Eric50 Posted April 14, 2011 Share Posted April 14, 2011 Here is a quick interview of Jim Grant. He has an interesting way of seeing gold: "To me the gold price takes the form of a very uncomplicated formula, and all you have to do is divide one by ‘n.’ And ‘n’, I’m glad you ask, ‘n’ is the world’s trust in the institution of paper money and in the capacity of people like Ben Bernanke to manage it. So the smaller ‘n’, the bigger the price. One divided by a receding number is the definition of a bull market. You’ll notice that this had nothing to do with security analysis. This is conceptualizing, brainstorming, nothing to do with price/earnings ratios, other valuation methods like cash flows. It is a proposition or a hypothesis on what is driving the gold market. So the gold market is necessarily a speculative piece of business. It’s not to be confused with the kind of investment that Ben Graham wrote about. Anyway, I happen to be bullish on it, but not for reasons that I can readily defend before a member of the fraternity of chartered financial analysts.” http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2011/4/14_Jim_Grant_-_US_Will_Resolve_Debt_by_Returning_to_Gold_Standard.html Link to comment Share on other sites More sharing options...
Parsad Posted April 14, 2011 Share Posted April 14, 2011 Terrific quote! Accurate as well. Cheers! Link to comment Share on other sites More sharing options...
Rabbitisrich Posted April 15, 2011 Share Posted April 15, 2011 Oh bother. "And how do you determine N?" "Simply divide M and L." Link to comment Share on other sites More sharing options...
rkbabang Posted April 15, 2011 Share Posted April 15, 2011 Reminds me of the economic theories that have equations including things like "utility". How on earth does one quantify "trust", "utility", or anything else which is not only different from person to person, but in each and every individual can change from moment to moment? And even in one individual at one moment there are no units so no way to quantify it and assign it a specific numerical value. Sure you can say the price of gold in any fiat monetary unit tends to be inversely proportional to the trust in that fiat money, but using a mathematical formula is inappropriate in this case. Also this guy is dreaming if he thinks the U.S. dollar will ever again be redeemable for gold. The political class never gives up power willingly or peacefully. I can't imagine this happening, even though it should. Link to comment Share on other sites More sharing options...
beerbaron Posted April 15, 2011 Share Posted April 15, 2011 You guys are taking it to much by the word. He's just saying that gold price is inversely proportional to currency trust. I think it's a very well presented explanation. BeerBaron Link to comment Share on other sites More sharing options...
gaf63 Posted April 15, 2011 Share Posted April 15, 2011 Rkbabang, your thoughts on Jim Grant tell me much more about you than him. You should read what he has said over the years instead of making derogatory assumptions. Link to comment Share on other sites More sharing options...
Myth465 Posted April 15, 2011 Share Posted April 15, 2011 Rkbabang, your thoughts on Jim Grant tell me much more about you than him. You should read what he has said over the years instead of making derogatory assumptions. Link to comment Share on other sites More sharing options...
rkbabang Posted April 15, 2011 Share Posted April 15, 2011 Rkbabang, your thoughts on Jim Grant tell me much more about you than him. You should read what he has said over the years instead of making derogatory assumptions. Wow. 1) Thou shall not criticize anything anyone says unless you have read what he has said over a period of years. I'll try to remember that. I guess I should go back and read years worth of your writings before criticizing this statement of yours, but since I disagree with it I won't. 2) I agree with almost everything he said I just made 2 small criticisms. One, that you can't put a number to "trust". And two, that regardless of what should happen I don't think the US will go back to the gold standard. 3) It is much easier to launch an ad hominem attack than to criticize the content of someone's comments. Which says a lot about yourself. --Eric Link to comment Share on other sites More sharing options...
Guest broxburnboy Posted April 15, 2011 Share Posted April 15, 2011 Just to get back on topic..Jim Grant and gold.. Grant is a fairly recent convert to accepting the dynamic that gold trades inversely to the dillution of fiat money, in this case the USD. But there is another dynamic as well, the simultaneous ongoing fiscal deficits which decrease the value of the whole enterprise asset base. So we have an ongoing situation where fresh money is created and is backed by a decreasing real asset base. Gonzalo Lira says it better than Jim Grant. http://gonzalolira.blogspot.com/2011/04/burning-candle-at-both-ends-raising.html Link to comment Share on other sites More sharing options...
rkbabang Posted April 15, 2011 Share Posted April 15, 2011 Just to get back on topic..Jim Grant and gold.. Grant is a fairly recent convert to accepting the dynamic that gold trades inversely to the dillution of fiat money, in this case the USD. But there is another dynamic as well, the simultaneous ongoing fiscal deficits which decrease the value of the whole enterprise asset base. So we have an ongoing situation where fresh money is created and is backed by a decreasing real asset base. Gonzalo Lira says it better than Jim Grant. http://gonzalolira.blogspot.com/2011/04/burning-candle-at-both-ends-raising.html Excellent article thanks. Gonzalo has a more realistic assessment of what the government is actually going to do...exactly what it has been doing. It will burn that candle until the wax is gone then try to deny that the candle no longer exists when it's gone. I just can't imagine them doing what needs to be done. Not this year, or next, or ever. The tone of my first post may have been a little harsh, but to state that the US dollar will (not "should", but "will") be made redeemable by gold is quite a wishful statement. I just don't see that happening. Link to comment Share on other sites More sharing options...
ubuy2wron Posted April 15, 2011 Share Posted April 15, 2011 If we get to the point where the currency that the world has been used for the last 70 years as a reserve currency has lost its place because of a lack of faith by the majority we are all screwed . The Weimar ? Republic and Zimbabwe were not wonderful places for any one to try to raise a family and make a living the best advice is to get out of the country if you can before it happens. It seems that in the part of the article posted Jim is saying "this time is different" which of course can be true but usually is not. Link to comment Share on other sites More sharing options...
gaf63 Posted April 15, 2011 Share Posted April 15, 2011 rkbabang, sorry for the comment, was unnecessary and thoughtless on my account Link to comment Share on other sites More sharing options...
Mungerville Posted April 15, 2011 Share Posted April 15, 2011 I'm with you broxburnboy... precious metals - mainly silver - have been my main bet ever since I was forced to sell my ORH common to Watsa for below intrinsic value. Link to comment Share on other sites More sharing options...
Myth465 Posted April 16, 2011 Share Posted April 16, 2011 http://feedproxy.google.com/~r/trillianmedia/JVWE/~3/xzV48CpXoUg/james-grant Link to comment Share on other sites More sharing options...
rkbabang Posted April 18, 2011 Share Posted April 18, 2011 rkbabang, sorry for the comment, was unnecessary and thoughtless on my account No problem. I've typed many a thing in haste on-line that I regretted afterward. We all do it. The tone of my initial post was somewhat inflammatory now, that I go back and read it, as well, for which I apologize. Link to comment Share on other sites More sharing options...
Myth465 Posted April 18, 2011 Share Posted April 18, 2011 Mr Grant is quite this busy man. http://www.kingworldnews.com/kingworldnews/Broadcast/Entries/2011/4/16_James_Grant_files/Jim%20Grant%204%3A16%3A2011.mp3 http://www.gurufocus.com/news/129130/jim-grant-interview-on-world-king-news Link to comment Share on other sites More sharing options...
keerthiprasad Posted April 18, 2011 Share Posted April 18, 2011 The wealthtrack piece was very good. Link to comment Share on other sites More sharing options...
Recommended Posts
Create an account or sign in to comment
You need to be a member in order to leave a comment
Create an account
Sign up for a new account in our community. It's easy!
Register a new accountSign in
Already have an account? Sign in here.
Sign In Now