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December 20, 2019 | Understanding: ‘Price’ vs. ‘Value’! The Difference!

Donald B. Swenson: Born January 24, 1943, Roseau, Minnesota. Graduated H.S. 1961, Moorhead High, Minnesota. Graduated College 1968, Moorhead State University, Minnesota. Designated member of Appraisal Institute (MAI), 1974. Employed with Western Life Insurance Company, 1968 – 71; Iowa Securities Company, 1971 – 73; American Appraisal Company, 1974 – 81. Part-time teacher/valuation consultant/bartender, 1979 – 2008 (taught workshops at Waukesha County Technical Institute, Wi. and Madison Area Technical College, Wi.). Retired 2008 (part time teacher/blogger), AZ. Self educated economist/philosopher/theologian:

Image result for the value of gold is different from the price

‘Value’ and ‘Price’ is now an issue to consider. The difference is HUGE!

What is the ‘market value’ of my/your home? Is ‘value’ inherent within the bricks and mortar of a property? Is ‘value’ objective or subjective?  Let’s explore the difference between PRICE and VALUE for this missive. I watch the ‘prices’ of key commodities (oil, gas, gold, silver) daily. I notice the difference between these concepts (price and value) as I invest in our markets. Let’s think on these concepts to discern the differences.

Today, PRICES are generally not negotiated via people in a marketplace (with a few exceptions). Prices are stored within our computers and various algorithms are used to create prices for select commodities and most products. Oil prices are important as these prices set the foundation for most units of production. Gas prices are key to transportation and our futures markets set these prices daily. Food prices are derived from farm products which are traded on our electronic futures markets.

Basically, we now live with a computer driven marketplace where ‘prices’ get determined by traders and their computers. Traders use emotionless algorithms to monitor, control, and manipulate select prices as they trade these markets. Have you noticed how our central planners (often called the Plunge Protection Team) monitors, controls and rigs our electronic stock markets our gold/silver markets? A few traders with high frequency computers can program algorithms (via a source code) to determine select ‘prices’ of key commodities. It’s all done electronically via the computer.

I watch the silver/gold markets daily and I have noticed how these markets are controlled and rigged daily. PRICE is key to all trades. PRICE is what traders watch prior to making their trades and investments. The flow of prices can be watched, monitored, and changed via computer algorithms (using a pre-programmed source code). Have you noticed how the spot price of silver/gold gets SLAMMED on a regular basis? Who is ‘slamming’ these prices and why? How is this being done to affect PRICE?

What happens is that our Plunge Protection Team (and/or their proxies) use algorithms (sourced with a code) to trade key commodities to control and manipulate the ‘prices’. PRICES are now determined by our computers (not by people negotiating these prices). The OPEN OUTCRY system (for determining prices) has been abolished so that all our prices are now changed via electronic means. Computers monitor, change, and manipulate key prices daily in real-time. Watch the ‘tick’ charts for regular ‘slamming’ of the gold/silver/oil prices. It’s done daily so as to control these PRICES.

The culprits today are not real traders (people) but programmed algorithms which operate independently via their source codes. A pre-programmed algorithm can execute trades for buying/selling 24/7. Prices are then determined by these programmed algorithms which can act independently of real traders (people’s emotions). The emotion of trading (to determine price) is eliminated now that computer algo’s determine our PRICES. But what is the difference between PRICE and VALUE?

My house, car, oil, gold, silver all have a subjective ‘value’ given to them by traders, investors, lenders, buyers, and sellers. VALUE, however, is not the same as PRICE. Value is subjective and operates within us (our subjective consciousness). We all assign a VALUE to items traded in the marketplace. But this VALUE may be substantially different from the PRICE which is determined by emotionless algorithms. Let’s think of this commodity called GOLD for our example. It’s our historic money for all markets.

Gold is traded daily and the spot price is determined by computer algorithms daily. At this moment the spot price of gold is $1478/ounce and silver is at $17.17/ounce. These PRICES are not negotiated by people in a marketplace. There is no OPEN OUTCRY system used to create these spot prices. What is used are computer algorithms which then create prices within our computer screen. Algorithms can use a pre-programmed source codes to trade these precious metal markets. This source code executes trades on our futures markets as electronic contracts are purchased. Price then results from the trades.

Electronic contracts can be purchased to short a key commodity (say oil, gold, silver) to prevent any significant change in the PRICE. Algorithms can trade 24/7 to bracket a PRICE of these key commodities. Have you noticed how the PRICE of gold/silver are bracketed, then slammed, then allowed to increase briefly and then slammed again and again to maintain the PRICE (within a select range). All this is done via programmed ALGORITHMS (which trade these markets). Who is behind all this rigging of the gold/silver prices?

The subjective VALUE of gold could be multiples or what the current PRICE is allowed to show on our computer screens. The subjective VALUE of silver/oil/copper, etc. also could be MUCH different from the PRICE which gets revealed within our computer driven markets. Price is how determined (mostly) by algorithms which trade without any emotion or human input. The algorithms are sourced with a code (pre-programmed) to execute whatever the QUANT (who programs the algo) desires. We live with manipulated PRICES (derived via algo’s) and then think with our subjective mind about VALUE.

I own a stock which has some 22 million ounces of gold in the ground (documented). But the stock trades at less than $1. The VALUE of the gold is ignored (mostly) as algorithms are used to determine the PRICE of this stock. Since this stock price is manipulated by algorithmic trading it does not reflect the real VALUE of the underlying gold (in the ground). The stock price can be manipulated via algorithmic trading (daily) to prevent any increase in its PRICE. This happens with numerous gold/silver stocks today. Prices are suppressed and VALUE is not truly represented.

When the emotions of traders determined PRICE (via human negotiation) then VALUE and PRICE were more similar. Human emotions would change the PRICE in the marketplace. The OPEN OUTCRY system was this system where human emotions were allowed to flourish. Today, emotions are eliminated as machines trade our markets electronically. Algorithms get pre-programmed with source codes and this allows PRICES to be manipulated, rigged, and controlled. All our markets are now RIGGED!

We live with manipulated PRICES today for most key commodities. Gold is manipulated. Silver is manipulated. Oil is manipulated. Gas is manipulated. Any commodity can be manipulated if our Plunge Protection Team (our central planners) desire this result. We live with rigged and manipulated STOCK markets and anyone with some wisdom can discern this situation. Our central planners can RIG these markets daily via their computer trading strategies. PRICES can go up and up even as VALUE goes down (in the minds of many).

Value and Price are now much different. We need to THINK about this issue to discern what is happening within our markets. VALUE is subjective and PRICE is determined by algorithms. Is any of this producing valid/logical markets? I don’t think so. All is RIGGED by traders operating behind closed doors. Central planners run our system today. Free markets are history and Capitalism is history. Watch our politicians as they subjectively perceive this reality. Why is Socialism now being promoted? Have a great Holiday Season and watch for major changes in 2020. I am:

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December 20th, 2019

Posted In: Kingdom Economics

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