Johnson goes as Shadow Chancellor

[lost]

Gold is one of the most misunderstood commodities around, the argument is more complicated than just it should be sold at this price rather than that. The price of gold increases during periods of financial stress and inflation rather than due to traditional supply/demand ratios due to its original role as money. The 80’s high for example came at the end of a similar period to now, increased inflation and large amounts of government debt, confidence in the dollar for example became so low that the US had to issue some of debt in deutschmarks, its possible that if things had continued as they were there would have been a loss of confidence in fiat currencies overall, which is where gold would of taken over having never been rejected as payment by governments throughout history.

I think a good example would be if a government had a cetain stock of a drug such as tamiflu, if there was a massive outbreak of a new flu strain in another country and the price of that drug reached huge levels on the market should the government sell? Most people would say no as the same outbreak could hit this country and the drugs be needed. Equally if we went 5 –10 years with no flu outbreaks anywhere in the world and the price of the drug hit rock bottom should the government assume that there would be no outbreaks ever again and sell down the countries drug stocks?

Equally with levels of spending which may have looked affordable when bumper tax recipts were paid by banks which made vast amounts of money making risky investments and people who where happy to pay huge amounts of stamp duty and re-mortgage to spend on useless tat, we'd of been ok as we had ever increasing house prices which would of carried on rising to 10 , 15 , 20 times earnings?? if the “world recession” hadn’t of stopped them

That’s what Brown needs to be judged on..

Basically a belief that he brought an end to boom and bust and never had to plan for a world where gold maybe needed again or a recesion may take place.

[TalkShow Bob]

Wow, a political party being political with the presentation of facts. Who'd have thought it.

[TalkShow Bob]

Gold is one of the most misunderstood commodities around, the argument is more complicated than just it should be sold at this price rather than that. The price of gold increases during periods of financial stress and inflation rather than due to traditional supply/demand ratios due to its original role as money. The 80’s high for example came at the end of a similar period to now, increased inflation and large amounts of government debt, confidence in the dollar for example became so low that the US had to issue some of debt in deutschmarks, its possible that if things had continued as they were there would have been a loss of confidence in fiat currencies overall, which is where gold would of taken over having never been rejected as payment by governments throughout history.

I think a good example would be if a government had a cetain stock of a drug such as tamiflu, if there was a massive outbreak of a new flu strain in another country and the price of that drug reached huge levels on the market should the government sell? Most people would say no as the same outbreak could hit this country and the drugs be needed. Equally if we went 5 –10 years with no flu outbreaks anywhere in the world and the price of the drug hit rock bottom should the government assume that there would be no outbreaks ever again and sell down the countries drug stocks?

Equally with levels of spending which may have looked affordable when bumper tax recipts were paid by banks which made vast amounts of money making risky investments and people who where happy to pay huge amounts of stamp duty and re-mortgage to spend on useless tat, we'd of been ok as we had ever increasing house prices which would of carried on rising to 10 , 15 , 20 times earnings?? if the “world recession” hadn’t of stopped them

That’s what Brown needs to be judged on..

Basically a belief that he brought an end to boom and bust and never had to plan for a world where gold maybe needed again or a recesion may take place.

[eFestivals]

... banks which made vast amounts of money making risky investments ...

except they never did. And here lies the problem.

The profits they thought were a guaranteed payout in the future which they added to their books now turned out to NOT be that guaranteed pay-out, and this is why they went tits-up. They made the very basic mistake of believing that 'on paper' profits were of the same substance as profits that had been collected into their bank accounts.

Because they already had those 'on paper' profits written into their balance sheets, it gave the illusion of success, when it was the emperor's new clothes. When the illusion was exposed, all of the profits they'd made and more had to be handed to them by us, taxpayers.

They made no money.

[lost]

except they never did. And here lies the problem.

The profits they thought were a guaranteed payout in the future which they added to their books now turned out to NOT be that guaranteed pay-out, and this is why they went tits-up. They made the very basic mistake of believing that 'on paper' profits were of the same substance as profits that had been collected into their bank accounts.

Because they already had those 'on paper' profits written into their balance sheets, it gave the illusion of success, when it was the emperor's new clothes. When the illusion was exposed, all of the profits they'd made and more had to be handed to them by us, taxpayers.

They made no money.

[eFestivals]

its still a risky investment

the fact that they were risky investments is rather solidly proven by the fact they all went to shit.

But that wasn't really the point of my post. The point of my post was to correct your words of saying "banks which made vast amounts of money": they didn't make vast amounts of money, what had really happened was that they'd cooked the books so that there was a false impression of having made vast amounts of money.

All the money the banks claimed to have made in the last ten years (and more) has since been proven to be a false claim, which is why they've needed taxpayers money to bail them out.