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Politics : Dutch Central Bank Sale Announcement Imminent?
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To: The Wharf who wrote (23304)7/1/2005 5:34:04 PM
From: sea_urchin  Read Replies (2) of 81050
 
Darleen > I don't entirely agree about gold because there is a cost number one to retrieve it and one associated with production

Of course, that is so but the cost of production is not the basis for speculation in gold. People who speculate in gold fantasize about runaway inflation or economic disaster(s) or the gold shorts being held to account for what they don't have. I think the only ones who are concerned about gold as a metal are those who use it as a commodity eg in the jewelry trade or electronics etc.

> I just don't think inflation can be controlled when risk is sold as profit base

As you know, debt is the basis for currency creation and the argument is if someone is prepared to service that debt (ie pay interest on it and ultimately repay it) then that adds "substance" to what otherwise would just be a fictitious entry in the national balance sheet. As result of the inflation over time the debt becomes increasingly insignificant providing the assets bought with it don't depreciate in value. That is why those who can afford to carry debt become richer by buying assets using debt. Indeed, debt is the basis of the American Dream where people arrive penniless into the US, borrow as much as they can, spend as much as possible, have their hair dyed, teeth crowned and face lifted -- and voila -- in five years they are either multimillionaires or in jail.
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