goldbug musings

mhammerman

I know we have beaten this horse beyond recognition but I have had an ephiphany of sorts regarding the world economic situation and it has resulting in clarifying my position on gold accumulation. I have been studying and watching gold for 20 years so this is not just an inspired diatribe but sober recognition that things are changing.

Now is the time to start buying small amounts of gold. I also know there have been various threads talking about China's effect on world economics and I have participated in the discussions. Well, one of the pieces of the big puzzle has fallen into place and it provides some insight into the level of China's anticipated dominance in world finances. Here's a piece from the Drudge Report this morning. A discussion on the EU running scared. It must be the first time they have ever seen a raging bull eye to eye.


"China's active industrial policy is turning the country into a low-cost competitor in high-skill industries," said the EU's Competitiveness Report 2004.

"The growth of Chinese brand-name producers exploiting these advantages will become a major challenge to established multinationals and brand owners affecting to a large extent well-positioned EU-15 companies," the report said.


China hasn't even started good yet and the EU is already shaking. There is only one way to fight off the results of the Chinafication of the world and the US dollar slide and the eventual crippling of the EU manufacturing/jobs base...accumulate gold. China is still a few years (3 or 4) away from it's arrival as the world power, it is not going to happen next month. It is not a time to panic but it is a good time to plan on acquiring small amounts of gold bullion every time we get a chance. It is kind of like hearing that there is a hurricane coming and you wait to see what it looks like but then it is too late to get out of the way. Everyone should be acquiring a little gold bullion over the next two or three years to assure their economic survival, it is the only world currency that will always be in demand. It is just buying insurance that you must have like health insurance. It is not for speculation or for a quick profit, it should be acquired slowly and patiently...20% of your wealth in gold always seemed a bit overboard to me but now it does not seem quite as extreme. Buy bullion in small increments, like 1 oz bars or even canadian maple leafs. This way you can sell them individually and not get the 1099 and it is an easy cash in and cash out deal. So, if you have an extra $200-300, buy that 1/2 oz you were thinking about. Buy an oz when you get that bonus check or make a nice sale or come into a few extra dollars. Do it slowly and patiently and regularly, like a clock and you will be financially healthy in the future. No need to rush but go ahead and get started now. You can probably do this at your local coin store or at your next show. Good luck!

Mike

roadrunner

Welcome to the "darkside" mhammerman. My epiphany occurred almost exactly 2 years ago while reading an article by James Sinclair on gold and financial derivatives in the Rosen Numismatic Advisory. At that point gold was at $315/oz. Up to that point I had never had much interest in gold, and saw no need for it. After all, hadn't the last 20 years "proved" that gold was dead? The more I read on the subject, the more I was convinced there were major changes coming very soon. Our 1990's miracle was built upon a foundation of borrowing and credit. As the holders of the world's currency, we've been able to shield ourselves from fiancial accountability for quite some time.

roadrunner

Steve27

I think it has nothing to do with China, and everything to do with Bush's spending habits. The huge deficits are causing the dollar to fall against all major world currencies, and thus gold and all precious metals are rising.

roadrunner

Bush bent the arms of foreign bankers and did everthing possible to keep the dollar propped up through the election. Now they are letting the chips fall since goal #1 was accomplished.....re-election.
Everything else was secondary.

roadrunner

mhammerman

Hey everybody, fresh coffee!

DeepCoin

Basically you are saying diversify your portfolio and hold some assets in bullion. This is a reasonable recommendation. Just remember that gold is only a hedge and has not intrinsic economic productive value other than as a store of value. I guess I am saying it is good to hold some but dont get carried away with the percentage of your portfolio.

Coinhusker1

I view my coin collection as exposure to silver and gold. As such, I am overexposed to silver and gold and sould, theoretically, sell short to balance my exposure. Nah, I'll let it ride!!

mrearlygold

Everybody's gotta pay. And you won't necessarily know when or how much. But you will pay.

The market is showing that right now.

2005 should be a good year in the coin and gold business. Especially with an out of control government.


Tom

ttown

Well I chose to buy common date gold coins XF/ low BU's, at their prices you can have a coin collection for about the price of a bullion coin. In fact you can buy some of these common date gold comm.’s that were broken out of sets for under spot gold and cheaper than a bullion coin.

I've also start to buy circ. Walkings and Franklins (merc too) by the roll and letting my kids collect them in albums for fun. Funny how times change seems most on this board want to claim to be "Real" collectors only if you buy high dollar MS65 and up coins. Now maybe it's just me but those are the same people that brag how much their going to be worth in the future, Who's speculating and Who's having fun with their investments at very little risk of losing anything?

JMO

CardsFan

If the economic surge is China is what is feared then why not just invest in the Chinese Dollar, or a China mutual fund instead of running to gold?

roadrunner

The Chinese Yuan is still linked to our dollar so I wouldn't want to go there quite yet. Eventually they will break away and float on their own. Could be years. The Chinese markets are still very inefficient.
I would think that the chances of scoring big or going bust in an investment are not that far apart. Makes more sense to me to be invested in the raw materials that China needs to build her economy.

Ttown, you hit the nail on the head. Many lower grade gold and silver coins don't sell for much over bullion. They are one of the cheapest ways to collect coins. And as a side benefit you get the bullion value too.

roadrunner

fishcooker

Years ago, the Chinese stocks had two prices - one for foreigners and another for Chinese. The one for foreigners was several times higher than the other.

Still want to buy?

Deadhorse

<< <i>I think it has nothing to do with China, and everything to do with Bush's spending habits. The huge deficits are causing the dollar to fall against all major world currencies, and thus gold and all precious metals are rising. >>



Sheesh!! It's amazing how many people don't have a clue that we are at war and it's not just in the Middle East. Homeland Security is expensive as well. Thousands of terrorist acts on US soil have ben prevented since 9-11.

I guess it's just easier to read the New York Times and blame GW Bush for every single thing that's wrong in the world. Heck, I hear he was really developing AIDS back when he was "supposedly" in the National Guard.

Back to the subject at hand, my idea of diversity in a portfolio is gold bullion along with silver bullion.

And because I'm a nice guy and open to fully embracing diversity, including China, I also have a stash of gold Pandas.

CardsFan

There are Chinese corporations that trade on Wall street, you don't have to invest in their stock market.

Neptune

but sober recognition that things are changing.

Boy ya got that right . . . and I think we are only seeing the proverbial tip of the iceberg. I agree that things were probably propped somewhat for the election. 2005 should bring an interesting year and, unfortunately, I feel that things could get worse for the economy.

Deadhorse

One man's economic disaster is another man's financial plan.

I've been betting against the US dollar for many years now.