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Old 05-21-2012, 14:23   #126
Paul7
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Originally Posted by Glotin View Post
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.

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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.

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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.

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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.

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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.

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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?
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Old 05-21-2012, 15:48   #127
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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.

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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.

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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.

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

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Are you not going to answer my question about our rising debt?
I did.
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Old 05-21-2012, 18:29   #128
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...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?
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Old 05-21-2012, 18:39   #129
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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.

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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.

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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.

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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?
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Old 05-21-2012, 18:40   #130
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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.
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Old 05-21-2012, 18:46   #131
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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.

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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?
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Old 05-21-2012, 19:06   #132
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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.
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Old 05-21-2012, 19:59   #133
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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.




You're killin' me man.
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Old 05-21-2012, 21:40   #134
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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.
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Old 05-21-2012, 21:52   #135
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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..


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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???



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... (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.
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Old 05-21-2012, 22:27   #136
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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.
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Old 05-21-2012, 23:25   #137
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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.
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Old 05-21-2012, 23:36   #138
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Mercury dimes won't end up in the back of your head when you're walking away. You might want to think about that.
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Old 05-22-2012, 01:18   #139
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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.
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Old 05-22-2012, 11:12   #140
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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.

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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.

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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.
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Old 05-22-2012, 12:59   #141
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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.

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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.


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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.
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Old 05-22-2012, 17:40   #142
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...
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.

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...
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?
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Old 05-22-2012, 17:42   #143
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Nothing lasts forever. Not even reserve currency status:

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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!!
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Old 05-23-2012, 10:33   #144
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...when I see Central Banks around the world clamoring for gold and delivery of it, that is good enough for me. ...
This^ +1,000
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Old 05-23-2012, 10:35   #145
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Old 05-24-2012, 07:45   #146
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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.

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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....

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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.

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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?

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Nothing lasts forever. Not even reserve currency status:

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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.
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Old 05-24-2012, 13:17   #147
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I'll buy you a gallon of gas here in Florida for every 4 mercury dimes you give me.
I would too. Melt value on four Mercury dimes is over $8.
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Old 05-24-2012, 17:23   #148
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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"?



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.

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..
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".

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...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?
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Old 05-24-2012, 20:11   #149
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Atlas - just let em go. Keep stacking it. When the inevitable happens, you will own men.
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Old 05-24-2012, 21:59   #150
Glotin
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"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...

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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?

Quote:
Originally Posted by Atlas View Post
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".
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