Does this article make a good point?
timcoin
Posts: 674 ✭
I'm a PM bull, but the argument made in this article is actually a good point... or is it?Wall Street Journal anti-gold article
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"Warren Buffett put it well. "Gold gets dug out of the ground in Africa, or someplace," he said. "Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head."
Maybe I should sell my stash and buy some US stocks and get away from that gold, yeah, that's the ticket...most folk have only lost 40% of their stock portfolio value in the last two years well, that's a bit of an exaggeration because it only went to sub 10K from 14K+ so you didn't really lose 40% if you were in pure dow. So, yeah, bet on wall street blog guy, keep throwing your money at it, some of it will surely stick.
Hoarding gold...who could do such a thing. I'm suprised he didn't bring out the 1980 gold price and talk about how those guys lost their butts...well they did make 30% if they sold it today. BUT, IT"S A PONZI...yeah, wanna sell yours or do you even have any or do you even have a bit of a clue about what you are talking about? Yeah, I need to buy some stocks so I can lose another 50% of my investment in wall street. Keep trying guys, folk stopped buying that treacherous metal scare talk after gold crossed 1K. Maybe it's because you can't eat it...but you can't eat stock certificates either so, oh well. In times of a flood would you rather have a boat or a certificate for a boat?
Got Cash?
Well said!
SB.
********************
Silver is the mortar that binds the bricks of loyalty.
<<if supply has consistently exceeded user demand, how come the price of gold has still been rising?
In a word, hoarding.
Gold investors, or hoarders, have made up all the difference.>>
So what? When did supply vs. demand become invalid? The impressive thing is that demand is increasing faster than the supply (which is also increasing). But he doesn't even hint at the reason why gold is going up - the threat of sovereign default and ultimately the debasement of all fiat currencies around the whole world.
<<They are the only reason total "demand" has exceeded supply.>>
Hoarding isn't a reason, it's an effect of bad government policy and inflation expectations. This guy thinks that "hoarders" appear out of nowhere for no reason. He probably buys stocks based on hot tips from his broker.
<<Lots of people have been buying gold in the hope it would rise. But the only way it can rise is if still more people buy it, hoping it will rise still further. And so on.>>
That's interesting. I don't buy any of the pms hoping for a rise. I know they're going to rise, and I'm just trying to protect my savings. I don't want gold to rise because that just means that things are getting harder for everyone around me. I don't relish that situation, but maybe that author does. The Wall Street mentality is to rip the little guy, is that not the case?
<<What do we call an investment scheme where current members' returns depend entirely on new money brought in by new members?
A Ponzi scheme.>>
I can reel off a list of more Ponzi schemes that were based on stocks and perpetrated by Wall Street firms than I can Ponzi schemes that were based on physical gold. It's not about returns. This guy is oblivious and will probably be oblivious until we see $50/gal. gasoline.
And then, there's the mother of all Ponzi schemes - Social Security. The author must be oblivious to that one as well. 'Nuf said.
I knew it would happen.
"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
That argument's been around for a long time. Wouldn't those same beings from Mars be scratching their heads about the budget deficit, overspending, and unfunded liabilities, too?
I knew it would happen.
<< <i>Warren Buffett put it well. "Gold gets dug out of the ground in Africa, or someplace," he said. "Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head."
That argument's been around for a long time. Wouldn't those same beings from Mars be scratching their heads about the budget deficit, overspending, and unfunded liabilities, too? >>
Good point!
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
<< <i>Buffet is correct. However, as long as everyone else is willing to keep paying more for it I think I'll keep trusting it, at least till I see otherwise. >>
And taking a profit whenever possible ... just like any asset.
One of the dumbest statements I've ever read.......and even WB knows it.
Judge WB by what he does and not what he says. Yeah, this is the same WB who from 1996-2004 managed to pick up around 120,000,000 ounces of silver, unbeknownst to the majority of the financial world. That was about the same physical amount that the Hunts put together in the 1970's. It wasn't until old Warren's silver was needed to fund the SLV ETF that he was made an offer he couldn't refuse. Part of his paybacks were sweetheart deals in banks and corporations following the 2008 bust.
Unless I'm mistaken, Warren's quote could apply to silver as well. He wan't buying silver because it was an industrial metal that people needed, he was buying it on speculation that investors would eventually want it. And had he not been "urged" to sell out in 2004 he would have reaped some nice profits in 2008. Obviously the guy has a soft spot for PM's and understands their "utility." Why didn't Warren put away 500 MILL ounces of copper, nickel, tin, lead or some other industrial metal?
One could substitute FRN's into WB's quote and it would have much more meaning. Think about cutting down trees to make currency and then declaring a note that cost pennies to make suddenly "worth" $10, $20, even $100. It's not backed by anything but a promise to someday pay the IOU off. Martians would not understand it. As far as gold not having "utility," that is totally false considering that nations, banks, and the rich have hoarded gold for thousands of years. If it has no utility why do the Central Banks hold 31,000 tons of gold on deposit? If it has no utility why are China, India, Russia, and other nations actively buying gold? Shouldn't they be buying paper fiat as the author suggests?
You can bet that Warren has considerable PM's put away for his own personal use/protection.
roadrunner
<< <i>Hummmmm...seems like a lot of wrong things in this article. Like anyone that has held gold has lost value over the last 20 years...on what plant is he writing from? Generates no income...just let go of two buffs I got at issue in '06 so that may not be income to him but it sure felt like it to me. Hoarding by the central banks...are they really hoarders or are they trying to run as far as they can from euros. Private ownership in gold is minisculine, not even measurable on a 100 point world ownership scale even if you measure all Weiss's pile at once so personal hoarding is nothing but if they ever start measuring personal stashes in tons then he might have a point.
Maybe I should sell my stash and buy some US stocks and get away from that gold, yeah, that's the ticket...most folk have only lost 40% of their stock portfolio value in the last two years well, that's a bit of an exaggeration because it only went to sub 10K from 14K+ so you didn't really lose 40% if you were in pure dow. So, yeah, bet on wall street blog guy, keep throwing your money at it, some of it will surely stick.
Hoarding gold...who could do such a thing. I'm suprised he didn't bring out the 1980 gold price and talk about how those guys lost their butts...well they did make 30% if they sold it today. BUT, IT"S A PONZI...yeah, wanna sell yours or do you even have any or do you even have a bit of a clue about what you are talking about? Yeah, I need to buy some stocks so I can lose another 50% of my investment in wall street. Keep trying guys, folk stopped buying that treacherous metal scare talk after gold crossed 1K. Maybe it's because you can't eat it...but you can't eat stock certificates either so, oh well. In times of a flood would you rather have a boat or a certificate for a boat?
Got Cash? >>
Hear, hear
We all get to choose. You can believe the Big Lie that paper based securities and fiat is safe while PMs are the risky scheme. Those not buying that lie are buying metals.
The desperation is palpable when gold is characterized as a Ponzi scheme. Such schemes by definition involve fraud. Gold does not defraud anyone - an ounce of gold is always an ounce of gold.
https://www.pcgs.com/setregistry/gold/liberty-head-2-1-gold-major-sets/liberty-head-2-1-gold-basic-set-circulation-strikes-1840-1907-cac/alltimeset/268163
Fred, Las Vegas, NV
"Playing Gold Without Getting Killed"" is the last of Arends' 3-part series (in part one he wrote about how it could go up a lot more from here), where he advocates buying call options on GLD as a way to speculate on a rise in gold without risking a lot of money. Of course, with this strategy you can lose everything you invest if GLD doesn't rise fast enough or if the ETF implodes (hard to see physical gold going to $0 in the near future). Personally, I would prefer a certified 2010 Proof Buffalo to a Jan 2012 $120 contract, and it's cheaper too. Maybe not as exciting as watching the option value jiggle up and down every day but you can hold the Buffalo in your hand and look at it if you want.
<< <i>Good article that presents a very sensible argument, but what are the chances that anyone in a PM chat room will pay any attention to it, or even consider it? >>
Probably just the two of us...
The Fed and the Obama administration have been using Buffet as their talking head the past 18 months. He represents
calm. The human form of the wise owl and a face and voice Americans can identify with. The oracle. There is ZERO chance he would
publically endorse gold at this time. Things have never been more fragile and public trust is waning. He must talk down gold.
Riddle me this?- How much interest has the USD throw off the past few years? I'm sure The Martian's
would find our monetary system much more head scratching then precious metals.
The fiat system and the electronic printing press is from outer space IMHO.
MJ
Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
Nope, read it from front to back, not unlike about 4 or 5 articles that folk find and post here every year although I admit, they do seem to be thinning out a bit. You can almost tick off the points in the article before you read it by just looking at the first few sentences. It's the classic and well worn anti gold article usually written by stock buffs with some ancient set of rules about how financial paper is good for everyone. Thanks for the article, it's always refreshing to see they're still out there.
Very Wise Statement. Does anyone think that ones that play at that level would EVER tip there hand as to what direction
they want to go. Public comments are for sending the general public in the direction you want, so they do not get any of your pie.
IMO Buffet is posturing for the cameras so to speak. The Fed and the Obama administration have been using Buffet as their talking head the past 18 months. He represents calm. The human form of the wise owl and a face and voice Americans can identify with. The oracle. There is ZERO chance he would publicly endorse gold at this time. Things have never been more fragile and public trust is waning. He must talk down gold.
Second Very Wise Statement. If the people in the upper levels of the game let slip what they KNOW is actually happening that would panic
the entire planet. Considering the leadership position of the U.S. at this moment in time. The Wall Street Journal is the main stream media.
The writer of that article would lose his job if he actually wrote the truth about why PM's going up in price constantly.
The more people believe in Gold and Silver, The less faith they have in the current fiat system. And if the faith in the current pretend system is shattered then it quickly comes to an end.
Just a couple of Ideas up for debate.
Terry
The strange thing about gold is that every one has an opinion, even those that have owned nothing more than 14K wedding bands and for the most part those opinions are spread across the horizon and they are all different. It is good to have discussion and this article is a very good opportunity to consider different points. I believe that unless you have some skin in the game, all you have is an opinion. It takes nice articles like this for us to have an informed discussion. Hey, you could save your skin.
Got Cash?
Edited for mistyping horizon.
not what they need to hear.
Promise the people things that can never actually be
paid for.
Convince the dumbest people in the Nation and you will have
captured the majority.
Cut out the middle men in both houses of Congress.
Elect only Corporate Officials or people that are
certifiably and totally crazy.Oh, we already do the latter.
What always amazes me, is that sometimes, though very rarely,
we elect people who are honest, smart, caring and capable of truly
serving the people and the nation.
If I had the trillions of dollars, like Warren Buffet, I would not need to hold
gold either.
"Well, I am too old to cry and it hurts too much to laugh."
Camelot