What is the standard weight measure for Gold & Silver?

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The standard measure for precious metals like Gold & Silver is the Troy Ounce, It is important to remember a troy ounce is heavier than an “ordinary” once. 1 troy ounce is just over 31.103 grams, so a 1kg bullion bar is 32.15 troy ounces.

Below for your convenience is a simple calculator to convert grams to Troy ounces


Grams to Troy Ounces conversions

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Value in Troy Ounces

Math of a credit bubble!

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I was thinking why do people use the terms credit “bubble” or the housing bubble, why don’t people say there is a “credit suitcase” or a “housing wood stack” instead?


A bubble by definition can only grow so big then it will pop, not just open up and vent some excess baggage like a suitcase or topple over top over like an over stacked wood pile but still leaving a base. A bubble shows no signs of stress it just grows and looks fine until one small point in the bubbles wall gives way and bang it pops with a rush of air that has momentum, intern leaving a vacuum resulting in implosion. Then the bubble is gone like it never existed. People think in linier terms but nature operates logarithmically.


It is interesting that to maintain a visually linearly expanding sphere or bubble (Growing in diameter at a constant rate) it actually takes an exponential increase of volume.


For example when you blow up a party balloon your first breath of air makes a impressive different to the size of the balloon, If party goers are looking-on you may feel quite impressed with your own lung capacity but then every breath after that seems to make less and less difference, what’s going on! People may now look away in disgusted at your feeble lung capacity so you blow faster but the balloon grows even slower in-fact it hardly seemed to grow at all just before it popped in your face!


Of course the balloon appears to grow slower over time as the amount of air you blow in with each breath becomes less as a percentage of the growing volume in the balloon. I have actually plotted this out in a graph below:


It is clearly shown below with a logarithmic scale for volume and a linier for bubble diameter:

Using this balloon analogy, if you were to think of the balloon or bubble size as “useful credit” and the substance that fills its volume as money or M3 then two interesting things emerge. One is as already stated: to maintain a linier expansion of useful credit one must exponentially increase the money supply, and the second the larger the credit use or bubble is the less notable each addition will be. Just like with the party balloon, at the end before the balloon pops, a big breath is hardly noticeable.

Of course this works in two ways, for one its harder to maintain a linear expansion of useful credit, but also it allows CB’s to get away with blue murder as 100 billion dollars to pay some bills makes little noticeable difference were as at the start of the credit expansion 100 billion would have been noticed by everyone and would have coursed a big commotion.
In-fact in the end it seems that you can just add as must M3 as you want and it does not seem to make any difference……pop!

But what does actually make it pop? Not shown on the graph above is the anti-bubble, the anti-bubbles volume is also growing at an exponential rate, and it tracks every move of the credit bubble and it can’t be shaken. The anti-bubble is the interest payments on debt.
The Credit bubble must stay ahead of the anti-bubble as if they meet they will pop (If the marginal utility of the credit expansion becomes less than the interest payments it does not work anymore) But it’s getting harder to stay ahead of the anti-bubble and the only way to slow down its gain on the credit bubble is to lower interest rates. But that discredits fiat currencies even more. Increasing the size of credit only brings temporary relief and the anti bubble grows even faster after a short delay.

So what are the different ways the anti-bubble can meet the credit bubble?

If for example a country is in trade deficit, then that expanding bubbles interest payments become a massive burden to the population as they don't have income from a foreign currency bubble to off set it. Thus saturation is eventually reached, that is the population simply can't afford to borrow more., POP! That is because as soon as borrowing stops the assets that were being pushed up backing the borrowing, deflate and it is a very sudden change. Suddenly those assets need to be sold.

 

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