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Gold/Mining/Energy : Gold Price Monitor -- Ignore unavailable to you. Want to Upgrade?

To: ahhaha who wrote (34828)	6/3/1999 4:36:00 PM
From: Bob Dobbs	Respond to of 116764

There is always a price. Something might be priceless, meaning price is infinity, but that is not to say that it's price doesn't exist. A FINITE price may not exist. Just as there may be no PRECISELY DEFINED price, as there is usually a bid/ask spread in the absence of a sale, but again, that's not to say price is undefined. This is not a relevant discussion. We were talking about higher price creating supply through price incentive. I maintain that the opposite is true, that lower price can decrease supply through price disincentive. This can come about as a single good experiences an increased demand, thus increasing its price and drawing money (whose supply is here fixed for discussion) away from other goods. This creates LOWER PRICES for those other goods by the above mechanism! That's the point. The existence and uniqueness of value and price and distinctions thereof is not relevant. Yes, your example of oil in the 70's is a clear example of a good rising in price (I'm not saying it had higher demand relative to other goods) and affecting related goods up the production chain. For that chain it is inflationary. But in the 70's the problem wasn't constrained oil supply or higher oil demand, it was higher fiat supply that was the PRIMARY variable. <<Increasing the supply of gold does not cause inflation. Neither does excess money supply! It is quite possible to have rising money supply and falling money availability as though interest rates were rising.>> I don't understand the above, I think because you have a funny definition of availability. To me availability of money is just how much interest is charged for it and what the creditworthiness requirements are. Again, the only things that cause "inflation" meaning increasing prices of goods and services overall, is an increasing supply of money be it gold or fiat (or a decreasing supply of goods, which is usually only a textbook example, eg. farmers dumping milk). <<And gold has nothing to do with inflation because it is the measure against which those things inflating are gauged.>> It does as I've shown, because an increase in its supply is inflationary. Gold is a measure just as fiat is a measure and both cause inflation through an increased supply. Anything hoarded, be it gold, silver, fiat, bushels of wheat, will affect prices in the economy. If everyone held onto their money prices would plummet. Likewise if everyone brought out their stash hoards of gold bars for general consumption, then prices would skyrocket. That's not what I'm talking about. I'm saying that, bring new gold up from the earth, and EVERYTHING ELSE BEING EQUAL, that is spending/hoarding habits being the same, SOME OF IT WILL BE SPENT and that is inflationary, ipso facto. (Sorry bout the caps; I get carried away.)

To: ahhaha who wrote (34828)	6/3/1999 4:59:00 PM
From: Investor-ex!	Read Replies (3) \| Respond to of 116764

It is quite possible to have rising money supply and falling money availability as though interest rates were rising. No "money" is created that isn't borrowed, as all "money" is borrowed into existence. No new borrows = no new "money", period. If the "money" supply is rising, then the "too frightened to lend theory" is either misperception or ruse. The central banks must be working for us since none of the bankers are around long enough to sway things much in any direction. They always reflect the will of the people. It is the people that cause the inflation. There is an unbroken line of central bank policy extending at least 300 years. This policy consists of banks getting something for nothing and this policy is quite stable. And the only change in this policy is the increasing boldness of it. The "will of the people" is "reflected" only to the degree that people are "willing" to borrow. As the system as a whole is ALWAYS willing to lend provided terms and collateral are at least somewhat agreeable (for the banks must continually expand, lest the system collapse), I can see where one might confuse cause with effect, since people have been conditioned to nearly always be willing to borrow. The banks don't "reflect" the will of the people, they do everything in their considerable power to "create" the hunger to borrow and then take full advantage of their creation.