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Thread: Price is what you pay, but Value is what you get ...

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    Default Price is what you pay, but Value is what you get ...

    a 'wake up call' about economic fundamentals , and the potential pitfalls of thinking of the US dollar as an accurate measure of 'value' from

    (snip)"Price is what you pay but value is what you get. During the Great Credit Contraction capital is seeking not only the safest assets but also the most liquid.

    Market liquidity is a business, economics or investment term that refers to an asset’s ability to be easily converted through an act of buying or selling without causing a significant movement in the price and with minimum loss of value."(snip)

    (snip)"The Great Credit Contraction, an economic climate change from an inflationary summer to a deflationary ice age, has barely begun. The remaining liquidity in the market is largely illusory. Residential real estate, commercial real estate, the major stock markets and even the banks are almost all zombie institutions anchored to fraudulent financial statements that are preventing the needed healing liquidation. The unemployment situation is escalating out of control and The Greater Depression is wearing on people and psychology is being changed. Earnings are collapsing and dividend to earning payout ratios are unsustainable. Meanwhile the monetary metals appear poised for a significant rise as the FRN$ continues evaporating.

    Because there is no intelligible answer for what is a dollar therefore it is an unreliable instrument for performing mental calculations of value. This next crash which appears imminent but could take a while to materialize because of manipulations will likely see the DOW fall from its current 9.5 ounces to about 5 ounces of gold and the S&P 500 sliding from its current 1.3 ounces of gold to about 0.85 ounces."(snip)

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    Default Re: Price is what you pay, but Value is what you get ...

    What is an effective standard of value? A currency or a commodity?


    BTW an inflationary period is always follwed by a deflationary period. The current one is just bigger than average because of lack of regulatory oversight. Probably because executive branch people were TOLD not to do their jobs.
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    Default Re: Price is what you pay, but Value is what you get ...

    What is an effective standard of value? A currency or a commodity
    Given that virtually every currency in the world today has zero backing by anything except a politician's promise that future taxes on its citizens will be able to pay off gov't bonds issued in those currencies, currencies don't measure anything except the speed at which the individual gov'ts have decided to run their printing presses.

    Commodities aren't an accurate measure either, since their 'value' can be changed by the actions of speculators without actually requiring the buying or selling of the commodity itself (i.e. naked shorting, piling into futures contracts). However, highly demanded commodities like oil or copper, by default, are better yardsticks of 'value' than currencies. Well, at least that's the opinion of the Chinese, who are 'quietly' selling their US dollar denominated treasury bonds to purchase commodity stockpiles !

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    Default Re: Price is what you pay, but Value is what you get ...

    Constant currencies, such as 2008 dollars, are the most accurate measure of value, when comparing things from two different times.

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    Default Re: Price is what you pay, but Value is what you get ...

    ^^^ well there are a variety of 'valuation' methods available to analyze comparative historical financial data well after the fact. But none of these methods can accurately measure changes in the 'value' of a particular currency in the short term. Then again, the same can be said of commodities.

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