Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Pastimes : CNBC -- critique. -- Ignore unavailable to you. Want to Upgrade?

To: Yogizuna who wrote (7899)	5/11/2001 6:24:01 PM
From: Hawkmoon	Read Replies (2) \| Respond to of 17683

a rising gold price does not necessarily mean the current financial system will be seriously damaged or destroyed, especially since it is so oversold at recent price levels. Agreed. I don't have a problem with gold rising because of demand from industry or jewelers. It's when people start begging for gold to shoot up to $400-600/ounce that ticks me off because it ignores the economic and financial dislocations that would result (ie: lost jobs, lost value of currency savings.. etc) Gold represents the ultimate financial insurance policy against political uncertainty, conflict, and reckless economic policies, and as such it serves as a valuable gauge and counterweight to fiscal mismanagement. And your "mine canary" analogy is an excellent example of how I view the metal. But there are some who still demand a return to the gold standard, despite the fact that there just isn't enough gold available in the world to meet the economic potential of humanity were each currency note required to be backed by a specific quantity of gold. And that's my biggest gripe about it. Those who are "blessed" to have significant quantities of the metal within their geographical boundaries have an unfair advantage over those who don't. They can literally print money based upon their mineral wealth, finding gold and issuing currency to finance their economies, literally a golden "money tree". Meanwhile, other resource poor nations are disadvantaged for capital no matter how much more efficiently they run their economies, because they have to dedicate much of their economic output to purchasing gold to back their currencies. Economic output that would be better utilized for investment in creating profitable industries. And to a certain extent we've seen this with oil as well. However, oil is a valuable commodity that is utilized to create energy, which is then converted into economic output. Those nations with vast quantities of such a resource have an advantage over those without it. In contrast, gold is not nearly as valuable for industry (although many vital uses DO exist). And btw, fair trade is certainly the goal. And it will require fair and equitable legal sytems that guarantee and protect investors and private property. By encouraging a gold standard, we undermine that mutual interest in creating such structures. There is something to be said for being mutually vulnerable and dependent upon each other via our economic ties. Free and fair trade creates these mutual dependencies that prevent nations from taking that fatal step to open conflict.