Comments on: China Stockpiles the “Perfect Money” http://dailyreckoning.com/china-stockpiles-the-perfect-money/ Entertaining Ideas on the Economy, Markets, Gold, Oil and Investing Strategies. Fri, 10 Feb 2012 23:16:51 +0000 hourly 1 http://wordpress.org/?v=3.2.1 By: Junior Mogambo Ranger # 777 http://dailyreckoning.com/china-stockpiles-the-perfect-money/#comment-6917 Junior Mogambo Ranger # 777 Thu, 30 Apr 2009 23:35:07 +0000 http://dailyreckoning.com/?p=15274#comment-6917 It was only a few short months ago that Yu Yongding, a former adviser to the People’s Bank of China was hinting at the idea that China should diversify into Euros, Yen, OIL and GOLD (two of the three things The Mogambo Guru and JMRs are buying.) Article listed here... tinyurl.com/c4stka Maybe the Chinese have learned from their own history what happens when a nation has a paper currecny backed by nothing but the government's word. (Answer, inflation then hyper-inflation happens.) China was one of the first if not the first nation in the world to use paper money. It was only a few short months ago that Yu Yongding, a former adviser to the People’s Bank of China was hinting at the idea that China should diversify into Euros, Yen, OIL and GOLD (two of the three things The Mogambo Guru and JMRs are buying.)

Article listed here…
tinyurl.com/c4stka

Maybe the Chinese have learned from their own history what happens when a nation has a paper currecny backed by nothing but the government’s word.
(Answer, inflation then hyper-inflation happens.)
China was one of the first if not the first nation in the world to use paper money.

]]> By: axbucxdu http://dailyreckoning.com/china-stockpiles-the-perfect-money/#comment-6892 axbucxdu Thu, 30 Apr 2009 16:48:25 +0000 http://dailyreckoning.com/?p=15274#comment-6892 Quote: "(BTW): recently I’ve seen a article contrarian to the gold bulls arguing that hyperinflationists don’t consider the amount of WEALTH ALREADY DESTROYED, WHICH IS MUCH GREATER THAN THE RECENT GROWTH IN M3. Any comment?" I believe none other than Greenspan himself made the very same argument to defend the Fed's reflation efforts during the 1987 "crash". The liquidity injected then, while a large amount in absolute terms, was a small fraction of the stock market wealth that was extinguished in October 1987. As there was no elevated inflation in the aftermath of that episode, one has to admit that the Greenspank was right...and thus unfortunately added to his halo... Quote: “(BTW): recently I’ve seen a article contrarian to the gold bulls arguing that hyperinflationists don’t consider the amount of WEALTH ALREADY DESTROYED, WHICH IS MUCH GREATER THAN THE RECENT GROWTH IN M3. Any comment?”

I believe none other than Greenspan himself made the very same argument to defend the Fed’s reflation efforts during the 1987 “crash”. The liquidity injected then, while a large amount in absolute terms, was a small fraction of the stock market wealth that was extinguished in October 1987.

As there was no elevated inflation in the aftermath of that episode, one has to admit that the Greenspank was right…and thus unfortunately added to his halo…

]]> By: matt smyth http://dailyreckoning.com/china-stockpiles-the-perfect-money/#comment-6891 matt smyth Thu, 30 Apr 2009 16:45:02 +0000 http://dailyreckoning.com/?p=15274#comment-6891 Hey Tom, Imagine an investor buys stock for $10k. To receive his shares, his broker transfers $10k of money from his account to the seller’s. The seller now has $10k, the buyer now has shares. The money simply changed hands. Then a stock panic hits and the shares plunge 50%. The investor’s fear gets the best of him so he frantically liquidates these shares for $5k. A new buyer’s broker transfers $5k from the buyer’s account to the investor’s. Did the investor’s original $10k of cash get destroyed in this stock plunge? Hey Tom, Imagine an investor buys stock for $10k. To receive his shares, his broker transfers $10k of money from his account to the seller’s. The seller now has $10k, the buyer now has shares. The money simply changed hands. Then a stock panic hits and the shares plunge 50%. The investor’s fear gets the best of him so he frantically liquidates these shares for $5k. A new buyer’s broker transfers $5k from the buyer’s account to the investor’s. Did the investor’s original $10k of cash get destroyed in this stock plunge?

]]> By: tom http://dailyreckoning.com/china-stockpiles-the-perfect-money/#comment-6883 tom Thu, 30 Apr 2009 15:42:00 +0000 http://dailyreckoning.com/?p=15274#comment-6883 I'd like to see some explanation from the Mogambo for the further huge slip down to 883 US$/oz of gold price today. (BTW): recently I've seen a article contrarian to the gold bulls arguing that hyperinflationists don't consider the amount of wealth already destroyed, which is much greater than the recent growth in M3. Any comment? I’d like to see some explanation from the Mogambo for the further huge slip down to 883 US$/oz of gold price today.

(BTW): recently I’ve seen a article contrarian to the gold bulls arguing that hyperinflationists don’t consider the amount of wealth already destroyed, which is much greater than the recent growth in M3. Any comment?

]]> By: Pablo Zunin http://dailyreckoning.com/china-stockpiles-the-perfect-money/#comment-6846 Pablo Zunin Thu, 30 Apr 2009 02:58:45 +0000 http://dailyreckoning.com/?p=15274#comment-6846 About Chinas reserves of US cash and bonds, whouldnt you say it is not entirely fair that China takes profit of everybodies research and developments and should not be rewarded for that policy. About Chinas reserves of US cash and bonds, whouldnt you say it is not entirely fair that China takes profit of everybodies research and developments and should not be rewarded for that policy.

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