Are you willing to 6 dollars for a gallon of gas!

[rb336]

The dollar is up against other currencies over the last week but down for the day the last I noticed. So what? How does that contradict anything you are responding to?

Simple -- Forbes claims the weak dollar is causing the rise in oil prices, when the dollar is, in fact, not weak. Ergo, the analysis is not only wrong, but based on a faulty premise. Further, the dollar is up against gold as we speak, and has been relatively stable for quite a while.
http://www.thestreet.com/story/11432...rengthens.html

In the last two months West Texas oil has gone up from about $99 to $109; about 10%.
The price of gold has gone up from about $1,600 to $1780; about 11%.

If US currency were still backed by gold, the price of oil would have declined 1% in the last two months.

Yet again, you are spouting something for which there is absolutely ZERO evidence. We are, my friend, in a gold bubble, just as we were in a housing bubble in the mid 2000s. It is being held up by one thing -- massive advertising by the gold brokers riding the Greater Fool Theory. Bought my gold 8 years ago, not selling, don't have my finger on the trigger,but I do have the safety off. It is up for the year, but still around $200 off the record high. What is triggering the oil price increases? Oh, the usual culprits - increased demand in Asia, sabre rattling by Iran [[and Rep. candidates) and, of course [[as is usually the case) rampant speculation

[mjs]

gp, to understand what Oladub is saying, consider we we were both given $100 cash last year and we could both go from empty to full on our tanks for exactly $100. Now consider that I had used that $100 to buy a gold coin that day and you had put your $100 under your bed.

Today, my gold coin could be traded for a tank full of gas and a Coke. Your $100 cash could only be traded for 9/10 of a tank. If we were on the gold standard, the government would guarantee you that you could buy that exact gold coin today with your $100 cash so you could also get a full tank and a Coke.

This means that gas prices did not really go up. It means that what a dollar will buy went down. What a dollar can buy went down because the government borrowed to buy something worth a dollar but they only want to have to sell something they bought for 90 cents a year ago to pay it back. In doing that, the stuff that you could buy last year for 90 cents, including gas, now costs a dollar. They also did it because they believe that if you see that $900 in your 401k grew to nearly $1000, you would thank them. However, since you can't buy as much gas or food or furniture with your $1000 as you could last year with your $900, you are thanking them for screwing you.

As Red said in The Legend of Josey Wales, "Senator, don't piss on my back and tell me it's raining".

[oladub]

ghettopalmetto: And you and Ron Paul are the only people in the world who are either shocked or worried by this. Welcome to Planet Earth.

That's one of the reasons the price of gasoline goes up.

But your "interpretation" is completely bunk, for the reasons I stated. Unfortunately, organisms as complex as global oil markets and monetary policy do not subscribe to the Glenn Beck School of Oversimplified Economic Analysis.

Your name calling aside, what specifically are you disagreeing about? This is what you are referring to as interpretation, bunk, and oversimplified. "There is an increase of the gold supply but nothing compared with the increase in our money supply. Every fiat currency ever created eventually becomes worthless ... China is about to pass India as the largest importer of gold even though China has expanded its own gold production."

Instead of calling names, why don't you just disprove any of that?

It's introductory macroeconomics. Take a course at your community college, since you clearly have plenty of free time to worry about this stuff.

If you are teaching it, I'll want my money back.

Or, Iran. But hey, they're the same, right?

Iran it is. You got me there. But in a way, they are the same to our foreign policy makers or hopefuls like Bush, Obama, Santorum, Romney, and Gingrich.

[oladub]

rb336: ]Simple -- Forbes claims the weak dollar is causing the rise in oil prices, when the dollar is, in fact, not weak. Ergo, the analysis is not only wrong, but based on a faulty premise. Further, the dollar is up against gold as we speak, and has been relatively stable for quite a while.
http://www.thestreet.com/story/11432...rengthens.html

The dollar is not weak relative to other currencies but the article is about how oil is selling at 82% if it's historical price relative to gold. Were the dollar still linked to gold, the price of oil would not be increasing other things being equal. Your article only referred to today's price of gold. The link I provided had to do with the last 60 days which is probably more relevant to the Iran situation. Here it is again. au0060lns.gif Also the 72 month graph found on post#9 and Det_ard's graph in post # 23 might be worth reviewing.

Yet again, you are spouting something for which there is absolutely ZERO evidence. We are, my friend, in a gold bubble, just as we were in a housing bubble in the mid 2000s. It is being held up by one thing -- massive advertising by the gold brokers riding the Greater Fool Theory. Bought my gold 8 years ago, not selling, don't have my finger on the trigger,but I do have the safety off. It is up for the year, but still around $200 off the record high. What is triggering the oil price increases? Oh, the usual culprits - increased demand in Asia, sabre rattling by Iran [[and Rep. candidates) and, of course [[as is usually the case) rampant speculation

This is what I wrote based on graphs "In the last two months West Texas oil has gone up from about $99 to $109; about 10%.
The price of gold has gone up from about $1,600 to $1780; about 11%.

If US currency were still backed by gold, the price of oil would have declined 1% in the last two months." The numbers in the first part is either true or false. Which numbers are wrong? prove it. Whether or not we are in a gold bubble is something for future historians to decide. I'll agree with you though that the price of oil is related to the saber rattling by Santorum, Gingrich, Obama, and Romney in about that order although Ron Paul as a Republican candidate not fitting into your profile.

[rb336]

look up the difference between correlation and causation sometime

[ghettopalmetto]

gp, to understand what Oladub is saying, consider we we were both given $100 cash last year and we could both go from empty to full on our tanks for exactly $100. Now consider that I had used that $100 to buy a gold coin that day and you had put your $100 under your bed.

Today, my gold coin could be traded for a tank full of gas and a Coke. Your $100 cash could only be traded for 9/10 of a tank. If we were on the gold standard, the government would guarantee you that you could buy that exact gold coin today with your $100 cash so you could also get a full tank and a Coke.

This means that gas prices did not really go up. It means that what a dollar will buy went down. What a dollar can buy went down because the government borrowed to buy something worth a dollar but they only want to have to sell something they bought for 90 cents a year ago to pay it back. In doing that, the stuff that you could buy last year for 90 cents, including gas, now costs a dollar. They also did it because they believe that if you see that $900 in your 401k grew to nearly $1000, you would thank them. However, since you can't buy as much gas or food or furniture with your $1000 as you could last year with your $900, you are thanking them for screwing you.

As Red said in The Legend of Josey Wales, "Senator, don't piss on my back and tell me it's raining".

And that same mechanism works in reverse too, leading to the extreme economic shocks that were experienced around the world prior to the introduction of fiat currencies.

But you already knew that.

You also knew that, with nearly 200 currencies around the world, not all of them are on the same economic tack at the same time. By adopting a worldwide gold standard, economic shocks in say, Zimbabwe, ripple quickly and directly through the rest of the world. But that's just grade school stuff, so we won't be bothered discussing why this is a bad thing.

You might be fascinated to know, however, that government spending and borrowing [[fiscal policy) is independent of cash supply [[monetary policy), which is enacted in this country by the Federal Reserve. The fact that you conflate the two, well, let's just say it's very telling.

[oladub]

GP, Zimbabwe's fiat currency is a great example what happens to a currency unattached to a commodity standard. Great example. All fiat currencies eventually collapse and become worth no more than the used paper they are printed on. A two thousand year old ounce of gold, however, will still fetch $1,700.

[rb336]

You are sooooooo wrong on that that I don't even know where to begin. It's the gold nut version of reductio ad hitlerum

[rb336]

And that same mechanism works in reverse too, leading to the extreme economic shocks that were experienced around the world prior to the introduction of fiat currencies.

But you already knew that.

You also knew that, with nearly 200 currencies around the world, not all of them are on the same economic tack at the same time. By adopting a worldwide gold standard, economic shocks in say, Zimbabwe, ripple quickly and directly through the rest of the world. But that's just grade school stuff, so we won't be bothered discussing why this is a bad thing.

add to that that the value of gold, or any commodity, is easily manipulated by individuals [[remember the Hunt Bro fiasco?) not to mention nations and other groups who could use such manipulations to wreak havoc on the world's economies if we did the gold standard. People forget that gold really has NO intrinsic value. It's pretty, malleable and doesn't tarnish as much as other metals. You can't grow food on it, you can't extract energy from it, you can't live in it. Its value is based solely on perception.

You might be fascinated to know, however, that government spending and borrowing [[fiscal policy) is independent of cash supply [[monetary policy), which is enacted in this country by the Federal Reserve. The fact that you conflate the two, well, let's just say it's very telling.

that is part of the paulites' charm.

paulites crack me up

[oladub]

rb: You are sooooooo wrong on that that I don't even know where to begin. It's the gold nut version of reductio ad hitlerum

Bringing up Hitler always wins arguments but how so? This is what I wrote, "Zimbabwe's fiat currency is a great example what happens to a currency unattached to a commodity standard. Great example. All fiat currencies eventually collapse and become worth no more than the used paper they are printed on. A two thousand year old ounce of gold, however, will still fetch $1,700."

Hitler aside, which points are wrong?
Did Zimbabwe have a fiat currency or a commodity based currency?
What is the longest lasting fiat currency in existence today of the thousands having existed? Does it buy as much as it used to?
How much is a two thousand year old ounce of gold worth?

[oladub]

add to that that the value of gold, or any commodity, is easily manipulated by individuals [[remember the Hunt Bro fiasco?) not to mention nations and other groups who could use such manipulations to wreak havoc on the world's economies if we did the gold standard. People forget that gold really has NO intrinsic value. It's pretty, malleable and doesn't tarnish as much as other metals. You can't grow food on it, you can't extract energy from it, you can't live in it. Its value is based solely on perception.
that is part of the paulites' charm.
paulites crack me up

You don't think that individuals and especially nations manipulate the value of our fiat dollars? Printing $16T and tossing into the economy has no reaction? The US had already stopped using silver in it's coins for 15 years when the Hunt brothers cornered silver. Had that silver been in coins instead of Hunt vaults, their task might have been more difficult. Before offering examples of the intrinsic value of gold you wrote that "People forget that gold really has NO intrinsic value. How about the paper our federal reserve notes are written on? What intrinsic value does that paper have except in paper drives and for starting fires?

Perhaps you can't perceive many intrinsic values of gold but here are some of the The many uses of gold.

Weimar Republic resident proving that fiat money, backed by nothing, still has intrinsic value. Thirty cents would buy a gallon of gas in the 1960's. The picture above offers 'hope' and might be part of our post Solyndra energy fix.

[rb336]

Bringing up Hitler always wins arguments but how so? This is what I wrote, "Zimbabwe's fiat currency is a great example what happens to a currency unattached to a commodity standard. Great example. All fiat currencies eventually collapse and become worth no more than the used paper they are printed on. A two thousand year old ounce of gold, however, will still fetch $1,700."

I wrote that arguing about Zimbabwe's currency [[or the Wiemar Marks for that matter) is the gold-standard charlatains' version of a reductio ad hitlerum.

Hitler aside, which points are wrong?
Did Zimbabwe have a fiat currency or a commodity based currency?
What is the longest lasting fiat currency in existence today of the thousands having existed? Does it buy as much as it used to?
How much is a two thousand year old ounce of gold worth?

Zimbabwe's currency issues have nothing to do with it NOT being backed by gold, and neither did the Wiemar marks. The problems with those currencies were/are countries that were economically devastated - Zimbabwe by massive corruption, Wiemar Germany by the terms of the Treaty of Versailles. It had little, if anything, to do with them not being backed by gold. Simply stating that it was because it was fiat money is historically inaccurate at best, and simple-minded. To say it causes runaway inflation is easily proven wrong -- when was the last time we had runaway inflation? [[before throwing some stock paulian answer, please refresh yourself by looking at the last argument you made regarding that and the truth -- it's been at 1.5 % to 3% for an awfully long time, and we've NEVER had the hyperinflation that was evident in Wiemar Germany or Zimbabwe. Therefore, bringing up Zimbabwe in a talk about inflation/gold standard is essentially the same as bringing up Hitler when talking about government policies -- pure bullshit

[oladub]

rb336: I wrote that arguing about Zimbabwe's currency [[or the Wiemar Marks for that matter) is the gold-standard charlatains' version of a reductio ad hitlerum.

I know.

Zimbabwe's currency issues have nothing to do with it NOT being backed by gold, and neither did the Wiemar marks. The problems with those currencies were/are countries that were economically devastated - Zimbabwe by massive corruption, Wiemar Germany by the terms of the Treaty of Versailles. It had little, if anything, to do with them not being backed by gold. Simply stating that it was because it was fiat money is historically inaccurate at best, and simple-minded. To say it causes runaway inflation is easily proven wrong -- when was the last time we had runaway inflation? [[before throwing some stock paulian answer, please refresh yourself by looking at the last argument you made regarding that and the truth -- it's been at 1.5 % to 3% for an awfully long time, and we've NEVER had the hyperinflation that was evident in Wiemar Germany or Zimbabwe. Therefore, bringing up Zimbabwe in a talk about inflation/gold standard is essentially the same as bringing up Hitler when talking about government policies -- pure bullshit.

Imagine that of saying, "not backed by gold" and instead saying "gold". It would have been impossible to inflate away the value of money. The results would have been different. Being able to print money does often lead to corruption as you point out it did in Zimbabwe and I frequently point out regarding Wall Street bailouts. I didn't say that printing fiat money "causes runaway inflation" but instead suggested that it makes it easier to do so and that all fiat currencies eventually become waste paper. In the '60s, thirty cents bought a gallon of gas, now it costs over $3, etc.. The last time we had near runaway inflation was under Jimmy Carter [[18%). Voelker did a good job as Fed chairman to end that with a recession. It is down right gullible to think that inflation is only 1.5 % to 3% because the government says it is. Clinton modified the criteria the government uses to come up with more pleasing numbers.

You deserve a prize for embellishing Hitler into your arguments twice in one post.

[rb336]

Clinton modified the criteria the government uses to come up with more pleasing numbers.

So I should believe an undocumented article by someone vested in the Greater Fool theory?

You deserve a prize for embellishing Hitler into your arguments twice in one post.

sorry, I didn't. I simply proved that your arguments are, as I said, gold-standard nuts' version of reductio ad hitlorum. Your arguments aren't factual, you get that proven, so you bring up Zimbabwe or Wiemar call it reductio ad zimababwum

[rb336]

oh -- and by the way, inflation was 7.8% annually under carter. At its worst, Zimbabwe's was over 7,000,000,000% PER MONTH. Yes, that is 7 billion percent per month. therefore the term reductio ad zimbabsurdum [[yeah, I like that better) is all your argument is. it is like pissing in the ocean to try to raise the water level

[ghettopalmetto]

You don't think that individuals and especially nations manipulate the value of our fiat dollars? Printing $16T and tossing into the economy has no reaction?

No, printing $16 trillion is SUPPOSED to have a reaction. That's the intent. One could say that an increase in the money supply was a direct action resulting from monetary policy. Just as repurchasing that currency and removing it from the economy is a direct action of monetary policy.

When you have an economic scenario where demand is stifled, you print money to get it into circulation. You would rather have us on a gold standard "just because", so that we could all stand in-line at Soviet-style grocery stores to [[maybe) buy a loaf of bread for $50. But hey, we could all shake our American penises at the world, since that $50 loaf of bread is backed by gold, baby!

Perhaps you can't perceive many intrinsic values of gold but here are some of the The many uses of gold.

Weimar Republic resident proving that fiat money, backed by nothing, still has intrinsic value. Thirty cents would buy a gallon of gas in the 1960's. The picture above offers 'hope' and might be part of our post Solyndra energy fix.

Weimar Republic ended in 1933. What does that have to do with the price of gasoline in the 1960s? The average salary in the 1960s was also $4700. If you want $0.30/gallon gas, then you have to also want a $4700 income.

[oladub]

oh -- and by the way, inflation was 7.8% annually under carter. At its worst, Zimbabwe's was over 7,000,000,000% PER MONTH. Yes, that is 7 billion percent per month. therefore the term reductio ad zimbabsurdum [[yeah, I like that better) is all your argument is. it is like pissing in the ocean to try to raise the water level

it reached 18% under Carter. Say "FIAT DOLLARS"; printing press magic.
http://www.time.com/time/magazine/ar...921854,00.html

[oladub]

ghettopalmetto: No, printing $16 trillion is SUPPOSED to have a reaction. That's the intent. One could say that an increase in the money supply was a direct action resulting from monetary policy. Just as repurchasing that currency and removing it from the economy is a direct action of monetary policy.

You didn't even learn about the $16T until Ron Paul managed to get a partial audit of the Federal Reserve and some of that went to European banks. Tell us about how the federal Reserve repurchased the currency. That's one I haven't heard about.

And the recipients couldn't have been more deserving,
The total lending for the Fed’s “broad-based emergency programs” was $16,115,000,000,000. That’s right, over $16 trillion. The four largest recipients, Citigroup, Morgan Stanley, Merrill Lynch and Bank of America, received over a trillion dollars each. The 5th largest recipient was Barclays PLC. The 8th was the Royal Bank of Scotland Group, PLC. The 9th was Deutsche Bank AG. The 10th was UBS AG. These four institutions each got between a quarter of a trillion and a trillion dollars. None of them is an American bank.

When you have an economic scenario where demand is stifled, you print money to get it into circulation. You would rather have us on a gold standard "just because", so that we could all stand in-line at Soviet-style grocery stores to [[maybe) buy a loaf of bread for $50. But hey, we could all shake our American penises at the world, since that $50 loaf of bread is backed by gold, baby!

Hey, that's like when I can't pay my bills and I get a loan. Good idea until it's time to pay it back. I'm not going touch the rest of your comment. Is the moon out tonight?

Weimar Republic ended in 1933. What does that have to do with the price of gasoline in the 1960s? The average salary in the 1960s was also $4700. If you want $0.30/gallon gas, then you have to also want a $4700 income.

The price of everything skyrocketed in the Weimar Republic as it's money was being printed at will instead of being backed by gold. This thread is supposed to be about $6 Obama gas. If money were backed by gold as it was until 1971, the prices of gas and oil would remain more constant. Instead gold will buy twice as much gasoline today as back in the 60's.as I wrote before, I can still exchange three 1964 dimes for two gallons of gas because of their silver content.

[RaumVogel]

http://en.wikipedia.org/wiki/Reductio_ad_Hitlerum
This thread has been "Godwined"!
http://en.wikipedia.org/wiki/Godwin%27s_law

[rb336]

it reached 18% under Carter. Say "FIAT DOLLARS"; printing press magic.
http://www.time.com/time/magazine/ar...921854,00.html

to blame that inflation, largely a continuing result of the oil embargo and supply-demand issues, on "fiat dollars" is absurd at best


using that calculator you put up, the highest was 11% a year [[yes, I was looking at something else with the 7.8 - my bad) , very far from hyperinflation.

The gold standard is not a panacea. adherence to it is widely "credited" with extending the great depression in both length and depth

[oladub]

to blame that inflation, largely a continuing result of the oil embargo and supply-demand issues, on "fiat dollars" is absurd at best


using that calculator you put up, the highest was 11% a year [[yes, I was looking at something else with the 7.8 - my bad) , very far from hyperinflation.

The gold standard is not a panacea. adherence to it is widely "credited" with extending the great depression in both length and depth

I blame the short run increase in gas prices mostly on tensions related to policy relating to Iran and fiat money on long run increases in gasoline and most everything else. If the embargo was a factor, our politicians should have learned that by now and not embargoed Iranian oil. Actions have consequences. Carter's peak quarterly inflation rate was 18% for one quarter and over 10% per annum for his four years in office. Too bad; I personally liked the guy.

No, the gold standard isn't a panacea but at least it prevents a measure of corruption and forces politicians to pay for things up front instead of with a hidden inflation tax as in secretly printing and handing out money. Maybe that is why the founders required that "No State shall make any Thing but gold and silver Coin a Tender in payment of Debts". The gold standard lasted until 1971 when Nixon ended it. The depression was more the fault of the fed's easy money than the gold standard. Too many dollars chasing a relatively static amount of goods always results in a bubble and bubbles always burst as we have more recently experienced with the fed inspired Nasdaq and housing bubbles.

The gold standard had nothing to do with the depression for at least two reasons. First, as you have pointed out, the Constitution gives Congress [[not a privately owned national bank) the power "To coin Money, [[and) regulate the Value thereof." Roosevelt did just that, ignoring that Roosevelt's executive order is not an act of Congress. He devalued the dollar by 41% by changing the exchange rate from $20.67 per ounce of gold to $35 per ounce of gold thus allowing foreign debts to be paid off in devalued dollars. Inflation is the friend of debtors. Second, since the US developed from scraggly little colonies into a world mega-power in 1971, it is hard to argue that the gold standard somehow hampered it's growth.

*Ron Paul is the only presidential candidate who would call off the embargoes and other hostilities toward Iran and try to reestablish the constitutionally required payment of debts in gold and silver thus addressing a couple of important short and long term reasons for increasing fuel prices.

[rb336]

Let's look at the facts, from the History Channel:

On April 5, 1933, Roosevelt ordered all gold coins and gold certificates in denominations of more than $100 turned in for other money. It required all persons to deliver all gold coin, gold bullion and gold certificates owned by them to the Federal Reserve by May 1 for the set price of $20.67 per ounce. By May 10, the government had taken in $300 million of gold coin and $470 million of gold certificates. Two months later, a joint resolution of Congress abrogated the gold clauses in many public and private obligations that required the debtor to repay the creditor in gold dollars of the same weight and fineness as those borrowed. In 1934, the government price of gold was increased to $35 per ounce, effectively increasing the gold on the Federal Reserve's balance sheets by 69 percent. This increase in assets allowed the Federal Reserve to further inflate the money supply.

http://www.history.com/this-day-in-h...-gold-standard

all done THROUGH congress

[Whitehouse]

Speaking about gas... here's a world-premiere!!

Gas-powered iPhone!!

[ghettopalmetto]

No, the gold standard isn't a panacea but at least it prevents a measure of corruption and forces politicians to pay for things up front instead of with a hidden inflation tax as in secretly printing and handing out money.

When are you going to learn the difference between monetary policy [[printing money) and fiscal policy [[taxation and spending)? It's almost like you're trying to NOT learn anything.

Maybe that is why the founders required that "No State shall make any Thing but gold and silver Coin a Tender in payment of Debts".

Key word: STATE.

[rb336]

When are you going to learn the difference between monetary policy [[printing money) and fiscal policy [[taxation and spending)? It's almost like you're trying to NOT learn anything.


Key word: STATE.

I only pointed that out a number of times. I do believe statement about trying to not learn anything is true, but that is what True Believers do