<< <i>Gold is one of the only assets that can NEVER go broke ! >>
I have never understood this mantra. The value of anything, including stocks, gold, oil, real estate, manure, is controlled at the base level by supply and demand. Gold does not have an intrinsic value.
Let me repeat that, gold does not have an intrinsic value.
Gold is an element comprised of atoms which exhibits a certain set of properties. Traditionally, these properties have been appreciated by humans to the extent that the demand was very high for the material. Since the supply of gold is limited, not everyone can have as much of it as they would like, so the value relative to other things has been set quite high. However, this does not change what it is, nor does the past demand for gold give it intrinsic value.
The value of gold is arbitrary, not intrinsic. Otherwise the price would not change from day to day. If tomorrow gold was to go out of fashion and everyone decided instead that they wanted something, anything, else, the value would plummet as everyone tried to sell. A change like this overnight is most assuredly not going to happen. But instead look at the changes through history we see the evolution of the various material ages. For a time each of the materials from copper to brass to bronze to iron to steel to carbon composites have been highly prized, but things change. In a thousand years years, will gold still be highly valued? I don't know, but since "NEVER" is a pretty long time, others seem to think so.
So lets place gold and silver for what they are, commodities with certain current technological and aesthetic applications which are currently experiencing a marked rise in value. For those who take the time to understand the forces behind their current trends in value, money can be made. For those who blindly enter the market like sheep, they are likely to be sheared.
<< <i>Gold is one of the only assets that can NEVER go broke ! >>
I have never understood this mantra. The value of anything, including stocks, gold, oil, real estate, manure, is controlled at the base level by supply and demand. Gold does not have an intrinsic value.
Let me repeat that, gold does not have an intrinsic value.
Gold is an element comprised of atoms which exhibits a certain set of properties. Traditionally, these properties have been appreciated by humans to the extent that the demand was very high for the material. Since the supply of gold is limited, not everyone can have as much of it as they would like, so the value relative to other things has been set quite high. However, this does not change what it is, nor does the past demand for gold give it intrinsic value.
The value of gold is arbitrary, not intrinsic. Otherwise the price would not change from day to day. If tomorrow gold was to go out of fashion and everyone decided instead that they wanted something, anything, else, the value would plummet as everyone tried to sell. A change like this overnight is most assuredly not going to happen. But instead look at the changes through history we see the evolution of the various material ages. For a time each of the materials from copper to brass to bronze to iron to steel to carbon composites have been highly prized, but things change. In a thousand years years, will gold still be highly valued? I don't know, but since "NEVER" is a pretty long time, others seem to think so.
So lets place gold and silver for what they are, commodities with certain current technological and aesthetic applications which are currently experiencing a marked rise in value. For those who take the time to understand the forces behind their current trends in value, money can be made. For those who blindly enter the market like sheep, they are likely to be sheared. >>
Very well said. It might be added that these markets (even gold) are very thin compared to the financial markets and even small changes in perception of the metals or the paper markets can cause extremely wild swings in the relative valuations. If one must enter any investment he should do it with eyes open and ready to throw in the towel at any time. This goes many times over for those who buy or sell metals and commodities.
A dollar is only worth a dollar because people believe it is. Gold is only worth $420+ because people believe it is. Gold is only a store of value because people believe it is. Governments rise and fall but PMs have always been valued. But it is only valuable because people want it to be.
I heard they were making a French version of Medal of Honor. I wonder how many hotkeys it'll have for "surrender."
Gold has intrinsic value because of it's physical properties and uses.
Corn, for example, has intrinsic value because you can eat it. Gold has intrinsic value because it can be used in electronics, ornamentation, etc. In ancient times man realized that gold, unlike most other things, never tarnished, corroded, decayed or deteriorated - even after eons of time. And it was valued for that. The problem with gold is that it has traditionally been too rare and too expensive to be widely used for anything other than monetary reserves and ornamentation.
If the price of gold were to drop, people would find more uses for it. The price of gold is somewhat self-stabilizing (relatively stable over time). That is why people say that it can never go broke - because it is a useful material that would find more uses should the price decline.
If the US Dollar were to drop, more people would probably want to unload them. The values of fiat currency are historically volatile and transient compared to gold.
50 years from now, which is more likely to be worthless:
I would not "invest" in dollars under any circumstance. "Speculate" in when I think it's going to make a move, but no way invest over any period of time. It's a loser.
ddink... every investment has its day, its week, its months and years.... right now the metals are in a bull market. I called the bull market for gold at $311 and publicly went on record in my website and on TV. Ive also said that silver was undervalued to gold. Im clearly on the record for that also.
While I say the metals are now in a bull trend, you still must realize that at some point bull markets end. That's what I meant by my previous post.
But the bull is running now. that is clear and certain. cheers, alan mendelson
I understand what you are saying now--you aren't saying that silver will retreat, just that at some point it will stop rising. Gotcha. BTW, you're on TV? Are you famous?
I heard they were making a French version of Medal of Honor. I wonder how many hotkeys it'll have for "surrender."
Gold has no intrinisic value? I would guess that 3000 years of recorded history might disagree with you on that. That's about 300 times the time frame that our federal reserve system and fiat dollar has been in vogue. I think I'll go with gold for the long term race. Our dollar won't even be around in the next few hundred years. But gold will be.....unless the powers to be try to confiscate it all.
One cannot eat a dollar bill either, nor does it have any value behind it whatsoever. The actual paper value is worth a fraction of a cent. Piles of them can keep you warm in the winter once ignited. It has that one advantage over gold. It is more portable too in higher denominations. The fact that US interest rates, and our currency, are all linked together with about $150 TRILLION in financial derivatives gives me the willies. Imagine if just one firm like JP Morgan ($35 TRILLION in derivatives) were to have a financial crack appear. Imagine the back lash from that that would reverberate throughout every market in the world....gold included. I'll stick with the silver and gold for the time being.
Roadrunner, look what he is actually saying. Why does gold have value? Because people believe it does. Gold is "fiat" just like cash, except that it DOES have a much longer history. Every day at noon, London says "Let the price of gold be fixed at $xxx."
Yes, gold IS much better than paper currency because people believe it's better. Yes, it is better because through recorded history people have always valued it. No, that's not likely to change. But what makes gold desirable? Supply and demand, right? The fact that more can't just be "created" right? The fact that you believe it's precious, and that your ancestors believed it was precious, right?
The argument is almost esoteric--he's not attacking gold, just being philosophical about it.
I heard they were making a French version of Medal of Honor. I wonder how many hotkeys it'll have for "surrender."
ddink, I agree with what you are sayng, but dollars have only the value assingned to them also and the supply can be increased at any time------------------BigE
LTCM was a drop in the bucket (a few measly billion) compared to the risk that a JP Morgan carries in derivatives. Imagine if they got caught in a 1% interest rate hit.....you're talking $300 BILLION dollars just like that. Stockholders would love that. The govt understood the downside of letting LTCM default and did not want to make it obvious about the cracks that could appear in the derivative bubble. Fannie-Mae may have incurred $25 BILLION in derivative losses over the past few years but have no legal reason to report this. Their CEO says this is not an issue. I'm sure. They hold a few TRILLION $$ in mortgage contracts that are specifically tied to interest rates. You can bet they are highly leveraged with derivatives. They are not even a govt agency per se. What would printing a TRILLION dollars do to our dollar's value to bail out a major institution 100x the size of LTCM?
Our govt is not going to bail out a $1 TRILLION deriv hit should it come about. Those institutions are going belly up in a domino chain. Survival of the fittest as they say. JPM could take the Trillion dollar hit I guess but not the hundreds or thousands of other institutions that are holding similar non-performing, unregulated, derivative contracts.
Well, this has been a most interesting discussion. I appreciate all the well thought out arguments. As a non-US resident, I think that bad times lay ahead for the US economy and dollar due to the massive debt. It seems to me that when the economy gets shaken up, and interest rates go up, then we will see chaos. I think that silver is a good play right now, for the reasons stated. A better play, though, is to be debt free - then you will be positioned to weather the storms which lie ahead. IMHO.
<< <i>Well, this has been a most interesting discussion. I appreciate all the well thought out arguments. As a non-US resident, I think that bad times lay ahead for the US economy and dollar due to the massive debt. It seems to me that when the economy gets shaken up, and interest rates go up, then we will see chaos. I think that silver is a good play right now, for the reasons stated. A better play, though, is to be debt free - then you will be positioned to weather the storms which lie ahead. IMHO. >>
It is impossible to become debt free now without absolute destruction of the dollar, taxes that actually go higher than what is now the case in communist countries like Vietnam, China ( it's only a couple points away from a tie now).
And without a default on payments which of course would destroy the entire worlds economy and maybe even start a world war as a result.
My comments were meant to be taken on a personal level, rather than on an international one. When things get ugly, if you are out of debt, you are less likely to lose your house....
<< <i>My comments were meant to be taken on a personal level, rather than on an international one. When things get ugly, if you are out of debt, you are less likely to lose your house.... >>
Understood, however it's all integrated now isn't it.
To a large extent this has always been true. It is panic more often than not which destroys institutions and currencies (gold based and otherwise). It is panic which feeds on itself in a massive feedback loop which brings down civilizations and kings. Such a scenario has been quite possible in this country for the past few decades because of some of the problems out- lined in this thread, but the economy has been getting more and more secure since about 1996 and a panic has become improbable. Yes, there are massive structural and institutional problems which must be addressed and ameliorated but those betting everything against a successful resolution of some of the most severe problems are likely to find themselves on the losing end. There probably will have to be some significant inflation and there likely will be some other pain caused to specific market segments as these problems are addressed.
Those who believe that they might profit in a panic are most likely very mistaken. The resourses necessary to survive such a calamity are very much different than they have ever been before. To a large degree it is impossible to insulate oneself from loss in such an eventuality now days.
I've got news for ya: if you think the sky is falling, all the silver and gold and platinum in the world isn't going to save you in the event of a total economic collapse, which, of course, will never happen.
I heard they were making a French version of Medal of Honor. I wonder how many hotkeys it'll have for "surrender."
<< <i>I've got news for ya: if you think the sky is falling, all the silver and gold and platinum in the world isn't going to save you in the event of a total economic collapse, which, of course, will never happen. >>
never is an awful long time, and history would tend to disagree with you...economies certainly can fail.
<< <i>I've got news for ya: if you think the sky is falling, all the silver and gold and platinum in the world isn't going to save you in the event of a total economic collapse, which, of course, will never happen. >>
Hahahaha well I'm certainly not one who thinks the "sky is falling". That said I DO think that this place is in for a serious economic jolt the likes of which we haven't seen in our lifetimes.
And with that in mind, there are some things that act as insurance against that.....metals and certain coins are one.
<< <i>never is an awful long time, and history would tend to disagree with you...economies certainly can fail >>
Forgive me for not qualifying that with the phrase "never within our lifetimes." Economies can fail--look at Russia--but a *total* collapse is unlikely in any event. A total collapse being that nobody uses the currency at all, everyone turns to a black-market system, for lack of funds Interstate highways, canals, railroads, and other infrastructure falls into disrepair and disintegrates, for lack of communication (since there is no infrastructure) the federal government collapses and roving bands of militia start running wild over the countryside--that's what I mean by a total collapse, not just a "big depression" which any country at any time may certainly face.
I heard they were making a French version of Medal of Honor. I wonder how many hotkeys it'll have for "surrender."
<< <i>never is an awful long time, and history would tend to disagree with you...economies certainly can fail >>
Forgive me for not qualifying that with the phrase "never within our lifetimes." Economies can fail--look at Russia--but a *total* collapse is unlikely in any event. A total collapse being that nobody uses the currency at all, everyone turns to a black-market system, for lack of funds Interstate highways, canals, railroads, and other infrastructure falls into disrepair and disintegrates, for lack of communication (since there is no infrastructure) the federal government collapses and roving bands of militia start running wild over the countryside--that's what I mean by a total collapse, not just a "big depression" which any country at any time may certainly face. >>
and in my opinion the conditions are just right for a serious "correction". I don't know about bands of militia, since I live in Canada where guns are hard to get
But, a somewhat more serious comment -- in the event of a major disruption in global trade, probably the North American economy is the most resilient of any region in its ability to weather the storm.
The reason for stating that "gold can never go broke" is because if one is holding the metal (not the gold mining stocks or future contracts) you can never have less than what you have.
Currencies on the other hand can have their actual NATURE changed. A dollar can be called 100 dollars but an ounce can not be called anything else than an ounce.
The other factor is that gold is a proxy for WORK....or labor. It represents the labor necessary to get an ounce out of the ground. Gold has many uses in industry and jewelry and always will have. No one will ever see gold as "ugly." It's "rarity" will keep it desirable just as rarity keeps coins valuable because of human nature to be able to own something that someone else can't.
Currencies on the other hand do not represent a unit of labor other than the current acceptance of it as "pay." Currencies represent debt, not assets.
It is a convoluted issue but it can be safely said that an ounce of gold will eliminate all worry of having an item of "value" at any spot on the globe with no requirement to change it to a local medium or make it known that you have any.
The days of isolated spots or localities not valuing gold is gone.
And lastly, gold can not be faked or counterfeited ............. yet.
So if interest rates are going to rise sharply, derivatives are going to sink JP Morgan, Fannie Mae, and every other major bank, and the US dollar is going to be worthless.....
then how on earth does the conclusion arrive that it's best to be debt-free?????
Sounds like I should be exchanging soon-to-be worthless US dollars for "stuff".
whether derivatives will sink Fannie or JPM remains to be seen. But in fact some major league players will get bit by derivatives as interest rates finally go back up....and JPM as well as Fannie and others will get bit good.
The US dollar will not become worthless, but it is on the road to still becoming worth much LESS than it currently is.
And yes, owning tangible "stuff" is one means to soften the blow caused by the above events. And not all tangibles will fair well in the coming years. Residential real estate as a group is one such "stuff" I am very leery of.
<< <i>But, a somewhat more serious comment -- in the event of a major disruption in global trade, probably the North American economy is the most resilient of any region in its ability to weather the storm. >>
This is true, but only as long as there is at least some petroleum available. Our lifestyle here in the USA is very dependent upon oil. A disruption in oil supplies would hit the USA much harder than any other place in the world.
We are a petroleum-based civilization.
No petroleum = No civilization.
If oil supplies were to suddenly disappear, we would revert to 3rd-world living conditions (or worse).
Fortunately, the USA can still produce some oil for itself. It is likely that oil supplies will run out slowly. That will force us (and give us time) to migrate to other lifestyles and energy sources. No other energy source is (was) as plentiful, cheap, safe, and concentrated as crude oil, however. Eventually, one way or another, sacrifices will have to be made.
In a crisis, Canadian oil will look very tempting to your well-armed neighbors to the south! >>
The USA has already, in essence, captured all the world's oil by maneuvering the US Dollar into the position of being the world's oil-pricing currency. Almost all of the world's oil is priced and sold in Dollars. If the USA wants oil, it can just print the Dollars it needs to buy it.
But any challenges to the dollar-pricing of oil (like Iraq's oil for Euros plan) may be met with economic or military force.
Fortunately, the USA can still produce some oil for itself. It is likely that oil supplies will run out slowly. That will force us (and give us time) to migrate to other lifestyles and energy sources. No other energy source is (was) as plentiful, cheap, safe, and concentrated as crude oil, however. Eventually, one way or another, sacrifices will have to be made. >>
While there's no evidence that it's imminent there is some speculation that this could actually occur relatively suddenly, and this would be exascerbated by maneuvering of big users to corner the remaining supplies.
I've stayed away from posting to this thread intentionally. I think I've already made my position clear.
If not fully to some, I will say that I spent 19K yesterday and bought at .45 UNDER spot on a private cash deal for silver bullion.
The real run has not yet started, but I'm rubbing my hands in anticipation. Early retirement may be even earlier than I have planned on.
"Lenin is certainly right. There is no subtler or more severe means of overturning the existing basis of society(destroy capitalism) than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and it does it in a manner which not one man in a million is able to diagnose." John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff
The way I see it, it's dimes for dollars. Silver goes down, I have 100 ounces, I lose $200. Silver goes up to say $20-$30, like many believe will happen one day, if not this time, then I stand to make $2000. The choice is simple for me too.
At any rate, you are right about oil. However, nuclear power is a safe, clean way to make electricity. We already bury our nuclear waste under Yucca Mountain in Nevada, so now that there is finally a safe place to store it, that's one less problem to worry about. For cars, a mix of electric/gas can get up to 50 mpg in the city and 70 mpg on the highway. In a crisis, it would take a LOT of time to switch everything over (both automotive and electrical), so any event would be serious. But if we did get 10 years warning that we were running out of oil, foresighted politicians COULD begin the change. At any rate I'm inclined to agree that in the short term, in the event of a truly imminent crisis, war would be a very undesirable, but possible, source of oil. Remember, Americans drilled the vast majority of the Arabian oil wells until those countries stole (nationalized) the oil industry. Personally I'm extremely disappointed that for political reasons George Bush is afraid to use any of Iraq's oil--if it were up to me, we'd put bases in Iraq (just like we did with Japan) and install a friendly government that would NOT be a part of OPEC. But politics aside, I digress.
Also, to be fair to Canada, don't forget Mexican oil
I heard they were making a French version of Medal of Honor. I wonder how many hotkeys it'll have for "surrender."
The USA has already, in essence, captured all the world's oil by maneuvering the US Dollar into the position of being the world's oil-pricing currency.
I don't think that realistic based on oil's price action over the last 12 months. OPEC set a range of $22 to $28 per bbl. The devaluation of the dollar by 30%+ vs the Euro has driven the price of oil up 30%. I don't see how that is anything remotely near being "captured."
. Personally I'm extremely disappointed that for political reasons George Bush is afraid to use any of Iraq's oil--
Iraq is exporting 2 million barrels per day. How is this not "using" Iraq's oil?
...install a friendly government that would NOT be a part of OPEC
That's what exists today. Have you heard the news of OPEC cutting oil output? The news anchors are all perplexed about it, for sure! They can't figure out that Iraq is not part of OPEC, and as Iraq approaches 3 million barrels per day OPEC must cut production to maintain stable prices. Not stable in terms of dollars, because the dollar is in decline.
The US oil companies do this every year to make more profits. It's such a sure deal it should be written up as a law. From April to Labor day one can count on big gas prices.
<< This is true, but only as long as there is at least some petroleum available. Our lifestyle here in the USA is very dependent upon oil. A disruption in oil supplies would hit the USA much harder than any other place in the world.
We are a petroleum-based civilization.
No petroleum = No civilization.
If oil supplies were to suddenly disappear, we would revert to 3rd-world living conditions (or worse).
Fortunately, the USA can still produce some oil for itself. It is likely that oil supplies will run out slowly. That will force us (and give us time) to migrate to other lifestyles and energy sources. No other energy source is (was) as plentiful, cheap, safe, and concentrated as crude oil, however. Eventually, one way or another, sacrifices will have to be made. >>
Dcarr made an excellent point. That is precisely why I am AGAINST gas-guzzling SUVs, FOR alternate energy research and development, AGAINST population explosion, and FOR reducing dependency on oil. I have a lot of ideas on how to do these things, but nobody listens. We always seem to say, "the heck with it", and continue to gulp down oil at an alarming rate by an ever-expanding population.
<< Remember, Americans drilled the vast majority of the Arabian oil wells until those countries stole (nationalized) the oil industry. Personally I'm extremely disappointed that for political reasons George Bush is afraid to use any of Iraq's oil--if it were up to me, we'd put bases in Iraq (just like we did with Japan) and install a friendly government that would NOT be a part of OPEC. But politics aside, I digress. >>
Let's face it. If our country cannot have its own oil (we've already sucked everything out that is easy), the next best thing is to control the countries that do. That is PRECISELY what we are doing in places like Iraq, Saudi Arabia, and Kuwait. We don't own these countries, but, for all intents and purposes, we just about do.
dollardude: I happen to agree with you despite my being a Republican. I am sad to say that the last 10 years of Presidents have done nothing to promote greater efficiency and to promote conservation.
It has become a sad cat and mouse game. Democrats looking for reduction in consumption and Republicans looking for increasing supplies of oil. Unfortunately BOTH are needed.
The big problem? Refinery capacity is not enough with all of the different kinds of formulations required by various states and the Feds.
Also the tax laws promoting superheavy weight SUV's to be allowed to be expensed as an expense election up to $100,000 in the year of purchase seems to me to be an insane perversion of the tax laws which at one time was designed to limit annual depreciation tax write offs of luxury automobiles.
The polticians in Washington DC should be ashamed.
<< <i>The US oil companies do this every year to make more profits. It's such a sure deal it should be written up as a law. From April to Labor day one can count on big gas prices. >>
Very true, prices are always high this time of year. But there is a big difference between prices going up from $1.05 to $1.25 and between prices going up from $1.50 to $1.80. But since an honest politician has yet to be born, nothing will ever happen. You have to sit back and shake your head at our brilliant system--a few oil companies (or retailers for that matter) get together and fix prices and make a billion dollars. IF it's discovered, and IF it's proven, the government fines them $20 million and says don't do it again. They just made $980 million in profit. What a sad world.
I heard they were making a French version of Medal of Honor. I wonder how many hotkeys it'll have for "surrender."
The philosophical arguments concern the value of gold, silver, oil, food and handguns in case of a world meltdown of order. These are issues I dont want to consider because while possible they are unlikely, and in the case of a meltdown of order, lets face it, guns and loaves of bread will be the ultimate commodities.
The practical discussions are what's important now:
gold and silver are in a bull run, this will impact our hobby and the values of our collections as well as the value of silver and gold non-collectibles -- what we might refer to as "junk."
as collectors and numismatists we must consider what the run up in prices will mean to low end coins and frankly, this is the time to be socking away ms64 and ms65 morgans because as silver runs up these prices are likely to take off.
with that said, anyone got some pcgs ms65 morgans for sale at still reasonable prices?
and please read my updates on the metals markets in my website www.moredeals.com -- link below.
Lawyers, Guns and Money by the, much too soon, late and great Warren Zevon.
"Lenin is certainly right. There is no subtler or more severe means of overturning the existing basis of society(destroy capitalism) than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and it does it in a manner which not one man in a million is able to diagnose." John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff
Comments
<< <i>Gold is one of the only assets that can NEVER go broke ! >>
I have never understood this mantra. The value of anything, including stocks, gold, oil, real estate, manure, is controlled at the base level by supply and demand. Gold does not have an intrinsic value.
Let me repeat that, gold does not have an intrinsic value.
Gold is an element comprised of atoms which exhibits a certain set of properties. Traditionally, these properties have been appreciated by humans to the extent that the demand was very high for the material. Since the supply of gold is limited, not everyone can have as much of it as they would like, so the value relative to other things has been set quite high. However, this does not change what it is, nor does the past demand for gold give it intrinsic value.
The value of gold is arbitrary, not intrinsic. Otherwise the price would not change from day to day. If tomorrow gold was to go out of fashion and everyone decided instead that they wanted something, anything, else, the value would plummet as everyone tried to sell. A change like this overnight is most assuredly not going to happen. But instead look at the changes through history we see the evolution of the various material ages. For a time each of the materials from copper to brass to bronze to iron to steel to carbon composites have been highly prized, but things change. In a thousand years years, will gold still be highly valued? I don't know, but since "NEVER" is a pretty long time, others seem to think so.
So lets place gold and silver for what they are, commodities with certain current technological and aesthetic applications which are currently experiencing a marked rise in value. For those who take the time to understand the forces behind their current trends in value, money can be made. For those who blindly enter the market like sheep, they are likely to be sheared.
<< <i>
<< <i>Gold is one of the only assets that can NEVER go broke ! >>
I have never understood this mantra. The value of anything, including stocks, gold, oil, real estate, manure, is controlled at the base level by supply and demand. Gold does not have an intrinsic value.
Let me repeat that, gold does not have an intrinsic value.
Gold is an element comprised of atoms which exhibits a certain set of properties. Traditionally, these properties have been appreciated by humans to the extent that the demand was very high for the material. Since the supply of gold is limited, not everyone can have as much of it as they would like, so the value relative to other things has been set quite high. However, this does not change what it is, nor does the past demand for gold give it intrinsic value.
The value of gold is arbitrary, not intrinsic. Otherwise the price would not change from day to day. If tomorrow gold was to go out of fashion and everyone decided instead that they wanted something, anything, else, the value would plummet as everyone tried to sell. A change like this overnight is most assuredly not going to happen. But instead look at the changes through history we see the evolution of the various material ages. For a time each of the materials from copper to brass to bronze to iron to steel to carbon composites have been highly prized, but things change. In a thousand years years, will gold still be highly valued? I don't know, but since "NEVER" is a pretty long time, others seem to think so.
So lets place gold and silver for what they are, commodities with certain current technological and aesthetic applications which are currently experiencing a marked rise in value. For those who take the time to understand the forces behind their current trends in value, money can be made. For those who blindly enter the market like sheep, they are likely to be sheared. >>
Very well said. It might be added that these markets (even gold) are very thin compared
to the financial markets and even small changes in perception of the metals or the paper
markets can cause extremely wild swings in the relative valuations. If one must enter any
investment he should do it with eyes open and ready to throw in the towel at any time. This
goes many times over for those who buy or sell metals and commodities.
A dollar is only worth a dollar because people believe it is. Gold is only worth $420+ because people believe it is. Gold is only a store of value because people believe it is. Governments rise and fall but PMs have always been valued. But it is only valuable because people want it to be.
<< <i>the issue is not the long term for silver and gold. yes, over the long term they are "dead" investments.
The only "dead" investment is the US dollar which I will be happy to give you in return for as much metal that you can send.
TP
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
Corn, for example, has intrinsic value because you can eat it.
Gold has intrinsic value because it can be used in electronics, ornamentation, etc.
In ancient times man realized that gold, unlike most other things, never tarnished,
corroded, decayed or deteriorated - even after eons of time. And it was valued for that.
The problem with gold is that it has traditionally been too rare and too expensive to be
widely used for anything other than monetary reserves and ornamentation.
If the price of gold were to drop, people would find more uses for it.
The price of gold is somewhat self-stabilizing (relatively stable over time).
That is why people say that it can never go broke - because it is a useful
material that would find more uses should the price decline.
If the US Dollar were to drop, more people would probably want to unload them.
The values of fiat currency are historically volatile and transient compared to gold.
50 years from now, which is more likely to be worthless:
1. The US Dollar
2. Gold
?
2. Gold
? >>
I would not "invest" in dollars under any circumstance. "Speculate" in when I think it's going to make a move, but no way invest over any period of time. It's a loser.
Gold is a proven winner.
TP
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
While I say the metals are now in a bull trend, you still must realize that at some point bull markets end. That's what I meant by my previous post.
But the bull is running now. that is clear and certain. cheers, alan mendelson
www.AlanBestBuys.com
www.VegasBestBuys.com
the metals are going higher now. but just remember every bull runs out of steam.
am I famous? no. but it pays the rent, and the alimony, and the college bills, and....
kcal-tv los angeles
cheers, alan mendelson
www.AlanBestBuys.com
www.VegasBestBuys.com
Here's the scorecard for the week:
Mar. 26 Apr. 2 Change % change
Silver, cents/oz. 770.7 814.6 43.90 5.7%
Gold, dollars/oz. 422.1 421.6 -0.50 -0.1%
Gold/silver ratio 54.77 51.76 -3.01 -5.5%
Dow in gold Dollars (DiG$) $500.43 $513.39 12.96 2.6%
Dow in gold ounces 24.21 24.84 0.63 2.6%
Dow 10,218.30 10,470.59 252.29 2.5%
S&P500 1,108.96 1,141.81 32.85 3.0%
US dollar index 88.85 88.54 -0.31 -0.3%
TP
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
Our dollar won't even be around in the next few hundred years.
But gold will be.....unless the powers to be try to confiscate it all.
One cannot eat a dollar bill either, nor does it have any value behind it whatsoever. The actual paper value is worth a fraction of a cent.
Piles of them can keep you warm in the winter once ignited. It has that one advantage over gold. It is more portable too in higher denominations. The fact that US interest rates, and our currency, are all linked together with about $150 TRILLION in financial derivatives gives me the willies. Imagine if just one firm like JP Morgan ($35 TRILLION in derivatives) were to have a financial crack appear. Imagine the back lash from that that would reverberate throughout every market in the world....gold included. I'll stick with the silver and gold for the time being.
roadrunner
Yes, gold IS much better than paper currency because people believe it's better. Yes, it is better because through recorded history people have always valued it. No, that's not likely to change. But what makes gold desirable? Supply and demand, right? The fact that more can't just be "created" right? The fact that you believe it's precious, and that your ancestors believed it was precious, right?
The argument is almost esoteric--he's not attacking gold, just being philosophical about it.
Imagine if just one firm like JP Morgan ($35 TRILLION in derivatives) were to have a financial crack appear.
Geez you've got a better chance of winning the PowerBall lotto than that happening. No way would something like that be allowed to become public.
Just like the Hunt's weren't allowed to buy more silver and LTCM investors weren't allowed to lose their money.
Our govt is not going to bail out a $1 TRILLION deriv hit should it come about. Those institutions are going belly up in a domino chain.
Survival of the fittest as they say. JPM could take the Trillion dollar hit I guess but not the hundreds or thousands of other institutions that are holding similar non-performing, unregulated, derivative contracts.
roadrunner
<< <i>Those institutions are going belly up in a domino chain >>
Good. What is it that they say about the fool and his money?
<< <i>Well, this has been a most interesting discussion. I appreciate all the well thought out arguments. As a non-US resident, I think that bad times lay ahead for the US economy and dollar due to the massive debt. It seems to me that when the economy gets shaken up, and interest rates go up, then we will see chaos. I think that silver is a good play right now, for the reasons stated. A better play, though, is to be debt free - then you will be positioned to weather the storms which lie ahead. IMHO. >>
It is impossible to become debt free now without absolute destruction of the dollar, taxes that actually go higher than what is now the case in communist countries like Vietnam, China ( it's only a couple points away from a tie now).
And without a default on payments which of course would destroy the entire worlds economy and maybe even start a world war as a result.
Buy metals.
Rgrds
TP
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
<< <i>My comments were meant to be taken on a personal level, rather than on an international one. When things get ugly, if you are out of debt, you are less likely to lose your house.... >>
Understood, however it's all integrated now isn't it.
Whether we like it or not.
Rgrds
TP
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
To a large extent this has always been true. It is panic more often than not which destroys
institutions and currencies (gold based and otherwise). It is panic which feeds on itself in a
massive feedback loop which brings down civilizations and kings. Such a scenario has been
quite possible in this country for the past few decades because of some of the problems out-
lined in this thread, but the economy has been getting more and more secure since about 1996
and a panic has become improbable. Yes, there are massive structural and institutional problems
which must be addressed and ameliorated but those betting everything against a successful
resolution of some of the most severe problems are likely to find themselves on the losing end.
There probably will have to be some significant inflation and there likely will be some other pain
caused to specific market segments as these problems are addressed.
Those who believe that they might profit in a panic are most likely very mistaken. The resourses
necessary to survive such a calamity are very much different than they have ever been before.
To a large degree it is impossible to insulate oneself from loss in such an eventuality now days.
<< <i>I've got news for ya: if you think the sky is falling, all the silver and gold and platinum in the world isn't going to save you in the event of a total economic collapse, which, of course, will never happen. >>
never is an awful long time, and history would tend to disagree with you...economies certainly can fail.
<< <i>I've got news for ya: if you think the sky is falling, all the silver and gold and platinum in the world isn't going to save you in the event of a total economic collapse, which, of course, will never happen. >>
Hahahaha well I'm certainly not one who thinks the "sky is falling". That said I DO think that this place is in for a serious economic jolt the likes of which we haven't seen in our lifetimes.
And with that in mind, there are some things that act as insurance against that.....metals and certain coins are one.
TP
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
<< <i>never is an awful long time, and history would tend to disagree with you...economies certainly can fail >>
Forgive me for not qualifying that with the phrase "never within our lifetimes." Economies can fail--look at Russia--but a *total* collapse is unlikely in any event. A total collapse being that nobody uses the currency at all, everyone turns to a black-market system, for lack of funds Interstate highways, canals, railroads, and other infrastructure falls into disrepair and disintegrates, for lack of communication (since there is no infrastructure) the federal government collapses and roving bands of militia start running wild over the countryside--that's what I mean by a total collapse, not just a "big depression" which any country at any time may certainly face.
<< <i>
<< <i>never is an awful long time, and history would tend to disagree with you...economies certainly can fail >>
Forgive me for not qualifying that with the phrase "never within our lifetimes." Economies can fail--look at Russia--but a *total* collapse is unlikely in any event. A total collapse being that nobody uses the currency at all, everyone turns to a black-market system, for lack of funds Interstate highways, canals, railroads, and other infrastructure falls into disrepair and disintegrates, for lack of communication (since there is no infrastructure) the federal government collapses and roving bands of militia start running wild over the countryside--that's what I mean by a total collapse, not just a "big depression" which any country at any time may certainly face. >>
and in my opinion the conditions are just right for a serious "correction". I don't know about bands of militia, since I live in Canada where guns are hard to get
<< <i> I don't know about bands of militia, since I live in Canada where guns are hard to get >>
Criminals tend to find a way
In a crisis, Canadian oil will look very tempting to your well-armed neighbors to the south!
<< <i>docday2003 -
In a crisis, Canadian oil will look very tempting to your well-armed neighbors to the south!
<< <i>
<< <i>docday2003 -
In a crisis, Canadian oil will look very tempting to your well-armed neighbors to the south!
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
Currencies on the other hand can have their actual NATURE changed. A dollar can be called 100 dollars but an ounce can not be called anything else than an ounce.
The other factor is that gold is a proxy for WORK....or labor. It represents the labor necessary to get an ounce out of the ground. Gold has many uses in industry and jewelry and always will have. No one will ever see gold as "ugly." It's "rarity" will keep it desirable just as rarity keeps coins valuable because of human nature to be able to own something that someone else can't.
Currencies on the other hand do not represent a unit of labor other than the current acceptance of it as "pay." Currencies represent debt, not assets.
It is a convoluted issue but it can be safely said that an ounce of gold will eliminate all worry of having an item of "value" at any spot on the globe with no requirement to change it to a local medium or make it known that you have any.
The days of isolated spots or localities not valuing gold is gone.
And lastly, gold can not be faked or counterfeited ............. yet.
So if interest rates are going to rise sharply, derivatives are going to sink JP Morgan, Fannie Mae, and every other major bank, and the US dollar is going to be worthless.....
then how on earth does the conclusion arrive that it's best to be debt-free?????
Sounds like I should be exchanging soon-to-be worthless US dollars for "stuff".
The US dollar will not become worthless, but it is on the road to still becoming worth much LESS than it currently is.
And yes, owning tangible "stuff" is one means to soften the blow caused by the above events. And not all tangibles will fair well in the coming years. Residential real estate as a group is one such
"stuff" I am very leery of.
roadrunner
<< <i>But, a somewhat more serious comment -- in the event of a major disruption in global trade, probably the North American economy is the most resilient of any region in its ability to weather the storm. >>
This is true, but only as long as there is at least some petroleum available. Our lifestyle here in the USA is very dependent upon oil. A disruption in oil supplies would hit the USA much harder than any other place in the world.
We are a petroleum-based civilization.
No petroleum = No civilization.
If oil supplies were to suddenly disappear, we would revert to 3rd-world living conditions (or worse).
Fortunately, the USA can still produce some oil for itself. It is likely that oil supplies will run out slowly. That will force us (and give us time) to migrate to other lifestyles and energy sources. No other energy source is (was) as plentiful, cheap, safe, and concentrated as crude oil, however. Eventually, one way or another, sacrifices will have to be made.
<< <i>docday2003 -
In a crisis, Canadian oil will look very tempting to your well-armed neighbors to the south!
The USA has already, in essence, captured all the world's oil by maneuvering the US Dollar into the position of being the world's oil-pricing currency. Almost all of the world's oil is priced and sold in Dollars. If the USA wants oil, it can just print the Dollars it needs to buy it.
But any challenges to the dollar-pricing of oil (like Iraq's oil for Euros plan) may be met with economic or military force.
<< <i>
Fortunately, the USA can still produce some oil for itself. It is likely that oil supplies will run out slowly. That will force us (and give us time) to migrate to other lifestyles and energy sources. No other energy source is (was) as plentiful, cheap, safe, and concentrated as crude oil, however. Eventually, one way or another, sacrifices will have to be made. >>
While there's no evidence that it's imminent there is some speculation that
this could actually occur relatively suddenly, and this would be exascerbated
by maneuvering of big users to corner the remaining supplies.
If not fully to some, I will say that I spent 19K yesterday and bought at .45 UNDER spot on a private cash deal for silver bullion.
The real run has not yet started, but I'm rubbing my hands in anticipation. Early retirement may be even earlier than I have planned on.
John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff
At any rate, you are right about oil. However, nuclear power is a safe, clean way to make electricity. We already bury our nuclear waste under Yucca Mountain in Nevada, so now that there is finally a safe place to store it, that's one less problem to worry about. For cars, a mix of electric/gas can get up to 50 mpg in the city and 70 mpg on the highway. In a crisis, it would take a LOT of time to switch everything over (both automotive and electrical), so any event would be serious. But if we did get 10 years warning that we were running out of oil, foresighted politicians COULD begin the change. At any rate I'm inclined to agree that in the short term, in the event of a truly imminent crisis, war would be a very undesirable, but possible, source of oil. Remember, Americans drilled the vast majority of the Arabian oil wells until those countries stole (nationalized) the oil industry. Personally I'm extremely disappointed that for political reasons George Bush is afraid to use any of Iraq's oil--if it were up to me, we'd put bases in Iraq (just like we did with Japan) and install a friendly government that would NOT be a part of OPEC. But politics aside, I digress.
Also, to be fair to Canada, don't forget Mexican oil
I don't think that realistic based on oil's price action over the last 12 months. OPEC set a range of $22 to $28 per bbl. The devaluation of the dollar by 30%+ vs the Euro has driven the price of oil up 30%. I don't see how that is anything remotely near being "captured."
. Personally I'm extremely disappointed that for political reasons George Bush is afraid to use any of Iraq's oil--
Iraq is exporting 2 million barrels per day. How is this not "using" Iraq's oil?
...install a friendly government that would NOT be a part of OPEC
That's what exists today. Have you heard the news of OPEC cutting oil output? The news anchors are all perplexed about it, for sure! They can't figure out that Iraq is not part of OPEC, and as Iraq approaches 3 million barrels per day OPEC must cut production to maintain stable prices. Not stable in terms of dollars, because the dollar is in decline.
<< <i>Iraq is exporting 2 million barrels per day. How is this not "using" Iraq's oil? >>
Something must be wrong somewhere, because all I see everytime I make my weekly pilgrimage to the pump is higher and higher prices.
roadrunner
We are a petroleum-based civilization.
No petroleum = No civilization.
If oil supplies were to suddenly disappear, we would revert to 3rd-world living conditions (or worse).
Fortunately, the USA can still produce some oil for itself. It is likely that oil supplies will run out slowly. That will force us (and give us time) to migrate to other lifestyles and energy sources. No other energy source is (was) as plentiful, cheap, safe, and concentrated as crude oil, however. Eventually, one way or another, sacrifices will have to be made. >>
Dcarr made an excellent point. That is precisely why I am AGAINST gas-guzzling SUVs, FOR alternate energy research and development, AGAINST population explosion, and FOR reducing dependency on oil. I have a lot of ideas on how to do these things, but nobody listens. We always seem to say, "the heck with it", and continue to gulp down oil at an alarming rate by an ever-expanding population.
<< Remember, Americans drilled the vast majority of the Arabian oil wells until those countries stole (nationalized) the oil industry. Personally I'm extremely disappointed that for political reasons George Bush is afraid to use any of Iraq's oil--if it were up to me, we'd put bases in Iraq (just like we did with Japan) and install a friendly government that would NOT be a part of OPEC. But politics aside, I digress. >>
Let's face it. If our country cannot have its own oil (we've already sucked everything out that is easy), the next best thing is to control the countries that do. That is PRECISELY what we are doing in places like Iraq, Saudi Arabia, and Kuwait. We don't own these countries, but, for all intents and purposes, we just about do.
Check out a Vanguard Roth IRA.
It has become a sad cat and mouse game. Democrats looking for reduction in consumption and Republicans looking for increasing supplies of oil. Unfortunately BOTH are needed.
The big problem? Refinery capacity is not enough with all of the different kinds of formulations required by various states and the Feds.
Also the tax laws promoting superheavy weight SUV's to be allowed to be expensed as an expense election up to $100,000 in the year of purchase seems to me to be an insane perversion of the tax laws which at one time was designed to limit annual depreciation tax write offs of luxury automobiles.
The polticians in Washington DC should be ashamed.
<< <i>The US oil companies do this every year to make more profits. It's such a sure deal it should be written up as a law. From April to Labor day one can count on big gas prices. >>
Very true, prices are always high this time of year. But there is a big difference between prices going up from $1.05 to $1.25 and between prices going up from $1.50 to $1.80. But since an honest politician has yet to be born, nothing will ever happen. You have to sit back and shake your head at our brilliant system--a few oil companies (or retailers for that matter) get together and fix prices and make a billion dollars. IF it's discovered, and IF it's proven, the government fines them $20 million and says don't do it again. They just made $980 million in profit. What a sad world.
The philosophical arguments concern the value of gold, silver, oil, food and handguns in case of a world meltdown of order. These are issues I dont want to consider because while possible they are unlikely, and in the case of a meltdown of order, lets face it, guns and loaves of bread will be the ultimate commodities.
The practical discussions are what's important now:
gold and silver are in a bull run, this will impact our hobby and the values of our collections as well as the value of silver and gold non-collectibles -- what we might refer to as "junk."
as collectors and numismatists we must consider what the run up in prices will mean to low end coins and frankly, this is the time to be socking away ms64 and ms65 morgans because as silver runs up these prices are likely to take off.
with that said, anyone got some pcgs ms65 morgans for sale at still reasonable prices?
and please read my updates on the metals markets in my website www.moredeals.com -- link below.
cheers, alan mendelson
www.AlanBestBuys.com
www.VegasBestBuys.com
Liberty: Parent of Science & Industry
<< <i>
Hmmm wasn't there a song, "bring lawyers, guns and money"?
guns and money ( in dis ting of ours, bullion and coins
Rgrsd
TP
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
This will work too?
Rgrds
TP
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff