And here I thought the math of negative interest rates was tough.
Speaking of getting confused, this piece is by SchiffGold which I assume is Peter Schiff rather than Congressman Adam Schiff, although the latter does have that slightly maniacal look about him that you see in the die-hard gold salesmen:
From ZeroHedge:
This summer, Peter Schiff and Jim Rickards discussed the possibility of $15,000 gold. In a recent interview. economist Rafi Farber took this line of thinking to the next level, arguing the dollar price of gold could eventually hit infinity – meaning simply that the value of the dollar will go to zero.....
But before we even get into the maths of dividing by infinity the author makes a very problematical assertion:
....What most people still do not understand, even gold bugs, is that even today, right now, this second, gold is literally money. When you buy a carton of milk at the supermarket, you are not buying it with dollars or euros or yen or whatever. You are buying it with a gold intermediary called a ‘dollar.’ Dollars only have value right now precisely because they can still be exchanged for some (ever smaller) amount of gold.”....MORE
Ya gotta understand your numéraire. Here's a post from 2013:
"Bitcoin Is No Longer a Currency"
It never was a currency. It was always quoted as "dollars per Bitcoin" not Bitcoins per dollar".
Swiping a line from the Wikipedia entry for "Numéraire":
...If a store sells 1 can of soup for $1.20, the numéraire is dollars. If the store would buy $1 for 5/6 of a can of soup, the numéraire is cans of soup. Trading a can of soup is simpler than trading fractional cans of soup, so most stores use a numéraire of money, which has fractional units....
The numéraire was the whole point of my comment on the FT Alphaville article "Debunking goldbugs":Here's a quick hit (and excellent link) from Kitco:
Are you quoting rocks per dollar or dollars per rock?As long as gold is quoted as dollars-per-ounce it is the dollars that are money, not the gold.
Or the Bitcoins.
Dollar Strength, Weakness and the Price of Gold: A Primer
When the US Dollar gets stronger, it takes fewer dollars to buy any commodity that is priced in $USD. When the US Dollar gets weaker it takes more dollars to purchase the same commodity.
The price of all US Dollar denominated commodities, like gold, will change to reflect the fact that it will take fewer or more dollars to buy that commodity. So it’s quite possible, in fact it’s almost always the case that a portion of the change in the price of gold is really just a reflection of a change in the value of the US Dollar. Sometimes that portion is insignificant. But often the opposite is true where the entire change in the gold price is simply a mathematical recalculation of an ever-changing US Dollar value.
When the dollar gets strong, gold appears to go down, and vice versa. That accounts for part of the fluctuations that we see in the value of gold.
The other part is an actual increase in the supply or demand for gold. If the price is higher when being measured not only in US Dollars, but also in Euros, Pounds Sterling, Japanese Yen, and every other major currency, then we know the gold demand is higher and it has actually increased in value.
Consequently, if gold is higher in US Dollars while at the same time cheaper in every other currency, then we can conclude that the US Dollar has weakened, and that gold has actually lost value in all other currencies. But the price, because it is being quoted in $USD will be higher and give the illusion of gold becoming more valuable. In such a case the devaluation of gold, due to increased supply on the market, is camouflaged by a weakened US Dollar.
Our feature on kitco.com breaks the change of the price of gold into 2 components. One part shows you how much of that change can be attributed to US Dollar strength, or lack of it. The other portion is indicative of how much the price changed as a result of normal trading. Interestingly whatever changes happen to the price of gold as a result of US Dollar strength/weakness also occurs to every other US Dollar denominated commodity by the exact same proportion.
And for infinity, if interested, read "Georg Cantor (1845-1918):The man who tamed infinity" (33 page PDF)