Peter Schiff

Originally posted by telerion
I don't follow. How does your post relate to my response to MB?

You do see the point that I was making right? There's nothing controversial about it and I hardly expected that it warranted a long response about the time value of gold vs a dollar vs a good (like a house or a loaf of bread).

I'm not necessarily saying that you are wrong, but I really think you missed my very simple, very shallow point.

It sounded as though you were characterizing his statement as contradictory or possibly self-defeating. My long-winded riff was in support of the relative stability of gold as it relates to real-world value.

Or, at least, that's what I wanted to do!

Originally posted by twhitehead
And how is this 'value' calculated? Can one ounce of gold buy the same amount of food today as say 10 years ago? How do we know whether food prices have stayed the same? What if we look at how many computers an ounce of gold can buy? Or cars? Surely 'value' is always relative to everything else.

See the post immediately preceding yours on that subject.

Originally posted by FreakyKBH
It sounded as though you were characterizing his statement as contradictory or possibly self-defeating. My long-winded riff was in support of the relative stability of gold as it relates to real-world value.

Or, at least, that's what I wanted to do!

Well, I'm not saying that his statements are contradictory. I'm saying that they are redundant, and he doesn't seem to realize that. He seems to think that there is a substantive difference between 1 and 2 (further evidenced by his response) when in fact they are identical statements.

Can anyone think of a situation where only one of the two statements is true?

Originally posted by KazetNagorra
And apparently this guy has written five books on economics. Pretty hilarious if you think about it, how many people would take a physics book seriously if it was written by someone with a bachelor's degree in mechanical engineering?

Economics has a bad image problem mostly (I would argue) because economics writing is swamped by these armchair "experts" (and politicians).

Originally posted by Metal Brain
Don't you know how the dollar index is measured? It is measured in relation to a basket of other currencies. Those currencies are losing value as well. That creates the illusion that the dollar has not dropped when it has.

The best measure is to look at the dollar's value in relation to gold. Take a look and remember that gold isn't really gaining value, the dollar is losing value. So are a lot of the other currencies.

Just in the other thread you said you guesstimated that inflation went up by about 6 or 7%. Gold went up by 30% in the last year and STILL you don't think gold is gaining value?

None so blind as those who will not see.

Originally posted by telerion
Well, I'm not saying that his statements are contradictory. I'm saying that they are redundant, and he doesn't seem to realize that. He seems to think that there is a substantive difference between 1 and 2 (further evidenced by his response) when in fact they are identical statements.

Can anyone think of a situation where only one of the two statements is true?

I agree he didn't help his cause, but there is something to be said when one sees a constant such as gold buying as much today as it bought throughout history--- in terms of real-world commodities, such as the example given.

Originally posted by telerion
Well, I'm not saying that his statements are contradictory. I'm saying that they are redundant, and he doesn't seem to realize that. He seems to think that there is a substantive difference between 1 and 2 (further evidenced by his response) when in fact they are identical statements.

Can anyone think of a situation where only one of the two statements is true?

The fun part is that then he goes on to claim one is inflation and the other one is deflation. 😵

Originally posted by telerion
1 and 2 are neither inflation or deflation by the standard definition, unless you assume that gold is currency in which case both are deflation. Since the statements were originally posed with fiat currency, 1 and 2 are simply two ways of stating the same relative price change.

As for your second assertion about gold not changing much in value, value ...[text shortened]... ple, US prices are usually stated as dollars per unit of a good. There is no absolute measure.

You are not making any sense.
Either the price of gold is moving up or it is moving down. You can't say the value of gold is changing. Since it is the buying power of the currency that is reducing, it takes more of that currency to buy gold.

Gold is close enough to being a currency. It is real money that hold value better than any fiat currency. What are you trying to say, that fiat currency holds it's value better than gold? That clearly is not the case.

I never said there was an absolute measure, I said "best" measure. Even the price of goods is not always the best measure. Goods are supposed to deflate if the manufacturing process becomes more efficient and competition lowers prices. That does happen, computers for example.

Increasing the money supply artificially raises these lowering prices. That means the FRS is taking away your lower prices. You are free to argue that central banks need to do it to avoid deflation, but don't tell us that is not our money the FRS is creating out of nothing. Productivity and competition created the wealth and it is taken from us by the FRS operating like a counterfeiter. Funny how all that money is created out of thin air and we never see it.

We could have 0% inflation and still have an increasing money supply. That increase in money supply should go back to us. If you really look at it, we are getting ripped off big time.

Originally posted by Palynka
Just in the other thread you said you guesstimated that inflation went up by about 6 or 7%. Gold went up by 30% in the last year and STILL you don't think gold is gaining value?

None so blind as those who will not see.

If you are claiming gold is overvalued that is a fair argument, but keep in mind that one could just as easily claim gold has been undervalued for many years.

Learn to live with both possibilities.

Originally posted by Palynka
The fun part is that then he goes on to claim one is inflation and the other one is deflation. 😵

You are a moron!

Originally posted by Metal Brain
If you are claiming gold is overvalued that is a fair argument, but keep in mind that one could just as easily claim gold has been undervalued for many years.

Learn to live with both possibilities.

But wasn't gold supposed to be a very good long term investment? How come it was undervalued for so many years?

Originally posted by Palynka
But wasn't gold supposed to be a very good long term investment? How come it was undervalued for so many years?

I never said it was always a good investment compared to other investments. It has been a safe long term investment though. Currencies come and go but gold is forever.

Now is different. Things have changed. We have the QE FRS counterfeiting scam. Debt is a serious problem!

Originally posted by Metal Brain
I never said it was always a good investment compared to other investments. It has been a safe long term investment though. Currencies come and go but gold is forever.

Now is different. Things have changed. We have the QE FRS counterfeiting scam. Debt is a serious problem!

You were claiming it is a good investment now, while it is almost at its inflation-adjusted all-time high. So according to that logic gold has been undervalued except perhaps at the last peak.

I find it difficult to see how you can say gold is "undervalued" when it basically a purely speculative commodity with little actual productive potential.

Originally posted by KazetNagorra
You were claiming it is a good investment now, while it is almost at its inflation-adjusted all-time high. So according to that logic gold has been undervalued except perhaps at the last peak.

I find it difficult to see how you can say gold is "undervalued" when it basically a purely speculative commodity with little actual productive potential.

It's inflation adjusted high would be over $2300.00 and that would be another $900.00 on the upside. That is not almost at it's high as you claim.

Productive potential? What is your idea of something that does have productive potential? Whatever that means to you.

Originally posted by Metal Brain
It's inflation adjusted high would be over $2300.00 and that would be another $900.00 on the upside. That is not almost at it's high as you claim.

Productive potential? What is your idea of something that does have productive potential? Whatever that means to you.

It's not that far from its inflation-adjusted high, and that high is a well-known bubble.

Steel, for example, has productive potential, because you can make e.g. cars out of it. Wheat has productive potential because you can make bread from it. Gold has some industry and cosmetic applications, but mostly it just sits there.