If (or when) gold bubble bursts....

I don't think gold will ever be supplanted as "the" monetary metal, however, I think is currently being augmented due to the size of the world economy. Platinum has been monetized and it wouldn't surprise me to see a palladium eagle in our future. I don't think that this will drive the price of gold up or down but go more toward filling an increasing demand for precious metal.
As for the "gold bubble", it does not exist. In order for there to be a gold bubble, the price would need to spike against all the world's currency, not just the dollar. If I remember correctly, each time gold hit $1000.00, the dollar index was in the toilet and gold held against most other currencies. So my question is, why did the dollar sink so low that it took a thousand of them to buy one little gold coin and when is the economy and dollar going to be strong enough so I can scoop them up for a couple of hundred buck a piece?

 

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Correct and correct.

 

What country monetized platinum? I did an internet search and only found your post!

As far as a new metal being discovered, its been awhile since I took chemistry, but I think I remember it. A new metal has to have a certain number of protons in its nucleus, and all the numbers are taken by other elements, up to 103 or something like that. Higher numbers of protons result in unstable elements, they decompose into other elements in a very short time.

 

The United States. The Platinum Eagle is legal tender by act of congress with the face value of $100.00 for the one ounce coin, of course, no one outside of congress would ever use one to pay off a $100.00 debt. Same goes for the $50.00 Gold Eagle. By being monetized you can hold it in an IRA or 401k.

I tried to find a link to the law that it was passed under but according to the mint it was part of a culster bill passed by congress "Omnibus Consolidated Apropriations for Fiscal Year 1997 (P.L. 104-208)"

It does show up in the US Code title 31 section 5112 (k).

 

Boss: this is a great thread. Tried reading every response, but this one by Vess1 is just very interesting to me. I agree the president does not control the economy. The PRIVATE non government instituion called the Federal Reserve unihibitedly controls the economy. The term "Federal" is intentionally deceptive. In the 1913 the Federal Reserve Act was passed with only 3 congress members present which essentially allowed the Fed Res to be above the law and manipulate our economy as they saw fit by issuing and controlling our currency and credit lines. Interviews with Mr Greenspan on PBS demonstrate that they are complete unregulated private entity. The Federal Reserve has never been audited by any entity or agency whatsoever. Prior to that the Congress had control of monetary policy. They are not a government entity, and are in fact not subject to any laws or any form of regulation. The Reserve is entirely manipulated by Wall Street. The Fed Reserve has been buying up banks as fast as they can, as they are "on sale" by design via the reserve tanking the economy by influencing derugulation of derivatives which caused the bank failures via these "toxic assests" and exotic unstable investments. Mind you this was under the leadership and influence of Paul Summrers and non other than Timothy Guithner who are now throwing blame on AIG and other Lehman Brothers, etc. when in fact they orchestrated this debacle. Two interesting articles accordingly. http://www.bizjournals.com/phoenix/stories/2008/09/15/daily81.html

http://www.sanjuanislander.com/columns/brandt/part-2.shtml

The Fed reserve over a period of time slowly bought up Fortune 500 companies, and if companies refused they would sick the Feds on them to investigate them for alleged violations. The repeal of the Glass-Stegal Act of 1933 (http://en.wikipedia.org/wiki/Glass-Steagall_Act) allowed the Banking industry to buy up toxic debts from 1999 onward under Clinton. The was accomplished by the Gramm-Leach-Bliley Act. This essentially allowed Banks to do whatever they wanted and form huge mergers and take overs of other banks creating unregulated monopolies.

What people should consider is that the current downward spiral we are in is not random or accidental but in fact, by design. Henry Kissinger is a very powerful proponent of the new world order as is our current president. Consider this speech to Germany in 2008 in which Obama used these phrases:

His speech reeked of phrases such as, "global citizenship [which] binds us together."

He spoke of "global commitment," "global partnership," "global development" and a "globalized world."

He spoke of being a "citizen of the world."

He spoke of how "the world might be remade" and "a world that stands as one."

Here's the speech off Obama's page for reference: http://http://my.barackobama.com/page/community/post/obamaroadblog/gGxyd4

As well, could go on and on but their is a very concerted movement towards a one world currency (many articles are being written on this) and unification of the governments. The EU has already accomplished this and unified their currency with the Euro. There is a stong push for the "Amero" which would be a floated currency between Mexico, US and Canada. What will these moves do to gold? I would argue inflate it greatly as people would not know how to interpret these actions and would be perceived as instability and investors looking for a universal standard of currency. Gold can be exchanged for any currency and globalization would elevate gold in most people's eyes. I am debating about taking my little remaining home equity and buying more gold as I believe my and all our houses will continue to decline as the commerical real estate market implodes before the end of this year. Starbucks, Sharper Image, Mervyn's and list goes on of chain business that are in defualt or are doing major scale backs will leave unleased properties around the country. This will have an even bigger ripel effect than the current problem in my opinion.

 

hm

 

Thanks Spock- I know the HELOC expenditures are viewed as unwise, but if I really believe things are going in the toilet, then I would rather have something tangible. Already upside down on my house (lost about $250K in equity with the housing debacle). As the commercial real estate crashes and the house of cards falls like dominoes (as planned by the super rich banking elite) many more will lose their houses and the banks will own them. Food riots would follow as the unemployment rate will make the Great Depression look like a party. Look at the hysteria of the swine flu with a WHO "level 5" pandemic as the pharmaceuticals rake in billions for Tamiflu (which does nothing for this virus). What a joke. This just a precurser to prepare people for martial law under FEMA (look at how FEMA handled Katrina-National Guard was NOT there to help the people, but forcibly removed them from their houses confiscated and later destroyed their guns). Nobody wants to believe this, but the information is all out there. It seem these scenarios might be bad for rare coins and good for gold but I really don't know. Unchartered waters!!

 

The more I think about it, I think the waters have been chartered. Just look up hyper-inflation in wikipedia. Unemployment? That can be solved easily, just have the mother of all WPA programs, and print the money to pay for it. I do agree we'll all be on the same world currency. Our government is unable or unwilling to control what they're doing to our money, our wealth, but the world bank will have no problem doing that. I'm not sure why some believe banks deliberately caused this, banks don't seem to be benefitting from it. As everything becomes unaffordable for all except the elite due to high prices and lack of money in people's hands, I believe our government will institute price controls, which will cause everything to disappear from stores. Then the food riots.

 

WPA's- ? I think I got get out Dodge and get to the country!

 

come now man there is no such thing as unchartered waters

 

Self-edited. No problem. No politics- though bullion goes hand and hand with politics. But a little off topic obviously. I guess to say if they world falls apart and we have a unified world bank what would gold do. Go way up I imagine??

 

Lets try to not go to political.

 

yes yes i agree

 

The topic is "if (or when) gold bubble bursts...". It depends on politics.

 

Yes Joe- I agree. Gold bullion in inextricably tied to politics and should be exempt. I edited my post for other reasons. I guess the real question is is that what will gold do under a more global economy. I believe gold would sky rocket.

 

This thread is getting a little too conspiracy theory for my tastes so this will be my last post in this thread because there are a few points being lost.

Eddie has the most accurate technical definition of inflation. To answer the question about why all of this money hasn't sparked inflationary moves is also pretty simple. The reason inflation hasn't hit yet, but most certainly will (again, don't panic as there are powers at play with a keen interest on keeping inflation in check), is because the funds we're all expecting to hit are still in a state of limbo.

First off the bailout money, intended to help resume the flow of credit, has instead remained parked on bank balance sheets as a ballast to the imperial truckload of bad debt the bailed out bank recipients are holding. Consequently, that money is not a functional part of the economy as it remains to be injected into the system. This scenario could persist indefinitely as there really is no telling when banks can recapitalize enough to resume credit. The mortgage issues still outstanding -- and threatening the balance sheets of banks -- will have to be resolved before they can capitalize enough to offset the bad debt AND get back to healthy lending. Expect banks to continue the hoarding until this can be resolved -- not to mention a certain degree of threat to the overall economy.

Secondly, the stimulus money is, for all intents and purposes, mired in state and local bureaucracies as everyone determines the best allocation methods. This is, of course, a temporary situation due to the raw amount of stipulations attached to acceptance of the money. Governments that have accepted stimulus cash have also accepted the conditions that it be spent according to certain conditions and time frames. This stimulus money will most likely represent the first blip on the inflation radar as it will be hitting the system relatively soon.

Now, to elaborate a little more on my previous post. I've already explained why the "powers that be" won't allow inflation to go all Zimbabwe on us but I would like to speculate a little bit on how they might achieve this in the face of something as powerful as the doubling of the money supply. Vess is absolutely right in that no one group has total control of the economy, to suggest otherwise is absurd. However, one doesn't need to control the entire economy if one has control over the most important levers such as credit and money supply. Considering the importance of credit to the US economy, is it all that difficult to understand how much control is wielded by those who control both credit and the money supply? To suggest that this situation does not give the Fed, and the banking system in general, enormous power over the economy is also absurd. If you control credit and money supply, you have a tremendous amount of leverage with which to move the economy as you wish. It is through the manipulation of those two mechanisms that inflation will be kept in check. Sure there will be inflation, for sure, but inflation overrunning the economy ala Germany post-WWI or current day Zimbabwe? Don't count on it.

Last but not least, this is a coin collecting forum. Even I won't believe in my own theories 100% until they come to pass.

 

Conspicarcy theory

No theory to it. Liar loans, scads of cover ups, and a matrix of mintiae stories put out by news creators make a fine conspiracy.
We have been pushed into a cycle where they feed us a constant flow of created news, information to the excess,
and deception. We try to solve a puzzle but should look at where when and who are in the large picture and solve that as a unit.
I never did find out what the small red spots were on a first spouse coin that was on E-Bay. There were five and only one showed spots later after purchase,as per owner.
They had never been to a TPG or were often looked at since 2007.

 

Price 0f gold these days.

 

Reminds me of what my ex-wife used to say to me, in effect: "This is the end of this discussion, as soon as I get the last word in".

Yes, the Fed can control interest rates. They can lower them all the way to zero, and they can raise them to infinity. Their problem is the economy is in the dumps, so they've lowered rates to zero, and it still hasn't worked, so we've printed trillions, and it still hasn't worked. When hyper-inflation happens, it happens fast. The fed can respond by raising interest rates very high, but it might not have any effect. Besides, raising interest rates would really kill the economy.

The fact is we've as a nation have been spending money faster than we've been making it for years. That has to end, and it will end, one way or another. My only concern is how will it affect the price of gold?