Why not hold all long term savings in gold?

[cjppjc]

Re: Why not hold all long term savings in gold?

I've bought plenty of gold, yet I still love travel, wine and food. I also buy almost everything on credit and pay my bill every month and pocket the cash back. Maybe I'm broken? :p

Guess you're going to have to buy that house with plastic and pocket the cash back.

[Master Shake]

Re: Why not hold all long term savings in gold?

I've bought plenty of gold, yet I still love travel, wine and food. I also buy almost everything on credit and pay my bill every month and pocket the cash back. Maybe I'm broken? :p

Ditto. Pay for everything with an American Airlines sponsored card. Earned multiple free trips over the years. No problems with cashing the miles in.

[ricket]

Re: Why not hold all long term savings in gold?

Ditto. Pay for everything with an American Airlines sponsored card. Earned multiple free trips over the years. No problems with cashing the miles in.

Hope you enjoyed stealing

Your "rewards" are actually from interest paid by other people who also have accounts, who unfortunately got stuck in the I/(P+I) who are forced into default or weren't able to pay their bill without interest being added. Since every interest bearing loan is a mathematical impossibility (see other discussions for explanation), then you have participated in "theft by receiving"...

If someone steals a car and gives it to you, then it's a crime. Just because it's a bank (i.e. credit card company) and instead of a car they are just laundering the money to give to you to *buy* a car, that doesnt make it any more morally or legally legitimate.

Understand and be educated in regards to the ramifications of your actions, and you won't be partly responsible for the poverty of others.

[Starving Steve]

Re: Why not hold all long term savings in gold?

Hope you enjoyed stealing

Your "rewards" are actually from interest paid by other people who also have accounts, who unfortunately got stuck in the I/(P+I) who are forced into default or weren't able to pay their bill without interest being added. Since every interest bearing loan is a mathematical impossibility (see other discussions for explanation), then you have participated in "theft by receiving"...

If someone steals a car and gives it to you, then it's a crime. Just because it's a bank (i.e. credit card company) and instead of a car they are just laundering the money to give to you to *buy* a car, that doesnt make it any more morally or legally legitimate.

Understand and be educated in regards to the ramifications of your actions, and you won't be partly responsible for the poverty of others.

You posted that every interest-bearing loan is a mathematical impossibility. Your Greenspanese was: I/(P+I) is mathematically impossible.

Is this the crap that they teach at Princeton and Harvard, the London School of Economics, and Stanford?

So savers are not entitled to rent on their savings for lending their savings out and fore-going the pleasure that their savings would bring, if spent? So savers can be the suckers: they take the risk of lending and are denied the reward? And at the same time this Greenspanese passes as "economics", FDIC in America is bankrupt and so-far has not been bailed-out by the Federal Reserve Bank.

Gold is getting the message from this Greenspanese, and so am I: The debtors can run wild; the debt-hole can be dug deeper, and the savers can be held hostage.:eek:

[ricket]

Re: Why not hold all long term savings in gold?

So savers are not entitled to rent on their savings for lending their savings out and fore-going the pleasure that their savings would bring, if spent? So savers can be the suckers: they take the risk of lending and are denied the reward? And at the same time this Greenspanese passes as "economics", FDIC in America is bankrupt and so-far has not been bailed-out by the Federal Reserve Bank.

Lending and charging interest (usury) in the Christian faith is a sin, so yes, they are *not* entitled to making money off of *having* money. There is an exception for lending to foreigners, but in our globalized financial system, those are becoming harder and harder to come by. The price of default, however, is 7 years of debt bondage, but at least if you work hard enough the debt is always repayable. There is also the tradition of Debt Jubilee. It's sad that most "Christians" seem to forget and ignore these specific aspects of their faith, but latch on so desperately to those against abortion and homosexuality.

The formula comes from the fact that the amount of debt that is "in the money", ie repayable, is equal to P/(P+I). Thus the number of people who will default on the debt because there is a shortage of funds taken up by the interest payments is I/(P+I). The creator of the "Money as Debt" series came up with this formula and it can easily be demonstrated with simple arithmetic.

[Starving Steve]

Re: Why not hold all long term savings in gold?

How about having debtors DO WORK, maybe PRODUCE, and maybe EXPORT PRODUCTS so that they can pay the rent of the money they borrow? In this common-sense economics then:

(P + E) > (P + I ) where P is principle, E is exports, and I is interest.

So long as (P + E) > (P + I), everything is wonderful, and the system is honest and stable. The debtor on the left side of the equation produces more than is required to pay-back the debt to the saver.

The problem in America is that the Federal Reserve Bank ever since Greenspan took control of it in 1984, has let debtors run wild. They produce little or NOTHING and go around having good times consuming and living off the world.

The Chinese get the shaft; the savers get the shaft; and the senior citizens get nothing for their life's work.

Only the putz from Princeton and Alan Greenspan could come up with this outrage as economics and pass it off as mathematical and moral.

Keep shafting me, and I will take my savings OUT of America and invest elsewhere where my sacrifice is appreciated and rewarded with REAL interest. Tell that to your church or your economics class at Princeton.

The world does NOT need consumers, at least not in the long run.

[Munger]

Re: Why not hold all long term savings in gold?

Hope you enjoyed stealing

Your "rewards" are actually from interest paid by other people who also have accounts, who unfortunately got stuck in the I/(P+I) who are forced into default or weren't able to pay their bill without interest being added. Since every interest bearing loan is a mathematical impossibility (see other discussions for explanation), then you have participated in "theft by receiving"...

If someone steals a car and gives it to you, then it's a crime. Just because it's a bank (i.e. credit card company) and instead of a car they are just laundering the money to give to you to *buy* a car, that doesnt make it any more morally or legally legitimate.

Understand and be educated in regards to the ramifications of your actions, and you won't be partly responsible for the poverty of others.

This is factually incorrect. Rewards points come from excess interchange fees that the card issuers charge merchants, who pass the fees onto consumers.

It works like a stealth tax.

The merchant signs a contract with a credit card company. In the contract, the merchant agrees to pay monthly fees + interchange fees. Interchange fees purportedly protect the issuer from losses.

Interchange fees run about 20 cents + around 3% or so per transaction.

Here's the kicker - the contract states that merchants are not allowed to charge more for people who use credit cards. So the merchants raise their prices by 3% for everyone to cover the fees.

Everyone loses in this situation. The merchants have to charge more. The customers have to pay more. Well, except the credit card companies don't really lose ;)

People who use rewards cards lose less. Usually, these cards carry a very high interchange fee - sometimes up to 5%. The rewards encourage the person to use the card. The CC company still pockets 3% and kicks back 2% to the card user.

The people who really get screwed are the people who pay with cash. Which is typically, as usual, the poorest people, who simply do not have access to credit cards with rewards points.

There is a huge class action going on on behalf of merchants suing credit card companies. Not coincidentally, shortly after this lawsuit was filed all the credit card companies went public. Now isn't that odd? Why would they want to start sharing their loot with the general public? Obviously the banks who own the credit card companies want to cash out in case they lose bigtime.

In Australia I believe a law was passed wherein the contract provision prohibiting merchants from charging more for credit card users was deemed not enforceable.

As a result, merchants started charging a 3% fee to use a credit card. You can guess what happened to credit card usage. Nothing like letting the free market work it out. It only works when people actually have the information to see the cost of using the cards though.

[pianodoctor]

Re: Why not hold all long term savings in gold?

itulip's warned for years gov't may tax the crap out of gold... here in the usa they already have. cap gains on even gold etfs are subject to a 'collectibles' tax rate vs regular cap gains for oil, equity & all other etfs. what if they raise the tax on gold sales to 50%?

insodoing they will create a gigantic black market. do you want all of your savings in an asset that may some day only be liquid in a black market?

I wonder, could we just wake up one morning with a surprise new higher tax on gold, or would we have forewarning as it works its way through the legislative process?

[ThePythonicCow]

Re: Why not hold all long term savings in gold?

I wonder, could we just wake up one morning with a surprise new higher tax on gold, or would we have forewarning as it works its way through the legislative process?

If there was a forewarning, the tax would be retroactive.