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JimBaker488
02-27-2011, 10:58 AM
Silver, Copper, and Palladium are used industrially for important manufacturing processes, but basically Gold has very few such applications.
It's pretty and it's durable, but so what if there's not any real intrinsic economic applications for it to speak of, it just has very little economic utility.
So why do people invest in it ? Even sovereign nation-states invest billions in Gold as just recently we've read about big purchases by both China & India.
But FYI the smart money has been bidding the other metals up much higher than Gold.

FD
02-27-2011, 11:16 AM
As a hedge against inflation in paper currencies.

Frankie
02-27-2011, 11:29 AM
Why do people "invest" in Gold ?

Because Glenn Beck keeps telling them to. :D

Stewie
02-27-2011, 11:43 AM
Because it has intrinsic value, always has. It's also a way to protect against falling fiat currencies that have no value other than a government's ability to control supply. That control is gone worldwide. It's far too easy (politically) to turn on the printing press rather than deal with financial issues that fiat currencies have always caused.

There's a reason China bought 600+ tonnes of gold in an admission in '09. It's suspected they are still on a huge buying binge. While most western developed nations hold a decent percentage of gold as assets (as far as can be garnered), China only has about 1.2% while holding huge dollar based assets. They are moving some assets from paper to tangible assets.

Hog Farmer
02-27-2011, 11:54 AM
I collect Gold just to piss off the Anunaki.

Bewbies
02-27-2011, 12:42 PM
There's going to be a lot of people smoked with gold, the same way they were with real estate.

When every commercial on the radio and tv talks about you buying an "investment" it's about to burst.

The people who make money sell when people are buying, and buy when people are selling.

chiefsnorth
02-27-2011, 12:53 PM
It's funny, a lot of the people harping about gold paid fees that would put any brokerage out of business. they buy antique coins at inflated prices from these online clearing houses. Or worse, they buy the paper (or buy gold and then pay the company a percentage a year to store it)

Gold was a good buy a decade or so ago around $300 or whatever it traded at then. The people who were going to make money in gold have already made it. there are a lot of idiots buying at record historical highs who ate going to end up with a bunch of junk worth a fraction of that.

My favorite are the dumbasses who think gold coins will save them in a situation where social order breaks down. If I am struggling for food and water and lifes necessities, who gives a flying **** about a gold coin? In that situation a box of shotgun shells or a set of batteries or a TV dinner would be worth more than some stupid coin.

The only thing funnier than investment gold are people who buy investment diamonds.

Anyway. Carry on.

Bwana
02-27-2011, 12:56 PM
I bought in when it was in the 800 dollar range. I wish I would have bought more at the time. I just need to keep watching this mess and decide when to unload it. I don't think it is done rising yet. I do know that if it drops $100, its' going away and I'm taking my profit.

Chiefshrink
02-27-2011, 12:58 PM
Because Glenn Beck keeps telling them to. :D

When a loaf of bread hits 20$ and it takes 100- 1$ bills to buy it then you will quit scoffing at the gold and silver that people are storing up and thus realize that a couple of gold coins will buy you 4 bags of groceries and some ice cream and gas for the car to boot:thumb:

BTW, did you buy that book?

Stewie
02-27-2011, 01:01 PM
There's going to be a lot of people smoked with gold, the same way they were with real estate.

When every commercial on the radio and tv talks about you buying an "investment" it's about to burst.

The people who make money sell when people are buying, and buy when people are selling.

This is so wrong it's hardly worth responding, but I will.

First, when gold hit $400 the naysayers said, "That's it! Get out now!" They've been saying the same thing at every new high for the past 10 years and have never been right.

There's no evidence Joe Six Pack is investing in gold. Just because there are commercials (mostly for companies that want your gold) doesn't mean there's a fundamental change. Gold dealers know who their clients are and there's been no surge in run-of-the-mill investors buying gold in any quantity. There are ETFs, but it's unclear if they actually only buy physical gold.

The main reason for my opinion (and many big time professional money managers) that gold will not go down to any extent is that there is NO fiscal change that will stop the printing presses. It's that simple.

China is huge support for current prices. If you pay attention to the market you can see the pattern using a little technical analysis. In the past few years there have been 20% corrections but that hasn't happened recently because the floor is set. Any dip is immediately bought by someone... in big quantities.

Plus, I wouldn't bet against George Soros or John Paulson, who are both big gold investors. Paulson's hedge fund made $158/minute on his gold investments in 2010. He has a huge position in physical gold and isn't selling.

So, while the stock market took a huge dump people in gold just laughed and laughed and have never looked back.

Of course, you can always buy QQQQ. Which has lost 50% in 10+ years, but that's a "sound" investment according to the bubble heads on Financial TV.

Stewie
02-27-2011, 01:07 PM
I bought in when it was in the 800 dollar range. I wish I would have bought more at the time. I just need to keep watching this mess and decide when to unload it. I don't think it is done rising yet. I do know that if it drops $100, its' going away and I'm taking my profit.

If it drops $100, let me know where I can buy it from you. I've been waiting for a big drop to buy more but it doesn't happen.

chiefsnorth
02-27-2011, 01:11 PM
When a loaf of bread hits 20$ and it takes 100- 1$ bills to buy it then you will quit scoffing at the gold and silver that people are storing up and thus realize that a couple of gold coins will buy you 4 bags of groceries and some ice cream and gas for the car to boot:thumb:

ROFL

CrazyPhuD
02-27-2011, 01:13 PM
I buy brass and lead, when society breaks down they will be the far more valuable metals! Granted I'm buying them in the form of bullets.

Stewie
02-27-2011, 01:16 PM
I buy brass and lead, when society breaks down they will be the far more valuable metals! Granted I'm buying them in the form of bullets.

Gold investors don't think society is going to breakdown.

Besides, what are you going to get with bullets? Someone's spoiled food in their fridge? A can of beans in their pantry?

Chiefshrink
02-27-2011, 01:18 PM
I bought in when it was in the 800 dollar range. I wish I would have bought more at the time. I just need to keep watching this mess and decide when to unload it. I don't think it is done rising yet. I do know that if it drops $100, its' going away and I'm taking my profit.

Hold on to it Bwana. I really believe the world economy and especially ours is like the game "Jinga" right now. The powers that be are just deciding when to pull that one piece out that will make everything collapse. Our politicians have put our economy,security as a people and everything America is truly about not only at a dangerous risk but have sold us out and it's just a matter of time IMHO.

This guy sells a newsletter and I get that, but what he say's are stated facts. He expects gold to possibly hit 5-6K an ounce. When you have time it would be worth your weight in gold (Pardon the Pun) to listen.

Diversifying the "right way"(not just buying gold) during a severe financial crisis in order to save the majority of what you have.

http://www.stansberryresearch.com/pro/1011PSIENDVD/PPSIM229/PR

Bwana
02-27-2011, 01:18 PM
I buy brass and lead, when society breaks down they will be the far more valuable metals! Granted I'm buying them in the form of bullets.

Heh, I have a lot more of this than I do gold myself. :)

Bwana
02-27-2011, 01:44 PM
Diversifying the "right way"(not just buying gold) during a severe financial crisis in order to save the majority of what you have.

http://www.stansberryresearch.com/pro/1011PSIENDVD/PPSIM229/PR

Oh trust me, I'm very diversified. Gold is by far the smallest investment I have, looking at the big picture.

notorious
02-27-2011, 01:52 PM
Besides, what are you going to get with bullets? Someone's spoiled food in their fridge? A can of beans in their pantry?



:facepalm:

Chiefshrink
02-27-2011, 01:52 PM
Oh trust me, I'm very diversified. Gold is by far the smallest investment I have, looking at the big picture.

My bad, sorry for my laziness, I should have prefaced what I said earlier. I'm not saying you specifically weren't diversified correctly but what I meant to say was that 'people in general' need to diversify correctly.:thumb:

CoMoChief
02-27-2011, 01:55 PM
because soon the US dollar isn't going to amount to shit...and gold has strong monetary value all across the globe, not matter where you go.

Just wait til the US dollar loses it's reserve status and we experience hyper inflation where it's gonna be $10 for a loaf of bread etc. We're already seeing higher gas prices....which was something the libtards were saying it's Bush's and the conservatives faults. Now what are they gonna say when we're going to see $4 at the pump sometime this summer? Are they gonna wait for another Barry O speech that tells them everything will be ok as long as there's hope and people come together?

Rain Man
02-27-2011, 02:18 PM
I think gold does have some good industrial applications, but that's not why it's hoarded. I've asked the question many times myself about why people and nations hoard gold. If the world goes to hell, it's just a rock, and it's not even a hard rock.

teedubya
02-27-2011, 02:21 PM
I own ZERO gold, but shitloads of silver.

With the industrial uses of silver, and the amount of above ground silver, they said that it could become an extinct metal in the next 20 years. They use WAY more silver than what is above ground, each year.

The US also in 1940 had over 10 Billion ounces in reserves, now it has zero. The US actually had to buy silver for the first time to make the 2011 American Silver Eagles.

Long term bet for me, as far as precious metal goes, is silver. I am also in some rare earth element mining stocks.

Bewbies
02-27-2011, 02:22 PM
This is so wrong it's hardly worth responding, but I will.

First, when gold hit $400 the naysayers said, "That's it! Get out now!" They've been saying the same thing at every new high for the past 10 years and have never been right.

There's no evidence Joe Six Pack is investing in gold. Just because there are commercials (mostly for companies that want your gold) doesn't mean there's a fundamental change. Gold dealers know who their clients are and there's been no surge in run-of-the-mill investors buying gold in any quantity. There are ETFs, but it's unclear if they actually only buy physical gold.

The main reason for my opinion (and many big time professional money managers) that gold will not go down to any extent is that there is NO fiscal change that will stop the printing presses. It's that simple.

China is huge support for current prices. If you pay attention to the market you can see the pattern using a little technical analysis. In the past few years there have been 20% corrections but that hasn't happened recently because the floor is set. Any dip is immediately bought by someone... in big quantities.

Plus, I wouldn't bet against George Soros or John Paulson, who are both big gold investors. Paulson's hedge fund made $158/minute on his gold investments in 2010. He has a huge position in physical gold and isn't selling.

So, while the stock market took a huge dump people in gold just laughed and laughed and have never looked back.

Of course, you can always buy QQQQ. Which has lost 50% in 10+ years, but that's a "sound" investment according to the bubble heads on Financial TV.

Buying an "investment" at record high prices, regardless of what it is, you're going to lose. I'm not offering advice or anything, just sound reason.

Anyone who bought real estate in 2004-2006 knows exactly what people buying gold today are looking forward to.

As to what people on tv are telling us, if they had any idea what they were doing they'd be making a lot more money doing that. Just like the 'NFL Scouts' on ESPN--if they could actually scout players out they'd work in the NFL. :thumb:

Bewbies
02-27-2011, 02:25 PM
I think gold does have some good industrial applications, but that's not why it's hoarded. I've asked the question many times myself about why people and nations hoard gold. If the world goes to hell, it's just a rock, and it's not even a hard rock.

People will always tell you that gold will always have a value, and that it can't be manipulated like currency. Of course they're ignoring the stratospheric rise in price over the last few years as 'currency manipulation' and not 'record high demand for gold influencing the price.'

teedubya
02-27-2011, 02:25 PM
<iframe title="YouTube video player" width="480" height="390" src="http://www.youtube.com/embed/zkRNeIjbNtY" frameborder="0" allowfullscreen></iframe>

Stewie
02-27-2011, 03:26 PM
Buying an "investment" at record high prices, regardless of what it is, you're going to lose. I'm not offering advice or anything, just sound reason.

Anyone who bought real estate in 2004-2006 knows exactly what people buying gold today are looking forward to.

As to what people on tv are telling us, if they had any idea what they were doing they'd be making a lot more money doing that. Just like the 'NFL Scouts' on ESPN--if they could actually scout players out they'd work in the NFL. :thumb:

Do what you want. Stuff those dollars in a can and bury it in the backyard.

The ignorant ignoramuses that spew BS about gold are everywhere. I guess they're invested in something worth million$. Whatever.

It's not about gold. It's about you not being able to sell your house because the market is falling like a rock. It's about small business not getting a loan. It's about the IMF that wants a semi-gold standard. It's about China buying gold by the tonne. It's about the gov't of the U.S. that has no political balls because they pander to their voters that demand more and more money. It's really not that difficult.

Gold will rise. Your buying power will shrink.

teedubya
02-27-2011, 03:34 PM
Demand for Gold and Silver in China and India are through the roof now, btw.

Silver investment demand soars in India, China
Published on: January 31, 2011 at 16:15

BEIJING/MUMBAI (Commodity Online): Investment demand for silver for industrial use and jewellery making is surging in China and India, two of the largest silver consuming countries in the world.

Silver prices that are in the $28-30 range these days have doubled in the last 15 months, thanks to the rising demand for the white metal from around the world.

China and India are the largest silver marketplaces globally. While unprecedented constructions and setting up of new factories are driving up the industrial demand for silver, rising gold prices is forcing people to opt for silver jewellery in place of gold jewelery.

"Industrial demand for silver is surging these days thanks to the economic boom in China and India. Silver prices have soared in the last one year mainly due to the high demand for the precious metal from these two countries," Devang Nerula, a silver bullion dealer in Mumbai, India’s commercial capital said.

He said that driven by the surging demand for silver from around the world, several global companies are setting up manufacturing facilities in China and India to produce more industrial silver. The fact that both the countries are the largest consumers of silver is driving large global firms to invest in production capacities in China and India.

According to a recent research report from China Research Intelligence (CRI), an important feature of China's silver market is that the domestic price is higher than international market price.

“Domestic price of silver in China is not completely synchronized with the international price and it lags behind with too large fluctuation, resulting in increasing risk of downstream silver consuming enterprises,” says the report.

The CRI report said that China urgently needs to improve the formation mechanism of domestic silver price and seek appropriate trade modes to maintain values and avoid risks. It will be the general trend to introduce silver futures.

Here are some highlights on the China silver production and consumption:

**In 2009, the world's silver output was 21,500 tons, increasing by 0.40% over 2008; renewable silver output was 5,500 tons, increasing by 2.70% over 2008; the government undersold 375 tons, reducing by 31.80% over 2008.

**In 2009, global supply of physical silver was 27,375 tons, rising by 0.20% over 2008; the total supply of the world silver market is expected to reach 29,000 tons in 2010.

**In 2009, the total output of China's mineral silver and regenerate silver was 10,348 tons, maintaining No.1 in the world. Nonferrous metal enterprises are the backbone of the Chinese silver production, accounting for 90% of total silver output. In recent years, the rapid increase in the production of lead, copper and zinc in China becomes an important reason for rising output of China's silver.

**In China, such regions as Hunan, Henan, Jiangxi, etc. are the largest ones with concentrating production of refined lead and refined copper. Henan Yuguang Gold & Lead Group, Jiangxi Copper Co., Ltd., Hunan Xinda Silver Industry Co., Ltd., Yunnan Copper (Group) Co., Ltd., Hunan Chenzhou Jingui Non-ferrous Metal (Group) Co., Ltd., etc. are enterprises with most silver output in China.

**In terms of demand, although silver has made progress in the applications of automotive exhaust catalyst handling, conductive silver ink market, photovoltaic cells, solar energy, radio frequency identification and medical antibiosis, such electrical & electronics fields as silvers used in the electrical & electronics industry, silver-base alloys and silvers used in solders are still the uppermost silver consumption fields.

**As the investment threshold of silver is much lower than that of gold, the silver investment market is tipped for a big future. In addition, as China suffered serious inflation in 2008, there is much room for the development of the silver investment market from the perspective of reserve assets.

**Currently, since China's domestic silver industry obtain surplus, it is more suitable for medium and small investors to invest silver products with a low investment threshold. A major problem now is that silver products suitable for public investment are relatively few and require development of relevant enterprises, in which lies enormous investment opportunities.

**Silver consumption mainly concentrates in industrial applications and investment demands. Currently, 65% of the world's total silver consumption comes from industrial fields. Accordingly, with the recovery of the world's economy, the silver demand from industrial fields is expected to increase steadily.

India, the largest consumers of gold and silver in the world, has set new records in the import of silver in 2010. Spurred by huge industrial and investment demand, silver import by India is likely to hit a record high this year.

According to the year-end estimates by the Bombay Bullion Association, the apex traders body in gold and silver, imports of silver by India will rise by nearly 25% in 2010 to hit more than 1200 tonnes.

Prithviraj Kothari, president of the Bombay Bullion Association, said that festive season sales and strong industrial demand has pushed up the consumption of the yellow metal in India in 2010.

“Despite the high prices of silver, the consumption of the metal has been rising in India. Silver sales have picked up in India during festivals. Silver imports by India will hit 1,200 tonnes in 2010," Kothari said.

In 2009, India’s import of silver was around 1,000 tonnes.

He said that silver consumption in India is going to jump in 2011 thanks to soaring demand for silver raw materials.

RNR
02-27-2011, 03:45 PM
Do what you want. Stuff those dollars in a can and bury it in the backyard.

The ignorant ignoramuses that spew BS about gold are everywhere. I guess they're invested in something worth million$. Whatever.

It's not about gold. It's about you not being able to sell your house because the market is falling like a rock. It's about small business not getting a loan. It's about the IMF that wants a semi-gold standard. It's about China buying gold by the tonne. It's about the gov't of the U.S. that has no political balls because they pander to their voters that demand more and more money. It's really not that difficult.

Gold will rise. Your buying power will shrink.

Welcome to the grand illusion~

Stewie
02-27-2011, 03:50 PM
Welcome to the grand illusion~

Sorry for you. Been in gold since $380. Too bad you missed it. I'm sure your investments have done better. What did you have? GM? The Dow? If the Dow were gold it would be at 30,000. Those investors are geniuses!

People that make money on your money hate gold. They don't make a damn penny. Good for them for stealing. "Don't mind me, I'm just over here pilfering your stuff!"

BucEyedPea
02-27-2011, 04:45 PM
Because it has intrinsic value, always has.
It's not that is has intrinsic value so much as people have placed value in it over time. There's no such thing as intrinsic value. Things have value because people value it and scarcity plays into it too.

I agree with the rest of what you wrote. Plus there's officials in China that have been reading the Austrian School writers like Tom Woods. :thumb:

BucEyedPea
02-27-2011, 04:48 PM
Gold is more difficult to manipulate but govts have managed that in the past. The Romans clipped coins but buyers could see it was debased right off-the-bat and would demand two of the same. Kings melted coins and debased then with other metals. It is more difficult though....but the way you prevent monkeying with it is to not have govt or it's handmaiden, a central bank, have a monopoly on the money.

LiveSteam
02-27-2011, 05:14 PM
Where do you go to buy silver?

Frankie
02-27-2011, 05:51 PM
When a loaf of bread hits 20$ and it takes 100- 1$ bills to buy it then you will quit scoffing at the gold and silver that people are storing up and thus realize that a couple of gold coins will buy you 4 bags of groceries and some ice cream and gas for the car to boot:thumb:

BTW, did you buy that book?

Ordered it online. It's on it's way.

BucEyedPea
02-27-2011, 06:13 PM
Where do you go to buy silver?

Silverado?:p

Bewbies
02-27-2011, 06:36 PM
Welcome to the grand illusion~

Don't worry, nobody can manipulate the value of gold.

teedubya
02-27-2011, 08:31 PM
They say history repeats itself.

http://www.usagold.com/germannightmare.html

FD
02-27-2011, 10:02 PM
They say history repeats itself.

http://www.usagold.com/germannightmare.html

It does. The deflationary spiral is still a very real risk:

http://www.princeton.edu/~pkrugman/deflation_us_j.gif

Hog Farmer
02-28-2011, 03:13 AM
I've been investing my money in cash. In fact I just bought 6 $50 bills for $500. I just figure when times are hard , everybodys gonna have ones, fives, tens and twentys but the fitys are gonna be scarce.

RNR
02-28-2011, 05:45 AM
Sorry for you. Been in gold since $380. Too bad you missed it. I'm sure your investments have done better. What did you have? GM? The Dow? If the Dow were gold it would be at 30,000. Those investors are geniuses!

People that make money on your money hate gold. They don't make a damn penny. Good for them for stealing. "Don't mind me, I'm just over here pilfering your stuff!"

:rolleyes: Stewie Trump~

JimBaker488
02-28-2011, 08:07 AM
I think gold does have some good industrial applications, but that's not why it's hoarded. I've asked the question many times myself about why people and nations hoard gold. If the world goes to hell, it's just a rock, and it's not even a hard rock.
Bingo ! Here's a man who understands that most of the appeal for Gold is derived thru marketing hype, pure BS ! Basically investing in Gold isn't that much different than investing in paintings or antiques in terms to it's basic economic value or use. And actually the industrail applications for Gold are really quite limited. On the other hand Silver has many important applications in medical, electronics, & energy. 2 examples would be batteries and Solar equipment. And thats why over the last 2 years Silver has increased 130% in value compard to a relatively unimpressive 40 % for Gold. Palladium has also increased in value much more than Gold. As has Copper.
And please, anytime somebody says Gold is a "hedge against inflation", ask them to explain what they mean, because they proably don't really know ? Intentionally or unknowingly they are just parroting the marketing promos we all see too often on TV. Gold doesn't keep you warm like oil products do, or shelter you like lumber products, or nourish you like soybeans or wheat.
And compared to metals like Silver and Copper with real manufacturing/industrial utility, Golds are very limited. But you know what , it sure is pretty isn't it ? Right !

Taco John
02-28-2011, 12:01 PM
I've been investing my money in cash. In fact I just bought 6 $50 bills for $500. I just figure when times are hard , everybodys gonna have ones, fives, tens and twentys but the fitys are gonna be scarce.

I've got 6 for you that I'll give you at a $100 discount on that deal. I hate to do it, but I'll make that deal hoping that you'll come back for repeat business.

BucEyedPea
02-28-2011, 12:47 PM
It does. The deflationary spiral is still a very real risk:

http://www.princeton.edu/~pkrugman/deflation_us_j.gif

There's nothing really wrong with deflation. It's just supply and demand playing out. Besides inflation benefits the wealthy. Deflation hurts the rich but helps others get through an economic slowdown.

HonestChieffan
02-28-2011, 12:51 PM
People invest in gold for a lot of reasons. Example like Beatle Boots. If you invested big into Beatle Boots in 1965 you would not have a lot to show for it. Or Studebaker stock.

Chinchillas were not a hit either.

DJJasonp
02-28-2011, 01:35 PM
Buy gold all you want....but the US government has the ability to confiscate that gold in times of "crisis".

We're screwed with cash or gold.

BucEyedPea
02-28-2011, 01:49 PM
Buy gold all you want....but the US government has the ability to confiscate that gold in times of "crisis".

We're screwed with cash or gold.

For that matter they can confiscate your home or anything else.

Calcountry
02-28-2011, 03:49 PM
There's going to be a lot of people smoked with gold, the same way they were with real estate.

When every commercial on the radio and tv talks about you buying an "investment" it's about to burst.

The people who make money sell when people are buying, and buy when people are selling.Funny thing about gold also is the fact that when the price of it gets really high, people start digging more of it out if the ground.

Calcountry
02-28-2011, 03:50 PM
For that matter they can confiscate your home or anything else.Sharia law now!!!

HonestChieffan
02-28-2011, 05:15 PM
Funny thing about gold also is the fact that when the price of it gets really high, people start digging more of it out if the ground.

Its the anti-oil in that regard.....

googlegoogle
02-28-2011, 05:54 PM
It's ancient money since it never rusts & corrodes and is 'rare'.

When first humans evolved and came upon a stream and saw this sparkling metal , they thought this is no ordinary stuff.

banyon
02-28-2011, 07:53 PM
This is so wrong it's hardly worth responding, but I will.

First, when gold hit $400 the naysayers said, "That's it! Get out now!" They've been saying the same thing at every new high for the past 10 years and have never been right.

There's no evidence Joe Six Pack is investing in gold. Just because there are commercials (mostly for companies that want your gold) doesn't mean there's a fundamental change. Gold dealers know who their clients are and there's been no surge in run-of-the-mill investors buying gold in any quantity. There are ETFs, but it's unclear if they actually only buy physical gold.

The main reason for my opinion (and many big time professional money managers) that gold will not go down to any extent is that there is NO fiscal change that will stop the printing presses. It's that simple.

China is huge support for current prices. If you pay attention to the market you can see the pattern using a little technical analysis. In the past few years there have been 20% corrections but that hasn't happened recently because the floor is set. Any dip is immediately bought by someone... in big quantities.

Plus, I wouldn't bet against George Soros or John Paulson, who are both big gold investors. Paulson's hedge fund made $158/minute on his gold investments in 2010. He has a huge position in physical gold and isn't selling.

So, while the stock market took a huge dump people in gold just laughed and laughed and have never looked back.

Of course, you can always buy QQQQ. Which has lost 50% in 10+ years, but that's a "sound" investment according to the bubble heads on Financial TV.

What happens when China stops buying.

Saul Good
02-28-2011, 08:00 PM
There's nothing really wrong with deflation. It's just supply and demand playing out. Besides inflation benefits the wealthy. Deflation hurts the rich but helps others get through an economic slowdown.

How does inflation benefit the wealthy? It punishes those who park their money and benefits the borrowers.

If I have a $250,000 mortgage at 4.5% interest for 30 years, inflation improves my deal.

banyon
02-28-2011, 08:12 PM
How does inflation benefit the wealthy? It punishes those who park their money and benefits the borrowers.

If I have a $250,000 mortgage at 4.5% interest for 30 years, inflation improves my deal.

As a holder of a student loan, I find your logic impeccable.

KC native
02-28-2011, 08:26 PM
There's nothing really wrong with deflation. It's just supply and demand playing out. Besides inflation benefits the wealthy. Deflation hurts the rich but helps others get through an economic slowdown.

Deflation fucks everyone. :facepalm:

2bikemike
02-28-2011, 09:22 PM
How does inflation benefit the wealthy? It punishes those who park their money and benefits the borrowers.

If I have a $250,000 mortgage at 4.5% interest for 30 years, inflation improves my deal.

This is true which is one reason I don't mind being highly leveraged.

prhom
03-01-2011, 06:49 AM
Its the anti-oil in that regard.....

To certain degree yes, but new gold mines take a long time to develop and existing mines usually don't have a lot of excess production capacity. Add to that the fact that many of the best gold mines are seeing a reduction in the average grade of remaining reserves and you've got a very similar situation to oil production. In some regards it's even worse than oil because while both commodities are capitally intensive to develop, oil production is easier to adjust or shut off if prices aren't where you need/want them to be. Gold production is much more difficult to regulate. Operating costs are high and have a large fixed component so once you build a mill you have to keep it going or shut it down completely, they really can't run economically at 75% or 50% capacity.

JimBaker488
03-01-2011, 07:21 AM
It's ancient money since it never rusts & corrodes and is 'rare'.

And why would that be important ? You can't eat it, burn it, or build a shelter with it. So why would it be valuable to you ? OK it's pretty, but that's not a value economically speaking.

Stewie
03-01-2011, 03:56 PM
Today is a day why you invest in gold.

Americans analyze the how's and why's of gold from an American, dollar-centric view. The rest of the world doesn't.

I ask you this. Who has been buying gold? The ETFs have been net sellers recently.

BucEyedPea
03-01-2011, 04:21 PM
And why would that be important ? You can't eat it, burn it, or build a shelter with it. So why would it be valuable to you ? OK it's pretty, but that's not a value economically speaking.

When paper money loses all it's value you can't eat it, or build a shelter with it but you can burn it to start a fire.
Gold is what people have historically relied on during calamities because it winds up being exchangeable.

BucEyedPea
03-01-2011, 04:24 PM
How does inflation benefit the wealthy? It punishes those who park their money and benefits the borrowers.

If I have a $250,000 mortgage at 4.5% interest for 30 years, inflation improves my deal.

Inflation over time causes the devaluation of money and the rich make money on the difference between the devaluing loan (money) and the inflated hard assets. Inflation favors those who have money to get in early on the cycle and pay back with cheaper dollars.

RubberSponge
03-03-2011, 04:50 AM
When paper money loses all it's value you can't eat it, or build a shelter with it but you can burn it to start a fire.
Gold is what people have historically relied on during calamities because it winds up being exchangeable.

You can take your paperweights. I'll take a buying boat load of survival gear, tillable land, medicine, fuel, clean water supply and food before they become scarce or highly defended. Having the availbility to clean water is the #1 most vital ingredient to survival in times of disaster. Gold comes in at about #59 or so on the list. We'll come down from the hills hunting you for your gold at night if it becomes that important to have, or just wait for you to die from a waterborne disease. Good Luck!

googlegoogle
03-03-2011, 03:27 PM
And why would that be important ? You can't eat it, burn it, or build a shelter with it. So why would it be valuable to you ? OK it's pretty, but that's not a value economically speaking.

It's rare and beautiful. Has many electrical uses.

People like it and want it.

It's ancient ancient currency.

Stewie
03-03-2011, 03:51 PM
You can take your paperweights. I'll take a buying boat load of survival gear, tillable land, medicine, fuel, clean water supply and food before they become scarce or highly defended. Having the availbility to clean water is the #1 most vital ingredient to survival in times of disaster. Gold comes in at about #59 or so on the list. We'll come down from the hills hunting you for your gold at night if it becomes that important to have, or just wait for you to die from a waterborne disease. Good Luck!

People that own gold are about five miles ahead of your list. Good luck!

BucEyedPea
03-04-2011, 07:51 AM
Gold has intrinsic properties that make it valuable. However, it does not have intrinsic value.

I mention this, because, at some point, you will read about gold as a store of value. You will read of gold's intrinsic value. Every time you read either of these phrases, you will know that the author does not understand economic theory....

The important fact to understand here is that objective prices are the result of competitive bids by people with subjective assessments of the future: immediate and more distant assessments....

There is a widespread mistake in economic analysis within those circles that are called the hard-money camp. People are under the impression that gold is a standard of economic value. This concept is foreign to economic theory.

The fact that the average American owns no gold indicates that the average American does not assess the future in the same way that the average gold bug does. The typical buyer of a gold ETF or other gold fund is not thinking the way that the average American does.

Gold possesses intrinsic physical qualities. It is extremely durable. It is malleable. It has a certain luster. All of this in combination has made gold a popular investment tool down through the ages. But there is no intrinsic value to gold. Value is not intrinsic. It is imputed.

Nothing has intrinsic value. Value is imputed. Value is a result of subjective assessments.

Gold Has No Intrinsic Value (http://www.lewrockwell.com/north/north952.html)

JimBaker488
03-04-2011, 04:39 PM
Nothing has intrinsic value. Value is imputed. Value is a result of subjective assessments.

Gold Has No Intrinsic Value (http://www.lewrockwell.com/north/north952.html)
BS ! But soybeans or corn nourish us, keep us alive ! That's real intrinsic value !
And unlike silver or copper, gold has very limited manufacturing. Oh that's right, it can be used for false teeth and jewelry. Big deal !

Jaric
03-04-2011, 04:40 PM
I assumed it was because it's shiny.

BucEyedPea
03-04-2011, 04:59 PM
BS ! But soybeans or corn nourish us, keep us alive ! That's real intrinsic value !
Bull! Corn doesn't even get digested fully. Soy wrecks your body. There's other foods that can provide nourishment, even do a better job. It comes down to what one values more in terms of taste, cost and what they think is more nourishiment for the most value. I would avoid those foods. Then again I was talking economic theory and how value is determined—by individuals.

And unlike silver or copper, gold has very limited manufacturing. Oh that's right, it can be used for false teeth and jewelry. Big deal !

Irrelevant to my point.

Stewie
03-05-2011, 01:47 PM
BS ! But soybeans or corn nourish us, keep us alive ! That's real intrinsic value !
And unlike silver or copper, gold has very limited manufacturing. Oh that's right, it can be used for false teeth and jewelry. Big deal !

Manufacturing? What? Who cares? What do they manufacture out of paper dollars?

The reason that gold is demeaned in the U.S. is because money managers don't make a damn penny on it. They want your paper dollars/numbers in a 401K/403B where they get a cut no matter how bad they manage your money. How do you think they get billion$ in bonuses? Keep on drinking the Wall Street Kool-Aid.

I suggested gold as an investment from the moment I signed up on this board. It was around $500/oz. then, I think. Anyway, it was far lower than it is now. I was in earlier when gold was below $400.

China and Russia are buying gold hand over fist. I would never want to invest in something that's in demand... that's FOOLISH!

teedubya
03-05-2011, 02:14 PM
Manufacturing? What? Who cares? What do they manufacture out of paper dollars?

The reason that gold is demeaned in the U.S. is because money managers don't make a damn penny on it. They want your paper dollars/numbers in a 401K/403B where they get a cut no matter how bad they manage your money. How do you think they get billion$ in bonuses? Keep on drinking the Wall Street Kool-Aid.

I suggested gold as an investment from the moment I signed up on this board. It was around $500/oz. then, I think. Anyway, it was far lower than it is now. I was in earlier when gold was below $400.

China and Russia are buying gold hand over fist. I would never want to invest in something that's in demand... that's FOOLISH!

Don't forget India. And Silver is actually a bigger play right now.

Stewie
03-05-2011, 02:23 PM
Don't forget India. And Silver is actually a bigger play right now.

Yes. Silver is catching up, but it's still way behind. Most gold producers sell their silver and copper (it's a by-product) to companies in that business. That's why gold miners can extract gold for $200/oz. They sell the scrap to those that can use it.

Don't sneeze at silver producers or royalty companies. I own a couple of these by default (buyouts). SLW is an 800 lb. gorilla in my portfolio.

Stewie
03-05-2011, 02:38 PM
Stewie is curious why KC Native hasn't chimed in. I told him gold was a great investment many years ago and he told me I was a fool. I think he's some sort of financial adviser, or something. Doesn't make a penny on gold. Too bad.

KC native
03-05-2011, 02:53 PM
Stewie is curious why KC Native hasn't chimed in. I told him gold was a great investment many years ago and he told me I was a fool. I think he's some sort of financial adviser, or something. Doesn't make a penny on gold. Too bad.

You are full of shit. Years ago? I joined in 2009 fuck stick.

Color me not surprised that you distort my position on gold (don't think I haven't forgot about your performance misrepresentation).

I've always maintained that gold should have a place in a portfolio. However, gold dominates your portfolio and much of it is in forms where you aren't going to get the money back that you expect. Have fun selling your gold coins at flea markets for the next 5 years.

Finally, I'm not a financial advisor. Never have been and never will be. Go ahead and keep making shit up though. It really reflects well on your gold bug insanity.

Stewie
03-05-2011, 03:09 PM
You are full of shit. Years ago? I joined in 2009 fuck stick.

Color me not surprised that you distort my position on gold (don't think I haven't forgot about your performance misrepresentation).

I've always maintained that gold should have a place in a portfolio. However, gold dominates your portfolio and much of it is in forms where you aren't going to get the money back that you expect. Have fun selling your gold coins at flea markets for the next 5 years.

Finally, I'm not a financial advisor. Never have been and never will be. Go ahead and keep making shit up though. It really reflects well on your gold bug insanity.

Oh, so gold was only at $800. I forget when the naysayers spew their dumbassery. There have been so many... so wrong... for so long. I was saying gold was a good investment long before you showed up. Sorry you've missed the ride.

I'll talk to you again when gold is over $1600 and miners are through the stratosphere.

Bewbies
03-05-2011, 03:23 PM
Stewie sounds like the guy that paid $5,000,000 for a 200 sq ft condo in Miami in 2005 and laughed at everyone who said anything that differed from his view that the condo would go up 30% in the next 5 days.

He could be right, and buying gold when he did was a great move, buying gold today is risky as hell. If I had gold I'd be selling. All of it.

teedubya
03-05-2011, 08:42 PM
Why would you sell right now? Unless you were gonna buy survival gear? Hyperinflation will hit later this year, and the price will soar.

Bewbies
03-05-2011, 08:43 PM
Why would you sell right now? Unless you were gonna buy survival gear? Hyperinflation will hit later this year, and the price will soar.

WILL HIT LATER THIS YEAR?

Dude, go buy some lottery tickets and invest the winnings into the next google, facebook and whatever else it is you can already see.

teedubya
03-05-2011, 08:46 PM
WILL HIT LATER THIS YEAR?

Dude, go buy some lottery tickets and invest the winnings into the next google, facebook and whatever else it is you can already see.

It sure as hell is coming soon.

You can't do this... without serious repercussions.

http://survivingglobalrecession.files.wordpress.com/2010/12/infation-scale1.jpg?w=300&h=247

Bewbies
03-05-2011, 08:48 PM
It sure as hell is coming soon.

You can't do this... without serious repercussions.

http://survivingglobalrecession.files.wordpress.com/2010/12/infation-scale1.jpg?w=300&h=247

There's a big difference between the two. Will happen this year and sure is coming soon are quite a ways apart.

Is inflation coming? Most likely. Is hyper-inflation coming? Maybe. Will our currency collapse? Who knows. Will I be forced to barter with gold coins I bought at record high prices or be forced to offer my virgin anus for buttsects to buy food for my family? I hope so!

KC native
03-06-2011, 12:52 PM
Oh, so gold was only at $800. I forget when the naysayers spew their dumbassery. There have been so many... so wrong... for so long. I was saying gold was a good investment long before you showed up. Sorry you've missed the ride.

I'll talk to you again when gold is over $1600 and miners are through the stratosphere.

Even a broken clock is right twice a day.

Saul Good
03-06-2011, 01:04 PM
Even a broken clock is right twice a day.

Great response to someone who has been completely vindicated on a position he has held for years.

The Mad Crapper
03-21-2011, 08:11 AM
A ‘Unique’ Form of ‘Terrorism’
Editorial of The New York Sun | March 20, 2011

http://www.nysun.com/editorials/a-unique-form-of-terrorism/87269/

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Here is a thought experiment concerning two men who have issued money. One issued gold and silver coins that will today bring more in dollars than he charged for them. The other issued paper notes that are today worth but a fraction the gold or silver they were worth at the time they were issued. One man is facing the possibility of years in prison after a federal jury found his issuing of money to have been a crime. The other man is walking around free and being treated by the authorities with great deference.

Which is which?

It turns out that the man walking free is Ben Bernanke, the chairman of the Federal Reserve. A one-dollar note that his bank issued used to be worth — as recently as, say, the start of President Bush’s first term — a 265th of an ounce of gold; today it’s value has plunged to less than a 1,400th of an ounce of gold. The man who issued the coins that will fetch more dollars today than when he issued them is Bernard von NotHaus, 67. He called his coins “Liberty Dollars,” minted them with some similarities to government money, and even though they more than held their value it turns out they’re against the law.

Von NotHaus promised a “spectacular trial” when, in 2007, he was interviewed by our Joseph Goldstein.* At the time von NotHaus was expecting to be indicted, as he eventually was, in connection with his minting of coins. His boast to our Mr. Goldstein was that he would “put this country's monetary system on trial.” In the event, the trial of von NotHaus, which took place at Statesville, North Carolina, was over in but eight days. The jury deliberated but two hours before bringing in its verdict of guilty. It will stand for many as a lesson in the difficulties of illuminating the illogic of our monetary system.

We do not suggest that Mr. von NotHaus was wrongly tried or convicted. The United States code imposes a fine or imprisonment for anyone who, “except as authorized by law, makes or utters or passes, or attempts to utter or pass, any coins of gold or silver or other metal, or alloys of metals, intended for use as current money, whether in the resemblance of coins of the United States or of foreign countries, or of original design . . .” The Justice Department, in a press release about the verdict, asserts that von NotHaus was placing just such coins into circulation with the purpose of mixing them “into the current money of the United States.”

Nor do we suggest that Mr. Bernanke and his colleagues at the Federal Reserve have been violating the United States criminal code by issuing their currency by fiat. Nor do we suggest that the officers and directors of the Fed are anything other than honest and honorable individuals. The Federal Reserve has, over the years, won most of its battles in the federal courts, though possible angles for constitutional challenges have yet to be exhausted.

What we do suggest is that the contrast between the Fed and von NotHaus is an example of how the scandal is not in what’s illegal but in what’s legal. When Mr. Goldstein interviewed Mr. von NotHaus in 2007, he had recently been selling a one-ounce silver coin for $20, which at the time was, Mr. Goldstein noted, several dollars above the spot price of silver. It was also at the start of a rapid collapse in the value of Federal Reserve Notes, which has plunged to the point where today a dollar is worth less than a 30th of an ounce of silver. So who is the injured party — the individual who acquired a one-ounce Liberty silver coin for $20 or the individual who kept his wad of twenty one-dollar Federal Reserve Notes?

“A unique form of domestic terrorism” is the way the U.S. Attorney for the Western District of North Carolina, Anne M. Tompkins, is describing attempts “to undermine the legitimate currency of this country.” The Justice Department press release quotes her as saying: “While these forms of anti-government activities do not involve violence, they are every bit as insidious and represent a clear and present danger to the economic stability of this country.” Such language strikes us as hyperbolic. It may be that the monetary authorities in America fear that their own currency will be exposed as unsound. The monetary terror for the rest of Americans is the danger that there will be a further collapse in the value of their dollars or, conversely, a deflation that will make it even harder, or impossible, to pay back their debts.

The Founders of America understood all this. No doubt they wanted a national coinage. The Constitution they wrote forbids the states from making legal tender out of anything but gold or silver coins, and it is to the Congress that the Constitution gives the power to coin money and regulate its value. But they promptly defined a dollar as 371 ¼ grains of silver, which was the same as in a coin called a Spanish Milled Dollar, or the free market equivalent in gold. The record left by the Founders is replete with expressions of horror at paper money. They required our government officials to enforce the laws Congress has passed until a court tells them otherwise. But they would have understood the instinct of a man like von NotHaus to seek protection from a debasement that the Founders feared was, in respect of paper money, inevitable.

_______



http://www.nysun.com/editorials/a-unique-form-of-terrorism/87269/

Stewie
03-22-2011, 03:51 PM
Even a broken clock is right twice a day.

Twice a day x several years = being right an inordinate amount of times.

The first rule of investing by old timers who know about investing is, "Be right and sit tight. The rest is just noise." That has been no truer than today's investor that gets burned because they're absolutely positive they know where to put their dollars only to end up broke.

Great response to someone who has been completely vindicated on a position he has held for years.

Thanks. I don't preach on here much, but when I do I get the normal BS from the people that "know it all."

Stewie
03-23-2011, 01:56 PM
This cracks me up. The un-spin zone.

<tt>Mar. 23, 2011

Goldman Sachs is still bullish on gold. In a March 17 note, the bank predicted a move to $1480 in the next three months (via Prag Cap).

“Optimism over the state of the global economic recovery at the start of the year, which drove US real interest rates sharply higher – and gold prices lower – has been tempered by the ongoing events in the Middle East and North Africa (MENA) and Japan, sending the 10-year US TIPS yield down to near 80 bp, setting the stage for the next gold price rally.

</tt>A reader's response:

<tt>Revised:
Mar. 23, 2011

Goldman Sachs, no longer able to short and suppress Gold since 2001, is still bullish on gold.

In a March 17 note, the bank's Media (CNBC) predicted a move to $1480 in the next three months, in order to calm widely held estimates of $1650 because they STILL have under water short positions. :) </tt>

chiefsnorth
03-23-2011, 02:49 PM
When a loaf of bread hits 20$ and it takes 100- 1$ bills to buy it then you will quit scoffing at the gold and silver that people are storing up and thus realize that a couple of gold coins will buy you 4 bags of groceries and some ice cream and gas for the car to boot:thumb:

BTW, did you buy that book?

Lololol still the funniest post I have seen here...

At target they are going to be taking gold coins... The clerk will have a little jeweler's eye loupe and eyeball each one before nodding and typing "3 coins" into the cash register. And, at a time of economic crisis and want, a measure of wheat for a day's wages, we'll all make sure we are treating ourselves to some ice cream.

Hey, if the premise that people will still assign a value to coins made of metal X instead of metal Y after the monetary system ends is not too crazy for Chiefsplanet, then it's not too crazy to think we'd splurge our auric bounty on ice cream.

:thumb:

Jaric
03-23-2011, 02:52 PM
Hey, if the premise that people will still assign a value to coins made of metal X instead of metal Y after the monetary system ends is not too crazy for Chiefsplanet, then it's not too crazy to think we'd splurge our auric bounty on ice cream.

:thumb:
Laugh now, but you won't be lauging so hard when you aren't getting enough calcium in your diet and we are.

Stewie
03-23-2011, 02:57 PM
Lololol still the funniest post I have seen here...

At target they are going to be taking gold coins... The clerk will have a little jeweler's eye loupe and eyeball each one before nodding and typing "3 coins" into the cash register. And, at a time of economic crisis and want, a measure of wheat for a day's wages, we'll all make sure we are treating ourselves to some ice cream.

Hey, if the premise that people will still assign a value to coins made of metal X instead of metal Y after the monetary system ends is not too crazy for Chiefsplanet, then it's not too crazy to think we'd splurge our auric bounty on ice cream.

:thumb:

You are truly ignorant.

chiefsnorth
03-23-2011, 03:08 PM
Laugh now, but you won't be lauging so hard when you aren't getting enough calcium in your diet and we are.


As the theory goes, the dollar totally collapses. Paper money is worthless. Social order is breaking down. People are concentrating on just meeting basic needs like obtaining food. The economy is in shambles and there is no end in sight.

What the hell do I want with a gold coin in this situation? Why would I give someone something useful like food in exchange for useless bits of metal? IMaybe you'll find some suckers out there to trade useful commodities for useless commodities, such as food for gold coins, but come talk to me when you have something that has a use. If you have ammunition let's talk. If you have food or fuel, let's talk. If you have clean water or clothing, let's talk. Those things have uses, besides fixing a wobbly table or holding down papers.

Keep dreaming about whistling through the graveyard powered by your Beck Bucks... the coins you bought from the internet at a 30% markup aren't going to get you jack in this situation.

The Mad Crapper
03-23-2011, 03:09 PM
Lololol still the funniest post I have seen here...

At target they are going to be taking gold coins... The clerk will have a little jeweler's eye loupe and eyeball each one before nodding and typing "3 coins" into the cash register. And, at a time of economic crisis and want, a measure of wheat for a day's wages, we'll all make sure we are treating ourselves to some ice cream.

Hey, if the premise that people will still assign a value to coins made of metal X instead of metal Y after the monetary system ends is not too crazy for Chiefsplanet, then it's not too crazy to think we'd splurge our auric bounty on ice cream.

:thumb:

I know, it can't happen here.

The Germans--- who gave us our space program--- were just a bunch of retards. :drool:

The Mad Crapper
03-23-2011, 03:09 PM
Even a broken clock is right twice a day.

Shut up, scumbag.

chiefsnorth
03-23-2011, 03:25 PM
I know, it can't happen here.

The Germans--- who gave us our space program--- were just a bunch of retards. :drool:

Help me out then. Why would I want gold if I have food? What value would gold have in this situation when your concern is meeting basic needs? Sure, if you think this will all be over in a couple of weeks maybe accumulating gold will be ok because you can change it back to money later. But if we got to this point, it's not going to be something that is fixed in the short term.

Jaric
03-23-2011, 03:31 PM
As the theory goes, the dollar totally collapses. Paper money is worthless. Social order is breaking down. People are concentrating on just meeting basic needs like obtaining food. The economy is in shambles and there is no end in sight.

What the hell do I want with a gold coin in this situation? Why would I give someone something useful like food in exchange for useless bits of metal? IMaybe you'll find some suckers out there to trade useful commodities for useless commodities, such as food for gold coins, but come talk to me when you have something that has a use. If you have ammunition let's talk. If you have food or fuel, let's talk. If you have clean water or clothing, let's talk. Those things have uses, besides fixing a wobbly table or holding down papers.

Keep dreaming about whistling through the graveyard powered by your Beck Bucks... the coins you bought from the internet at a 30% markup aren't going to get you jack in this situation.
I'm going to go out on a limb and assumed you missed the point of the post I made that you qouted.

I agree with you that if everything goes to hell, "money" (in whatever form it takes) will be all but useless. I've said on several occasions in several threads if society breaks down, Ammo will be the new currency (A line I stole from a poster on another forum who I agree with 100% on the issue)

However, the post I qouted seemed to mock the usefullness of ice cream. I pointed out, that you won't be getting enough calcium. That's all. Wasn't making a point about gold.

EDIT: In other words, I was joking.

teedubya
03-23-2011, 04:00 PM
Yeah, you can't EAT SILVER OR GOLD... but when all of your other supplies are prepared... you can buy some. :-)

teedubya
03-23-2011, 04:02 PM
I was actually watching a show last night about the universe... and they said when a star explodes into a supernova... that is when silver and gold are created... and it's very rare.

Diamonds conversely are not so rare... the core of a blue dwarf becomes a HUGE diamond when it's all said and done.

Pants
03-23-2011, 04:11 PM
Ammo is a much better investment than gold for any "economic collapse" scenarios, IMO. People with the most ammo will have all the gold for themselves in the end.

The Mad Crapper
03-23-2011, 05:05 PM
Help me out then. Why would I want gold if I have food?

Food is perishible.

Jaric
03-23-2011, 05:15 PM
Yeah, you can't EAT SILVER OR GOLD... but when all of your other supplies are prepared... you can buy some. :-)

Only if you believe other people are willing to trade necessities for shiny metal.

Which oddly, might be completely possible. For some reason or another Gold has almost always held some kind of value for humans.

That said, if I have a choice between a sustainable source of food, shelter, and ammunition or gold well... lets just say dinner's on me.

Jaric
03-23-2011, 05:17 PM
Food is perishible.

Which is why the best "investment" one could engage in if they are preparing for epic collapse would be to learn how to produce your own food without having to pay or trade for it.

If nothing else it gives the people with more guns than you a reason to keep you around.

KC native
03-23-2011, 06:02 PM
Twice a day x several years = being right an inordinate amount of times.

The first rule of investing by old timers who know about investing is, "Be right and sit tight. The rest is just noise." That has been no truer than today's investor that gets burned because they're absolutely positive they know where to put their dollars only to end up broke.



Thanks. I don't preach on here much, but when I do I get the normal BS from the people that "know it all."

What the fuck ever. You have zero credibility on this issue after being called out on your bullshit performance numbers. Spouting a bunch of cliches and not being able to produce a real return number because you buy gold coins (and you have no idea what a time weighted return is) doesn't make you right. It makes you a nut bag gold bug.

The Mad Crapper
03-23-2011, 06:36 PM
What the **** ever. You have zero credibility on this issue after being called out on your bullshit performance numbers. Spouting a bunch of cliches and not being able to produce a real return number because you buy gold coins (and you have no idea what a time weighted return is) doesn't make you right. It makes you a nut bag gold bug.

Still selling VUL's to vulnerable spinsters, Cabron?

Bewbies
03-23-2011, 08:14 PM
The real question is whether or not the gov't will bailout gold buyers when the market collapses since they did that with homeowners?

Pitt Gorilla
03-23-2011, 08:23 PM
When a loaf of bread hits 20$ and it takes 100- 1$ bills to buy it then you will quit scoffing at the gold and silver that people are storing up and thus realize that a couple of gold coins will buy you 4 bags of groceries and some ice cream and gas for the car to boot:thumb:

BTW, did you buy that book?ROFL

RJ
03-23-2011, 09:14 PM
Most women like gold.

Most men like women.

Stewie
03-24-2011, 02:50 PM
A great read from the inimitable Dan Norcini.

I wanted to post some brief comments to let some of the newer readers understand why many of us believe that there is a war being waged upon gold by the Central Banks of the West.

Let me start this off by quoting from none other than former Fed Chairman Alan Greenspan more than 40 years ago:In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. … This is the shabby secret of the welfare statists’ tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists’ antagonism toward the gold standard
What the former Fed Chairman was then saying was that absent a gold standard or some device for restraining the unlimited creation of fiat money, there was nothing to impede monetary officials from engaging in such activity to the extent that it would ultimately set in motion a process of inflation, which is really just another name for the erosion of the purchasing power of a nation’s currency by debasing it. Inflation was and is in essence, the transfer of wealth from one class to another.

Today we have the Fed engaging in the very process that Greenspan warned against back then. We also have the BOJ and the ECB effectively doing the same thing to an extent.

Unlike Silver, Gold is the main metal that most analysts and commentators look to when attempting to decipher whether or not inflation is a serious problem. That means the reference point of gold has become a target for Central Banks which want the world to believe that they can create unlimited amounts of funny money with absolutely ZERO impact on inflation levels. In other words, that they can conjure up wealth and produce prosperity with the electronic equivalent of a printing press and produce no serious inflationary impact by so doing.

Rising gold debunks their hubristic assertions to the contrary for it stands as a silent witness testifying against them. This is the reason the yellow metal is despised by so many Central Banks. It mocks their policies and displays their folly for all the world to see. Central Bankers, being the demigods that they are, will tolerate no rivals to their claims of economic omniscience. You see they have actually come to believe that it is their own wisdom and foresight which enables them to see through the fog that hinders and impedes our economic progress and that they are in a unique position to provide the rest of us with lasting prosperity. They attempt to do this by basically providing or withdrawing liquidity as they in their wisdom judge best and by the setting or manipulation of interest rates.
Those of us who believe that it is free market capitalism and the industry and efforts of mankind that produce wealth and prosperity would beg to differ but that is another story altogether. I would add that it is my opinion that the world would be better off without this plague of locusts that actually devour a nation’s wealth but the fact is that they are here.

While they are here gold will attempt to move in such a manner that it either blesses or curses their policies. Now we all would love to have our policies approved by the vote of the market but what about those times in which the market frowns on our course of action and refuses to smile upon it? Why this is but a simple matter – attack the messenger! If one can somehow manage to keep the price of gold under wrap so that it does not move sharply higher then one can attempt to make the claim that inflation is not a serious problem. The comments usually go something like this:

"Well Jerry, we are looking at the gold price and from what we can see, that while it is definitely higher, it is not soaring out of control. The market may be pricing in some gradual inflation but the action in the gold price is telling us that any fears of inflation getting out of control are definitely unwarranted. Besides, we all agree that some inflation is a good thing because the alternative is deflation and no one wants to see that."

Imagine Fed Chairman Ben Bernanke testifying before Congress saying that the current rise in prices of many goods is only "temporary" and "relatively modest" if the gold price were soaring beyond $1650 and higher! Do you think anyone would take anything that the Chairman said seriously? Copper can soar higher and most will not notice it. Even if it does, it is generally explained as a positive because we are told it is a sign of strong economic growth ahead. Crude oil and energy prices can rocket higher and that can be attributed to geopolitical unrest among oil producing nations. Food can rise sharply and everyone notices that but such things are often explained away by citing weather conditions, supply constraints, etc. but a rising gold price? How does one explain that away?

The only reason that gold has a sustained price rise is because of a lack of confidence in the monetary system. It does not rise sharply because of such things as jewelry demand or industrial demand – it rises when fear, distrust, doubt, suspicion and uncertainty over Central Bank policy reigns. It rises when REAL interest rates are negative and investors understand the insidious process of currency debauchment practiced by these monetary authorities is underway. It thus cries aloud and issues a warning to those who can hear it and what it shouts displeases many Central Bankers because they are among those who while they despise its message, are all too keenly able to hear that message.

Thus the messenger, the prophet, the oracle, must be silenced or at the very least, his message blunted, toned down, marginalized, trivialized by whatever means possible. The mechanism employed to do just this is a subject for another time and place. Suffice it to say for now, without the efforts by the monetary officials of the West to discredit gold, it would be trading considerably higher. Even at that however, the ancient metal of kings refuses to go quietly and docilely into the night. It will yet have the final say.

Calcountry
03-24-2011, 05:29 PM
There's going to be a lot of people smoked with gold, the same way they were with real estate.

When every commercial on the radio and tv talks about you buying an "investment" it's about to burst.

The people who make money sell when people are buying, and buy when people are selling.Plus, when it gets this high, every "Gold Rush Alaska", dipshit gets gold fever and dig more of it out of the ground.

The Mad Crapper
03-24-2011, 06:17 PM
Let me start this off by quoting from none other than former Fed Chairman Alan Greenspan more than 40 years ago:In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. … This is the shabby secret of the welfare statists’ tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists’ antagonism toward the gold standard
What the former Fed Chairman was then saying was that absent a gold standard or some device for restraining the unlimited creation of fiat money, there was nothing to impede monetary officials from engaging in such activity to the extent that it would ultimately set in motion a process of inflation, which is really just another name for the erosion of the purchasing power of a nation’s currency by debasing it. Inflation was and is in essence, the transfer of wealth from one class to another.

People are whistling past the graveyard. It don't matter, the same rain falls on us all.

banyon
03-24-2011, 07:14 PM
Sorry, when the commercials are on tv for granny to smelt her jewelry, .the bubble's burst is imminent

Saul Good
03-24-2011, 07:53 PM
Sorry, when the commercials are on tv for granny to smelt her jewelry, .the bubble's burst is imminent

That reasoning seems backwards to me. Those commercials are for people trying to BUY gold. Why would they be trying to buy at gold's peak?

Bewbies
03-24-2011, 08:03 PM
Plus, when it gets this high, every "Gold Rush Alaska", dipshit gets gold fever and dig more of it out of the ground.

Speaking of the gold rush, you know who got rich during that? The people providing tools to the gold diggers. NOT the people looking for gold. LMAO

banyon
03-24-2011, 08:56 PM
That reasoning seems backwards to me. Those commercials are for people trying to BUY gold. Why would they be trying to buy at gold's peak?

Because the commercials are a scam. They don't really give a crap about granny's jewelry, they just want to hammer her on commissions, S&H, and other charges until it's a bad trade.

Scam artists usually appear at the top of bubbles (e.g., see Fannie and Freddie Mac, Angelo Mozillo, Bernie Madoff, etc.).

Stewie
03-25-2011, 03:59 PM
Because the commercials are a scam. They don't really give a crap about granny's jewelry, they just want to hammer her on commissions, S&H, and other charges until it's a bad trade.

Scam artists usually appear at the top of bubbles (e.g., see Fannie and Freddie Mac, Angelo Mozillo, Bernie Madoff, etc.).

Show me this bubble. I really want to see it. I can show you stock market bubbles and real estate bubbles. Where's this gold bubble? The only big buyers of gold are sovereign nations, not Joe Blow. Joe Blow still believes their money manager that steals 2-3% of their net worth per year is a genius.

Fannie, Freddie, etc. were part of the real estate bubble and Madoff was just stealing billions while Wall Street looked the other way.

prhom
03-25-2011, 08:06 PM
Lololol still the funniest post I have seen here...

At target they are going to be taking gold coins... The clerk will have a little jeweler's eye loupe and eyeball each one before nodding and typing "3 coins" into the cash register. And, at a time of economic crisis and want, a measure of wheat for a day's wages, we'll all make sure we are treating ourselves to some ice cream.

Hey, if the premise that people will still assign a value to coins made of metal X instead of metal Y after the monetary system ends is not too crazy for Chiefsplanet, then it's not too crazy to think we'd splurge our auric bounty on ice cream.

:thumb:

The key phrase here is "after the monetary system ends". In a post-apocalyptic scenario the need for money would be limited at best. As you have pointed out, if all social structure is gone and there is no economy and people are only trying to survive until the next day then gold or any other form of money is truly worthless because money is only relevant if a monetary system exists. So your comment about greater value for metal X vs. metal y is a bit off because without a monetary system nothing has value as money, only goods with intrinsic worth have value.

However, gold has the ultimate utility as a form of money and it works equally well in primitive and modern monetary systems. That is why it carries such value because it holds value all the way until a monetary system ends and is the first thing people turn to when a new monetary system develops.

It makes perfect sense as money because it is durable, easily divisible, difficult enough to produce that any John Doe can't make it, plentiful enough to meet demand, universally recognizable and verifiable, and easy to transport. That's why is has greater value than copper, or zinc, or wood, or anything else that you could make money from.

prhom
03-25-2011, 08:57 PM
Plus, when it gets this high, every "Gold Rush Alaska", dipshit gets gold fever and dig more of it out of the ground.

How much did they end up getting after an entire summer of effing around in Alaska? I didn't see the last few episodes, but midway through they only had a few grams to show for it. Those types are only a fraction of world supply.

prhom
03-25-2011, 09:21 PM
Show me this bubble. I really want to see it. I can show you stock market bubbles and real estate bubbles. Where's this gold bubble? The only big buyers of gold are sovereign nations, not Joe Blow. Joe Blow still believes their money manager that steals 2-3% of their net worth per year is a genius.

Fannie, Freddie, etc. were part of the real estate bubble and Madoff was just stealing billions while Wall Street looked the other way.

Joe Blow in India and China are buying gold big time because they don't trust their government issued currencies, can't yet afford to invest in hard assets there, and are restricted in their access to equities.

The Mad Crapper
03-26-2011, 10:16 AM
Forbes always does a great job explaining reality (that's why moonbats read Krugman instead):

The front page of Section R of the March 14 edition of The Wall Street Journal was devoted to the pros and cons of investing in gold. The section posed the question, “Is gold a good investment?” It then, of course, presented two different points of view.

One writer, a certified financial planner, answered, “Yes.” The other author, a chief investment officer, said, “No.” A better answer to the WSJ’s question would be, “Gold had better not be a good investment, because if it is, we are in for a dismal economy.”

Of course, by the time that the WSJ is talking about gold as an “investment,” you know that we’re in trouble. From the standpoint of the economy as a whole, gold is not an investment at all. A million dollars invested in U.S. nonresidential fixed assets will yield about $500,000 of annual GDP, $90,000/year in federal revenues, and about five average jobs, while $1 million invested in 703 ounces of gold (at the March 14, 2011 closing price) produces nothing.

People “invest” in gold because they have given up on investing in jobs and economic growth. Buying gold represents a last-ditch effort to preserve capital in the face of an unstable, weak dollar. Right now, enormous quantities of real resources are being devoted to extracting gold from the earth and then promptly burying it again (in vaults). Relative to actual annual consumptive usage, there is already a greater inventory of gold than there is of any other commodity.

The “Real Dow” (the Dow Jones Industrial Average divided by the price of gold) provides an indicator of the relative attractiveness of investing in the real economy vs. inflation hedges. When the Real Dow is going up, investors profit from investing in economic growth. When it is going down, they are better off putting their money into gold.

In the decade of the 1950s, the Real Dow went up by 205% (to 17.74), and the unemployment rate declined from 6.5% to 5.2%. In the 1960s, the Real Dow advanced by another 20% (to 21.30), and the unemployment rate declined to 3.9%.

Gold was a “superior investment” during the 1970s. During that dismal decade, the Real Dow crashed, declining by almost 94% (to 1.34). Unemployment rose by almost 62%, to 6.3%.

Ronald Reagan and Paul Volcker turned things around in the 1980s. The Real Dow rose by 365% (to 6.24), and unemployment fell to 5.4%.

Economic growth was also a better investment than gold in the 1990s. The Real Dow went up by 518% (to 38.59, which was within 2% of its all time high), and unemployment fell to 4.0%

Gold (and, for a time, housing) was a better investment than stocks in the 2000s, and we are struggling to recover from the consequences of this fact today. The Real Dow fell by 76% (to 9.33) during that decade, and unemployment more than doubled, to 9.7%.

At the end of the day on March 14, 2011, the Real Dow stood at 8.43, down almost 10% since the start of the decade of the 2010s. This does not bode well for the real economy.

Economic growth, federal revenues, and employment all depend upon capital investment. The fastest growing economies are the ones that invest the most. Private investors will not commit capital to productive assets when the value of those assets is losing ground to inflation. Instead, they will spend their money on inflation hedges, like gold. Gold produces nothing and employs no one, but it does protect capital from the depredations of central banks.

The real economy does best when the dollar is stable. The dollar was formally defined in terms of gold (at $35/oz) during the 1950s and 1960s. During the 1980s and 1990s, the dollar actually increased in value relative to gold (by 57% and 46%, respectively), although this mainly represented a (partial) recovery from the disastrous 1970s. During the bad decades for the real economy, the 1970s and the 2000s, the value of the dollar in terms of gold fell (by 95% and 74%, respectively).

If we want a growing economy, low unemployment, stable financial markets, and a peaceful world, we must stabilize the U.S. dollar. Nothing good can come from allowing gold to be a good investment.

http://blogs.forbes.com/louiswoodhill/2011/03/16/bright-gold-dim-economy/

Stewie
03-26-2011, 12:36 PM
Joe Blow in India and China are buying gold big time because they don't trust their government issued currencies, can't yet afford to invest in hard assets there, and are restricted in their access to equities.

This is an ignorant statement. India "Joe Blows" have always been a big gold consumer, from the beginning of their culture. It's not some new phenomena that drives this market. China recently allowed its people to invest in gold directly because they, as a government, see the fallacy of fiat currencies. They will be tied to the dollar until they aren't, then watch out.

The reason that the gold price is where it's at is not due to people buying gold, gold coins or gold jewelry. The reason is that sovereign nations are buying gold by the tonne. These nations never say anything until after the fact. China admitted in 2008 that it had purchased tonnes and tonnes of gold prior to their announcement. This buying is still going on in a big way, we just don't know who's doing the buying.

prhom
03-26-2011, 03:56 PM
This is an ignorant statement. India "Joe Blows" have always been a big gold consumer, from the beginning of their culture. It's not some new phenomena that drives this market. China recently allowed its people to invest in gold directly because they, as a government, see the fallacy of fiat currencies. They will be tied to the dollar until they aren't, then watch out.

The reason that the gold price is where it's at is not due to people buying gold, gold coins or gold jewelry. The reason is that sovereign nations are buying gold by the tonne. These nations never say anything until after the fact. China admitted in 2008 that it had purchased tonnes and tonnes of gold prior to their announcement. This buying is still going on in a big way, we just don't know who's doing the buying.

Look, if you're going to call someone ignorant at least check some facts first.

The gold purchase announced by China in 2009 (not 2008 BTW) was 454 tons over 6 years. The latest World Gold Council figure puts their reserves at 1054.1 tonnes in March 2011. It is possible that they have been buying and hiding it, but let's consider that estimated gold production for 2010 is 4108 tonnes and demand from officially reported sources was 3812 tonnes that leaves 296 unaccounted-for tonnes. A figure which is dwarfed by 3393 tonnes of gold which went into jewellery and investment purposes. You can't tell me that mysterious purchases of 296 tonnes was the main price driver for the market when 3393 tonnes were purchased on public, open markets. Prices are primarily driven by investors here and abroad and by plain-old consumers that like gold for the fact that it does act as a store of value and looks nice on their hand.

As for Joe Blow abroad, the article in the following link gives another reason why their individual demand continues to increase.

Quote from article on one reason demand continues to grow in China:
“Investors continue to find gold an attractive investment because of government restrictions on other big-ticket investments such as property and cars.”

http://www.bloomberg.com/news/2011-03-23/china-may-match-india-as-world-s-biggest-gold-consumer-on-amazing-demand-.html

All demand and production figures were taken from the World Gold Council at:

http://www.gold.org/world_of_gold/market_intelligence/gold_demand/gold_demand_trends/

banyon
04-03-2011, 06:07 PM
Thought this article spells out pretty well why or when the gold bubble might end:

The Impending Collapse of the Gold Bubble

http://seekingalpha.com/article/260900-the-impending-collapse-of-the-gold-bubble

By analyzing the reasons behind gold’s surge; presenting the relevant fundamental stories, projections, and catalysts; studying the price action, supply and demand factors, and technical levels; and pointing out the extreme and very unsettling psychological forces currently involved in the gold theme – we will explain why the herd-like behavior and highly speculative participation in Gold is pointing to a huge bubble that poses severe risks and may soon collapse.

With global crises, currency devaluations, stagnant recoveries, and a looming threat of war, many funds and investors have flocked to gold as a diversification tool, protection from inflation, and even investment. And with prices up nearly 500 percent in less than 10 years, many still see more upside for this historic store of value. But with the most prominent banks, research firms, gold mining companies' CEOs, and investment legends predicting gold prices to reach anywhere from $1,000 to $15,000, who dowe listen to? And can we really be sure these aren't extremely optimistic forecasts that will never be realized?

It is true that many of the most well-known individuals strongly believe in the continuation of the enormous gold bull market. It is also true that gold has been of tremendous interest to investors and speculators worldwide due to its importance as a "fear hedge," store of value, protection against currency devaluation, and "tangible" wealth. But after an historically steep 10-year rise and domination ofnews and media headlines and investor attention for at least a year now, are most of gold's fundamental reasons already factored into the price?

Frankly, this gold bubble - which will eventually pop - has been dragging on for longer than I expected.It is completely possible that we will see an additional steep rise if global fears escalate. It is also possible that gold prices will soar for a short period, marking a "blowoff top" - which would also signal the beginning of gold's collapse. But the major issue regarding gold is the risk to average investors who have bought gold recently in hopes of riding along with the rest of the crowd. Not only will many latecomers suffer major losses, but if they have invested in gold in the form of coins or physical gold they will be stuck with an asset plunging in value and hard to dispose of for a reasonable loss.

I am not arguing with the underlying reasons that make gold attractive. Gold’s inherent value is understandable. As I’ve mentioned in previous articles ("Gold Bubble: Final Warning?"), the rapid price increase in gold over the past few years is due to mounting fears over currency, poor investment alternatives, and the lack of stability in just about anything else – among other things.

I completely understand the bullish case for gold: It’s a "tangible" store of value, it can act as a hedge for currency risk, demand is expected to continue to grow, etc. What I don’t agree with, however, is that the current price of gold is justified. Sure, demand has increased, uncertainty continues, and the threat of financial collapse still lingers over our heads. But at what point have we sacrificed our rational thinking by skyrocketing gold prices just to own a "tangible" asset? Believing that gold will "always retain its value" is a complete misconception – yes, gold will always be valuable; but its actual value relies on how much people are willing to pay for it. Gold would still be valuable at $800 an ounce. But if you buy it at $1400 and the price drops to $800 because people start to realize they have become a little too exuberant, you still lose a lot of money. Gold is therefore not a screaming buy as many believe. Instead, I think that over-speculation, extreme expectations, faulty arguments, and massive publicity make investing in gold much riskier than many are willing to accept.

Why gold is in a bubble:

1. Rapid Price Run-Up

http://static.seekingalpha.com/uploads/2011/3/29/763684-130144225429152-ChartProphet.png

Gold prices have exploded upwards from near $250/oz to above $1400/oz in 10 years! For an asset that has been the main source of value for thousands of years and throughout the history of civilization, such a massive move requires a radical shift in circumstances. We do potentially have that radical shift underway, but it’s hard to believe that the chaos of our current state of affairs is any more extreme than the massive upheavals that have been encountered throughout history – such as World War I or II, the Great Depression, or any other major financial panic.

And if we compare the current commodity price surge to the tremendous moves over the past 200 years, can we really say with certainty that this time will be different? Every other time commodity prices have risen this quickly, they have seen sharp declines.


http://static.seekingalpha.com/uploads/2011/3/29/763684-13014423056333-ChartProphet.jpg

2. Information Cascade

"Bull markets are born on skepticism, mature on optimism, and die on euphoria." -John Templeton

For a speculative bubble to form and expand, a few core requirements must be met. First, there must exist a small number of individuals or investors who profit from a specific investment. Second, a second wave of investors must see the profits made by the first group and invest in the same asset in hopes of realizing profits similar to group one. The longer the speculative bubble lasts, the higher the number of waves or groups of investors that will participate. Most importantly, however, is that each successive wave of investors sees smaller and smaller profits and is at more risk than the group before it. In other words, the first ones to hear about or invest in this investment theme were the true leaders whose potentially big profits convinced many investors to follow in their footsteps and attempt to repeat their success; but the attempt to repeat others’ previous success is often met with failure, and those individuals who jump on the train too late can suffer huge losses.

It is therefore the transfer of investing enthusiasm from one individual to the next that makes the bubble develop and expand. And the expansion is accomplished through what has been termed an "information cascade": as stories of profits proliferate via personal accounts or media coverage, information regarding the investment theme is transferred; and as that information transfer continues and grows, it sparks a lot of interest and enthusiasm among new potential investors – thereby expanding the bubble.

So how does this apply to Gold?

Since the bull market in gold has lasted for approximately 10 years now, there has been plenty of time for success stories of the initial investors in gold to proliferate throughout the rest of the investing world. After a period of relative success, the next wave of investors joined the gold bandwagon. Then came the introduction of gold ETFs, which made investing in gold easier and more accessible to the average investor. With the addition of factors such as financial turmoil, plunging stock prices, and increasing media attention, gold has been able to continually expand as a "surefire" investment theme. But with the possibility that investor and media enthusiasm is at an extreme, the gold bubble could be reaching its peak.

Here’s how Carl Futia, self-described contrarian, explains the influence of first-investor success stories:

"This is a nearly universal characteristic of investment crowds. Any social group’s growth is fed by the success of its founding members. An investment crowd’s growth is stimulated by the financial success of its early adherents. They have gotten rich from a dramatic upward move in the price of some asset ("The Art of Contrarian Trading," 24)."

It is exactly these success stories and human greed, in attempting to copy others’ success, that keep these speculative bubbles going:

"Crowds develop and grow during a communication process called an information cascade. During an information cascade the print and electronic media focus public attention on recent, dramatic movements in markets and the associated profits and losses of investors. This in turn encourages people to put aside their natural skepticism and adopt the investment theme the media are highlighting. As the investment crowd thus grows larger, it pushes the market even further away from fair value and toward a substantial valuation mistake (ibid. xii-xiii)."

Moreover, it is the big price change in the asset that the crowd then relies on as proof of further gains. And although betting on future price increases based on large run-ups that have already occurred is counter-intuitive and risky, the speculative bubble crowd actually uses these faulty arguments as proof of its correctness.

The crowd then continues to grow as institutional investors, investment gurus, and average investors join. The continuous coverage of success stories, hopes of extreme future profits, and the comfort of being part of an investment crowd with numerous and prominent members, all contribute to these investors’ beliefs that their investments are sound and that their arguments are well-supported.

But the crowd cannot be right forever. At some point there just aren’t any profits to be made because everyone has attempted to profit from the same thing. The arguments that were made in support of the investment may have been based on true statements and forecasts, but the high prices to which the underlying asset has been pushed are no longer justified. In other words, investors were correct in that what they invested in should rise; but the excitement and frenzy over their investments pushed prices to extremes – which were no longer justified by their original arguments in support of those investments.

It is at this time that the speculative bubble is at risk of deflating. So long as the crowd’s success continues, and money is still being made, the bubble can continue to grow by attracting new investors. But once profits begin to wane or there are few if any investors left to join the crowd, the bubble begins to implode. Not much different than a Ponzi scheme, the end of new-investor participation marks the end of the run; and it is many of the last investors to get in that suffer the greatest losses.

The collapse of the speculative bubble picks up steam on the way down just as the bubble picked up steam on its way up:

"Because an information cascade is so fragile, the growth of an investment crowd is likely to halt as soon as the above-average returns to its investment theme fail to materialize. This will happen as a natural consequence of the significant divergence of the market price from fair value that has resulted from the crowd’s investment activities. And as soon as the crowd’s growth stops, there will then be a trickle of members who lose faith in the crowd’s theme. As they leave the crowd, the market price will slowly begin to drift back toward fair value. At that point the information cascade that built the crowd will begin to run in reverse and the trickle of disillusioned members will become a flood (ibid. 41)."

So where are we now in the life of the bubble?

http://static.seekingalpha.com/uploads/2011/3/29/763684-130144243150198-ChartProphet.png

We have undoubtedly passed the "stealth" phase in which the first smart-money investors bought gold around ten years ago. We have also passed the "awareness" phase, in which institutional investors jumped on board before the majority of the public; the introduction of the gold ETFs approximately five years ago probably took place during this phase. We then entered the "mania" phase, in which increasing media attention, public enthusiasm, and – likely - delusion have taken place. There is still a possibility of a rapid "blow-off" phase where prices will shoot up for a short period, tricking the final investors to get in before the bubble ultimately collapses. It is still unsure if the top has been reached; but caution is highly warranted if we currently are nearing the peak.

3. Media Frenzy

There is no doubt that gold has become the focus of much attention over the past year or two: the price has soared, it has become the number one source of "protection" from currency devaluations and economic turmoil, and it is the center of discussion in much of the financial media.

And it is by following the exuberant media coverage of gold that we can better understand the psychology and speculative behavior of the crowd:

"Because the print and electronic media are midwives to the birth of investment crowds, we have the opportunity to watch crowds develop from toddlers to mature adults just by monitoring media content (ibid. 73)."

But why is that a bad thing?

TV Signals Top? Gold vs. Housing

"Even more significant are new TV series that appear just as an associated crowd is about to begin its disintegration process (ibid. 75)."

Huge publicity may signal the top. If widespread media coverage is a sign of investment saturation and the peak of popularity, gold may have already peaked. Gold has made the front page of the Wall Street Journal and has been the subject of a popular TV show entitled "Gold Rush: Alaska." As I mentioned in "Is TV Signaling a Top in Gold?", the housing bubble peaked and began its collapse at the exact time that TV shows were portraying the "house-flipping" process to the masses.

If "Flip This House" and "Flip That House" signaled the peak of the speculative bubble-hunting in the housing market, "Gold Rush Alaska" may prove to do the same for the gold bubble, which may have started for the right fundamental reasons and which has made a considerable profit for a numerous bunch, but which may ultimately end in disaster for those who have joined the party too late.

http://static.seekingalpha.com/uploads/2011/3/29/763684-130144286889145-ChartProphet.png

http://static.seekingalpha.com/uploads/2011/3/29/763684-130144277418809-ChartProphet_origin.png

Wall Street Journal Warning Signal

In addition to TV media, the print media has embraced the gold theme as well. And with the Wall Street Journal displaying gold as the cover story in late 2010, the end may be near.

"In the early 1970s Paul Macrae Montgomery observed that when Time magazine had a cover story about a prominent business personality, about the stock market, or about some other finance-related matter, one could often infer that an important move in the markets was imminent, a move that was likely to be in the direction opposite to what the cover suggested. Optimistic covers led to unexpected drops in prices, while pessimistic covers had the opposite effect (ibid. 92)."

http://static.seekingalpha.com/uploads/2011/3/29/763684-130144299044002-ChartProphet.png

Though the study by Montgomery involved Time magazine, the principle could be applied to the Wall Street Journal – when a story makes the front page of a widely-circulated newspaper or magazine, it signals widespread recognition of that story or theme. Since heavily-distributed newspapers and magazines tend to reflect the widespread sentiment of its readers and the general population, a front-page headline signals the acceptance of that idea as consensus.

It’s been a fairly long-standing negative omen for the market when major cover stories marvel at the wondrous bull-market run-ups and, inversely, a positive omen for the market when cover stories mourn the death of markets. That said, positive cover stories regarding investment themes are bad omens, signaling an upcoming pause or correction, if not an end to that theme.

If mass mood in this case is extreme optimism regarding gold, it may be nearing the end of its run. At the very least, the TV series and heavy media attention signal that the "mania Phase" is underway.

"We Buy Gold" Everywhere

In the past two years, there have been more "sell your gold" commercials and "we buy gold" stores than ever before – not to mention all the gold and silver ads located all over the internet. It seems as if everywhere I go or look I see some kind of reference to gold. The prevalence of these stores and commercials not only points to market saturation, but also points to the massive spotlight that has been shining on gold.

4. Extreme Speculation

a. The introduction of gold ETFs, and the ease with which the average investor can now invest in gold, has made gold much more accessible – and, in turn, much more speculative than ever before.

b. No hedging by the mining companies at the exact time when protecting themselves from declining prices is most important. In order to protect their businesses from a sudden decline in Gold prices, mining companies have generally hedged themselves by owning some put options or other forms of derivatives that would limit their losses in case of such declines. And the higher the price of gold, the more dangerous the price decline is for the miners. But because most of the miners think that gold prices are going to continue rising, they have recently stopped hedging themselves. At a time when protection is actually the most important in the history of their businesses, they’ve joined the gold craze and ceased to hedge. This is as counter-intuitive as it gets: hedges are protections "just in case" prices go down; miners seem to have forgotten that "just in case" is a small bet compared to the potential devastation they may be setting themselves up for.

c. Gold vending machines! It wasn’t enough for gold to be bought at jewelry stores or through distributors directly. They have now built vending machines from which to buy gold!

d. Gold is not enough. First, investors flocked to gold through the GLD ETF. Then, they jumped into the gold miners ETF (GDX) for higher returns. Then they dove into the junior miners (GDXJ). The further down the line investors go, the higher the speculation and, in turn, risk.

But the gold and gold miners weren’t enough, so investors have moved on to other derivative plays on gold – silver (SLV), palladium (PAL), platinum (PPLT), copper (JJC), rare earth elements (REE), Molycorp (MCP), and the GLTR ETF, just to name a few. These moves by investors are not only evidence of the extreme belief that gold prices will continue to rise, but are also signs of massive risk-taking and a potential expansion of the gold bubble, as investors flock to these stocks and ETFs simply due to the fact that they are related to gold.

And if my opinion isn’t enough to convince you, maybe the CEO of Molycorp calling the rare-earth play a bubble will.

banyon
04-03-2011, 06:07 PM
5. Lack of Traditional Investment Valuations ("It’s Different This Time")

A major characteristic of speculative bubbles is the lack of ways to correctly value the underlying asset. Many bubbles, such as the technology bubble of the late 1990s, develop and grow due to giant expectations of the future success or appreciation of the often-misunderstood asset.

"So it is natural to expect that an information cascade is especially likely to develop in response to a genuinely new and different investment opportunity, one that is completely outside the realm of most investors’ personal experience. And this is exactly what is happening when we hear talk about new industries and new technologies that promise to revolutionize the economy (ibid. 48)."

With the tech bubble, investors thought the internet was the future and their investments would only keep rising in value:

Spurred on by the growing use of the internet and the speculation that this new technology was the wave of the future, stock prices soared as investors piled into internet-based companies, sometimes simply for the fact that they included an "e-" prefix or ".com" ending to their names. And though investors were correct in assuming that the internet and technology were the future of business, the exorbitant prices they were willing to pay for companies that hadn’t even turned in a profit should have stood as a stark warning.

But what could investors have done? The internet was rapidly gaining popularity, stock prices were soaring, and the argument that this was a "new age," where old valuation measures no longer applied, was becoming the norm. Things were "different this time," and you’d be crazy not to join the party.

Yet while investors were correct in asserting that the internet and technology were to be the wave of the future, their expectations got a little ahead of themselves, and their blind-faith in almost any company in the technology space was unwarranted. If you joined the party too late, you would have lost almost everything.

( "Cloud 9" Computing:Sign of a Renewed Technology Bubble?)

Similar to the technology bubble, gold also involves an asset that is hard to truly value. It has been the main source of wealth for thousands of years and throughout the globe, yet it is hard to determine what it’s truly worth. Its value is affected by inflation, deflation, war, economic crisis, etc. – factors that are nearly impossible to evaluate or determine with certainty. Instead, gold prices have been highly influenced by speculation about upcoming world events, as well as uncertainty and fear. Human psychology and its extreme opposition to fear make gold almost a perfect candidate for a bubble that preys on emotion:

"Affirmative messages that build crowd unity are not usually appeals to the intellect of crowd members. Instead they are appeals to emotion, to sterotypes, to dreams or fears. The language of persuasion and crowd solidarity is the language of drama, not science (ibid. 56)."

"It’s Different This Time.” As in most bubbles and overly-euphoric investor behavior, the argument that this time things are different has surfaced once again. In the "dot com" bubble the argument was that the "new age of technology and the Internet" was here. In the housing bubble, land values were going to continue to soar because land was only to continue to be scarce as population grew and people needed homes; the extravagant prices were seen as a result of "new valuations" for homes. Now, gold’s value is considered to be "different this time" because global markets are interconnected, economies are at high risk, and currency systems are seen as highly unstable. But are things really so different now?

Rapid price run-ups tend to diverge from the underlying fundamental reasons for their move. In other words, as people start getting overly excited about a certain investment theme they actually run the price up too far, too fast. Their reasons for excitement may be accurate, but their excitement and the extent to which prices run up are actually getting ahead of themselves. Prices can’t go up forever, and they eventually start to drop. And as more and more people start to realize this, prices plummet faster than before. This marks the bursting of the bubble that will eventually see prices crash and many people worse off than before. And if gold is the current bubble, this fate awaits many people now investing in gold.

6. Faulty Historical Comparison

The often-used argument by gold bugs has been that the gold price, if adjusted for inflation, is still considerably below the highs of the early 1980s. And since we are still below the early 1980s prices, we should not be concerned about a gold bubble. Even more, the argument claims that since we are well below inflation-adjusted record prices in gold, we can expect gold prices to continue to run up significantly before a peak is in place. In other words, they claim that $1400 gold is still not expensive because $1400 in 2010 is worth less than $700 in the early 1980s.

I have a few issues with those claims though:

1) Gold price records of 1980 came at a time of soaring inflation. Inflation was at 13.5 percent in 1980! Compare that to 2009 where we had negative inflation, and to 2010 and 2011 where we’re averaging nowhere near 13.5 percent as in 1980. Since inflation "inflates" prices, it is understandable how gold prices skyrocketed in the early 80s in order to reflect the surge in overall prices. But at a time when inflation is far from soaring (at least in comparison to the early 1980s), much of the speculation in gold today is due to uncertainty and fears about the future, rather than the reality that supported gold’s rise in the 1980s.

Take a look at the chart:

http://static.seekingalpha.com/uploads/2011/3/29/763684-130144382517916-ChartProphet.png

As you can see, the 1980 gold price high was accompanied by huge percentage increases in the CPI. And over the next 25 years, gold prices were generally stable as the CPI grew between 1 and 6 percent annually. But starting in 2005, we all of a sudden have a huge divergence between gold prices and the CPI. In other words, we would expect gold prices to rise and fall in accordance with changes in the CPI – if the CPI soars we would expect gold prices to rise as well, and if the CPI falls we would expect gold prices to fall or at least grow modestly. But that’s not the case here; the gold price surged together with CPI in 1980, but is completely diverging from CPI since 2005. If anything, we should be seeing gold prices stagnate or even drop a little to match the lower inflation.

2) Largest divergence between real gold prices and inflation-adjusted gold prices. Not only are gold prices diverging from the yearly CPI changes, but they are also diverging from themselves.

Take a look at the chart:

http://static.seekingalpha.com/uploads/2011/3/29/763684-130144388722873-ChartProphet.png

While real gold prices and gold prices adjusted for inflation have generally remained close, they have diverged from each other to a huge extent since 2005. In the early 1980s, the two prices were almost identical, and even overlapped. But in 2010, we had real prices at $1400 while the inflation-adjusted price of $644 lagged by over 50 percent. Either the inflation-adjusted price has to catch up, or the $1400 real gold price has to drop. With such a massive and unprecedented divergence between the two, I’d bet on option B.

3) As CPI is up less than 30 percent since 2000, gold is up over 350 percent. If CPI is a good measure of overall inflation, we’d expect prices of most items to increase, or decrease, in accordance with changes in the CPI. Therefore, if the CPI increases by 30 percent, we’d expect most items to increase in a range around that 30 percent; prices of food may rise 35 percent, but prices of energy could rise only 25 percent, for example. But when we see the price of one item increase by 350 percent, as gold has in this case, we should question whether such a move is really justified as prices of the rest of the things we could buy are not even close to moving that rapidly.

Take a look at the chart:

http://static.seekingalpha.com/uploads/2011/3/29/763684-130144393469049-ChartProphet.png

As CPI has essentially flat-lined since 2005, gold is up almost threefold.

4) Price highs from the 1980s stand as strong resistance against much higher prices. Since gold lacks intrinsic value, unlike stocks, and relies mainly on supply and demand, previous high prices play an even greater role. In our case, the inflation-adjusted price highs of the 1980s (between $1700 and $2400) could present heavy selling pressure, as investors reconsider their gold investments as prices near previous all-time highs. And the chances of approaching the $2000 level are probably slim anyways if inflation has anything to do with it, since we are nowhere near inflation levels of that period.

In conclusion, though we have not surpassed the record high price of gold in 1980 when we adjust for inflation, we have certainly doubled the record in real prices, we currently have no soaring inflation that would justify the huge price moves (as it did in 1980), and we have the largest divergence ever between real prices and inflation-adjusted prices. In other words, gold is moving much faster than inflation, and maybe even too fast.

7. Intolerance of Opposing Views

"I have found a crowd’s intolerance of contrary views to be its single most important identifying characteristic. This intolerance shows itself in the form of ridicule and abuse of any skeptical consideration of its theme (ibid. 56)."

One of the strongest signs of herd mentality is the fear of taking the opposite view. So far, I am yet to see strong opinions in opposition to gold – someone who puts their money where their mouth is. And when I do see someone claiming gold to be a bubble, their claims are met with heavy opposition and ridicule. This ridicule and scorn (visible in the comment sections of many anti-gold articles) are undoubtedly signs of intense bias and strong emotional ties to the gold theme; and breaking from these biases or emotions is extremely hard to do – especially when one’s money is invested in what is being argued against.

We therefore can understand why gold-bubble claims are met with heavy opposition – because those invested in gold have a high interest in continued price increases. But when the ridicule becomes so one-sided and intense, especially when it’s backed by faulty logic or extreme expectations, signs of a crowd and speculation emerge. Strong and vehement opposition to anti-gold individuals is therefore substantial proof that the gold bubble is nearing saturation.

8. Herd-like Price Targets

"In the late stages of a crowd’s life cycle, virtually all of the content will be devoted to methods for exploiting the market’s projected movements, not to explanations of why these movements should occur at all (ibid. 121)."

Gold Price Targets Range From $1,000 to $15,000: Who is Right?

Virtually no one is willing to bet against gold. Even among those who think gold is a bubble or risky investment, there are very few, if any, people actually willing to bet against it. Though it’s generally a very smart move to avoid betting against a stock or investment theme with a lot of momentum behind it, the fact that even gold bears are shying away from betting against it may signal that it is a bubble with extremely high bullish sentiment. If the gold bears are even afraid to bet against it, is there really much room left for gold to run? What happens if these gold bears finally gather the courage to start betting against it?

Moreover, if we look at the huge number of price-target estimates made by institutions, investment professionals, analysts, and the gold mining companies themselves – only 2 out of over 100 estimates are below $1400! And most of them are far beyond the price today. Such extreme bullishness should be met with severe cautious at the very least. The lack of dissenting opinion is highly unsettling.

But - I could be wrong. At least that's what almost every analyst, bank, mining company, investor,and financial institution thinks. Gold price targets for 2011 range from anywhere near $1000 to as high as $15,000. The larger financial institutions are clustered near $1,500 though. And considering Gold is currently selling at around $1430, does it really pay to take on the potentially large risk when consensus estimates are only about $70 away? If you do think it is worth it, youshould hope some of the individuals predicting$2,000 or $15,000 goldare right.

Here is a comprehensive and exhaustive list of Gold price projections:

http://static.seekingalpha.com/uploads/2011/3/29/763684-130144401451653-ChartProphet.png

banyon
04-03-2011, 06:12 PM
From GoldinMind.com:

Higher than $10,000

1. Mike Maloney: $15,000;

2. Ben Davies: $10,000 – $15,000;

3. Howard Katz: $14,000;

4. Dr. Jeffrey Lewis: $7,000-$14,000;

5. Jim Rickards: $4,000 – $11,000;

6. Roland Watson: $10,800 (in our lifetime);

$5,000 – $10,000

1. Bob Kirtley: $10,000 (by 2011);

2. Arnold Bock: $10,000 (by 2012);

3. Porter Stansberry: $10,000 (by 2012);

4. Tom Fischer: $10,000;

5. Shayne McGuire: $10,000;

6. Eric Hommelberg: $10,000;

7. Anonymous: $6,410 – $10,000 (by 2012-2016);

8. David Petch; $6,000 – $10,000;

9. Gerald Celente: $6,000 – $10,000;

10. Egon von Greyerz: $6,000 – $10,000;

11. Peter Schiff: $5,000 – $10,000 (in 5 to 10 years);
Gold-forecast: Jim-Rogers-Peter-Schiff-or-Roubini

12. Patrick Kerr: $5,000 – $10,000 (by 2011);

13. Peter Millar: $5,000 – $10,000;

14. Roger Wiegand: $5,000 – $10,000;

15. Alf Field: $4,250 – $10,000;

16. Peter George: $3,500 (by 2011-13); $10,000 (by Dec. 2015);

17. Jeff Nielson: $3,000 – $10,000;

18. Dennis van Ek: $9,000 (by 2015);

19. Dominic Frisby: $8,500;

20. James Turk: $8,000 (by 2015);

21. Joseph Russo: $7,000 – $8,000;

22. Michael Rozeff: $2,865 – $7,151;
Rozeff

23. Martin Murenbeeld: $3,100 – $7,000;

24. Jim Willie: $7,000;

25. Dylan Grice: $6,300;

26. Chuck DiFalco: $6,214 (by 2018);

27. Aubie Baltin: $6,200 (by 2017);

28. Murray Sabrin: $6,153;

29. Samuel "Bud" Kress: $6,000 (by 2014);

30. Robert Kientz: $6,000;

31. Harry Schultz: $6,000;

32. Lawrence Hunt: $5,000 – $6,000 (by 2019);

33. Martin Hutchinson: $3,100 – $5,700;

34. Jeremy Charlesworth: $5,000+;

35. Przemyslaw Radomski: $5,000+;

$5,000

1. David Rosenberg: $5,000;

David Rosenberg #2

2. Doug Casey: $5,000;

3. Peter Cooper: $5,000;

4. Robert McEwen: $5,000;

5. Martin Armstrong: $5,000 (by 2016);

6. Peter Krauth: $5,000;

7. Tim Iacono: $5,000 (by 2017);

8. Christopher Wyke: $5,000;

9. Frank Barbera: $5,000;

10. John Lee: $5,000;

11. Barry Dawes: $5,000;

12. Bob Lenzer: $5,000 (by 2015);

13. Steve Betts: $5,000;

14. Stewart Thomson: $5,000;

Up to $5,000

1. Pierre Lassonde: $4,000 – $5,000;

2. Willem Middelkoop: $4,000 – $5,000;

3. Mary Anne and Pamela Aden: $3,000 – $5,000 (by February 2012);

4. James Dines: $3,000 – $5,000 (in June 2011);

5. Goldrunner: $3,000 – $5,000 (by 2012);

6. Bill Murphy: $3,000 – $5,000;

7. Eric Janszen: $2,500 – $5,000;

8. Larry Edelson: $2,300 – $5,000 (by 2015);

9. Luke Burgess: $2,000 – $5,000;

10. Jeff Nichols: $2,000 – $5,000;

11. Jim Sinclair: $1,650 – $5,000 ($1650 by January 14, 2011 OR $3,000-$5,000 by June 2011);

< $3,000 – $4,000

1. Mike Knowles: $4,000;

2. Ian Gordon/Christopher Funston: $4,000;

3. D.P. Baker: $3,000 – $3,750 (by Jan./Feb. 2012);

4. Adam Hamilton: $3,500 (by 2010/11);

5. Christopher Wood: $3,360;

6. Eric Roseman: $3,500+;

7. John Henderson: $3,000+ (by 2015-17);

8. Hans Goetti: $3,000;

9. Michael Yorba: $3,000;

10. David Tice: $3,000 (by 2012);

11. David Urban; $3,000;

12. Mitchell Langbert: $3,000;

13. Brett Arends: $3,000;

14. Ambrose Evans-Pritchard: $3,000;

15. Trader Mark: $3,000 (by mid-2011);

16. John Williams: $3,000;

17. Louise Yamada: $3,000 (by 2016-17);

18. Byron King: $3,000;

19. ThumbCharts.com: $3,000;

20. Bob Chapman: $3,000 (by 2011);

21. Ron Paul: $3,000 (by 2020);

22. Chris Weber: $3,000 (by 2020);

$2,500 – $3,000

1. Ian McAvity: $2,500 – $3,000 (by 2012);

2. Graham French: $2,000 – $3,000;

3. Joe Foster: $2,000 – $3,000 (by 2019);

4. Sascha Opel: $2,500+;

5. Rick Rule: $2,500 (by 2013);

6. Daniel Brebner: $2,500;

7. James DiGeorgia: $2,500;

Source: Goldmine.com.

Additional Risks:

1. Emerging Market Troubles

One of the major drivers of the markets over the past two years has been the "unstoppable" and highly promising future of the emerging markets -- especially China. As millions of inhabitants in emerging countries begin to enter the "modern" world and middle class, their consumption and their effect on the economies of countries all over the globe increases. And as millions of people contribute to the growth of China, India, and other countries, they will require extra food, energy sources such as gasoline and oil, cotton for their increased consumption and clothing needs, industrial metals for their new cars and technology, and many other materials that a growing and evolving population needs.

The problem that may emerge, however, is that there is no guarantee that China and other emerging countries will actually meet our lofty expectations. Emerging markets have been growing at such a rapid pace (7-10+ percent compared to 2-3 percent for the U.S.) that their development may actually be setting them up for housing bubbles, high inflation, and uncontrollable growth.

The problem -- and it's a major one -- with this emerging markets theme that has dominated for the past two years is that all the expectations and projections investors have had may be way too optimistic. With China and others showing very troubling weakness and attempting to slow their growth in order to prevent economic turmoil, a huge economic dip is not out of the question. Add to that the possibility that all the growth is already factored into the commodity and stock prices (that investors have speculated tremendously in all EEM-related themes and that the current prices reflect future expectations), and any stumble or slower growth could send prices plummeting as they attempt to adjust to more realistic growth.

Here is the possible scenario that derails economic recovery and hurts emerging markets investors:

Emerging markets have been set up with lofty expectations for growth that will not be achieved due to unsustainable commodity and food prices, as well as unsustainable growth rates.
The double-digit growth rates that many investors have been relying on do not actually materialize. More reasonable growth rates of 5-8 percent do.
Since prices have run up at such massive rates and steep angles, they must come back down to reflect the more reasonable growth rates that have surfaced.
Prices for emerging markets, commodities, food, and energy drop considerably in order to better reflect current conditions and revised future expectations.

If emerging markets continue to show weakness, commodity prices could suffer. And if commodity prices suffer, gold will most likely drop as well.

2. Monetary Tightening/Interest and Margin Rate Risks

If emerging countries and others begin tightening what has been very loose monetary policy since the recession, commodity prices may suffer. With high and unsustainable inflation emerging in many countries – from China to the UK – increasing interest rates or margins in order to combat these threats could put a sharp stop to gold and commodity prices. Furthermore, though it may be far off, U.S. tightening could put a big damper on further price increases.

3. Inflation or Deflation?

Investors have bought gold out of fear of both inflation and deflation – one of the two must be wrong.

4. Market Up Means Gold Down

I am not yet convinced that the market will continue its uptrend and recovery. But those gold lovers out there must keep in mind that much of gold’s run has been due to the uncertainty and the continued threat of a renewed recession or global turmoil. If the market continues to rise and the economy continues to improve, many investors will move back into stocks instead of gold; much of the incentive to invest in gold will no longer exist. According to this argument, only a market decline should justify buying gold. On the other hand, rapid inflation could justify rising gold prices too. It appears that gold will benefit only from a renewed recession or rapid inflation; anything in the middle supports gold’s decline. A recession or inflation isn’t out of the picture though.

5. Gold Price and Gold Miners Lagging

Gold has set new highs in U.S. dollar terms, but is lagging both in terms of other currencies and in the share price of gold miners.


http://static.seekingalpha.com/uploads/2011/3/29/763684-130144411658134-ChartProphet.png

According to Kitco's index, Gold is yet to make new highs in unanimous fashion; it is still lagging in terms of other currencies. And unless it can break out to new levels in a decisive way, we may currently be approaching the next phase down.

While gold has recovered all of its losses and even broken out to new highs (at least in U.S. dollar terms), the miners have failed to do so, and have even dipped for the second time since attempting the recovery.


http://static.seekingalpha.com/uploads/2011/3/29/763684-13014442048066-ChartProphet.png


http://static.seekingalpha.com/uploads/2011/3/29/763684-130144424530224-ChartProphet.png

6. Still a Safe Haven?

Gold is even starting to show weakness as a "safe-haven" play, as prices have not responded well to the Middle East and Japan turmoil.Though gold and silver are expected to gain if the market drops, as investors flee to safety, we're not so sure if these precious metals are truly as "safe" as many believe them to be. If gold and silver have become speculative trades, as we think they have, they may drop together with the rest of the market (as did oil in 2008, when everyone believed it would continue to soar).

Conclusion

For all the reasons above, we think the risks involved in gold are too great to warrant investing in it. Not only have we seen soaring prices, media frenzy, overly enthusiastic investors, extreme speculation, and what appears to be an overly-saturated investment theme; we are now seeing weakness, as gold has underperformed silver and many commodities over the past few months and has even lost some of its strength as a "safe-haven" play during the Middle East and Japan turmoil. Furthermore, we think there are other investment opportunities that provide better value and further upside for much less risk (diamond-related plays or natural gas, for example).

We continue to hold the opinion that gold looks extremely dangerous at these levels, against what seems to be the entire investing world. With so many clues pointing to the near-definite gold bubble, accompanied by extremely optimistic investor sentiment generally seen in previous bubbles, we are short gold mining companies and awaiting further confirmation to pile on the short-gold trade.

"When everyone thinks alike, everyone is likely to be wrong" – Neill (1954)

Sometimes it pays to go against the crowd.

BucEyedPea
04-03-2011, 08:07 PM
Faber says there will be a correction for gold but long term prospects are still good for it. This would be a good time to pick up more.

Stewie
04-05-2011, 01:32 PM
Look, if you're going to call someone ignorant at least check some facts first.

The gold purchase announced by China in 2009 (not 2008 BTW) was 454 tons over 6 years. The latest World Gold Council figure puts their reserves at 1054.1 tonnes in March 2011. It is possible that they have been buying and hiding it, but let's consider that estimated gold production for 2010 is 4108 tonnes and demand from officially reported sources was 3812 tonnes that leaves 296 unaccounted-for tonnes. A figure which is dwarfed by 3393 tonnes of gold which went into jewellery and investment purposes. You can't tell me that mysterious purchases of 296 tonnes was the main price driver for the market when 3393 tonnes were purchased on public, open markets. Prices are primarily driven by investors here and abroad and by plain-old consumers that like gold for the fact that it does act as a store of value and looks nice on their hand.

As for Joe Blow abroad, the article in the following link gives another reason why their individual demand continues to increase.

Quote from article on one reason demand continues to grow in China:
“Investors continue to find gold an attractive investment because of government restrictions on other big-ticket investments such as property and cars.”

http://www.bloomberg.com/news/2011-03-23/china-may-match-india-as-world-s-biggest-gold-consumer-on-amazing-demand-.html

All demand and production figures were taken from the World Gold Council at:

http://www.gold.org/world_of_gold/market_intelligence/gold_demand/gold_demand_trends/

No one knows how much gold China is buying. They rarely show their cards about anything they don't want known by the outside world. The WGC is pulling numbers out of their ass. China's monetary statements about gold, which are rare, is that they want to increase their reserves.

Stewie
04-05-2011, 01:42 PM
I'll briefly comment on the seekingalpha article but it is so full of crap it's brown.

They think gold producers should hedge? Why? Hedging suppresses price which is why the big banks want the producers to do it. The big producers have costs in the $200-$300/ounce range. What's to hedge? You hedge when prices are low. Hedging is having a bank guarantee a minimum price. Almost all miners have de-hedged for the exact reason that the article says they should be hedging.

A main point in the price in the rise of gold is debt. The talking heads are always looking for gold to go down when business seems to be on the uptick. Nothing is further from the truth. We're at all time highs in the price of gold because debt around the world is untenable with no governmental interest in solving problems other than printing money.

When the debt bubble pops (you never hear about that, eh?) I'll move out of gold. For now it's been a great ride.

Stewie
04-05-2011, 02:03 PM
The paper market has been trying to keep the gold price below $1444 but today it failed. The physical market is more expensive and will eventually make the paper market a moot point.

http://img822.imageshack.us/img822/6622/gold45.jpg

prhom
04-05-2011, 03:05 PM
No one knows how much gold China is buying. They rarely show their cards about anything they don't want known by the outside world. The WGC is pulling numbers out of their ass. China's monetary statements about gold, which are rare, is that they want to increase their reserves.

Great argument..."the numbers are wrong because I think they're wrong". What is it that you don't believe about the WGC numbers? What you're proposing instead just doesn't make any sense.

You seem to be saying that China and other central banks are the primary consumer of gold in the world and would consequently be the main price setter. Which is why we have the prices we have today, right?

But then on the other hand you say that China and other central banks are purchasing this gold from sources unknown to the WGC, that are untraceable in the market, and thus aren't included in WGC supply figures.

These two scenarios are contradictory. If secret purchases are driving prices then they really can't be that secret. Purchases that are large enough to dwarf documented jewelery and investment demand (as reported by the WGC) would be huge news and would attract all kinds of speculation about who the purchaser was. I've never heard anything of the kind and I'd love to see you find any news item that mentions it.

The other hole in your theory is that even though demand can be hard to trace supply really isn't. Gold mining is a capitally intensive business and the vast majority of world gold production comes from the very companies that are affiliated with the WGC. To say that somehow, somewhere, people are mining market-changing quantities of gold that is not reported by the WGC is unrealistic. It would mean large-scale processing facilities and surface disturbances. You can't just hide something like that from the world and pretend it doesn't exist.

Stewie
04-05-2011, 03:11 PM
Great argument..."the numbers are wrong because I think they're wrong". What is it that you don't believe about the WGC numbers? What you're proposing instead just doesn't make any sense.

You seem to be saying that China and other central banks are the primary consumer of gold in the world and would consequently be the main price setter. Which is why we have the prices we have today, right?

But then on the other hand you say that China and other central banks are purchasing this gold from sources unknown to the WGC, that are untraceable in the market, and thus aren't included in WGC supply figures.

These two scenarios are contradictory. If secret purchases are driving prices then they really can't be that secret. Purchases that are large enough to dwarf documented jewelery and investment demand (as reported by the WGC) would be huge news and would attract all kinds of speculation about who the purchaser was. I've never heard anything of the kind and I'd love to see you find any news item that mentions it.

The other hole in your theory is that even though demand can be hard to trace supply really isn't. Gold mining is a capitally intensive business and the vast majority of world gold production comes from the very companies that are affiliated with the WGC. To say that somehow, somewhere, people are mining market-changing quantities of gold that is not reported by the WGC is unrealistic. It would mean large-scale processing facilities and surface disturbances. You can't just hide something like that from the world and pretend it doesn't exist.

The WGC has no idea about China's buying of gold because most of China's buying is internal.

OK, you know it all. If it's so expensive to mine, how do these companies mine so efficiently?

KC native
04-05-2011, 03:20 PM
I'll briefly comment on the seekingalpha article but it is so full of crap it's brown.

They think gold producers should hedge? Why? Hedging suppresses price which is why the big banks want the producers to do it. The big producers have costs in the $200-$300/ounce range. What's to hedge? You hedge when prices are low. Hedging is having a bank guarantee a minimum price. Almost all miners have de-hedged for the exact reason that the article says they should be hedging.

A main point in the price in the rise of gold is debt. The talking heads are always looking for gold to go down when business seems to be on the uptick. Nothing is further from the truth. We're at all time highs in the price of gold because debt around the world is untenable with no governmental interest in solving problems other than printing money.

When the debt bubble pops (you never hear about that, eh?) I'll move out of gold. For now it's been a great ride.

JFC when are you going to actually attempt to learn something about derivatives?

Hedging, done properly, is done at all price points. A good hedge isn't static. It must adjust for price movements and expectations.

Second, the seeking alpha piece is actually a pretty good piece whether you agree with it or not. It's thorough and gives historical and quantitative reasons as to why gold will more than likely have a significant fall. Feel free to pick out points that you specifically disagree with so we can evaluate your claims (I don't expect you to do this because you're pretty full of yourself but one can hope).

KC native
04-05-2011, 03:22 PM
The WGC has no idea about China's buying of gold because most of China's buying is internal.

OK, you know it all. If it's so expensive to mine, how do these companies mine so efficiently?

Ah, yes. The "we gold bugs know what's going on but everyone else is clueless" post. Classic gold buggery.

Stewie
04-05-2011, 03:25 PM
JFC when are you going to actually attempt to learn something about derivatives?

Hedging, done properly, is done at all price points. A good hedge isn't static. It must adjust for price movements and expectations.

Second, the seeking alpha piece is actually a pretty good piece whether you agree with it or not. It's thorough and gives historical and quantitative reasons as to why gold will more than likely have a significant fall. Feel free to pick out points that you specifically disagree with so we can evaluate your claims (I don't expect you to do this because you're pretty full of yourself but one can hope).

Thanks for your input. It was funny several hundred dollars ago. Hedging in the gold mining industry was heavily weighted in favor of the banks. It did two things. It suppressed the price of gold and put money in the pockets of the bankers and allowed them to "lease" gold. It was a complete and utter sham. The miners (back when gold was $300) had no choice. It buried Barrick and others. They finally figured out it was not in their interest and told the banks to fuck off.

Stewie
04-05-2011, 03:27 PM
Ah, yes. The "we gold bugs know what's going on but everyone else is clueless" post. Classic gold buggery.

I'm really sorry that you missed the boat. Didn't I say that three years ago and now gold is at $1450+ an ounce. Carry on with your excellent investment advice. It's stellar and I'll ignore it.

KC native
04-05-2011, 03:27 PM
Thanks for your input. It was funny several hundred dollars ago. Hedging in the gold mining industry was heavily weighted in favor of the banks. It did two things. It suppressed the price of gold and put money in the pockets of the bankers and allowed them to "lease" gold. It was a complete and utter sham. The miners (back when gold was $300) had no choice. It buried Barrick and others. They finally figured out it was not in their interest and told the banks to fuck off.

:facepalm: Futures market is way larger than the physical trade in gold and where everyone does their hedging. You really need to learn some basic finance and market structures.

KC native
04-05-2011, 03:32 PM
I'm really sorry that you missed the boat. Didn't I say that three years ago and now gold is at $1450+ an ounce. Carry on with your excellence investment advice. It's stellar.

And again, way to misrepresent my position on gold. It really shows your prowess for not understanding shit and being a typical dumb fuck gold bug.

Keep buying those coins though. One day, you may be able to sell them and actually get your money back out of them and still lie about your investment performance.

Stewie
04-05-2011, 03:38 PM
:facepalm: Futures market is way larger than the physical trade in gold and where everyone does their hedging. You really need to learn some basic finance and market structures.

And I tried to explain why this is a stupid statement several hundred dollars ago. You really need to understand hedging when it comes to gold miners and banks. It's not the phony baloney futures market. I think you've sat in too many "how do I invest because I'm clueless and yes sir, I see" classes.

Stewie
04-05-2011, 03:44 PM
And again, way to misrepresent my position on gold. It really shows your prowess for not understanding shit and being a typical dumb fuck gold bug.

Keep buying those coins though. One day, you may be able to sell them and actually get your money back out of them and still lie about your investment performance.

Where are your huge returns? For years I've documented my gains in gold and they're still going strong. If Warren Buffet had stayed the course with silver he'd be in hog heaven. But the Oracle of Omaha was forced to write down $1 billion in phony stock gains because he was using tricky accounting in crappy stocks. Gold is the silent witness for all that is wrong in the financial/fiat world. Good luck with whatever you are invested in. I prefer gold and have done well. I've ridden it up from $400 and will get out when I feel it's appropriate.

prhom
04-05-2011, 04:08 PM
The WGC has no idea about China's buying of gold because most of China's buying is internal.

OK, you know it all. If it's so expensive to mine, how do these companies mine so efficiently?

Yes, but that's my point. If China is primarily buying internal supply then it's not influencing worldwide prices because it never makes it to market. I'm saying it's that portion of the world gold supply that it buys openly that helps support the worldwide gold price, and that portion is being purchased by their citizenry and is easier to track.

They don't all mine with the same efficiency or cost. The largest contributing factor to low-cost production is the nature of the deposit. An open pit mine with high grade ore and low-cost processing is going to net the lowest production cost per ounce. If the mine is underground it becomes more expensive to mine. If the ore requires milling and oxidation treatments before the gold is extracted it is more expensive to mine. So worldwide there is a wide distribution of operations each with a unique production cost per ounce. If you graph this out you'll have a curve from which you could determine how many tons of gold can be produced each year for less than $XXX per ounce. This graph also shows which mines will be the first to shut down if the gold price were to drop to $700 per ounce. That's how I like to think of the market personally.

There's a lot of gold being produced right now for $500 per ounce or less. This is why I think the gold price can be so volatile. Current spot prices are way above break-even production costs for many mines (especially when you take into account credits from copper and silver production) so even large changes in demand won't affect production decisions at the mines. When demand slows down, there is almost immediate downward pressure on prices simply because mining companies can afford to sell for well below $1400 per ounce. If people start selling then things can really go downhill quickly because they are competing with mines who own the gold for far less than most people do today.

BTW, I don't know everything, but I work in the gold mining industry so I spend quite a bit of time thinking about both sides of the market and what affects it. There's a time to be a bull and a time to be a bear, you just have to know when the time is right.

Stewie
04-06-2011, 03:08 PM
:facepalm: Futures market is way larger than the physical trade in gold and where everyone does their hedging. You really need to learn some basic finance and market structures.

Gold miners do NOT use the futures market to hedge production.

KC native
04-06-2011, 04:13 PM
Where are your huge returns? For years I've documented my gains in gold and they're still going strong. If Warren Buffet had stayed the course with silver he'd be in hog heaven. But the Oracle of Omaha was forced to write down $1 billion in phony stock gains because he was using tricky accounting in crappy stocks. Gold is the silent witness for all that is wrong in the financial/fiat world. Good luck with whatever you are invested in. I prefer gold and have done well. I've ridden it up from $400 and will get out when I feel it's appropriate.

ROFL The Oracle of Omaha has a 50 year track record of investment success and is worth $38 Billion and you try to invalidate him for a $1 Billion write off.

Fucking hilarious.

KC native
04-06-2011, 04:18 PM
Gold miners do NOT use the futures market to hedge production.

You have no fucking clue what you're talking about. When they agree to sell their production to a bank in the future they are using futures and foward contracts. They may be using OTC contracts but it is still the futures market. Seriously, you are a danger to anyone who takes your investment advice. You have no clue about basic finance and market structures and you disregard concrete evidence if it doesn't fit your gold bias.

Like I said, have fun buying coins from infomercials. That's a sound investment strategy. :thumb: ROFL

banyon
04-06-2011, 09:44 PM
Thanks for your input. It was funny several hundred dollars ago. Hedging in the gold mining industry was heavily weighted in favor of the banks. It did two things. It suppressed the price of gold and put money in the pockets of the bankers and allowed them to "lease" gold. It was a complete and utter sham. The miners (back when gold was $300) had no choice. It buried Barrick and others. They finally figured out it was not in their interest and told the banks to **** off.

I will just add stewie, that based on the technical, psychological, long-term cyclical, and coincident commodity prices, your answer with respect to the article I posted is dramatically incomplete.

I find the reasoning persuasive, but then again I missed the move from $1200-present and silver's run up.

But I've done okay on my valuation-based equity plays. I'm trying to get light for the next move down.

Stewie
04-07-2011, 12:52 PM
You have no fucking clue what you're talking about. When they agree to sell their production to a bank in the future they are using futures and foward contracts. They may be using OTC contracts but it is still the futures market. Seriously, you are a danger to anyone who takes your investment advice. You have no clue about basic finance and market structures and you disregard concrete evidence if it doesn't fit your gold bias.

Like I said, have fun buying coins from infomercials. That's a sound investment strategy. :thumb: ROFL

Sorry, you're wrong. If you understood how gold producers operate you wouldn't be so high and mighty. You don't and you aren't.

You think "banks" and that's completely wrong. Good luck. Sorry you've missed the easy money.

Stewie
04-07-2011, 12:59 PM
I will just add stewie, that based on the technical, psychological, long-term cyclical, and coincident commodity prices, your answer with respect to the article I posted is dramatically incomplete.

I find the reasoning persuasive, but then again I missed the move from $1200-present and silver's run up.

But I've done okay on my valuation-based equity plays. I'm trying to get light for the next move down.

Gold is rising because of untenable debt worldwide. It's that simple.

My earlier post about how gold producers could be so efficient as miners was never answered. Gold producers also mine tonnes of silver, copper, etc. as a by-product. With silver pushing $40/oz. is it any wonder these companies make money hand over fist?

KC native
04-07-2011, 07:03 PM
Sorry, you're wrong. If you understood how gold producers operate you wouldn't be so high and mighty. You don't and you aren't.

You think "banks" and that's completely wrong. Good luck. Sorry you've missed the easy money.

JFC, just go look it up. The info is out there. You are as wrong as you can be.

prhom
04-07-2011, 07:20 PM
Gold is rising because of untenable debt worldwide. It's that simple.

My earlier post about how gold producers could be so efficient as miners was never answered. Gold producers also mine tonnes of silver, copper, etc. as a by-product. With silver pushing $40/oz. is it any wonder these companies make money hand over fist?

Did you not even bother reading my earlier post? I was trying to answer the question of why some are efficient, but others are not. I'll try again as I might have rambled a little before.

What I said was that it's a CAPITALLY intensive business, that doesn't necessarily mean it's expensive to mine. It only means that to produce large, market-changing quantities of gold in today's world you would have to invest a lot of money up front to start a mine and that it would impact a large surface area.

How this relates to your arguments about mysterious buyers and sellers of gold acting in the market is pretty clear. The transparent gold market is huge with thousands of tonnes being produced each year. The companies responsible for this production are enormous and their actions are known the world over. Where is China or any other central bank going to buy their mysterious off-the-books gold from? If you believe that much more gold is being purchased each year than official records indicate it has to come from somewhere? The countries with more gold reserves than China are all western countries with nothing to gain from secrecy over their holdings so they're not selling it to them. Private entities can't come close to owning the amounts of gold that would have to be exchange to be driving prices. So it would have to be produced somewhere, by someone. That production would be noticeable because it would be a multibillion dollar enterprise to do so. It takes an enormous amount of resources to produce a million ounces a year and that's a drop in the bucket compared to the numbers that China would have to be buying to drive up prices on their own.

As to why gold companies can produce gold for so little money right now is easily answered as well. The only projects that get built right now are projects that can produce gold for less than $600 (approximately) because it's risky to spend capital on projects that have higher costs than that. The really large producing mines were started in the 90s in an environment of much lower prices. They could be profitable even if gold was at $500 per ounce. As the price of gold rises, more and more marginal deposits become robust deposits and become producing mines. Most of the "new" mines built in the last 5 years were actually discovered in the 80s and 90s, they just couldn't be built when gold was at $300.

prhom
04-07-2011, 07:24 PM
You have no ****ing clue what you're talking about. When they agree to sell their production to a bank in the future they are using futures and foward contracts. They may be using OTC contracts but it is still the futures market. Seriously, you are a danger to anyone who takes your investment advice. You have no clue about basic finance and market structures and you disregard concrete evidence if it doesn't fit your gold bias.

Like I said, have fun buying coins from infomercials. That's a sound investment strategy. :thumb: ROFL

What I find really interesting is that hedging is also a way for banks to gain exposure to rising gold prices when they decide to provide initial funding for a new mine. Some mines have to agree to sell a certain amount of gold to the bank at a certain price until the debt is repaid. So not only does the bank make money off their interest, but they get a nice bonus as long as the gold price is higher than the hedge price. I guess CW is right, he who has the cash makes the rules.

Saul Good
04-07-2011, 07:40 PM
You have no fucking clue what you're talking about. When they agree to sell their production to a bank in the future they are using futures and foward contracts. They may be using OTC contracts but it is still the futures market. Seriously, you are a danger to anyone who takes your investment advice. You have no clue about basic finance and market structures and you disregard concrete evidence if it doesn't fit your gold bias.

Like I said, have fun buying coins from infomercials. That's a sound investment strategy. :thumb: ROFL

How does it feel to be so sure that your theories are sound only to watch them get the shit kicked out of them in practice every day? The guy's nearing a 300% return since he started advocating gold. He put his money where his mouth was, and he's almost quadrupled it.

Honest question: What have you ever done?

JimBaker488
04-07-2011, 08:51 PM
Silver is kicking Golds azz ! Only a fool invests in Gold when he has a far superior alternative to gold in silver.

petegz28
04-07-2011, 08:58 PM
Gold miners do NOT use the futures market to hedge production.

Actually they do.

prhom
04-07-2011, 08:59 PM
Silver is kicking Golds azz ! Only a fool invests in Gold when he has a far superior alternative to gold in silver.

True, silver has been on a tear lately. It just doesn't have quite the same history as gold does. Hard to argue with the results though. I bought some silver as a kid, but finally sold it back in 2003. It would have been a long wait for a return, but I wish I had just kept it. Especially because I didn't really need the money then, I think I went to the bar with my friends and spent it. Oh well...

KC native
04-07-2011, 09:54 PM
How does it feel to be so sure that your theories are sound only to watch them get the shit kicked out of them in practice every day? The guy's nearing a 300% return since he started advocating gold. He put his money where his mouth was, and he's almost quadrupled it.

Honest question: What have you ever done?

Nearing a 300% return while buying the whole way up and buying gold coins? You are fucking retarded.

Also, if we were to time weight his returns (like they should be) then he would look even worse.

Oh, and please show me any of my theories that get their ass kicked. I'm not an EMH adherent and I don't believe in buy and hold and hold and hold. So please enlighten me as to where you think my theories are getting their ass kicked.

teedubya
04-08-2011, 02:50 AM
Tonight, silver just hit $40 for the first time since 1980.

JimBaker488
04-08-2011, 06:26 AM
True, silver has been on a tear lately. It just doesn't have quite the same history as gold does. Hard to argue with the results though. I bought some silver as a kid, but finally sold it back in 2003. It would have been a long wait for a return, but I wish I had just kept it. Especially because I didn't really need the money then, I think I went to the bar with my friends and spent it. Oh well...
I got into both a Gold & Silver ETF 'bout 2 years ago (Feb., '09). OK, that Gold fund is up 48 %, which ain't bad. But the Silver ETF is up 173 %, or more than triple the Gold ETF ! Like I said man, silver is kicking azz !

Saul Good
04-08-2011, 07:59 AM
Nearing a 300% return while buying the whole way up and buying gold coins? You are ****ing retarded.

Also, if we were to time weight his returns (like they should be) then he would look even worse.

Oh, and please show me any of my theories that get their ass kicked. I'm not an EMH adherent and I don't believe in buy and hold and hold and hold. So please enlighten me as to where you think my theories are getting their ass kicked.

Where have you put your money, and how much did you plop down? You've spent years blasting a guy who has been out in front of the gold boom and put his money where his mouth is.

I don't own gold, but I'm not going to blast a guy who does. You sound. Like hamas when he would rip people who advocated Bradford at #1.

Put up or shut up.

Stewie
04-08-2011, 03:40 PM
Actually they do.

They do not on production. They have (or did have) non-recourse loans with bullion banks. They dropped those when it was shown the gold price was rising and sustainable. If memory serves, things changed significantly around the $600-$700 range. I don't think any major or junior miners have that hedge on their books.

KC native
04-08-2011, 03:50 PM
Where have you put your money, and how much did you plop down? You've spent years blasting a guy who has been out in front of the gold boom and put his money where his mouth is.

I don't own gold, but I'm not going to blast a guy who does. You sound. Like hamas when he would rip people who advocated Bradford at #1.

Put up or shut up.

Running from that blown up theories post huh?

Currently in cash but when invested I maintain a diversified portfolio and didn't lose any money in the crash because I went to cash. I missed most of the run up currently because I underestimated QE but I did pull an 8% run for only being half invested for about a quarter last year. Gold and other commodities are always a part of any portfolio I would put together.

Have yet to put anything to work this year because I was waiting for the end of QE2. Japan has kinda fucked with my timing because their QE is still goosing markets. As soon as we get a 10-15% correction, I will be back in unless there are some major macro changes.

I get on Stewie because he lied about his investment performance and he only has gold. His portfolio, if you can call 1 asset a portfolio, is doomed to disaster. He's emotionally married to his pick and has been holding gold since 2002 (IIRC). He's the type of investor who is going to hold gold up or down and then when it goes up say, "I told you so. It only took me 8 years to be right." Also, factor in he buys gold fucking coins and you can see he's just a nut bag gold bug.

KC native
04-08-2011, 03:52 PM
They do not on production. They have (or did have) non-recourse loans with bullion banks. They dropped those when it was shown the gold price was rising and sustainable. If memory serves, things changed significantly around the $600-$700 range. I don't think any major or junior miners have that hedge on their books.

JFC, just go look it up. How many people have to tell you that you're wrong before you'll quit taking gold nut message board info as truth?

Stewie
04-08-2011, 03:54 PM
Nearing a 300% return while buying the whole way up and buying gold coins? You are fucking retarded.

Also, if we were to time weight his returns (like they should be) then he would look even worse.

Oh, and please show me any of my theories that get their ass kicked. I'm not an EMH adherent and I don't believe in buy and hold and hold and hold. So please enlighten me as to where you think my theories are getting their ass kicked.

I own some physical gold. My main investment is in miners. My 800 lb. gorilla is Goldcorp. I bought a highly rated small miner in '03 called Wheaton River Minerals. It skyrocketed in the first big move in gold and was bought by Goldcorp for about $12/share. It was an all stock deal and I received 758 shares of Goldcorp. Goldcorp is now trading at $54ish. You do the math on a $2000 investment. Wheaton River then introduced Silver Wheaton (SLW) as a royalty company and I invested in that, too. Really nice returns.

I also own some other precious metal royalty companies. I can't complain about any precious metal investment I've made in the past nine years. I get really good advice from really smart people. I'm not a genius, I just trust the people I listen to.

Stewie
04-08-2011, 03:56 PM
JFC, just go look it up. How many people have to tell you that you're wrong before you'll quit taking gold nut message board info as truth?

You know nothing about how miners used to get paid. Sorry you've missed the boat. I understand your anger. It's immense, like your losses.

KC native
04-08-2011, 03:56 PM
I own some physical gold. My main investment is in miners. My 800 lb. gorilla is Goldcorp. I bought highly rated small miner in '03 called Wheaton River Minerals. It skyrocketed in the first big move in gold and was bought by Goldcorp for about $12/share. It was an all stock deal and I received 758 shares of Goldcorp. Goldcorp is now trading at $54ish. You do the math on a $2000 investment. Wheaton River then introduced Silver Wheaton (SLW) as a royalty company and I invested in that, too. Really nice returns.

I also own some other precious metal royalty companies. I can't complain about any precious metal investment I've made in the past nine years. I get really good advice from really smart people. I'm not a genius, I just trust the people I listen to.

Now, you're picking and choosing your investments? Do you deny you have posted in the past that you have been a buyer the whole way up and were recently buying more?

Stewie
04-08-2011, 04:04 PM
Now, you're picking and choosing your investments? Do you deny you have posted in the past that you have been a buyer the whole way up and were recently buying more?

I've posted screen shots of my portfolio. I have nothing to hide. I have neither bought nor sold precious metals or miners since '08. I'm just along for the big ride.

Stewie
04-14-2011, 04:25 PM
Dollar Status

News out this morning from China shouldn’t surprise anyone. The BRICS (Brazil, Russia, India, China, & South Africa) came out with a statement calling for a revamped global monetary system that relies less on the U.S. dollar.

Meeting on the Chinese island of Hainan, the group agreed to establish mutual credit lines denominated in their local currencies, NOT in U.S. dollars. They also stated that the current financial crisis had exposed the inadequacies of the current monetary order (code word for dollar). The BRICS are very concerned right now about the inevitable dollar devaluation due to out of control spending and deficits in Washington. They also were frustrated with the advantages and privileges that the U.S. has controlling the reserve currency, calling for a new "broad-based international reserve currency system providing stability and certainty" in an official statement. These statements all come out just after congress and the President agreed to spend and borrow more for fiscal year 2011 than they did in 2010. If congress is to follow through on what they passed to avert a government shutdown (shutdown in name only), then the U.S. will need to borrow at least another trillion in order to get us to October. Of course the debt ceiling is currently by law set at 14.3 trillion which it’s at now, so we are headed to at least 15.3 trillion within the next 6 months. Amazing isn’t it, the first trillion took 204 years and the next one is projected to take 6 months.

So the BRICS are starting to do transactions in their own currencies, pushing for a new reserve currency, and importing record amounts of gold and silver. Yet, more than likely we will have to suffer through more gold bubble talk from the main stream media, when in reality they should be talking about the mother of all bubbles, the dollar bubble.


http://img263.imageshack.us/img263/993/414gold.jpg

And it keeps on rolling...

http://img577.imageshack.us/img577/5559/415gold.jpg

teedubya
04-15-2011, 04:03 PM
$43.05 silver. I'm such a fool for investing in it.

prhom
04-17-2011, 08:58 PM
I own some physical gold. My main investment is in miners. My 800 lb. gorilla is Goldcorp. I bought a highly rated small miner in '03 called Wheaton River Minerals. It skyrocketed in the first big move in gold and was bought by Goldcorp for about $12/share. It was an all stock deal and I received 758 shares of Goldcorp. Goldcorp is now trading at $54ish. You do the math on a $2000 investment. Wheaton River then introduced Silver Wheaton (SLW) as a royalty company and I invested in that, too. Really nice returns.

I also own some other precious metal royalty companies. I can't complain about any precious metal investment I've made in the past nine years. I get really good advice from really smart people. I'm not a genius, I just trust the people I listen to.

I like the miners more than physical metal because it's such a pain in the ass to move them and I can never get the prices I want buying and selling. I'm into GG also and like them the best of all the major gold miners. As I said in my previous posts, the miners are still making great money at $1000 gold so they have a little more support than a gold ETF does. Congrats on making a killing from Goldcorp though. You just gotta know when to say when.

KILLER_CLOWN
04-17-2011, 08:59 PM
$43.05 silver. I'm such a fool for investing in it.

You might want to convert that to gold, Silver is due for an adjustment.

prhom
04-17-2011, 09:13 PM
You might want to convert that to gold, Silver is due for an adjustment.

If silver corrects, gold will also correct. I'd say it depends on your timeline whether you do anything at all.

Stewie
04-20-2011, 03:56 PM
You might want to convert that to gold, Silver is due for an adjustment.

Actually, silver is behind when looking at historical trends. With gold at $1500 (who called that $700 ago? :D) silver should be north of $70.

There was a great article on Silver Wheaton (SLW). I'll try to dig it up, but that company makes money hand over fist. It has agreements with miners that dig up silver as an offside to their real interest (gold, copper, etc.) to take it off their hands. The price they pay for the silver, you ask? $4/ounce. Yep. Why people aren't all over these investments blows me away.

Here's the article:

http://www.thestreet.com/_yahoo/story/11087708/1/silver-wheatons-high-profit-margins.html?cm_ven=YAHOO&cm_cat=FREE&cm_ite=NA

Stewie
04-21-2011, 02:44 PM
Apple sells penny trinkets and they're heros. The real economy is far more important than the phone in your hand.

Norman Einstein
04-22-2011, 04:32 AM
Because Glenn Beck keeps telling them to. :D
People buy gold because it's a precious metal.

Why do you hate Beck and others? Because they see what Obama is doing to the country?

At least with gold people have made an investment that may be valuable when the dollar continues to drop.

Most people I know are buying silver.

Stewie
04-22-2011, 01:16 PM
Gold: Look at How WRONG the Financial Media Has Been

http://l.yimg.com/a/i/us/fi/gr/wscs_106x27.gif (http://us.lrd.yahoo.com/SIG=111ggcmlc/**http%3A//wallstcheatsheet.com/)

On Friday April 22, 2011, 8:56 am EDT


What do you call a 12-year trend that has appreciated each and every year?


Its a bull market but apparently not if its Gold. In that case, its the “gold trade” or the “gold rally.”


Reporters and journalists refer to the bull market in Gold as a rally. A rally indicates a revival or renewal of some sort. It implies weakness was in the rear-view mirror. Gold’s run could be termed a rally until 2005. A year later, Gold was closing in on the 1980 high and the bull market was obvious. Now we are 11-12 years into this bull market, Gold is almost twice its previous all-time high, yet this is still a rally? The rally is over. The bull market is on now! (http://us.lrd.yahoo.com/SIG=12d8ivd53/**http%3A//premiums.wallstcheatsheet.com/gold-and-silver-premium-newsletter/)

(http://us.lrd.yahoo.com/SIG=12d8ivd53/**http%3A//premiums.wallstcheatsheet.com/gold-and-silver-premium-newsletter/)
The same goes for the “gold trade.” I’m sick and tired of hearing this nonsense as if Gold’s run is some aberration or something random with nothing behind it. First of all, I want to show (in my opinion) what a bull market, bear market and trade look like. Take a look at the chart.


http://wallstcheatsheet.com/wp-content/uploads/2011/04/apr21ed.png (http://us.lrd.yahoo.com/SIG=12700vkko/**http%3A//wallstcheatsheet.com/wp-content/uploads/2011/04/apr21ed.png)


Twelve years running and nary a mainstream concession that Gold is in a bull market . It is remarkable that we are past the halfway point in this bull market and so few have caught on.


Perhaps the bursting of recent bubbles has falsely conditioned investors to believe that trends cannot be sustained or that trends will automatically collapse. The reality of Gold is actually counter-intuitive. The bubble is not in Gold but in our monetary system and fiat currency. The bull market is the correction to the bubble that is our monetary system. The masses need to admit there is a bull market before they can understand what is really happening.


The bull market will get more validation as Wall Street begins to participate. Keep your eyes on Wall Street. The bull market will become mainstream when Wall Street begins to finance Gold and Silver companies, take them public and advertise Precious Metals as a way to attract more business. We aren’t yet close to that.


For now, the financial media will continue to mis-characterize what will become the greatest bull market in generations. They, like today's investment professionals are stuck in the short-term and cannot even see the obvious. They are too busy trying to make 2% on a day trade that they have completely missed an obvious bull market.


The fundamental drivers are so obvious. Maybe that is why Gold has gone up every year for what now will be the 11th year. Yet, the recent past will be nothing compared to the accelerating bull market and bubble and mania to follow.

teedubya
04-23-2011, 01:19 AM
The dollar is about to collapse... no doubt about it.

KILLER_CLOWN
04-23-2011, 01:33 AM
The dollar is about to collapse... no doubt about it.

On the bright side we have until the end of 2012.

Stewie
04-23-2011, 11:39 AM
ROFL


Morningstar Lowers 3-Year Gold Price Forecast By 26%

By Murray Coleman

Many of the fundamental drivers of gold’s current bull run appear unsustainable over the longer-term, says Morningstar (MORN (http://quotes.barrons.com/MORN)).
As a result, the Chicago-based investment research firm has lowered its 2014 forecast for gold to $1,200 an ounce, down 26% from its previous estimate.


It has also dropped 2015 price projections to $1,236 an ounce, 28% lower than before.


One of the catalysts that analyst Joung Park warns about in the report (http://news.morningstar.com/articlenet/article.aspx?id=377690) dated April 20 is the role of exchange-traded funds.
“While we recognize the manifold appeal of gold ETFs and regard these investment vehicles as more than just a temporary fad, we doubt that gold ETFs can continue to attract the tremendous amount of inflows over the long run, like they have done so far in their brief history,” Park wrote.
He added: “In fact, we’ve already seen net inflows into gold ETFs in 2010 (and so far in 2011) decline from their 2009 highs.”


The SPDR Gold Trust (GLD (http://online.barrons.com/public/quotes/main.html?symbol=gld&type=usstock&pt=true)) has suffered more than $3 billion in net outflows this year through March, according to the National Stock Exchange, a data collector.


Meanwhile, a popular fund to track miners has also seen more money taken out of its coffers than put in during 2011. The Market Vectors Gold Miners (GDX (http://online.barrons.com/public/quotes/main.html?symbol=gdx&type=usstock&pt=true)) had $835 million in net outflows so far, some $246 million coming last month.


Its sibling Market Vectors Junior Gold Miners (GDXJ (http://online.barrons.com/public/quotes/main.html?symbol=gdxj&type=usstock&pt=true)), which focuses on small-caps, lost almost $139 million in net outflows in March. For the year, it has about $140 million in net inflows.


Another catalyst for gold has been central banks around the world — particularly those in larger emerging markets. These are referred to as “official sector” purchases in the report.


After consistently selling gold, that sector in 2010 for the first time in decades became net buyers of gold, Morningstar points out.
“While recent trends in official sector gold sales have been a major tailwind for gold demand during the last few years, we don’t think it would be wise to extrapolate this trend over the long term,” Park wrote.
Then there’s hedging activities by miners. Park noted:
“Given that gold miners’ hedge books have been whittled to less than 5 million ounces by the end of 2010 (from more than 100 million ounces at the end of 2000), miners will no longer have to purchase gold on the open market (or earmark their current production) to cancel existing forward sales agreements.”
The result, asserted Park, could be that a “previously significant tailwind for gold demand will subside going forward, and could even reverse to a headwind if gold miners decide to rebuild their hedge books to lock in historically high bullion prices.”


Of course, lots of different twists and turns can develop to alter such a longer-term forecast, Morningstar analysts concede.


“While we think that some of these factors could continue to provide a tailwind for gold prices, we believe many of the factors cited above are unsustainable over the long run, thereby lending support to our lower long-run gold price forecast,” Park wrote.


[/URL][URL="http://blogs.barrons.com/focusonfunds/2011/04/22/morningstar-lowers-3-year-gold-price-forecast-by-28/tab/print/"] (http://blogs.barrons.com/focusonfunds/2011/04/22/morningstar-lowers-3-year-gold-price-forecast-by-28/?mod=yahoobarrons#)

Stewie
04-23-2011, 11:42 AM
ROFL

Where's the mention of $1 trillion deficits that will continue ad infinitum? And gold ETFs peaked in '09 so where's the decline in the price of gold? ETFs aren't driving this market, not even close. This guy contradicts himself throughout the article.


Morningstar Lowers 3-Year Gold Price Forecast By 26%

By Murray Coleman

Many of the fundamental drivers of gold’s current bull run appear unsustainable over the longer-term, says Morningstar (MORN (http://quotes.barrons.com/MORN)).
As a result, the Chicago-based investment research firm has lowered its 2014 forecast for gold to $1,200 an ounce, down 26% from its previous estimate.


It has also dropped 2015 price projections to $1,236 an ounce, 28% lower than before.


One of the catalysts that analyst Joung Park warns about in the report (http://news.morningstar.com/articlenet/article.aspx?id=377690) dated April 20 is the role of exchange-traded funds.“While we recognize the manifold appeal of gold ETFs and regard these investment vehicles as more than just a temporary fad, we doubt that gold ETFs can continue to attract the tremendous amount of inflows over the long run, like they have done so far in their brief history,” Park wrote.
He added: “In fact, we’ve already seen net inflows into gold ETFs in 2010 (and so far in 2011) decline from their 2009 highs.”


The SPDR Gold Trust (GLD (http://online.barrons.com/public/quotes/main.html?symbol=gld&type=usstock&pt=true)) has suffered more than $3 billion in net outflows this year through March, according to the National Stock Exchange, a data collector.


Meanwhile, a popular fund to track miners has also seen more money taken out of its coffers than put in during 2011. The Market Vectors Gold Miners (GDX (http://online.barrons.com/public/quotes/main.html?symbol=gdx&type=usstock&pt=true)) had $835 million in net outflows so far, some $246 million coming last month.


Its sibling Market Vectors Junior Gold Miners (GDXJ (http://online.barrons.com/public/quotes/main.html?symbol=gdxj&type=usstock&pt=true)), which focuses on small-caps, lost almost $139 million in net outflows in March. For the year, it has about $140 million in net inflows.


Another catalyst for gold has been central banks around the world — particularly those in larger emerging markets. These are referred to as “official sector” purchases in the report.


After consistently selling gold, that sector in 2010 for the first time in decades became net buyers of gold, Morningstar points out.
“While recent trends in official sector gold sales have been a major tailwind for gold demand during the last few years, we don’t think it would be wise to extrapolate this trend over the long term,” Park wrote.
Then there’s hedging activities by miners. Park noted: “Given that gold miners’ hedge books have been whittled to less than 5 million ounces by the end of 2010 (from more than 100 million ounces at the end of 2000), miners will no longer have to purchase gold on the open market (or earmark their current production) to cancel existing forward sales agreements.”
The result, asserted Park, could be that a “previously significant tailwind for gold demand will subside going forward, and could even reverse to a headwind if gold miners decide to rebuild their hedge books to lock in historically high bullion prices.”


Of course, lots of different twists and turns can develop to alter such a longer-term forecast, Morningstar analysts concede.


“While we think that some of these factors could continue to provide a tailwind for gold prices, we believe many of the factors cited above are unsustainable over the long run, thereby lending support to our lower long-run gold price forecast,” Park wrote.

Stewie
04-27-2011, 03:55 PM
So, Bernanke becomes the first Fed Chairman to hold a press conference and announces he's not responsible for inflation and the Fed will stop buying US debt in June. He sounded really nervous, but that's understandable since he's lying through his teeth. The reason you bought US debt, Ben, was because no one else wanted it. You suddenly have a buyer of billions now? I doubt it and so does the market. Dollar dropped and gold hit an all time high. There will be some other "program" or backdoor buying by the Fed. They have to do something to goose the economy. The game is over, Ben.

http://img156.imageshack.us/img156/5819/golddollar.jpg

Pants
04-27-2011, 04:04 PM
So, Bernanke becomes the first Fed Chairman to hold a press conference and announces he's not responsible for inflation and the Fed will stop buying US debt in June. He sounded really nervous, but that's understandable since he's lying through his teeth. The reason you bought US debt, Ben, was because no one else wanted it. You suddenly have a buyer of billions now? I doubt it and so does the market. Dollar dropped and gold hit an all time high. There will be some other "program" or backdoor buying by the Fed. They have to do something to goose the economy. The game is over, Ben.

http://img156.imageshack.us/img156/5819/golddollar.jpg

The game is over? So what is next?

Stewie
04-27-2011, 04:17 PM
The game is over? So what is next?

1) Inflation, inflation, inflation.

2) A dollar that continues to drop. (You can't hide printing billion$ of fiat currency.)

3) Stock markets will rise, but not even close to commodity investments. All that freshly printed money has to go somewhere.

FD
04-27-2011, 04:53 PM
So, Bernanke becomes the first Fed Chairman to hold a press conference and announces he's not responsible for inflation and the Fed will stop buying US debt in June. He sounded really nervous, but that's understandable since he's lying through his teeth. The reason you bought US debt, Ben, was because no one else wanted it. You suddenly have a buyer of billions now? I doubt it and so does the market. Dollar dropped and gold hit an all time high. There will be some other "program" or backdoor buying by the Fed. They have to do something to goose the economy. The game is over, Ben.



Nobody else wants US debt? Then why are rates so low?

BucEyedPea
04-27-2011, 04:58 PM
Nobody else wants US debt? Then why are rates so low?

For now....

KurtCobain
04-27-2011, 05:20 PM
If I had some money, I'd invest in beryllium.

Stewie
04-29-2011, 03:23 PM
Nobody else wants US debt? Then why are rates so low?

Rates are artificially low through intervention by the Fed. It's called QE2. Foreign buyers are going away, that's why they had to print at least $600 billion of your dollars to buy your debt. Grand, ain't it?!

Stewie
04-29-2011, 03:28 PM
Took some nice profits today. First time I've sold anything gold related.

http://img854.imageshack.us/img854/7696/gold429.jpg

Pants
04-29-2011, 03:31 PM
1) Inflation, inflation, inflation.

2) A dollar that continues to drop. (You can't hide printing billion$ of fiat currency.)

3) Stock markets will rise, but not even close to commodity investments. All that freshly printed money has to go somewhere.

Oh, maybe I was confused what game you were talking about.

Stewie
04-29-2011, 03:38 PM
Oh, maybe I was confused what game you were talking about.

The game I was talking about is that Bernanke has nothing left that can make a difference. It's over. He has been reduced to giving press conferences (first time ever for a Fed Chair) to try to talk the markets in the direction he wants. Remember when the Fed came out and said, "We don't think we'll need to use the entire $600 billion of QE2 because the economy is looking good?" People laughed and laughed. Really Ben? You expected us to believe that? And it goes on and on.

Pants
04-29-2011, 03:46 PM
The game I was talking about is that Bernanke has nothing left that can make a difference. It's over. He has been reduced to giving press conferences (first time ever for a Fed Chair) to try to talk the markets in the direction he wants. Remember when the Fed came out and said, "We don't think we'll need to use the entire $600 billion of QE2 because the economy is looking good?" People laughed and laughed. Really Ben? You expected us to believe that? And it goes on and on.

So when does our society collapse?

Stewie
04-29-2011, 03:55 PM
So when does our society collapse?

It won't. Fiat currency abuse is quite common and has been going on for years and years. In fact, once a currency dies its slow death the new monetary system works better. The idea is to stay ahead of the curve and invest accordingly.

FD
04-29-2011, 03:57 PM
Rates are artificially low through intervention by the Fed. It's called QE2. Foreign buyers are going away, that's why they had to print at least $600 billion of your dollars to buy your debt. Grand, ain't it?!

How much lower are rates because of QE2? The estimate I've seen are on the order of 20 basis points. Its not exactly like "nobody else wants it." Rates are still very, very low.

Stewie
04-29-2011, 04:23 PM
How much lower are rates because of QE2? The estimate I've seen are on the order of 20 basis points. Its not exactly like "nobody else wants it." Rates are still very, very low.

China is a net seller of our debt. What looks like new buying is less than they're selling. It's a stop-gap. The Fed had to step in because there were no net buyers. Who wants to buy dollar assets? If QE2 ends in June, and it won't, it would be a complete disaster.

FD
04-29-2011, 04:32 PM
China is a net seller of our debt. What looks like new buying is less than they're selling. It's a stop-gap. The Fed had to step in because there were no net buyers. Who wants to buy dollar assets? If QE2 ends in June, and it won't, it would be a complete disaster.

But you can gauge "who wants to buy dollar assets" by the price of Treasuries, and the answer is lots of people. If they didn't, rates would not be so low.

Stewie
04-30-2011, 11:37 AM
But you can gauge "who wants to buy dollar assets" by the price of Treasuries, and the answer is lots of people. If they didn't, rates would not be so low.

The Fed is buying Treasuries hand over fist. That's the worst possible scenario. They're printing your dollars to buy our debt and keep rates low. How desperate is that? The Fed wants low rates and they're doing everything they can to keep it that way. If rates rise it's over and they know it. The Fed is painted into a corner with no way out.

Stewie
04-30-2011, 02:23 PM
The trick to making money in the markets is listening to experienced people, not your Wall Street indoctrinated robot. The Wall Street losers who make no money on gold, and can't, ignore this trend that's now going on a decade plus. Too bad. I saw a recommendation for INTC today. Really? It's going to skyrocket to $40? Woohoo! Wasn't it there 10 years ago? Heh! The chart is gold vs. NASDAQ.

http://img62.imageshack.us/img62/9618/goldbull.jpg

Stewie
04-30-2011, 02:45 PM
My point is, what do your advisers suggest? I really want to know. Do they recommend Diamonds (Dow Jones Average), Spyders (S&P 500), or specific companies that will have an ROI that's decent?

I imagine, like most investors, you're relying on someone else that takes 2% of your money. What do they tell you, or does it matter to you?

FD
05-01-2011, 03:40 PM
China is a net seller of our debt. What looks like new buying is less than they're selling. It's a stop-gap. The Fed had to step in because there were no net buyers. Who wants to buy dollar assets? If QE2 ends in June, and it won't, it would be a complete disaster.

Also, you say QE2 ending will be a disaster, but the Fed has said at every opportunity that it will end as scheduled, if not sooner. The markets expect it, so why has the market not priced in the possibility of this "complete disaster." It seems like every argument you are making about the Fed and QE2 is easily refuted by the fact that Treasury rates remain as low as they do. If the Fed was the only buyer, the opposite would be true.

BigChiefFan
05-02-2011, 09:29 AM
Paper is more valuable than gold, because the FED told me so...(snicker)

Stewie
05-03-2011, 04:21 PM
Also, you say QE2 ending will be a disaster, but the Fed has said at every opportunity that it will end as scheduled, if not sooner. The markets expect it, so why has the market not priced in the possibility of this "complete disaster." It seems like every argument you are making about the Fed and QE2 is easily refuted by the fact that Treasury rates remain as low as they do. If the Fed was the only buyer, the opposite would be true.

The Fed HAS to continue. They have said that QE2 will end, but not easy money. In fact, they just came out last week and said the easy money will continue for the foreseeable future. QE2 will end only to replaced by something else.

I'm not sure what you see that suddenly makes the economy a juggernaut. It's not even close to a recovery... just look at the fact that 13% of all homes in the US are vacant.

FD
05-03-2011, 05:22 PM
The Fed HAS to continue. They have said that QE2 will end, but not easy money. In fact, they just came out last week and said the easy money will continue for the foreseeable future. QE2 will end only to replaced by something else.

I'm not sure what you see that suddenly makes the economy a juggernaut. It's not even close to a recovery... just look at the fact that 13% of all homes in the US are vacant.

Oh I see, so the problem is you don't understand the difference between QE2 and standard Fed practices.

ILChief
05-03-2011, 07:34 PM
Because Glen Beck endorses it.

Raiderhater58
05-04-2011, 04:44 AM
I buy brass and lead, when society breaks down they will be the far more valuable metals! Granted I'm buying them in the form of bullets.

lol

Molitoth
05-04-2011, 07:34 PM
I buy brass and lead, when society breaks down they will be the far more valuable metals! Granted I'm buying them in the form of bullets.

Although I understand your point; investing in something to protect yourself and family.... isn't it shame the human race to resort to bullets as currency? :huh:

We are slowly killing ourselves off and the faster this monetary system collapses, the quicker we can develop a resource based economy. It's too bad the gov is going to go the re-active route rather than pro-active.

eazyb81
05-05-2011, 03:43 PM
The trick to making money in the markets is listening to experienced people, not your Wall Street indoctrinated robot. The Wall Street losers who make no money on gold, and can't, ignore this trend that's now going on a decade plus. Too bad. I saw a recommendation for INTC today. Really? It's going to skyrocket to $40? Woohoo! Wasn't it there 10 years ago? Heh! The chart is gold vs. NASDAQ.



LOL, really? I never really respected your investment ideas (still waiting for Dow 5000) but I thought you were at least more than a lemming momentum trader.

Your chart shows that gold has outperformed a broad US stock index over ten years during the worst recession since the Great Depression - nothing more. Should we play a similar game parsing out prior ten year periods of time?

And who is your idea of an "experienced" person if Wall Street doesn't fit the bill? Your Ed Jones broker in Olathe?

Speaking of the commodities bubble, silver slid 12.6% today and 29% since last Thursday, the 8th worst 5-day slide ever.

Stewie
05-05-2011, 04:19 PM
LOL, really? I never really respected your investment ideas (still waiting for Dow 5000) but I thought you were at least more than a lemming momentum trader.

Your chart shows that gold has outperformed a broad US stock index over ten years during the worst recession since the Great Depression - nothing more. Should we play a similar game parsing out prior ten year periods of time?

And who is your idea of an "experienced" person if Wall Street doesn't fit the bill? Your Ed Jones broker in Olathe?

Speaking of the commodities bubble, silver slid 12.6% today and 29% since last Thursday, the 8th worst 5-day slide ever.

I buy and hold. I'm not a momentum investor. If you look at my post from last Friday you'd see I sold a portion of my precious metals on Friday. Pretty good timing, eh?

Monty Guild is my adviser. He's well respected and very successful. Look him up. He's forgotten more about investing than you or I will ever know.

I don't hold much silver. It's more volatile than gold, for sure. Plus, margin rates were increased which caused selling by highly leveraged people. It's clear down to, what?, $38 when one year ago it was $15.

I'm glad to hear the economy is booming now. Ya know, with horrible employment numbers... oh, and suddenly housing values are back to '06 levels. Whew! I was worried there for a minute.

QE3 was hinted at today by the Fed. Who knew!?

JimBaker48.8
05-06-2011, 05:59 AM
Got out @ the top for a third of my "SLV" position last week and sold at 47 & change, then panicked yesterday and unloaded another third @ just under 34. I'm gonna hang on to the remaing third for awhile, I think ?

Stewie
05-29-2011, 12:47 PM
The rock and the hard place has finally become a reality. An economy not accelerating at an accelerating rate is declining at an accelerating rate. The mirage of a recovery is getting harder and harder to MOPE about. It simply is not there. We are entering a declining phase that will not end in any kind of a soft landing.

Stimulation monetarily, QE, and fiscal are like controlled substances in that the real high is on the first injection. After that, each additional stimulation of an economy must be multiples of the first stimulation in ever increasing size just in order to hold the line. QE3 is guaranteed unless the powers that be want to see a depression that will make the Great Depression look like kindergarten in the pain department.

This week we saw a European Bank forced to sell their US mortgage derivatives and the loss was a shocker. These pieces of crap are not worth the digital bits they are written on. Smart money has not let this event pass their view, and know now how broke the US financial system really is. This event broke the camouflage of FASB’s selling their souls out to politics by allowing the banks to value their mortgage derivatives at any price the bank wanted on the bank’s cartoon balance sheets. The western balance sheets of their financial institutions are raging misstatements. The system is broke. This is why there is no recovery of merit but rather a statistical aberration, which was until recently only holding the line.

Here we are at that place we have anticipated for the past 45 years knowing that all the games being played had to play out at that point where super stimulation had no effect and it became totally appreciated that even many trillions of printed money will only impact the currency and not business.

The rock and the hard place is a time when the Western World is simply screwed.

Stewie
06-21-2011, 03:50 PM
How ya'll doin'?

Stewie
07-06-2011, 03:44 PM
I've been a gold advocate for years on this site. I still am for obvious reasons. Paper burns.

FD
07-06-2011, 03:49 PM
If QE2 ends in June, and it won't, it would be a complete disaster.

ROFL

Stewie
07-06-2011, 03:52 PM
ROFL

I'm not sure about your motive, but if QE2 ended gold would have tanked... it went up $50.

Stewie
07-06-2011, 03:54 PM
ROFL

Oh, are you KC Native? He laughed at gold at $650. I told him it would go to $1500. He no longer posts.

FD
07-06-2011, 03:54 PM
I'm not sure about your motive, but if QE2 ended gold would have tanked... it went up $50.

Are you suggesting there a secret QE3 conspiracy? Why can't you just admit you were wrong.

Stewie
07-06-2011, 03:56 PM
Are you suggesting there a secret QE3 conspiracy? Why can't you just admit you were wrong.

Wrong about what? The markets show QE continues. Show me where the Fed raised rates. I'm positive there are negative rates going forward. Prove me wrong.

FD
07-06-2011, 03:59 PM
Wrong about what? The markets show QE continues. Show me where the Fed raised rates. I'm positive there are negative rates going forward. Prove me wrong.

I already proved you wrong a couple times today. You make it easy with your constant predictions of disaster. To answer this post it looks like I have repeat myself again.

http://www.chiefsplanet.com/BB/showpost.php?p=7617116&postcount=192

Stewie
07-06-2011, 04:02 PM
I already proved you wrong a couple times today. You make it easy with your constant predictions of disaster. To answer this post it looks like I have repeat myself again.

http://www.chiefsplanet.com/BB/showpost.php?p=7617116&postcount=192

I guess I don't understand your convoluted point. You're saying all is well? I've said it is not, for 10 years. The PIIGS continue to prove my point. The debt in the world with fiat money is unsustainable... by trillions$. Good luck.

Stewie
07-06-2011, 04:29 PM
To Forward Dante:

I challenge you to short gold. Do it.

FD
07-06-2011, 04:33 PM
To Forward Dante:

I challenge you to short gold. Do it.

I've never made any statements for or against gold. I've got a challenge for you, though:

Stop making stupid predictions like "If QE2 ends in June, and it won't, it would be a complete disaster."

Because when they don't come true, you look like an idiot.

Stewie
07-06-2011, 04:43 PM
I've never made any statements for or against gold. I've got a challenge for you, though:

Stop making stupid predictions like "If QE2 ends in June, and it won't, it would be a complete disaster."

Because when they don't come true, you look like an idiot.

QE2 didn't end, it has morphed. That's the point. If QE2 ended gold would be at $1400 and interest rates would have gone up. The same monetary policy continues. There's a shitload of freshly printed money coming into the system. The Fed just tries to hide it through other avenues. Those avenues are less transparent.

FD
07-06-2011, 04:48 PM
QE2 didn't end, it has morphed. That's the point. If QE2 ended gold would be at $1400 and interest rates would have gone up. The same monetary policy continues. There's a shitload of freshly printed money coming into the system. The Fed just tries to hide it through other avenues. Those avenues are less transparent.

You're starting to sound like sportsshrink with this conspiracy talk.

KC native
07-06-2011, 09:45 PM
Oh, are you KC Native? He laughed at gold at $650. I told him it would go to $1500. He no longer posts.

I no longer post in your threads because you ignore shit you don't understand and only allow for evidence that reinforces your cognitive biases.

prhom
07-06-2011, 10:41 PM
I no longer post in your threads because you ignore shit you don't understand and only allow for evidence that reinforces your cognitive biases.

Well said. One only needs to look through a few pages in this thread to see that facts and figures are completely meaningless to him.

Stewie
07-12-2011, 01:51 PM
Gold is fucking killing all paper markets. Where's your money? If you're smart enough to be in palladium you're ahead of the game. Lots of opportunities that aren't GM.

Oh, and here's your QE3.

WASHINGTON (Reuters) - Federal Reserve officials are ready to provide more monetary policy easing if the recovery is too sluggish to cut the lofty unemployment rate and if inflation eases as expected, minutes of their June meeting released on Tuesday show.

It HAS to and WILL happen. That's why gold is at all time highs.

Stewie
07-12-2011, 02:52 PM
The US’s ongoing default began in 1971 when it could no longer settle its debts in constant dollar terms. As James Turk observes in his latest commentary (http://www.fgmr.com/something-more-important-than-the-debt-limit.html).

Government spending has become an even bigger force in the economy than when the US was on a war-footing during World War II. Never before has government consumed so much of the private sector’s wealth creation.

The printing press is the only option without material reductions in big government at this stage of the game. Any attempt to cut off the socialistic money spigot will be met with social unrest.

eazyb81
07-13-2011, 08:20 AM
NEW YORK, July 13 (Reuters) - U.S. stocks extended gains on Wednesday after the Federal Reserve Chairman Ben Bernanke said the central bank is ready to ease monetary policy further if the economy weakens and inflation moves lower, suggesting policymakers are actively mulling further stimulus.

Stewie
07-13-2011, 02:45 PM
Gold is the rocket that Wall Street hates. It exposes the lies the banks have been shilling for years and have been teaching in business schools. Game over.

BigChiefFan
07-14-2011, 04:38 PM
NEW YORK, July 13 (Reuters) - U.S. stocks extended gains on Wednesday after the Federal Reserve Chairman Ben Bernanke said the central bank is ready to ease monetary policy further if the economy weakens and inflation moves lower, suggesting policymakers are actively mulling further stimulus.

This really is a mess, but the only way I see out of it is to tighten the purse strings dramatically or default. We've got to bite the bullet now, so we can change courses for the better, long-term.

Saul Good
07-18-2011, 04:47 PM
Stewie is an idiot.
KC Native really knows his shit. I mean, this guy really knows what he's talking about.

Gold prices top $1,600 an ounce on debt worries

By SANDY SHORE, AP Business Writer – 3 hours ago

Gold prices topped $1,600 an ounce Monday as debt problems flared in the United States and Europe.

Gold for August delivery settled up $12.30 at $1,602.40 an ounce. The price was a record in dollar terms but below the peak reached in the 1980s after accounting for inflation. Silver, platinum and palladium also rose while other commodities mostly fell.

The price of gold has been rising since July 1 on concerns about Europe's financial problems, including Greece's debt crisis and the prospect that they could spread to countries such as Italy and Spain.

Greece may be declared in default by credit rating agencies if banks are involved in a second bailout of the debt-ridden country. European leaders will hold an emergency meeting Thursday to discuss the terms of the Greece deal.

In Washington, President Barack Obama and congressional members are debating ways to raise the U.S. government debt limit before an Aug. 2 deadline.

Questions about how the problems will be resolved have prompted investors to buy more gold and silver, which are considered relatively stable stores of value, particularly during uncertain times and when other financial markets are volatile.

Edward Meir, a senior commodities analyst at MF Global, said where the price of gold is headed will depend largely on what happens with the debt negotiations on both continents.

Silver for September delivery rose $1.271 to settle at $40.342 an ounce, October platinum gained $19.90 to $1,775.40 an ounce and September palladium rose $13.95 to $794.60 an ounce. September copper fell 1 cent to settle at $4.403 a pound.

In other trading, energy and agricultural products were mostly lower as the dollar grew stronger against other currencies. Commodities are priced in dollars so a stronger dollar makes them more expensive for investors who use other currencies.

Corn prices rose as forecasters predicted more favorable weather for parts of the Midwest. Analysts have said that shortages of the grain can only be alleviated by a bumper crop of corn this year.

Corn for December delivery fell 8 cents to settle at $6.77 a bushel, September wheat dropped 5.25 cents to $6.895 a bushel and November soybeans fell 0.75 cent to $13.8625 a bushel.

Benchmark crude for August delivery fell $1.31 to settle at $95.93 a barrel on the New York Mercantile Exchange.

In other Nymex contracts, heating oil dropped 4.03 cents to settle at $3.0777 per gallon, gasoline fell 3.19 cents to $3.0974 per gallon and natural gas gained 0.4 cent to $4.524 per 1,000 cubic feet.

http://www.google.com/hostednews/ap/article/ALeqM5izpO3SI-W6mgZ9cp_wTjCEsSjZiQ?docId=c44e3c06774b4d15bbc3ba6d45e7887c

Stewie
07-22-2011, 02:35 PM
When the alarms went off in 2001 no one paid attention. Big money, central banks and even Warren Buffet said the place to be was in gold and precious metals. Those entities had to tone back their voice because it would scare the "educated" investor.

Here's a simple graph of a company that's really smart, but don't invest in gold...

http://img62.imageshack.us/img62/4227/roygold.jpg

RNR
07-22-2011, 03:23 PM
A question for gold owners. Is your gold locked away in your house, safety deposit box or anywhere that you can see it and protect it? If not then all you have is a piece of paper saying you own it. If the bottom falls out it is worth no more than the dollars in my account. If you do have it in your possession and the bottom falls out you cannot eat it, make bullets out of it or even make tools out of it for that matter. I often hear this bold talk about the Apocalypse of our economy and that gold is the answer. If it all goes to shit you are just as fucked as everyone else~

Stewie
07-22-2011, 04:07 PM
A question for gold owners. Is your gold locked away in your house, safety deposit box or anywhere that you can see it and protect it? If not then all you have is a piece of paper saying you own it. If the bottom falls out it is worth no more than the dollars in my account. If you do have it in your possession and the bottom falls out you cannot eat it, make bullets out of it or even make tools out of it for that matter. I often hear this bold talk about the Apocalypse of our economy and that gold is the answer. If it all goes to shit you are just as fucked as everyone else~

This is a stupid statement. Gold has risen for 10 years because of the Fed and stupid gov't spending. It's that simple. Gold is not unique to the US. In fact, China is buying hand over fist. I don't invest in gold because of Armageddon, I invest in gold because my dollars are purposely being devalued.

Saul Good
07-22-2011, 04:47 PM
I no longer post in your threads because you ignore shit you don't understand and only allow for evidence that reinforces your cognitive biases.

Scoreboard, bitch.

Saul Good
07-22-2011, 04:48 PM
This is a stupid statement. Gold has risen for 10 years because of the Fed and stupid gov't spending. It's that simple. Gold is not unique to the US. In fact, China is buying hand over fist. I don't invest in gold because of Armageddon, I invest in gold because my dollars are purposely being devalued.

I hope you have physical gold instead of just paper. There is a good chance that a lot of this gold that is said to exist isn't actually there.

RNR
07-22-2011, 04:53 PM
I hope you have physical gold instead of just paper. There is a good chance that a lot of this gold that is said to exist isn't actually there.

~

Saul Good
07-22-2011, 05:06 PM
If you do have it in your possession and the bottom falls out you cannot eat it, make bullets out of it or even make tools out of it for that matter. I often hear this bold talk about the Apocalypse of our economy and that gold is the answer. If it all goes to shit you are just as fucked as everyone else~

That's why I don't invest in it. I like the idea of a hedge investment, but I prefer something that is functional (oil, real estate, etc.) rather than symbolic. That said, it's hard to argue with someone who is swimming in cash like Scrooge McDuck.

BigChiefFan
07-23-2011, 12:52 PM
I can't believe anybody would argue against precious metals versus paper, especially knowing who have been members of the FED and their general directive of greed over ethics. Paulson, Geithner, Bernake, etc. are laughing all the way to the bank and it isn't paper they are after.

Stewie
07-23-2011, 01:52 PM
I hope you have physical gold instead of just paper. There is a good chance that a lot of this gold that is said to exist isn't actually there.

If you mean "paper" I assume you're talking about the Crimex :). That's a manipulated index by people who hate gold (the banks). If you really want to see something ridiculous look at the silver market. They trade a billion of ounces per day when there's only about a million ounces of physical silver available at any given time.

I do own physical gold that I bought years ago. If you've never held a $50 American Gold Eagle in your hand you're missing out. There's a reason it's valuable.

I also own shares in gold mining companies and have done quite well. I missed the collapse in the other markets.... so sad.

KCWolfman
07-24-2011, 11:30 AM
I don't want to read back.

Has anyone mentioned the electronics applications of gold in the electronics industry?

On a personal level, I would invest in gold only if I saw a sell date in my near future (5-10 years). Otherwise, I am planning on something destroying the current barter system. If some event does destroy current currency applications, unless I physically have that gold in my hands, I am betting that money I invested will be totally wasted as the holders of the gold may not be required to give me back my physical property.

Stewie
08-02-2011, 02:46 PM
How was your day?

http://img705.imageshack.us/img705/1419/82gold.jpg

If you look from Sunday night (blue line) gold declined due to the fact that there was a realistic compromise on the budget. (Fools to sell.)

Monday (red line) and gold moves higher because the word is that's it's all spending, little cutting. It dropped when the banks moved in to assure everyone the debt was a good thing.

Tuesday (the green line). This additional $2.4 trillion is what powered gold from $385 to the record high today. Nothing has changed. Gold will continue higher.

Oh, and Japan and Korea bought tonnes of gold recently. First time in 13 years.

It's not Joe Sixpack that's driving gold higher, it's sovereign nations. That's been the driving force for years.

Stewie
08-02-2011, 03:00 PM
<tt>Indexes since 2001:


- GOLD.....................up +526%
- Shanghai, China..........up +28%
- Dow, USA.................up +22%
- DAX, Germany.............up +17%
- FTSE, UK.................up +2%
- Nikkei, Japan..........DOWN -23%

This doesn't include the recent DOW plunge or the rise in gold.
</tt>

Saul Good
08-02-2011, 04:48 PM
In KCnative I trust.

Saul Good
08-02-2011, 04:49 PM
Because Glenn Beck keeps telling them to. :D

You could have done worse than to have listened to him, I guess.

KC native
08-02-2011, 05:40 PM
In KCnative I trust.

Damn, my dick must taste really good since you're still riding it so hard. :rolleyes:

KC native
08-02-2011, 05:45 PM
If you mean "paper" I assume you're talking about the Crimex :). That's a manipulated index by people who hate gold (the banks). If you really want to see something ridiculous look at the silver market. They trade a billion of ounces per day when there's only about a million ounces of physical silver available at any given time.

I do own physical gold that I bought years ago. If you've never held a $50 American Gold Eagle in your hand you're missing out. There's a reason it's valuable.

I also own shares in gold mining companies and have done quite well. I missed the collapse in the other markets.... so sad.

.

Stewie
08-06-2011, 12:30 PM
Who allows this sort of drivel to be printed? Oh, "The Street." Gold loses steam? It closed at an all-time high this week and when the stock market plunged gold was down 0.1%. The weekly close is also an all-time high. And equities are regaining momentum? Hang on to your wallet if you listen to that bullshit! Sheesh! BTW, gold rallied on Friday at the close at $1663 (+$14). If the DOW were gold it would be at 35,000+.





Gold Prices Lose Steam as Equities Regain Momentum



By Alix Steel (http://www.thestreet.com/author/1110517/AlixSteel/all.html) http://i.thestreet-static.com/files/tsc/v2008/css/images/email_9x12.gif (http://www.thestreet.com/email/story/11211383.html) http://i.thestreet-static.com/files/tsc/v2008/css/images/print_14x13.gif (http://www.thestreet.com/print/story/11211383.html) http://i.thestreet-static.com/files/tsc/v2008/css/images/reprints_12x13.gif (http://www.thestreet.com/static/about/reprints.html) http://i.thestreet-static.com/files/tsc/v2008/css/images/feed_icon_12x12.gif (http://feeds.thestreet.com/tsc/feeds/rss/AlixSteel) 08/05/11 - 03:14 PM EDT

Gold for December close down $7.20 to $1,651.80, an ounce at the Comex division of the New York Mercantile Exchange. The gold price (http://www.thestreet.com/topic/43441/gold-price.html) has traded as high as $1,673 and as low as $1,644.20 while the spot gold price was adding $4.50, according to Kitco's gold index.

Gold prices had a wild and crazy day Friday after being caught in a flood of selling Thursday as investors fled all assets. Gold then mounted a solid rally Friday as investors searched for a safe haven after July's jobs report only to lose steam into the close.

Ace Gunner
08-06-2011, 01:22 PM
I wouldn't get rid of those trinkets

Stewie
08-19-2011, 01:24 PM
<tt>'Chavez Orders $11 Billion of Gold Home as Metal Hits Record'

</tt>It will be very interesting to see how this plays out. The Bank of England is the custodian of this gold. The last time someone repatriated their gold holdings from the BoE (Hong Kong) there was a sudden large buyer on the open market. This led to suspicions that BoE didn't have the gold at all, only paper.

Saul Good
08-19-2011, 01:34 PM
Damn, my dick must taste really good since you're still riding it so hard. :rolleyes:

Its delicious. Got any hot tips? I need to know what to short.

Stewie
08-19-2011, 04:01 PM
I no longer post in your threads because you ignore shit you don't understand and only allow for evidence that reinforces your cognitive biases.

Apparently you still do. I listen to really smart people, not dumbasses like you.

Shit I don't understand? I think I've been right for years.

Did you short gold? Did you buy HP? How about GM a few years ago?

The proof is in the numbers.

KCTitus
08-19-2011, 04:21 PM
I bought a few thousand in silver coins that have an individual value of roughly 20-30 dollars per coin. I bought it in case the economy completely collapses, I have something for barter. I also have invested in ammunition.

9mm ammunition is a very common and popular caliber and one that I feel would be worthwhile in a barter situation. I have a couple thousand rounds in my safe at the moment.

Given the fact that the US is printing money and buying its own debt, this is in effect, devaluing the dollars I hold. Governments cannot 'make' precious metals, therefore they have intrinsic value.

Stewie
08-19-2011, 04:26 PM
I bought a few thousand in silver coins that have an individual value of roughly 20-30 dollars per coin. I bought it in case the economy completely collapses, I have something for barter. I also have invested in ammunition.

9mm ammunition is a very common and popular caliber and one that I feel would be worthwhile in a barter situation. I have a couple thousand rounds in my safe at the moment.

Given the fact that the US is printing money and buying its own debt, this is in effect, devaluing the dollars I hold. Governments cannot 'make' precious metals, therefore they have intrinsic value.

I'm curious. Why did you buy silver coins?

The ammunition purchase baffles me, but do what you want to do. This isn't going to end in warfare, it never does.

evenfall
08-19-2011, 04:27 PM
I bought a few thousand in silver coins that have an individual value of roughly 20-30 dollars per coin. I bought it in case the economy completely collapses, I have something for barter. I also have invested in ammunition.

9mm ammunition is a very common and popular caliber and one that I feel would be worthwhile in a barter situation. I have a couple thousand rounds in my safe at the moment.

Given the fact that the US is printing money and buying its own debt, this is in effect, devaluing the dollars I hold. Governments cannot 'make' precious metals, therefore they have intrinsic value.

Of what value is silver in that situation? If we are battering for our needs and you offer me silver, I will say no thanks and tell you my price in 9x19.

(Or maybe, in 7.62x39)

Stewie
08-19-2011, 04:32 PM
Of what value is silver in that situation? If we are battering for our needs and you offer me silver, I will say no thanks and tell you my price in 9x19.

(Or maybe, in 7.62x39)

Yeah, if you're a fucking hillbilly.

KCTitus
08-19-2011, 04:32 PM
I'm curious. Why did you buy silver coins?

The ammunition purchase baffles me, but do what you want to do. This isn't going to end in warfare, it never does.

For barter.

KCTitus
08-19-2011, 04:34 PM
Of what value is silver in that situation? If we are battering for our needs and you offer me silver, I will say no thanks and tell you my price in 9x19.

(Or maybe, in 7.62x39)

I take my cues from someone who's been through something similar in South America.

Stewie
08-19-2011, 04:37 PM
I take my cues from someone who's been through something similar in South America.

No reserve currency has ever been located in SA.

KCTitus
08-19-2011, 04:38 PM
No reserve currency has ever been located in SA.

At this rate, it's not going to be located in NA, either...thus the investments Ive made.

Stewie
08-19-2011, 04:43 PM
At this rate, it's not going to be located in NA, either...thus the investments Ive made.

You're right. Gold is the reserve currency and sovereign nations are buying by the billion$. Silver? Not so much. Will it rise? Probably. If you walked up to someone on the street with a 1955 dime would they know what they're looking at? I'd say no. BUT, they may soon learn.