
>  
>  
> 
> 
> --- On Tue, 12/23/08, bobf <bobford79 AT yahoo.com>
> wrote:
> 
> From: bobf <bobford79 AT yahoo.com>
> Subject: Re: [Homestead] More on Gold
> To: cayadopi AT yahoo.com, homestead AT lists.ibiblio.org
> Date: Tuesday, December 23, 2008, 12:41 PM
> 
> Leslie my comments were specific to Dr. Fekete 's
> meaning, using his own
> words : 
> 
> " In the end, no one was willing to exchange gold and
> silver coins for the
> debased coinage of the empire."
> 
> Acoording to him, and others like him, I might add, the
> gold never lost its
> value; the gold was never debased.  On the contrary,
> because if its innate,
> intrinsic value, it was hoarded and hidden away, for there
> was nothing left,
> proclaimed by fiat that had retained enough value that the
> owners of gold were
> "willing to exchange" their gold.
> 
> Now, Fekete is an uber goldbug.  I find good points in alot
> of his writing; but
> other groups would call him hysterical or even a
> 'nut'.
> There are other finacial sites similar to financial
> sense--the site that you
> quote.  Some or bigger, some smaller, but they all have
> well written commentary
> by many well educated ,sometimes prominent, men.  Each
> commengtary makes perfect
> sense until you read the next commentary.  There are many
> historical analogies,
> and different ways of interpreting those historical events.
>  Even today, our
> best economists still disagree on what finally ended the
> great depression, and
> that wasn't very long ago.
> 
> There is also the factor of price manipulation of
> currencies (including gold if
> you consider gold to be money) by governments and
> financials cartels all through
> history.  Much tales of manipulation are real and much is
> the fabric of told
> & yet untold conspiracy theories.
> 
> Dr. Fekete is just another very smart voice.  try
> 321Gold.com,or  jsmineset.com
> , for a bigger variety of commentary.  JSMineset is the
> most prominent (along
> with the commentry section of Peter Schiff's
> Europac.net.).  You seem to be
> drifting toward to very worst case senario set; and you
> could very well be
> right.  I'm still reading and thinking, having not yet
> decided that anyone
> is even close to perfecting predicting the future.  And, I
> always 'hope'
> for a better case scenario..:-) .............
> 
> --------------------------------------------------------------------------
>  
> 
> 
> 
> 
> 
> 
> --- On Tue, 12/23/08, Leslie <cayadopi AT yahoo.com>
> wrote:
> 
> > From: Leslie <cayadopi AT yahoo.com>
> > Subject: Re: [Homestead] More on Gold
> > To: homestead AT lists.ibiblio.org
> > Date: Tuesday, December 23, 2008, 10:20 AM
> > No I don't think I misinterpreted.
> >  
> > In other things I have read, governments, serfdoms,
> > kingdoms, etc. practiced "clipping" coins
> (i.e
> > they cheated on the value of the coin).  The modern
> day
> > equivalent is clearly seen in US dimes and quarters,
> which
> > are no longer solid silver.  They have been clipped
> > (filled) with other metals.  The US government is
> cheating
> > on the value of coins & paper currency.  The
> exchange
> > of X units of labor for a 100% silver dime, is now
> exchanged
> > for 1/100th% of the same amount of silver via
> > "clipping"/cheating.  (Not an exact number,
> but
> > illustrative for argument.)  This has been a long
> drawn out
> > process of clipping both metal & paper currency in
> the
> > US spanning some 80-90 years.
> >  
> > The hoarding events that has lead to current time
> > backwardation probably has occured in two stages. 
> The
> > first being those who hid their gold from the
> government
> > confiscating it some 80-90 ago when the US made it
> illegal -
> > and passed it on to their children.  And the second
> wave
> > starting when the US made it legal to own gold again,
> and
> > then took us off the gold standard in the 1970s
> triggering
> > fear of monetary collapse.  I would venture there are
> a lot
> > of gold bugs who never sold any of the gold they
> purchased
> > in the 70s as back then they understood the collapse
> of the
> > fiat currency was underway regardless of how
> many years it
> > would take - even if they bought at the top.  I know
> I was
> > in my early twenties, and I understood that back then
> - that
> > gold is to be hoarded and exchanged as the currency
> finishes
> > collapsing.
> >  
> > Fekete explains hoarding was a long drawn out event
> in the
> > W. Roman Empire, and in modern times we have a similar
> event
> > going on.
> >  
> > Backwardation in part is telling us that fewer and
> fewer
> > people hoarding gold/silver today are willing to
> exchange
> > it for paper dollars or for those "clipped"
> silver
> > dimes and quarters that are no longer 100% silver.
> >  
> > Currently the troops are still accepting below minimum
> > wage(?) paid in the form of paper fiat
> currency.   If the
> > government doesn't increase their wages in sync
> with
> > hyperinflation - how long will they stay?  How can
> they
> > feed their families?  
> >  
> > There is no doubt in my mind that the US Gov't is,
> and
> > has been for a long time, bankrupt.  So far the US is
> still
> > paying debts by creating more and more currency out of
> thin
> > air.  How long people will continue to accept that
> form of
> > payment is another story.  I do believe we're
> headed
> > for a monetary hyperinflation phase, where the
> currency
> > collapses in the end.  (And not just the US, I
> believe a
> > lot of G-20s are going the same way.)
> >  
> > What happens after that? 
> >  
> > >From what I've read, hyperinflations do not
> end
> > until governments stop issuing the collapsing
> currency,
> > issue a new currency, and promise not to debase it by
> > increasing the number of units circulating.  It
> won't
> > work until there is CONfidence that the government
> will stop
> > the clipping.  I wish I knew if that typically
> happens
> > overnight, or if the next new currency typically gets
> > clipped again after a short period of CONfidence. The
> gold
> > bugs may hoard their gold, even if it means passing
> to the
> > next generation... meaning there is no centralized
> price
> > mechanism.
> >  
> > How DO people value gold outside of a government
> issued
> > money system - which in part is what I interpreted
> James to
> > be talking about.  You can't eat it, but you can
> use it
> > to trade without others willing to accept it, but what
> is
> > the pricing mechanism?  
> >  
> > If the dollar collapses and people are still willing
> to
> > trade gold for say Euro, you have a pricing
> mechanism.  If
> > the Euro collapses, and the Canadian or NZDollar still
> > sports a gold price, you can still exchange it, and so
> on. 
> > After that, how do people come to a consensus of value
> - of
> > fair value?  If no one is willing to trade for ANY
> fiat
> > currency, then what?
> >  
> > The way I read Fekete's article is that during the
> dark
> > ages there was a period where you could not count on
> > gold/silver being used as a medium of exchange.  It
> may
> > have been because there was no way to determine value
> (i.e.
> > how many grams would be worth a dozen eggs, etc.)  He
> > states that gold/silver went into hiding never to
> re-emerge
> > during the lifetime of the original holders.  I
> assume from
> > that that it was passed on from generation to
> generation
> > until such time as there was a reason to swap out into
> a
> > different kind of currency or other medium of exchange
> (as
> > there have been many besides gold/silver).  Of course
> back
> > then, computers and modern transportation did not
> exist to
> > facilitate world wide trading.
> >  
> > In a Dark Ages II type scenario, you can't eat
> gold,
> > can't wear it, can't heat with it.  However,
> you
> > can pass it to the next generation clandestinely and
> avoid
> > paying taxes to theiving governments.  LOL.  
> >  
> > I think Fekete is saying that gold/silver retains
> value as
> > a more wide-spread medium of exchange (whether in
> physical
> > metal or metal backed currency) only when their is
> > wide-spread confidence in the governing body.  
> >  
> > Under a chaotic government(s) situation - and limited
> > person to person gold/silver exchange - a large
> > landowner/farmer MIGHT be willing to exchange his
> excess
> > food production for some gold IF his goal is to
> acquire gold
> > for his heirs or for a time when the governing body
> can be
> > trusted again.  However, a small farmer barely able
> to
> > produce above his own needs is not going to swap his
> one
> > extra chicken for gold if he needs a horse shoe from
> the
> > blacksmith for his plow, and the blacksmith
> doesn't want
> > gold but needs to eat.
> >  
> > I don't know if the US or the world will decsend
> into
> > another Dark Ages; I don't discount the
> possibility -
> > but I don't have any way of determining how far
> out
> > along the fat tail of a bell curve the
> possibility of a
> > Dark Ages II needs to go.  Of if we will just return
> to a
> > more agrarian society, or what.
> >  
> > One point that Fekete makes is that he foresees a time
> when
> > there would be no sellers of gold/silver.  I would
> have to
> > think about that for a long time.  But my first
> thought, is
> > maybe initially but, I think in time some would be
> willing
> > to sell as a last resort (or not knowing the value) to
> those
> > who have excess production, who see gold/silver as a
> future
> > generation(s) way of preserving wealth.  
> >  
> > On your point, "Anyone who now believes things
> will
> > become 'that bad', should be out with ropes,
> rifles,
> > pitchforks, and whatever else will kill and maim those
> in
> > power who would allow such a thing to occur."
> >  
> > True, but in truth WHO allowed it to occur?  WE DID.
> WE
> > who did not rise up in anger at the debasement of the
> > currency and put a stop to it.  WE who understood the
> > consequences and failed to teach values of exchange
> and of
> > production and self-preservation through our own
> efforts. 
> > WE DO deserve to get a new Dark Ages, not because we
> are
> > sitting and waiting for it, but because we failed to
> > recognize the cause of it and failed to prevent it,
> even
> > with all of our accumulated knowledge of thousands of
> years.
> >  
> > Although ropes and guillotines won't be needed -
> > starvation and disease will take care of it.
> >  
> > Yes, it echoes of Ayn Rand, but to me it is the much
> more
> > accurate to blame "we" than those in power.
> >  
> >  
> > PS CAPS are not "yelling",,,, but meant to
> > emphasis on paper the words I would emphasis in
> person.
> > 
> > 
> > --- On Tue, 12/23/08, bobf <bobford79 AT yahoo.com>
> > wrote:
> > 
> > From: bobf <bobford79 AT yahoo.com>
> > Subject: Re: [Homestead] More on Gold
> > To: cayadopi AT yahoo.com, homestead AT lists.ibiblio.org
> > Date: Tuesday, December 23, 2008, 11:04 AM
> > 
> > Leslie, I believe you mis-read Dr. Fekets's
> intenet
> > where he draws upon
> > historical anaylis.  He wrote:
> > 
> > "............... causation goes in the opposite
> > direction. The
> > disappearance of gold and silver coins as a means of
> > exchange was a
> > long-drawn-out, cumulative event. In the end, no one
> was
> > willing to exchange
> > gold and silver coins for the debased coinage of the
> > empire. At that point the
> > empire was bankrupt; it could no longer pay the troops
> that
> > defended its
> > boundaries against the barbarians threatening with
> > invasion.'......."
> > 
> > That is to say, that the gold and silver still
> retained
> > their value , in his
> > opinion; but ttheir was nothing left in the fiat
> system
> > worth the trade value of
> > the gold and silver.  And, if we are sitting and
> waiting
> > for a return of the
> > "dark ages", we desrve whatever we get,
> anyway. 
> > Anyone who now
> > believes things will become 'that bad', should
> be
> > out with ropes,
> > rifles, pitchforks, and whatever else will kill and
> maim
> > those in power who
> > would allow such a thing to occur.  Most of us think
> we are
> > witnessing a
> > calamity, but not anything close to a repeat of the
> > 'Dark Ages'.
> > 
> >
> --------------------------------------------------------------------
> > 
> > 
> > 
> > 
> > --- On Tue, 12/23/08, Leslie
> <cayadopi AT yahoo.com>
> > wrote:
> > 
> > 
> > >  
> > > Fekete writes an update on the outlook for the
> value
> > of
> > > gold.  This one is quite interesting as he talks
> > about what
> > > happened to gold/silver during/after the collapse
> of
> > the
> > > Western Roman Empire and the parallels to
> today. 
> > History
> > > supports James' points a couple weeks
> ago that
> > > gold/silvere will have zero value - the pricing
> > mechanism
> > > will be gone.
> > >  
> > > Fekete warns that gold in backwardation in Dec
> 2008,
> > is
> > > warning, is a premonition of what is coming down
> the
> > road. 
> > > He believes there will be repeated instances of
> > > backwardation, each more severe than the
> preceeding,
> > as
> > > gold/silver go into hiding.  Hyperinflation and
> > ultimately
> > > the collapse of the monetary system - a point
> where
> > > gold/silver will not have a value either, because
> > those
> > > hoarding will not be willing to part with it,
> until
> > such
> > > time as confidence in a fiat currency returns.  
> > >  
> > > After the collapse of the Roman Empire we went
> into
> > the
> > > Dark Ages, where payment in gold/silver could not
> be
> > taken
> > > for granted - gold/silver went into hiding never
> to
> > > re-emerge during the lifetime of the original
> > holders. 
> > > Fekete warns that the disappearance of
> gold/silver is
> > > ominous.
> > >  
> > >
> > 
> > 
> >       
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> > 
> > 
> > 
> > 
> >       
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> 
> 
> 
> 
> 
>       
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