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Investing in Gold
dollardude
Posts: 1,263
Gold is falling quickly, and the stock market continues to rally. In Iraq today, people are exchanging their old Dinar currency for a new currency. Gold is never once being used in the establishment of a new Iraqi economy. Let this be a lesson that GOLD IS A HORRIBLE INVESTMENT. It is NEVER used as a medium of exchange if an economy fails, as evidenced in Iraq, nor is a good investment. You can end up buying high and selling low real fast with gold.
Author of MrKelso's official cheat thread words of wisdom on 5/30/04. 
Check out a Vanguard Roth IRA.
Check out a Vanguard Roth IRA.
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Some very intelligent prognosticators have predicted that there is a liklihood that we are about to enter into a hyper-inflationary period during which precious metals have historically held their value and ususally have significantly increased in value.
The following article may be an interesting read for you:
"Believe It' by Jim Puplava & Eric King
Stuart
Collect 18th & 19th Century US Type Coins, Silver Dollars, $20 Gold Double Eagles and World Crowns & Talers with High Eye Appeal
"Luck is what happens when Preparation meets Opportunity"
If you invest in good growth stock mutual funds, you would, conservatively, average 12% gain per year. Gold has, on average, made 3-4% gain per year. If you invest in good growth stock mutual funds, not only are you much more likely to build wealth, but your gains will likely way overcome the rate of inflation anyway. If you invest in gold, you will likely average 3-4% per year, so you will actually be LOSING MONEY because inflation will eat up those gains.
<< this and any other investment, do not mortgage the house for any investment. thanks for playing. ned >>
Thank you, Ned. Whatever you invest in, PLEASE, NEVER BORROW MONEY TO INVEST.
Dan
Check out a Vanguard Roth IRA.
U.S. government securities form the basis for our financial markets. They also defer the cost of government projects to future periods. Some same that's unfair to future generations, but quite often future generations benefit from those projects.
The last time the entire U.S. government debt was paid off was during the presidency of Andrew Jackson. Jackson's economic policies were responsible in part for one of the worst depressions of 19th century, the Panic of 1837.
We always get these Chicken Little clowns who write this doom and gloom stuff often for their own benefit. They are out to sell gold and drive up the price for the commissions they might earn or the profits they might make on their holdings or futures trading. Or perhaps they are trying to sell a cacamamie book.
Gold is a commodity just like orange juice and pork bellies. It’s fun to collect gold coins and wear gold jewelry, but beyond that it’s poor substitute for a well run monetary policy. All a gold standard would do would be to place artificial limits on the money supply. That would be recipe for economic disaster.
Frankly I’ll be happy if gold prices fall. I wanted to fill some want lists for my customers who are building type sets. I was afraid to buy any $20 gold coins for them at FUN because I was concerned that the gold price would fall after I sold them the coins. That would leave them or maybe me holding the bag. Now maybe sanity to return to the market for large gold coins.
I know each and everyone of you will change your tunes or go underground once gold starts rallying again. Haven't you heard of corrections ?
5 % gold correction is much less than the 15% correction that people are expecting in the stock market.
The simple fact for the small investor in bullion is that you are limited to coin dealers as a point of disposal. Given that most coin dealers are marginally capitalized does this make you feel good about your bullion investments?
<< <i>$260 to $420 sounds like a good investment to me! >>
Oh no! That's not an investment, just ask Dollardude.
In the last 13 months I made over 45K from primarily silver. That wasn't an investment nor apparently a profit either.
In the last month or so, I've invested heavily and I've made nearly 20K on that alone. But again, that's not an investment nor a profit either.
Sheesh!! I am geting sick of the gold and silver bashers.
Let's see, a few years ago my brother lost nearly a half-million in the stock market crash. But that, being in blue-chip stocks, was apparently a proper investment.
My head is about to explode here!!!
John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff
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<< <i>That is long term, but investment for short term is dangerous unless you can unload as fast as you bought! Maybe tougher than you think! >>
Think so? I could unload a ton of silver with 2 or 3 phone calls right now. Maybe only 1 call would do it.
I watched a lady sell 200 ounces of gold just last week, 200 Pandas, a quick printed out check and she was done in 5 minutes.
John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff
<< <i>In the last 13 months I made over 45K from primarily silver. >>
-you haven't made a dime unless you are selling.
<< <i>The simple fact for the small investor in bullion is that you are limited to coin dealers as a point of disposal >>
Incorrect sir, eBay! God's gift to the small investor of bullion. On a serious note....I don't care what anyone says, if you do your homework and know what you are doing then gold and silver can be very lucrative regardless of how big time or small time you are. Key note - if you do your homework and know what you are doing
I agree. Hindsight is 20/20. And, you don't make money until you actually sell at a higher price than what you purchased at, minus the rate of inflation, minus sales fees, and minus storage costs. Yes, you could theoretically make money in gold, but it is very, very difficult. How can you possibly know the exact time to buy, and the exact time to sell, gold? And even if you do, you still have to make a profit after all of the expenses involved. I'm sure there are a few people out there who have made money, but they are very few and far between.
Look, if you don't believe me that gold has no place in monetary policy as a medium of exchange, look at the situation in Iraq with your own eyes on the news. You will see Iraqis trading the old currency for the new currency. Have you ever seen an Iraqi trade gold for the new currency? Think about it.
Check out a Vanguard Roth IRA.
perhaps you should take a look at the price of gold then and the price of gold now.
if you made so much in silver/investments, why did you have to mortgage your house?
go back through your previous posts and you might find a contridiction or two. ned
<< <i>
<< <i>The simple fact for the small investor in bullion is that you are limited to coin dealers as a point of disposal >>
Incorrect sir, eBay! God's gift to the small investor of bullion. On a serious note....I don't care what anyone says, if you do your homework and know what you are doing then gold and silver can be very lucrative regardless of how big time or small time you are. Key note - if you do your homework and know what you are doing >>
You are correct regarding eBay but bullion sales are often very time critical. eBay may be too slow. An example: In about 1984 silver suddenly spiked to the $11-12 range (I believe it had been in the $7 range). I was out in my car listening to the radio when reports of this were noted. I literally turned the car around, went to my safe depoisit box, got all the silver out and drove over to a local coin shop and sold it all. Within no more than two days the spike was over and silver had returned to its previous level. eBay would not have been of much value in this situation. It has been my observation that bullion tends to rise slowly and fall quickly. You have to be able to move fast.
Hypothetical Example - Say you bought when gold was at $375. You check gold before you go to bed one night and it's at 400$. You check again from work and it is $480. Go to your car or your briefcase, get the disk and post your auctions right then and there. Put a buy it now price of $475 per ounce. Boom...it sells in 2 hours and you made 100$ per ounce profit and your buyer(s) are stoked cause they just purchased below spot price! Win - Win situation.
Sure you coulda waited another day or two to see if gold goes up higher but it could also dip down much lower and you lost your opportunity. There is no magic wand to know when to sell. Just trust your instinct and err on the profit side. If you sell off and it still goes up who cares...you still made money. When it goes down again, rebuy and do it all over again. The beautiful thing about gold and silver is they are rarely very stagnant. One way or the other they are moving around and you will get the chance to buy and sell repeatedly.
Perhaps he's secretly loading up on the yellow metal??
"Ask, and it shall be given you; seek, and ye shall find; knock, and it shall be opened unto you." -Luke 11:9
"Hear, O Israel: The LORD our God is one LORD: And thou shalt love the LORD thy God with all thine heart, and with all thy soul, and with all thy might." -Deut. 6:4-5
"For the LORD is our judge, the LORD is our lawgiver, the LORD is our king; He will save us." -Isaiah 33:22
<< <i>you mortgaged your house a month ago and now your rolling in profits?
perhaps you should take a look at the price of gold then and the price of gold now.
if you made so much in silver/investments, why did you have to mortgage your house?
go back through your previous posts and you might find a contridiction or two. ned >>
No contradictions at all. I was buying heavily over 18 months ago and nearly all was silver. That's what I refer to as the earlier profits. Yes I did sell some late last summer and therefore I can call it a profit. Since that time, I used most of that to repurchase more and came out well ahead after the dip last fall.
I didn't mortgage my house, I refinanced it and took out equity. I wanted to invest more in silver, much more. Since that time, silver is up overall. I don't think I am rolling in profits, not yet. In fact I expect it will be quite some time before that happens.
I have some gold, some might consider it alot of gold, but it is a very small percentage. I don't need to go back through previous posts.
Anyway, I thought I made it clear that my salary more than covers my monthly expenses twice over and then some and my position is quite secure. I refinanced at a lower rate on an 8 year mortgage. Less than 5%, in fact. I expect silver to do much better than that over the duration.
I'm not really a gold bug, but I've not heard the term silver bug, so call me what you will.
But anyway, thanks for looking out for me Ned, nice to know someone is looking over my shoulder.
John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff
Nothing posted on these boards will change a person's investment philosophy. So why the constant barrage from the Dow-heads? Are you that insecure in your investment planning that you seek reinforcement from your confederates? Look, I wish you all well and hope you make a bundle. I also hope that you are wise enough to take some of these paper profits and invest in some metals as a hedge.
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In reply to DollarDude's following comment: <<...gold has no place in monetary policy as a medium of exchange. >>
I've read that many of the Moslem countries, with Indonesia taking the lead, are planning to introduce a Gold Dinar as their basis for backing their currencies and as an exchange medium. This gold coin also has significant Moslem historical and religious significance.
They wish to do this in an attempt to dethrone the USD as the World's banking currency, and as an alternative to withdraw their investments from the U.S. in an attempt to negatively affect the value of the U.S. Dollar and adversely affect the U.S. financial markets.
Many of these countires have huge trade surpluses from Oil exports, and have lots of cash to invest, which has traditionally been invested in U.S. debt & equities for secruity against inflation and adverse risk.
Some may wish to think of it as a legal form of "economic terrorism", but I'm sure that they consider it National and religious solidarity. If this come to pass, it would likely have a buoyant effect in raising the price of gold. Just my $20 worth...
Stuart
Collect 18th & 19th Century US Type Coins, Silver Dollars, $20 Gold Double Eagles and World Crowns & Talers with High Eye Appeal
"Luck is what happens when Preparation meets Opportunity"
....ahem...
"Section 10. No state shall enter into any treaty, alliance, or confederation; grant letters of marque and reprisal; coin money; emit bills of credit; make anything but gold and silver coin a tender in payment of debts;...."
Those stupid old goats.
If gold is such a "horrible" investment, then you should open a commodities trading account and sell short. Do it right away ! I dare ya ! I double-triple dog dare ya !
And if gold does retreat back to sub $300 per ounce, it's a great time to accumulate more if you like owning it -- for whatever reasons...
If it does happen to skyrocket, then some of us are covered with our little hoards of the shiny, heavy, yellow metal
Stuart
Collect 18th & 19th Century US Type Coins, Silver Dollars, $20 Gold Double Eagles and World Crowns & Talers with High Eye Appeal
"Luck is what happens when Preparation meets Opportunity"
around a long time.
People have made fortunes and lost their life savings on each and
every one.
Since the economy is steered by world events, both political and social,
and predicting world events is difficult, investing in anything is nothing
more than gut-feelings and luck .
The only philosophy that keeps ringing true is Diversification !
Putting all eggs in one basket is like playing the lottery;
you may get lucky but most likely you'll lose !
Stuart
Collect 18th & 19th Century US Type Coins, Silver Dollars, $20 Gold Double Eagles and World Crowns & Talers with High Eye Appeal
"Luck is what happens when Preparation meets Opportunity"
I guess I am responsible for a lot of the gold-bashing here, and many pro-stock market posts. As I've said, I've been wiped out financially, so I know what it's like to have done stupid things with money, like carry credit card debt, not having a budget, and speculating in things like precious metals. I have rebuilt my wealth by un-learning our society's "get rich quick" schemes and borrowing money to do anything, and by learning the old-fashioned ways of handling money, i.e., paying cash for everything and building wealth slowly over time. If you are looking for a get-rich-quick scheme like gold, I think you will likely lose your butt. Our society, where most people are broke and in debt, is looking for a get-rich-quick scheme like gold, and it just doesn't exist. We live in a microwave society, but you have to look at the crock pot approach. Wealth is built slowly over time. Nothing I've read in any of these posts has convinced me that gold is a wise investment or is a wise medium of exchange. I'm not using today's dramatic drop in the price of gold to say, "See, I told you so." If this is what you think, you have misunderstood me. I am saying that I believe people are beginning to understand that the runup in gold is unfounded. I want people to look at what happened in gold today as a lesson. Also, I was trying to use today's news in Iraq to show the "pro-gold" crowd that gold is simply not used in the real world when an economy fails. Yes, I have read many of the theories on gold out there, but these are just theories. What I was saying is to look at what is actually happening right now in the real world. No one in Iraq is using gold. Hey, I want people to prosper in our broke-and-in-debt society. Yes, you can theoretically make money in gold, but you have to know exactly when to buy, track the market at all times, and know exactly when to sell. You also have to have enough of a gain to cover the buying expenses, storage expenses, and selling expenses. For most people, this simply is not possible. For a very few people, you might make some money, but it is nearly impossible.
<< I've read that many of the Moslem countries, with Indonesia taking the lead, are planning to introduce a Gold Dinar as their basis for backing their currencies and as an exchange medium. This gold coin also has significant Moslem historical and religious significance.
They wish to do this in an attempt to dethrone the USD as the World's banking currency, and as an alternative to withdraw their investments from the U.S. in an attempt to negatively affect the value of the U.S. Dollar and adversely affect the U.S. financial markets.
Many of these countires have huge trade surpluses from Oil exports, and have lots of cash to invest, which has traditionally been invested in U.S. debt & equities for secruity against inflation and adverse risk.
Some may wish to think of it as a legal form of "economic terrorism", but I'm sure that they consider it National and religious solidarity. If this come to pass, it would likely have a buoyant effect in raising the price of gold. Just my $20 worth... >>
This would not change my view of gold. If they want to do that, fine, but most of the rest of the world does not use gold as a medium of exchange. We live in a modern, high-tech society. Heck, in a few years, we won't even need currency -- everything will be electronic.
<< If gold is such a "horrible" investment, then you should open a commodities trading account and sell short. Do it right away ! I dare ya ! I double-triple dog dare ya ! >>
I do not trade single stocks or commodities of any kind, no matter what. I do not trade options or sell anything short. I don't have any desire to even play that game. I'll stick to my old-fashioned good growth-stock mutual funds and paid-for real estate.
Check out a Vanguard Roth IRA.
Gold will rebound....it is tightly adhered to the US dollar. Nothing in the financials has changed this past week. Gold will recover and continue its rise until the US dollar finally hits bottom down the road.
Stocks are a scam on you and I. Gold will finish out this year much stronger than it is today. Sit back and watch the run. It won't be straight up every day. Anyone who thinks gold falling after a run of months is a sign of weakness is grossly mistaken. Don't forget that the rise in the stock market this year was basically fueled by inflation. Yup, those 30% gains, those were due to the dollar losing 30% of its value. The net gain on those stocks and your long term
investment was ZERO. Cash in your stocks for dollars? Get 30% less dollars than when you started. Some bull market?
The pundits were mostly wrong on how gold would perform in 2003. I expect much of the same in 2004. See ya on Dec 31st. Dollardude.
roadrunner
<< <i>Not once is gold ever being used for anything related to money as a medium of exchange or investments. What is actually happending RIGHT NOW is that the price of gold is plummeting. Gold is a commodity like oil, wheat, frozen orange juice, and cattle. It is used in jewelry, collector coins, and industry (like the production of ICs). It has absolutely NO place in monetary policy. >>
Um.....er.......DollarDude, what world history are you looking at? NO Country or Government has survived long term once the printing presses were put on full throttle and debased the paper used to replace REAL money....ie....gold and silver.
These are by definition real money, and the fact that 2 generations of Americans have grown up without it being used as money during their lifetimes doesn't change that. Fact is that for all of the 1st 175 years or so of our country's history inflation rose a VERY small amount.....maybe 20% or so as i recall reading BECAUSE gold and silver couldn't be created out of thin air. A "dollar" is not the piece of paper most americans believe it to be thru ignorance, but is in fact a certain weight of coin in silver as stated in the founding father's documents.
Inflation has gone up at least 20 TIMES in the last 45 years or so, and especially since 1971........because we cut the monetary link to gold and silver.
You don't happen to be "short" the gold and silver markets, now....are you?
.....the "crap" of what you speak is more like the paper we currently use, and at some point might substitute well in the bathroom!
......what a crock!!!!!!
<< <i>Article 1, Section 10.....Constitution of the United States...
....ahem...
"Section 10. No state shall enter into any treaty, alliance, or confederation; grant letters of marque and reprisal; coin money; emit bills of credit; make anything but gold and silver coin a tender in payment of debts;...."
Those stupid old goats.
---------------------------------------------------------------------------------------
DollarDude diatribe:
<< <i>Stuart, I read your article, and this does not change my position. He's saying that the U.S.' debt is too large to pay off, there is inflation from time to time, and that gold is used as a medium of exchange. Gold is NOT the answer to the deficit problem. Jim Puplava is mixing a few facts with his own theory. This is just a THEORY. I disagree with his THEORY. I am looking at REALITY RIGHT NOW. People are beginning to wake up and say, "Hey, why am I buying this crap?" What is actually happening RIGHT NOW is that the Iraqis are exchanging their old currency for a new currency. Not once is gold ever being used for anything related to money as a medium of exchange or investments. What is actually happending RIGHT NOW is that the price of gold is plummeting. Gold is a commodity like oil, wheat, frozen orange juice, and cattle. It is used in jewelry, collector coins, and industry (like the production of ICs). It has absolutely NO place in monetary policy.
If you invest in good growth stock mutual funds, you would, conservatively, average 12% gain per year. Gold has, on average, made 3-4% gain per year. If you invest in good growth stock mutual funds, not only are you much more likely to build wealth, but your gains will likely way overcome the rate of inflation anyway. If you invest in gold, you will likely average 3-4% per year, so you will actually be LOSING MONEY because inflation will eat up those gains.
<< this and any other investment, do not mortgage the house for any investment. thanks for playing. ned >>
Thank you, Ned. Whatever you invest in, PLEASE, NEVER BORROW MONEY TO INVEST.
Dan >>
Once again resides with Legend, the original purchaser "raw" at live Eliasberg auction. Laura and i "love" the same lady!
roadrunner
That is exactly right. However having some floating ratio of gold backed dollars might be wise to provide security and liquidity for an expanding economy.
Oh helll, I don't know, I should just go get some tea and shut my yapper!
.....Yesterday i finally bought my 1st ever $1,000 face 90% silver bag.......actually FIVE full bags......as i had no exposure in the white metal and got it under spot. Traded in 41 Krugerrands and the balance in cash.
......'cept now i'm really sore! That "crap" is heavy!!!
<< <i>Joejeweler, eloquently said. I hope our govt gets this message at some point. Gold IS the only true currency. We scammed the world since Bretton Woods and more recently since 1971 and reaped enormous benefits by sucking the blood out of so many other countries by printing our currency at will...and they bought it too! The game is over 30 years old but doesn't have an indefinite lifespan. We are currently rewriting history as we are in unchartered financial territory. There is no playbook at this point. It's a true crap shoot. That's why gold has resurfaced as the safe haven and has regained its currency crown in place of the dollar.
roadrunner >>
Once again resides with Legend, the original purchaser "raw" at live Eliasberg auction. Laura and i "love" the same lady!