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Linux Flourishes In 200-Year-Old Gold Markets 195

Posted by timothy
from the neal-stephenson-themes-everyhere dept.
tbarkerload writes "H-Online [a spin off of a major German daily] reports on a gold trader managing over 15 tonnes of gold, worth $660m, with a platform built on open source tech. BullionVault operates a 24-7 electronic market in gold bullion open to both retail and professional traders. Their systems handle thousands of daily transactions from both human traders and bots operating through their API. If Linux has reached the world of hundred year old assaying firms, and Swiss vaults buried in mountains, can final world domination be too far away?"
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Linux Flourishes In 200-Year-Old Gold Markets

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  • how much? (Score:3, Insightful)

    by Red Flayer (890720) on Thursday April 23, 2009 @06:19PM (#27695127) Journal
    660 million?

    Pitiful.

    Hey, guess what OS the stock exchanges of NY, London, Hong Kong, Mumbai, Tokyo, etc are built on?

    If you REALLY want to talk about world domination, I'd start there instead of some two-bit (ok, 5.3 billion-bit) gold exchange.
    • Not to mention server!=desktop. I think there's a natural ceiling on the server market. Somewhat larger than we have today, something less than IPV6 addresses available.

      • by fractoid (1076465)

        I think there's a natural ceiling on the server market.

        Five, or thereabouts?

    • Didn't atleast one of those suffer major down time after switching from unix to windows?

    • Re:how much? (Score:5, Insightful)

      by superwiz (655733) on Thursday April 23, 2009 @08:17PM (#27696471) Journal
      But the whole point of the post was that Linux reached something so archaic -- not something at the forefront.
    • by V!NCENT (1105021)

      The NY stock exchange has been Linux for a long time, without any problems... until Microsoft came about a year ago?

      Two major crashes have happened, with only one (the firts one) being a Microsoft fault.

      Microsoft made promotion with it, but due to the two crashes it became a major backlash.

      Now, TFA is about what is possible and proved with Linux. It's not an indicator for how much world domination it has...

  • by DriedClexler (814907) on Thursday April 23, 2009 @06:31PM (#27695291)

    Quick question: Is anyone else buying up physical, in-your-possession gold? Given all that's been going on, it seems like it's virtually impossible for major currencies *not* to get severely devalued. The massive underfunded pension tidal waves, medicare programs, new spending, banks that will be unable to pay back loans...

    I recently bought at Bullion Direct [bulliondirect.com], a few Canadian Maple gold coins. Well, Bullion Vault just got some free advertising, because it looks like they offer a better deal on an ounce of gold. But I think you're best off buying in coin form since you may have some defense in the even the government decides to seize gold; it will probably exempt some small amount for "collector's purposes", which wouldn't apply to bars.

    • by BitHive (578094) on Thursday April 23, 2009 @06:53PM (#27695553) Homepage

      Why not hoard a commodity whose price is more stable? I'm amazed that in this day and age there are still people who think gold has inherent value and will suddenly be the default currency when everything goes Max Max Real Soon Now.

      Let me guess, you bought a bunch of Ron Paul Liberty Dollars from NORFED too.

      • Re: (Score:3, Interesting)

        by mcrbids (148650)

        What is the "price"? Most people think of price in nominal terms, EG: so many Dollars/Pounds/Marks/Sheiks/Yen/Whatever.

        But when the amount of money available on the marketplace fluctuates, then the "price" of commodities fluctuates.

        Gold, as valued in dollars, has fluctuated in price internationally roughly as much as other internationally traded commodities such as oil and iron, indicating that it's not the price of gold that's fluctuating so much as the value of the money used to buy it. On the surface, th

        • Re: (Score:3, Insightful)

          by Trepidity (597)

          Where are the indication that we're seeing stagflation? I see mainly indications of deflation.

          • by fractoid (1076465)
            From the wiki page:

            First, stagflation can result when an economy is slowed by an unfavorable supply shock, such as an increase in the price of oil in an oil importing country, which tends to raise prices at the same time that it slows the economy by making production less profitable.

            Does that sound familiar? The price of crude oil doubled between 2004 and 2008.

            Anecdotally, food and other daily necessities are f**king expensive now compared to 10 years ago, while wages have stayed relatively stagnant. The official inflation figures posted (for Australia) are ~4.5%, but in terms of actual buying power it's much much higher. I earn maybe 1.6x what I earned 8 years ago, but prices for most commodities are up by 2x or more. Despite my higher wage I have less buying powe

            • by Trepidity (597)

              Sure, there's been inflation over a 10-year time span, especially if you have your cutoff in 2008. But stagflation is inflation concurrent with economic stagnation. That, I don't see: since the current major recession began sometime in early to mid 2008, there has been small to negative inflation. The price of crude oil has plummeted by 70% since mid-2008, the price of many food staples is down significantly over the past year (corn down 50%), etc. Where do you see the inflation concurrent with economic sta

              • by fractoid (1076465)
                Well, I have yet to see supermarket-type consumer goods fall in price, but maybe that's just the area where I live. The price of petrol here is determined by the Singapore market, in some crazy scheme to stop our local production being shipped overseas* so transport and cold-storage costs are still high (although it's definitely improved, from $1.50/litre this time last year down to $1.20-$1.30 a litre now). Food is still just as expensive if not more so. Housing is expensive unless you're living 40+ kms aw
      • Re: (Score:2, Insightful)

        by dlaudel (1304717)
        I'm trying to buy gold, too, but it has no "inherent" value. No object in the world has inherent value, just the subjective values due to people's wants. Gold has historically functioned very well as money, is fairly rare (though common enough that anyone could get a bit), and is durable. It is not easily counterfeited either. Thus, people assign a great deal of value to it as a medium of exchange or something to store value. It's not because we all believe it is magical or something, it's because it has
        • by vertinox (846076)

          No object in the world has inherent value, just the subjective values due to people's wants.

          Food and drink has true value.
          Without it, you would die.

          You don't need to eat gold on a daily basis nor use it to fuel the trucks that bring the food to your table nor power the water plants to filter the water and pump it to your tap (or bottled water).

          Beyond that it is more likely subjective.

      • But, it's all shiny?! :S

      • "Why not hoard a commodity whose price is more stable?"

        Hummm... I propose sea water.

      • by lawpoop (604919) on Thursday April 23, 2009 @08:23PM (#27696505) Homepage Journal

        Why not hoard a commodity whose price is more stable?

        Which commodity are you recommending here? What's more portable, has better liquidity, or has better value density? What doesn't corrode or rot? You can take a piece of gold to any pawn shop or jeweler and get money for it -- try doing that with wheat or oil.

        I'm amazed that in this day and age there are still people who think gold has inherent value and will suddenly be the default currency when everything goes Max Max Real Soon Now.

        I'm surprised you didn't know that gold has been the most valuable commodity to any society that could get their hands on it. Why has gold been a universal currency for the past 5,000 years? Gold was valuable to the Incas, who had no connection to the east or west, until they were conquered by the Spanish.

        What commodity is more easily transportable and has a better value density? Why is the word for 'money' or 'coin' or 'value' in many languages literally 'gold'? What do people take with them when they have to flee a country? What do people put in their safe deposit box? Why were ancient treasures filled with gold? Why does Fort Knox hold a bunch of gold? Why did kingdoms and governments use gold to back their paper currency -- which really does have no inherent value -- with gold, until very recently? If it truly has no inherent value, how come it's never completely lost its value, unlike paper currency, or tulip bulbs?

        The answer is, gold is probably the closet thing we'll have to a perfect currency. It's malleable, divisible, and meltable -- unlike precious stones -- which means you can pay in exact change, and take your small denominations of gold, melt it down, and create a single unit out of it. It can't be arbitrarily multiplied, as a currency can -- no hyper inflation, unless we perfect the art of alchemy. Human beings are genuinely tickled by it's color -- it's used in jewelry and decoration, literal representations of value. It's pretty, unlike, say, lead. It doesn't corrode, like copper or iron. It won't rot, and can't be eaten, like wheat or rice. It can't be 'used up', like paper, especially printed paper ( currency) or toilet paper. It's not toxic and it won't spill, like oil. It's got a good value density -- Would you rather trade a 1 ounce gold coin ( value ~$1,000 ) or 1 ton of rice ( value ~$1,000) for something? And, it actually does have industrial applications, in electronics.It has inherent value as a medium of exchange.

        What commodity would you recommend?

        • by WrongMonkey (1027334) on Thursday April 23, 2009 @08:40PM (#27696631)

          What commodity would you recommend?

          Nuka-Cola Caps

        • by spasm (79260) on Thursday April 23, 2009 @10:50PM (#27697451) Homepage

          Silver was the `universal commodity' for most of the last 5000 years. Gold is a Johnny-come-lately from the last 400 years at best.

          The actual `use value' of gold (as decoration, malleable flexible material, conductor) is about US$80 an ounce. The other $900 is fluff value we've assigned to it because a few currencies were based on it for a while.

          And I say this as someone who did drill & blast for ten years in gold mines in Australia, and hence has a health appreciation of the dot-com mentality that periodically envelops the industry every time there's a run on the stuff. Driller's pay-per-metre isn't called `silly money' for noting.

          • by Flavio (12072)

            The actual `use value' of gold (as decoration, malleable flexible material, conductor) is about US$80 an ounce. The other $900 is fluff value we've assigned to it because a few currencies were based on it for a while.

            How did you get this $80 figure?

            I don't understand how one could separate use value and market value, since if you're using something, then you obviously believe it's worth at least what you'd get by selling it at the market price.

            • by Trepidity (597)

              It's a hypothetical of course, but it's not incoherent to consider the matter. Gold doesn't trade mainly as a commodity, but as a currency, so it's interesting to ponder what its commodity value is, if it weren't used as a currency. For example, what would happen to the price of all central banks sold their reserves of bullion? It wouldn't go to zero, because gold does have value as a metal--- it's in demand for jewelry and various industrial uses. But it would be considerably lower than $900/ounce.

              • I think it is incoherent to consider the matter. Gold can't be worth $80 "for its use value" or nobody would pay $900 to use it!

                As for what would happen if central banks dumped their gold, you're ignoring two effects:

                1) Doing so would simulatenously kill the dollar/pound/etc, because the reserve banks would then only have government bonds as assets, placing the currencies on much flimsier foundantions, and devaluing the currency.

                2) Because gold has so many alternate uses just waiting to be exploited (but a

                • by Trepidity (597)

                  Gold can't be worth $80 "for its use value" or nobody would pay $900 to use it!

                  Sure they would; that's how currencies get value! People are willing to pay for something that they believe to be currency even if they don't think it has any inherent value. Paper dollar bills have close to zero use value, yet people are willing to trade commodities for them, purely because of their currency value.

                  • *sigh* I was using "use value" in the sense that you were originally using the term -- to refer to its "use value" in electronics. Let me rephrase what I want so we can avoid your clever equivocation:

                    "Gold can't provide less than $80/ounce of value in its capacity as a conductor, or nobody would pay $900/ounce to use it as a conductor."

                    Now, think up something clever again!

                    • by Trepidity (597)

                      That ignores supply/demand. Sure, there are a non-zero number of people who currently pay $900/ounce to use it as a conductor. But not nearly enough to account for the (rather large) supply of gold, so if its price stopped being bid up by people using it as a currency (and central banks artificially increasing its scarcity by hoarding it as currency), the price would collapse, because there is not enough demand for gold as a metal to support current prices.

                    • by Talla (95956)

                      "Gold can't provide less than $80/ounce of value in its capacity as a conductor, or nobody would pay $900/ounce to use it as a conductor."

                      Because the price is so high, very few who need gold to use it need it enough to buy at the current prices, but of course some do. The real use value is the price it would have if everybody bought it to use it. If there were no competition from all those who buy it just because everybody else seems to want it, the price would be much lower.

          • True that gold is over-inflated. Has been since the US left it in the 70's, when it was a very reasonable $35.
            Silver is about on the money at $12. If I could buy silver without paying tax, I would. Added to that the fact that I can afford silver. I can't really afford to invest in gold; I simply don't have several thousand, but what I do have I'd like to keep in secure medium so when the GBP£ dies on it's arse, my wealth isn't with it.
            Either which way, precious metals are the way. Gold is ea

            • The $35 price you cite for gold was the government-imposed price. When it became legal to own (thanks, pres. Ford) the price rose to about $70. At that time, cheap bread sold for about $0.20 a loaf. It's now about $1.50. Other dollar prices for things not strongly affected by advancing technology are similar. This corresponds to gold at $525, so gold might be almost 2X a reasonable market value, but not the 28X that your post implies.
              US gold coins were minted in coins as low as $2.50, 1/8 oz. That's about
              • Ah, wasn't actually implying it should be at $35 today! Would be nice if it were, but it shouldn't be. Please also bear in mind it was legal to trade in the UK, where I am. I agree that $500-600 is a reasonable price right now.
                Sadly it's inadvisable to be buying gold at the 1/8oz level, since the premium you'll pay for any coins/bullion in them amounts overrule any possible gains, and for safekeeping you're better off saving the cash till you can buy ounces, as indeed I am doing. I'd prefer silver thoug

          • Silver was the `universal commodity' for most of the last 5000 years. Gold is a Johnny-come-lately from the last 400 years at best.

            Ahem, do you know what the Roman aureus (from 1st century BC to roughly 4th century AD) was made from? Answer: 99% gold. So gold as a universal currency -- and the Roman Empire was about as universal as Europe ever got -- is a lot older than 400 years.

        • by Yunzil (181064)

          Why has gold been a universal currency for the past 5,000 years?

          Because it's pretty. That's about it.

          • Re: (Score:3, Informative)

            by lawpoop (604919)

            Because it's pretty. That's about it.

            You're overlooking several things. First, gold is a metal. Metal currencies are better than other 'precious' things, because they can be melted down, recast, and almost endlessly. Gemstones are pretty, but the have problems as currency. For one, they can shatter, or break, and can't be repaired, which destroys value. If I want to trade 1/2 of my ruby with you, there's not an easy to do that. I can cut up a piece of gold almost endlessly and I don't ruin its value as gold.

            It's a pretty metal that doesn't t

        • by vertinox (846076)

          I'm surprised you didn't know that gold has been the most valuable commodity to any society that could get their hands on it. Why has gold been a universal currency for the past 5,000 years? Gold was valuable to the Incas, who had no connection to the east or west, until they were conquered by the Spanish.

          And the Spanish brought all the gold back to Europe was created massive inflation and ruined their economy...

          And please stop the myth about gold being the universal currency for the past 5,000 years.

          First

        • Which commodity are you recommending here? What's more portable, has better liquidity, or has better value density? What doesn't corrode or rot? You can take a piece of gold to any pawn shop or jeweler and get money for it -- try doing that with wheat or oil.

          Uranium might be quite valuable in near future. But be careful not to buy too many of it at once.

      • by vertinox (846076)

        I'm amazed that in this day and age there are still people who think gold has inherent value and will suddenly be the default currency when everything goes Max Max Real Soon Now.

        I am reminded of a scene in the Fist of the North Star anime in which the wasteland mauraders muder a family and steal their food leaving a suite case full of diamonds, gold, and money scatter like it was trash.

        If the economy does cause such a world... Guns, ammo, gas, water, and food will be the commodities of the day.

        I mean if you

    • I've been hearing a lot about gold hoarding on some financial sites. The boardies at marketwatch.com are especially into it but they're pretty nutty anyway. The most common advice I hear is to make sure whoever you're buying from can actually deliver the gold. Some gold sellers are selling paper gold which will be just as worthless in a major event. Gold in hand is what you want not the "promise to deliver gold".
      • by Keith_Beef (166050) on Thursday April 23, 2009 @10:59PM (#27697507)

        Gold in hand is what you want not the "promise to deliver gold".

        I have, in my hand, a Piece of Paper, signed by Mr. Bailey, whereupon he promises to pay me, upon presentation of his Note, the Sum of Twenty Pounds.

        I am sorely tempted to present this Note at his Banca, in the hope of receiving Twenty Pounds Troy Weight of pure Gold.

        It is my Suspicion, however, that Mr.Bailey will simply substitute the Promissory Note I currently hold for another bearing the same Promise.

        K.

    • While I haven't been, your post raises an interesting question about these guys, and similar operations.

      If one wishes to invest in gold merely as another financial instrument, like stocks, bonds, etc. but with different behavior, then the whole "OMG physical storage of gold!" angle offered by these guys, along with egold and their ilk, is merely overhead, the more abstract representations are fine. If one wishes to invest in gold because they think they'll be able to trade it for dog food and buckshot af
      • by BitHive (578094)

        Yes, but they haven't given it as much thought as you just did.

        There are people who believe that the government wants to make it illegal to own gold because it 'competes' with the fiat money system, which they (the Fed'ral Gubbermint) use to rob you blind with inflation (via the Federal Reserve).

        Most of these people don't have enough money to even buy one or two ounces of gold at a time, but they fear collapse so much and are tantalized by the prospect that it would drive gold prices higher so they 'invest'

      • by plover (150551) *

        Come the locusts, I'd rather have the dog food and the buckshot than physical gold under my bed. If I survive, I'll be eating dog food and fending off the people who are starving because they can't eat their gold. Once they die, I expect they'll drop gold and other phat lewt. But just like the games, if every dead body is dropping gold, the value of the gold will plummet.

        Of course your point is still valid -- the gold under the bed is still far more valuable than trying to trade with eGold.

        • by jedidiah (1196)

          > Come the locusts, I'd rather have the dog food and the buckshot than physical gold under my bed. ...and given the value density of gold: you can have the monetary value of that stockpile fit in your pocket.

    • by StikyPad (445176) on Thursday April 23, 2009 @07:16PM (#27695829) Homepage

      Nope, but I sold mine recently, so thanks for buying it at nearly twice what I paid for it.

      I'm no financial genius, but buying low and selling high. As Buffet puts it, "be fearful when others are greedy, and greedy when others are fearful." It means essentially the same thing. That said, gold seems to be rather high right now, while stocks are quite low. The only way it makes sense to pick gold over stocks is if you believe we're headed for Mad Max. Although personally, if that's the case, I'd rather have guns than gold.

      • Re: (Score:3, Funny)

        by BitHive (578094)
        Gold bugs, meet the 'other side' of your shrewd 'investment' transactions
      • "I'd rather have guns than gold."

        Hummm... gold guns, what an idea!

    • The Dollar (Score:4, Insightful)

      by copponex (13876) on Thursday April 23, 2009 @07:29PM (#27695949) Homepage

      Trust me. The dollar will not fail.

      If China allowed the dollar to tank, the American economy would make the current crisis look like paradise. Oil would be unaffordable. Our reserves would be locked up for military use. The power vacuum left by a rapidly destabilized American military would fuck shit up. You'd probably have dozens of wars spring up, especially in the middle east, as Europe and Asia battle over the energy reserves currently under our control. Israel would probably end up dropping a pre-emptive nuke to make everyone think twice about moving in their direction. Who knows which way Russia would swing.

      So, the world isn't going to let America fail at the moment, since no one knows how better or worse off they'd be. That's why the dollar is up since the crisis. China may have all of our money, but we still have more military power than the rest of the world combined.

      And gold? Gold isn't going to get you to the border, or to any place of safety. You should buy a dirtbike and a shitload of ammunition if you think the dollar is going to fail. Gold won't buy much more than cash if everyone is starving.

      Plus, your fears about spending are basically groundless. During WWII we drove up our deficit to unbelievable highs - wars are expensive, that's why taxes should go up when a country goes to war. McCain said in 2003: "The tax cut is not appropriate until we find out the cost of the war and the cost of reconstruction." That was, of course, before he starting toeing the line for the real political power in the GOP.

      We can afford national healthcare, stimulus packages, more education, and ponies if we reduce military spending, which is currently at a trillion dollars a year. Empire is what is bankrupting the country, not social spending.

      • by copponex (13876)

        I meant to expand on this, but China doesn't actually have all of our money, just the most out of any foreign country, along with Japan. I still think they hold enough to do some damage, though, if they switch entirely to Euros or something else.

        • I meant to expand on this, but China doesn't actually have all of our money, just the most out of any foreign country, along with Japan. I still think they hold enough to do some damage, though, if they switch entirely to Euros or something else.

          And who exactly would buy their dollars? China is worried about this, as they've recently come to the realization that they've been working on the cheap for America in exchange for nothing more than........paper.

      • "If China allowed the dollar to tank, the American economy would make the current crisis look like paradise. Oil would be unaffordable. Our reserves would be locked up for military use. The power vacuum left by a rapidly destabilized American military would fuck shit up."

        I see how this would be bad for USA (and western world, in general) but I fail to understand how can this be but good for China's government with its massive ammount of reserves and internal market. Oh! and while there is oil it won't be u

        • by copponex (13876)

          From what I understand, a collapse of the dollar would immediately lead to the pricing of oil in Euros instead of dollars. Both Iraq and Iran and Venezuela have threatened to sell oil in Euros instead of dollars, but if I remember correctly, it is still OPEC policy to only sell oil in dollars. I've read that a war against the Euro is one of the reasons we were drawn so easily into Iraq, but I digress.

          Once oil is sold in Euros, lets say 100 Euros per barrel, and the dollar craters in value, it would cost pos

          • The problem is the EU is hurting even worse than the U.S. right now. All evidence currently points to a complete collapse of the world economy if the U.S. economy craters (which is what it would take for the dollar to collapse)
          • "it would cost possibly thousands of dollars to bring a barrel of oil into the United States."

            Now I see. It is not that "oil would be unaffordable" but that "oil would be unaffordable... for the United States" (and then, given that USA is the greatest oil consumer, that would mean more oil for anybody else). Again, I see how this can be bad for USA but I don't see why this would be bad for China.

            "China doesn't have the military capability to step in behind America."

            Now I see too. USA economy being in bad

      • by EdIII (1114411) *

        You should buy a dirtbike and a shitload of ammunition if you think the dollar is going to fail.

        Well, I do think the dollar is going to fail. Maybe I am to cynical and bitter about all the crap that has happened in the last 20 years, but that is the way I feel. I have zero faith in the U.S government.

        You are entirely right about Gold. I have transportation, alternative fuel sources and energy, food, and medicine. Ohh, and a shitload of weapons and ammunition. Not to mention a place to go that is well o

      • Too big to fail.... where have I heard that recently?

        K.

      • Alas, McCain, like most Democrats, is either a liar or willfully ignorant of the Laffer Curve. Within reasonable limits, lower taxes increase government income (especially long term), and lower taxes greatly increase private income.
        • More revenues for society to not mean the society is healthy, especially if wealth is being concentrated among fewer people. Plus, saying that revenues went up since we started cutting taxes in the 1980s is meaningless. If revenues didn't go up, you wouldn't be beating inflation.

          Obviously, there is some point at which raising tax rates becomes damaging to an economy. Our rates seem to be just fine - we just need a simpler tax code that closes loopholes for corporations, since they pay some of the lowest eff

    • My estimate is that by September we will be seeing some pretty hefty inflation.

      Did you pay attention last month to what happened when the Chinese suggest we move away from the dollar as the reserve currency? China had just come to the realization that their supply of dollars might lose value very quickly, and it was worrying them. All the other bankers in the world were very quick to assure that the dollar was going to remain the reserve currency, and yet, quietly, they've been selling their own dollars
      • by Yunzil (181064)

        My estimate is that by September we will be seeing some pretty hefty inflation.

        Bet you a dollar we won't.

  • One of my Everquest guild mates (from a LONG time ago) was a security admin for a gold mine and he told me that they were training him in breaking Linux. Ironically, he played a rogue and he was a good one. Ever since then I've been thinking about how many high risk/high security places use OSS.
  • If Linux has reached the world of hundred year old assaying firms, and Swiss vaults buried in mountains, can final world domination be too far away?"

    Yeah, we just need a few nuclear exchanges. Linux and roaches, FTW!

  • Finally! 2009 shall be the Year of Linux on the Mountaintop!

  • by Zey (592528)

    Oh FFS, the year is 2009 not 1999. Linux being used for servers in big business and multinationals is not newsworthy. Linux is a mainstream server platform. This is a "dog bites man" story and isn't worth our attention.

  • ok, nice to get the press coverage but an iPhone could probably handle "thousands" of daily transactions. compared to exchanges processing millions per second, this is not so impressive. a lot of them are using linux (NYSE at least uses it for some stuff, although they use AIX or z/OS for lots of stuff, too). it should come as no surprise to anyone that almost all financial markets operate on some type of unix or linux platform. really, what else would you use?

We are Microsoft. Unix is irrelevant. Openness is futile. Prepare to be assimilated.

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