Perspectives on the global economic meltdown- (Nov 28 2010)

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Theo_Fidel

Re: Perspectives on the global economic meltdown- (Nov 28 20

Postby Theo_Fidel » 15 Jun 2013 19:50

All debt should be weighed against assets.
Debt should not be weighed against income only or at all.

What are the assets of the the US & for that matter Indian government?
------------------------

Again, data indicates 50%-60% of gold buying in India is as jewellery that is then used during marriages mostly as dowry. It not really for personal savings. So all this thesis about inflation, misgovernance, etc is quite weak. People buy gold because they can and the social pressure is very high to do this.

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Re: Perspectives on the global economic meltdown- (Nov 28 20

Postby svinayak » 15 Jun 2013 20:52

http://www.gata.org/about

About GATA

The Gold Anti-Trust Action Committee was organized in the fall of 1998 to expose, oppose, and litigate against collusion to control the price and supply of gold and related financial instruments. The committee arose from essays by Bill Murphy, a financial commentator on the Internet (LeMetropoleCafe.com), and by Chris Powell, a newspaper editor in Connecticut.

Murphy's essays reported evidence of collusion among financial institutions to suppress the price of gold. Powell, whose newspaper had been involved in antitrust litigation, replied with an essay proposing that gold mining and investor interests should act on Murphy's essays by bringing antitrust lawsuits against financial institutions involved in the collusion against gold.

The response to these essays was so favorable that the committee was formed and formally incorporated in Delaware in January 1999. Murphy became chairman and Powell secretary and treasurer.

GATA financed the federal anti-trust lawsuit of its consultant, Reginald H. Howe -- Howe vs. Bank for International Settlements et al. -- which was pursued in U.S. District Court in Boston from 2000 to 2002. While the Howe suit was dismissed on a jurisdictional technicality, it yielded valuable information at a court hearing in November 2001 and became the model for Blanchard Coin and Bullion's anti-trust lawsuit brought the following year against Barrick Gold and J.P. Morgan Chase & Co. in U.S. District Court in New Orleans, whose settlement appears to have included Barrick Gold's decision to stop selling gold in advance.

Using the U.S. Freedom of Information Act, throughout 2008 and 2009 GATA sought access to the Federal Reserve's gold-related records, eliciting an admission from the Fed that it has gold swap arrangements with foreign banks and insists on keeping them secret. To obtain the records at issue, in December 2009 GATA sued the Fed in U.S. District Court for the District of Columbia. In February 2011 the court ruled that most of the Fed's gold records could remain secret but that one had to be disclosed: minutes of the April 1997 meeting of the G-10 Committee on Gold and Foreign Exchange. The minutes, released by the Fed two weeks after the court's ruling, showed G-10 member treasury and central bank officials secretly discussing the coordination of their policies toward the gold market. The court ordered the Fed to pay court costs to GATA.

GATA has collected and published dozens of documents showing Western treasury and central bank efforts to intervene both openly and surreptitiously against a free market in gold. GATA has held four international conferences: in Durban, South Africa, in 2001; in Dawson City, Yukon Territory, Canada, in 2006; in Washington, D.C., in 2008, and in London in 2011.

GATA's Internet site is www.GATA.org.

GATA is recognized by the U.S. Internal Revenue Service as a tax-exempt educational and civil rights organization under Section 501-c-3 of the U.S. Internal Revenue Code and is grateful for donations to sustain its work.

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Re: Perspectives on the global economic meltdown- (Nov 28 20

Postby svinayak » 15 Jun 2013 20:56

http://www.gata.org/node/11102

GATA can't vouch for the data published in the latest edition of Alan M. Newman's financial letter, Crosscurrents, which argues that financial manipulation has become the main pursuit of the United States economy, but he is far from alone in his observations. Commentary about this trend arose around 20 years ago, perhaps first in The New Republic magazine. And there is a well-established entry about it at Wikipedia, the Internet encyclopedia, here:

http://en.wikipedia.org/wiki/Financialization

Newman writes that dollar trading volume (presumably in U.S. markets) now is more than four times larger than the U.S. gross domestic product as well as four times larger than total stock market capitalization. "The churn continues at the most ferocious pace, making a mockery of our capital markets," Newman writes. "The theme of investing for the future is now meaningless as high-frequency trading distorts price discovery, resulting in gross pricing inefficiencies."

This echoes what GATA board member Adrian Douglas, publisher of the Market Force Analysis letter (www.MarketForceAnalysis.com), often has written about the gold and silver markets particularly -- that paper trading is scores of times greater the actual metal traded and, perhaps more important, scores of times greater than actual metal available for delivery.
This means, as you've heard from this quarter before, that there are no markets anymore, just interventions (http://www.gata.org/node/6242), with the virtually infinite amounts of money necessary for manipulation being delivered by central banks to the monster financial houses that act as their agents both officially and openly as well as unofficially and surreptitiously.

And yet we too may be faulted for paying such close attention to it. Yes, these manipulations supply the main cues for all asset and consumer prices, but now that "trillion" has become a commonly accepted term, the economy's connection to reality itself is being lost. For as Zimbabwe discovered recently and as Weimar Germany discovered 90 years ago, when it comes to human affairs, "trillion" exists only in the imagination, if there. It is incomprehensible.

The digits that flash on our computer screens every day are now mostly just the reflections of holograms concocted by machines. These machines may not yet have taken over the world in the much-feared moment of "singularity," catapulting us all into the losing side of some Arnold Schwarzenegger movie, but as Newman notes they could turn on their masters at any time.

You know all the old philosophical arguments in favor of gold and silver as an independent form of money -- human liberty, limited government, and so forth. But an equally compelling argument now may be the defense of simple reality. In the end monetary metal in your hand is at least something. Hurl it hard enough at an arrogant central banker, a parasitic fund manager, or a sleeping market regulator and it would sting a bit. However the precious metals are to be priced, holding them as money is a way of rejecting and defying the holograms and the creators of infinite money.

Having had plenty of horrible experience with infinite money, the American Founders knew all this and so insisted on commodity money. But their descendants lacked such experience, and so it came to seem primitive to let the money supply be determined by how much metal could be pried out of the ground each year. Indeed, it is primitive. It just seems that any more sophisticated money inevitably becomes too sophisticated, and the result of that is far worse than primitive -- predatory, corrupt, totalitarian, and unreal.

Alan Newman's letter, headlined "A Mockery of the Capital Markets," is posted at the Crosscurrents Internet site here:

http://www.cross-currents.net/charts.htm


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Re: Perspectives on the global economic meltdown- (Nov 28 20

Postby svinayak » 15 Jun 2013 21:34

Theo_Fidel wrote:

Again, data indicates 50%-60% of gold buying in India is as jewellery that is then used during marriages mostly as dowry. It not really for personal savings. So all this thesis about inflation, misgovernance, etc is quite weak. People buy gold because they can and the social pressure is very high to do this.

Unless you understand what the families have gone through for hundred of years and history of those families, you will not be able to understand the gold buying psychology.

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Re: Perspectives on the global economic meltdown- (Nov 28 20

Postby panduranghari » 15 Jun 2013 22:32

Theo_Fidel wrote:All debt should be weighed against assets.
Debt should not be weighed against income only or at all.

What are the assets of the the US & for that matter Indian government?
------------------------

Again, data indicates 50%-60% of gold buying in India is as jewellery that is then used during marriages mostly as dowry. It not really for personal savings. So all this thesis about inflation, misgovernance, etc is quite weak. People buy gold because they can and the social pressure is very high to do this.


Please do not use western terms like dowry. The correct descriptive term is called stree-dhan. Social pressure has nothing to do with it, they do it because since time when the concept of money was invented the people felt the need to save the surplus. The best mode was gold and hence it's used.



The asset differs for every nation.

Middle East oil rich nations asset is oil in the ground.

The asset of Asia until recently was labour. The re-emergence of India China and Philippines is changing it but it will take time to move from being just a manufacturer and back office for west. But change is happening.

The asset for US was innovation. Until recently they believed it will continue but the economic downturn is forcing US to innovate.

This is a very good article. http://truth-out.org/opinion/item/16944 ... mic-growth

The asset for Europe until the 1950s was their huge empires for exploitation. Germany never had an empire and to gain one they constantly innovated. The same effort has produced innovation in current downturn. I believe they can continue with this.

Talking about nations, the sovereign states save in gold. Not in silver. They do hold RESERVES of USD and EUROs and some other fiat currencies as needed. But the overwhelming desire is to hold something tangible.

Marc Faber rates RBI very high and he has stated in an interview from 2005 era that its the most sensible Central bank. I don't buy that because I am certain every central bank tries its best to keep their country relevant in international financial war.

This is what Gideon Gono the head of Zimbabwe central bank said at the height of hyperinflation.


question- Your critics blame your monetary policies for Zimbabwe's economic problems.

Answer- I've been condemned by traditional economists who said that printing money is responsible for inflation. Out of the necessity to exist, to ensure my people survive, I had to find myself printing money. I found myself doing extraordinary things that aren't in the textbooks. Then the IMF asked the U.S. to please print money. I began to see the whole world now in a mode of practicing what they have been saying I should not. I decided that God had been on my side and had come to vindicate me.

Question- In November you shut down Zimbabwe's stock exchange. Will you open it again?
Answer- The stockbrokers were creating a money supply that wasn't there. I printed Z$1.5 quadrillion, but the exchange was operating with Z$100 sextillion. So I said, "Who is doing my job?" Unless there is more discipline and honor, the exchange will stay closed. I can't be bothered. I don't know when it'll open. It's a free market, a business which must be allowed to succeed or fail.

Question- Do you view your term as a success?
Answer- It's a mystery to many how I have survived. I am modestly credited with the survival strategy of my country. The issue is if you want to break Zimbabwe and want it to fall, just deal with one man. You deal with Gideon Gono.

Question- Do you have constant security?
Answer- It's elaborate. It's an occupational hazard. If you ask Bernanke or Greenspan, it's the same, but it just differs in intensity. If you raise the interest rate you'll be friends of people who have access to money. If you lower the interest rate, you'll be the darling of borrowers, but pensioners will curse you to hell. It's never about popularity. At all times you are definitely hurting some people in the economy.

Question- Many say you profit off the poverty of others.
Answer-That is simply not true.

Question-What do you think of your many critics?
Answer-I have been in the trenches during every moment of survival for my country. Any central bank governor is of necessity. When things go bad, we governors are the fall guys. No other governor in the world has had to deal with the kind of inflation levels that I deal with, no other governor has to come up with the gymnastics and strategy for the survival of his country. But let me say that in my bank resides the cutting edge of the country. I'm privileged to be the leader of that team.


http://www.thedailybeast.com/newsweek/2 ... worse.html

Theo_Fidel

Re: Perspectives on the global economic meltdown- (Nov 28 20

Postby Theo_Fidel » 15 Jun 2013 22:36

What does stree dhan mean?

Again the majority of gold in India is bought as jewellery and given as dowry. The data is unequivocal on this.
This is the effect of social pressure today or do you want to blame this one as well on Mahmud of Ghazni.
And no amount of spinning is going to hide just how bad dowry is for society and the economy.
Last edited by Theo_Fidel on 15 Jun 2013 23:01, edited 1 time in total.

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Re: Perspectives on the global economic meltdown- (Nov 28 20

Postby vishvak » 15 Jun 2013 22:59

[==quote="Acharya"]
http://www.gata.org/about

About GATA
..
Murphy's essays reported evidence of collusion among financial institutions to suppress the price of gold. Powell, whose newspaper had been involved in antitrust litigation, replied with an essay proposing that gold mining and investor interests should act on Murphy's essays by bringing antitrust lawsuits against financial institutions involved in the collusion against gold.

..
GATA has collected and published dozens of documents showing Western treasury and central bank efforts to intervene both openly and surreptitiously against a free market in gold. GATA has held four international conferences: in Durban, South Africa, in 2001; in Dawson City, Yukon Territory, Canada, in 2006; in Washington, D.C., in 2008, and in London in 2011.

[==/quote==]


[==quote="Acharya"]
http://www.gata.org/node/11102

..
"The churn continues at the most ferocious pace, making a mockery of our capital markets," Newman writes. "The theme of investing for the future is now meaningless as high-frequency trading distorts price discovery, resulting in gross pricing inefficiencies."
..
Yes, these manipulations supply the main cues for all asset and consumer prices, but now that "trillion" has become a commonly accepted term, the economy's connection to reality itself is being lost. For as Zimbabwe discovered recently and as Weimar Germany discovered 90 years ago, when it comes to human affairs, "trillion" exists only in the imagination, if there. It is incomprehensible.
..
Having had plenty of horrible experience with infinite money, the American Founders knew all this and so insisted on commodity money. But their descendants lacked such experience, and so it came to seem primitive to let the money supply be determined by how much metal could be pried out of the ground each year. Indeed, it is primitive. It just seems that any more sophisticated money inevitably becomes too sophisticated, and the result of that is far worse than primitive -- predatory, corrupt, totalitarian, and unreal.

http://www.cross-currents.net/charts.htm


[==/quote==]
What is hidden in the economic crisis is who donnit and proverbial dogs who didn't bark, root causes and remedies, punishments and corrections. All of this is still hidden while it is very easy to point at gold when it has nothing to do with it. That is not an excuse to ignore reality.

Stree-dhan is a legal term, all over India. Enough information on the internet, guess propaganda machinery has ignored it altogether.

Fact of the matter is all govts hold gold regardless, and there are gold exchanges all over the world too regardless.

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Re: Perspectives on the global economic meltdown- (Nov 28 20

Postby svinayak » 15 Jun 2013 23:11

http://www.gata.org/node/4195

What are the purposes of the gold price suppression scheme?

We believe there are several:

1. To keep interest rates down by deceiving the bond markets about the rate of inflation, inflation historically being gauged in large part by the price of gold. You may remember the famous comments about the bond market that were attributed to President Clinton not long after he took office. He was frustrated with having to take the advice of his economic advisers that the approval of the bond market was crucial to his administration s political success. Clinton said he resented having to make his administration one of Eisenhower Republicans. GATA thinks that the gold price suppression scheme -- the massive deception of the bond market -- was Clinton's revenge.

2. To strengthen the U.S. dollar in relation to other curencies; to suppress commodity prices generally, since commodity prices take their cues from the gold price; and, by extension, to raise living standards in the United States by expropriating the developing world, which makes its living largely from producing and exporting commodities.

3. To enrich through inside information about U.S. government policy the Wall Street investment houses that have helped implement the gold price suppression scheme and that long have staffed the Treasury Department and Federal Reserve.

But the results of the gold price suppression scheme have been far greater than all this. The results include the devastation of the economies of the developing world, particularly sub-Sarahan Africa, and the vast misallocation of capital throughout the world in the last decade. That is, with the bond market deceived about inflation, the dollar, and the strength of the U.S. economy, most economic decisions around the world for the last decade have been based on horribly mistaken premises. The U.S. stock market bubble, now bursting, is evidence of this.

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Re: Perspectives on the global economic meltdown- (Nov 28 20

Postby panduranghari » 15 Jun 2013 23:15

Theo_Fidel wrote:What does stree dhan mean?

Again the majority of gold in India is bought as jewellery and given as dowry. The data is unequivocal on this.
This is the effect of social pressure today or do you want to blame this one as well on Mahmud of Ghazni.
And no amount of spinning is going to hide just how bad dowry is for society and the economy.


I stated once and I state again dowry is western concept. Stree-dhan is an Indic concept.

And please do watch the CBS documentary. You will get your answer. Either you are ingenious or you are trolling. I am uncertain.

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Re: Perspectives on the global economic meltdown- (Nov 28 20

Postby vishvak » 15 Jun 2013 23:27

What is dowry?

If one is able to pass value judgements about whole society even understanding what stree-dhan is, it should be easier to put labels on those world-level greed mongers who participate in scams, monopolies, suck out credits and also those who remain silent. Or even in labeling one should be selective.

Silence about those to be blamed, and make profit out of, for globe-level financial crisis just means that there is a cover provided for it. Silence is the cover for it, supplemented by finger pointing.
Last edited by vishvak on 16 Jun 2013 02:15, edited 1 time in total.

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Re: Perspectives on the global economic meltdown- (Nov 28 20

Postby svinayak » 15 Jun 2013 23:47

panduranghari wrote:
Theo_Fidel wrote:What does stree dhan mean?

Again the majority of gold in India is bought as jewellery and given as dowry. The data is unequivocal on this.
This is the effect of social pressure today or do you want to blame this one as well on Mahmud of Ghazni.
And no amount of spinning is going to hide just how bad dowry is for society and the economy.


I stated once and I state again dowry is western concept. Stree-dhan is an Indic concept.

And please do watch the CBS documentary. You will get your answer. Either you are ingenious or you are trolling. I am uncertain.

We dont need western social engineering inside India and no Indian should support western sociology views on India.
Indians who are westernized and who follow western norms have nothing to comment on Indian social system.
Social views of foreigners dont matter inside India

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Re: Perspectives on the global economic meltdown- (Nov 28 20

Postby member_26147 » 16 Jun 2013 02:38

Neshant wrote:
If you look at the last 12 years, its been nothing but debt layered upon debt. Post-2008, the only thing pushing up the markets is more debt, money printing, interest rate surpressing and stock market rigging - the latter which the federal reserve itself admits to.

One thing is for certain, the vast amounts of debts rapidly being accumulated are not going to be repaid - not at the present purchasing power of the dollar.


Thats right. Its not going to be repaid. It can be solved multiple ways. Which way its going to go, depends on how the quantum flip occurs in this universe.

Neshant wrote:
Exactly who decides what is "really useful" to anyone. Bernanke was getting a whole load of people into "really useful" investments pre-2008. Even at the height of the real estate bubble, he claimed there was no bubble and prices were rising because the economy was doing great. Now again he's getting people into really useful things on the stock market, derivative and a whole load of other speculative fronts. We'll see how this ends.

It certainly helps to have creditors around if and when the paper money system implodes. Ultimately capital can only come from savings (or looting other people's savings). It cannot come out of a printing press.


Capital is generated through innovation, and production both of which require initial capital investment. Hoarding gold doesn't solve anything, except it keeps a country's innovative and productive people behind because the capital is locked up. So, its self-evident that revolving capital is useful to everyone in the society.

Neshant wrote:
Economic decisions would be made very wisely if that were to happen. Debt would be something people would take on very cautiously. Productivity would be maximized and various useless industries like banking and paper shuffling would be largely cut out of the picture - unless they offer something of real value to society as opposed to rent seeking. Just the opposite of today.

The time to pay the piper will come eventually with wreckless spending and debt binging if there is no real growth on the income side of the ledger. When it does, either the paper holders will have to be cheated through taxation, confiscation, inflation..etc or they would stand to gain massively in huge tsunamis of defaults rolling through the system. Judging from history, I'd bet on the former.


Yeah right! Economic decisions were made very wisely during the entire human history which is why we had wars. Not to mention the reason India was invaded was because people knew Indians collected gold. Would the same thing have happened if Indians were collecting gunpowder from China and innovating in the Defense industry? I think not! Also, the debt repayment even during the gold era was lower than it is now. Partly because the bankers would lend at ridiculous rates and eventually capture the lands of the debtors. This is how feudalism started. Productivity quadrupled after the gold standard was dropped. Think of all the innovation that has happened in the last 50 years that couldn't happen in the last 500 years before that.

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Re: Perspectives on the global economic meltdown- (Nov 28 20

Postby svinayak » 16 Jun 2013 02:44

DhruvP wrote: Productivity quadrupled after the gold standard was dropped. Think of all the innovation that has happened in the last 50 years that couldn't happen in the last 500 years before that.

THis is ponzi scheme. The credit card debt and demand created by that was used to increase the supply side/productivity. With debt burden this cannot continue. Demand drops and adjustment happens. There was discrimination in where the investment went for supply side. Money for investment was carefully controlled to only those countries

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Re: Perspectives on the global economic meltdown- (Nov 28 20

Postby panduranghari » 16 Jun 2013 03:11

DhruvP wrote:Hoarding gold doesn't solve anything, except it keeps a country's innovative and productive people behind because the capital is locked up.


Hmm seems Deutsche Bank analysts disagree with you.


http://www.businessinsider.com/deutsche ... ney-2012-9
The undisputable evidence for the case that gold is money, according to the Deutsche Bank analysts:

While it is included in the commodities basket it is in fact a medium of exchange and one that is officially recognised (if not publically used as such). We see gold as an officially recognised form of money for one primary reason: it is widely held by most of the world’s larger central banks as a component of reserves.

That's their take. But there's more – the analysts differentiate between "good money" (gold) and "bad money" (fiat paper currency):

We would go further however, and argue that gold could be characterised as ‘good’ money as opposed to ‘bad’ money which would be represented by many of today’s fiat currencies. In describing gold as such we refer to Gresham’s Law – when a government overvalues one type of money and undervalues another, the undervalued money (good) will leave the country or disappear from circulation into hoards, while the overvalued money (bad) will flood into circulation.

What's interesting is that all of the arguments against gold propogated by the anti-goldbugs – that it's not really a consumption good, that it serves no industrial purpose, etc. – are all the exact reasons why Brebner and Xiao call gold "good money."

The analysts elaborate on this point in the report:

In our view the ideal medium of exchange must balance the paradox of representing value while having little intrinsic value itself. There are very few media which can do this. Fiat currencies physically have no use other than that which is prescribed to them by government and accepted by the public. That fiat currencies cost little to produce is of a secondary concern and we believe, quite irrelevant to the primary purpose.

Gold is neither production good nor consumption good. Jewellery we see as a form of storage or hoarding (the people of Portugal have all but exhausted their personal gold stores – hoarded in the form of jewellery – having converted them to survive the crisis). If gold did have a meaningful commercial use we believe that it would make the metal less attractive as a medium of exchange as the value of the metal in whatever market it was used in could periodically interfere with its medium-of-exchange role...

Other characteristics are important of course in fulfilling the requirements for ‘good’ money: indestructibility, divisibility, transportability and universal acceptability.

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Re: Perspectives on the global economic meltdown- (Nov 28 20

Postby vishvak » 16 Jun 2013 03:28

Just one aspect of the financial crisis is about credit sucked into questionable debt structures that no one seems to indicate as toxic.

A very famous example of this is how Lehman Brothers filled for bankruptcy. I am not able to find out ratings of stock held by Lehman Brothers on Saturday Sep 13 2008, but the bank filed for bankruptcy on a Sunday! - link

So what happened between Saturday and Sunday? The excuse given was lack of transfer of money between EU and US branches of Lehman Brothers, but no one official word on how toxic debts were allowed to be traded and how many hands it changed and what happened to credit that structures sucked in. There are no simple answers there.

There are enormous gray areas where trading and handling of such trades becomes subjective of higher authorities and not to usual trading practices which should have been the normal case as per free transparent trading system as expected by investors.

Theo_Fidel

Re: Perspectives on the global economic meltdown- (Nov 28 20

Postby Theo_Fidel » 16 Jun 2013 05:14

Dowry is dowry. Pretending it is not dowry does not make it go away.
Any way it is OT here.

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Re: Perspectives on the global economic meltdown- (Nov 28 20

Postby member_26147 » 16 Jun 2013 08:56

Everybody knows that toxic loans was piled up and sold as AAA derivatives since everyone assumed housing would always go up. That was a problem. However, most posters here don't understand that eventually, capital will migrate from bonds to stocks or commodities to stocks because they are growth drivers.

One way to avoid getting caught up into this mess is to have a sound financial position by not buying a house beyond your means and buying physical stocks of corporations you trust instead of trading into volatile options and hold them for a long time by looking at their fundamentals. At the same time, hedge your position by buying bonds and gold. This will ensure an all round growth.

I'm not saying all is well with the financial world. There needs to be reform there. That does not mean the world economy is going to implode. There have been worse events that have happened in history, so I don't claim to be an oracle saying things are going to be smooth sailing from here on out. But, it is the extreme either-or between investments in gold and everything else that is incorrect. Eventually, the sun always rises again. So barring the aliens destroying earth, Exchanges are not going to go away.

Pandu, You distrust the financial system and you posted the opinion of a bank? Whatever suits your argument, ain't that right? :rotfl:

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Re: Perspectives on the global economic meltdown- (Nov 28 20

Postby TSJones » 16 Jun 2013 12:16

^^^^Not only that but a bank that the US regulators think is under capitalized.

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Re: Perspectives on the global economic meltdown- (Nov 28 20

Postby panduranghari » 16 Jun 2013 13:53

DhruvP wrote:
Pandu, You distrust the financial system and you posted the opinion of a bank? Whatever suits your argument, ain't that right? :rotfl:


People who buy gold have been called tin foil hatters, evil gold hoarders, cultists, brainwashed morons etc. just because pro gold opinion is considered blasphemy by anti gold people, i offered you a view of someone whom you trust.

For the record bankers are really bank-sters.

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Re: Perspectives on the global economic meltdown- (Nov 28 20

Postby Neshant » 16 Jun 2013 14:23

DhruvP wrote:Thats right. Its not going to be repaid. It can be solved multiple ways.


what way is that? i.e. who do you propose get cheated

Capital is generated through innovation, and production both of which require initial capital investment. Hoarding gold doesn't solve anything,


How about letting the market decide what's best? This is as opposed to some guy sitting on a high horse in a central bank directing the situation as if he's an all knowing oracle when he's really just a deluded fool.

Inevitably all such folks end up doing is using the power to print money to enrich their cronies (the private banks) and transfer their market gambling losses onto the backs of productive society.

The whole concept of some guy like Bernanke giving a speech and having the markets rise or fall as if he's some economic tsar or central planner goes against the notion of capitalism.

Would the same thing have happened if Indians were collecting gunpowder from China and innovating in the Defense industry?


I don't see what gold has to do with innovation. Spending money or running up debt or printing money does not equal innovation. The latter is just counterfeiting money. Taking on debt is borrowing against the future.

It is the people who have earned and saved the money who should decide in what medium they wish to save their money and when they should invest it. Not some "wise old man" sitting in an ivory tower thinking he knows what's best like the guy below :


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Re: Perspectives on the global economic meltdown- (Nov 28 20

Postby Neshant » 16 Jun 2013 14:39

DhruvP wrote:However, most posters here don't understand that eventually, capital will migrate from bonds to stocks or commodities to stocks because they are growth drivers.


that is not a given.

in Japan the stock market has gone down for 22 to 23 years.

and that's despite strong exports and global growth all throughout that period.. and big govt spending aka wasting money.

Once this period of running up debt, money printing and stock market rigging comes to an end, one wonders what will happen.

I can see no new industry powering the economy which is the same feeling I had post 2002 when I could not understand how things were allegedly improving. As it turned out, all that growth was illusionary and that debt which imploded still exists - off the books for now. The only thing growing is debt, money printing & financial fraud which is being hidden and/or legalized.

I've stated my belief that I do not believe there is any intention in the west to repay their debt. This leaves but a few options - specifically who gets cheated and how. At the first whiff by bond holders that they are going to be cheated, there will be a big jump in interest rates as investors dump govt bonds.

As with all cases, most countries will not see a bond market collapse coming until its upon them. It can happen at any time.

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Re: Perspectives on the global economic meltdown- (Nov 28 20

Postby vishvak » 16 Jun 2013 19:22

Theo_Fidel wrote:Dowry is dowry. Pretending it is not dowry does not make it go away.
Any way it is OT here.

No wonder it is off-topic. I never understood how dowry system of European royals, regardless of questionable ancestry, and gold stored in vaults by European and US govt banks, can have any effect whatsoever on global financial crisis.

There is still silence however on dogs who didn't bark and what happened to rest of toxic assets that were not considered after issues like Lehman Brothers declaring bankruptcy on Sunday!

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Re: Perspectives on the global economic meltdown- (Nov 28 20

Postby vishvak » 16 Jun 2013 19:40

Everyone knew that toxic assets were floating around and sold as AAA derivatives on assumptions. So much for accuracy of assumptions of rating agencies.

About growth areas that attract capital and toxic assets, how come toxic assets find way to AAA rating structures.

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Re: Perspectives on the global economic meltdown- (Nov 28 20

Postby shyam » 16 Jun 2013 21:27

DhruvP wrote:Productivity quadrupled after the gold standard was dropped. Think of all the innovation that has happened in the last 50 years that couldn't happen in the last 500 years before that.

Largest economic expansion in US happened immediately after WW2, and US was in gold standard.

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Re: Perspectives on the global economic meltdown- (Nov 28 20

Postby shyam » 16 Jun 2013 21:36

DhruvP wrote:Everybody knows that toxic loans was piled up and sold as AAA derivatives since everyone assumed housing would always go up. That was a problem.

How many people were talking about this pile up of toxic loans before Lehman crash? Very very few! Only after it was burst, people knew about the AAA rated toxic assets, and people now talk as if investors knowingly invested in those toxic bonds.

Similarly, now countries are being loaded up with huge debt using low interest rates, and after sovereign debts go bust, I am sure some experts will comment that countries were raking up debt and that was the problem. Experts will never the see the problem when it builds up in front of them, they will develop expertise only when it bursts.

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Re: Perspectives on the global economic meltdown- (Nov 28 20

Postby Theo_Fidel » 16 Jun 2013 22:21

US left gold standard in 1932 when gearing was introduced. IIRC a massive devaluation of 50% was undertaken. Regular devaluations were undertaken after that.

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Re: Perspectives on the global economic meltdown- (Nov 28 20

Postby panduranghari » 16 Jun 2013 23:15

shyam wrote:
DhruvP wrote:Productivity quadrupled after the gold standard was dropped. Think of all the innovation that has happened in the last 50 years that couldn't happen in the last 500 years before that.

Largest economic expansion in US happened immediately after WW2, and US was in gold standard.



Its true that economic expansion happened exponentially after WW2. However we are measuring things from western perspective.

If we do purva paksha the economic expansion of the west happend after WW2. The rest of the world especially Asia was never considered when the talk about economy is focused on the west. India China constituted over 50% of global economy prior to 1850. By 1950 the west had successfully ruined the world.

However fate does have a sense of irony. In spite of the raping and pillaging, India and china are resurgent again. The west unable to digest this is creating fissures internally within India and to a lesser extent within china.

The future belongs to those who own gold in physical form. In the distant future there will be a few guys who will rue not buying gold when it's cheap at 1500$/oz.

One should grasp that "today, your wealth, is not what your currency say it is"! In this world, paper currency is for trade, only! It is for the buying, selling, earning and paying, not for knowing the value of your family holdings! Know this, "the printers of paper do never tell the owner that the money has less value, that judgment is reserved for the person you offer that currency to"! Again, I ask, how can we know a true value for our assets, when they are known only in currency that finds its worth, as in the exchange rate for another currency?

Many will "think long and hard on this", but will find little reason for this position. For it is in your history to know only "things valued in paper terms".

Your past holds little of knowing value outside of currencies, this does block the good view!

Hear me now, what the wealthy and powerful know: "real value does not have to always be stated or converted thruout time. It need only be priced once during the experience of life, that will be much more than enough!"

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Re: Perspectives on the global economic meltdown- (Nov 28 20

Postby panduranghari » 16 Jun 2013 23:18

Theo_Fidel wrote:US left gold standard in 1932 when gearing was introduced. IIRC a massive devaluation of 50% was undertaken. Regular devaluations were undertaken after that.


US left gold standard on 15 August 1971.


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Re: Perspectives on the global economic meltdown- (Nov 28 20

Postby svinayak » 16 Jun 2013 23:54



From enormous debt loads to rampant inflation to government incompetence, the United States is on the brink of severe economic depression. With a real national debt of $222 trillion including all unfunded liabilities and expenditures, it's surprising that no one talks about how the U.S. will eventually become a bankrupt nation -- if it isn't already.

"We've got a much bigger collapse coming, and not just of the markets but of the economy. It's like what you're seeing in Europe right now, only worse," stated Peter Schiff, president of Euro Pacific Capital, in an interview with Yahoo's Breakout.

"That's when it really is going to get interesting, because that's when we hit our real fiscal cliff, when we're going to have to slash — and I mean slash — government spending. "Alternatively, we can bail everybody out, pretend we can print our way out of a crisis, and, instead, we have runaway inflation, or hyper-inflation, which is going to be far worse than the collapse we would have if we did the right thing and just let everything implode."



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Re: Perspectives on the global economic meltdown- (Nov 28 20

Postby Neshant » 17 Jun 2013 05:46

shyam wrote:Largest economic expansion in US happened immediately after WW2, and US was in gold standard.


It was a gold standard only in name. Bretton Woods stated that ONLY (allied) governments could approach the US govt to exchange their dollars for gold, not individuals.

The trick of course is that the US knew no foreign govt dared approach it to change dollars into gold. If they did, they would incur the wrath of the US and bare some dire economic consequences for waging a war against the US dollar. US was of course an economic super-power post WWII.

The system fell apart only when France was bold enough to do so - handing the US govt something like 3 billion and asking for gold in return. They were told to go pound sand and the US promptly declared the gold window closed.

A gold standard is only in existence when you can go to a bank with your paper money and exchange it for gold coins anonymously. In that sense, a gold standard has not existed since the Federal Reserve came into being in 1913.

Right now we are on a semi-gold standard. You are free to purchase gold but there are harsh restrictions put in place to prevent people from using it as money to preserve the monopoly of private bankers controlling the central bank. They will not give up their control over money and go quietly into the night because they profit greatly from extracting wealth from society.

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Re: Perspectives on the global economic meltdown- (Nov 28 20

Postby Neshant » 17 Jun 2013 05:58

Interestingly, Warren Buffett's Father was a gold bug. He wrote an essay on gold in 1948 entitled :

Human Freedom Rests on Gold Redeemable Money
http://www.fame.org/pdf/buffet3.pdf

It includes such prescient quotes as:

"...paper money, gives the individual who owns it no independence, because it has no redemptive value. Under such conditions the individual citizen is deprived of freedom of movement. He is prevented from laying away purchasing power for the future. He becomes dependent upon the goodwill of the politicians for his daily bread. Unless he lives on land that will sustain him, freedom for him does not exist."


And he closes his essay with this grim warning..

"...unless you are willing to surrender your children and your country to galloping inflation, war and slavery, then this cause demands your support. For if human liberty is to survive in America, we must win the battle to restore honest money. There is no more important challenge facing us than this issue - the restoration of your freedom to secure gold in exchange for the fruits of your labors."

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Re: Perspectives on the global economic meltdown- (Nov 28 20

Postby TSJones » 17 Jun 2013 21:09

Here's one for the Doom and Gloom club:

http://finance.yahoo.com/blogs/daily-ti ... 57036.html

.... yup, China is gonna implode. Just a matter of when.

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Re: Perspectives on the global economic meltdown- (Nov 28 20

Postby ramana » 18 Jun 2013 00:25

Yesterday BBC had an indepth review of German Economy. Will try to find the links for that program.

Essentially Germany avoided the doom and gloom of the last decade but the future is murky due to: demographics (low birth rate, immigration expected to fall due to bad economy), education system stagnating (only 2 institutes in top 50 despite massive spending, plus side many in the next 200 and 300 utys), not much innovation (plus side is the Fraunhofer Institutes promoting industry and uty research).

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Re: Perspectives on the global economic meltdown- (Nov 28 20

Postby member_26147 » 18 Jun 2013 02:37

Neshant wrote:
what way is that? i.e. who do you propose get cheated


I can give multiple proposals, what the US government does is what will ultimately matter. They have started diluting the dollar already, by increasing the money supply, the bond market is about to correct, which puts pressure on China, the wars in Iraq and Afghanistan put a lid on China and India's manufacturing growth which brought capital to the BRIICS earlier due to rising oil prices. As long as the dollar is the reserve they can take any number of measures and are taking those measures to ensure that they keep growing. Whether its successful or not in the long run, time will tell.

Neshant wrote:
How about letting the market decide what's best? This is as opposed to some guy sitting on a high horse in a central bank directing the situation as if he's an all knowing oracle when he's really just a deluded fool.

Inevitably all such folks end up doing is using the power to print money to enrich their cronies (the private banks) and transfer their market gambling losses onto the backs of productive society.

The whole concept of some guy like Bernanke giving a speech and having the markets rise or fall as if he's some economic tsar or central planner goes against the notion of capitalism.


Bernanke's speech affects day traders and mutual fund managers who have short oversight. The long term investor is a rare individual who buys during these dips and sees record gains. Giving into gold is not the answer. I already explained earlier that markets have behaved irrationally even during the gold standard. You haven't provided an explanation of why that happened, instead just spewed the perma-bear crap about Fed and its control. I dislike the Fed too, but fleeing to Gold is destroying India's economy more than it is helping.
Look below (you can ignore the part where they say that US Stock market is unlikely to slump or the dollar to lose its value, we all know that is wrong but you need to understand the fundamental principal that gold is not a growth driver):
http://www.cnbc.com/id/100819215

For the Indian economy, however, the gold obsession is worse than a poor investment. Unlike buying stocks or bonds, parking money in gold slows, rather than stimulates, economic growth by sucking cash out of the system. (In contrast, even oil imports, while bad for the trade deficit, literally fuel industry).

Meanwhile, a growing trade deficit forces the country to devalue its currency – for India, about 10 percent a year for the past two decades. Those plunging values scare people out of rupees, and foreign funds out of India. That, in turn, means less investment and slower growth, and thus a further weakening rupee.

In other words: A vicious cycle.


Neshant wrote:
I don't see what gold has to do with innovation. Spending money or running up debt or printing money does not equal innovation. The latter is just counterfeiting money. Taking on debt is borrowing against the future.

It is the people who have earned and saved the money who should decide in what medium they wish to save their money and when they should invest it. Not some "wise old man" sitting in an ivory tower thinking he knows what's best like the guy below :


Innovation needs capital investment in the form of loans that needs to be borrowed. If everybody stashes gold in their basement, money is locked. Not every good innovator has enough cash to even start a small scale enterprise. The incubation process is killed. This is why innovation is stifled in India and we have businesses starting up in record numbers in the Western world. Don't the Indians, Chinese get ideas? OfCourse they do, as is evident by the ethnicity of entrepreneurs in silicon valley. They just don't get support and capital in India. China gives material support but even there, they concentrate on manufacturing for American enterprises to avoid risk. The state owned enterprises have now started taking risk like Huawei etc and they are doing well, despite unfair practices from US due to distrust. Atleast their homegrown companies are doing well in China. In India, because there is a lack of risk-takers, US enterprises are setting up shop and gobbling up small businesses.

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Re: Perspectives on the global economic meltdown- (Nov 28 20

Postby member_26147 » 18 Jun 2013 02:50

Neshant wrote:
that is not a given.

in Japan the stock market has gone down for 22 to 23 years.

and that's despite strong exports and global growth all throughout that period.. and big govt spending aka wasting money.

Once this period of running up debt, money printing and stock market rigging comes to an end, one wonders what will happen.

I can see no new industry powering the economy which is the same feeling I had post 2002 when I could not understand how things were allegedly improving. As it turned out, all that growth was illusionary and that debt which imploded still exists - off the books for now. The only thing growing is debt, money printing & financial fraud which is being hidden and/or legalized.

I've stated my belief that I do not believe there is any intention in the west to repay their debt. This leaves but a few options - specifically who gets cheated and how. At the first whiff by bond holders that they are going to be cheated, there will be a big jump in interest rates as investors dump govt bonds.

As with all cases, most countries will not see a bond market collapse coming until its upon them. It can happen at any time.


I can see multiple industries powering the economy that are on the horizon. Medical equipment industry has only recently started trusting technology and its a multi-billion dollar market waiting to be tapped in. 3D printing while in its infancy has great potential in the future to disrupt manufacturing. Wearable computing is going to eliminate the bricks called cellphones we carry around as the form factor becomes smaller than 5 nm in 2019. Medicine is going to be more and more efficient as more and more genes are linked to a particular disease, improving detection and even prevention. I have many more that I'm going to file provisional patents on that I'm not going to even list here. All these technologies are promising but they need investment. That is not going to happen in India because of the general worship of gold. And I foresee that India will never be able to overtake the US and/or China if this mindset doesn't change.

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Re: Perspectives on the global economic meltdown- (Nov 28 20

Postby member_26147 » 18 Jun 2013 03:02

panduranghari wrote:
DhruvP wrote:
Pandu, You distrust the financial system and you posted the opinion of a bank? Whatever suits your argument, ain't that right? :rotfl:


People who buy gold have been called tin foil hatters, evil gold hoarders, cultists, brainwashed morons etc. just because pro gold opinion is considered blasphemy by anti gold people, i offered you a view of someone whom you trust.

For the record bankers are really bank-sters.


Gold obsession is not pro-gold. There is pro-gold and there are gold bugs. You are an obsessed gold bug. Your assumption is that all the stock trading will implode at a certain time in the future and gold will rise to n x 100%. While everything has a chance of happening, I would assign this assumption of yours a probability of 0.01, even though the dollar is being diluted and even though the Fed is taking extreme measures because this has never happened (note: none of the exchanges have closed shop). You're locking the money supply based on this assumption. Statistically, since this is not a sound strategy, these people (including you) will be labeled names. Usury has been practiced during gold standard and the stabilization of interest rates in Fiat-based economy has allowed more risk-takers to produce. Its the players that are corrupt (and have been corrupt even during gold standard). The economics is not.

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Re: Perspectives on the global economic meltdown- (Nov 28 20

Postby TSJones » 18 Jun 2013 04:53

For the samll investor dollar cost averaging is the only way to go. That is to say, invest regular sums of money *every* month regardless. Even if its only $25 -$50 bucks a month. With firms like Scottrade, etc. there are no minimums (I think). It just that $7 a trade takes a signnficant protion of you monthly sum. But it saves your butt when things like 2008 ocurrs. You don't have to run out and dump your potfolio because you have a low average cost per stock over the years that you've pruchased it. The only drawback to this plan is if you were planning to retire when a recession hits. You have to be able to sit tight and ride out the storm until the rebound hits.

The other surefire technique, and this is from Crammer, is DIVERSIFICATION. Cramer says that diversification is the only free lunch you will ever receive as an adult. He recommends a five sector diversification plan, such as energy, tech, medical, financial and consumables/household. He also recommends 10% metals. (Platinum is showing real promise at this time.)

The other thing I would like to point out is that the derivatives market is necessary function of a free market. It helps farmers lock in the price of their crops. Oil companies also lock in their productive oil reserves, etc. When you say that the $300 trillion dollar derivative market can't be funded in a crash. that is not true. A sector of it can be as the 2008 housing bubble proved. When a crash ocurrs not all of the sectors of the derivative market will collapse. They never have. The history of the US has proven this. A collapse in corn doesn't mean a collapse in wheat, etc. A collapse in housing doesn't mean a collapse in another financial sector, etc.

Finally, I realize that I am pissing against the tide in this forum as far as the Doom and Gloom club goes, but a sense of reality has to be maintained in an economic outlook. Yes, everything fails, eventually, but even Taleb (Black Swan) doesn't recommend living your life like Chicken Little running around saying the sky is falling. You do have to make robust, resilient decisions/systems. It can be done.


Secret from the Grave by Julius Westheimer

1. Always buy on the cannons, sell on the trumpets.
2. Bonds are the house you live in.
3. Never speculate
4. Pay off debt fore investing

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Re: Perspectives on the global economic meltdown- (Nov 28 20

Postby panduranghari » 18 Jun 2013 05:19

DhruvP wrote:
Gold obsession is not pro-gold. There is pro-gold and there are gold bugs. You are an obsessed gold bug. Your assumption is that all the stock trading will implode at a certain time in the future and gold will rise to n x 100%. While everything has a chance of happening, I would assign this assumption of yours a probability of 0.01, even though the dollar is being diluted and even though the Fed is taking extreme measures because this has never happened (note: none of the exchanges have closed shop). You're locking the money supply based on this assumption. Statistically, since this is not a sound strategy, these people (including you) will be labeled names. Usury has been practiced during gold standard and the stabilization of interest rates in Fiat-based economy has allowed more risk-takers to produce. Its the players that are corrupt (and have been corrupt even during gold standard). The economics is not.


Dhruv ji,

Zimbabwe stock exchange has shut shop since a few years. Argentine stock exchange is open but the capitalisation is a few billion but the money supply is running at a few quadrillion. In my understanding, argentine stock exchange is as good as closed.

It's a misnomer to state that by buying gold i am locking money supply.

Actually I am employing the miners, the gold bullion dealers ( I use Matterhorn Asset management and coininvestdirect.com), the courier company which ferries some gold from Britannia to Zurich, the people who vault the gold.

See a lot of people are dependant on me and others buying physical gold.

Then last year I bought my wife my mother and my mother in law some jewellery, so I employed some skilled craftsmen through the jeweller in doing this. See I ensured their job survived and they could in turn make profit through the trade.

Now please show me how I am constraining the money supply.

I am seeing things differently.

Instead of being a total schmuck by employing a financial advisor or a broker, I am employing someone who in my humble opinion is more deserving of my hard earned money like a skilled craftsman who makes nice jewellery out of something very valuable.

Let me interest you in a story of gold.

http://www.npr.org/templates/story/stor ... Id=7397200
Ever wonder where the gold in your wedding ring came from? This Valentine's Day, we ask Neil deGrasse Tyson, director of New York City's Hayden Planetarium, to explain the history of the rare element.

In the Beginning

According to Tyson, author of Death by Black Hole and Other Cosmic Quandries, all gold on Earth started out in the center of a star; he says stars are "in the business of cosmic alchemy."

When the universe began, there were only two kinds of atoms: hydrogen, which has one proton, and helium, which has two protons.

The problem was that hydrogen and helium couldn't combine to make a new kind of atom of three, four or five protons. The two atoms resisted each other because they were the same charge.

Unless, of course, it got very, very hot. How much heat would it take to get two protons to sit together?

About 10 million degrees, Tyson says. And that's where stars come in.

Fiery Fusion

Stars like our sun are so hot that protons collide with such force and have no choice but to combine. It's called fusion. Inside the sun's furnace, protons turn into heavier and heavier atoms: Hydrogen atoms combine to become helium, and then those helium atoms combine to become carbon.

"It keeps going," Tyson says. "Carbon and oxygen and nitrogen and silicon, and [fusion] just plows its way up the periodic table of elements."

Carbon has six protons, nitrogen seven protons, oxygen eight protons. A hot star can cook all the way up to iron, a 26-proton atom. But that's where it stops.

"When you reach iron, nobody can do anything... It's dead matter. You can't fusion it. You can't fission it," Tyson explains.

Once a star has converted all its atoms into iron, it's out of fuel.

"That's a bad day for the star," Tyson says. "And at that moment, the entire star collapses, and in that collapse, the star reaches stratospheric temperatures and blows its guts to smithereens."

The Collapsing Star

A collapsing star is called a supernova. The explosion is so powerful and cataclysmic that you can see it across the universe.

Supernovae outshine whole galaxies, because the atoms inside are colliding furiously, creating intense heat — hundreds of millions of degrees.

Only in a supernova is it possible to create atoms with 30 protons, 40 protons, 50 protons or even 60 protons. Nature prefers even numbers for stability, but every so often, the star will forge an odd-numbered atom, a real rarity: gold!

Gold is a rare, odd-numbered atom with 79 protons. For every single gold atom in the universe, there are 1 million iron atoms, Tyson says.

A Long Journey

After the explosion, those few gold atoms are cast deep into the universe where they sit in empty space for eons. Eventually, some of the atoms may join a cloud. That cloud may condense into a planet.

Once inside a planet, some of the atoms may make it near the surface where we can come and dig them up.

So every atom of gold in your wedding ring was forged in a collapsing star, and then traveled across the universe to get to your finger. All the gold we wear and all the gold we give has made this same journey.

So how many miles and how many years are represented in a ring?

Calculating the path from several supernovae around our galaxy back to our solar system, Tyson concludes, all told, it's a journey of 3 million light years.


Compare this to paper dollar. What is more valuable?

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Re: Perspectives on the global economic meltdown- (Nov 28 20

Postby member_26147 » 18 Jun 2013 06:21

Panduji, you're on my ignore list. Good luck with your gold. Its clear you have no understanding of economics and I am not going to waste my valuable time arguing with you.

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Re: Perspectives on the global economic meltdown- (Nov 28 20

Postby disha » 18 Jun 2013 07:33

TSJones wrote:For the samll investor dollar cost averaging is the only way to go. That is to say, invest regular sums of money *every* month regardless. Even if its only $25 -$50 bucks a month. With firms like Scottrade, etc. there are no minimums (I think). It just that $7 a trade takes a signnficant protion of you monthly sum.


For the small investor, there are several no-load good mutual funds which take some $100 bucks a month as regular investment. Saves you 7% drop when you trade via scotttrade on 100$ just on a trade.

For initial, there is always indexing. Cheapest to get in and stay in including dollar cast investing. Find out 5-6 good index mutual funds (large, small, medium, S&P500 etc) and put it on auto-pilot. It adds up.


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