Do you really think of bullion as a hedge?
MrEureka
Posts: 24,240 ✭✭✭✭✭
Or are you just trying to make money?
Not that we believe in money, of course.
Not that we believe in money, of course.
Andy Lustig
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
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Comments
<< <i>the biggest game of musical chairs this world has ever seen! >>
I think it will be something more like "old maid" or "hot potato", either way you don't want to be the one stuck with dollars when the bottom falls out.
<< <i>Or are you just trying to make money? >>
No. I'm just trying to preserve wealth.
Worry is the interest you pay on a debt you may not owe.
"Paper money eventually returns to its intrinsic value---zero."----Voltaire
"Everything you say should be true, but not everything true should be said."----Voltaire
It's the same reasoning that says that bullion can protect you in both higher inflationary periods, deflationary periods, and during unsettled times. It's an added plus that you can sell off some of your hedge when prices get too high, and have the option of buying it back when the price is lower. Nothing wrong with profiting from your hedge which I think is the base instinct for getting it in the first place. One has to think they are going to "profit" in some way by taking a position.
roadrunner
I am reading a biography. There is a brief mention about the turn of the century and the financial turmoils in 1894, 1907, and then of course the big banana in 1929. That makes for three financial panics is less than 40 years in the most politically stable country in the world. There were also two world wars in the 50 year period. Now that gold floats free, it is a good insurance to have in case of financial collapse, or a change in government. Unthinkable? Yes, for three generations of Americans that have only seen reasonably stable financial markets and stable governments and have a narrow American view of the world. For students of history, especially those that know a bit of world history--no. When things change, they often change quickly and in unpredictable ways.
I knew it would happen.
Brother, I'm buying gold to leave my two curlyettes as a way of apologizing for the mess we've made for them.
<< <i>They will come in handy once China stops accepting our dollars, >>
Is that why you are so heavy into gold yuan?
i have mostly NCLT gold
junk silver and a wee bit of NCLT silver
(as my small hedge)
none of it is "bullion" as in bars and rounds and/or ingots, though. do you (OP) include junk and NCLT PM? and if not why? j/curious
<< <i>
<< <i>They will come in handy once China stops accepting our dollars, >>
Is that why you are so heavy into gold yuan?
That brings up a really good point. I have been critisized on numerous occasions for buying pandas. Its always something like "why are you supporting a communist country who would like to see us all dead?". Its kind of funny though. By exporting gold pandas to the U.S. (because of feverish collectors like me), China is trading a precious commodity for PAPER and INK! Therefore I dont see my buying of pandas as supporting China, but rather as more of a "fleecing" of their assets.
<< <i>
<< <i>
<< <i>They will come in handy once China stops accepting our dollars, >>
Is that why you are so heavy into gold yuan?
That brings up a really good point. I have been critisized on numerous occasions for buying pandas. Its always something like "why are you supporting a communist country who would like to see us all dead?". Its kind of funny though. By exporting gold pandas to the U.S. (because of feverish collectors like me), China is trading a precious commodity for PAPER and INK! Therefore I dont see my buying of pandas as supporting China, but rather as more of a "fleecing" of their assets.
Interesting way to look at it and not one that I can necessarily disagree with.
I just can't get the vision our of my head of Chinese soldiers, after the war is over, ransacking your house (or SDB, or where ever they are) and getting all excited over finding a hoard of their very own Chinese gold.
i think he falls into the flipping and hedging category
<< <i>gecko109 has a valid point, about foreign countries dumping dollars, China in particular >>
Lets examine this fear.
The Chinese have proven themselves to be savvy business people.
The US is their biggest market. If they lose US market share, it will severely hurt their domestic economy.
They currently hold billions of US government debt securities, the value of which would plunge if the dollar plunges against the Yuan.
They are now in the midst of a serious recession, like the US and Europe. They are putting together their own stimulus plan and are hoping that an economic recovery in the US will help them out of their recession.
The US has been complaining for years that China has manipulated its currency exchange rates in order to keep the Yuan valued low against the dollar in order to keep Chinese goods priced lower than US and other foreign manufactured goods. This has helped them grow their economy.
Dumping the dollar would hurt their economy, especially while it is in a recession.
As bad as the US dollar may look to you, it has gained considerable strength against most other currencies, except the Yen, as Europe and Australia struggle with their own housing and banking crisis and recessions.
So now, explain to me exactly why China is going to dump the dollar.
CG
<< <i>
<< <i>gecko109 has a valid point, about foreign countries dumping dollars, China in particular >>
Lets examine this fear.
The Chinese have proven themselves to be savvy business people.
The US is their biggest market. If they lose US market share, it will severely hurt their domestic economy.
They currently hold billions of US government debt securities, the value of which would plunge if the dollar plunges against the Yuan.
They are now in the midst of a serious recession, like the US and Europe. They are putting together their own stimulus plan and are hoping that an economic recovery in the US will help them out of their recession.
The US has been complaining for years that China has manipulated its currency exchange rates in order to keep the Yuan valued low against the dollar in order to keep Chinese goods priced lower than US and other foreign manufactured goods. This has helped them grow their economy.
Dumping the dollar would hurt their economy, especially while it is in a recession.
As bad as the US dollar may look to you, it has gained considerable strength against most other currencies, except the Yen, as Europe and Australia struggle with their own housing and banking crisis and recessions.
So now, explain to me exactly why China is going to dump the dollar.
CG >>
Imagine that you are making some type of item in your home. You are selling 100 units per month total. 50 of those units are going to your next door neighbor, and the other 50 are dispersed throughout the neighborhood. Your next door neighbor hasnt paid his bills on time for years, and his debt to you keeps getting larger and larger. To complicate matters even more, when he does send you funds, they are just xeroxed pieces of paper he prints from his computer, and nothing of real intrinsic value. Now you find out that this neighbor is in debt to many others as well. On top of this, he is having domestic problems of his own. You then realize that this neighbor just bought 3 more printers, and is printing non-stop in his basement, yet still cant seem to get this newly printed paper over to your house. Even though he is technically, by sales volume alone, your single biggest customer....at what point do you tell him no more paper?
Take your example but not add the following: all of your other customers in the neighborhood to whom you just sold the other 50 units are doing the same thing as your neighbor, and so are you.
CG
<< <i>Gecko,
Take your example but not add the following: all of your other customers in the neighborhood to whom you just sold the other 50 units are doing the same thing as your neighbor, and so are you.
CG >>
Name a single other nation with a 10 trillion national debt!
Current U.S. debt...10 TRILLION dollars
All countries are issuing feit money.
CG
<< <i>The amount of per capita debt and debt relative to gdp is much higher in Europe than in the US.
All countries are issuing feit money.
CG >>
Yes all countries are issuing fiat monies, but not all countries....not even 1 other country, is producing, from thin air, 800 billion new fiat dollars to "stimulate" an economy. Hey, what happened to the other 700 billion bailout money? Do you see my point? We are OUT OF CONTROL!
Perhaps you would prefer no stimulus plan. Perhaps we could eliminate the capital gains tax so that anyone with built-in gains in their current portfolios can sell those off those assets now, even at the current low market prices, pay no tax, drive prices down even more, and then buy back the same stock or other assets at the new lower price. That would take lots of money out of the economy and you wouldn't have to worry about inflation. Wouldn't that be a great move.
CG
<< <i>The EU countries are doing bailouts and stimulus programs as well. So is China. So is Russia. Everyone is "out of control" but you are ignoring the fact that the economy is shrinking, so that the new dollars going into the economy are doing so in an attempt to replace some of the dollars that have been lost--and many more dollars have been lost, and are being lost daily, than the amount of the stimulus plan.
Perhaps you would prefer no stimulus plan. Perhaps we could eliminate the capital gains tax so that anyone with built-in gains in their current portfolios can sell those off those assets now, even at the current low market prices, pay no tax, drive prices down even more, and then buy back the same stock or other assets at the new lower price. That would take lots of money out of the economy and you wouldn't have to worry about inflation. Wouldn't that be a great move.
CG >>
What would truly be a great move is if the government had less involvement and let natural selection play out. The banks that made the poor decisions to lend money to people who couldnt afford to pay it back are the ones who should suffer. And yes...their shareholders would also suffer, but thats the risk of investment. What the government is doing right now amounts to nothing more than artificially propping up a failed system with toothpicks. Let the big banks go out of business. Let the mortgage companies fold. My personal stock portfolio has taken a 40% chit already, and thats WITH these so called "bailout fixes". ITS NOT WORKING! What we need is a good old fashioned "forest fire" to get rid of all this dead wood and make way for fresh, new companies with new business plans that are more fiscally responsible.
CG
True but in nature it is more of a case of evolution than the near cataclysmic collapse such as we are witnessing. Rather than allow for the natural evolution of selection to play out, we have chosen to violently destroy our economy rather than let it seek it's natural course. Our response is still evolutionary but it's more like a giant meterorite striking the earth rather than the plodding, generational selection of species.
Predators have infiltrated the economic structure and they have parlayed their trust and wisdom into a wealth destroying ponzi that benefits only themselves and those that are with them. By manipulating commodities with paper shorts, by hedging equities, by inflating paper debt and investing real wealth in derivatives of incalculable value, or as we have recently witnessed just stealing the money, the system has succumbed to being played like a cheap harmonica.
We will survive this, probably better than most countries. There will be pain for those here that have fallen on the wrong side of the evolutionary line regardless of our leaders efforts to show compassion by offering other peoples money as a salve for their wounds. They are not going to be happy about their fate. Yes, hold cash and PM and things of real, calculable value, they will come in handy not only as a hedge and also as a vehicle to carry you to the correct side of the line of evolution. Good luck.
JMHO
"When the going gets weird, the weird turn pro"
H.S.T., PhD
That guy doesn't have that much money, so I wouldn't worry about him.
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
The problem is the US has just allowed too many manufacturing and service jobs to be exported because of the wild growth expectations associated with corporate profits...
GREED is has not lived up to its expectations
Experience the World through Numismatics...it's more than you can imagine.
They currently hold billions of US government debt securities, the value of which would plunge if the dollar plunges against the Yuan
I think that the total debt held by China is less than the current 'en vogue' stimulus fiasco........er plan.
'We' could have chosen to say goodbye to mainland China instead of enacting this current 'emergency social plan' which has a CBO analysis of just about nothing.
When the AMERICAN public starts to see through this current plan and it's hidden social reform agenda........you'll see a lot of really ticked off people. The seeds are being planted right now for a populist uprising in this country and many people are buying gold not for money or for profit or good looks but for INSURANCE. There is just about 3.9 TRILLION dollars sitting idling in neutral in money market accounts-just looking for the next parking spot. The people who are benefitting the most from this current 'plan' have the least skin in that 3.9 TRILLION game and IF it looks like the GOVT is going to make a play for those assets........you will see a revolution in this country.
Watch out asset holders.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
<< <i>Brother, I'm buying gold to leave my two curlyettes as a way of apologizing for the mess we've made for them. >>
Bullion is a hedge against fiat currency. Curly, I thought maybe your MPL's were a hedge you could leave the Curlyettes, if not it's still cool to pull them out as I do this now and then with my MPL's. My favorite is a 1911 in an old NGC-PR-64 brown holder with a bluish green obverse.