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Old 05-21-2012, 11:27   #121
Glocksanity
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Originally Posted by Glotin View Post
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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Originally Posted by Glocksanity View Post
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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Originally Posted by Glotin View Post
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.

Quote:
$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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Old 05-21-2012, 14:18   #125
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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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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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Old 05-21-2012, 14:23   #126
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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.

Quote:
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.

Quote:
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.

The Furball Forum


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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Nov 11, 2013 at 16:42