Gold, Silver other PMs taking a major dump today [Archive] - Glock Talk

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Dragline
05-08-2012, 08:44
Looks like a spiraling downward trend that could continue into June.

Lower crude oil prices and strengthening U.S. dollar are apparently helping drive metal prices down so far today.

Short term not looking good for PMs currently.

Dennis in MA
05-08-2012, 08:46
Can't be. Economic uncertainty means that metals go up.

JohnBT
05-08-2012, 09:25
The socialist victories in France and Greece mean the world economy is all but healed and we have nothing to fear from future financial collapse.

Nobody needs gold and silver now. The future is bright. All is well.

:whistling:

Brucev
05-08-2012, 09:27
As the prophet Gomer routinely said, "Surprise! Surprise! Surprise!" Sgt. Carter and company never seemed to appreciate the words of the prophet. No surprise.

Flying-Dutchman
05-08-2012, 09:27
Can't be. Economic uncertainty means that metals go up.
They already went up and that train left the station a few years back.

Crude and gold go together. Crude is down as the markets realize they have been lying about the unemployment numbers to prop up a certain person.

Dennis in MA
05-08-2012, 09:33
Yeahbut, they tell me that when bad economic news comes out, gold ALWAYS goes up. Now you've introduced ANOTHER sub-rule to me. It's almost like you are saying that it depends on what investors want or fear and that it might not accurately represent the true cost.

Nahhhh, can't be. Buy gold - it always goes up.

Geko45
05-08-2012, 09:35
Where is that Gold vs S&P 500 thread again?

:whistling:

arclight610
05-08-2012, 09:57
Strong hands will be rewarded

fwm
05-08-2012, 10:29
Yeahbut, they tell me that when bad economic news comes out, gold ALWAYS goes up. Now you've introduced ANOTHER sub-rule to me. It's almost like you are saying that it depends on what investors want or fear and that it might not accurately represent the true cost.

Nahhhh, can't be. Buy gold - it always goes up.

Well they always tell you about the economies of scale too. Only when you reach the masters level do you learn the rule of dis-economies of scale. (larger scale of production leads to an Increase in product price)

ETA: I believe the price of copper is suffering from this now.

Gregg702
05-08-2012, 10:45
Down $40 and $0.75 are not too bad, there have been days when they dropped $100 and $4.00.

VinnieD
05-08-2012, 12:28
Precious metals retain relative buying power. If the buying power of the dollar increases their price goes down. If the dollar inflates, their price goes up. Same with any commodity really.

Of course with demand they'll also fluctuate relative to the market to some degree. Gold is probably a bit inflated right now, which is why some folks are going to Silver and Copper as a more stable PM. They won't spike as much, but unless you're trying to play the market for short term gains, something with long term staying power to retain wealth in the event of major inflation or market crash, is the real value of PMs.

Of course unless you're seriously expecting an economic crash in which the dollar will crease to be accepted as currency, a mutual fund will get you better results, since it would both compensate for inflation, and grow with interest. Most people just aren't patient enough to ride them out though.

Bilbo Bagins
05-08-2012, 12:49
Eventually the gold bubble had to burst. The events of the 2008 collapse and the Obama presidency just prolonged it a few years.

Just like housing prices, its got to come down to normal levels. You can't substain over a half a million dollar average homes prices and plus $1,500 an ounce for gold forever.

G29Reload
05-08-2012, 13:06
When the market tanks, some people need to liquidate other assets to cover their positions…margin calls, etc.

so when a bunch of folks sell en masse, more supply available on the market depresses prices.

Dennis in MA
05-08-2012, 13:37
I'm so glad you guys are around to show me how these things work.

Glocksanity
05-08-2012, 14:28
That is just the paper price.

Very few are selling actual physical gold and silver.

The market manipulation continues in the pm markets with naked shorting. Nothing new here. Just a good time to stack some more. Get it while you can.

arclight610
05-08-2012, 14:35
That is just the paper price.

Very few are selling actual physical gold and silver.

The market manipulation continues in the pm markets with naked shorting. Nothing new here. Just a good time to stack some more. Get it while you can.

This is truth. It's nice and convenient how Apmex raises their fees to compensate. When silver was "$8", you couldn't get physical near that.

DanaT
05-08-2012, 14:55
You guys dont have a couple pounds of gold and platinum laying around?

-Dana

Glocksanity
05-08-2012, 15:44
This is truth. It's nice and convenient how Apmex raises their fees to compensate. When silver was "$8", you couldn't get physical near that.

Yep. And when the paper price goes to $1,000 for gold there won't be any to be had. No one will sell any physical for that price.

The paper game is coming to an end...so are the paper shenanigans. This paper dump is just part of that end game.

Keep stacking. It is the lifeboat for the coming flood.

F350
05-08-2012, 16:12
When I was in Iraq as a contractor I was buying silver (physical silver; 1 troy ounce rounds) at ~$15, so I ain't hurtin', would have liked to have sold at $45+ though. I have a little over 1,000 ounces sitting in the gun safe.

If it drops some more it will bee a buying opportunity.

Dragline
05-08-2012, 16:20
I just bought some palladium a couple weeks ago.
I did not anticipate a significant drop in price there, but nevertheless, here we are.

Glotin
05-08-2012, 16:20
Keep stacking. It is the lifeboat for the coming flood.

And the worlds most expensive paperweight when that flood never comes. Sure is shiny though.

arclight610
05-08-2012, 16:22
And the worlds most expensive paperweight when that flood never comes. Sure is shiny though.

What do you base your prediction off of?

Bullwinkle J Moose
05-08-2012, 16:42
Gold, Silver other PMs taking a major dump today

Not really. It's by nature a volatile market


Looks like a spiraling downward trend that could continue into June.

Short term not looking good for PMs currently.
This isn't unusual. PM isn't a good short term investment anyhow

Glocksanity
05-08-2012, 17:38
And the worlds most expensive paperweight when that flood never comes. Sure is shiny though.

Just tell me a better place to put my money for the next ten years then. Cuz the last ten have been fantastic!

Gold and silver have absolutely no counter party risk. In a world where crooks are running the paper game, I'll take that.

arclight610
05-08-2012, 18:29
Just tell me a better place to put my money for the next ten years then. Cuz the last ten have been fantastic!

Gold and silver have absolutely no counter party risk. In a world where crooks are running the paper game, I'll take that.

Nah. 10 years from now you'll need a wheel barrow full of gold to buy a loaf of bread. Widows will be using silver to light their stoves it will be so worthless.

Glotin
05-08-2012, 22:18
What do you base your prediction off of?

The past few hundred years. The late 20's and early 30's compared to where we are now and the systemic structures in place to prevent that from happening.

Just tell me a better place to put my money for the next ten years then. Cuz the last ten have been fantastic!

Gold and silver have absolutely no counter party risk. In a world where crooks are running the paper game, I'll take that.

Based on current valuations, I'd suggest real estate and the stock market. Natural gas and associated businesses are very attractive right now.

If there is no contract, there is no counter party risk. There are plenty of other risks and costs associated with PMs though.

Clearly the past 10 years have heavily influenced your opinions. It's interesting to me that you can give so much weight to the last 10 years while totally discounting the previous 200 or so.

I'm not sure if you were around, but the 1970's were very similar to the 2000's. The charts look almost identical. From 1972-1979 the CAGR of Large Cap stocks was 5.1%. Commodities (gold) returned an impressive 22.1%. Surely people were boasting about how much they made in gold and, having been scared out of the stock market, continued to buy more. Unfortunately they would have missed the incredible bull markets of the 80's and 90's, while watching gold prices fall back to where they were before the 70's bubble.

Here is the take of some old man from Omaha:
http://finance.fortune.cnn.com/2012/02/09/warren-buffett-berkshire-shareholder-letter/

Scroll down to the current valuation of gold and what you could buy instead (All 400 Million acres of cropland in the US, 16 Exxon Mobiles and have $1 Trillion left over)

Bilbo Bagins
05-09-2012, 07:55
Just tell me a better place to put my money for the next ten years then. Cuz the last ten have been fantastic!

Gold and silver have absolutely no counter party risk. In a world where crooks are running the paper game, I'll take that.

The last 10 years WERE great. I bought three gold eagles in 2002 and 2003 when it was under $320 an ounce. Sold two of them in 2008 for a hair over $1000 when gold spiked at $ 1084 and started going down, then the 2008 crash happend and gold spiked again and I so sold the last ounce of about $1700.

That is how I profited with gold. Pure luck buying low and selling high. However, I would have made money buying Apple Stocks around the same time, because 10 years ago Apple sucked and the stock were cheap and now look at them.

The problem people are having is everyone is screaming "Buy Gold" and the ones who are making money with it are the ones selling it. How do you expect to turn a profit when you are buying ANYTHING high and selling low. Those who bought gold at +$1700 are finding that out the hard way right now.

When the hype dies, eventually the price has to come down to normal market levels. That is with Housing, stocks, oil, and even gold.

devildog2067
05-09-2012, 07:58
Well they always tell you about the economies of scale too. Only when you reach the masters level do you learn the rule of dis-economies of scale. (larger scale of production leads to an Increase in product price)


Economy of scale is about costs, not prices. Those two things are not the same.

EDITED TO ADD: that is not to say that diseconomy of scale doesn't exist. It does, and it can add to per-unit costs when an organization gets large enough. I was trying to be precise. Too many people don't know the difference between prices and costs.

cowboy1964
05-09-2012, 08:07
Silver $28.86. Buying opportunity!

Dennis in MA
05-09-2012, 08:19
U guyzez are so smart. So I should buy now because it went up. Wow. I got my behind handed to me in 2000 doing that with tech stocks and in 07 with real estate. But THIS time is different, right?

Avoid those crappy investments. No one will ever buy them again. I'm writing a book about all this good advice.

Ronaldo
05-09-2012, 08:30
I gathered up my scrap gold and coins when it was a hair over $1700 and sold it all. I'm sitting on the proceeds to add to my silver when it gets down to my buy point.

Anyone crazy enough to still be in stocks or mutuals will deserve what happens. PM's are the safest long-term investment. With the rampant corruption in all the banking houses, physical PM's are a safety net you can count on. I prefer silver because it allows smaller increments of value, vital if we move into a barter economy.

Actually, there is already a sizeable underground barter economy right now, if you know where to look

Ronaldo - oro y plata es el ultimo dinero

cowboy1964
05-09-2012, 08:38
You can't substain ... $1,500 an ounce for gold forever.

Sure you can. Just like $3 gas can be sustained forever. It ain't ever going back to $1.50 again. Gold is priced in dollars, just like gas is. The dollar is going to continue to fall, not magically rise. Been to the grocery store lately?

cowboy1964
05-09-2012, 08:40
Anyone crazy enough to still be in stocks or mutuals will deserve what happens.

Yeah, my Apple stock has doubled in a year. What a disaster!

BFN
05-09-2012, 08:44
Here is what Warren Buffet thinks of gold. Can't really argue with one of the richest men in the world.

"The problem with commodities is that you are betting on what someone else would pay for them in six months. The commodity itself isn’t going to do anything for you….it is an entirely different game to buy a lump of something and hope that somebody else pays you more for that lump two years from now than it is to buy something that you expect to produce income for you over time."

"Gold is a way of going long on fear, and it has been a pretty good way of going long on fear from time to time. But you really have to hope people become more afraid in a year or two years than they are now. And if they become more afraid you make money, if they become less afraid you lose money, but the gold itself doesn’t produce anything."

"I will say this about gold. If you took all the gold in the world, it would roughly make a cube 67 feet on a side…Now for that same cube of gold, it would be worth at today’s market prices about $7 trillion dollars – that’s probably about a third of the value of all the stocks in the United States…For $7 trillion dollars…you could have all the farmland in the United States, you could have about seven Exxon Mobils, and you could have a trillion dollars of walking-around money…And if you offered me the choice of looking at some 67 foot cube of gold and looking at it all day, and you know me touching it and fondling it occasionally…Call me crazy, but I’ll take the farmland and the Exxon Mobils."

"[Gold] gets dug out of the ground in Africa, or someplace. Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head."

devildog2067
05-09-2012, 08:51
Anyone crazy enough to still be in stocks or mutuals will deserve what happens. PM's are the safest long-term investment.

History disagrees with you. Even taking into account the Great Depression, the long-term performance of stock markets beats that of gold.

And more to the point:

I prefer silver because it allows smaller increments of value, vital if we move into a barter economy.

How much of your time, money, and effort are you going to spend preparing for something that may never happen?

In other words, are you going to play the game that we have now, or are you going to spend all of your time preparing for the day when the rules change, even though that day might never happen?

certifiedfunds
05-09-2012, 08:54
Eventually the gold bubble had to burst. The events of the 2008 collapse and the Obama presidency just prolonged it a few years.

Just like housing prices, its got to come down to normal levels. You can't substain over a half a million dollar average homes prices and plus $1,500 an ounce for gold forever.

BB - are you calling the bubble here and now? Let me know because I'd like to bookmark this.

Nothing goes straight up (though gold has done a pretty remarkable job of it so far). This is just a correction in the bull market. Buying opportunity.

Interestingly enough, Marc Faber just called this.

arclight610
05-09-2012, 08:56
Here is what Warren Buffet thinks of gold. Can't really argue with one of the richest men in the world.

Warren Buffett's advice is always peculiarly. One day he says silver is a horrible investment, then he buys 120 mil ounces. It's almost like he's trying to shake people out, so he can sweep in on the cheap to get it.

Maybe he's just a little butthurt at PM's in general. He bought that 120 million oz of silver at $5 an oz, it went up to $7 and he thought it was a bad investment so he dumped it. It later shot up to $45 oz as we all know.

Ronaldo
05-09-2012, 08:57
While Buffet makes a good point, you have to consider that the size and breadth of his investments give him good leverage with respect to safety versus earnings. Economies of scale are at work here.

As I said before, PM's preserve wealth, they do not increase it. I am approaching 70 yrs so have to rely on what money I already have, and speculation in the markets would be foolish in my situation. If you are a 30-something, have a good career and are well grounded financially, then Buffet's rule may work for you.

Metals are about preservation of capital, not growth.

Ronaldo

certifiedfunds
05-09-2012, 09:45
Warren Buffett's advice is always peculiarly. One day he says silver is a horrible investment, then he buys 120 mil ounces. It's almost like he's trying to shake people out, so he can sweep in on the cheap to get it.

Maybe he's just a little butthurt at PM's in general. He bought that 120 million oz of silver at $5 an oz, it went up to $7 and he thought it was a bad investment so he dumped it. It later shot up to $45 oz as we all know.

Buffett is out for Buffett. He doesn't play with the same ground rules as the rest of us.

4 glocks
05-09-2012, 09:54
I gathered up my scrap gold and coins when it was a hair over $1700 and sold it all. I'm sitting on the proceeds to add to my silver when it gets down to my buy point.

Anyone crazy enough to still be in stocks or mutuals will deserve what happens. PM's are the safest long-term investment. With the rampant corruption in all the banking houses, physical PM's are a safety net you can count on. I prefer silver because it allows smaller increments of value, vital if we move into a barter economy.

Actually, there is already a sizeable underground barter economy right now, if you know where to look

Ronaldo - oro y plata es el ultimo dinero

If we move to a barter economy Gold and Silver will have little value. What will have value is clean water, food, gas, ice, T-paper, alcohol, cigarettes guns and ammo. You can not eat, drink, or fuel a generator on gold or silver. Look at any major disaster these are the items people will need to survive.

arclight610
05-09-2012, 09:59
If we move to a barter economy Gold and Silver will have little value. What will have value is clean water, food, gas, ice, T-paper, alcohol, cigarettes guns and ammo. You can not eat, drink, or fuel a generator on gold or silver. Look at any major disaster these are the items people will need to survive.

I don't think we'll have to worry about going to a barter economy any time soon. However, hyperinflation is a real concern.

Glotin
05-09-2012, 11:12
When the hype dies, eventually the price has to come down to normal market levels. That is with Housing, stocks, oil, and even gold.
Very true. The principal difference being that gold has little to no utility. At least oil is used for something. Real Estate and companies, of course, can generate positive cash flow while you wait for another cycle. Good companies produce even in the bad times. Gold is a shiny rock, and one oz is no different from the other; they have the same valuation.


Anyone crazy enough to still be in stocks or mutuals will deserve what happens. PM's are the safest long-term investment. With the rampant corruption in all the banking houses, physical PM's are a safety net you can count on. I prefer silver because it allows smaller increments of value, vital if we move into a barter economy.

See my comment re. the 1970's.

In 1979 BusinessWeek published a cover story titled "The Death of Equities". The article, like you, pointed out that you'd have to be crazy to invest in equities. This, of course, was on the eve of probably the greatest bull market in history. Oops.

Warren Buffett's advice is always peculiarly. One day he says silver is a horrible investment, then he buys 120 mil ounces. It's almost like he's trying to shake people out, so he can sweep in on the cheap to get it.

Maybe he's just a little butthurt at PM's in general. He bought that 120 million oz of silver at $5 an oz, it went up to $7 and he thought it was a bad investment so he dumped it. It later shot up to $45 oz as we all know.

He bought silver in 1998, when it had an attractive valuation. That's what he does. He buys things for less than they are worth and sells them for more than they are worth. He bought for $5, sold shortly thereafter for $7, and then the price retreated back below $5. He would've had to hold that silver for 12 years before it climbed, very briefly, to $45. His money was employed much more effectively in productive assets over that 12 years, which is one of the reasons he's one of the richest men in the world.

You think he's butt hurt because he made $240 million in a few months?

I don't think we'll have to worry about going to a barter economy any time soon. However, hyperinflation is a real concern.

Stocks are also a hedge against inflation.

nathanours
05-09-2012, 11:20
"The problem with commodities is that you are betting on what someone else would pay for them in six months. The commodity itself isn’t going to do anything for you….it is an entirely different game to buy a lump of something and hope that somebody else pays you more for that lump two years from now than it is to buy something that you expect to produce income for you over time."

"Gold is a way of going long on fear, and it has been a pretty good way of going long on fear from time to time. But you really have to hope people become more afraid in a year or two years than they are now. And if they become more afraid you make money, if they become less afraid you lose money, but the gold itself doesn’t produce anything."

"I will say this about gold. If you took all the gold in the world, it would roughly make a cube 67 feet on a side…Now for that same cube of gold, it would be worth at today’s market prices about $7 trillion dollars – that’s probably about a third of the value of all the stocks in the United States…For $7 trillion dollars…you could have all the farmland in the United States, you could have about seven Exxon Mobils, and you could have a trillion dollars of walking-around money…And if you offered me the choice of looking at some 67 foot cube of gold and looking at it all day, and you know me touching it and fondling it occasionally…Call me crazy, but I’ll take the farmland and the Exxon Mobils."

"[Gold] gets dug out of the ground in Africa, or someplace. Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head."

I don't agree with the part in bold. Gold is used heavily in electronics. I've got a pair of headphones with a gold coated jack. You could also say that it has utility in the fact that it is highly desirable for jewelry. It gives people pleasure to wear, helping to maximize their utility in the same way driving a sports car would give someone pleasure.

From my econ dictionary:

Utility
1. An economic term referring to the total satisfaction received from consuming a good or service.

If people receive satisfaction from owning gold or jewelry made with it, then it does provide utility.

arclight610
05-09-2012, 11:25
I don't agree with the part in bold. Gold is used heavily in electronics. I've got a pair of headphones with a gold coated jack. You could also say that it has utility in the fact that it is highly desirable for jewelry. It gives people pleasure to wear, helping to maximize their utility in the same way driving a sports car would give someone pleasure.

From my econ dictionary:

Utility
1. An economic term referring to the total satisfaction received from consuming a good or service.

If people receive satisfaction from owning gold or jewelry made with it, then it does provide utility.

The utility of gold is minimal. Gold is the most malleable metal. It can be hammered so thin, it becomes translucent. 1 oz of gold can be hammered into a 100 sq ft sheet. What this means is that it doesn't take alot of gold to plate something or make gold foil.

nathanours
05-09-2012, 11:54
The utility of gold is minimal. Gold is the most malleable metal. It can be hammered so thin, it becomes translucent. 1 oz of gold can be hammered into a 100 sq ft sheet. What this means is that it doesn't take alot of gold to plate something or make gold foil.

I know this and agree, but wouldn't you also agree that most married women gain more utility or satisfaction from a gold wedding ring than they would from a silver one? I know it is that way because of societal norms, but it holds true none the less.

Glocksanity
05-09-2012, 12:18
The last 10 years WERE great. I bought three gold eagles in 2002 and 2003 when it was under $320 an ounce. Sold two of them in 2008 for a hair over $1000 when gold spiked at $ 1084 and started going down, then the 2008 crash happend and gold spiked again and I so sold the last ounce of about $1700.

That is how I profited with gold. Pure luck buying low and selling high. However, I would have made money buying Apple Stocks around the same time, because 10 years ago Apple sucked and the stock were cheap and now look at them.

The problem people are having is everyone is screaming "Buy Gold" and the ones who are making money with it are the ones selling it. How do you expect to turn a profit when you are buying ANYTHING high and selling low. Those who bought gold at +$1700 are finding that out the hard way right now.

Here's the rub. What is the next Apple stock? Anyone can say they would have made more money with Apple looking at the past, but going forward from today, tell me what one stock is going to outperform gold? Just one stock. Just give me the one stock that will outperform gold over the next ten years. I mean, it's easy right? Just like Apple. So tell, me. What is that stock?

When the hype dies, eventually the price has to come down to normal market levels. That is with Housing, stocks, oil, and even gold.

What you think is hype, I think is a paradigm shift in the world's reserve currency from US Dollars to gold. Once the world's Central Banks decide that the US dollar is no longer wanted as the world's reserve currency, a substitute needs to be found. Yep, back to gold. And that will cause gold to skyrocket. You obviously don't understand or see or think that will happen, but the writing is on the wall.

devildog2067
05-09-2012, 12:20
Here's the rub. What is the next Apple stock? Anyone can say they would have made more money with Apple looking at the past, but going forward from today, tell me what one stock is going to outperform gold? Just one stock. Just give me the one stock that will outperform gold over the next ten years. I mean, it's easy right? Just like Apple. So tell, me. What is that stock?

You have it entirely wrong. Picking one stock is insanely difficult. But that's not the point.

The point is that you don't HAVE to pick one stock. On average, the performance of the entire market will beat gold.

Glocksanity
05-09-2012, 12:25
Here is what Warren Buffet thinks of gold. Can't really argue with one of the richest men in the world.

Actually you can. Buffet is clueless when it comes to gold. He has a vested interest in bashing gold as he benefits from our current printing to infinity fiat system.

He has done extremely well for some year, but the last ten his stock has tanked.

Dennis in MA
05-09-2012, 12:32
You have it entirely wrong. Picking one stock is insanely difficult. But that's not the point.

The point is that you don't HAVE to pick one stock. On average, the performance of the entire market will beat gold.

Stop poking the inmates. :rofl:



It's like those rubes on the radio that talk about the "Custom suit" comparison. If you bought a custom suit in 1920, it would cost you about an ounce of gold. If you bought one today, it would cost around an ounce of gold. Ergo, Gold is a great investment because it holds value.

Of course, if you invested in the S&P500 back then. . . your gold would need to be worth $67,000 per ounce to even start to compete, and you could buy 40-50 suits.

Dennis in MA
05-09-2012, 12:34
Actually you can. Buffet is clueless when it comes to gold. He has a vested interest in bashing gold as he benefits from our current printing to infinity fiat system.

He has done extremely well for some year, but the last ten his stock has tanked.

Tanked???

Not a Buffett fan by any means, but 10 years ago, his stock was worth HALF of what it is today.

From my estimation, that's a double. But I could be wrong.

devildog2067
05-09-2012, 12:41
Actually you can. Buffet is clueless when it comes to gold.

Warren Buffett has a very specific talent--he can look at something and figure out what it's worth.

It's a limited talent, and he's the first to admit it. But to think it doesn't apply to gold is simply insane. He's made money moving in and out of precious metals many times.


He has done extremely well for some year, but the last ten his stock has tanked.

Uh...
http://chart.finance.yahoo.com/z?s=BRK-A&t=my&q=l&l=off&z=l&a=v&p=s&lang=en-US&region=US

Glocksanity
05-09-2012, 12:46
You have it entirely wrong. Picking one stock is insanely difficult. But that's not the point.

One stock is the point if people are going to compare gold versus Apple the last ten years.

The point is that you don't HAVE to pick one stock. On average, the performance of the entire market will beat gold.

Well it hasn't over the last twelve years. Now, what does the future hold? That is the question. I'll stick with the hot hand, gold.

Bilbo Bagins
05-09-2012, 12:46
Sure you can. Just like $3 gas can be sustained forever. It ain't ever going back to $1.50 again. Gold is priced in dollars, just like gas is. The dollar is going to continue to fall, not magically rise. Been to the grocery store lately?

I'm sure they said that about $2 gas in during Jimmy Carter's term :rofl:

For crying out loud, 2009 even in the Obama administration where the national aver gas was well under $3 a gallon. 2009 it was $1.84, 2010 it was 2.78.

You want it $3 gas for another 4 years, don't vote for Romney. Pretty much LIKE GOLD people look at the current big numbers and not what the price was just a few years ago and historically over time.

Gas was under $2 between 1981 and 2007, then it spiked near the end of GW Bush's term, and it spiked again in 2010 to present.

Just a few years ago gas was selling for $1.60 and gold was $400 an ounce.....but ,but....you should put your money in Oil and Gold last year because Oil was selling for $120 a barrel and Gold was selling for $1800 an ounce.

Now where are you :dunno:

If you bought a Barrel of Oil and a ounce of gold last year you would be down about $320. Way to protect your wealth.

Flying-Dutchman
05-09-2012, 12:49
Yeahbut, they tell me that when bad economic news comes out, gold ALWAYS goes up. Now you've introduced ANOTHER sub-rule to me. It's almost like you are saying that it depends on what investors want or fear and that it might not accurately represent the true cost.

Nahhhh, can't be. Buy gold - it always goes up.
I just made up that rule like the talking heads do every day on TV to explain the daily market moves when in reality they have no idea unless they are Soros or Niederhoffer.

The rule is there is no rule.

Gold is money but to invest you want your money circulating; gold is the exact opposite as it just sits there.

I salute those who went all in gold at $289; it is all so crystal clear now but I did not predict that the Government would act in such a fiscally reckless manner.

To the gold bugs – if Romney wins dump gold. Romney likes to fire people. Expect fiscal restraint.

devildog2067
05-09-2012, 12:50
Well it hasn't over the last twelve years.

But it has over the last fifty, and hundred, and two hundred. Why are you looking at only the last twelve years? Why not some other arbitrary time period?

Gold is down three dollars in the last 30 minutes!

JohnBT
05-09-2012, 12:50
"but going forward from today, tell me what one stock is going to outperform gold?"

The way gold is going now - down - any stock will outperform gold.

The way the Euro is going, the dollar will be in favor for quite some time.

I know one thing, my father and I began seriously saving scrap silver/coins in the '50s and '60s and added some gold along the way and you know what, it's still sitting there and has not produced one penny of income. It just sits and I'm too lazy to sell it.

Now that CD rates are near zero, I think some days that I should take my mother's CD money and buy gold. Let's see, call it $1600 an ounce divided into $500,000 equals what, about 20 pounds? Geez, think of the storage fees. But then if I needed the money for her nursing home bills I'd take a beating on the sales commission. Her yearly bill is right at $100,000. This is year six.

It was a good first quarter for the stock market. I have some index funds that nearly doubled gold's 52-week performance.

John

Glotin
05-09-2012, 12:59
Well it hasn't over the last twelve years. Now, what does the future hold? That is the question. I'll stick with the hot hand, gold.
It's amazing to me how your brain wraps itself around this one.

You realize that in the history of the world, the hot hand has eventually always failed? Be it real estate, stocks, oil, gold, tulip bulbs (http://en.wikipedia.org/wiki/Tulip_mania), what have you. Again, the difference being that real estate and stocks are productive.

"Chase what's hot, get burned"

What is smart at one price is foolish at another.

eracer
05-09-2012, 13:02
You guys dont have a couple pounds of gold and platinum laying around?

-DanaSelma Hayek is bathing in my solid gold bathtub as we speak. Wait... she's calling. Gotta run!

Glocksanity
05-09-2012, 14:14
Uh...
http://chart.finance.yahoo.com/z?s=BRK-A&t=my&q=l&l=off&z=l&a=v&p=s&lang=en-US&region=US

Looking at the performance of gold vs. Berkshire since the start of 2000 shows that the value of gold has increased considerably more than the value of Berkshire Hathaway. In fact, with a gain of 466% since the start of 2000, gold's gain has been nearly four times the return of BKR.A (466% vs 120%).

No wonder the old man hates gold.

Glocksanity
05-09-2012, 14:15
It's amazing to me how your brain wraps itself around this one.

You realize that in the history of the world, the hot hand has eventually always failed? Be it real estate, stocks, oil, gold, tulip bulbs (http://en.wikipedia.org/wiki/Tulip_mania), what have you. Again, the difference being that real estate and stocks are productive.

"Chase what's hot, get burned"

What is smart at one price is foolish at another.

Looking at the history of the world, gold has always lasted as money. Paper, not so much. The US dollar is getting ready to be abandoned as the world's sole reserve currency. Prepare for it or get hammered. Pretty simple.

devildog2067
05-09-2012, 14:27
Looking at the performance of gold vs. Berkshire since the start of 2000 shows that the value of gold has increased considerably more than the value of Berkshire Hathaway. In fact, with a gain of 466% since the start of 2000, gold's gain has been nearly four times the return of BKR.A (466% vs 120%).

Hey, I can read SeekingAlpha too! Link (http://seekingalpha.com/article/572731-how-berkshire-hathaway-stacks-up)

Looking at the performance of the two assets since the start of 2000 shows that the value of gold has increased considerably more than the value of Berkshire Hathaway. In fact, with a gain of 466% since the start of 2000, gold's gain has been nearly four times the return of BKR.A (466% vs 120%).

You might want to consider citing a source the next time you decide to borrow someone else's words.

And that said, let's look at the numbers. It's true that gold has outperformed BKR.A since 2000:

http://www.bespokeinvest.com/storage/Berkshire%20vs%20Gold.png?__SQUARESPACE_CACHEVERSION=1336485264726


but what about since 1990?

http://1.bp.blogspot.com/-boaEI_nTYSM/TzYTOYE7_cI/AAAAAAAAAMQ/17sC0uVF1oM/s1600/Gold%2BValue%2Bof%2BBerkshire%2BHathaway.jpg

As you can see, BKR.A has outperformed gold over the last 22 years, if not the last 12. I couldn't find any charts going back to 1980 and I don't have time to make one, but I suspect it's even more stark.

You keep choosing "since 2000" as your time horizon, for no reason other than that it justifies your position. Yes, gold has done better than equities over the last 12 years. No, that is not a reason to think that it will continue to do so forever. The dollar isn't going anywhere as the world's reserve currency--not because it doesn't have problems (of course it does) but because everything else is worse.

greatwun
05-09-2012, 14:31
TO THOSE WHO SAY THE GOLD BUBBLE HAS BURST, PLEASE REFFER TO THIS CHART:



http://img207.imageshack.us/img207/7967/goldanddebtceilingchart.jpg (http://imageshack.us/photo/my-images/207/goldanddebtceilingchart.jpg/)

wjv
05-09-2012, 14:41
PMs always take a summer dumps. Typically starting in May.

Last year was an exception. Around Sep-Oct things will start to ramp up again.

arclight610
05-09-2012, 15:01
I just made up that rule like the talking heads do every day on TV to explain the daily market moves when in reality they have no idea unless they are Soros or Niederhoffer.

The rule is there is no rule.

Gold is money but to invest you want your money circulating; gold is the exact opposite as it just sits there.

I salute those who went all in gold at $289; it is all so crystal clear now but I did not predict that the Government would act in such a fiscally reckless manner.

To the gold bugs – if Romney wins dump gold. Romney likes to fire people. Expect fiscal restraint.

Don't count on it. Do you know who Romney's biggest campaign donor is? Goldman Sachs. Do you know who Romney's biggest campaign donor is? Goldman Sachs. Banks are playing both sides.

EDIT: I mistyped that. Goldman Sachs is not Obama's top donor, just one of the top.

certifiedfunds
05-09-2012, 22:57
Hey, I can read SeekingAlpha too! Link (http://seekingalpha.com/article/572731-how-berkshire-hathaway-stacks-up)



You might want to consider citing a source the next time you decide to borrow someone else's words.

And that said, let's look at the numbers. It's true that gold has outperformed BKR.A since 2000:

http://www.bespokeinvest.com/storage/Berkshire%20vs%20Gold.png?__SQUARESPACE_CACHEVERSION=1336485264726


but what about since 1990?

http://1.bp.blogspot.com/-boaEI_nTYSM/TzYTOYE7_cI/AAAAAAAAAMQ/17sC0uVF1oM/s1600/Gold%2BValue%2Bof%2BBerkshire%2BHathaway.jpg

As you can see, BKR.A has outperformed gold over the last 22 years, if not the last 12. I couldn't find any charts going back to 1980 and I don't have time to make one, but I suspect it's even more stark.

You keep choosing "since 2000" as your time horizon, for no reason other than that it justifies your position. Yes, gold has done better than equities over the last 12 years. No, that is not a reason to think that it will continue to do so forever. The dollar isn't going anywhere as the world's reserve currency--not because it doesn't have problems (of course it does) but because everything else is worse.

DD - 2000 is relevant b/c that's when the gold bull started running.

JohnBT
05-10-2012, 09:13
Let's use gold's all-time high of $850 per ounce in 1980 as a starting point. I bought a house in 1980 and could have kept renting and bought gold with the 30% down payment. The gold market back then was booming. I know people who got a second mortgage to buy gold and cashed in retirement accounts to buy gold as the price went up and up and up.

With one 1980 dollar now the inflation-adjusted equivalent of almost $3, gold would have to rise to over $2400 just to set a new high.

Iow, if I had bought gold at $850 in 1980, I'd still be losing money on the deal.

You just never know when the crowd will panic and run the other way to buy something of more interest to them.

John

eyesnorth
05-10-2012, 09:47
Let's use gold's all-time high of $850 per ounce in 1980 as a starting point. I bought a house in 1980 and could have kept renting and bought gold with the 30% down payment. The gold market back then was booming. I know people who got a second mortgage to buy gold and cashed in retirement accounts to buy gold as the price went up and up and up.

With one 1980 dollar now the inflation-adjusted equivalent of almost $3, gold would have to rise to over $2400 just to set a new high.

Iow, if I had bought gold at $850 in 1980, I'd still be losing money on the deal.

You just never know when the crowd will panic and run the other way to buy something of more interest to them.

John

Any long term mortgage/gold comparisons? Say a couple hundred years or so, for comparison.

.264 magnum
05-10-2012, 09:48
Let's use gold's all-time high of $850 per ounce in 1980 as a starting point. I bought a house in 1980 and could have kept renting and bought gold with the 30% down payment. The gold market back then was booming. I know people who got a second mortgage to buy gold and cashed in retirement accounts to buy gold as the price went up and up and up.

With one 1980 dollar now the inflation-adjusted equivalent of almost $3, gold would have to rise to over $2400 just to set a new high.

Iow, if I had bought gold at $850 in 1980, I'd still be losing money on the deal.

You just never know when the crowd will panic and run the other way to buy something of more interest to them.

John

For the record that gold's modern era high. It's all time A.D. high was most likely during "The High Middle Ages". One of my econ. profs did the calculations IIRC in ~1130 AD England gold was an inflation adjusted ~$39,000oz.

Glotin
05-10-2012, 11:25
Hey, I can read SeekingAlpha too! Link (http://seekingalpha.com/article/572731-how-berkshire-hathaway-stacks-up)



You might want to consider citing a source the next time you decide to borrow someone else's words.

And that said, let's look at the numbers. It's true that gold has outperformed BKR.A since 2000:

http://www.bespokeinvest.com/storage/Berkshire%20vs%20Gold.png?__SQUARESPACE_CACHEVERSION=1336485264726


but what about since 1990?

http://1.bp.blogspot.com/-boaEI_nTYSM/TzYTOYE7_cI/AAAAAAAAAMQ/17sC0uVF1oM/s1600/Gold%2BValue%2Bof%2BBerkshire%2BHathaway.jpg

As you can see, BKR.A has outperformed gold over the last 22 years, if not the last 12. I couldn't find any charts going back to 1980 and I don't have time to make one, but I suspect it's even more stark.

You keep choosing "since 2000" as your time horizon, for no reason other than that it justifies your position. Yes, gold has done better than equities over the last 12 years. No, that is not a reason to think that it will continue to do so forever. The dollar isn't going anywhere as the world's reserve currency--not because it doesn't have problems (of course it does) but because everything else is worse.

The longest available timeframe for that data is from 1965 when Buffett took over Berkshire Hathaway. Since 1965:

http://fortunewallstreet.files.wordpress.com/2012/02/fate_of_100_dollars.jpg

http://www.forbes.com/sites/stevedenning/2012/05/09/why-warren-buffett-wont-invest-in-gold/

In the past 20 years gold has increased 376% while Berkshire Hathaway has risen 1330%.

Warren Buffett on CNBC: “When we took over Berkshire, it was selling at $15 a share and gold was selling at $20 an ounce. Gold is now $1600 and Berkshire is $120,000. Or you can take a broader example.

You could you buy the Dow Jones Industrial Average for 66 at the start of 1900. Gold was then $20. At the end of the century, it was 11,400, and you would also have gotten dividends for a hundred years. So a decent productive asset will kill an unproductive asset.

Why do you think gold bugs get so irate? Because they really do come out. ... You can knock almost any investment and nothing happens. But when you talk about gold it’s different. Of course that says something about their motivation for ownership. They want people to agree with them. They want everybody to get so scared they run to a cave with gold. Caves might be a better investment than gold. At least they’re not producing more caves all the time. So they want people to be as afraid as they are. Incidentally, they’re right to be afraid of paper money. Their basic premise that paper money around the world is going to be worth less and less over time is absolutely correct. They have the correct basic premise. They should run from paper money. But where they run to is the mistake."

Any long term mortgage/gold comparisons? Say a couple hundred years or so, for comparison.

I'm not sure what you're asking.

Inflation greatly helps a mortgage holder over time; not so for gold, as pointed out above.

Glocksanity
05-10-2012, 11:25
The dollar isn't going anywhere as the world's reserve currency--not because it doesn't have problems (of course it does) but because everything else is worse.

That is where we disagree. The dollar will be abandoned as the world's reserve currency. It's just a matter of when, not if. Nothing lasts forever. Ask the Romans. I think in the next decade or so it will happen. Gold will play a big part in Central Bank reserve currency transactions. In order for that to happen, gold will be repriced way higher than it is now.

You obviously disagree and time will reveal who is correct.

devildog2067
05-10-2012, 11:42
That is where we disagree. The dollar will be abandoned as the world's reserve currency. It's just a matter of when, not if. Nothing lasts forever.

I don't disagree. I absolutely agree with you. The dollar will not last forever.

I think in the next decade or so it will happen. Gold will play a big part in Central Bank reserve currency transactions. In order for that to happen, gold will be repriced way higher than it is now.

Here's where you're wrong. The dollar will be displaced when something stronger comes along. As of right now, there simply does not exist a contender.

Atlas
05-10-2012, 11:54
....The dollar will be displaced when something stronger comes along. As of right now, there simply does not exist a contender.



"Stronger" is a relative valuation, yeah?
Your phrasing implies that "when something stronger comes along" is of necesity far into the distant future...


With the Fed in recent months buying more than 50% of the US's debt, how strong will "strong" be in five years, in ten years?

devildog2067
05-10-2012, 11:58
"Stronger" is a relative valuation, yeah?

Indeed.


Your phrasing implies that "when something stronger comes along" is of necesity far into the distant future...

Take a look around--whose economy do you think is stronger than the US's today? Who will be stronger in the next 10 years?

The answer is, frankly, no one. No one even begins to come close. Will the answer be different in 20 years? Maybe. Depends a lot on what China decides to do with respect to exploiting their natural resources between now and then.

But there's definitely no one whose currency will replace ours within the next ten. Everyone else has problems, just like we do.

Atlas
05-10-2012, 17:12
Indeed.



Take a look around--whose economy do you think is stronger than the US's today? Who will be stronger in the next 10 years?

The answer is, frankly, no one. No one even begins to come close. Will the answer be different in 20 years? Maybe. Depends a lot on what China decides to do with respect to exploiting their natural resources between now and then.

But there's definitely no one whose currency will replace ours within the next ten. Everyone else has problems, just like we do.

So you assume that any replacement for the dollar as the world's reserve would necessarily be a currently existing, sovereign currency?

Sporaticus
05-10-2012, 17:23
Interestingly enough, Michael Murphy predicted a retracement in silver to around $29 as part of a typical cycle. I'm waiting on Bernanke to start QE III and I am getting in big time.

vikingsoftpaw
05-10-2012, 17:26
Yeahbut, they tell me that when bad economic news comes out, gold ALWAYS goes up

Only if said bad news involves the dilution or devaluation of a national currency. Think Quantitative Easing III IV V etc.

Dennis in MA
05-10-2012, 17:47
Looking at the performance of gold vs. Berkshire since the start of 2000 shows that the value of gold has increased considerably more than the value of Berkshire Hathaway. In fact, with a gain of 466% since the start of 2000, gold's gain has been nearly four times the return of BKR.A (466% vs 120%).

No wonder the old man hates gold.

So now "tanking" means not a loss or even a real-dollar loss, but underperforming gold?

Where do you teach economics and finance again?

I'm done with this thread. CF and Atlas always bring up decent points. This changing shill argument is sophomoric.

devildog2067
05-10-2012, 18:25
So you assume that any replacement for the dollar as the world's reserve would necessarily be a currently existing, sovereign currency?

No.

But it's not going to be a basket of currencies, it's not going to be an SDR, and it's not going to be gold.

I can imagine a few things that are not existing sovereign currencies--maybe something like an energy credit (literal energy, like a gigajoule dollar). I'm not an economist and I don't have the imagination to come up with something truly revolutionary (if I did, that's what I'd be doing for a living right now!).

Dragline
05-14-2012, 11:57
Downward slide continues today.
Damn, I'm taking a beating too on the Palladium I bought recently.

Geko45
05-14-2012, 12:04
maybe something like an energy credit (literal energy, like a gigajoule dollar).

I don't think modern economics has really adopted the idea of currency as a representation of "units of work" and I think there is much to be learned from understanding that relationship. I'm about to spend a lot of my own "units of work" on learning more about economics and this is one area I hope to explore. It's no "Higgs hunt" but I think it can contribute.

robertoh
05-14-2012, 12:45
When Obama's inflation kicks in about this summer from all the trillions the Goverment is printing you'll see Gold and Silver and many other commities jump in price.
I was a young married man when President Carter helped to almost sink America.And lot of things that happened then are happening now also. Some gold and silver in your closet won't hurt a thing.

M2 Carbine
05-14-2012, 13:09
Some gold and silver in your closet won't hurt a thing.
Along with a couple years supply of food and ammo. If nothing else it's better than money in the bank.


Silver is at $28.39 right now.
http://www.providentmetals.com/bullion/silver/us-slv/ase.html

Those American Silver Eagles are really pretty.:)

Atlas
05-14-2012, 17:23
I hope, I hope, I hope, gold drops at least another 40 - 50% in the near future!!!

Dragline
05-14-2012, 18:32
I hope, I hope, I hope, gold drops at least another 40 - 50% in the near future!!!

Is that because you want to buy a bunch of it?

cowboy1964
05-14-2012, 21:50
I think the U.S. dollar may have a pretty good next 12-24 months as the Euro collapses. But long term it's doomed.

Gold under $1400 and silver under $25 is going to be really, really tempting. It may not even go that low though.

cowboy1964
05-14-2012, 21:53
To the gold bugs – if Romney wins dump gold. Romney likes to fire people. Expect fiscal restraint.

Sure. You apparently have no idea the depth of the problems nor the resistance to real change that he will meet (IF he even tries in the first place).

http://usdebtclock.org/

Didn't it seem like just a few months ago the debt passed $14 trillion? We're now closing in on $16 trillion.

Atlas
05-14-2012, 21:54
I think the U.S. dollar may have a pretty good next 12-24 months as the Euro collapses. But long term it's doomed.

If so then I may get my wish. :cool:

Dennis in MA
05-15-2012, 12:46
Romney didn't fire nearly enough people here AND raised ever fee in the flipping state by at least double. Oh, but he didn't raise taxes. :upeyes:

Little Joe
05-15-2012, 12:55
Romney is definitely not the answer, but I'd rather try a new idiot over the one we've got.

mhill
05-15-2012, 13:46
Careful rough times here.

https://www.igolder.com/gold-charts/

AK_Stick
05-15-2012, 14:03
That is just the paper price.

Very few are selling actual physical gold and silver.

The market manipulation continues in the pm markets with naked shorting. Nothing new here. Just a good time to stack some more. Get it while you can.


I don't know about the "very few are selling actual gold and silver" I see more than I could ever buy on the market

cowboy1964
05-17-2012, 10:04
Well, looks like this latest buying opportunity is over. Silver up 4% so far today.

bobby_w
05-17-2012, 21:52
Well, looks like this latest buying opportunity is over. Silver up 4% so far today.

Not arguing, but it is still a good buying opportunity. Always buy on the dips and this is still a dip.

certifiedfunds
05-17-2012, 21:58
For the gold haters and the people who are so sure they've called "the bubble":

Can you explain to us all why the gold bull market started in 2001, long before the collapse of 08?

Paul7
05-17-2012, 23:05
The past few hundred years. The late 20's and early 30's compared to where we are now and the systemic structures in place to prevent that from happening.



Based on current valuations, I'd suggest real estate and the stock market. Natural gas and associated businesses are very attractive right now.

If there is no contract, there is no counter party risk. There are plenty of other risks and costs associated with PMs though.

Clearly the past 10 years have heavily influenced your opinions. It's interesting to me that you can give so much weight to the last 10 years while totally discounting the previous 200 or so.

I'm not sure if you were around, but the 1970's were very similar to the 2000's. The charts look almost identical. From 1972-1979 the CAGR of Large Cap stocks was 5.1%. Commodities (gold) returned an impressive 22.1%. Surely people were boasting about how much they made in gold and, having been scared out of the stock market, continued to buy more. Unfortunately they would have missed the incredible bull markets of the 80's and 90's, while watching gold prices fall back to where they were before the 70's bubble.

Here is the take of some old man from Omaha:
http://finance.fortune.cnn.com/2012/02/09/warren-buffett-berkshire-shareholder-letter/



Gold has beaten the old man from Omaha 9 of the last 10 years. Are you smarter than him? He's anti-gold (unlike his father) because he's so in the tank for Obama. People getting into PMs would be an indication the economy isn't right.

I have yet to have it explained to me how we pay off $15 trillion ($25 trillion in 10 years) in debt other than default or continued currency debasement.

Paul7
05-17-2012, 23:08
The last 10 years WERE great. I bought three gold eagles in 2002 and 2003 when it was under $320 an ounce. Sold two of them in 2008 for a hair over $1000 when gold spiked at $ 1084 and started going down, then the 2008 crash happend and gold spiked again and I so sold the last ounce of about $1700.

That is how I profited with gold. Pure luck buying low and selling high. However, I would have made money buying Apple Stocks around the same time, because 10 years ago Apple sucked and the stock were cheap and now look at them.

What if you had bought Kodak instead?

The problem people are having is everyone is screaming "Buy Gold" and the ones who are making money with it are the ones selling it. How do you expect to turn a profit when you are buying ANYTHING high and selling low. Those who bought gold at +$1700 are finding that out the hard way right now.

When the hype dies, eventually the price has to come down to normal market levels. That is with Housing, stocks, oil, and even gold.

What you don't understand is it isn't hype, it is a worldwide rejection of fiat money. Central banks today are still buying gold like crazy. You must have great faith Obama is going to fix everything.

The recent PM drop is because the dollar is temporarily rising from people fleeing the Euro.

Paul7
05-17-2012, 23:16
To the gold bugs – if Romney wins dump gold. Romney likes to fire people. Expect fiscal restraint.

Even if true, the US is only a small part of world gold demand. I will vote for Romney and think he will do less damage than Obama, but I don't expect real structural change, even Reagan couldn't do that. Any real reform proposals will be met with riots in the street like Greece, by people who vote for a living.

Paul7
05-17-2012, 23:19
Hey, I can read SeekingAlpha too! Link (http://seekingalpha.com/article/572731-how-berkshire-hathaway-stacks-up)



You might want to consider citing a source the next time you decide to borrow someone else's words.

And that said, let's look at the numbers. It's true that gold has outperformed BKR.A since 2000:

http://www.bespokeinvest.com/storage/Berkshire%20vs%20Gold.png?__SQUARESPACE_CACHEVERSION=1336485264726


but what about since 1990?

http://1.bp.blogspot.com/-boaEI_nTYSM/TzYTOYE7_cI/AAAAAAAAAMQ/17sC0uVF1oM/s1600/Gold%2BValue%2Bof%2BBerkshire%2BHathaway.jpg

As you can see, BKR.A has outperformed gold over the last 22 years, if not the last 12. I couldn't find any charts going back to 1980 and I don't have time to make one, but I suspect it's even more stark.

You keep choosing "since 2000" as your time horizon, for no reason other than that it justifies your position. Yes, gold has done better than equities over the last 12 years. No, that is not a reason to think that it will continue to do so forever.


Nobody is saying gold will do better forever. In the '80s and '90s, stocks were the place to be. Since 2000, gold is, and IMHO that won't change for the next 5+ years.

Gold fell in 1980 because Volcker put a lid on the money supply and interest rates went up to 15%+. What would those rates to to our servicing our $15 trillion debt?

voyager4520
05-18-2012, 02:31
I've wanted to sell my high school class ring for scrap gold, I think I'll do it soon before the price drops any more. It's down like $100 in one week.

certifiedfunds
05-18-2012, 06:20
I have yet to have it explained to me how we pay off $15 trillion ($25 trillion in 10 years) in debt other than default or continued currency debasement.

First, we don't have to pay it off. It is easily serviced. Safe harbor - that could change.

Secondly, paying it off is very simple and can be done in one generation with cuts and growth.

The problem is, no one is willing to cut and the cards are being stacked against the kind of robust growth needed due to taxes and spending.

certifiedfunds
05-18-2012, 06:24
Nobody is saying gold will do better forever. In the '80s and '90s, stocks were the place to be. Since 2000, gold is, and IMHO that won't change for the next 5+ years.

Gold fell in 1980 because Volcker put a lid on the money supply and interest rates went up to 15%+. What would those rates to to our servicing our $15 trillion debt?

Asia, food, commodities up. US relative decline.

Paul7
05-18-2012, 08:36
First, we don't have to pay it off. It is easily serviced.

It's taking something like 20% of our tax receipts to service it, what will it be when it doubles and/or interest rates go up? There is an economic theory that says the debt itself retards economic growth.

Secondly, paying it off is very simple and can be done in one generation with cuts and growth.

The problem is, no one is willing to cut and the cards are being stacked against the kind of robust growth needed due to taxes and spending.

Which means continuing devaluation. This is why we are doomed, McCain got the same percentage of the white vote as Reagan did, but in 1980 the white percentage was 88%, now it is 74% and dropping. Every year 600,000 more children of illegal aliens reach voting age. Not exactly Ron Paul supporters.

BTW, I am hispanic.

Boy this thread sure got quiet with gold going up the last two days.

Dragline
05-18-2012, 10:05
Boy this thread sure got quiet with gold going up the last two days.

There has been a PM rally in the last couple of days but gold seems to be seeing resistance at the psychological $1,600.00price.

It got close earlier this morning then backed off again most recently.

Glotin
05-18-2012, 10:52
Gold has beaten the old man from Omaha 9 of the last 10 years. Are you smarter than him? He's anti-gold (unlike his father) because he's so in the tank for Obama. People getting into PMs would be an indication the economy isn't right.

I have yet to have it explained to me how we pay off $15 trillion ($25 trillion in 10 years) in debt other than default or continued currency debasement.

And he has crushed gold over every other timeframe available... what's your point?

Am I smarter than him? Maybe. Am I as good an investor as he is? No. Are you?

He's anti-gold because it is overpriced and for no other reason. That's what he does. He buys things for less than they are worth and sells them for more than they are worth.

For the gold haters and the people who are so sure they've called "the bubble":

Can you explain to us all why the gold bull market started in 2001, long before the collapse of 08?

Come on, you know the answer to this... That's when the tech bubble burst.. the 9/11 and ensuing wars, etc.

And for the record, I'm not "sure" I've called the bubble. Gold is one of those trains, like Facebook for instance, that I don't believe in. Doesn't mean I'm going to step in front of it. I just think anyone who buys gold at this price is crazy. Anyone who buys and hoards large quantities of physical gold is even more so. To denounce productive assets and advocate investing in nothing but gold is madness.

That being said, this sure looks like a top to me:
http://finance.yahoo.com/echarts?s=GLD+Interactive#symbol=gld;range=20110630,20120518;compare=;indicator=sma(50,200)+volume;c harttype=area;crosshair=on;ohlcvalues=0;logscale=off;source=undefined;

Paul7
05-18-2012, 11:06
And he has crushed gold over every other timeframe available... what's your point?

My point is I'm talking about THIS timeframe.

Am I smarter than him? Maybe. Am I as good an investor as he is? No. Are you?

No, which is why I have very little in the stock market. We are still in a long-term equity bear-market and a long-term PM bull market. Fight the trends if you want.....

He's anti-gold because it is overpriced and for no other reason. That's what he does. He buys things for less than they are worth and sells them for more than they are worth.

And yet gold has beaten him the last decade. He seems embarrassed about that.



And for the record, I'm not "sure" I've called the bubble.

The bubble will come when it rises vertically and everybody is buying it. Less than 2% of Americans do now.

Gold is one of those trains, like Facebook for instance, that I don't believe in. Doesn't mean I'm going to step in front of it. I just think anyone who buys gold at this price is crazy.

They said the same thing when gold was $500, $1,000, $1,400........

Anyone who buys and hoards large quantities of physical gold is even more so. To denounce productive assets and advocate investing in nothing but gold is madness.

Madness is being in the stock market heavily with the world's current economic problems, or having much faith in fiat money which has lost 95% of it's value the last century.

That being said, this sure looks like a top to me:
http://finance.yahoo.com/echarts?s=GLD+Interactive#symbol=gld;range=20110630,20120518;compare=;indicator=sma(50,200)+volume;c harttype=area;crosshair=on;ohlcvalues=0;logscale=off;source=undefined;

It looks little different than the 2008 correction, when you were probably also saying the 'bubble' was over:

http://finance.yahoo.com/echarts?s=GLD+Interactive#symbol=gld;range=my;compare=;indicator=sma(50,200)+volume;charttype=area;c rosshair=on;ohlcvalues=0;logscale=off;source=undefined;

Maybe you can explain to me how we deal with a $15 trillion debt (on it's way to $25 trillion) other than default or currency debasement?

JohnBT
05-18-2012, 13:56
I'm glad I didn't buy gold when it was $1900/oz. less than one year ago.

Could have been a good time to sell some though.

I'm glad I didn't buy gold when it was $1725/oz. six months ago.

Still might be a good time to sell some. What did it close at today, $1590?

robertoh
05-18-2012, 14:05
Gold and Silver done a lot better than FaceBook today. Maybe Bono who bought heavily into FaceBook took what is called on WS,a bath.:whistling:

Dragline
05-18-2012, 14:09
What did it close at today, $1590?

About $1,592 I think. It flirted briefly with reaching $1,600 but couldn't quite manage that.

Glotin
05-18-2012, 17:10
My point is I'm talking about THIS timeframe.

So you're only willing to talk about the single arbitrary timeframe that fits your thesis...

And yet gold has beaten him the last decade. He seems embarrassed about that.

Beaten him based on which metric? How much revenue has gold produced over the past decade? How much revenue will gold produce over the next decade vs his holdings? How liquid is gold vs his holdings? If he were to sell all of his productive assets and buy gold with it, what would his transaction costs be? Transportation costs? Housing and protecting all that gold?

Why would he be embarrassed about it anyway?

The bubble will come when it rises vertically and everybody is buying it. Less than 2% of Americans do now. Says who? A lot more Americans bought gold in 1980 than do today?

http://inflationdata.com/inflation/images/charts/Gold/Gold_inflation.jpg

Madness is being in the stock market heavily with the world's current economic problems, or having much faith in fiat money which has lost 95% of it's value the last century.

I disagree with you on the first point. The sky is not falling.

I don't have much "faith" in fiat money, which doesn't have much to do with owning companies.

It looks little different than the 2008 correction, when you were probably also saying the 'bubble' was over

Maybe you can explain to me how we deal with a $15 trillion debt (on it's way to $25 trillion) other than default or currency debasement?
Nope, wasn't saying anything about it in '08 actually.

How we deal with $15 Trillion in debt? Probably the same way we did after WWII, when the debt was much higher than it is now.

I hope we drastically curtail spending, starting with entitlements.

Currency debasement is/has been happening.. that doesn't really affect my portfolio in anything other than nominal terms, just like it will affect gold in nominal terms.

I don't think the US is going to collapse. If it does, a pile of shiny rocks isn't going to get me any further than a bunch of useless paper. I'd much rather have water, food, guns and ammo in that highly unlikely scenario.


Gold and Silver done a lot better than FaceBook today. Maybe Bono who bought heavily into FaceBook took what is called on WS,a bath.:whistling:

Uh, what? The net worth of Bono's firm grew by about $1.4 Billion today. I think you've got the wrong definition of "taking a bath".

Paul7
05-18-2012, 17:58
So you're only willing to talk about the single arbitrary timeframe that fits your thesis...

Yes, the one we're in is the one I care most about. I admit the 80's and 90's were the time to be in equities, not PMs. At some point they may be again. Feel better?

Beaten him based on which metric?

Percentage return.

How much revenue has gold produced over the past decade? How much revenue will gold produce over the next decade vs his holdings? How liquid is gold vs his holdings?

Very.

If he were to sell all of his productive assets and buy gold with it, what would his transaction costs be? Transportation costs? Housing and protecting all that gold?

Why would he be embarrassed about it anyway?

None of your questions change this:

http://finance.yahoo.com/news/financial-face-off-warren-buffett-192100100.html

I disagree with you on the first point. The sky is not falling.

It most certainly is falling in Europe, and we aren't that far behind them. You seem to have the classic bias for normal.

I don't have much "faith" in fiat money,

You seem to have more faith in fiat than gold. Gold has been money for 5,000 years, the fiat experiment is relatively recent, and has often ended badly.

which doesn't have much to do with owning companies.

Why would I want to own companies during an equities bear market? How has that worked out the last decade?

How we deal with $15 Trillion in debt? Probably the same way we did after WWII, when the debt was much higher than it is now.

I hope we drastically curtail spending, starting with entitlements.

Don't hold your breath. If anyone tries it there will be rioting in the streets, a la Greece.

Currency debasement is/has been happening.. that doesn't really affect my portfolio in anything other than nominal terms, just like it will affect gold in nominal terms.

A twenty dollar bill a century ago would be worth .50 today, a twenty dollar gold piece would be worth $1,600. I don't see that trend changing soon.

I don't think the US is going to collapse. If it does, a pile of shiny rocks isn't going to get me any further than a bunch of useless paper.

The shiny rocks will be worth something, the paper may be worth zero. Do you really not see you would have been better off with gold in recent Zimbabwe or 1930's Germany?

I'd much rather have water, food, guns and ammo in that highly unlikely scenario.

I have both.

07 LMB Z06
05-18-2012, 19:15
Gold and Silver done a lot better than FaceBook today. Maybe Bono who bought heavily into FaceBook took what is called on WS,a bath.:whistling:

I think not. CNBC was talking about it today. Bono bought ~2-3% for $90 million. His shares, at FB's current valuation, are worth north of $1 billion. Bono hit a grand slam.

Glocksanity
05-18-2012, 22:52
As soon as Saudi Arabia says they no longer require US Dollars for oil, the game is over. China, Russia, Germany, India and the oil rich Arabs will create currencies backed by gold for settlements in the international oil trade. That is the end game. The US Dollar will be on the outside looking in. Gold will get repriced to about $50,000 and those without it will suffer greatly.

certifiedfunds
05-18-2012, 22:55
It's taking something like 20% of our tax receipts to service it, what will it be when it doubles and/or interest rates go up? There is an economic theory that says the debt itself retards economic growth.



Which means continuing devaluation. This is why we are doomed, McCain got the same percentage of the white vote as Reagan did, but in 1980 the white percentage was 88%, now it is 74% and dropping. Every year 600,000 more children of illegal aliens reach voting age. Not exactly Ron Paul supporters.

BTW, I am hispanic.

Boy this thread sure got quiet with gold going up the last two days.

I agree with all of that. My point is that the debt itself isn't an insurmountable problem. The trajectory is the problem.

JohnBT
05-19-2012, 06:19
Gold at $50,000/oz? WOW. Better get me some more on Monday.

"done a lot better than FaceBook today"

It's obvious to me that the FB supporters must have been going to their broker's site and clicking the Like button instead of the Buy button.

John

certifiedfunds
05-19-2012, 06:30
How we deal with $15 Trillion in debt? Probably the same way we did after WWII, when the debt was much higher than it is now.



You mean robust post-war growth? Do you see the conditions necessary for that scenario?

Paul7
05-19-2012, 06:49
As soon as Saudi Arabia says they no longer require US Dollars for oil, the game is over. China, Russia, Germany, India and the oil rich Arabs will create currencies backed by gold for settlements in the international oil trade. That is the end game. The US Dollar will be on the outside looking in. Gold will get repriced to about $50,000 and those without it will suffer greatly.

On the bright side, it will make it easy to pay off your mortgage.

M2 Carbine
05-19-2012, 06:57
Silver is back up to about $29 this morning.
Too bad, I was going to buy a bunch of American Silver Eagles if silver hit $26.


I'm not really a big fan of gold and silver but I figure in a few years the dollar bill will only be good for lighting the fireplace.

Some of you, like me, are old enough to remember the news reel movie of the German woman pushing a wheel barrel of German money into the store to buy a loaf of bread.

Atlas
05-19-2012, 07:38
..
Some of you, like me, are old enough to remember the news reel movie of the German woman pushing a wheel barrel of German money into the store to buy a loaf of bread.

Yeah but the experts here at GT have declared that can never happen in the U.S.

Dragline
05-19-2012, 08:38
Silver is back up to about $29 this morning.
Too bad, I was going to buy a bunch of American Silver Eagles if silver hit $26.



It's still probably not a bad buy at $29 if you can get some for only a couple bucks over spot.

$10 face value rolls of 1964 JFK halves can be a good buy as well. These 90% silver coins are readily available and instantly recognized as regular legal tender US currency.
Coin shops often have them for sale at relatively bargain prices since coins like these are commonly brought in by people who wish to cash them in. The coin dealers will often be happy to turn these around for a quick few dollars profit.

Glotin
05-21-2012, 00:57
Percentage return. Percentage return on a nominal price basis, perhaps. If you factor in revenue you get a much different picture.

Very. We both know that's not true.

None of your questions change this:

http://finance.yahoo.com/news/financial-face-off-warren-buffett-192100100.html

:yawn: Actually, they do. That analysis factors none of those considerations. That analysis also has a cherry picked time frame.

It most certainly is falling in Europe, and we aren't that far behind them. You seem to have the classic bias for normal.

If the "classic bias for normal" is believing that the end is not, in fact, nigh, then yes, I have it.

You seem to have more faith in fiat than gold. Gold has been money for 5,000 years, the fiat experiment is relatively recent, and has often ended badly. No, I have faith in productive assets. Fiat money and gold are not very different. What you don't understand is that regardless of the method of exchange, productive assets will always be valuable. People will always be willing to exchange some of their work, or currency, whatever it may be, for food, shelter, luxuries, etc.


Why would I want to own companies during an equities bear market? How has that worked out the last decade?

It's worked out great for me over the last decade.

A twenty dollar bill a century ago would be worth .50 today, a twenty dollar gold piece would be worth $1,600. I don't see that trend changing soon.

Actually a $20 bill a century ago would be worth, at minimum, $20. You're confusing purchasing power with nominal value.

$20 worth of the S&P 500 purchased a century ago would be worth much more than $1600.

The Dow went from 66 to 11,497 in the 20th century (12369 today). $20 in the Dow would be worth $3484 today, more than doubling the return of gold, without factoring in dividends.

The shiny rocks will be worth something, the paper may be worth zero. Do you really not see you would have been better off with gold in recent Zimbabwe or 1930's Germany?

The United States is not 1930s Germany or Zimbabwe. That the shiny rocks will be worth something is an assumption that you're making. If society disintegrates to the point you're talking about, shiny rocks probably wont be worth anything, as they have no utility.

As soon as Saudi Arabia says they no longer require US Dollars for oil, the game is over. China, Russia, Germany, India and the oil rich Arabs will create currencies backed by gold for settlements in the international oil trade. That is the end game. The US Dollar will be on the outside looking in. Gold will get repriced to about $50,000 and those without it will suffer greatly.

You are truly living in a fantasy world. I hope it works out for you.

Yeah but the experts here at GT have declared that can never happen in the U.S.

It's not that it can never happen in the US, but it's much more unlikely. Things are a bit different here and now than they were in post war Germany. Believe it or not, economists today are aware of it as well.

Glocksanity
05-21-2012, 11:27
You are truly living in a fantasy world. I hope it works out for you.


And perhaps you are living with your head in the sand.

We shall see...

Peace Warrior
05-21-2012, 12:34
As soon as Saudi Arabia says they no longer require US Dollars for oil, the game is over. China, Russia, Germany, India and the oil rich Arabs will create currencies backed by gold for settlements in the international oil trade. That is the end game. The US Dollar will be on the outside looking in. Gold will get repriced to about $50,000 and those without it will suffer greatly.
Spot on! :thumbsup: (But I only see gold going to 10-15K US before hyper-inflation kicks in for America.)

Additionally, Libya (i.e., Moammar Gadhafi) had HUGE reserves of gold coins, gold bullion, and precious metals. The new world order's theft of his gold and other precious metal reserves has placed a "hiccup" of uncertainty that is just now being felt in the world's precious metal market. Since people are more and more starting to demand tangible metal (in coins or bullion), instead of mere "papered promises" that their precious metals actually exist, it is becoming somewhat a more particular exercise for the world bankers to justify downward price fluctuations unless they can show more actual circulation/holdings.

The US petrol-dollar is on the way out and has literally been cut to the heart by nations side-steeping its use when buying/selling their oil. This current drop in gold price is merely a strategy from the elitists, and the world's federal reserve banks, to staunch the hemorrhaging US petrol-dollar and try to impede the fast growing autonomy of other nations with relation to the US petrol-dollar. In the eyss of the banking elite, Iran's leadership has already committed the same "mortal sin" of Iraq's Saddam Hussein, which is leaving the petrol-dollar in favor Euro's, selling directly to other nations for gold itself, and for simply trading the oil "straight up" for the delivery of new weapons/weapon systems. Saddam did all these things, and everyone knows what happened to him.

Heck, in an odd-ball, knee jerk reaction, not too long ago our country's covert operators cut a couple of (IIRC) fiber optic cables, used by Iran to facilitate trade with other nations, and we did so just in order to try to stem the tide of Iran's "disobedience" of not exclusively utilizing the US petrol-dollar for oil transactions. (No, it didn't work and made us look like spoiled brats. You can stop wondering why Iran is upset at America.)

Regardless, the powers that are behind the fiat currencies of the entire world have always worked long and hard to keep both gold and silver undervalued so as to keep up the hustle of their profiteering, fiat money systems, which these allow them to control all the world populations' finances as well as steal individual nation's wealth by either deflating or inflating the fiat based currencies AT THEIR DISCRETION so as to further their own agenda.

Paul7
05-21-2012, 13:00
We both know that's not true.

You don't think gold is liquid? Your local coin store will give you cash for it for very close to the spot price.

:yawn: Actually, they do. That analysis factors none of those considerations. That analysis also has a cherry picked time frame.

Yes, the time frame we're in, an equity bear market and PM bull market. It's the time frame I care about.

If the "classic bias for normal" is believing that the end is not, in fact, nigh, then yes, I have it.

How do you define 'end'? A continued slow devaluation of the dollar is reason enough for me to have gold.

No, I have faith in productive assets. Fiat money and gold are not very different. What you don't understand is that regardless of the method of exchange, productive assets will always be valuable. People will always be willing to exchange some of their work, or currency, whatever it may be, for food, shelter, luxuries, etc.

Or gold.....

It's worked out great for me over the last decade.

Not as well as PMs have, unless you're smarter than Warren Buffet.

Actually a $20 bill a century ago would be worth, at minimum, $20. You're confusing purchasing power with nominal value.

You know what I mean.

$20 worth of the S&P 500 purchased a century ago would be worth much more than $1600.

The Dow went from 66 to 11,497 in the 20th century (12369 today). $20 in the Dow would be worth $3484 today, more than doubling the return of gold, without factoring in dividends.

Irrelevant during a bear equity market. With inflation factored in, the Dow has lost 25% since 2001.

The United States is not 1930s Germany or Zimbabwe. That the shiny rocks will be worth something is an assumption that you're making. If society disintegrates to the point you're talking about, shiny rocks probably wont be worth anything, as they have no utility.

In such a case, the shiny stuff will very probably be worth much more than FRNs.

Want to explain to me how the $15 trillion debt (on it's way to $25 trillion) will be paid off short of default or continued devaluation?

Glotin
05-21-2012, 13:41
There you go in your circle again.

I've laid out my thesis very clearly. I understand that you disagree. That you don't, or refuse, to understand it is beyond to me.

How is 100 years of history, including the past 10 irrelevant compared to just the past 10 years? History tends to repeat itself. there's no reason for me to believe that what worked in this system over the past 100 years wont continue to work. We have faced much greater challenges before and the world still turns.

You seem to think that you want to buy equities in a bull market and sell in a bear market... you've got it backwards... and your reasoning is precisely why the great majority of people can't figure out how to make money in equities, so they call the system corrupt and unfair, take their toys and go home, and buy up a bunch of shiny metal to make themselves feel better. Fine. Just don't expect to get wealthy that way. To believe that gold will continue to rise in price because that's what it has done over the past 10 years is stupid, but for whatever reason you don't want to believe that. There are a number of factors that point toward gold performing fairly well over the short term. I'm fine with that, but I'm an investor, not a gambler.

As to these three points:


How do you define 'end'? A continued slow devaluation of the dollar is reason enough for me to have gold.

Or gold.....

Not as well as PMs have, unless you're smarter than Warren Buffet.

1. End meaning the US dollar is no longer worth anything. Inflation taken with the fact that gold is not productive should lead you to productive assets such as equities instead.

2. No, gold is not productive.

3. I don't have to be smarter than Warren Buffet. I have a number of advantages over him that you obviously don't understand.

Glocksanity
05-21-2012, 14:18
1. End meaning the US dollar is no longer worth anything. Inflation taken with the fact that gold is not productive should lead you to productive assets such as equities instead.

Savers don't want to speculate and that is what equities force them to do. Equities have counter party risk that savers don't want to incur. What savers want is purchasing power preservation, not huge gains from investing. They are two different animals. What our monetary system has done, however, with the artificially low interest rates, is forced savers to become speculators in order to try and preserve their purchasing power. Well, guess what, not everyone wants to speculate and invest, nor are they qualified to do so.

2. No, gold is not productive.

And this is its greatest asset!! It is also rare, has little manufacturing demand other than as jewelry, does not decay, and is easily divisible, thus making it a great store of value function for money. Gold makes great money when it is used as a store of value. It no longer needs to be a medium of exchange, as digital and paper dollars fill that function brilliantly. But gold not being productive actually is the point of why it is so good as a store of value in an honest money system. US Dollars fail miserably in that function, as do all fiat money systems as too much money is ultimately printed by governments. That is why you will see Central Banks moving away from US Dollars as a reserve currency and start to use gold as a reserve currency (they already do) for international settlements.

Why do you think governments the world over are not ony buying gold, but demanding to take physical possession of it? Because that is the future of the international monetary system.

Paul7
05-21-2012, 14:23
There you go in your circle again.

I've laid out my thesis very clearly. I understand that you disagree. That you don't, or refuse, to understand it is beyond to me.

How is 100 years of history, including the past 10 irrelevant compared to just the past 10 years? History tends to repeat itself. there's no reason for me to believe that what worked in this system over the past 100 years wont continue to work. We have faced much greater challenges before and the world still turns.

There is that bias for normal.

You seem to think that you want to buy equities in a bull market and sell in a bear market... you've got it backwards... and your reasoning is precisely why the great majority of people can't figure out how to make money in equities, so they call the system corrupt and unfair, take their toys and go home, and buy up a bunch of shiny metal to make themselves feel better.

What great majority? Less than 5% are into PMs to any significant degree, which hardly makes it a bubble. If they've done it the last ten years they're much better off than following your plan. Far more sheeple have stayed in the stock market the last decade, to their detriment.

Fine. Just don't expect to get wealthy that way.

I don't, I hope to preserve what I have. Broke people aren't buying PMs.

To believe that gold will continue to rise in price because that's what it has done over the past 10 years is stupid, but for whatever reason you don't want to believe that.

But you prefer to believe the Dow will continue to rise because of it's past? We have some very unique sets of problems today. There very well will be a time to get out of PMs and into equities, IMHO that is years away, most likely after a dollar crash and reset under some kind of gold-linked standard.

There are a number of factors that point toward gold performing fairly well over the short term. I'm fine with that, but I'm an investor, not a gambler.

If you're heavily into this stock market you are.

As to these three points:



1. End meaning the US dollar is no longer worth anything. Inflation taken with the fact that gold is not productive should lead you to productive assets such as equities instead.

2. No, gold is not productive.

3. I don't have to be smarter than Warren Buffet. I have a number of advantages over him that you obviously don't understand.

Really, how many billions do you have?

Are you not going to answer my question about our rising debt?

Glotin
05-21-2012, 15:48
What great majority? Less than 5% are into PMs to any significant degree, which hardly makes it a bubble. If they've done it the last ten years they're much better off than following your plan. Far more sheeple have stayed in the stock market the last decade, to their detriment. The majority of people fail to beat the market over time. Most people would be best served to buy VTSMX and be done with it. In fact, the majority of professional stock pickers do no better than random selection. I wasn't talking about gold buyers. Also, again, by your metric 1980 wasn't a bubble.

But you prefer to believe the Dow will continue to rise because of it's past? We have some very unique sets of problems today. There very well will be a time to get out of PMs and into equities, IMHO that is years away, most likely after a dollar crash and reset under some kind of gold-linked standard. Yes, I do. People will always need food, clothes, shelter, etc. more than they will need shiny rocks. There are also other advantages over owning companies rather than rocks. I'm glad that you at least recognize that the bull market for gold will some day be over.

If you're heavily into this stock market you are. Untrue. I'm getting some great bargains. UPL is the most recent example. The longer this bear market goes the happier I get.

Really, how many billions do you have? Having billions would remove one of my major advantages.

Are you not going to answer my question about our rising debt? I did.

Atlas
05-21-2012, 18:29
...People will always need food, clothes, shelter, etc. more than they will need shiny rocks. There are also other advantages over owning companies rather than rocks. ...


You continue to hammer the point that in your opinion in the event of extreme national (or international) economic distress gold would be of little or no value.

Why would you believe that would change over the historical norm? In what nation or society has gold ever not been desired and sought after during extreme hard times?


Of course many (most) people in the U.S. would in event of extreme economic conditions be seeking food, clothing, and shelter. Does that really mean that there would be no one anywhere seeking more valuable assets?

What about those who have an abundance of food, clothing, and shelter, and have also an abundance of capital?
Do you assume there is no such person here, in the richest nation on earth? Really?

Paul7
05-21-2012, 18:39
The majority of people fail to beat the market over time. Most people would be best served to buy VTSMX and be done with it.

Let's see, in 2000 VTSMX was at $34.48, today it is at $32.90. Be still my heart.....

BTW, $1 in 2000 devalued to .78 in 2010.

I'm glad that you at least recognize that the bull market for gold will some day be over.

I've never said otherwise. Gold has not always been, and will not always be, a good place to put your money. I'm still waiting for you to say the same about the Dow.

Untrue. I'm getting some great bargains. UPL is the most recent example. The longer this bear market goes the happier I get.

I've got a little in the market too, thinking about getting ROST. But most people would be better off playing the odds in Las Vegas as be in this market big-time.

I did.

What, the debt is just going to magically go away because Obama wants it too? Will that be happening with the Greek, Spanish, and Italian debts also?

Paul7
05-21-2012, 18:40
You continue to hammer the point that in your opinion in the event of extreme national (or international) economic distress gold would be of little or no value.

Why would you believe that would change over the historical norm? In what nation or society has gold ever not been desired and sought after during extreme hard times?


Of course many (most) people in the U.S. would in event of extreme economic conditions be seeking food, clothing, and shelter. Does that really mean that there would be no one anywhere seeking more valuable assets?

What about those who have an abundance of food, clothing, and shelter, and have also an abundance of capital?
Do you assume there is no such person here, in the richest nation on earth? Really?

Exactly. There has never been a time when gold has not been valued, there have been many times when fiat currency has been valueless.

Atlas
05-21-2012, 18:46
I suppose he's never seen the many images of people in Zimbabwe panning for gold...
with their hands because they're too poor to own a pan, or a shovel.

http://i.ytimg.com/vi/fuieirztyHw/hqdefault.jpg


I mean really, they're out there every day digging in the mud to find a fraction of a gram of gold in order to buy a single meal to maintain enough strength to get up tomorrow and do it all over again.

This has been well documented in the world press for two years now, since the complete and total collapse of the Zimbabwe dollar.
This is of course the most extreme example, which I offer here only to make the point.

When in all of human history was gold not sought after?

JohnBT
05-21-2012, 19:06
I read National Geographic, there are people living in garbage dumps around the world digging through trash for tin cans, paper and cloth scraps. Just because a poor person does thankless labor doesn't make the product of their labor particularly valuable.

Atlas
05-21-2012, 19:59
I read National Geographic, there are people living in garbage dumps around the world digging through trash for tin cans, paper and cloth scraps. Just because a poor person does thankless labor doesn't make the product of their labor particularly valuable.

:rofl:



You're killin' me man.
:faint:

AZ Jeff
05-21-2012, 21:40
You continue to hammer the point that in your opinion in the event of extreme national (or international) economic distress gold would be of little or no value.

Why would you believe that would change over the historical norm? In what nation or society has gold ever not been desired and sought after during extreme hard times?



If and when American society devolves to the point that people are trading precious metals for various commodities, we will be trading the commodities THEMSELVES, and PM's will become a form of fiat currency.

It will be FAR easier for me to trade a few cartridges for a loaf of bread than to wander around carrying fairly heavy PM's. (Not to mention that they would have to be cut up into barterable chunks, and that would necessitate scales, etc.) In a barter society, we could skip all that rigamarole.

Atlas
05-21-2012, 21:52
If and when American society devolves to the point that people are trading precious metals for various commodities, .....


You aren't aware that there are people across America and all over the planet trading gold (which is itself a commodity of course) for various commodities 24 hours per day, seven days per week? Not people you know perhaps, but that doesn't change the fact..


If and when American society devolves to the point that people are trading precious metals for various commodities, we will be trading the commodities THEMSELVES, and PM's will become a form of fiat currency.

It will be FAR easier for me to trade a few cartridges for a loaf of bread than to wander around carrying fairly heavy PM's. ....


*sigh*


Really?
1) We are not necessarily talking "end of the world as we know it"
2) Even if we were, why would you assume that there would not be more than a few people who already have abundant supplies of ammo, along with stores of food, shoes, shoelaces, toilet-paper, rivets, Q-tips, 2x4s, etc. etc. who are in a better position than most and have abundant capital and want to shelter some of it in an asset that has been in demand since the earliest recorded history?

I mean here, in the U.S. you don't think there are many people who are well enough off that they aren't worried about "getting by" and scooting off to the town square to barter for necessities?


What is it with the folks here who think this way?
In the event of economic chaos not everyone will be thinking of toilet-paper. Some Americans own the damn mills where the TP is manufactured. Such people usually aren't too concerned with scoring thier next box of 5.56 x 45.. they pay other people to do that, and to stand around with the rifle for them.


AGAIN,
WHEN AND WHERE IN ALL OF HUMAN HISTORY HAS GOLD NOT BEEN IN DEMAND???

:dunno:

... (Not to mention that they would have to be cut up into barterable chunks, and that would necessitate scales, etc.) In a barter society, we could skip all that rigamarole.

Better for you that you don't mention it... you'll only embarrass yourself.

Paul7
05-21-2012, 22:27
It will be FAR easier for me to trade a few cartridges for a loaf of bread than to wander around carrying fairly heavy PM's.

I didn't know gold weighed that much more than lead.

Glocksanity
05-21-2012, 23:25
It will be FAR easier for me to trade a few cartridges for a loaf of bread than to wander around carrying fairly heavy PM's.

Mercury dimes won't end up in the back of your head when you're walking away. You might want to think about that.

cowboy1964
05-21-2012, 23:36
Mercury dimes won't end up in the back of your head when you're walking away. You might want to think about that.

:rofl:

AK_Stick
05-22-2012, 01:18
You aren't aware that there are people across America and all over the planet trading gold (which is itself a commodity of course) for various commodities 24 hours per day, seven days per week? Not people you know perhaps, but that doesn't change the fact..





Nor does it change the fact that of all the bartering/horse trading/swapping that goes on in America, gold is probably the LEAST commonly traded commodity.


Gold will be valuable after a fashion because it will be backed by the market, and whatever currancy that comes out after the dollar is tanked.


In the interim though, I do think he's correct. Gold will not be as valuable, unless there's a market to bring it to.

Glotin
05-22-2012, 11:12
I've never said otherwise. Gold has not always been, and will not always be, a good place to put your money. I'm still waiting for you to say the same about the Dow.

Does that really need to be spelled out? Yes. It is 'bad' to own the Dow when it becomes less valuable.... because it has become less valuable.

However, over time, history has shown equities to be a much better store/grower of wealth than anything else. Given that your average investor is unable to time the market, and a 10+ year time horizon, it is better to follow a continuing investment plan in order to dollar cost average.

I suppose he's never seen the many images of people in Zimbabwe panning for gold...
with their hands because they're too poor to own a pan, or a shovel.

I mean really, they're out there every day digging in the mud to find a fraction of a gram of gold in order to buy a single meal to maintain enough strength to get up tomorrow and do it all over again.

When in all of human history was gold not sought after?

So, because people in Zimbabwe spend their time digging for gold, I should value it?

There was also a time in human history when everyone had always believed that the earth was flat and at the center of the universe. Turns out that just because that's what had always been believed it didn't make them right.

I see no reason for people to value gold. Saying "it's always been that way" isn't good enough for me.

If you like gold, I think a good way to play it is GDX or specific miners like Barrick. The dichotomy between GLD and GDX demonstrates the nature of the bubble, and GDX is a good way to play it if you must have exposure to gold.

1) We are not necessarily talking "end of the world as we know it"
2) Even if we were, why would you assume that there would not be more than a few people who already have abundant supplies of ammo, along with stores of food, shoes, shoelaces, toilet-paper, rivets, Q-tips, 2x4s, etc. etc. who are in a better position than most and have abundant capital and want to shelter some of it in an asset that has been in demand since the earliest recorded history?

1. Yes, you are. If the dollar is worthless, it is the end of the world as we know it. Gold is a hedge against crisis and uncertainty and nothing else. You could call GLD the fear index.

Glocksanity
05-22-2012, 12:59
I see no reason for people to value gold. Saying "it's always been that way" isn't good enough for me.

Value is a subjective matter. However, when I see Central Banks around the world clamoring for gold and delivery of it, that is good enough for me. They do set monetary policy after all.

If you like gold, I think a good way to play it is GDX or specific miners like Barrick. The dichotomy between GLD and GDX demonstrates the nature of the bubble, and GDX is a good way to play it if you must have exposure to gold.

Actually, GDX and GLD are perhaps the worst way to get exposure to gold. Physical gold has no counter party risk and is no one's liability. You can't say that about paper gold (GLD) or mining companies. MF Global? How did that work out? If you don't hold it, you don't own it.


1. Yes, you are. If the dollar is worthless, it is the end of the world as we know it. Gold is a hedge against crisis and uncertainty and nothing else. You could call GLD the fear index.

Gold is also money. That is why it is on the books with Central Banks. It is a reserve currency that has been used for thousands of years for international trade settlements. The last 40 or so years are the exception, not the rule. And guess what, we are heading back to the rule. And when we do, gold will have to be priced considerably higher to absorb all the fiat that has been printed over the last 40 years. That is why $50,000 gold is not unreasonable at all.

Atlas
05-22-2012, 17:40
...
So, because people in Zimbabwe spend their time digging for gold, I should value it?
..

I see no reason for people to value gold. Saying "it's always been that way" isn't good enough for me.

You don't need to value gold at all.
I feel compelled to point out though that some very large, extremely rich corporations have massive investments in digging for gold also...
They send people to the ends of the earth and dig two miles into the ground using hundreds of millions of dollars in machinery to do just that. Must be a reason, huh?


A former GT member (now deceased) made this observation on the perceived value of gold:
(paraphrasing here)

"Gold is valuable because young women have always, since the beginning of human history been willing to do amazing things for little trinkets of gold. For this reason alone men will always go to extreme risk to explore for gold, and be willing to fight and die for it."

If anyone has a rational argument against that, I would like to hear it.

...
1. Yes, you are. If the dollar is worthless, it is the end of the world as we know it. Gold is a hedge against crisis and uncertainty and nothing else. You could call GLD the fear index.

No, I am not. I make no such assumptions.
I said only that I was posting the bit about gold panning by the poor in Zimbabwe only to make a point about the frequent posts proclaiming that in extreme economic conditions, "gold will be worthless, everyone will be bartering bullets for toilet-paper and food"

That same silly assertion has been made many times in discussion here at GT, usually by people who clearly had no knowledge at all about economic history.


Forget Zimbabwe, as I said it is a recent but extreme example.
To you I will ask directly: When and where in all of human history has gold not been highly prized and valued?
Why would you assume that would change today?
You seem to be making certain assumptions about the modern historical counter-relationship between gold and the dollar vis-a-vis that gold will only have a higher price in times of economic panic.
Good luck with that, I wish I could see the future so clearly.


You assert that gold has no use other than as "a hedge against crisis"?
That would be grossly incorrect, and if you believe that then perhaps you should do a little research.


You do realize that you are using and dependent upon countless millions of little nuggets of almost pure gold at this very moment, right?
Without gold there would not be, could not be an internet.
But you knew that, right?

Glocksanity
05-22-2012, 17:42
Nothing lasts forever. Not even reserve currency status:

http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2012/05/Reserve%20Currency_1.png

So, it's not a matter of if the US Dollar will be abandoned, just when. Some of us think sooner than later. Evidence? Have you seen any of the bi-lateral trade agreements between Russia, China, Brazil, Iran, India? They all avoid using US dollars. And with the US kicking Iran out of the Swift system, other countries will start their own.

The writing is on the wall. Hee hee hee. Gonna be fun!!

Peace Warrior
05-23-2012, 10:33
...when I see Central Banks around the world clamoring for gold and delivery of it, that is good enough for me. ...
This^ +1,000

Peace Warrior
05-23-2012, 10:35
I'll buy you a gallon of gas here in Florida for every 4 mercury dimes you give me. :supergrin:

Glotin
05-24-2012, 07:45
You don't need to value gold at all.
I feel compelled to point out though that some very large, extremely rich corporations have massive investments in digging for gold also...
They send people to the ends of the earth and dig two miles into the ground using hundreds of millions of dollars in machinery to do just that. Must be a reason, huh?

That's true. But they do that because people are willing to pay ridiculous amounts of money for that gold. Notice they are selling it, not hoarding it.

No, I am not. I make no such assumptions.
I said only that I was posting the bit about gold panning by the poor in Zimbabwe only to make a point about the frequent posts proclaiming that in extreme economic conditions, "gold will be worthless, everyone will be bartering bullets for toilet-paper and food"

That same silly assertion has been made many times in discussion here at GT, usually by people who clearly had no knowledge at all about economic history.

I see. That is more clear. Still, you're affirming the consequent.

People in Zimbabwe are digging for gold because there is a market for it. If the economy of the US collapses, the world economy will have collapsed. There will be no outside international market demanding gold at today's prices.

I've never said anything about bartering bullets for TP....

To you I will ask directly: When and where in all of human history has gold not been highly prized and valued?
Why would you assume that would change today?
You seem to be making certain assumptions about the modern historical counter-relationship between gold and the dollar vis-a-vis that gold will only have a higher price in times of economic panic.
Good luck with that, I wish I could see the future so clearly.

I don't have to see the future; all I have to do is look at an inflation adjusted historical chart of gold prices.

I'm not saying that gold hasn't always been valued. I'm saying that long term, equities are better at storing and growing wealth. I'm also saying that if your "investment" strategy consists of buying gold at any price, and thinking that someday it will be pegged at $50,000, you're in for a rude awakening. I'm saying that at today's prices, gold is overvalued compared to just about anything else. The risk/return is completely upside down.

You assert that gold has no use other than as "a hedge against crisis"?
That would be grossly incorrect, and if you believe that then perhaps you should do a little research.

You do realize that you are using and dependent upon countless millions of little nuggets of almost pure gold at this very moment, right?
Without gold there would not be, could not be an internet.
But you knew that, right?

Yes, I did know that. You do realize that the industrial demand for gold comes nowhere close to absorbing the supply, right?

Nothing lasts forever. Not even reserve currency status:

http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2012/05/Reserve%20Currency_1.png

So, it's not a matter of if the US Dollar will be abandoned, just when. Some of us think sooner than later. Evidence? Have you seen any of the bi-lateral trade agreements between Russia, China, Brazil, Iran, India? They all avoid using US dollars. And with the US kicking Iran out of the Swift system, other countries will start their own.

The writing is on the wall. Hee hee hee. Gonna be fun!!

Sure. But like Devil Dog said, while the dollar will someday be replaced by something, there is no viable replacement currently available.

Dragline
05-24-2012, 13:17
I'll buy you a gallon of gas here in Florida for every 4 mercury dimes you give me. :supergrin:

I would too. Melt value on four Mercury dimes is over $8.

Atlas
05-24-2012, 17:23
That's true. But they do that because people are willing to pay ridiculous amounts of money for that gold. Notice they are selling it, not hoarding it.

..


"ridiculous amounts of money for that gold"..
By your personal valuation. Apparently a large segment of the worlds population doesn't agree.

You remind me of other GT members who've posted in past discussions more than a few times "if gold is so valuable, why is it that those selling gold accept dollars for it"?

:rofl:

You say that the fact that mankind has valued gold throughout history is not a valid reason to believe it has value, and then use arguments like "all time historical highs" and make comparisons to the historical performance of equities.
Hmmm.

..
I don't have to see the future; all I have to do is look at an inflation adjusted historical chart of gold prices. ...

I've said nothing at all about "investment strategies".

...If the economy of the US collapses, the world economy will have collapsed. There will be no outside international market demanding gold at today's prices...

That is an extremely simplistic binary view..
You assume that the only possible way that gold could ever be valued greatly higher in the world market is a very sudden and complete collapse of the U.S. economy.

On what do you base that?

certifiedfunds
05-24-2012, 20:11
Atlas - just let em go. Keep stacking it. When the inevitable happens, you will own men.

Glotin
05-24-2012, 21:59
"ridiculous amounts of money for that gold"..
By your personal valuation. Apparently a large segment of the worlds population doesn't agree. Not according to the other guy who keeps claiming that only 2% of Americans are buying gold...

You say that the fact that mankind has valued gold throughout history is not a valid reason to believe it has value, and then use arguments like "all time historical highs" and make comparisons to the historical performance of equities.
Hmmm.

Right, because there are no ancillary reasons to support gold having value. It is not productive and has little use. When have I said "all time historical high" in this thread?

Seriously, you kept saying "Gold has always been valued!!!" over and over and over. I said I'm not disputing that. I said that over time, equities outperform gold. Is your reading comprehension really that bad?

That is an extremely simplistic binary view..
You assume that the only possible way that gold could ever be valued greatly higher in the world market is a very sudden and complete collapse of the U.S. economy.

On what do you base that?

What? That's actually close to the opposite of what I've said.

To be frank I don't think you have the reading comprehension or education to have an intelligent discussion about this. At least Paul was bringing up some good points. Even Glocksanity raises a few interesting points amid his $50,000 crazy talk.

I've offered my view for the benefit of people who may be reading this thread in an effort to steer them clear of this gold mania by offering a historical long-term perspective. I'm trying to submit information for the benefit of people who are actually trying to educate themselves, a category you don't fall into.

You're not going to change my mind and I'm not going to change yours, so there's no point discussing it when you don't even understand what I'm saying and aren't offering any information of your own... you're just challenging a misinterpreted view of what I'm saying, and randomly comparing me to "people you've heard before".

Atlas
05-25-2012, 03:27
Not according to the other guy who keeps claiming that only 2% of Americans are buying gold...

There are quite a few human beings on earth other than the general population of the U.S.

..

And do you assume that only the holdings of private individuals of average means (the world average or the average in the U.S., either one) matter to the market?


When have I said "all time historical high" in this thread?


Not your exact words, sorry if you feel I was deliberately misquoting you but...


all I have to do is look at an inflation adjusted historical chart of gold prices.





It is not productive and has little use.


http://geology.com/minerals/gold/uses-of-gold.shtml

Glocksanity
05-26-2012, 12:29
Sure. But like Devil Dog said, while the dollar will someday be replaced by something, there is no viable replacement currently available.

Okay, not to belabor the point, but you are totally missing the point. Not using the US Dollar is real easy.

From the AP: "Japan and China are expected to start direct trading of their currencies as early as June as part of efforts to boost bilateral trade and investment, according to reports.

With the planned step, exchange rates between the yen and the yuan will be determined by their transactions, departing from the current "cross rate" system that involves the dollar in setting yen-yuan rates, Kyodo News said on Saturday.

The two governments are eyeing setting up markets in Tokyo and Shanghai, the Yomiuri Shimbun said."


You see, there does not need to be a new fiat reserve currency to replace the US Dollar. Countries can go bi-lateral, bypassing the US Dollar altogether. They can also us gold as well. This is going to be an economic disaster for the US...and soon.


Get gold and hold on for dear life. It is your life boat. US Dollar denominated financial assets are in a bubble that is getting ready to burst. Ha ha ha for those that stick with them. You have been warned.

Peace Warrior
05-27-2012, 08:15
I would too. Melt value on four Mercury dimes is over $8.
Zactly, and people say precious metals don't hold value.

Glocksanity
05-29-2012, 12:54
Germany is now saying they will provide cash to the broke PIIGS for....wait for it.... it's coming....almost there......GOLD! Ha ha ha. The world is moving to a new gold standard as fiat collapses. And when gold gets repriced...it's going to be a doozy!

http://www.zerohedge.com/news/germany-has-generous-proposal-broke-piigs-cash-gold

cowboy1964
05-29-2012, 15:26
Silver and gold down today. Buy! Buy! Buy!

cowboy1964
06-01-2012, 07:45
Gold back to $1600 already today on the bad economic data.

Seriously people, it ain't going back to $700 ever again. And gas isn't going back to $1.80.