Same as Pixie above, I've learned something and thank you for that :)
I do have a question though and it goes to your assertion that: "only when the dust settles and physical gold price discovery emerge will the true price be known. I hold physical gold for this eventuality, and look forward to the price drop as a sign of stress in the LB…
Same as Pixie above, I've learned something and thank you for that :)
I do have a question though and it goes to your assertion that: "only when the dust settles and physical gold price discovery emerge will the true price be known. I hold physical gold for this eventuality, and look forward to the price drop as a sign of stress in the LBMA system." - weren't there times in history when holding physical gold was deemed illegal (even in the 20th century)? Can you give some pointers on how to navigate the landscape if that sort of fuckery happens again?
Most of my thoughts are heavily informed by Another, FOA, and FOFOA. A guess:
The 1933 ban was enacted to help control the dollar peg to gold under a gold standard. I don't think nations would or can go back to a gold standard in this modern era.
Under a gold standard when there is more demand for gold than the currency the peg breaks unless the central bank accepts currency and issue gold, thereby decreasing supply of currency and increasing the gold supply. So to be on a gold standard is synonymous with the central bank supporting convertibility. I point this out because on forums people often talk about a gold standard or gold peg but they don't seem to be aware this requires a central bank to manage that peg by buying and selling gold and currency.
What would happen if, say, Russia pegged to gold. The US could print dollars, exchange them for Rubles in the Fx market and then send the Rubles to the CBR and request gold. If they maintain their gold standard they would take in rubles and send gold. The result is that the ruble would strengthen compare to the dollar, their positive trade balance would erode, ruble denominated debts would get harder to pay, and their gold reserves would decay. Countries don't wants any of these things, they want to competitively devalue, have the options to print, and make debts easier to pay.
This is all just to say that the prior conditions that incentivized an ownership ban (as part of controlling a gold standard) have near zero chance of reoccurring. We may see lots of schemes to defraud people, thefts, and perhaps temporarily a huge windfall tax rate. One should be prepared to hold physical for the duration and in the words of FOFOA, to "lay low" and be quiet until all the fuckery dissipates.
Same as Pixie above, I've learned something and thank you for that :)
I do have a question though and it goes to your assertion that: "only when the dust settles and physical gold price discovery emerge will the true price be known. I hold physical gold for this eventuality, and look forward to the price drop as a sign of stress in the LBMA system." - weren't there times in history when holding physical gold was deemed illegal (even in the 20th century)? Can you give some pointers on how to navigate the landscape if that sort of fuckery happens again?
There sure is a lot of fuckery afoot.
Most of my thoughts are heavily informed by Another, FOA, and FOFOA. A guess:
The 1933 ban was enacted to help control the dollar peg to gold under a gold standard. I don't think nations would or can go back to a gold standard in this modern era.
Under a gold standard when there is more demand for gold than the currency the peg breaks unless the central bank accepts currency and issue gold, thereby decreasing supply of currency and increasing the gold supply. So to be on a gold standard is synonymous with the central bank supporting convertibility. I point this out because on forums people often talk about a gold standard or gold peg but they don't seem to be aware this requires a central bank to manage that peg by buying and selling gold and currency.
What would happen if, say, Russia pegged to gold. The US could print dollars, exchange them for Rubles in the Fx market and then send the Rubles to the CBR and request gold. If they maintain their gold standard they would take in rubles and send gold. The result is that the ruble would strengthen compare to the dollar, their positive trade balance would erode, ruble denominated debts would get harder to pay, and their gold reserves would decay. Countries don't wants any of these things, they want to competitively devalue, have the options to print, and make debts easier to pay.
This is all just to say that the prior conditions that incentivized an ownership ban (as part of controlling a gold standard) have near zero chance of reoccurring. We may see lots of schemes to defraud people, thefts, and perhaps temporarily a huge windfall tax rate. One should be prepared to hold physical for the duration and in the words of FOFOA, to "lay low" and be quiet until all the fuckery dissipates.
If you haven't read FOFOA I'd recommend it, his old (free) blog is http://fofoa.blogspot.com/