Use access key #2 to skip to page content.

dpdoor (29.04)

Print more money to make it more valuable

Recs

9

December 07, 2010 – Comments (19) | RELATED TICKERS: GLD , GLL

Just a confusing thought I had. If we print more money then investors buy more gold.

As I understand it we are the largest holder of gold reserves.

When the dollar drops 1% gold goes up 2 or 3%.

The more dollars we print the lower the dollar goes and the more gold goes up (3 to 1.)

So United states is becoming much richer in gold as we print more money.

So does that mean our dollar is worth more since gold is worth so much more?

And if it is worth more shouldn’t gold, wait, no, ok dollar going down makes gold go up, but gold going up makes dollar… wait, ok I don't understand. 

Very confusing, any thoughts?

19 Comments – Post Your Own

#1) On December 07, 2010 at 10:47 PM, truthisntstupid (87.09) wrote:

Are you trying to invent a paradox?

Report this comment
#2) On December 07, 2010 at 11:16 PM, dpdoor (29.04) wrote:

I didn't invent it the paradox, but I do see one

Report this comment
#3) On December 07, 2010 at 11:41 PM, chk999 (99.97) wrote:

We have way less gold than 1/3 of our outstanding dollars, so you idea doesn't work.

Report this comment
#4) On December 08, 2010 at 12:47 AM, nodebtisgood (< 20) wrote:

I don't even think that we have 1/3 of the existing dollars as dollars.  Most wealth is not paper money, it is electronic data storage on bank servers.  There aren't warehouses filled with $20s to cover what the banks have or what businesses have, so why does anyone care if the fed prints a few extra sheets? 

Report this comment
#5) On December 08, 2010 at 7:40 AM, dbjella (< 20) wrote:

nodebtisgood

The treasury would have to print those "extra sheets." The Fed does not print paper money, the Treasuries job is to coin money (paper that is). 

Report this comment
#6) On December 08, 2010 at 8:24 AM, TigerPack1 (97.91) wrote:

The FED lent forward all its gold under Greenspan two decades ago, and our fraudulently reported gold holdings represent less than 10 cents on each Dollar in circulation.

For your logic to work the U.S. first needs to own some gold, unencumbered by contracts to sell it at $400 an ounce, and the price needs to rise by a ratio of at least 10 to 1.

Otherwise, I like your thinking.

Of course, the easy way to make each Dollar worth more is to have FEWER in circulation... Printing and borrowing $2-$3 trillion new ones annually from QE and POMO and out-of-control deficit spending is making each Dollar worth LESS on a daily basis now.  But common sense escapes most investors and economists nowadays.  The easy answer to a problem is usually the best one.

I posted a good rant last night no one is reading... http://caps.fool.com/Blogs/the-eclectica-fund-manager/484149

http://caps.fool.com/Blogs/how-to-fix-america/302070 is another blog to read if you TRULY want to fix things.

-TigerPack

Report this comment
#7) On December 08, 2010 at 8:29 AM, ChrisGraley (29.75) wrote:

Also, that gold is in private hands and not public hands. The government will eventually confiscate your gold like they did in the past though.

They can take mine if they find it. They won't find it.  For the largest portion, even if they did find it they couldn't take it.

Report this comment
#8) On December 08, 2010 at 8:56 AM, TigerPack1 (97.91) wrote:

Chris,

I like this game...

Is it in a safety deposit box at a Canadian or Swiss bank, under a different name with a coded password only you know?

-Tiger Riddle Solver

Report this comment
#9) On December 08, 2010 at 10:03 AM, ChrisGraley (29.75) wrote:

I'd tell ya TigerPack, but I'd have to kill ya. ;)

I will say that it's stored in more than 3 and less than 10 different places right now and most of it isn't in this country. Even the stuff in this country would be hard for them to find/grab.

Report this comment
#10) On December 08, 2010 at 4:38 PM, TMFCrocoStimpy (95.45) wrote:

The government can take my gold when they pry it out of my dead, cold.......teeth

Report this comment
#11) On December 08, 2010 at 6:34 PM, jingxin wrote:

Welcome to ---------------(http://www.kogoal.com )We are specialized in offering all kinds of top brand shoes, jeans, t- shirts, bikini, swimwear, jacket, jerseys, watches, purses, handbags, belts, wallets , sunglasses and hats etc.Accept paypal ,All the prices list on our website include shipping cost,insurance, tax etc..$30 nike shoes,air jordan shoes,nike shox shoes,gucci shoes$35 true religion jeans, ed hardy jeans,coogi jeans,afflictio n jeans, Laguna Beach Jeans$14 ed hardy T-shirts,Coogi T-shirts,Christ ian Audigier T-shirts,Gucci T-shirts,Polo T-shirts.$35 coach handbag,gucci handbag,prada handbag,chanel handbag.f

Report this comment
#12) On December 10, 2010 at 2:38 PM, mtf00l (44.87) wrote:

@TMFCrocoStimpy

Thank you!

The Government: "Your proposal is acceptable."

Men In Black reference for those of you curious types.  Before that Charlton Heston uttered something like those words for the NRA.  FYI, they accepted his proposal as well. =D

Report this comment
#13) On December 10, 2010 at 2:39 PM, mtf00l (44.87) wrote:

Now as for the gold in the vault, I suspect theree is an IOU signed...

Report this comment
#14) On December 10, 2010 at 2:40 PM, mtf00l (44.87) wrote:

The Federal Reserve

Report this comment
#15) On December 11, 2010 at 8:52 AM, quanquan123 wrote:

Hello! The burning hot summer arrived, this is the demonstration stature good season,the retreat wi nter sincere appearance, lets lithe, the individua lity, the fashion, the sex appeal, mature you sta rt from here! Has a good news to tell everybody: R ecently, every bought full 200 US dollars in this company, then has the present to see off, Vietna m which buys delivers are more, please do not miss this good opportunity!!!welcome to :====http://www.kogoal.com==== free shippingcompetitive priceany size availableaccept the paypal
fd

Report this comment
#16) On December 14, 2010 at 7:45 AM, muji3 wrote:

welcome to: =======http://www.kogoal.com=======The website wholesale for many kinds of fashion shoes, like the nike,jordan,prada, also including the jeans,shirts,bags,hat and the decorations. All the products are free shipping, and the the price is competitive, and also can accept the paypal payment.,after the payment, can ship within short time.free shippingcompetitive priceany size availableaccept the paypalhttp://www.kogoal.comSOCCER JERSEY 16USD jordan shoes $32nike shox $32Christan Audigier bikini $23Ed Hardy Bikini $23Smful short_t-shirt_woman $15ed hardy short_tank_woman $16Sandal $32christian louboutin $80Sunglass $15COACH_Necklace $27handbag $33AF tank woman $17puma slipper woman $30=====http://www.kogoal.com======
fd

Report this comment
#17) On January 27, 2011 at 11:56 PM, dpdoor (29.04) wrote:

so is it safe to have a gold etf. what good is it if all goes to hel..o. what are you going to do with that paper, buy food?

Report this comment
#18) On January 28, 2011 at 12:23 AM, truthisntstupid (87.09) wrote:

I love this blog!  And I'm going to use your reasoning to screw with people at work.  It's very funny.

Report this comment
#19) On March 24, 2011 at 11:40 AM, rfaramir (29.37) wrote:

"Of course," Quantemonics1 says, "the easy way to make each Dollar worth more is to have FEWER in circulation."

He's exactly right.

If you're seeing a 2-3% rise for each 1% printed, that means the public is anticipating the inflationary rise in dollars printed by a pretty sizable factor and buying gold even faster than the Fed is printing. That is a sign of hyperinflation coming. Thanks for warning us!

Report this comment

Featured Broker Partners


Advertisement