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

Originally Posted by Butterfly

I am obviously being very simplistic here for illustrative purposes

It helps us dumb asses to understand you know The technicians will now pull your theory apart and quote obscure theory to backup their views, but hey ho.

^ I am sure our Gold supporters will come up with some strange theory how Gold will magically make the loan process completely disappear

they forget also that there is a reason people don't hold physical gold, it's easy to be robbed when carrying it around. That was the original purpose of paper money, to make transactions safer for the holders of notes.

Originally Posted by Butterfly

they forget also that there is a reason people don't hold physical gold, it's easy to be robbed when carrying it around. That was the original purpose of paper money, to make transactions safer for the holders of note

I think it might have had something to do with weight and convenience. After all it does not matter much if the robber steals your little bag of gold off your belt, or the wallet out of your ass pocket full of banknotes.....it's still the same loss provided the bank notes were of the same value as the gold....

Taking this process one step further, we now carry a plastic card(s) in lieu of bank notes...even less wight, bulk, and more convenience...
Nobody would carry around actual gold anymore, but that's no reason not to have some stashed in a vault.

Originally Posted by Butterfly

Do you think we could issue credit cards based simply on gold holdings ?

Wouldn't be a bad idea. As it is now we even have instore credit cards so that chavs living on welfare can buy new hoodies. If he had to remove the little gold stud from his nose to pay for his attire he might think twice about getting into debt.

Whatever next eh ............... they'll be giving credit cards to up country farmers !

Vivre Pheu Thai !

Originally Posted by blue

Traders don't own stocks and shares,
when other people buy or sell them, they get commission
so then when the market level falls ,why do they always show traders with thier head in thier hands

Comissions!

Originally Posted by IceSpike

Originally Posted by blue

Traders don't own stocks and shares,
when other people buy or sell them, they get commission
so then when the market level falls ,why do they always show traders with thier head in thier hands

Comissions!

On your bike you mean.

Originally Posted by Butterfly

^ like any system based on trust, there will be assholes to abuse it, but the system itself is needed and bring a lot of advantages we take for granted

those who talk about the good old age of the gold standard and no debt have no clue, our economic system is far more complex and sophisticated to go back to some old archaic system. Do you think we could issue credit cards based simply on gold holdings ?

There will be no gold standard. Easy money(fiat) will float against hard money(gold)

The ECB already does this. When it really kicks in is when the western fractional bullion banking system collapses.
ECB: Consolidated financial statement of the Eurosystem as at 1 July 2011

Originally Posted by Butterfly

^ I am sure our Gold supporters will come up with some strange theory how Gold will magically make the loan process completely disappear

they forget also that there is a reason people don't hold physical gold, it's easy to be robbed when carrying it around. That was the original purpose of paper money, to make transactions safer for the holders of notes.

You know nothing about central banking, fractional reserve bullion banking, fractional reserve commercial banking or international trade.

Gold has nothing to do with basic peasant transactions.

The more I read on this forum and others, plus the so called experts in the press, the more I realize that no one has a clue about what is really going on. It is all just smoke and mirrors and people playing monopoly with real money. Jim

Originally Posted by koman

Originally Posted by Butterfly

they forget also that there is a reason people don't hold physical gold, it's easy to be robbed when carrying it around. That was the original purpose of paper money, to make transactions safer for the holders of note

I think it might have had something to do with weight and convenience. After all it does not matter much if the robber steals your little bag of gold off your belt, or the wallet out of your ass pocket full of banknotes.....it's still the same loss provided the bank notes were of the same value as the gold....

Taking this process one step further, we now carry a plastic card(s) in lieu of bank notes...even less wight, bulk, and more convenience...
Nobody would carry around actual gold anymore, but that's no reason not to have some stashed in a vault.

actually the first "notes" were more like "draft" with a name on it, a cheque actually is more like it

they could steal the paper but not make any claim on it

Originally Posted by koman

we now carry a plastic card(s) in lieu of bank notes

and the cards are "safer" than cash and more convenient, same argument as the original "notes"

you can still steal the card but not make any claim on the stored value

I am talking theory here, obviously

Originally Posted by socal

Originally Posted by Butterfly

^ I am sure our Gold supporters will come up with some strange theory how Gold will magically make the loan process completely disappear

they forget also that there is a reason people don't hold physical gold, it's easy to be robbed when carrying it around. That was the original purpose of paper money, to make transactions safer for the holders of notes.

You know nothing about central banking, fractional reserve bullion banking, fractional reserve commercial banking or international trade.

Gold has nothing to do with basic peasant transactions.

classic

Flutterby out of his depth again...

^ I see you are game for another round

I'm quite happy to watch Socal kick your arse some more.

Originally Posted by socal

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

I would likely invest it into something that is actually productive and beneficial to humanity - biomedical, agriculture, energy tech related industries, or even housing.

I certainly wouldn't bother with an intrinsically worthless metal like gold.

Originally Posted by OhOh

Lets just agree that Gold is a store of value.

No doubt it was convenient to do so in the past. In reality though, its value does not truly correlate with its usefulness to humanity in these modern times.

But we won't let a little thing like practicality get in the way of tradition, will we?

France, Spain, Italy and Belgium have just banned short selling. Germany is proposing that all of EU should ban it.

I made such a suggestion on this very board some months ago, and was suitably savaged by some of our resident financial wizards for being naive, idiot blah blah blah....

Why people are allowed to sell stock they don't own and then buy it back when the price goes down and pocket the difference has always puzzled me. What kind of regulation is that? It is pure speculation/gambling and has no element of investing in it that I can see. Short sellers are just sucking money of the system...nothing more. Do we have any defenders of short selling out there???

^its needed for hedging.

Originally Posted by baby maker

Originally Posted by koman

Why people are allowed to sell stock they don't own and then buy it back when the price goes down and pocket the difference has always puzzled me. What kind of regulation is that? It is pure speculation/gambling and has no element of investing in it that I can see. Short sellers are just sucking money of the system...nothing more. Do we have any defenders of short selling out there???

How to speak to this....it is true short sellers don't own the stock...but that does not mean the stock doesn't exist....the stock sold is borrowed under contractual obligation with the sponsoring broker from an ligitmate stock owner on the share register....

If I borrowed your car and sold it so I could buy it back cheaper six months down the road that would make sense then?

thereby makeing stock which may not otherwise be available to the market available to the counter party...the buyer...the buyer recieves his stock...
the short seller has a period of time to buy in the equity to cover the short...twelve to thirteen months...if memory serves....it's been some years since i've sold short....

it should not be brushed aside too quickly.... short sellers make liquidity available to the market...give oppertunities to buyers to buy and higher prices to cash out when a short squeeze presents....

I thought a big part of our problem initially was too much liquidity.....followed by too little liquidity....followed by chaos...mostly accelerated by short selling.....

the other side of the arguement is major players can drive the market down ahead of them given they have deep pockets and access to stock borrowing..another buying oppertunity, if you have confidence in your view.....

Ah ha...major players driving down the market by larg scale short selling so they can rape and pillage it later ...now we're getting somewhere....

the real threat to my mind in short selling....is the short selling of naked dirivatives...things that don't actually exist....

short selling or preselling in commodities is a vital mechanism of crop production and indeed some ventures where startup capital is to be raised against projected forward sales over cost of production....mineing startup, biotech startups and alike....

But here you are talking about "futures" which have their own market, and startups which are covered in the venture capital markets. These are special cases and not something that "ordinary" investors expose themselves to as a rule.

to hold absolute views on something so vibrant as any market is to invite chastisement by that market....

the governments of Spain, Italy, France and Belgium have another view....
and who can argue with that...Governments rarely get it wrong....they have a wealth of experience in spending other peoples money....

OK we know its always safe to blame the governments They are to be blamed for everything, including the lack of sound regulations which allows the kind of nonsense we have seen recently in the banking and investment sectors.

anyhow....the market will correct any false assumpsions...it allways does...

The world somehow worked before short selling.....believe it or not...