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**brurdefdoro** · 03-08-2012, 12:00 PM

Bro, with price of gold going up in the last decade, we have started to see a lot of gold bugs nowadays, with almost all speculating further rise in gold price. The gold has already gone up from about $220-240 /ounce (2001) to $1686 /ounce (today closing). Whereas silver has gone from about $1-2 /ounce to $ 32 /ounce. Both these items are in bubble territory.

Bro Pawlak will not tell you that, but let me tell you that the biggest investor in silver commodities is no other than JPMorgan Chase, go figure. Both gold and silver are purely speculative play at this moment, with hedge fund and Investment Bankers betting big time (the best way tofigure it out is to take any stock and look at its investment holdings) . But imagine what will happen to the poor investor when these speculators withdraw from this market space?. However, there are chances that gold might fall by about 50% (to say $900 /ounce), if that happens than those investing in gold/silver or are buying gold and silver coins will get badly hurt. It always good to be diversified in your investments, that what I learned in graduate school.

Another thing is that for anyone to trade gold and silver coins with another commodities, they need to have an exchange like CME (Chicago Merchantile Exchcange), so incase if the prices of gold and silver plunges, there can still be a fair trade between commodities (gold vs rice etc).

Yes, the prices of silver and gold have tumbled before, sometimes from an arbitrary change in trading laws. Suddenly some types of transaction are forbidden and the prices tumble unbelievably. There may be other causes.

I read there are "alternative economists" who therefore propose "alternative currencies" backed not by just petroleum or gold or silver or a few precious commodities, but by a whole bucketload of commodities. I get the idea that it's intended to smooth out extremes of price due to fluctuation and speculation in a few commodities, making a more stable system.

I've been curious about it since my lecturer made me read Schumacher's "Small is Beautiful" more than ten years ago.

Also some science fiction books I've read with concepts like "gift economy" and "eco-economics". One science fiction book I read proposed an innovative "negative interest rate" so that some portion of hoarded wealth returns to the community... it made me laugh because it's an OLD idea. It's just our Zakat system! Zakat, normally described as charity or tax, can also be thought of as "negative interest"!

But mainly those books made me realize how much of modern economics is arbitrary rather than natural. It's there just because people in power say so.

03-08-2012, 12:00 PM	#28
brurdefdoro Join Date Oct 2005 Posts 528 Senior Member	Bro, with price of gold going up in the last decade, we have started to see a lot of gold bugs nowadays, with almost all speculating further rise in gold price. The gold has already gone up from about $220-240 /ounce (2001) to $1686 /ounce (today closing). Whereas silver has gone from about $1-2 /ounce to $ 32 /ounce. Both these items are in bubble territory. Bro Pawlak will not tell you that, but let me tell you that the biggest investor in silver commodities is no other than JPMorgan Chase, go figure. Both gold and silver are purely speculative play at this moment, with hedge fund and Investment Bankers betting big time (the best way tofigure it out is to take any stock and look at its investment holdings) . But imagine what will happen to the poor investor when these speculators withdraw from this market space?. However, there are chances that gold might fall by about 50% (to say $900 /ounce), if that happens than those investing in gold/silver or are buying gold and silver coins will get badly hurt. It always good to be diversified in your investments, that what I learned in graduate school. Another thing is that for anyone to trade gold and silver coins with another commodities, they need to have an exchange like CME (Chicago Merchantile Exchcange), so incase if the prices of gold and silver plunges, there can still be a fair trade between commodities (gold vs rice etc). Yes, the prices of silver and gold have tumbled before, sometimes from an arbitrary change in trading laws. Suddenly some types of transaction are forbidden and the prices tumble unbelievably. There may be other causes. I read there are "alternative economists" who therefore propose "alternative currencies" backed not by just petroleum or gold or silver or a few precious commodities, but by a whole bucketload of commodities. I get the idea that it's intended to smooth out extremes of price due to fluctuation and speculation in a few commodities, making a more stable system. I've been curious about it since my lecturer made me read Schumacher's "Small is Beautiful" more than ten years ago. Also some science fiction books I've read with concepts like "gift economy" and "eco-economics". One science fiction book I read proposed an innovative "negative interest rate" so that some portion of hoarded wealth returns to the community... it made me laugh because it's an OLD idea. It's just our Zakat system! Zakat, normally described as charity or tax, can also be thought of as "negative interest"! But mainly those books made me realize how much of modern economics is arbitrary rather than natural. It's there just because people in power say so.
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