US Stocks Plunge, Dow Falls Over 300 Points As Fears Grip Market

**socal** · 08-08-2011, 06:36 AM

Originally Posted by Agent_Smith

Originally Posted by OhOh

In the real world the bar of gold will by you lakes of water, wine and enough people to feed and pamper you for your lifetime. In the desert it would also buy you food, water, camels, a guide and dancing girls whilst you water would last you a day tops.

Not if you're alone and thirsty.

My point is that gold itself has little value to humans, its value is made up.

If it has no value to humans, then why has it been worth something for 5 or 10,000 years ?

the evidence is stacked against you.

Anyway, back to the markets...

The US dollar is plunging in CHF and Yen, DOW futures are down 243 points, oil is plunging, gold hits an all time record of $1693.

**Tom Sawyer** · 08-08-2011, 10:24 PM

Originally Posted by Agent_Smith

My point is that gold itself has little value to humans, its value is made up.

True but so is any currency - money as well.

Anyway, I agree with your main point. Mine is that gold is a bubble waiting for more security in a real currency to come along. Probably the USD - but it may take a year or more. So those who want to jump on the speculative bandwagon can surely do so. Just beware - when it turns it will happen fast. The reason for that is because most holders are speculators who will all want to sell at the same time.

**OhOh** · 08-08-2011, 10:26 PM

http://blogs.wsj.com/marketbeat/2011...rkets-turmoil/

"In connection with its downgrading of U.S. government debt, ratings service Standard & Poor's early Monday likewise downgraded the senior issue ratings on Fannie Mae and Freddie Mac to double-A-plus fromtriple-A.

"The downgrades of Fannie Mae and Freddie Mac reflect their direct reliance on the U.S. government. Fannie Mae and Freddie Mac were placed into conservatorship in September 2008 and their ability to fund operations relies heavily on the U.S. government," S&P said in a statement."

**socal** · 08-08-2011, 10:50 PM

Originally Posted by Tom Sawyer

Originally Posted by Agent_Smith

My point is that gold itself has little value to humans, its value is made up.

True but so is any currency - money as well.

Anyway, I agree with your main point. Mine is that gold is a bubble waiting for more security in a real currency to come along. Probably the USD - but it may take a year or more. So those who want to jump on the speculative bandwagon can surely do so. Just beware - when it turns it will happen fast. The reason for that is because most holders are speculators who will all want to sell at the same time.

A year or more....

Gold represents payment in full. It is nobodies liability. Cash deposited in a bank is lent out at interest, that is risk.

**Butterfly** · 08-08-2011, 11:29 PM

Originally Posted by OhOh

Note Libya doesn't appear on it because it has no debt.

obviously another reason why it should be bombed to oblivion,

**Agent_Smith** · 09-08-2011, 04:05 AM

Originally Posted by socal

If it has no value to humans, then why has it been worth something for 5 or 10,000 years ?

The answer is in the question. Why only 5 - 10,000 years? Why only now?

The whole monetary system, gold included, is a fiction created by long dead people and believed by all today. These things that represent value really have no practical value at all to humanity.

Which element is more valuable to humans, gold or oxygen? Yet which is coveted more? It is funny, in a sad way, that what we covet the most doesn't really matter in any practical sense to our survival or happiness.

There may come a day when society sees through this make believe world of money and the illusion of material wealth, the rampant competition with its cast of financial "losers" and "winners" will seem quaint and maybe just a bit insane. There will be more important and valuable (to humanity) pursuits other than riches and expensive toys.

Maybe not in my lifetime, or hell maybe never - humanity may be doomed for all I know. It certainly will be if we continue down the road of make believe and short sighted pursuits (wealth).

Originally Posted by socal

Gold is physical money. It represents time. It takes allot of time to find, then to dig out of the ground. It is rare, that is what gives it value.

Gold does not represent time, a potato does that better - it take time to grow and it is valuable because it provides nourishment. Gold does neither but it has been somewhat arbitrarily assigned as a value marker for so many potatoes.

It is relatively rare and this limits it supply, that's all. That is one reason it is a handy value marker. If nobody looked for it or refined it or did anything with it this would not affect humanity one iota. We would still exist and procreate, eating, building, laughing, dancing, etc. The existence of gold is only as relevant to our experience as we have been taught by society. In all practical matters, this metal is completely irrelevant to our existence here.

Originally Posted by OhOh

Many people around the world, in deserts, jungles and cities equally value gold because of the many "items" it enables them to purchase or consume.

Technically, people rarely buy anything with gold nowadays. They use currency which is backed by their nation's production quotient, or by gold. It's kinda funny that one currency stands in place for another currency which is really just a made up place marker for actual valuable things. If anything, the value of money tied to a nation's production output is a little more realistic than money tied to a metal that has little genuine or useful purpose to humanity.

**OhOh** · 09-08-2011, 06:24 AM

^ Lets just agree that Gold is a store of value. The amount of value varies.How that value is used can vary. How that value is decided varies.

For a number of years that value has been determined by "the market" as being steadily worth more as opposed to most other things, real estate, currency or a mans sweat.

The "market", many individuals around the world, are willing to exchange goods and services for a piece of gold. In a Thai perspective watch your girl smile, from every orifice, when you present her with a small amount.

**OhOh** · 09-08-2011, 06:28 AM

Originally Posted by Agent_Smith

the value of money tied to a nation's production output is a little more realistic

Thats the biggest scam in the world.

**Tom Sawyer** · 09-08-2011, 07:00 AM

A nation's currency more to do with trust that it will honored. Lose trust in the state's ability to do so and it becomes worthless.

**sabang** · 09-08-2011, 07:52 AM

I consider gold to be a very high risk asset at these prices, very high indeed. Then again, in conditions like this, it may still rise sharply in the short term. I may actually be investing in equities again soon, for the first time in a while. Certainly the Dividend yield vs Interest rate equation is historically very favorable to equities, very much indeed. There is always a reason for that though, and in this case it is inept government and governance. It is not the US debt load, which is quite manageable if you get a powerful Think tank, like a bunch of primary school kids, to work it out.

Damn I'm glad I left the West behind. Riots, market turmoil, massacres, short sighted greed, racial tension, inept government. What a miserable place. I think the public unrest will only get worse. We live in interesting times.

**Latindancer** · 09-08-2011, 08:03 AM

Originally Posted by OhOh

......for a piece of gold. In a Thai perspective watch your girl smile, from every orifice, when you present her with a small amount.

**socal** · 09-08-2011, 08:40 AM

Originally Posted by Agent_Smith

Originally Posted by socal

If it has no value to humans, then why has it been worth something for 5 or 10,000 years ?

The answer is in the question. Why only 5 - 10,000 years? Why only now?

The whole monetary system, gold included, is a fiction created by long dead people and believed by all today. These things that represent value really have no practical value at all to humanity.

Which element is more valuable to humans, gold or oxygen? Yet which is coveted more? It is funny, in a sad way, that what we covet the most doesn't really matter in any practical sense to our survival or happiness.

There may come a day when society sees through this make believe world of money and the illusion of material wealth, the rampant competition with its cast of financial "losers" and "winners" will seem quaint and maybe just a bit insane. There will be more important and valuable (to humanity) pursuits other than riches and expensive toys.

Maybe not in my lifetime, or hell maybe never - humanity may be doomed for all I know. It certainly will be if we continue down the road of make believe and short sighted pursuits (wealth).

Originally Posted by socal

Gold is physical money. It represents time. It takes allot of time to find, then to dig out of the ground. It is rare, that is what gives it value.

Gold does not represent time, a potato does that better - it take time to grow and it is valuable because it provides nourishment. Gold does neither but it has been somewhat arbitrarily assigned as a value marker for so many potatoes.

It is relatively rare and this limits it supply, that's all. That is one reason it is a handy value marker. If nobody looked for it or refined it or did anything with it this would not affect humanity one iota. We would still exist and procreate, eating, building, laughing, dancing, etc. The existence of gold is only as relevant to our experience as we have been taught by society. In all practical matters, this metal is completely irrelevant to our existence here.

Originally Posted by OhOh

Many people around the world, in deserts, jungles and cities equally value gold because of the many "items" it enables them to purchase or consume.

Technically, people rarely buy anything with gold nowadays. They use currency which is backed by their nation's production quotient, or by gold. It's kinda funny that one currency stands in place for another currency which is really just a made up place marker for actual valuable things. If anything, the value of money tied to a nation's production output is a little more realistic than money tied to a metal that has little genuine or useful purpose to humanity.

Where would you put 50 million dollars if you won it today ?

**Hampsha** · 09-08-2011, 08:46 AM

That's it. My feeling is this really is the end. I mean this is a great depression and everyone is going to lose at least in the US. Everything has to be cut including social security and military funding. There could be a civil war of some sort soon if not WW3. What a fucking mess! Screw the pro-war nazi rightwingers who ruined the nation with all their fucking wars and screw the liberal wacko turds who are just as fucked. They all worthless shits. Just my feelings at this moment.

**sabang** · 09-08-2011, 08:49 AM

Your anger is warranted.

**socal** · 09-08-2011, 08:54 AM

Originally Posted by sabang

I consider gold to be a very high risk asset at these prices, very high indeed. Then again, in conditions like this, it may still rise sharply in the short term. I may actually be investing in equities again soon, for the first time in a while. Certainly the Dividend yield vs Interest rate equation is historically very favorable to equities, very much indeed. There is always a reason for that though, and in this case it is inept government and governance. It is not the US debt load, which is quite manageable if you get a powerful Think tank, like a bunch of primary school kids, to work it out.

Damn I'm glad I left the West behind. Riots, market turmoil, massacres, short sighted greed, racial tension, inept government. What a miserable place. I think the public unrest will only get worse. We live in interesting times.

Dividend yields and interest rates are part of the problem. I am quoting a certain "gold bug" but he explains it well.

"Most people are savers, not investors or traders. Yet today we are all forced to be investors chasing a yield because there is no such thing as a perfect inflation hedge. If there were such a thing, a large portion of the "investing public" would not be anywhere near stocks and bonds. Even the most "risk free" bonds, US Treasuries, have the greatest risk of all, currency risk. And in the case of the dollar, this is exposure to a risk that, today, is well out of the hands of the currency manager thanks to seven decades of functioning as the global reserve standard.

Furthermore, a saver must look deeper than the CPI, or even its shadow-equivalent, for the real inflation that must be protected against. And that is the inflating VOLUME of savings with which one must compete. A perfect inflation hedge would not only keep up with the shadow-CPI but it would also rise in VALUE (as opposed to volume) relative to changes in aggregate monetary savings.(Gold) "

**StrontiumDog** · 09-08-2011, 09:11 AM

BBC News - Asian markets tumble after share sell-off in the US

9 August 2011 Last updated at 01:43 GMT

Asian markets tumble after share sell-off in the US

Nikkei 225 Index

Last Updated at 09 Aug 2011, 00:45 GMT

Asian markets have been hammered amid fears that the US is heading for a recession and after Wall Street posted the biggest losses since late 2008.

Japan's Nikkei 225 index fell 4.8%, South Korea's Kospi lost 7.3%, and Australia's ASX shed 4.7%.

Earlier in the US, the Dow Jones stock index dropped 5.6%, despite US President Barack Obama trying to reassure investors.

A US recession would hurt Asia's export-led economies.

"You can't control it," Peter Esho, chief market analyst at City Index, told the BBC.

"You have the onset of fear in the market. There are a lot of things that don't make sense."

Rocking market

A number of issues have created the current market pessimism.

At the heart of the sell-off is the fear that ongoing debt problems in the US and Europe will slow economic growth and dent corporate profits.

On top of that, on Friday the US had its triple A credit rating cut by Standard and Poor's for the first time in history, adding to the sense of gloom surrounding the world's biggest economy.

"What's rocking the market is a growth scare," said Kathleen Gaffney of Loomis Sayles.

She said investors were concerned about "how Europe and the US are going to work their way out of a high debt burden" if the global economy slows.

With this in mind, other asset classes were also impacted on Tuesday. Crude oil prices continued to slide amid concerns that demand would wane in coming months.

Gold, meanwhile, hit a new record as investors looked for assets that are considered to be less risky. The Swiss franc also gained.

Not immune

Analysts said that while economies in Asia had been growing robustly and the outlook for the region remained positive, a slowdown in the US and Europe could hurt growth significantly. Not least because the stock market slump may put off consumer and corporate spending.

"When you see such significant falls, Asia cannot distance itself completely," said City Index's Mr Esho.

Rajiv Biswas of IHS Global Insight told the BBC that investors were also worried that the cut in the US credit rating would force a serious reining in of bugetary spending.

"That will be a big drag on growth," he said.

Mr Biswas added that there was "little doubt" that a slowdown in the US and Europe would hurt growth and trade in Asia.

Analysts said that Asian economies may now have to have to revise their own economic projections as a result. On Monday, Singapore cut its growth forecast for this year to between 5-6%, down from 5-7%.

"The discussion now in Asia is to have a look at growth assumptions and perhaps even to revise numbers that could be a little too optimistic in light of what is happening the markets," said City Index's Mr Esho.

Broad sell-off

Investors have been dumping stocks across all industries in the US and Asia.

The S&P 500 index was down 6.7% in New York on Monday, the worst drop since December 2008, with every listed stock falling.

In points terms, the Dow ended down 635 to 10,810, its biggest one-day decline since October 2008, and the sixth largest on record. The Nasdaq index fell even further, losing 6.9%.

Earlier in the UK, the main FTSE 100 index lost 3.4%, or 178 points. It was the first time in the FTSE 100's 27-year history that it had fallen by more than 100 points for four sessions in a row.

Share indexes also fell heavily across Europe on Monday, with Germany's Dax ending down 5%, while France's Cac lost 4.7%.

**Butterfly** · 09-08-2011, 02:19 PM

Originally Posted by socal

"Most people are savers, not investors or traders. Yet today we are all forced to be investors chasing a yield because there is no such thing as a perfect inflation hedge. If there were such a thing, a large portion of the "investing public" would not be anywhere near stocks and bonds. Even the most "risk free" bonds, US Treasuries, have the greatest risk of all, currency risk. And in the case of the dollar, this is exposure to a risk that, today, is well out of the hands of the currency manager thanks to seven decades of functioning as the global reserve standard.

Furthermore, a saver must look deeper than the CPI, or even its shadow-equivalent, for the real inflation that must be protected against. And that is the inflating VOLUME of savings with which one must compete. A perfect inflation hedge would not only keep up with the shadow-CPI but it would also rise in VALUE (as opposed to volume) relative to changes in aggregate monetary savings.(Gold) "

there is too much money being saved, that's why interest rates are so low and it's triggering inflation in certain areas as "savers" flee to overpriced assets such a Gold and other commodities.

**Bower** · 09-08-2011, 03:01 PM

[quote=Butterfly;

there is too much money being saved, that's why interest rates are so low and it's triggering inflation in certain areas as "savers" flee to overpriced assets such a Gold and other commodities.[/quote]

This is very true, i would also add: I take about £12,000 per month through the PDQ in my pub, it is very clear that most people are using their debit cards and not their credit cards anymore. There must be a huge reduction in personal debt, at least in the UK.

**Butterfly** · 09-08-2011, 03:03 PM

^ indeed, see this interesting WSJ article regarding the current crisis

Why This Crisis Is Different From the 2008 Financial Crisis - WSJ.com

**Butterfly** · 09-08-2011, 03:05 PM

“Be Greedy When Others are Fearful” -- Warren Buffett

**harrybarracuda** · 09-08-2011, 03:25 PM

Shall I change some more dollars into Baht this week or next? (Those are the only two choices).

**blue** · 09-08-2011, 04:21 PM

I'M bored ,
I want to watch the FTSE100 index falling live
anyone know a good website ?
I've got a headache trying to find one

**Bower** · 09-08-2011, 04:29 PM

Originally Posted by Butterfly

^ indeed, see this interesting WSJ article regarding the current crisis

Why This Crisis Is Different From the 2008 Financial Crisis - WSJ.com

Interesting, and thank you for the link.

As a small time perhaps hobbyist investor i am 'vulture trading' at the moment and belive there as some fantastic bargains out there.
It cannot be long before these huge plc's and institutions that are awash with money step in. Some of the big companies with massive reserves must be considering buy back in their own shares ?

Pension funds surely have to be major buyers of equities soon ?

Interesting times if you are not vunerable.......

**Bower** · 09-08-2011, 04:31 PM

Originally Posted by blue

I'M bored ,
I want to watch the FTSE100 index falling live
anyone know a good website ?
I've got a headache trying to find one

If you are in the UK CNBC or Bloomberg on the tv is good.
Rabbits in the headlights comes to mind !

**Bangyai** · 09-08-2011, 04:53 PM

Originally Posted by Butterfly

“Be Greedy When Others are Fearful” -- Warren Buffett

Does that mean you've seen the light and are making a short term investment in gold ?

Thread: US Stocks Plunge, Dow Falls Over 300 Points As Fears Grip Market

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