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Gold/Mining/Energy : Blue Chip Gold Stocks HM, NEM, ASA, ABX, PDG (MODERATED) -- Ignore unavailable to you. Want to Upgrade?

To: detlef gerlach who wrote (20)	9/28/2013 11:01:07 AM
From: Tommaso	1 Recommendation Recommended By shakes Respond to of 51

That may be the best discussion of the link between gold and paper money prior to and after 1933 that I have ever read. A physicist I knew once called economics "a firm grasp of the obvious." I think he meant to insult economics by calling it that, but I think his own thinking may have been even more subtle than he realized. It's hard to grasp the obvious, because the obvious is the medium of the perception that is trying to grasp it. The obvious thing about economic activity is that it involves the exchange of something called money. Almost from the time that we learn to speak as children, we learn to offer money for what we want to possess or enjoy. But understanding what we are doing with the money and what the money is, is as hard as understanding what we are doing with the language we use. That's as far as I care to pursue that line of thought. To get back to gold, yes, for many years before 1933, gold had in many countries exercised a restraint on the issue of paper money that became an inconvenience for President Roosevelt, who believed that prices in general needed to rise in order to restore economic activity. What is usually called "raising the price of gold" was really a devaluation of the currency. This may not have been immediately obvious to Americans at home, but for George Santayana living in Italy at the time and living off the dollar income from a hotel in Boston, it was obvious; he found his income had almost been cut in half overnight (though he responded cheerfully that he had always lived on half his current income anyway, so it didn't bother him). And back to the issue of confiscation: thank you and Mr. Keith Weiner for the lucid explanation of why the conditions involved in the gold confiscation of 1933 simply do not exist. I guess I continue to fear that if enough "Fat Cats" begin to use gold too preserve wealth, instead of spending it on villas on the French Riviera and Maseratis, the U. S. government might heavily tax any "excess profits" made on gold transactions. I think this would be less likely on mining companies, but any sort of crazy thing can happen. Such as obstructing the work of Congress by reading "Green Eggs and Ham" aloud.