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Old 05-18-2012, 06:24   #101
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Originally Posted by Paul7 View Post
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.
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Old 05-18-2012, 08:36   #102
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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.

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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.
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Old 05-18-2012, 10:05   #103
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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.
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Old 05-18-2012, 10:52   #104
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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.

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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=G...rce=undefined;
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Old 05-18-2012, 11:06   #105
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Originally Posted by Glotin View Post
And he has crushed gold over every other timeframe available... what's your point?
My point is I'm talking about THIS timeframe.

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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.....

Quote:
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.



Quote:
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.

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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........

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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.

Quote:
That being said, this sure looks like a top to me:
http://finance.yahoo.com/echarts?s=G...rce=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=G...rce=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?
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Old 05-18-2012, 13:56   #106
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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?
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Old 05-18-2012, 14:05   #107
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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.
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Old 05-18-2012, 14:09   #108
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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.
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Old 05-18-2012, 17:10   #109
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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...

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Originally Posted by Paul7 View Post
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?

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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?

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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.

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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.


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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.
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".
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Old 05-18-2012, 17:58   #110
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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?

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Beaten him based on which metric?
Percentage return.

Quote:
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.

Quote:
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/financ...192100100.html

Quote:
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.

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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.

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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?

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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.

Quote:
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.

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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?

Quote:
I'd much rather have water, food, guns and ammo in that highly unlikely scenario.
I have both.
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Old 05-18-2012, 19:15   #111
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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.
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.
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Old 05-18-2012, 22:52   #112
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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.
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Old 05-18-2012, 22:55   #113
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Originally Posted by Paul7 View Post
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.
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Old 05-19-2012, 06:19   #114
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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.

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Old 05-19-2012, 06:30   #115
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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?
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Old 05-19-2012, 06:49   #116
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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.
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Old 05-19-2012, 06:57   #117
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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.
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Old 05-19-2012, 07:38   #118
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..
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.
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Old 05-19-2012, 08:38   #119
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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.
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Old 05-21-2012, 00:57   #120
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Percentage return.
Percentage return on a nominal price basis, perhaps. If you factor in revenue you get a much different picture.

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Originally Posted by Paul7 View Post
Very.
We both know that's not true.

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None of your questions change this:

http://finance.yahoo.com/news/financ...192100100.html
Actually, they do. That analysis factors none of those considerations. That analysis also has a cherry picked time frame.

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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.

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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.

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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.

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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.

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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.

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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.

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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.
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Old 05-21-2012, 11:27   #121
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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...
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Old 05-21-2012, 12:34   #122
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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! (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.
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Old 05-21-2012, 13:00   #123
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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.

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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.

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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.

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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.....

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It's worked out great for me over the last decade.
Not as well as PMs have, unless you're smarter than Warren Buffet.

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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.

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$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.

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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?
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Old 05-21-2012, 13:41   #124
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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:

Quote:
Originally Posted by Paul7 View Post
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.
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Last edited by Glotin; 05-21-2012 at 13:51..
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Old 05-21-2012, 14:18   #125
Glocksanity
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Quote:
Originally Posted by Glotin View Post
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.

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Originally Posted by Glotin View Post
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.
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