@derryb said:
Just because the Gov says their gold is worth $5000 an ounce does not mean your gold is worth $5000 an ounce. Currently US values their gold at $42 an ounce, what does the market say yours is worth?
You are absolutely right. My response was to the previous poster saying it was a one time fix to raise the gov balance sheet value of gold. That assumes that gold will not continue to rise in the market on a forum where it seems the majority consensus at one time was that gold was going to the moon.
For some folks gold is worth zero. Can't exchange it for what they want.
Really? You really think that? Anyone who can't figure out how to extract the value from an ounce of gold is not very industrious, not very informed, not very bright - or worse - all three.
Q: Are You Printing Money? Bernanke: Not Literally
I posted a detailed article a month or 2 ago on Fort Knox inventories and vault seals. Some of those vaults have been fully inventoried in the past 10-25 years. I think the most recent one was either 1998 or 2006. All of it has not been audited since 1954 and the records raise a lot of questions. Just getting a peak at the inventory letters cost the author $3,000....something your average citizen would never do. You can be sure that the recent "tour" by our govt officials probably didn't touch any old vaults that are properly sealed.
If gold is indeed a barbarous relic....then let the Treasury of the Secretary, US Mint Director, and the Fed Chairman produce all the gold bullion transactions of the past 50 yrs (sales, leases, swaps, derivatives, etc.)...and in particular the past 25 years since the beginning of the Summers/Rubin strong dollar/weak gold policy of the 1994-2002 era. Pigs will fly first. With gold so worthless, it is interesting that China as a nation has accumulated 15,000-20,000 tonnes of gold over the past 15 yrs....which suggests other nations gave theirs up. China is now the world's leading gold mining country at around 360 tonnes/year....none of which leaves the country.
@jmski52 said: For some folks gold is worth zero. Can't exchange it for what they want.
Really? You really think that? Anyone who can't figure out how to extract the value from an ounce of gold is not very industrious, not very informed, not very bright - or worse - all three.
Other forum members have already stated anecdotal evidence. I just offered to buy a boat for gold and was turned down.
Other forum members have already stated anecdotal evidence. I just offered to buy a boat for gold and was turned down.
Does this mean that you are one of those folks for whom gold is worth zero?
I stand by my observation, to wit:
Anyone who can't figure out how to extract the value from an ounce of gold is not very industrious, not very informed, not very bright - or worse - all three.
Q: Are You Printing Money? Bernanke: Not Literally
@jmski52 said: Other forum members have already stated anecdotal evidence. I just offered to buy a boat for gold and was turned down.
Does this mean that you are one of those folks for whom gold is worth zero?
I stand by my observation, to wit:
Anyone who can't figure out how to extract the value from an ounce of gold is not very industrious, not very informed, not very bright - or worse - all three.
I thought gold was worth as much as the boat. The counterparty did not. Didn't want the hassle. He actually was a very informed, intelligent and industrious person. Gold is only worth what your "conterparty" thinks it's worth. Why should the counter party be burdened with trying to "extract the value of gold"?
This has been my point for the last decade. You PM bugs think gold is worth $xxxx but when it would come to convert into another good or service, the counter party will either disagree on the value of gold, or increase the value of the good or service you want.
Oh, there's a hurricane coming and you want my stash of water or gas or plywood, and you think your ounce of gold is sufficient? Better think again. So much for no counterparty risk.
there is no counterparty risk when payments/goods are exchanged. counterparty risk (default risk) applies only to contractual agreements.
the risk that no one will accept your form of payment is an inherent risk that applies to all forms of money. We gold bugs know that our gold is worth XXX amount of dollars and that over time its value is directly related to the value of those dollars. time has proven, with the exception of rare deflationary periods, to work in gold's favor.
Natural forces of supply and demand are the best regulators on earth.
Hopefully the time will never come when you have to value gold in terms of a good or service. The party you wish to exchange with will mostlikely have a different opinion of value.
The price of gold isn't a contract that is hanging out there waiting for fulfillment. The price of gold fluctuates, but that's not counterparty risk, regardless of who you decide to deal with and regardless of whether or not there's a hurricane involved.
Q: Are You Printing Money? Bernanke: Not Literally
@jmski52 said:
The price of gold isn't a contract that is hanging out there waiting for fulfillment. The price of gold fluctuates, but that's not counterparty risk, regardless of who you decide to deal with and regardless of whether or not there's a hurricane involved.
Until there's a contract there is no counter party. What's so hard to understand about that?
A contract limits you to the specific terms & conditions in the contract. If you haven't made an agreement, you are free to find another deal. If you HAVE made a contract, you have counterparts risk.
Maybe you aren't bound by contract law where you work, but most people are.
Q: Are You Printing Money? Bernanke: Not Literally
Lol....yeah, I guess you can't have a counterparty if there is no party on the other side that agrees with your valuation of gold. Got me there. Haha.
Here's something maybe you'll think about in regards to your flawed time of investment idea.
If we take gold and compare it to one of the largest balanced mutual funds--that's a fund that would be regarded as a middle of the road market risk, broadly diversified and invested for a combination of growth and income, then gold would only have out performed it during the last 15 year holding period. The mutual fund would have beaten gold over the 5, 10, 20 and 25 year terms. In other words, the only way gold would have beaten a managed diversified and balanced portfolio, would be if you were lucky enough to have purchased during a very short 2-3 year period during the last 25 years. In fact, my study went back to the mid 70s, and the outperformance since then was by a massive 600%. So over the last 40 years, the window for gold to outperform was only about 5% of the time.
You guys say you can't time the market, yet you are content in your little window of a few years over a lifetime of investing. Kinda makes one want to LOL.
I won't argue your point. I was in the stock market almost exclusively from 1982 through 1996 when I started dabbling in platinum some. Frankly, when they rolled back the wall between investment banking and mortgage lending in 1999 and started coming up with the crap that exists now, I knew that the fix was in.
I was lucky during the dot.com bubble and bought my place with the proceeds, but I neglected to pay attention to the speculative tech stocks comprising my tax-deferred IRA account as it went to ZERO during the dot.com crash. That one was my fault for not paying closer attention. In the meantime though, I was getting back into metals.
So, to my point - there is a time & a place for everything. And to my point, the time NOT to be buying stocks is when risk is elevated by the Fed and the big banks playing games with the money supply and with the financial markets to pump their own positions and to line their own pockets. I simply won't support that. I may speculate using the existing framework, but I won't support it. It's too corrupt. Been there, done that.
Physical precious metals holdings can be influenced by the rigged system, but not always and not forever. I personally don't need the risk involved with a marginalized financial system.
If the system gets restored to an honest footing, I will feel much better about finding value in productive companies for investment and if someone like Bill Black is installed to prosecute the financial malfeasance that's been endemic for the past 20 years or so - then heck yes, I'll be all over stock market investing. Until then not so much. Knock yourself out!
Q: Are You Printing Money? Bernanke: Not Literally
I neglected to pay attention to the speculative tech stocks comprising my tax-deferred IRA account as it went to ZERO during the dot.com crash. That one was my fault for not paying closer attention
If I leave a gold coin on the counter and it gets lost or stolen, should I blame the gold market?
This is what happens when folks try to go it alone. However, I don't believe you neglected to pay attention. You are a patient person as evidenced by your position on PMs. I think you watched those individual stocks drop almost every day, wishing and hoping and praying they would come back. I don't think you truly understood the companies you owned. Those are attributes I find in every unsuccessful investor, save the patient part (as time heals wounds).
They also go from one extreme to the next.
Balance and moderation jmski. Takes out all the emotion.
I don't believe you neglected to pay attention. You are a patient person as evidenced by your position on PMs. I think you watched those individual stocks drop almost every day, wishing and hoping and praying they would come back. I don't think you truly understood the companies you owned.
Nah, I actually did ignore what was happening. My purpose was to place potential home-run stocks into a tax-deferred vehicle and to let it ride. While I was letting it ride, I was busy using the proceeds from the runup in my much better stocks (Sprint PCS, Pixar, STM Electronics) cashed out at the right time) to buy land and build my place.
Sometimes you have to be willing to let a speculative position ride. I knew what I had bought. JDSU, and a few other interesting stocks that were based on tech. I wasn't actively managing that position, and I hadn't intended to. But there wasn't much wishing and hoping and praying that the position would come back, as you suggest. Not my style - anymore at least.
You know, cohodk. I don't remember exactly when I read the article but I believe it was in the WSJ editorial section about 30 years ago when the point was being made that a diversified portfolio does keep you out of hot water for the most part. But, the point of the article was that you are pretty much guaranteed not to get spectacular results with that approach either. Believe it or no, balance and moderation aren't always required or desired.
Having studied portfolio theory and sensitivity analyses when getting my MBA in finance, I did understand and identify with what was being pointed out in that particular WSJ article. I had accepted that risk in that gambit and chose to ride it out. I didn't like the result, but I had other fish to fry at the time. Would I ignore something like that again? Maybe, if I thought I was still correct in my assessment! Would I re-assess? Now, I certainly would.
I've given my reasons for not being in the stock market and for being in precious metals at this point. My assessment is still my assessment. I'm rescuing dollars at points along the way as they are earned. I'm diversifying my market risk over time (which I contend is perfectly valid).
My selling strategy will probably be a mirror image of what I've been doing as a buying strategy. Unless the metals markets spike one day. Then it'll be time to re-assess. A major drop simply means that I won't be fabulously wealthy in my lifetime. I guess I can accept that as well.
Q: Are You Printing Money? Bernanke: Not Literally
I mention the tax aspects of all this investing (& speculating) strategy from time to time.
Consider that the inflation tax, capital gains taxation and tax-loss carryforward rules should always enter into any position that you build. All of these things serve to dampen any gains or losses regardless of your investing skills and money management skills.
The most valuable assets you can have are a good job or profession and the ability & temperament to save.
Touche'
Q: Are You Printing Money? Bernanke: Not Literally
you are pretty much guaranteed not to get spectacular results with that approach either
Coach Belichick of the Patriots wrote that he prefers to have players on his team that are reliable and consistant. He wants a running back that will give him 4 yards whe they need 3. He doesn't want a back that could go for 80 or lose yards.
Have the Patriots won the Super Bowl every year? Of course not. Have they outperformed their peers consistantly? Absolutely.
You went from owning high flying Internet stocks to gold. That's quite a extreme change in style. It's interesting to hear the changes in your emotions.
You went from owning high flying Internet stocks to gold. That's quite a extreme change in style. It's interesting to hear the changes in your emotions.
And before the high flying internet stocks, I owned a selection of mutual funds. Before that, gold and silver contracts along with some physical.
I don't know what emotional changes you think you hear, but I'm glad I got mostly out of stocks in 2007 and into land, a new house & metals. The only emotion I remember from that time was, alright - now I can buy property and build my dream home!
The only reason that I had speculative internet stocks in my IRA in the first place was to...........speculate, of course. Some speculations go sour, and that one did. I knew it could happen but I wasn't wringing my hands about it. I'm sure that Coach Belichick has made a winning call every now and then, instead of going for the tie, lol.
You keep trying to paint metals investors as emotional, when what I see is guys who seem to understand money.
Q: Are You Printing Money? Bernanke: Not Literally
With gold so worthless, it is interesting that China as a nation has accumulated 15,000-20,000 tonnes of gold over the past 15 yrs....which suggests other nations gave theirs up. China is now the world's leading gold mining country at around 360 tonnes/year....none of which leaves the country.
Where does the gold come from that is exported in Chinese Panda's?
Where does the gold come from that is exported in Chinese Panda's?
It either comes from the buying inventory of the PBOC who then sends the gold to the Chinese mints or the mints themselves buying through the Shanghai Gold Exchange. Every official ounce of gold imported to China has to first be sold on the SGE. Whether it comes from the Chinese gold mines, or PBOC formal purchases from other central banks/bullion banks is beyond my scope. The approx 40 tonnes per year of gold Pandas is around 10% of what China mines. And only a fraction of that 40 tonnes in Pandas is exported.
"The Chinese Mint has an exception to export golden Panda coins and to my knowledge there are also a couple jewelry companies that are allowed to trade non-standard gold (jewelry) in and out of the Chinese domestic market, but this tonnage is insignificant."....Koos Jansen, Bullionstar
As of March 2015 only these 15 banks had PBOC import licenses for gold.
Shenzhen Development Bank / Ping An Bank
Industrial and Commercial Bank of China
Shanghai Pudong Development Bank
Agricultural Bank of China
China Construction Bank
Bank of Communications
China Merchants Bank
China Minsheng Bank
Standard Chartered
Bank of Shanghai
Industrial Bank
Bank of China
Everbright
HSBC
ANZ
Comments
You are absolutely right. My response was to the previous poster saying it was a one time fix to raise the gov balance sheet value of gold. That assumes that gold will not continue to rise in the market on a forum where it seems the majority consensus at one time was that gold was going to the moon.
My Ebay Store
For some folks gold is worth zero. Can't exchange it for what they want.
Really? You really think that? Anyone who can't figure out how to extract the value from an ounce of gold is not very industrious, not very informed, not very bright - or worse - all three.
I knew it would happen.
I posted a detailed article a month or 2 ago on Fort Knox inventories and vault seals. Some of those vaults have been fully inventoried in the past 10-25 years. I think the most recent one was either 1998 or 2006. All of it has not been audited since 1954 and the records raise a lot of questions. Just getting a peak at the inventory letters cost the author $3,000....something your average citizen would never do. You can be sure that the recent "tour" by our govt officials probably didn't touch any old vaults that are properly sealed.
If gold is indeed a barbarous relic....then let the Treasury of the Secretary, US Mint Director, and the Fed Chairman produce all the gold bullion transactions of the past 50 yrs (sales, leases, swaps, derivatives, etc.)...and in particular the past 25 years since the beginning of the Summers/Rubin strong dollar/weak gold policy of the 1994-2002 era. Pigs will fly first. With gold so worthless, it is interesting that China as a nation has accumulated 15,000-20,000 tonnes of gold over the past 15 yrs....which suggests other nations gave theirs up. China is now the world's leading gold mining country at around 360 tonnes/year....none of which leaves the country.
Other forum members have already stated anecdotal evidence. I just offered to buy a boat for gold and was turned down.
Knowledge is the enemy of fear
Other forum members have already stated anecdotal evidence. I just offered to buy a boat for gold and was turned down.
Does this mean that you are one of those folks for whom gold is worth zero?
I stand by my observation, to wit:
Anyone who can't figure out how to extract the value from an ounce of gold is not very industrious, not very informed, not very bright - or worse - all three.
I knew it would happen.
I thought gold was worth as much as the boat. The counterparty did not. Didn't want the hassle. He actually was a very informed, intelligent and industrious person. Gold is only worth what your "conterparty" thinks it's worth. Why should the counter party be burdened with trying to "extract the value of gold"?
This has been my point for the last decade. You PM bugs think gold is worth $xxxx but when it would come to convert into another good or service, the counter party will either disagree on the value of gold, or increase the value of the good or service you want.
Oh, there's a hurricane coming and you want my stash of water or gas or plywood, and you think your ounce of gold is sufficient? Better think again. So much for no counterparty risk.
Knowledge is the enemy of fear
there is no counterparty risk when payments/goods are exchanged. counterparty risk (default risk) applies only to contractual agreements.
the risk that no one will accept your form of payment is an inherent risk that applies to all forms of money. We gold bugs know that our gold is worth XXX amount of dollars and that over time its value is directly related to the value of those dollars. time has proven, with the exception of rare deflationary periods, to work in gold's favor.
Natural forces of supply and demand are the best regulators on earth.
Hopefully the time will never come when you have to value gold in terms of a good or service. The party you wish to exchange with will mostlikely have a different opinion of value.
There is much counterparty risk. Don't ignore it.
Knowledge is the enemy of fear
The price of gold isn't a contract that is hanging out there waiting for fulfillment. The price of gold fluctuates, but that's not counterparty risk, regardless of who you decide to deal with and regardless of whether or not there's a hurricane involved.
I knew it would happen.
Lol...let's hope you never see it.
Knowledge is the enemy of fear
Until there's a contract there is no counter party. What's so hard to understand about that?
A contract limits you to the specific terms & conditions in the contract. If you haven't made an agreement, you are free to find another deal. If you HAVE made a contract, you have counterparts risk.
Maybe you aren't bound by contract law where you work, but most people are.
I knew it would happen.
Lol....yeah, I guess you can't have a counterparty if there is no party on the other side that agrees with your valuation of gold. Got me there. Haha.
Here's something maybe you'll think about in regards to your flawed time of investment idea.
If we take gold and compare it to one of the largest balanced mutual funds--that's a fund that would be regarded as a middle of the road market risk, broadly diversified and invested for a combination of growth and income, then gold would only have out performed it during the last 15 year holding period. The mutual fund would have beaten gold over the 5, 10, 20 and 25 year terms. In other words, the only way gold would have beaten a managed diversified and balanced portfolio, would be if you were lucky enough to have purchased during a very short 2-3 year period during the last 25 years. In fact, my study went back to the mid 70s, and the outperformance since then was by a massive 600%. So over the last 40 years, the window for gold to outperform was only about 5% of the time.
You guys say you can't time the market, yet you are content in your little window of a few years over a lifetime of investing. Kinda makes one want to LOL.
Knowledge is the enemy of fear
I won't argue your point. I was in the stock market almost exclusively from 1982 through 1996 when I started dabbling in platinum some. Frankly, when they rolled back the wall between investment banking and mortgage lending in 1999 and started coming up with the crap that exists now, I knew that the fix was in.
I was lucky during the dot.com bubble and bought my place with the proceeds, but I neglected to pay attention to the speculative tech stocks comprising my tax-deferred IRA account as it went to ZERO during the dot.com crash. That one was my fault for not paying closer attention. In the meantime though, I was getting back into metals.
So, to my point - there is a time & a place for everything. And to my point, the time NOT to be buying stocks is when risk is elevated by the Fed and the big banks playing games with the money supply and with the financial markets to pump their own positions and to line their own pockets. I simply won't support that. I may speculate using the existing framework, but I won't support it. It's too corrupt. Been there, done that.
Physical precious metals holdings can be influenced by the rigged system, but not always and not forever. I personally don't need the risk involved with a marginalized financial system.
If the system gets restored to an honest footing, I will feel much better about finding value in productive companies for investment and if someone like Bill Black is installed to prosecute the financial malfeasance that's been endemic for the past 20 years or so - then heck yes, I'll be all over stock market investing. Until then not so much. Knock yourself out!
I knew it would happen.
Something...anything is worth merely worth what someone is willing to give you.
I neglected to pay attention to the speculative tech stocks comprising my tax-deferred IRA account as it went to ZERO during the dot.com crash. That one was my fault for not paying closer attention
If I leave a gold coin on the counter and it gets lost or stolen, should I blame the gold market?
This is what happens when folks try to go it alone. However, I don't believe you neglected to pay attention. You are a patient person as evidenced by your position on PMs. I think you watched those individual stocks drop almost every day, wishing and hoping and praying they would come back. I don't think you truly understood the companies you owned. Those are attributes I find in every unsuccessful investor, save the patient part (as time heals wounds).
They also go from one extreme to the next.
Balance and moderation jmski. Takes out all the emotion.
Knowledge is the enemy of fear
I don't believe you neglected to pay attention. You are a patient person as evidenced by your position on PMs. I think you watched those individual stocks drop almost every day, wishing and hoping and praying they would come back. I don't think you truly understood the companies you owned.
Nah, I actually did ignore what was happening. My purpose was to place potential home-run stocks into a tax-deferred vehicle and to let it ride. While I was letting it ride, I was busy using the proceeds from the runup in my much better stocks (Sprint PCS, Pixar, STM Electronics) cashed out at the right time) to buy land and build my place.
Sometimes you have to be willing to let a speculative position ride. I knew what I had bought. JDSU, and a few other interesting stocks that were based on tech. I wasn't actively managing that position, and I hadn't intended to. But there wasn't much wishing and hoping and praying that the position would come back, as you suggest. Not my style - anymore at least.
You know, cohodk. I don't remember exactly when I read the article but I believe it was in the WSJ editorial section about 30 years ago when the point was being made that a diversified portfolio does keep you out of hot water for the most part. But, the point of the article was that you are pretty much guaranteed not to get spectacular results with that approach either. Believe it or no, balance and moderation aren't always required or desired.
Having studied portfolio theory and sensitivity analyses when getting my MBA in finance, I did understand and identify with what was being pointed out in that particular WSJ article. I had accepted that risk in that gambit and chose to ride it out. I didn't like the result, but I had other fish to fry at the time. Would I ignore something like that again? Maybe, if I thought I was still correct in my assessment! Would I re-assess? Now, I certainly would.
I've given my reasons for not being in the stock market and for being in precious metals at this point. My assessment is still my assessment. I'm rescuing dollars at points along the way as they are earned. I'm diversifying my market risk over time (which I contend is perfectly valid).
My selling strategy will probably be a mirror image of what I've been doing as a buying strategy. Unless the metals markets spike one day. Then it'll be time to re-assess. A major drop simply means that I won't be fabulously wealthy in my lifetime. I guess I can accept that as well.
I knew it would happen.
I mention the tax aspects of all this investing (& speculating) strategy from time to time.
Consider that the inflation tax, capital gains taxation and tax-loss carryforward rules should always enter into any position that you build. All of these things serve to dampen any gains or losses regardless of your investing skills and money management skills.
The most valuable assets you can have are a good job or profession and the ability & temperament to save.
Touche'
I knew it would happen.
>
Yes
Knowledge is the enemy of fear
you are pretty much guaranteed not to get spectacular results with that approach either
Coach Belichick of the Patriots wrote that he prefers to have players on his team that are reliable and consistant. He wants a running back that will give him 4 yards whe they need 3. He doesn't want a back that could go for 80 or lose yards.
Have the Patriots won the Super Bowl every year? Of course not. Have they outperformed their peers consistantly? Absolutely.
You went from owning high flying Internet stocks to gold. That's quite a extreme change in style. It's interesting to hear the changes in your emotions.
Knowledge is the enemy of fear
You went from owning high flying Internet stocks to gold. That's quite a extreme change in style. It's interesting to hear the changes in your emotions.
And before the high flying internet stocks, I owned a selection of mutual funds. Before that, gold and silver contracts along with some physical.
I don't know what emotional changes you think you hear, but I'm glad I got mostly out of stocks in 2007 and into land, a new house & metals. The only emotion I remember from that time was, alright - now I can buy property and build my dream home!
The only reason that I had speculative internet stocks in my IRA in the first place was to...........speculate, of course. Some speculations go sour, and that one did. I knew it could happen but I wasn't wringing my hands about it. I'm sure that Coach Belichick has made a winning call every now and then, instead of going for the tie, lol.
You keep trying to paint metals investors as emotional, when what I see is guys who seem to understand money.
I knew it would happen.
Understanding money is the second best thing in life
Living life is the first
JMHO
Successful transactions with : MICHAELDIXON, Manorcourtman, Bochiman, bolivarshagnasty, AUandAG, onlyroosies, chumley, Weiss, jdimmick, BAJJERFAN, gene1978, TJM965, Smittys, GRANDAM, JTHawaii, mainejoe, softparade, derryb
Bad transactions with : nobody to date
With gold so worthless, it is interesting that China as a nation has accumulated 15,000-20,000 tonnes of gold over the past 15 yrs....which suggests other nations gave theirs up. China is now the world's leading gold mining country at around 360 tonnes/year....none of which leaves the country.
Where does the gold come from that is exported in Chinese Panda's?
It either comes from the buying inventory of the PBOC who then sends the gold to the Chinese mints or the mints themselves buying through the Shanghai Gold Exchange. Every official ounce of gold imported to China has to first be sold on the SGE. Whether it comes from the Chinese gold mines, or PBOC formal purchases from other central banks/bullion banks is beyond my scope. The approx 40 tonnes per year of gold Pandas is around 10% of what China mines. And only a fraction of that 40 tonnes in Pandas is exported.
"The Chinese Mint has an exception to export golden Panda coins and to my knowledge there are also a couple jewelry companies that are allowed to trade non-standard gold (jewelry) in and out of the Chinese domestic market, but this tonnage is insignificant."....Koos Jansen, Bullionstar
As of March 2015 only these 15 banks had PBOC import licenses for gold.