Hi fellow DUers. Quick question: Pls. tell me why gold is NOT the way to go now or why it IS

[secondwind]

[msongs]

1. it was the way to go when it was only $500/oz nt

[bemildred]

16. Correct. The rule is "buy low, sell high". This is time to sell, if it's time to do anything. nt

[Art_from_Ark]

80. Why was early October the time to sell?

When you made your post on October 6, silver was trading at approximately $22.00 per ounce. Today, it is more than $29.00 per ounce. Gold was about $1350 and now it's $1380.

[Taitertots]

83. Because markets can remain irrational longer than you can stay solvent

It was irrationally exuberant then and it is irrational still now.

[Art_from_Ark]

87. Sounds like you're actually talking about the NYSE

Talk about irrational-- have you ever seen how the prices of stocks are decided? Not only on the trading floor, which is a chaotic mess on the best of days, but the way Wall Street rewards companies for laying off employees, shipping jobs overseas, cutting employee pay, anything to squeeze money out of the people actually doing the heavy work for the company just to add to the riches of the investors.

[Taitertots]

92. You don't know how prices are calculated for stocks, bonds...

ROI, ROA, PE ratios... Some are over traded, some under traded, but the reasons they have value is concrete.

How is the price of gold determined? Institutional investors run the prices up, sheep follow them into the market, and institutional investors bring down the house and short it on the way out.

But I'm sure gold is nothing like Tech stocks in 2001, housing in 2007, S%Ls in 1980's, Japan at the start of the 1990's, or GOLD in the 1980's.

[Art_from_Ark]

100. No, gold is nothing like Tech stocks in 2001

housing in 2007, S&Ls in 1980's, Japan at the start of the 1990's, or gold in the 1980's. In fact, I seriously doubt if you could tell me how Japan in the 1990s, or the S&L crisis, or the housing bubble, have anything at all to do with the price of gold today.

As for "concrete" reasons for valuing of stocks, that is absolutely laughable. The prices of stocks are even more irrational than the price of gold, as you yourself alluded to with the Tech stock bubble. With stocks, you have to factor in a whole set of subjective information that may or may not be accurate, and pump-and-dumpers (a.k.a. "market makers") can get suckers, er, investors interested in an otherwise worthless company, and get the price up to a point where insiders can bail out and leave outsiders holding the bag.

[westerebus]

102. What's the p/e on net flicks these days?

This market is trading in the FEDiverse.

QE 2. POMO.

And where's Main Street?

Try half way across the river Styx just before a rock and a hard place.

AKA high unemployment and dropping home values.

The Bernank is digitizing.

That's pushing inflation into the global market.

Result, higher commodity prices. Globally.

Add the Euro spasms.

The elders of the tribe say: Buy the dip.

They also say: An eagle in the hand is better than two on paper.

[Art_from_Ark]

48. So it's only a good investment if you can triple your money?

If you bought at $600, and sold at $1350, you're out of luck?

[bbinacan]

2. Gold

Not the way=price is high. The way=the economy is on the verge of collapse, might come in handy.

[FiveGoodMen]

6. If the economy ever really collapses and takes the government with it

only weapons and ammo will mean anything.

Because people will use those to get everything else.

We'd better not have the collapse. Preparing for it isn't worth thinking about.

[bbinacan]

11. Could be.

I hope not. Guns and ammo may very well be more valuable than gold.

[eridani]

34. For what? How would tomato peddlers give you change? n/t

[Lost-in-FL]

3. IMO, Gold is up, so buying gold now would be dumb. nt

[secondwind]

4. Tks, guys.

[Cleita]

5. Take some jewelry to a buyer and see what you get for

it. It varies. The fact is that gold is only worth what someone else wants to give you for it. Sure there are runs sometimes on precious metals but would you know when to sell? It's not like you can pick up a piece of gold and get what you paid for it all the time. It's just as risky as the stock market.

[Art_from_Ark]

22. Gold jewelry is not an investment item in the US

It is in some parts of the world, but not the US. Tangible gold investment items in the US are mainly limited to coins and bars. In most cases, it is better to have US-minted coins since there is a bigger domestic market for those. Notable exceptions include Canadian, Australian and Chinese gold bullion coins (although I personally would stay away from the Chinese stuff), British sovereigns, and Mexican gold coins. Bars should be from one of the well-known suppliers, such as Johnson-Matthey, Englehard or Credit Suisse.

If you stick with bullion, with the weight and fineness stamped on the coin/bar, then there is a market that will buy and sell that gold at relatively fixed prices that are based on the market price. I'm not talking about fly-by-nighters like SellMeYurGold.com or IBuyYurGoldCheap.com, I mean dealers like those who advertise in coin publications like Coin World and Numismatic News.

If you get real gold from a legitimate dealer, there is no way that gold investment is "just as risky as the stock market". With stocks, you have absolutely nothing that is tangible, and many big name stocks have lost a huge amount, sometimes 90% or even 100%, of their value. Gold will NEVER do that.

But gold investment is not for everybody. You have to do your homework first.

[pokercat999]

74. Don't say never. House prices in America never fall either. nt

[Art_from_Ark]

81. I didn't say gold prices will never fall

I said they will never fall by 90 or 100%, the way some stocks like GM and Citigroup did.

[Taitertots]

84. That is an unsupportable claim to make

There is nothing stopping gold from losing 90% of it's value except the fiat of the powers that be.

[Art_from_Ark]

86. Considering that gold has not been $130 in nearly 40 years

I seriously doubt that it will fall to that price ever again. I have been following metals since gold was $35 an ounce and silver was $1.29. I stand by my statement.

Barring a revaluation of the US dollar, Gold will NEVER go back down to $200 or less. There is just too much fiat money floating around that will latch onto gold long before it goes anywhere near that level.

[Taitertots]

91. You sound just like the people who were over leveraged on housing

You have followed gold since it was $35 an ounce. What fundamentals have changed to justify a 20x increase in price?

[Art_from_Ark]

94. Overleveraging and fundamentals

I don't buy gold on credit, so there is no leveraging of my holdings.

As for fundamentals, all sorts of fundamentals have changed since 1968, when I bought my first gold coin, was on the mailing list of a gold coin dealer, and was avidly reading various coin periodicals and books. First of all, the US price was kept artificially low because of the gold restrictions that were in place at the time. A lot of people thought that owning gold of any kind (except jewelry) was illegal, so that also helped to depress the market. Ownership of US gold coins was not illegal, though, and it was also legal to hold foreign coins dated 1960 or earlier. It was not legal to hold (that is, buy and sell) bullion, though, and the ownership of foreign coins dated 1961 or later was regulated. For example, if I had wanted (or been able to afford) the $20 gold coin that Canada struck in 1967 to commemorate 100 years of confederation, I would not have been able to order it directly from the Canadian mint due to US restrictions. Only certain dealers with a special import license could order new foreign coins directly from foreign suppliers (but I'm not sure if that provision was in place in 1967).

But prices started to rise around 1969 or so when it became clear that owning US gold coins was perfectly legal (the legality of holding US gold coins had been affirmed by the Coinage Act of 1965, but the word was apparently slow to spread). The gold market started to perk up, and prices for both US and foreign gold coins began to rise. For example, common British gold sovereigns (about the size of a nickel and containing about 7.2 grams of gold) quickly rose from about $12 to $20 or so. Gold prices got a bigger boost in 1971 when Nixon removed the last vestiges of the Gold Standard, as well as the last vestiges of precious metals in US coinage, and inflation started to kick in. People became increasingly interested in buying gold (and silver) as hedges against inflation.

Inflation continued to rise, and in 1973 was exacerbated by the first Oil Shock. The price of gold increased more, and while the official US price had been raised to a little more than $42/ounce, the world market was higher, and the prices for US and foreign coins reflected the world market. British sovereigns which had been selling for $12 in 1967 were now selling for $30 or more.

Then, on December 31, 1974, President Ford signed a law that removed the last restrictions on gold ownership for Americans and, in conjunction with inflation, gold prices also kept rising (albeit with various fluctuations, of course). By that time, British sovereigns were selling for $50 or more. The inflationary trend continued through the rest of the '70s, and there was great demand for gold and silver as inflation hedges. Prices were still comparatively low compared with today, with, for example, common US $20 gold pieces selling for around $300 in 1978, when I bought my first one. But the next year, prices started to take off, with the price of $20 gold pieces doubling and silver going from about $5 per ounce to well over $20 per ounce in just a few months, due to inflation, another oil shock, market manipulation by the Hunt Brothers and others, and a general feeling of economic unease. That time was a classic bubble, since prices were rising too fast. I sold most of my stuff at that time, to pay for various personal expenses. I was quite happy to receive 13 times face value for US silver coins that I had bought a year before for 4 times face value.

But the dam bust in January 1980. Silver reached an official high of $50/ounce (although almost no one was buying at that level) and gold blipped at $850 (once again, no one was buying at that level). When it became known that the Hunt Brothers had been trying to corner the silver market, silver prices collapsed. Gold prices went down $100 almost immediately, and then started on a slow descent in the 1980s when inflation eased and interest was turned to other investment options such as stocks and bank CDs, which had become quite attractive.

Gold prices during this period were greatly affected by market manipulation by European central banks, which were quietly buying when prices were low, then dumping when prices were high. This situation lasted until the euro was officially adopted in 2002, and the EU pledged to set annual limits to gold sales. It is no coincidence that there was renewed interest in gold starting around this time.

Today, we are in a situation where there is supposedly no inflation but prices on a lot of basic goods and services are rising nonetheless. We also have a situation where the US government is in debt for trillions of dollars, and no one knows exactly how much. Also, no one seems to have any idea about how much fiat money there is in circulation (including both coins/notes and electronic "money"), although it is generally assumed to be in the trillions.
What's more, other investments such as bank CDs are probably the least attractive they have ever been, and there is much doubt and suspicion about the stock market, which seems to be stacked against the average investor, especially in the wake of the Lehman Brothers crisis and the derivatives scandals. And there are also many new players in the gold market, including China and India. China, for example, only recently lifted the restrictions on private gold ownership, and gold has consequently become a popular item with both the Chinese government and the Chinese nouveau riche. Moreover, gold and other precious metals are about the only investment vehicle (besides land) that cannot be artificially grown or produced.

Gold can also be easily fashioned into small coins and bars that nonetheless represent high value, it does not corrode or break down, and the world market has a relatively good idea of how much gold is available, and how much new gold is entering the market each year. Moreover, gold has played a role as a monetary medium for millennia. Therefore, I am not surprised at all that the price has risen so much. Nonetheless, I would not buy gold bullion at these levels. My gold purchases, what few there are these days, are limited to coins that have both a bullion and a numismatic appeal.

[Taitertots]

95. You are trying to answer the wrong question

A better way to phrase it might be "why does gold have value"? You are getting close with "it does not corrode or break down, and the world market has a relatively good idea of how much gold is available, and how much new gold is entering the market each year". This is one of the remaining qualities of gold that causes it to have intrinsic value. The other qualities are usefulness in electronics, coin collection, and jewelry.

The things you listed are changes to underlying factors. Every change you listed is nothing more than animal spirits. There have been no changes that effect market fundamentals that make gold intrinsically more valuable.

You are trying to explain why gold has it's current price, not why gold is valuable in the first place. If everyone wanted 1980's McDonald's happy meal toys the price would go up, but it wouldn't increase the intrinsic value of 1980's McDonald's toys, it would be an unsustainable bubble. Gold is a fad, like beanie babies, just don't get caught holding it when the bubble bursts.

[Art_from_Ark]

96. A fad like beanie babies? That's nonsense

Absolute nonsense.

I have listed many factors that have affected the price of gold since I started following it.

Also, it is valuable because it best meets the requirements for a monetary medium:

It is durable
It does not corrode or tarnish
It has appeal as a monetary medium around the world, and has had for millennia
It cannot be produced artificially,
It can be easily shaped into coins and bars that represent high value even in small amounts
It is scarce but not excessively rare
It is fungible
It is a world market

I should also add that governments around the world, including the US, have re-acknowledged gold as a monetary metal by issuing gold bullion and commemorative coins. The US, for example, has been issuing gold bullion coins since 1986 (or 1982 if you count the American Arts series of medallic coins). Many other countries have produced gold bullion coins within the last 40 years, including Turkey, Mexico, the UK, Australia, Austria, South Africa and China. Dozens of other countries have issued gold commemorative coins.

Your argument loses all credibility when you compare the gold price with beanie babies or McDonald's toys, and shows just how little you know about metals and their role as a monetary medium.

[Taitertots]

97. It was an absolute failure as a monetary medium

Which is why every advanced economy ran away as fast as they could after how much it worsened the Great Depression. Gold was a pathetic failure as a medium of exchange.


Durable covers half the rest of the list. The other half is covered by limited supply. So we have two reasons why gold should have value.

Durable:McDonald's toys are plastic, they will outlive us all without significant degradation.
Rare: There are a limited number of old McDonald's toys. They are more rare than gold, more gold can be mined, you can't go back in time.
The only difference is that institutional investors benefit from causing a bubble in Gold because they have gold already.

It is exactly like beanie babies. It a market that depends solely on intended resale price and current price movements, and has nothing to do with fundamental principals or intrinsic value.

[Art_from_Ark]

98. What utter nonsense

Beanie babies have limited appeal, and plastic does break down. They cannot be reshaped into anything else, and they have never been used as money. They do not have a value that can be easily calculated based on weight and fineness, and their "limited number" can always be artificially increased at any time in any amount.

[Taitertots]

99. Why are you obsessing over the analogy? It is the least important part.

The most important part is the dismal failure of gold in the role of medium of exchange. No one wants to use it because it ruined economies around the world less than 100 years ago.

Follow closely by the revelation that none of those aspects either adds to it's intrinsic value and none of those factors has changed to justify the over 2000% price increase.

[Art_from_Ark]

101. Oh, for crying out loud

You seem to think that I am advocating a return to the Gold Standard, which I am not. The Gold Standard had its advantages, but also its disadvantages. But it was not gold that ruined economies, but rather stupid wars that drained national treasuries and wasted resources. Particularly World War I. And unbacked fiat money has ruined many economies since then.

At any rate, I am talking about something completely different, that is, gold as a monetary medium (not a currency) that offers a hedge against reckless fiat monetary policies.

[Taitertots]

104. Gold isn't a hedge against "Reckless fiat monetary policies"

It is a bubble that isn't supported by anything other than undue inflationary fears.

The eighties real gold price spike is a perfect example of gold exceeding realistic long run averages. A lot of people became inflationary chicken littles and lost a huge amount of money. Some hedge.

What alleged "Reckless fiat monetary policies" are you trying to hedge against?

[Po_d Mainiac]

106. Duh

What alleged "Reckless fiat monetary policies" are you trying to hedge against?
cough gag :puke: Gee QE and issuing FED IOU's seems to fit that question better than a black glove in a LA courtroom

[Taitertots]

107. Ok genius. Where is the inflation?

There has been no "Reckless fiat monetary policies" in America. Reality and your uneducated opinions are diametrically opposed.

[Po_d Mainiac]

108. Ow stupid me........ where shall I start

Gasoline
Heating oil
Motor Oil/lubricants
Cereals and grains
Industrial Metals
Coffee
Property Taxes
Homeowners Insurance

ESAD

[Taitertots]

112. There is not high inflation

Cherry picked sector changes doesn't mean there is inflation. Why don't you look at actual gages of inflation based on more than biased selections?

[Art_from_Ark]

110. You are talking like a babe in the woods

who has just fallen off the turnip truck into the cabbage patch.

Inflation is very much with us. College tuition at my state university, for example, has quadrupled in just 20 years. The health, life, homeowners and car insurance premiums that my folks are paying are going up every friggin' year, as are utilities, car repairs, vet bills, handyman bills, groceries, gasoline...

The uneducated opinions are yours.

[Taitertots]

111. Changes in one sector is not inflation

You don't even understand inflation.

[Art_from_Ark]

113. Oh, fer crying out loud!

I have listed SEVERAL MAJOR sectors in which inflation is a part of life. There are undoubtedly more. Geez. You are the one who has absolutely no understanding of inflation :banghead:

[Taitertots]

114. A handful of biased price groups increasing isn't inflation

Especially when you ignore any non-inflationary causes and ignore any changes that disagree with your opinion. Many other considerations go into the determination of the rate of inflation, when those are taken into account the price level changes are at rates which are perfectly fine.

Your opinion is akin to claiming there is massive deflation because housing prices have fallen. You don't get to pick and choose what factors you consider and which to ignore.

[Art_from_Ark]

115. For cryin' out loud, again

Declining housing prices are one reason why there is "no" inflation. Cheap imported junk is another. But both I and Po_D Maniac have cited several major sectors where inflation is very much a part of ordinary people's daily lives. To claim that there is no inflation is utterly ludicrous.

But then again, I have come to expect that from your uninformed arguments.

You have absolutely no knowledge of the historic role of metals in monetary systems.
You have no idea of how unbacked paper currencies have failed around the world, even in the Bretton Woods and post-Bretton Woods eras.
You refer to the "utter failure" of the Gold Standard 100 years ago, but completely ignore the fact that most of the countries that withdrew from the Gold Standard during the 1910s did so mainly because of the stupid expensive war that they insisted on fighting with each other. Your claim also fails to take into account the major role that the stock market collapse played in bringing on the Great Depression.
You have this naive idea that the prices of stocks are somehow always rational based on"concrete" criteria, even though you yourself admitted that the tech stock mania was a bubble.
You have no idea of how inflation has eaten away the buying power of the US dollar in the last 40 years, and that inflation is still very much with us today.
You make utterly ridiculous analogies between cheap, mass-produced consumer products with no intrinsic value and only limited collector value, and precious metals, especially gold, which has ALWAYS had value on the world market.

Really, you are just talking out your rear-end.

[Taitertots]

116. Cherry picked sector price increases isn't inflation

There is a problem that those sectors are increasing in price, but it isn't inflation. Monetary policy is going to have a very limited effect, which is why when that happens it isn't considered inflation. We need to address it with the Federal Government and not the Central Bank. Increase taxes and increase spending. The Fed didn't cause it and lacks the policy tools to effectively address those problems. Lets put the blame right were it belongs for price increases in those sectors, Republicans

"You have no idea of how unbacked paper currencies have failed around the world, even in the Bretton Woods and post-Bretton Woods eras."
I know about that quite well. It is a good thing that we are not doing the same things they did.

"You refer to the "utter failure" of the Gold Standard 100 years ago, but completely ignore the fact that most of the countries that withdrew from the Gold Standard during the 1910s did so mainly because of the stupid expensive war that they insisted on fighting with each other. Your claim also fails to take into account the major role that the stock market collapse played in bringing on the Great Depression."
The Great Depression was the culmination of a whole series of bad policy decisions. One of which was the gold standard. One of which was systemic problems in the stock market. One of which was pointless wars. One of which was bad agricultural practices. There are many more.

"You have this naive idea that the prices of stocks are somehow always rational based on "concrete" criteria, even though you yourself admitted that the tech stock mania was a bubble"
You are confusing having a concrete reason for having value, and price levels being set rationally. There is a reason that a stock has value beyond just expected price increases. Of course they have risk and can be over priced. That doesn't mean that the reason they are valuable is any less valid. The principal reason that gold has value is that people expect the price to go up. People expect the prices of stocks to go up because the companies are profitable or may become profitable. Comparing gold to all other commodities demonstrates just how irrational the gold market is. All other commodities are priced based on the concept they will be sold for production.

"especially gold, which has ALWAYS had value on the world market."
Markets can remain irrational much longer than you can remain solvent.

[Art_from_Ark]

120. To paraphrase Will Rogers:

"You say it's not inflation, and they say it's not inflation. So it's not inflation. But the people who are seeing the purchasing power of their fixed incomes decrease every year say it's the best imitation they've ever seen"

Really. The world knows the 1% or whatever official inflation rate is just bullshit. If prices are going up, that's inflation, regardless of the official pronouncement.

As for gold, the market has lasted for thousands of years. Your trite quote "Markets can remain irrational much longer than you can remain solvent" doesn't make any sense whatsoever in this context.

[Taitertots]

121. It is not inflation by definition

Cherry picked sector prices are increasing, that isn't inflation. I'm sorry if you choose to ignore the definition of inflation because it suits your ideological bias.

The facts are that those price level changes are not monetarily created (inflation), they are due to failures of the federal government. Deflation isn't going to make those more affordable, it is going to bring down all prices, including wages. All those things becoming expensive is a problem, it isn't inflation and monetary policy is going to have very limited effect on them.

[OllieLotte]

122. Overall, we are not experiencing high inflation.

The main reason is that wages are flat. There is excess manufacturing capacity and housing prices are falling. However, if someone is living on a fixed income, has been renting an apartment, buys food and drives a car, they are absolutely feeling the effects of inflation. In a few years, when housing turns around and the lower cost excess capacity is used up, it's gonna be painful. By that time, the only thing keeping prices down will be wages. I'm afraid that Japan and China won't be satisfied with 2.5% on ten year...check that....3.5% on 10-year Treasury Notes.

[Taitertots]

123. There is a problem, but it is not inflation

They are feeling the effects of Republican policy decisions. Health care costs are rising because the Federal government won't adopt the socialized medicine model that has shown that it offers better service at lower costs. Oil price increases cause price levels to rise for various products, this is because the Federal Government is refusing to aggressively fund alternatives. This is not inflation, this is the result of failed Republican policies that they are claiming as inflation.

It isn't going to be painful when we recover. The Fed is just going to sell off the government securities it bought. If we start taxing the rich at a fair rate than we could dramatically reduce if not remove the deficit. This is a Republican created problem (tax cuts for the rich) that is being framed as a debt crisis. This is a Republican scare tactic to sabotage Obama.

Edit:"by" to "but"

[blue sky at night]

7. when the sh~T hits the fan....

are you going down to Giant Eagle with your gold for bread and milk...it makes no sense to me to have to trade it back for cash...Listen to KTPK on Saturdays, they have financial talk on, last saturday they were talking gold is due for a crash.


This is about all we listen to.


http://kptk.cbslocal.com/

[Art_from_Ark]

24. The reasoning behind trading gold back for cash,

and this is based on people's experience in countries that have experienced hyperinflation, is that you convert enough gold to buy, say, a month's worth of supplies. By the time the month is up, inflation has vastly reduced the buying power of the paper money, but the buying power of gold theoretically remains relatively constant. And paper money can become worth so little that it ends up being demonetized. This has actually happened in numerous countries around the world, including Germany, Serbia, Hungary, Mexico, Peru, Brazil, Argentina, Bolivia and Zimbabwe, to name a few.

Can the dollar become demonetized? Maybe. Virtually every country has demonetized/replaced its currency since the US Dollar made its official debut in 1794. And the US has demonetized various coins and paper notes at one time or another. Currently, though, all US-issued coins and currency are officially legal tender in the US. So it seems unlikely that a total demonetization would occur, but these are strange times.

[Warpy]

103. Cheap diners used to trade meals for gold jewelry back in the 30s

at a fraction of a cent on the dollar the stuff was worth. Gold is not that easy to convert once the shit hits the fan, not even in the form of jewelry. When no one has the money to buy it, nobody does, and it doesn't get much in barter.

The only reason to buy gold as PART of an investment strategy is as a hedge against inflation. That point is not valid in this market, since the price of gold has fast outpaced the rate of inflation due to market meddling by institutional investors.

[Art_from_Ark]

109. Oh, for crying out loud

How many times on this thread do I have to emphasize that there is a huuuuuuuuuuuuuuuge difference between jewelry and investment gold?
Gold JEWELRY might be hard to convert, but gold BULLION is easy to convert. All you have to do is shop around for a dealer. Bullion coins, especially bullion coins made by the US Mint, ARE and WILL BE convertible with dealers. But trying to trade gold jewelry with a diner would be a FOOL'S ERRAND in any era.

As for the price of gold outpacing inflation...
What was the price of gold in 1970, and what were the national debt and money supply back then?
What is the national debt today, and what is the money supply? (And note that unlike 1970, today's money has absolutely no precious metal backing. No backing at all, except the "full faith and credit of the US government", which seems to be diminishing by the day)

[Warpy]

117. When the shit hits the fan, dealers won't have any money, either

because the shit hitting the fan generally means a rapid deflationary cycle during which gold deflates in value along with everything else. Dealers are not going to pay $1000/oz on Monday if they are afraid it will be $900 on Friday, and they're always afraid.

Bullion is actually harder to unload than jewelry is in a true fiscal catastrophe, which is what we're discussing here. It's only good to be held as a part of an overall investment strategy and only as a hedge against inflation.

You're correct about fiat currency in general and US currency in particular. Our currency is held up only by hot air and wishful thinking, no longer backed by the industrial powerhouse we used to represent. Too many critical industries have been offshored for that.

[Art_from_Ark]

119. How in the world did you come up with that scenario?

"because the shit hitting the fan generally means a rapid deflationary cycle during which gold deflates in value along with everything else."

When has that ever occurred? The only time gold "lost" value in the United States before 1933 was the result of the California Gold Rush, when it briefly became worth less than 16 times the same weight/fineness of silver. Nonetheless, from 1834 to 1933, the price of gold in the US remained at $20.67 per troy ounce. And in 1934, the official US gold price was raised to $35 (to artificially create inflation), where it remained until the early 1970s. On December 31, 1974, the gold market was completely liberalized in the US, and gold went up to a more natural level.

And your statement that jewelry is harder to unload than bullion is unsupportable for a number of reasons:

First, most jewelry sold in the US is at best 75% gold (18K). 14K gold is less than 60% pure, and 10K gold is only 41% pure. The lower the fineness, the lower the price, percentagewise, you can get for it. Also, much if not most of the price you pay for jewelry is for workmanship, not the actual gold content, so if you have to unload jewelry, you probably won't get anywhere near what you paid for it, even if the market remains relatively constant.

In contrast, US gold coins are at least 90% pure gold, and some recent bullion coins are 99.99% pure. The higher the purity, the more desirable the gold is from an investment perspective.

It is obvious you don't have much experience in this field.

[xchrom]

8. Cause it's 'bubbled' right now? Nt

[DCKit]

9. There's way more paper gold than gold.

Derivatives of our most basic currency just don't seem to be a good idea to me.

[FSogol]

10. Never buy anything when the price is at an all time high.

Gold being advertised on Fox should show you what kind of suckers are buying gold.

[DinahMoeHum]

13. "advertised on Fox" . . .ie. Glenn Beck and Goldline

:evilfrown:

The time to buy was YEARS ago, when hardly anybody was talking about it.

[zbdent]

14. to be honest, on quite a few "left" shows, too ... however ...

I also remember ads for speculating on gasoline and oil prices played on the radio not long ago ... right before the run-up of the oil prices started, leading to $140/barrel oil.

Bet a lot of people who bought in at $120 are significantly poorer right now ...

[Art_from_Ark]

88. The #1 rule to investing is doing your homework

Jumping feet-first into shark-infested waters is never a wise idea-- whether it's for stocks, real estate, consumable commodities, or precious metals.

[westerebus]

93. Exactly.

Even at that, no one makes the right investment all the time.

It all goes back to chickens.

As in not counting before they hatch.

Nor too many eggs in one basket.

Or why did one cross the road?

As I understand it:

Expect things don't go as planned.

Diversify.

Look for opportunities.

[Art_from_Ark]

25. The "kinds of suckers buying gold" include central banks

Maritius and Sri Lanka are two of the most recent, although there have been other big buyers as well. China's central bank is rumored to have been buying quietly on the market, as well as from domestic producers, and Russia's central bank is said to be absorbing domestic production of gold.

http://www.businessweek.com/investor/content/nov2009/pi20091125_103208.htm

Since that article was written more than 10 months ago, the price of gold has risen by roughly $140. I doubt you'll find many Fox viewers jumping in the market at these levels.

[dixiegrrrrl]

12. Can you eat it?

Can you plant seeds with it?
will it keep you warm?

Gold has become heavily marketed and very speculative.
Plus the gov't is now tracking indivicual sales of gold over 600.00 worth.
What does that tell you?
The reason to buy it would be to sell it later for more money, right?

And then you would use the money for.......?????

or, save the money and use it for what you need, invest in what you will need NOW.

If we have a crash, people will be more interested in finding food, energy, clothing, medicine, booze, cigs, etc, than carrying around your gold.
If they have enough money to buy your gold, they have enough money to buy the above needed items, right?

That's the way I see it, anyhow.

[jtuck004]

15. You could melt it down and make bullets. Or slingshot ammunition.

See? We CAN get manufacturing back to America!

;)

[dixiegrrrrl]

17. LOL.

[DoctorK]

32. medium of exchange

the government can't print gold, that's why its value is holding against paper money issued by the Fed.
Barter is inefficient, gold has offered itself as a medium of exchange in all countries for thousands of years. It is rare, durable, and divisible. It is not an accident or decree under which gold evolved as money.

The dollar was created as a unit of measure. It equaled a specific weight of gold, and consequently was inexorably tied to supply and demand in the marketplace of consumer demand (for savings, or cash - purchasing power).

Hopefully some sanity is restored in our monetary affairs before the dollar is completely destroyed (and the advantages and efficiencies of trade harmed thereby).

[eridani]

35. All money is fiat money by definition, and the government doesn't influence monetary policy--

--by printing anything. Here's a clue--most your money is less substantial than paper even---it's nothing but blips on hard drives. Come to think of it, that's what certificatss that say you "own" gold are as well.

[Art_from_Ark]

89. All of today's money is fiat

but government policies regarding the printing of fiat money-- literally, creating money out of thin air-- has a tremendous impact on monetary policy. Geez. If all governments could print as much money as they wanted without any consequences, there wouldn't be a single poor country on the planet. But it doesn't work that way.

[Taitertots]

124. So why was gold backed currency universally rejected by all modern economies?

Gold becomes unable as a currency base once a financial system because sufficiently large and/or complex. All the things that made it good back then are now useless and/or harmful.
Rare. This is not a good thing. Our currency should be flexible to changing world/domestic conditions.
Durable. How more durable do you need it to be than a dollar? I don't know about you, but I keep my savings in a bank. If there were systemic problems at banks, having gold backed dollar bank accounts isn't going to help at all.
Divisible. So are unbacked currencies. Gold backed currencies still have smallest units. Dividing physical gold is still limited both in accuracy and feasibility.
The government can't print gold. This is a huge problem. Image a situation where there are sustained gold outflows from the country. What happens to the gold backed currency when you don't have a lot of gold.

[northernlights]

18. you can't eat it...

silver at least has intrinsic manufacturing value. Try selling some gold jewelry and see what you'll get by the melt-downers. On your way tothe jewelry buyers, look at how many jewelers have massive sales going on.

If and when the SHTF, food stocks, toilet paper, toothpaste, basic medicines, water...usable stuff will be worth having, both for yourself and for trading. And I suppose guns and ammo for protection (and dogs for early warning system) but at least around where I live almost everybody is armed with hunting rifles and very self-sufficient. Along with starting raising veggies and hens for eggs next year, I hope to be able to trade for meat and fish for my dogs. There's a backyard "wild game processing" business about 2 miles from me.

Heh! I'll have 2 gardens. One is up by the house and road, where everybody can see it, for warm weather veggies. The new, big(50x70 or so) cool weather veggie one is hidden behind the house at the bottom of a steep incline. The only person who knows it will exist is the guy who rototilled for me a few weeks ago. :D

Oh, and wintertime trick for root veggies: bury them under a couple feet deep of straw and supposedly you can dig them out midwinter and they'll be fine. Haven't tried it yet, but learned about it for carrots in master gardening program.

[dixiegrrrrl]

21. bury them in a animal proof container under that straw

If you have a cool basement or shed, that is a better place.
worth even building a small "root cellar".

My Gram used root cellars, a lean-to device at the back of the house, 3 steps down, lots of
planks for shelves, bushel baskets and "gunny sacks" for freeze protection. All the winter vegies and jars of food were stored there, solid door covered it. She used it for 20 years or more,
back in the 50's to late 70's.

[Art_from_Ark]

26. As I wrote upthread, there is a big difference between jewelry and bullion

A BIG difference. With jewelry, you're mostly paying for the workmanship. With bullion, you're mostly paying for the actual metal itself (with some mark-up). Standard bullion gold coins with a marked weight and fineness generally trade at buy and sell prices that are closely tied to the market price of gold, if you deal with a legitimate dealer.

And jewelers always have massive sales going on. That is because the price of the jewelry is always several times higher than the value of the precious metal it contains (if it even contains precious metal). For example, a 14K gold ring with a small stone might be priced at $150, but if the metal weighs 1.5 grams, that means it contains less than 1 gram of actual gold, which is worth only around $44 even at today's prices. So there is some leeway in finding a happy medium between list price and the price the jeweler actually has to pay for the piece.

[northernlights]

27. so you can eat bullion?

Or you can sell bullion for...what? And if you sell your bullion back to dealers, you'll probably still be paying a hefty fee in some form.

Thanks, but I'll stick to small-farming and bartering with my hunter/fisherman neighbors, who I guarantee won't have use for gold in any form.

[Art_from_Ark]

31. You can't eat anything that is normally considered an investment

Even if you invest in hog bellies or corn futures, you aren't getting anything tangible.

I believe you're up in Alaska, where a lot of people live off the land, and the population density is only about 2 people per square mile. Down in the lower 48, the population density is 50 times that, and that includes the desert and mountain areas as well. It would be a lot more difficult to live off the land in the lower 48.

Considering that Alaska has been a gold-producing territory/state since nearly the time it was purchased in 1867, and it is currently the 2nd-largest gold-producing state in the nation (with much of that coming from small-time operations), I seriously doubt that all of your neighbors "won't have use for gold in any form".

[Po_d Mainiac]

33. You haven't bothered to think about this much.

The rototiller ain't worth shit without fuel.

Planting shit don't mean you'll harvest it before a critter decides to harvest it for you or mother nature fucks with you.

Do people herd their 'wild' game to the slaughter house, or do they haul it there with something that eats hmmm fuel...You're 50X70 ain't gonna feed you and a domesticated critter that would do the work otherwise done by a machine.

Study a little history about currencies and the reason they've existed for millennium. I'd also recommend a little research into how transactions were/are conducted in geographies that the shit has/is hitting the fan. (Diamonds come to mind)

Gold and silver (Au/Ag) exist in forms used specifically as currencies. They have known size and weights too ease their use as a currency.

Au/Ag are recognized all around the world, and are easily exchanged for goods or local currency. There is nothing else comparable that is portable, easy to value, and an indefinite shelf-life.

You may not be able to eat it, but you can go anywhere in the world and within 2 transactions have a full plate of groceries sitting in front of you.

In 1960 a US quarter (90% silver) bought a gallon of gasoline. 50 years later that same quarter will buy more than a gallon of fuel. In all the years in between that quarter had approximately the same buying power with relation to petroleum products. If you have a silver quarter you will be able to exchange it for go juice for the rototiller. If you have more that just one you'll be able to replace the shovel after it breaks

Au/Ag trade within a very small range when used as currency. This has been going on for longer than recorded time.

ITSHTF you may find yourself wishing you'd thought this through with just a little bit more foresight while making a meal outa the dogs.

ITSdoesn'tHTF you'll still be able to get gasoline within 2 transactions at or near the same rate as today.

[pokercat999]

75. Last week $1.00 in silver US Coinage was worth $28.00..nt

[Art_from_Ark]

79. You are referring to the $1 American Silver Eagle (ASE)

which contains exactly one ounce of pure silver. The old 90% US silver coins (dated 1964 and before) only contain about .715 ounce of silver per dollar face, which would make 4 silver quarters, or 10 silver dimes, worth a little more than $20 at current prices (assuming that they have no numismatic value).

[OllieLotte]

19. I think it is going to continue to run up some more.

Do I want to put more money into gold? No. I think there are better places to put money. I used to think bonds were a safe place. I don't feel that way these days. Everyone thinks gold is a bubble, wait until people want to unload their bonds all at the same time. I think bonds are a bigger bubble than gold.

[Po_d Mainiac]

38. Don't think of it as the price of metals rising

Think of it as the purchasing power of Federal Reserve Notes decreasing.

Base your decision on whether you believe the FED can keep pressing ink into linen, and that same linen will have the same purchasing power next year as it does today

I figure if my Au/Ag can be exchanged for the same amount of gasoline/fuel next year, as today, I've preserved value.

[pscot]

20. Gold have been bery good to me

Just sayin.

[westerebus]

23. It depends on what your plans are.

If you are deep enough in the woods, you might not want to spend your money for something you don't need. You would be better off buying seeds, chickens, solar panels, and ammo. Co-oping with neighbors to provide common needs. Security and labor, skills and mutual support.

If you're in the ex burbs, gardens and guns are not a bad idea. Getting your neighbors on board is not a bad idea either. If you have well water that's a plus. Do you have a pump if the electricity goes down? Got a barn with a horse? Well, horse's love chickens. Geese too. Ever try to sneak up on a goose? Just have to be careful with chicken eating dogs thought. Fencing in the garden is not a wish for, it's a to do. After, you take care of the to do's, a little gold wouldn't hurt.

If you live in the burbs ask your self, if things go to hell are you going to stay or go? Got family that live deep enough in the woods? Do they like you? Would they put up with you? Then your first concern is how to get from where you are to where they are. If you can do it early enough, it may not be a problem. Do it to late, the kids are in school and they are only rioting in LA and the National Guard is just been mobilized in your state, don't expect discount airfares and forget about trains. Who will you have to bribe and with what?

If you stay, and your community is not very tight knit, you may be on your own. Water, food, guns, ammo, medicine and cash in some form. Some gold and silver. Trade-ables in the form of booze, sanitary products, batteries, sleeping bags, crank lanterns, water filters, coffee, contact lens solution, sterno, lolly pops, gum, etc. etc. Forget about help from the authorities. Forget about highways. Forget about ATM's. If you missed the opportunity to get out, prepare to stay and possibly fight. Hopefully every body will be scared enough to stay home till things calm down. That could take a few days or a few weeks. Can you make it for three weeks on your own.

The first priority is safety. Distance from trouble works best. Second on the list, water and food. Simple as rice and beans, pasta and sauce, power bars and protein shakes and powdered milk, can soup counts as water. And no, what's in the freezer will last three days when the power goes out,the good news is you pig out on that first. Third, guns and ammo. Revolvers do not jam. Point and click. Shotguns change hearts and minds. Practice with what you own. Than you can think about shiny stuff.

If you live in a city. Get to know a cop, a fireman, an EMT or better yet their spouse, sister, or mother. If they pack up at 5 am to go visit family out of town, you are out of there too!

Even if it's just to the burbs. Distance from trouble works best. If you are not safe, it doesn't matter what you own.

[hedgehog]

28. If gold is so valuable, why do people trade it for paper money?

[westerebus]

29. Several reasons.

Gold is valued in currency. At one time there was a gold standard, money was valued in gold or silver. It fixed the rate of exchange. One ounce was equal to X number of dollars.

Empires have come and gone, one thing found in most of them was gold or silver in flat bars, chains and coins used as currency.

Today, paper currency is the norm. Fading fast as transactions are more data entry than cash in hand.

If you were willing to purchase something with gold, say very high end electronic equipment, there are some folks who could accommodate you. No bank records. No visa cards accepted. No sales tax. No import stamp. No end user certificate. No last names.

That's what I've heard. Many years ago. I don't recall where or who said it.

The problem with gold or silver is weight. When gold was $500 an oz, you needed 10 oz to get to $5000, 20 oz to get to $10,000. 20 oz of hundred dollar bills is considerably more money.

If you get into Zimbabwe dollars, hyper inflation, 200 oz of ZBD's is still pretty much worthless.

There are not that many people who hold gold or silver compared to the number of American Express card holder's. You may have one or several credit cards. American Express can pull your credit line at any time they are required to. As can Visa or Master card.

They can't pull that gold coin out of your pocket.

Your bank account can be frozen. Your debit card voided.

That has no affect on the coffee can bank under the rabbit hutch.

[eridani]

36. On what planet is paper currency the norm?

On my planet, currency that is blips on hard drives is the norm.

[westerebus]

39. Push the buttons on an ATM and what do you get out of it?

It ain't batteries, Bubba. Looking past the borders of the USA, you may find Dollar bills every where.:-)

[eridani]

57. I don't use an ATM, ever

I pay all my bills with checks or credit cards. I use cash for about 5% of my transactions.

[Art_from_Ark]

49. That planet would be "Earth"

Even in high-tech Japan, most people still pay for store purchases with paper currency.

[Art_from_Ark]

56. You might want to take a tour of the BEP web site

The BEP (Bureau of Engraving and Printing) produces all of Uncle Sam's paper money. There are 2 facilities-- one in Washington, D.C., and the other one in Ft. Worth, Texas.

On your tour, you might want to pay particular attention to these production facts. They could be helpful in making an informed post about paper money:

During Fiscal Year (FY) 2009, the Bureau of Engraving and Printing produced approximately 26 million notes a day with a face value of approximately $907 million.

During FY 2009 the BEP delivered 6.2 billion notes at an average cost of 7.5 cents per note.

95% of the notes printed each year are used to replace notes already in, or taken out of circulation.

Between the Fort Worth, Texas and the Washington, DC Facilities approximately 9.7 tons of ink per day were used during FY 2009.

http://www.moneyfactory.gov/uscurrency/annualproductionfigures.html

[Po_d Mainiac]

37. I'm amazed at the number of thirsty horses

standing at the trough that don't know what to do next.

They talk about bullion as if they are experts, but have no clue what the word means or the forms of bullion that PM's exist in.

I'm starting to think part of the reason is a generational thing where you and I are of an age that the use of PM's was just one disconnect away from the way most day to day transactions were conducted. You know that time before written history when credit cards were only good at certain branded filling/service stations. That era when checks were only accepted as payment if you were a known and trusted identity to the payee. That long forgotten age when you paid all your bills with cash.

I think the children posting on this thread are so accustomed to plastic and PayPal that to them a dollar bill is real, hard currency. The concept that it's just a piece of inked linen, printed by a bank indicates the brainwashing by the FED has been a true success.

Up-thread there's someone that thinks a patch of soil with a surface area less than 1/10th of an acre is all that's needed. I have to wonder what they think the term 'back 40' referred to. I also wonder if they've ever seen how much acreage is needed to fill a hay loft or how few critters can empty that loft when the sun casts long shadows in the middle of the day.

I guess either you have already gotten it, and made allowances or are just potential road kill :shrug:

[westerebus]

41. I hear you.

Pre super market (aka the A&P) how did we manage to survive? The grocer marked his ledger up for what was purchased and the folks paid on Saturday mornings before the banks closed. That's how old I am.

I think it's the lack of sun light and chores. You couldn't play with your friends unless your chores were done. Then you spent the day light hours doing stuff.

Stores were closed on Sundays. You rode the bus if you had to get somewhere that was too far to walk.

Recycling was getting a used bike on your birthday. Hand me downs were this year's nouveau fashions.

You can lead a horse to water...



:hi:

[Po_d Mainiac]

42. And the coffee grinders were by the cash registers

You could beat the top layer in the milk jug.

Really, really being fucked was getting stuck in a berg with no bars

Question:
How many cans of condensed milk did you boil before the first one blew up?

[westerebus]

44. I wasn't allowed near the stove.

We had a coal furnace in the basement and the window nearest the street was where the coal truck would chute the coal into the coal bin. Used the ashes in the winter to spread on the walk after it was shoveled. Another one of my chores.

My mom had a pressure cooker that scared the life out of my sisters. Everybody washed dishes in the sink. Dried them with a towel and put them away. Laundry was hung out to dry.

Phones were party lines and the operators were women. My grandmother ran a switch board for years. She never drove a car and kept a pantry you could eat out of for a month. She would tell us about the "hard times" and why you need to be kind to people who have less than you do.

My uncle Danny's wanted poster was hanging behind the bar of the local gin mill for years. Something about the British Army, a few of the lads and a train that blew itself up. All before I was born.

Condensed milk? Sweet or unsweetened? Not that it made a difference when it blew up!

[Po_d Mainiac]

45. Ouch... sounds like my life... here & now

Our only heater is a woodstove...the backup is a woodstove in the basement..The thermostat is a Hi-tech portable talking type.

Wife: I'm Cold
Self: I'll fill the stoves

I have a chute through one of the cellar windows, for the cord of wood that goes down there....(reminds me that I still have to stack the last load)

..the ashes are spread on the driveway in the winter, on the gardens this time of year, on the highest remaining snow banks in the spring.

My wife has an fairly old dishwasher
Me...But I let em set in the rack till dry

..Laundry is hung out to dry, until the snow/mud is over shin deep....Then they get hung off the loft railing (mid Nov.-mid May)

party lines were still in use till about 27 years ago...We had one till the early eighties . ..(One long, one short)....Had to threaten some kid with death before he'd hang up when my bride went into labor.

We have two pantries...well stocked.

Didn't have enough cash for Dbl glazed windows and 2 doors when we built from scratch in 86. Got the second door in 87 along with enough glass to build storm windows...Still putting storms on/off-spring/fall
...............

cracked open a roll of circulated SL $0.25's I'd gotten at an auction a while back.(melt bid) A few had legible dates. 2 were 27/s!
One low VG, the other a solid F...just watched a G/VG go on the Bay for $46.02...Just about the same as my first full time job payed for 40hrs before taxes
...............
BTW..Au/Ag ratio is down to 56:1....U$D looking worse than a rented mule....wonder if the children are paying contention this time?

ps........SWEETENED

[Art_from_Ark]

46. Wow-- two 27-S's in a roll of Standing Libs bought at melt

Redbook value for the solid F alone is around $120-- and if you bought that roll a few years ago, you would have paid, what, 70 or 80 bucks for the roll? You certainly got a heckava deal. It's the kind of find that collectors dream about.

And the gold price today is unbelievable-- $1381/oz, the last I checked. And silver is $24.35-- hasn't been like this since 1980.

[Po_d Mainiac]

50. But 'redbook' pricing doesn't come without

coughing over $ to one of the major graders...so i gotta drop the slabbing/grading fee for PCGS or NGC off what I can actually expect to get. Besides I'm hoping the sets can get passed on to the grand-kids.

A while back was just last spring....so I'm into that batch for somewhere around 12X+/- face...I was very happy to fill the hole. One of the end coins was a 'no star' that I thought might have a chance at a readable date. No joy.

I just happened to be at that particular auction cuzz my nephew wanted a maple sap evaporator, and needed my truck. Or thought he did. The boiler went for more than a new one to some fool. Opening bid was just South of spot/melt an I was the only one bidder. There were also a bunch of Morgan's, but they weren't cheap.

Bragging rights are split between a brick of proof/uncirculated Roosies I got through the Bay about 5 years ago....(3) 1960 PF DDO (FS-10-1960-109 early die state) in one tube. The irony was the seller was a 'brick and mortar' coin shop in Il...AND... (27) 1964 Type B Rev (MS-UNC) in a single tube of Washington's from 06 (I think)

'Cherry Picking' has been good to me over the years....I think a lot of the coins showing up today were never searched, and just sat in the bottom of the closet or undies drawer for 45 years. Kids are now just selling off the inheritance without even bothering to look at what they might have.

...........

Unfortunately we know how the 80's fleshed out....What's keeping me awake is whether this is a repeat, the swan song for the U$D, capitulation by the manipulators (JPM/BS), part of the emerging nation set-up to a new 'petro buck', or all/none of the above??

I know the ones that know they have the answers ain't got a clue, and those that got a clue are looking for the same answers that are puzzling self...

[Art_from_Ark]

51. ANACS is a lot cheaper than the Big 2

and they will assign a grade to your coin, even if it is cleaned or whatever, and for coins like yours they're every bit as accurate as the other two. I've had quite a bit of luck with ANACS, moreso than with the other 2, although I have to admit I was pleased when PCGS gave me a "64" on a $20 LIb.

12 X face was still a good deal for your Standing Libs, considering one coin in the roll is worth (theoretically) what you paid for the whole thing. And the other 27-S is just icing on the cake.

A lot of those "brick and mortar" shops don't pay too much attention to recent varieties, so their loss, your gain. :toast:

And, yeah, the '80s. Those of us who lived through them, especially those of us who were active in numismatics, can see a lot of parallels with today. But there are also a lot of new players and new factors today. And it's doubtful we'll see another repeat of the Hunt Brothers fiasco, and as you noted, the US $ ain't what it used to be. I myself am particularly interested in the China card, and how the euro plays out (if the euro falls apart, will European central banks go back to their old practice of gold manipulation?).

Please feel free to PM me at any time. I would love to share opinions and observations with you about the state of coin collecting, metals markets, and what-have-you. :hi:

[Po_d Mainiac]

54. Wow a "64"!!

U don't put one of those in a bank vault....U own a bank vault.

[Art_from_Ark]

55. I got lucky on that one

I was at a coin show in Japan and that little gal was all alone in a 2X2 flip just screaming "Buy me!". I had no choice but to plunk down the equivalent of $700 for that little beauty :D

[Art_from_Ark]

47. Horses at the trough

"They talk about bullion as if they are experts, but have no clue what the word means or the forms of bullion that PM's exist in."

Ain't that the truth?

I get a special kick out of posts that claim that "gold is in a bubble" because it's being advertised on Fox, or Glenn Beck, or some other right-wing media outlet. Any bull market will naturally attract people who see it as an opportunity to fleece some lambs. But you have to look at the big picture. The gold market isn't just a US market-- it's a world market, with lots of big players outside the United States. What they do has a much bigger impact on the gold price than the relatively small purchases made by Fox and Glenn Beck viewers.

What I am particularly concerned about is not the actions of small-time purchasers, but the actions of the big-time purchasers. It used to be that European central banks wielded a big influence over the price of gold buy dumping their holdings when prices were high, and discretely buying back after they had depressed prices low enough. That practice basically ended with the introduction of the euro, and now there are new, nouveau-riche players who weren't involved in the first series of gold run-ups. I am especially interested in what the Chinese have up their sleeve.

[Art_from_Ark]

30. Gold is not a currency

It is a monetary medium, but the last time it was used as actual currency in the US was in 1933. Today, governments around the world have mandated that fiat currency (paper and metal tokens, as well as checks and electronic blips representing money) is to be used in daily transactions. Thus, one must usually convert gold into one of these fiat monetary media in order to be able to use it as money.

[Po_d Mainiac]

40. These children ain't gonna understand what you just said.

Try this.

Think of exchanging gold or silver bullion into a local currency as no more complicated than buying out of a candy machine. First you have to get some cash from an ATM.

PS...I'm afraid if you start factoring things like communication breakdowns, electrical failures, no bars, along with other 'impossibilities' that heads would explode.

[Joanne98]

43. Bubblenomics

[cbdo2007]

52. If you are getting investment advice from DU - then I definitely think you should buy gold.

Really, put everything you have into it. You might lose a lot of your money but you're going to learn a very valuable lesson.

[Po_d Mainiac]

53. A childish response

To a legitimate forum topic.

How about explaining how one could lose "a lot of your money" or what type of options you feel comfortable with.

Sounds like either you know everything or nothing about the varied PM markets. Please share with the rest of the thread followers.

[cbdo2007]

58. Mine was a childish response??? ha haha

Thanks though.

Gold is in a bubble. One of these days it's going to crash. Everyone who knows anything that is posting here knows it and has expressed so in the comments above.

Better investment?? Stocks of course. Do a few hours of research and you can easily be pulling down 40% percent per year in the stock market right now at a MINIMUM with much smaller risk.

Gold isn't like stocks. You want to buy stocks of good companies when they are hitting their highs and their numbers still support that price because the price is only going to go higher - it's all there in the numbers. The only time to buy gold is in a major dip because the only thing raising gold prices is psychological - fear.

[Po_d Mainiac]

59. Wow

40% gains and you won't even share any of your secrets.

The worst time to try to buy a PM is during a crisis, but that's when you really need it

[cbdo2007]

60. No secrets - just research.

That's the great thing about stocks is that all the information is right there for you to find. I know most of DU is terrified of the stock market because they don't get it but just reading a few books will change your life and your investment strategy.

People invest in metals because they're easy to understand because for some reason everyone thinks they know gold and are a gold expert and it's shiny. People are scared of stocks because they have to sit for a couple of hours a week and look at some numbers and some graphs and they'd rather watch the football game.

Of the 8,800 stocks that appear on Google's stock screener, here is a link to the 1,045 of them that have gained 40% in the past 52 weeks:

http://www.google.com/finance/stockscreener#c0=Price52WeekPercChange&min0=38.99®ion=us§or=AllSectors&sort=&sortOrder=

That's a good starting point for you. No secrets to it. Just money in the bank.

[westerebus]

61. I suggest you put all your money in stocks.

Spend as much time as possible checking the charts and doing research.

It's just like money in the bank.

If I had only known.

Just like money.

In the bank.

I would put up a sarcasm icon, but it refused to take part.

[cbdo2007]

64. Oh I've got all my money in stocks....

And I've made a literal sh*t ton of money the past year and half, so hey, if you're happy with your gold strategy...

*snicker* good luck with that :)

[Art_from_Ark]

65. So gold is up 30% for the year but it's in a bubble

But your stocks go up 40% in a year but they're not in a bubble. Ho-kay.

Perhaps you would like to share the names of the stocks that have provided you with such treasure, and will continue to provide you with 40% returns well into the future. But I won't be holding my breath on that. It sounds a lot like you're talking out of your rear end to me.

And a year and a half ago, gold was trading at $880. Today, it's nearly $500 higher. Quite a respectable return, I would say.

[cbdo2007]

66. Stocks were undervalued due to the 2008 crash...

which is the good thing about stocks, is you can actually look at their book value and compare that with the stock price and you can see exactly what's going to happen. You can't see the value in gold, it is all hypothetical and is usually based on a collapse of our entire financial system, which if that happens the price of gold will plummet just like everything else.

I've made well over 40% in the past year and a half. Bought Sirius radio SIRI at $0.10 a share and it's now at $1.38. That one was fun too because a few months ago it kept bouncing between $0.90 and $1.10 so you could just keep buying and selling and buying and selling, raking in the dough. That's got no sign of slowing down over the next few years.

How about Netflix? NFLX. I bought in January this year because I had 5 frieds tell me in one week that they signed up for Netflix. I did the free trial and started looking into it. Bought at $54 and it's gone up almost 200% since then.

Sure, I haven't made money on every stock but it isn't because the stocks have gone down, only because I sold on a dip out of fear.

Stocks go down because people sell due to fear. Gold goes up because people buy due to fear. Making your investment decisions based on fear will always cause you to lose money. It took me a long time to figure that out, but it's true. Anyone actually making money in stocks can tell you that's the truth.

[Art_from_Ark]

67. You don't seem to know the first thing about metals.

Not the first thing.

Both Po_D Maniac and I have been involved with coins since at least the '60s. I am impressed with Po_D's knowledge of coins because it is obvious that he has been involved with and studied about them for a long time. And when you are seriously involved with coins as long as we have been, you gain a knowledge of metals and how they have been involved in the monetary system.

I bought my first gold coin in 1968 when gold was $35 per ounce. Since that time, gold has risen in price by a factor of nearly 40. Are you going to tell me that that price rise is completely due to fear?

Since civilization began, gold has served as a monetary medium longer than anything else. It is only recently that unbacked paper money has become the worldwide norm. But where you have unbacked paper, you have inflation. Gold is often viewed as a hedge against inflation. Countries can issue all the paper money they want, but every time they issue new unbacked paper, they dilute the value of the existing supply. Sometimes they get into trouble and print so much paper that it becomes nearly, or even completely, worthless. Yet gold in such countries has retained its purchasing power.

For the past several years, we have been seeing an unprecedented expansion of the paper money supply, and the US dollar is about the weakest it has ever been in the post-war era. Those of us old enough to to have been interested in monetary matters since the Vietnam era have witnessed a steady erosion of the buying power of Uncle Sam's paper. Yet, as Po_D has pointed out, silver has maintained its purchasing power during that time. And gold has actually increased its purchasing power.

As for your Google stocks, I checked out some of them and found that there are many lightly traded stocks that are near their historic highs. In other words, prime targets for pumping and dumping. Been there, done that, got burned.

And if you want to talk about bubbles, you should take a look at that stock you were promoting, NFLX. The P/E ratio is more than 63! And all it is is a company that rents out videos. Sorry, but I think I'll pass on that one.

[Po_d Mainiac]

62. Ah I get it ...spam alert.....Spam alert

[westerebus]

63. Spam. Old American.

1- noun. The cure for low blood pressure.

2- noun. The stuff that comes in a can.

3- noun. AKA: Alpo for primates.

Spam. New World Order.

1- Provided by primates with Alpo for brains intended to disrupt fact finding by other primates.

2- A distraction intended to prove Pavlov was correct. Dogs prefer Alpo 3 to 1 over Spam.

3- A cause of high blood pressure unrelated to consuming Spam by primates.

Numismatic. Old American.

1- Adult version of the kid who never parted with the first silver dime he made raking leaves for the widow lady next door.

Numismatic. New World Order.

1- Adult version of the kid who never parted with the first silver dime he made now selling that same dime for $60.00 on e-bay.

[Po_d Mainiac]

68. Classic! n/t

[Taitertots]

85. Classic Snake Oil Stock Market Bullshit

Your claims of ease and low risk demonstrate that you are not knowledgeable about the market fundamentals which would rationally set prices. You are a herd investor.

[Cassandra]

69. I recently melted down some gold...

jewelry that I had made when gold was $260, so a double handful brought in over $10k (mostly 14k but some 18k and two crowns, which are 16k). I use a refiner in the city who has an office upstairs; no walk-ins allowed. I weigh my pieces on my jewelers' scale in pennyweights before I see him and do the fine gold calculations myself, so that we were within .01 dwt of each other's weight (they weigh it in front of me). When gold was less volatile, I would get about 96% but now it's 88% (he had to recover some stones for me plus he gets a fee for small batches).
I upgraded my camera to earn some money taking portraits, got a new tripod, am mostly investing in new equipment for my business.

[golfguru]

70. Buy low and sell high is the way to make money

Right now it is buy and sell low!

[frankieT]

71. GOLD IS A BARBARIC RELIC

If we had to switch back to gold standard, that would be terribly deflationist. Gold standard enthusiasts are calling (knowingly or not) for hardcore capitalism (à la 19th century, slavery, famines, etc)

[Art_from_Ark]

82. Slavery and famines were caused by the Gold Standard?

WTF? When and where in the entire history of the modern world was a famine caused by the Gold Standard?

You also don't seem to realize that slavery had been abolished before the US adopted the Gold Standard as a de facto standard in 1873, and as an official standard in 1900. The Gold Standard had absolutely nothing to do with slavery in the US.

[upi402]

72. Are we failing to learn from history? Pre WW2 Germany

BushCo hid the M3 and we print Monopoly money to this day. Corporations are sitting on all-time record cash -and taking it out of the USA.

Why?

Gold is one egg in my basket, however modest. We can use craigslist and meet in public to trade gold coin for cash. We can then use that for airfare. History repeats, and similarities are going off like a fire alarm right now.

I look at this as a positive action, reasonable preparation, and a rational response to information.
I was repeatedly berated by smart people for buying gold at just over $700. Smart people scolded me for putting my last house on the market in 2007... sadly I listened and kept it. That's a $120,000 lesson. I learned to go with my knowledge and my gut. Everything in me is telling me that gold will come in very handy in time.

my .02

[AnneD]

73. I too have learned.....

to go with my knowledge AND my gut. I have had people berate me for my choices but I have done well and have managed to protect a large chunk of my nest egg. I have tangible gold, silver, stocks (in indexed funds and overseas) , and the kind of commodities that come in cans. I also have a defined pension plan.

I have people that I know that will help in a pinch (and it works both ways). I have a skill that has value (Nursing with an informal study of herbs) both now and in the event of a collapse. I have dabbled in gardening and storage for years. I fish and hunt and can clean and dress what I catch.

We have saved up to buy a house now while the price is down (and I advised Mom to sell when someone offered her top dollar in 2007). We bought gold and silver while the price was low. I sold off the bulk of stocks in 2006-07 at enough of a profit to make up for most of my losses in the dot com bust.

Gold and silver are not the only investment. I don't buy it for profit, but I have made profit from it. I look it as a means to preserve wealth. I sleep better at night knowing that I have some gold and silver in the basket.

Go with your knowledge and your gut.

[eridani]

76. Presumably that means you actually have your hands on the gold and silver?

What does it mean to have a piece of paper that says you own gold or silver?

[Art_from_Ark]

78. Having a piece of paper saying you own gold or silver doesn't mean shit

The only way to own gold or silver is to have physical possession.

[eridani]

90. I agree. Given known gold reserves, about what percentage would you say--

--is in the physical possession of the owners?

[Po_d Mainiac]

105. Not exactly an answer, but

http://www.investmentrarities.com/ted_butler_comentary12-21-10.shtml

[Rochester]

77. Buying something at very inflated prices hoping that it will go up even higher...

...is how we got ourselves into the mess we are in now!
Don't be the "biggest fool".
If this really is a bubble, then this would be the worst possible time to buy in.
If you are afraid that your currency will become worthless, this might be a good time to invest in lead!

[upi402]

118. Lead is for killing

...and "We" are not Dick Cheney and WILL be imprisoned. If you have a garden of any yield, you will have to defend it - when the sh*t hits the fan. May not work out too well.

When the USD is no longer being printed like Monopoly money, I'll sell off gold.

Until there's a move toward sanity - It might be a good time to sell large held units, and buy the smallest coins you can. Meet in public and check the bills. There will always be buyers, especially as the USD collapses.