Quote from: cypherdoc on April 05, 2012, 06:51:58 PM

can anyone here tell me where i can sell a few gold ounces for the true physical price? that is, spot price plus this hidden massive premium that i can't seem to locate anywhere?

i mean a real place where i can sell for that true price.

Currently, the only place you would be able to find the real price of gold is interbank (even then, not easily - oil producing nations were the only ones demanding gold for their product, which meant that the real value would only apply there and anything else didn't matter) and at the LBMA good delivery bar size - about 400oz. The official public price is like the gold standard was - (relatively) static until the system breaks and gold is publicly revalued.

He who holds the gold makes the rules, and the means of production determines what it will accept in exchange for its product, not the buyer. If the producer will only accept gold for his goods, then he will accumulate gold and therefore wield increasing power. For most of the 20th century, the oil producing powers have made the rules.

However, because oil is a consumable and finite resource, its producers needed a pool to store their accrued wealth that wouldn't go up in smoke. These oil producers already understood that paper currencies didn't store wealth reliably over long periods, particularly having witnessed multiple instances of inflationary wealth destruction. So they demanded a real asset, in this case the most reliable and easily transferred one in history: gold. Others have done extensive research, finding that there has long been a flow of gold to Middle East oil producing nations.

Essentially, there is a black market for gold that is more powerful than the official markets. It is off-limits unless you are a producer on a global scale. No gold, no oil.

A similar scenario (not exactly the same) is playing out as occurred in the 1970s: the financial system has over-extended itself on multiple fronts and the asset demanded for payment is in short supply. America and most other Western nations have put themselves into a dangerous position wherein they're dependent upon external resources and don't have enough of what the externals want to be paid in to keep acquiring those resources.

Let's say you want potable water for your farm, but you're unable to acquire it yourself; I have clean water in excess.

You suggest an exchange, but you have USD and I want rhodium; since rhodium is very limited, we come to an agreement in which you pay me 90% in USD and 10% in rhodium.

Over time, you start paying with greater than 90% USD and I call you on it by halting the water supply; without water, you risk your crops and even your own death, so you quickly start supplying the 10% rhodium agreed upon again.

More time goes by and you've saved a bundle in USD, which you've convinced everyone to readily accept (except for me); with all of your USD savings, you retire from farming and import much of what you need, still paying me rhodium for water.

A generation later with a dwindling pile of USD supporting a growing family, your children decide they want to keep the party going by making more USD.

Again the water payments start to be made with >90% USD, but this time the rhodium supply is almost gone; when I demand a resumption of the 10% rhodium payments, you (your children) have the arrogance to threaten me; I sell the water I was selling to you, to someone else; you panic and start paying again, but now I'm stockpiling guns & ammo while brushing up on my CQC & Krav Maga.

Once more, you start missing rhodium payments and I'm tired of getting piles of USD that are rapidly depreciating; the price of water is now rising and you're almost out of rhodium, so you try throwing your weight around but find you can't subdue me that easily; it's now getting to a point where others are fed up with your USD as well, so it buys even less water than before.

Since you're out of rhodium and I don't want USD in exchange but recognise the potential danger of your whole family coming after me, I offer a compromise: I'll accept your USD but only provide a bare minimum trickle of water; you will be too weak to fight me head-on if you barely have enough water to survive, and more so if others stop accepting your USD for their resources while I sell them my excess water.

If you go back to working your own farm, you might survive or you might not have enough resources now to live through a full cycle of seasons; your decision now is: try forcing myself and everyone else to keep supporting you, or do work that you barely even remember and consider beneath you.

... WWIII

Rhodium could be held by everyone, but the only place where the true value is realised is in exchange for water. The question then is: how many have enough productive capacity and are asking for rhodium? It's vitally important that the dollar be accepted everywhere. You can imagine the results if it isn't - an arrogant, dying superpower will almost certainly make a final do-or-die effort at maintaining its domination over the world rather than humble itself and suffer some painful introspection.

A movie that portrays the mechanics properly is Rollover. While Western nations view gold as an archaic lump of metal, much of the world sees it as protection from risk in the West.

America needs an intervention. Gold is its cure (with a side of Bitcoin).

(The problem is that the cure will probably kill the patient at this point.)