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What if gold goes to $5000 an ounce?
jkal
Posts: 116
I posted this on the US coin forum and was told that I was on the wrong forum site. I kind of disagree but thought that I would post it here because it is a concern of mine- thanks for any ideas with this- also, sorry if this has been asked a 1000 times already-
What if this really happened. I like many of you I have been purchasing gold and silver for a number of years now. What if this really happened? First of all, who could afford to purchase this gold and silver from us? It could be that the gold and silver would purchase that same amount of stuff as a $1000 worth today, with the value of the dollar going way, way down. Otherwise, what grocery store manager is going to give you some food for a $5.00 gold coin, or for a few Walker half dollars.
What I am saying here is we are all in big trouble if this happens. Even the few of us that are putting away gold and silver if this happens will still be in big trouble. If a 1908 NM $20 gold coin in MS65 is worth $2000 today with $1000 gold, what would this be worth if gold hits $5000. I do not see it going to $10,000. It might not even be worth $6000. Who would trade us their food for gold coins or half dollars?
This could be considered a subject for a different forum, however, I am talking about the future of our coins.
If the value of the US dollar crashes, why would we ever want to sell our gold and silver. If we don't ever sell, then we trade. If we trade, then in theory the commodites that we want will have gone up just as much.
What if this really happened. I like many of you I have been purchasing gold and silver for a number of years now. What if this really happened? First of all, who could afford to purchase this gold and silver from us? It could be that the gold and silver would purchase that same amount of stuff as a $1000 worth today, with the value of the dollar going way, way down. Otherwise, what grocery store manager is going to give you some food for a $5.00 gold coin, or for a few Walker half dollars.
What I am saying here is we are all in big trouble if this happens. Even the few of us that are putting away gold and silver if this happens will still be in big trouble. If a 1908 NM $20 gold coin in MS65 is worth $2000 today with $1000 gold, what would this be worth if gold hits $5000. I do not see it going to $10,000. It might not even be worth $6000. Who would trade us their food for gold coins or half dollars?
This could be considered a subject for a different forum, however, I am talking about the future of our coins.
If the value of the US dollar crashes, why would we ever want to sell our gold and silver. If we don't ever sell, then we trade. If we trade, then in theory the commodites that we want will have gone up just as much.
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You basically would want to have a variety of different types of PM's, from 90% dimes/quarters/halves for more local type trade, to gold and larger bars for storage of your wealth.
No one can answer for sure, but numismatic values will go away at least in the short term, for common date stuff in all probabililty.
If the dollar tanks, obviously that would be the last thing you would want to be holding. Eventually, some sort of money system will come back (in all probability), and holding onto your stored wealth in PM's you will then be able to convert what you need to this new system.
At least this is how my mind wraps itself around the STHF type scenario.
<< <i>If I sell, then I am getting a bunch of cash that is not worth much. >>
But you haven't lost either. That's the point.
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Gold went from $50 to $800 during the 70's. A run to $5000 would be of similar magnitude. We all survived. What i'm saying is that we wouldnt be in big trouble. We've already "been there, done that".
value of all of the real items goes up
That will not happen. Surely some goods will go up, but toilet paper will not cost $25 a roll and a 6-pack will not be $90.
Knowledge is the enemy of fear
<< <i>Its almost as if we can't win. >>
Not true, if you buy low sell high!
<< <i>If we buy gold and it goes down, then we lose. >>
This is true, but it won't happen if you buy low sell high!
<< <i>If we buy gold and it goes up, then we don't really win because the value of all of the real items goes up as well so we tie. >>
No you don't win anything extra, but you have real money (precious metals) to trade for food or trade for a ticket to get out. In other words, you have the mean to buy your way to survive another day!
<< <i>I think a lot of people believe that their metals will make them rich some day. >>
Nothing wrong with that, buy low sell high, they'll be rich someday!
<< <i>You will be rich compared to the dollar, but will still be able to purchase the same amount of items. >>
Who cares that I can only purchase the same amount of items, it is great that I can purchase/ trade for anything at all!
Let's say you have $20 and you keep it in your checking account. A year later we've suffered through some tough economic times.
A big canned ham that used to cost $20 is now "on sale" for only $99. If you've got $99, and you can find one, you can buy it. But you don't have $99. You've still got your $20 bill. You go hungry.
Likewise, an ounce of silver that used to cost $20 will cost you $99.
You can sell your $20 ounce for $99. And you buy your ham.
--Severian the Lame
roadrunner
If the Dow is at 10,000 -- 2:1-- I'm starting to work my way down from my current paper PM holdings and investigating diligently what sectors to get back into the market, if the accounting shananigans have been taken care.
I admire those who can move and quickly position themselves ahead of the market psychology with all the manipulation going on. I don't have the time or stomach for it anymore. S&P P:E ratio is 129 right now. Once upon a time, seems like I remember 20 was overbought??
edited for grammar and sp.
<< <i>f I sell, then I am getting a bunch of cash that is not worth much. >>
Relax. Go have a beer. The sky is not falling. The sun will rise again. If you bought gold under $1000 and it goes to $5000, just smile.
The spot price of gold is determined by the marketplace. It wouldn't ever get to $5000 if there weren't people willing and able to pay that price. And if no one was willing or able to pay that price, the price would fall until you found a price that people would pay.
Don't forget the tax man. If you sell 100 oz. of gold and make a 3000% gain, the feds will want at least 30 oz. of it.
Which brings us back to that nagging question - whose money is it, anyhow?
Maybe it would be better to own the Charmin, a storage tank full of gasoline and the hams - if you can manage to consume it, it's not taxable (yet).
I knew it would happen.
In the case of Weimar inflation, by the time you make your purchase, even the next day, your note stack might be worth consideralby less.
I knew it would happen.
it will have a rally and more people will want to join the hysteria
it is just like homes, stocks, collectibles
for the price to go up there are more buyers than sellers
THE BIGGER FOOL THEORY
you will be able to sell gold, but most here will hold theirs for $6K or $10K
and then keep it on the dip until it reaches new highs or they die