Peter Schiff doesn't know "Sh*t about money or the economy. Do not follow him if you want to earn money or keep your money. He is a bullion salesman... all day, every day. If you want to know something about how money works in the economy, read Steve Keen, especially his book debunking economics or go watch Mike Stathis (who will show you how much of a know-nothing Schiff is (ignore the anti-antisemitism if it rubs you the wrong way and just listen to the message).
Plus the economy can't be understood from a purely technical or fundamental perspective anyway since the vast majority of it it is not only systemically corrupt (the large set of processes), but structurally corrupt (the actual container of the system and its design). So, you have to learn about the corruption of it all - otherwise you won't know what is going on. Most information has no value or weight whatsoever because it doesn't recognize the corruption of it all.
How do you play a game like baseball or monopoly and win if the game was designed for you to lose? You might get lucky some of the time... but the answer is... you can't. Just understanding the rules as written will not help. You need to understand the design and how it is set up for you to lose. And then when you hear information and the news, you will know who to believe, who doesn't know sh*t from shinola, who is a thief, and who is a pumper and a dumper, and who is just a salesman selling gold, selling a newsletter, selling a fund or scaring you into selling your holdings.
I repeat. DO NOT FOLLOW PETER SCHIFF. His track record is all you need to see. Learn to look for solid track records. Also understand that people who promote newsletters also tend to be wrong most of the time and are just selling newsletters. If they knew anything, they would stick to making money and not be selling newsletters. Fund managers also tend to under-perform the market 90+ percent of the time.... and they change the name of their funds so that their track records are brand new and their losses are attached to a fund that no longer exists. Beware of funds that have very little track record.
Gold is a tricky subject. Most of the gold that people are buying is stolen gold. It has been stolen over the ages from your grandparents and it is being sold back to you now that the fiat dollar has been inflated away. Other gold has been stolen from other people around the world and restolen from various thieves over time. Read the book Gold Warriors Or listen to Bix Weir or GATA.
Plus, there is so much gold that is not accounted for, so the supply is much greater than all the numbers they are telling you in "official" statistics. Which means if you go by supply and demand economics, the supply would water down the value of your gold. But in reality because the market is so rigged, supply and demand economics does not apply. The paper derivatives market and the corrupt bankers control all of the prices of the gold, silver, commodities, and every other underlying asset. Since the market has been computerized, it is even more corrupt than it was in history. Buyer beware!
If you still like gold and you like the idea of goldmoney... check out digixDAO; which is a blockchain version of gold. You get the benefit of goldmoney plus the blockchain. It is still in development, but it will be the leading edge in transparency for the gold market.
Gold is an old monetary system. The fiat is the current system. The blockchain is the future. Hold all three. Just figure out much you want to hold of each. The problem with gold is that no one knows how much gold is out there. There is likely more out there any anyone knows. Lots of it is hidden And that which they say is there, really isn't, like Fort Knox gold. (Thanks Sec. Munchin for checking on it after all these years :-)). It also can be counterfeited as well as deluded, and it has throughout history. The other problem is that no one has gold, so there is really no one to transact with (at least in pure gold sense). So, we can't go back to a gold standard because no one has it in their possession.
Also, the current economy can't be sustained on the current amount of gold, unless we have a fractional system for gold. There isn't a one to one amount - so with the amount of current money in circulation; we would have to have more gold to equal all this fiat in circulation. So, if we have a fractional system, we are back to the same problems as fiat; with a fractional system. Another topic for another day is that in order to return to a gold standard there would need to be a massive revaluation of the current fiat system --- think of the value in the fiat floating into gold. Yeah it would spike the value of gold, but then we would have far less gold then we need to conduct the transactions we need and for everyone to have money.
There just isn't enough flexibility in the supply of gold to substantiate the size of our current modern economy or the future economy. We need money that has the same properties as gold - unit of account, fungible, scarce, resistant to counterfeiting, ability to easily transact, a store of value, etc.... just not gold.
Money in a philosophical sense is only representative of value. That is all we are doing. Measuring value, holding value, transacting value, dividing value. Over history, we have chosen items to be this thing that represents value. Things that have these properties tend to be the best because they meet the most properties that make for good money. Anything that meets this criteria, can be money. People have used shells, beads, wood sticks, and yes gold and silver. In fact, at times, no money was needed, and people bartered (not universally), and people just traded things that they thought were of equal value. However, that is a difficult system, because if I have a chick and you have a cow, we may not be able to make a fair trade since the cow is not easily divisible. It doesn't have the divisible property. Gold and silver have a good track record for being money. But they are not the only things that can be money. However, the difficulty with gold and silver and any other underlying asset, are that they tend to be fixed (or relatively fixed) in terms of supply. And having a fixed monetary system is very difficult, because then there is no way to create growth in the economy.
Take a step back and you will see that money is not paper, it is not gold, and it is not bitcoin. It is value. And value is subjective. The idea is that we as a society choose to agree on what has value so that we can have a medium of exchange that we all agree on. However, going forward, there will be lots of items (i.e., crypto-currencies that people will hold in the local, state, national and global community). Money going forward will be based on lots of things that serve as value.... value in networks, value in markets, value in community, etc.
Thoughts?
Good posting and agree with much. However, watch
Rob makes the point that you also raise vis a vis blockchain. Not so much that a coin/token is backed by gold but rather the immutable record prevents double spend, fractional banking and general corruption. Also, since science divides "time" into infinitesimal amounts, nano second for lunch, nope need more time. So too any fiat can fall relative to gold such that say the GBP is worth 0.0000000001 Kg of gold. If ICO's can price their tokens in tiny valuations there is no reason in this digital age that gold cannot rise to what might seem an exorbitant price but this will simply be a reflection of the value of a fiat measured against a "gold standard" just as one meter is defined as " as the distance traveled by light in a vacuum in 1/299,792,458 of a second." So it would be easy to define a gold standard in a similar way and then measure against that. What about silver?Load of what I have written is missing. Not showing in Preview. Have to work out how to post :) Thanks.