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  • Subject: Economy question
Subject: Economy question

I am an unjust ban magnet. Thank you, Qbix89, you really are a rogue moderator. I hope you get disbanded soon.

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Moderator notice. This thread is not about politics, it is about economics. If you feel this is too political, then, by all means, feel free to lock this thread.

In the EU Parliament, UKIP leader Nigel Farage said this about the gold reserves.

I'm not too knowledgable on economics, so how would announing the sale and quantity of the sale a year early be a disaster?

Apperently it lowered the price even further, but how and why?

  • 01.02.2013 3:24 AM PDT
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Redacted because OP yelled at me. :(

[Edited on 01.02.2013 3:29 AM PST]

  • 01.02.2013 3:26 AM PDT

Posted by: Kneecap
I keep on getting in conversations with a person who calls me John.


Posted by: ImOnTheDole
I suck at economics.

Here's a cat instead.

D'aww!

  • 01.02.2013 3:26 AM PDT

I am an unjust ban magnet. Thank you, Qbix89, you really are a rogue moderator. I hope you get disbanded soon.

Unjust bans on the main forums: 10
Bans on the main forms: 10


Posted by: ImOnTheDole
I suck at economics.

Here's a cat instead.
Don't de-rail the thread. This is a legitimate question.

[Edited on 01.02.2013 3:28 AM PST]

  • 01.02.2013 3:27 AM PDT
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Posted by: NSCLord

Posted by: ImOnTheDole
I suck at economics.

Here's a cat instead.
Don't de-rail the thread. This is a legitimate question.
Sorry, mom.

  • 01.02.2013 3:28 AM PDT


Posted by: ImOnTheDole
I'm not surprised.

[Edited on 01.02.2013 3:29 AM PST]

  • 01.02.2013 3:29 AM PDT
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  • Honorable Legendary Member
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O o
/¯_____________________
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serious threads require serious related links

  • 01.02.2013 3:30 AM PDT

I am an unjust ban magnet. Thank you, Qbix89, you really are a rogue moderator. I hope you get disbanded soon.

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Posted by: Koolen
serious threads require serious related links

Serious as in don't derail.

  • 01.02.2013 4:36 AM PDT

I am an unjust ban magnet. Thank you, Qbix89, you really are a rogue moderator. I hope you get disbanded soon.

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Could this relate to the stock market on how the price of Gold changes?

  • 01.02.2013 4:42 AM PDT
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Foman is my favorite moderator. <3

I'm at work and have no sound, but from what I know of Nigel he is very pro-gold, anti-Euro.

But to answer your question, gold is obviously driven by supply and demand. Governments routinely do not sell gold, so their holdings are not really considered part of the active trading supply.

By saying they are going to sell gold, they are saying that supply is going to increase. Supply increase = lower prices.

  • 01.02.2013 4:59 AM PDT

Because our money was based off the gold standard and Gordan Brown sold all of our gold for very little.

  • 01.02.2013 5:13 AM PDT

At least I didn't get kil-

They're all in cahoots with Ron Paul, they make a gold standard then boom, all the golds gone.

  • 01.02.2013 5:31 AM PDT

I am an unjust ban magnet. Thank you, Qbix89, you really are a rogue moderator. I hope you get disbanded soon.

Unjust bans on the main forums: 10
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Posted by: A Good Troll
I'm at work and have no sound, but from what I know of Nigel he is very pro-gold, anti-Euro.

But to answer your question, gold is obviously driven by supply and demand. Governments routinely do not sell gold, so their holdings are not really considered part of the active trading supply.

By saying they are going to sell gold, they are saying that supply is going to increase. Supply increase = lower prices.

Are you saying the price of gold is affected by its scarcity on the market, and that by announcing the quantity of the sale and in advance announcing it increased its supply on the market and therefore the prices fell?

  • 01.02.2013 7:17 AM PDT
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Posted by: NSCLord
Are you saying the price of gold is affected by its scarcity on the market, and that by announcing the quantity of the sale and in advance announcing it increased its supply on the market and therefore the prices fell?

Sure. Scarcity drives price, as long as demand stays the same.

This can work in government's favor for setting policies sometimes too - take the US Federal Reserve and their policy of buying mortgage-backed securities.

By saying they are willing to buy, and doing so publically, they say they are supporting the market as a buyer of last resort. People are more confident in buying, demand rises, and security prices rise - which is what they wanted (prop up the housing market).

  • 01.02.2013 7:23 AM PDT

http://i.imgur.com/fsISj.png

Not the biggest fan of Farage, but he's hit the nail on the head with that rant.

  • 01.02.2013 7:28 AM PDT

I am an unjust ban magnet. Thank you, Qbix89, you really are a rogue moderator. I hope you get disbanded soon.

Unjust bans on the main forums: 10
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Posted by: A Good Troll

Posted by: NSCLord
Are you saying the price of gold is affected by its scarcity on the market, and that by announcing the quantity of the sale and in advance announcing it increased its supply on the market and therefore the prices fell?

Sure. Scarcity drives price, as long as demand stays the same.

This can work in government's favor for setting policies sometimes too - take the US Federal Reserve and their policy of buying mortgage-backed securities.

By saying they are willing to buy, and doing so publically, they say they are supporting the market as a buyer of last resort. People are more confident in buying, demand rises, and security prices rise - which is what they wanted (prop up the housing market).
So the price of gold is effectively shared between each ounce, and with more gold becoming available, each ounce costs less?

  • 01.02.2013 7:40 AM PDT
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Posted by: NSCLord
So the price of gold is effectively shared between each ounce, and with more gold becoming available, each ounce costs less?

While I'll hesitate to use the term shared, yes.

If supply is increased, prices in general fall.

  • 01.02.2013 7:50 AM PDT

I am an unjust ban magnet. Thank you, Qbix89, you really are a rogue moderator. I hope you get disbanded soon.

Unjust bans on the main forums: 10
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Posted by: A Good Troll

Posted by: NSCLord
So the price of gold is effectively shared between each ounce, and with more gold becoming available, each ounce costs less?

While I'll hesitate to use the term shared, yes.

If supply is increased, prices in general fall.
Thank you.

  • 01.02.2013 7:53 AM PDT