When will London burst ?

antrobus

Generali wrote: »

The shadow banking system has little if anything to do with the FX market......

I suspect that the poster concerned does not understand what is meant by "capital controls".:)

Generali wrote: »

...!!!!!! does gold have to do with the price of bacon? Are you seriously suggesting that if the world's finance system collapses, China could finance her shortfall in food and pharma production by shipping gold to the Middle East, buying up some oil. Then using some of that oil to ship some more gold to Australia to swap for food? You're nuts. ....

I'm very much of the same opinion. I'm always puzzled by people who seem to think that physical gold is some kind of ultimate backup currency. Really?

Generali wrote: »

.. Seriously, think through the consequences of what you are saying. You can't eat gold, f... gold and it won't cure your cancer so what use is it?....

If and when Financial Armageddon does arrive, I'm of the opinion that having a cellar full of canned spam and peaches and an AK47 with plenty of ammo, is going to be of far more frackin use than a bar of a pretty yellow metal.

Generali wrote: »

..Oh and what exposure to the West's banking market do you think the Chinese shadow banking system has?

If I had to guess, I'd go for pretty much zero.

Generali

ciaccino wrote: »

If you don't believe me, just read both books by James G. Rickards and come back. He probably knows a bit more than the cheap tabloids you browse.

Don't dismiss me. I've worked in finance for almost two decades and have taught economics at Uni. What are your credentials apart from reading pdfs of a couple of cheap paperbacks?

You've been sucked in by a huckster.

Macro economics, as you will know as you are an expert, is a system that works rather like plumbing: each action leads to another and another and the whole thing feeds back on itself. So what precise mechanism does the Chinese shadow banking system have to destabilise international finance? Apart from your guru telling you that of course.\\

Mug.

antrobus

ciaccino wrote: »

That's half of Netherlands gold reserves (612.5), 1/3 of Switzerland and 1/26th of US gold reserves. Practically insignificant by pre-1971 standards.

Insignificant or not, 310 metric tonnes of gold is not "almost no gold". You were wrong. Live with it.:)

antrobus

ciaccino wrote: »

If you don't believe me, just read both books by James G. Rickards and come back. He probably knows a bit more than the cheap tabloids you browse.

He is just another gold bug.:)

Rickards insists – citing scripture, the founding fathers and King Croesus – that gold is the true store of value and everything else, including the dollar, fluctuates relative to gold.

http://www.ft.com/cms/s/2/b0c92908-bb3b-11e3-948c-00144feabdc0.html

antrobus

ciaccino wrote: »

It's typical of those who are losing an argument to divert the attention to academic credentials. I am a complete nobody. I have no academic titles. So, who cares? I surely don't. Slag my arguments but keep your titles for yourself.

Que?

You are the one, who when challenged, has sought to avoid argument with your appeal to authority - "read both books by James G. Rickards and come back" as well as resorted to an hominem attack by your reference to the "the cheap tabloids you browse".

That's two logical fallacies in one post.

antrobus

ciaccino wrote: »

You missed the pre-1971 thingy. ...

Irrelevant. You said that the UK had "almost no gold". It has 310 metric tonnes of gold. You were wrong. Live with it.

ciaccino wrote: »

...When western currencies were backed by that "vile" gold that you despise, a country whose central banks had so little gold reserves would have been made to default.

We're not on the gold standard anymore, so that's neither here nor there.

Why have you put quote marks around the word 'vile'. Who are you quoting? And why do you think I "despise" gold? It's actually quite pretty, and has a few useful industrial applications. I just think that in certain situations I'd rather have an AK47 than a bar of gold.:)

Generali

ciaccino wrote: »

It's typical of those who are losing an argument to divert the attention to academic credentials. I am a complete nobody. I have no academic titles. So, who cares? I surely don't. Slag my arguments but keep your titles for yourself.

Yeah, typical of an expert to think they know more than someone who read a book once. What was I thinking?

purch

antrobus wrote: »

Rickards insists – citing scripture, the founding fathers and King Croesus – that gold is the true store of value and everything else, including the dollar, fluctuates relative to gold.

Gold, is a good store of something, maybe not value, but a good store none the less. It is basically bright and shiny and good for not a lot.

Everything fluctuates relative to the price of Gold, just as every currency fluctuates in value relative to all other currencies (apart from those that are "fixed").

For Gold to be an absolute store of value, it would need to be accepted as that by everyone, but it isn't so it can't be.

purch

ciaccino wrote: »

How long do you think that a currency system backed by nothing can survive? Forever? Another 10-20-30-50 years?

Well it's lasted for 42 years so far, since the end of the Smithsonian Agreement, so forever is a better bet than 10 years IMHO.

wotsthat

ciaccino wrote: »

So why have central banks kept on buying gold in the last 30 years? If gold has no meaning as a currency, why not just sell the whole lot?

They haven't.

Central banks have added to gold reserves for the past five years, a reversal from two decades of selling since the late 1980s.

http://www.bloomberg.com/news/articles/2015-02-12/central-banks-hungry-for-gold-bought-enough-for-75-dreamliners

This article seems to suggest banks are buying gold because it very specifically isn't a currency.

Countries have bought 1,964 tons of gold over the past five years, equal to more than seven months of mine output, as they sought an alternative to currencies, according to the gold council report.

I think I'd rather be fit and in possession of a mean streak than having a couple of Canadian Maples buried in the back garden.