[gnm]

$this->bbcode_second_pass_quote('MattS', 'T')ell it to the people screaming to buy gold in the late 1970's when the world was going to end, we were running out of oil and natural gas, prices were skyrocketing, overpopulation, overfishing, global climate change, inflation, recession......uummmm......

[cube]

To: MattS
It's been fun talking to you MattS but it is obvious you are not interested in a serious conversation.
Furthermore you have a bad habit of using cherry picked info to create misinformation so I honestly don't see you having anything useful to offer me.

good bye *waves*

---you are now on my ignore list---

[mattduke]

At what point did gold make the instantaneous transition from "terrible investment you should never consider owning because it will always go down because it is useless" to "way too expensive and overbought due to public hysteria", and why did it never pass through the "a good time to buy" phase? Rationalizations for not owning gold change more rapidly than justifications for the Iraq war.

[Twilight]

$this->bbcode_second_pass_quote('mattduke', 'A')t what point did gold make the instantaneous transition from "terrible investment you should never consider owning because it will always go down because it is useless"...

[cube]

$this->bbcode_second_pass_quote('pstarr', '')$this->bbcode_second_pass_quote('MattS', '')$this->bbcode_second_pass_quote('cube', ' ')A new oil well or gold mine cannot be brought into production in 6 months. If it only takes 6 months to open a new dot-com company or build a house that's why after only 6 years the market is over-saturated and has reached its peak. That's why the dot-com bubble and real estate only lasted for 6 years.
Even if you do not believe in PO and are convinced there's an oil reservoir the size of Texas somewhere on this planet you have to admit it is physically impossible to over-saturate the world oil market in 6 years. It doesn't matter if ALL the world's oil drilling rigs are working 24/7/365 ---> the world will not be swimming in oil in 6 years.
Maybe 12 years but not 6.

[cube]

$this->bbcode_second_pass_quote('Twilight', '')$this->bbcode_second_pass_quote('mattduke', '.')..to "way too expensive and overbought due to public hysteria",...

[Twilight]

An excellent question. Always easier to say what is not than what is. I am still trying to figure it out.

I think if the future is deflationary, cash is undervalued. Anything you make now would then have higher buying power later, as most things fall relative to it as credit becomes scarce. The trick is surviving the price inflation that is preceding it, and afterwards declining industry could still make some items relatively even more scarce than cash. At random. It is not going to be easy, it could be a bit of a pinball game. But that is a period yet to come, right now my assumption is the credit bubble has propped up the price on virtually everything and the effects are coming to an end over the next few years.

[sjn]

$this->bbcode_second_pass_quote('Twilight', 'A')n excellent question. Always easier to say what is not than what is. I am still trying to figure it out.

I think if the future is deflationary, cash is undervalued. Anything you make now would then have higher buying power later, as most things fall relative to it as credit becomes scarce. The trick is surviving the price inflation that is preceding it, and afterwards declining industry could still make some items relatively even more scarce than cash. At random. It is not going to be easy, it could be a bit of a pinball game. But that is a period yet to come, right now my assumption is the credit bubble has propped up the price on virtually everything and the effects are coming to an end over the next few years.

[Cloud9]

At one time I was led to believe that the majority of the money in circulation was virtual as compared to a relatively modest amount of actual cash. Most of what I spend is in the form of credit card transactions. My savings exist on a hard drive at a credit union and, I have a little cash in my pocket.

If the entire credit system were to seize, the FDIC fold, virtual bank accounts disappear and credit cards be voided, would that not make cash more valuable?

[Twilight]

$this->bbcode_second_pass_quote('sjn', 'T')his really doesn't make complete sense. Cash is only useful when it can buy products and services, during the PO economic contraction/collapse there will be necessarily less products and services, yet still plenty of cash to spend!

[cube]

$this->bbcode_second_pass_quote('Twilight', 'A')n excellent question. Always easier to say what is not than what is. I am still trying to figure it out.

I think if the future is deflationary, cash is undervalued. Anything you make now would then have higher buying power later, as most things fall relative to it as credit becomes scarce. The trick is surviving the price inflation that is preceding it, and afterwards declining industry could still make some items relatively even more scarce than cash. At random. It is not going to be easy, it could be a bit of a pinball game. But that is a period yet to come, right now my assumption is the credit bubble has propped up the price on virtually everything and the effects are coming to an end over the next few years.

[Tyler_JC]

$this->bbcode_second_pass_quote('Cloud9', 'A')t one time I was led to believe that the majority of the money in circulation was virtual as compared to a relatively modest amount of actual cash. Most of what I spend is in the form of credit card transactions. My savings exist on a hard drive at a credit union and, I have a little cash in my pocket.

If the entire credit system were to seize, the FDIC fold, virtual bank accounts disappear and credit cards be voided, would that not make cash more valuable?

[Twilight]

$this->bbcode_second_pass_quote('Tyler_JC', 'T')hat's a pretty big IF. The FDIC is not going to fold because the federal government has an obligation to keep the financial system functioning.

[sjn]

$this->bbcode_second_pass_quote('Twilight', '')$this->bbcode_second_pass_quote('Tyler_JC', 'T')hat's a pretty big IF. The FDIC is not going to fold because the federal government has an obligation to keep the financial system functioning.

[Twilight]

$this->bbcode_second_pass_quote('sjn', 'A')nd that will, of course, be massively inflationary.

[Tyler_JC]

What's another couple hundred billion dollars in a 50 trillion dollar global economy?

Re-capitalizing the banks is inflationary but it's not 1920's Germany inflationary.

[sjn]

What is to stop any re-capitalisation attempt from injecting capital into a bank only for it to disappear as losses are written off and subsequently needing further injections for the bank to stay solvent? How long can you keep throwing good money after bad, before it all goes bad?

[Tyler_JC]

$this->bbcode_second_pass_quote('sjn', 'W')hat is to stop any re-capitalisation attempt from injecting capital into a bank only for it to disappear as losses are written off and subsequently needing further injections for the bank to stay solvent? How long can you keep throwing good money after bad, before it all goes bad?

[Twilight]

$this->bbcode_second_pass_quote('sjn', 'W')hat is to stop any re-capitalisation attempt from injecting capital into a bank only for it to disappear as losses are written off and subsequently needing further injections for the bank to stay solvent? How long can you keep throwing good money after bad, before it all goes bad?