Which comes first gold at $1500 or $3000?

Have you seen urban China recently? The last time I drove through suburbia Shanghai it totally made me feel like I was in a Borg cube. THAT is NOT the way humans are meant to live.... or at least I hope to hell not!

Please Register or Log in to view the hidden image!

Please Register or Log in to view the hidden image!

It just goes on and on and on ... ... ...

 

Log in or Sign up to hide all adverts.

That POV is common in US now but will be much less so when gasoline is more than $10 / gallon as high-rise urban living makes everything much more economical - often only an elevator ride to shop or work with less than two blocks walking*. China is not making the US suburban sprawl mistake, but preparing for the high energy cost era.

There should be many small parks (trees, fountains, etc) within short walking distance too. The photo of some Chinese high-rises I posted some years ago had tree lined streets etc and first two levels were only shops and bars etc. I think your photo also shows tree lined streets.

I live on 14th floor of 22 floor building in a secure complex of 6 similar buildings that surrounds our private park with fountains in small ponds,** flowers and jogging or walking path thru the trees. I would guess that park area is about an acre and is 50% of the complex. Each floor has 2 or 3 apartments, say 2.5 for average. With three people average to an apartment, that is 6x22x2.5x3 = 990 people living on about two acres. Say 450 people /acre as people move in and out all the time.

My wife knows at least half the people in our building but I know none (in part because my Portuguese is just fair) - I have greater privacy than when I lived in typical US neighborhood on 3/4 acre lot and had to be pleasant to others out cutting their grass etc. Brazil is less safe (I am almost sure) than China so I don't leave the complex after dark on foot and tend to drive thru red lights (after careful looking) when I must go to party or a store as robberies happen at stop lights.

I like living in this complex -no problems to fix or need to be sociable when I don't feel like making small talk with some neighbor etc. Jog or fast walk most nights in the park 15 or 20 minutes just prior to shower and bed.

* Residential only zoning is one of the dumbest ideas I know of. You should be able to walk or bike to more than half your daily needs.

** The largest has two small stone walled islands with a tree or two on them. I don't know how they got there, but some quite loud frogs help pace my nightly walks. It is spring here - I think they are males calling for mates.

 

Log in or Sign up to hide all adverts.

What are a couple or so good websites with pics of new China? I enjoy reading and looking at pics of this type of stuff.

Thanks!

 

Log in or Sign up to hide all adverts.

I read front page every day here:
http://usa.chinadaily.com.cn/
and typically two or three of the links I find there. Lots of pictures and good facts in text but often pictures will only post for a day or two.

 

I often hear the argument that it's better for providing 'services'. Maybe that's true. It's also is much much easier to control large groups of other humans when they're all crammed into a nice little space.

You won't find the CCP living in those cramped borg-like apartments. They live in nice villas or ultra plush highrise in the city.

I was in Shanghai and Nanjing and those massive (utterly, amazingly humongous) apartment complexes are not nice on the eyes. They go on and on and on for kilometers and kilometers. You can drive for 20-30 minutes on a freeway winding through massive apartment complexes and there's no end in sight. It literally feels like you're inside a Borg cube. Any trees on the street level would be dwarfed by these monstrosities. I couldn't see any fountains, but, admittedly the city exists under an ocean of haze and smog - there may some tiny ones down there ..... somewhere.

These apartments ARE going to become HUGE housing slums in the future. It's the way it always goes. Even in ultra-fastidious Japan the Apartments do get old and run down and start to look like shit.


Anyway, that's the way things are in China and perhaps some do like it that way (or at least like it more than on the family farm)? I know a lot of Chinese do NOT like living that way because I know a lot of Chinese that live outside of China and they complain about how ugly everything is now and how there's way way too many people.

My point is more to the State run mis-allocation of funds. I do see this as an Asian Century, but, China IS going to have huge downs that come with the ups. Is 2014 one of them?

 

If by "control" you mean their physical movements, yes. Prisons designed for that are always with small cells enclosed by high walls etc. - High density confinement.

If by "control" you mean what the people think and want, then the opposite is true. Then the government will prohibit groups gatherings, limit their ability to exchange ideas, and brain wash them with state generated propaganda in the their newspapers and TVs. etc.

If 1000 people all live in one large building, use the same elevators, the same recreational areas, a small near by park, the same swimming pool, the same tennis courts, etc. stopping them from exchanging ideas and controlling what they think is much harder than if they all lived separately on 500 acres (0.5 acre lots).

IMO, Americans are quite controlled in their thoughts. I.e. completely convinced that the "American way" is best. For example that their "for profit" medical system is best despite costing twice as much and giving two or even three years less life expectancy. Or that their educational system is the world's best* despite consistently producing lower scores and higher illiteracy rates than others, especially in math and sciences. Perhaps only the French are equally arrogant. A good example of arrogance is the Vietnam War: Despite more than a century of experience in "French Indo-China” and their soldiers speaking the language of the educated Vietnamese, the French were defeated by the Viet Cong. So with great self confidence and none of these important advantages, US took over the conflict and expected to win in a year or two at most.

If you read foreign press as I do, you will note there is considerable 1984 "new speak" in the US press. For example the US Army is trying to "liberate oppressed people" "spread democracy" "improve living conditions" "stop the terrorists" etc. but only in lands rich in oil. Most Americans believe these claims.

Yes, that is true of the wealthy everywhere. They feel (and are) more secure if they ordinary income and poor have no physical access to them (or their country clubs, etc.); however, very rarely do they chose to live alone, isolated from others.

Man is by nature a very social animal. Depriving him of contact with others is a punishment, feared even by prisoners. Rich, poor, and in between are more comfortable with lots of contact with others of their same social/economic class and ill at ease when forced to be with those who are very different. A large part of race ethnic and religious friction has this human characteristic as its foundation.

Tell us more of your first hand knowledge. Most of what I know has been filtered by China Daily to reflect the "politically correct" POV. BTW, will you translate into English the phrase under your name and tell where you grew up, went to school etc. so I know more of how your eyes filter things?

Nothing last forever, so yes even with good maintance they need to be torn down eventually; however if well made and maintained they can server for more than 50 years.

I tried to find the age of high rise I live in - it is at least 40 years old. The worst problems have been that its water distribution pipes were originally iron. Fortunately the distribution is in the walls of the common central stairs and most (all I think) have now been replaced with copper pipes. Also there is only one water meter for the entire building so management's notes usually mention the need to conserve water and once every year or two they will come to see if you faucets shut off well etc.

These are problems in most modern societies. The main advantage I see of China's economy is that the time horizon for infrastructure building is several decades, no benefit before the next election is required, as in the US.

One can "mis-allocate" / mis-manage / infrastructure capital both by too short a time horizon and by not spending. For example not keeping road, bridges, electrical systems, water systems, etc. in good repair, so cars break suspension in pot holes, bridges fall down, blackouts occur, more than half of the drinking water leaks out, etc.

I know too little about China and much of its infrastructure is relatively new, so do not know which society mis-allocates capital more. I am concerned that many US factories (especially the basic ones like steel industry) railroads are not very modern or well maintained. Also, think that less could be spent on rock concerts, NFL ball games, etc and more on upkeep of the infrastructure which would give our children some benefits instead of debts. What benefit remains from the millions spent on the 2007 rose bowl game and parade?

My expectations for 2014 have been posted for nearly 6 years. A run on the dollar quickly followed by worst ever depression in US and EU. China and its suppliers of raw materials, food stocks, and energy will experience a year (or two at most) of recession or slowly of their economies. Brazil, Australia, Canada, and some oil suppliers (but not Norway) will effectively become "economic colonies" of Asia. - Lose much of their own manufacturing capacity and buy those items with their earning on exports to Asia, especially China.

* It "aint" the best educational system but could be greatly improved at zero cost this way:

part of post here: http://www.sciforums.com/showpost.php?p=2616237&postcount=50

 

I think the next few years will be interesting to say the least

Please Register or Log in to view the hidden image!

RE: My filter
I grew up in a very small white trash trailerpark in Michigan (one of the first I am pretty sure - only 30 trailers). For a short period of my life I lived in Flint - East Side (near Angelo's Conny Island**

Please Register or Log in to view the hidden image!

other times I grew up in the countryside. I somehow got a full-ride scholarship to attend the University of Michigan, from there I moved overseas, did a PhD, lived in Australia, went back to the USA, went back to AU, went to NZ then AU again, then USA, then Japan and triangulated therein

Please Register or Log in to view the hidden image!

Similar to you I study the brain - for me it's the subventricular zone of the lateral ventricles. My research isn't that important though

Please Register or Log in to view the hidden image!

My visits to China were through invitation to present. I met the director of the SIBS (Shanghai Institute for Biological Sciences) as well as a Japanese who was asked to be director of an absolutely massive biotech/pharma complex - hiring Chinese PhDs at 7-10K a year ... why not??? BUT, as things go, the Japanese turned down the job as Director and went to Sony (he said Chinese probably wouldn't be happy to work under a Japanese at that level and he wouldn't be effective) and so I didn't work as a Research Supervisor in Shanghai (I would have had literally hundred of PhDs under my direction - that could have been fun). While I was in China I went to Nanjing and stayed with my Chinese friend for a week and then went to Japan.. but, the Pharma I was hired at was bought and sold off and so onward from there back to Academia .... as we do

Please Register or Log in to view the hidden image!

That was in 2008, I haven't been back since then. I think China IS going to do very well over the next few decades and then reach a level somewhat like Japan is now. Just like Japan, I expect some massive popping sounds as bubble burst affluence all over everyone's face. I do not like Shanghai as a city to live in - too many people. Those apartments are literally like the Borg. The problem I see with China is things are directed from above instead of grown "organically" from below. So you have cabbies that own 5 apartments in Shanghai as they go in on the ground floor, while others can't afford one at all. My friend owns 9 apartments all over China (mainly because of his mother who was China's first female PhD in some field of Chemistry). It's really crazy over there, just like the USA (maybe worse). Everyone wanting to get THEIR five apartments. Well, it's not happening anymore (or I don't think so). So, that's a bubble waiting to be pricked. What will happen? Will it pop? Will it slowly deflate? Will the State pump more air into it? Who knows?!?! What I do know is it's not normal to own 9 Apartments in such a short period of time.

Secondly, Chinese are not like Japanese (from my experience). They don't take care of property in the same way. I don't want to generalize but they're just not as concerned with "clean" in the same way. Japanese are out on the roads at 5am sweeping in front of their house. You just won't see that in China. Take this small example (anecdotal): That friend who owns 9 apts was visiting, while he was in my livingroom he was chewing on his thumb nail. He then spit it into the air and somewhere onto my floor - not even thinking twice. I said: Hey Hey! Then he realized what he did and picked it up. Ever go to China Town versus Little Tokyo? It's just completely different. We were once visiting China Town in Kobe and my friend said: THIS is NOT a China Town, it's way way too clean (he's Chinese). Reminded him of Disney Land China Town

Please Register or Log in to view the hidden image!

In Sydney if you to St Leonards over in the "North Shore" (aka: expensive side of Sydney) you'll find a bunch of newly build apartments that are totally falling in on themselves. One balcony I saw had a massive crack right down the center of it! These apt are only 5-7 years old. The whole half of this balcony was tilted downward from that crack onwards. Most of the trim had fallen off the back side of the building (most of these Apt are owned by Asians who have no idea what crap they bought). Mind you, this was in Sydney! Imagine what the apts are like in China in 10 years?!?

I mean, I just imagine it's as bad or worse. They don't make them like they did 40 years ago is my feeling.


But, who knows? Maybe the bubble will go on forever??? I don't think so, but you never really know what's going to happen.


**In MI we use BEEF the way the Gods intended a Coney Dog to be made: steamed bun, dog (beef) American style mustard, dry chilli with extra ground beef, topped with uncooked onion chopped thick ... ....

 

On the other side of the coin: I'm interested to know IF we don't have anymore QE (ie: QE4... QE3 was buying Eurotrash) then wouldn't there actually be a reduction in the total money supply...? And so gold could come crashing down to <$350/oz?

I heard somewhere that China has reduced their gold buying ... that's something to take note of.

Also, look at the support Ron Paul is getting... maybe 10-12% of the total electorate. Let's face it, Americans are not interested living anywhere but in the fiat world, whether they understand how it's enslaving them or not. Which means, even after the purported collapse - we're going to (one way or another) be living in a fiat world....

I suppose what I'm saying is, this poll should include votes for a potential deflationary economy in 2012-13.

 

Post 22, in part, replying to above:

This video tells some facts that expose how easily price of oil could in a week go above $500/ barrel:
http://www.insidersstrategygroup.co...832&s=574958&u=40779324&l=357823&g=201&r=Milo
It is long and ends promoting a book you can buy. Just see it long enough to get to the map showing were Saudi Oil mainly comes from and the fact the dominate population in that area is Shiite, who are increasing angry that Saudi government is helping the Sunni minority ruling Bahrain kill Shiites and could blow holes in oil pipelines. Note supply and demand are very closely balanced. Loss of 2% production when Lybia stopped exporting caused a 30% increase in oil price even with Saudi efforts to quickly boost production.

Even without pipeline destruction, the 15.1% annual growth of China's oil demand (2011 vs 2010) etc means oil (and then gasoline) is soon headed rapidly up in price. Saudis guard their production capacity more tightly than they would guard an A-bomb, but I think they have little spare now. Their production has not increased, despite higher prices for more than three years.

I think they seriously damaged their production capacity from existing wells back when the first Bush "leaned on them" to punish Saddam for selling oil not priced in dollars. I.e. they pumped so much that price of oil hit $10/ barrel and was less than $15 for months, until Saddam changed back to dollar pricing.

Oil is in porous rocks and if taken out as fast as possible these rocks compress and block flow from more distant still saturated rocks. A well, pumped too fast, has very limited production capacity. New wells are required to increase capacity, even if you still have lots of oil in the ground. Thus, if this "Saudis have damaged wells" POV is correct, I think only one, or certainly two, large pipelines damaged in Saudi fields could send oil price above $500/ barrel in a week.

 

Michael: Thanks for the personnel background data.

It is already deflating under control. Furthermore, calling it a bubble as is commonly done is somewhat misleading. Even in highest priced cities the cost / square meter is only 15% of what it is in Paris! Few say Paris has a bubble. I explained a major part of why the prices of homes are coming down now here:

and you provided some facts from friends supporting that many owned several apartments as investments. Now more investment opportunities are opening so those with many apartments may end up eating some loses as money flows into alternative investments. In the US, many are eating housing loses too, but that is not much to do with more attractive investments in the US pulling money out of housing. More to due with excessive building - over supply over hang, which was 8 million homes and still is 4 million more than demand (buy those who can pay), not to mention the "shadow inventory" - homes that owner would like to sell but does not put on the market as knows he would need to take a loss to sell it.

 

Perhaps I guessed correctly at end of post 17 above:

" Mainland China imported almost 102.8 metric tons in November, valued at about $5.4 billion, trade data on Jan. 11 showed. ... Bullion rallied 6.2 percent since plunging to within 1 percentage point of a bear market on Dec. 29...

“The thing that’s caught people’s minds is the massive increase in Chinese buying,” said Ross Norman, chief executive officer of Sharps Pixley Ltd., a brokerage handling physical bullion in London. ..."

From: http://www.bloomberg.com/news/2012-...s-most-bullish-in-two-months-commodities.html

Billy T comments:It may be a year or two yet before we know if my really far out on a limb guess / prediction is also correct. I still think when China is ready to see dollar collapse, it will back RMB bonds with gold but for central banks only.* That will make the RMB bond the preferred form for central banks to hold their reserves in. Both the central banks and China selling dollar paper will crash the value of the dollar - nearly destroy it as a reserve currency.

Then China, not the US, will be able to pay for imports it needs with printed pieces of paper. That alone will more than compensate for the loss it takes on dollars still held in its reserves, but fact that US & EU will be in deep, long lasting depression unable to buy much oil etc. will help China too as then they will be the main buyers of oil etc. (paying in the then preferred RMB when oil etc. sellers do not accept rapidly declining value dollars). Buying without the price being nearly as high as if US & EU were in the market buying too.

*China as the world's largest producer of gold for last three years and now also world's largest buyer (leaving Indian in distant second place) can easily back its bonds with gold, because they have not many outstanding and control the rate of new issue but more importantly very few central banks will actually ask for the gold. - They don't now and will not in the future as gold pays no interest and is a cost to store.

 

"... China's appetite for gold continued to grow at a rapid pace in 2011, with investment in gold bullion rising 45% to 258 metric tons, and jewelry fabrication rising 16% to eclipse the 500-ton mark for the first time, metals consultancy GFMS said Tuesday. ..." From: http://www.nasdaq.com/article/precious-metals-highlights-top-stories-of-the-day-20120117-01586

billy T comment: Interesting that the world's largest producer of gold imported or released from production to investors* more than 758 metric tons of gold in one year. How much more China produced but did not sell to investors* is unknown, outside of China.

This strengthens my belief, posted a couple of years ago, that China will soon (a few years more when China will want the dollar to collapse**) back its bonds with gold for central banks to encourage them to hold RMB bonds instead of dollar bonds in their reserves.

* In last part of 2009 China allowed its banks to open Gold accounts to Chinese. I.e. instead of X RMB the account has Y ounces of gold. They have been very popular, especially now that investing in real estate (the traditional Chinese investment) is giving negative returns. China can, as the US did, "confiscate" this privately owned gold, paying what ever Yuan/oz it wants to. (The US paid only $35/ oz when it "confiscated" privately held gold.) Surely an important reason why China is now letting the Chinese deposit Yuan into gold accounts is that removes them from circulation to fight inflation, which has come down for peak of 6.5% to only 4.5% in last year.

As I understand it, the Chinese cannot actually get the gold in their gold account, only its value in Yuan when they take it out. Thus when China does not need to peg the RMB to the dollar (Is more of a domestic than export economy) the RMB may appreciate 30% and that mean they will get ~30% less RMB when closing their Gold account. That appreciation will also greatly reduce inflation.

** That sends US & EU into deep long lasting depression, and effectively removes them as competitors buying oil, etc. China will absorb the ONE TIME loss on the dollar bonds it still holds*** for this EVERY YEAR SAVINGS on cost of its essential imports.

*** Despite its positive trade balance with the US, China as been reducing the total face value of US bonds held for at least a year by buying more value in real assets with dollars (minerals, food stocks, energy, lumber, coal, etc.).

 

Please Register or Log in to view the hidden image!

The red line is supply from gold mines, and the blue line is gold fabrication demand.

"... Morgan Stanley's numbers show that fabrication demand for gold is rising, and estimates indicate that it should soar in the years ahead. The company resolves this by saying that investment demand is going to go down.

With all due respect to Morgan Stanley, I believe it has that part of the equation wrong, and the only way this demand squeeze will be resolved is through much, MUCH higher prices that force fabricators to look for substitutes.

After all, when the price of an investment — whether it's gold or stocks or anything else — goes higher, do investors want less of it? Heck no! They usually want more — much more!

And this is exactly what I think we're going to see in gold — a rip-roaring rally that sends gold prices much, much higher. ..."

From: http://www.uncommonwisdomdaily.com/the-gold-chart-that-will-knock-your-socks-off-13703?FIELD9=3 Today´s article by Sean Brodrick of "uncommon wisdom"

Billy T comment: I agree with him, not MS, especially as China is buying at > three times the rate of last year, when it was the world´s largest buyer (as well as the world´s largest producer of gold, for last five years). The huge and rapid increase in jewelry, etc. demand is exactly what one should expect with four or five times more than the entire US population entering the "middle class" in the BRIC countreis alone in the next few years shown on the graph; however that demand will be self limiting due to price rise it produces.

I.e. the blue curve will not reach the peak shown for 2017 as only the very rich will be buying gold jewelry when gold is ~$6,000/oz. With fiat money presses running 24/7 all over the western world, the "investment demand" will soar and force the blue curve back down, lower than it is today.

I.e. I believe MS is putting out this nonsense that "investment demand" will fall is because they probably are net "short" in gold and want to talk the price down - much like they were short on silver and did help push it down with more short sales.

 

The more fiat money made, the more of it will be required to buy an ounce of gold.
(This is really quite simple, but excursions made by large short sellers can and do occcur. They hope to profit by scaring others into selling at lower prices to them to cover their short postions. If you want to help screw these market manipulators, take delivery and store long term for big nominal profits. I.e. give Morgan Stanley, Goldman Sucks, etc. a lesson in pain.)

Please Register or Log in to view the hidden image!

"... The global money-printing spree over the last three years has been nothing short of colossal: $500 billion in China, on top of $1.85 trillion in the US-which may not be finished-and $2.6 trillion more is required in Europe, according to economist David Malpass. Malpass still worries about "an implosion" of the European banking system, which is almost four times larger than its US counterpart. ..." This quote from: http://www.moneyshow.com/investing/article/1/Special-26482/The-10-Must-Know-Market-Forces-for-2012/

 

"... China's gold output reached a record high of 360.96 tons in 2011, cementing its top global ranking for the fifth consecutive year. Statistics from China's Ministry of Industry and Information Technology also show that the country's gold mining sector continued to expand in January with a rise of about 3.69% from the same month a year ago. China's increasing gold output remains nowhere near the country's huge appetite for consuming gold, however, which rose to roughly 800 tons in 2011. ..."

Billy T comment: A small part to the fiat money "printed" has been used by central banks to buy gold. They too think it is worth more than paper.

 

Somehow the term "fiat money" doesn't sit well with me.

A paper dollar (or, increasingly, an alphanumeric entry preceded by a dollar sign) simply represents your trust that when I give it to you in exchange for something you're selling, that you will be able to turn around and exchange it for a dollar's worth of whatever you need to buy. The amount of paper in circulation is tied to the number of such transactions taking place on any given day.

When a lot of paper money is being injected "hot off the presses" into circulation it represents a health in the economy because it signifies high circulation which usually signifies growth.

For a different perspective on the idea about how money gets its value, check out this story. (Just click on the pic. And yes, that's money.)

Please Register or Log in to view the hidden image!

 

It should as that is what modern economies use for commercial exchange, paying taxes etc. Barter is very rare and few pay in coins with intrinsic worth.

Yes what is used Or at least once was, for non-fiat money is an interesting history. Cows were the money with which to pay for a bride in large parts of the world once. Years of labor were too - several examples of this are mentioned in the Bible. The population of several South Pacific coral (no stones) islands usually used rare shells and direct barter until sailing ships arrived. When they had their cargo holds full of what they wanted, they left the no longer needed balast stones behind. Often they became the non-fiat money.

Sometimes the stones, especially if too heavy for one man to carry, were centrally stored in the open but everyone knew which stone belong to whom.

Much like modern societies electronic transfers, from A to B with nothing physical moved, when A got something of value (a bride or a fishing canoe, etc.) from B with nothing physical transfered by A to B, all knew that certain stone(s) that were owned by A in the central depot was now owned by B.

I.e. stones were like the modern computer bits whose ownership changed but with nothing physical moved.

 

An interesting rational theory on how to value Gold (but it does not consider effect of changes in the "velocity of money" - an increase is like more has been printed or "fear of fiat money") It concludes that until recently price was about equal to its value, but now price > value which is more typical (but, this theory tells other times since 1900 when the price < value, too)

I think the effect of the "fear of fiat money" has been off-setting (compensating) the unusually slow "velocity of money" effect.

BTW, I note we are still waiting for the thread´s question to be answered.

 

Once a stone fell into the ocean and was lost, but, everyone knew there was a stone and it was going to be delivered and so that stone too is 'owned' and transferred from owner to owner without anyone ever having seen it but only having been told tales of it's existence from the cutters who were transporting it. The invisible stone was a step in the direction of what 'money' really is.



As a side note, I read UK Bonds are in a 350 year bubble with US Bonds trailing slightly behind at a couple hundred year bubble. For the Asians buying bonds, the value is derived by our ability to cowtoe to our own god damn government when they shove a gun in our face and tax/steal our labor... ... ....


The next few years will be interesting.

 

The value of money is infused with the alchemy of gold. That is, until Nixon took us off the gold standard. Does anyone know if Fort Knox still has gold bricks? If it does, who owns them?