Official Gold Bug Prognosticator Thread: Gold over $440 again, where next?
RYK
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Where to next?
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ssshhhhh.......
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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"
Tyler
a commodity metal that rarely makes significant moves. The implication is that there
is a change in psychology probably driven by the belief that the move in oil is Per-
manent. Aluminum prices are largely determined by the cost of production which is
largely determined by the cost of electricity (oil). The dollar is hitting some new long
term lows which exascerbates such moves.
I'm not a gold expert, but real estate is at a peak and so is gold. However, if I had to pick one over the other, real estate would win every time.
Well ladies and gentlemen, as we get closer to crises, the media is starting to show up, even in the new Oct. Readers Digest beginning on page 122 is an article about how we are headed down the old tubes at a rapid rate. According to their staff the un-funded liabilities for just S.C. and Medicare is $74 trillion, and our entire national net worth is only $45 trillion. $ 420 Gold is nothing, the current federal debt and trade deficit is now running at $4 billion DAILY, call me when Gold hits $1,000 !
I'm certainly no expert, and I'd love to hear someone's explanation of how the growing trade defecit, national debt, etc can be a good thing (or at least neutral or sustainable phenomenon).
Not all of the money borrowed over the last 70 years is being sold to non-Americans in the form of debt, much of it was borrowed from us with out our approval, from Federal employee pension plans S.C. etc. Those Trillions of dollars are soon to be called on by us for repayment, and of course there is no money to pay us with.
One thing that can be done to stave off some of the pain of correcting this situation, at least for a few years, is to print the money and pay everyone what they are owed, and this is what is and will be done.
This is a strange comment: I'm not a gold "expert" but....gold is at a peak. Sure sounds like you are stating a fact from expertise.
Frankly, I'd pick gold by a longshot at this point. Real estate has been pushed to dizzying heights as the last bastion (or bubble) for an American to keep and maintain his "wealth." Unfortunately the wealth has been created out of thin air via easy credit and a large increase in the money supply, esp. over the past 3 years. Gold has just started a long term run, while housing is probably ready for a major cooling off. The govt has done everything in their power to give everyone a home who wants one. They've also done everything in their power (along with the central banks) to keep gold depressed over the past 10 years while they inflated the economy with no additional pressure applied by a rising gold price.
Unfortunately, they lost the handle on this starting in 2001. Gold will seek it's true, unmanipulated price level, as will housing.
Greenspan had it right in the 1966's when he was a gold proponent and anti-fiat. He had to change his tune in order to further his political career. A small price to pay, one's integrity for a little cash and power. You wanna bet he has a nice stash of gold put away?
roadrunner
there will be an upcoming price hike in this commodity of kings despots rulers govenrments and the average man for millennia which will last a long time and it will settle higher than it ever has before
there will be a synergy in gold in the form of obsolete usa gold coins and other gold collector coins that will outperform gold bullion
michael
What will keep gold shining for the long term is our record deficit, inevitable higher taxes to pay for Iraq, uncertainty of Iraq war/terrorism, real estate bubble popping and probably a derivative meltdown [chase? fannie?] in 2005-6.
Gold is maneuvering along with swings in the US dollar rate. But at some point in time it will be moving opposite to all world's currencies.
The US dollar will not always be the world's reserve currency. It is losing it's aura as we speak. It would make sense that in time, either China's currency or some other form of money, will become the world's reserve currency, not the US dollar.
roadrunner
Shhhhhh...don't tell everyone.
This time we are within $10, yet around $125 short of the previous mark. When saints first took a jump at the 2002 FUN show they went to over $700 with gold only reaching around $375. I think enough people got handed their keisters in those swings that they lost confidence in gold bullion and generic gold. Gun shy is a more apt term. A fresh set of newbies will carry saints to their next plateau.
Each successive major shakeout will trample the egos of each new group who think they can call the moves. Only the heartiest will survive it all. It's no more risky imo than buying MS65 common DMPL's at $750 a coin or MS65 bust halves at $4000-5500 each. The whole coin market is always full of risk. I see less risk in a $650 Saint with $350 of gold in it vs. a PF65 Morgan dollar at $4000 with $2.50 face value.
It will likely take a move above $430, possibly to $450 to energize buyers and send 64 saints back to the $775 mark. In any case, I don't see saints offering all that much risk in the low $600 range, which is where this last low began at.
The real story is that the anti-gold crowd has been unable to shake the major uptrend in the gold price since the fall of 1999.
roadrunner
The few friends and family I have that pay any attention to any of the numbers, and ask for advice, I send into the slabbed $20 market. They are not really interested in collecting, so Saints or Lib’s at 62, or better seems fine.
This statement may make no sense at all, even to many here, but one of the larger bullion dealers in Texas told me a few weeks ago,” there will come a time in the next few years that a person will not be able to buy even one ounce of Gold” I don’t think this was a comment on price just that he feels there is so much paper money now Worldwide, compared to the late 70’s, that he thinks there will be a time where buyers will out number sellers 100 to 1.
Since neither of the Presidential candidates want to go near these subjects it is obvious they also know there is no workable solution.
I often wonder if the reason that the government never passes any laws to stop American companies from moving operations overseas is that they know the game that must be played to keep our money system afloat, and feel it is at least of some benefit that our corporations are making some profit, and paying some taxes. I get a big kick out of poor old Mr. Lou Dobbs on CNNFN when I hear him ask week after week when this manufacturing out-sourcing will end. Like the rest of the media he is just totally in the dark until an event happens.
In his defense I guess he would not have his job long if he got on his program and told all the folks, all these give away programs must stop, and all governments at every level must be cut by 66%.
Why bother with $700+ Saints when you can buy bullion for $420? I really don't get the concept of buying generic gold coins when bullion costs less. When push comes to shove, the numismatic premium is going to mean less than the bullion value.
I see that with the emergence of the Euro as a competing currency to the US$, there is a need for a "hedge" by central banks, and gold is the ideal standard. I would expect to see gold around $475-500 in the next year, and would not be surprised to see $600 within 5 years.
I say YIKES!
PreTurb, you may be proven right eventually on this one, but for the time being, better grade saints (63-65) have outperformed the lower grades in each of the gold moves over the past 2 years.
And if you go back to the 1989 market you'll find much of the same.
MS65 saints won the "most appreciating" coin in last year's Forum survey with a gain of like 56%. MS64's were not far behind them. MS63's were further behind. Gold itself only went up around 20% in that time with the lower grade Saints appreciating around 30%. The leverage in the higher grade saints make them "the futures" of US gold coins. Lots of leverage...both up and down. You don't want to be holding them on the way down if you are speculating short term. They are beautiful and attractive in the 64 and 65 grades. Recall that MS64's once fetched $1500 in the 1989 craze. Even in 1990 they were at $1000 when gold itself was not far from today's price. But I do agree that the more times we go through the cycles, gravitating towards pure bullion would make more sense.
But until the gold price reaches crazy numbers like $600+/oz, I'll stick with the better grades. If gold ever reaches new records then the premiums between grades of saints will certainly shrink. We'll reassess the situation should we ever get there. For now, the better play has been the MS64 to MS65 grades.
MS64 and 65 Saints are "rare" coins to non-collectors, something most have never seen. And being 80 years old, the nostalgia adds something. I have no problem paying the 50% premium over spot. As I've stated before, MS65 saints are the "wheat pennies" of the gold market. They only sell for 3x bullion value...same for a wheat cent at about 3X face value. You don't see people screaming about buying wheat cents do you? Buy one MS65 saint or 36,000 wheat cents....same basic value at 3X bullion/face. The saint is a bit more manageable imo. Wheat pennies are at an all time high. Saints are still 40% of their all-time highs, and the economics of today is far different then 1989. Gold's role could change drastically very soon.
Goldsaint you've said a mouthful. And I have to agree. The gold market is very limited. One day of trading on the Dow could probably buy the whole thing, gold stocks included. Should something happen, the leverage that could be applied is enormous.
Outsourcing is just a natural effect of businesses finding the most economical way to survive. It's just part of the business cycle. We don't really have any way of stopping what happens naturally. If we didn't outsource, does one really think we could survive as an island? Our goods would be too costly to export and our wages too high to compete. This is basically the result of 90 years of printing excess money to live beyond our means.
Don't forget the gold-carry trade that made Billions for the gold companies in the 1990's. Even though their business was mining gold, they hedged (shorted) their foward production to lock in profits on interest rate differences. This was a great game and a sure-fire profit as long as gold stayed in the $250-$320/oz range. Central Bank selling of their gold reserves was the key behind keeping the prices depressed. Once gold started moving up strongly, many gold mining companies (and large financial institutions like JPM) were risking their shirts as they had to pay back those hedges/derivative contracts. As gold increased in price, they started paying off some of their hedges to limit overall risk. The whole concept of the carry trade was endorsed by central banks, nations (yes, the USA too), and the gold miners. Everyone made money except Joe Investor who kept losing money on the gold cycles. The "carry" trade helped to keep gold in a nice trading range for most of the 1990's. It also allowed govt's to print money knowing that a rising gold price would not give away their real game. Unfortunately, gold finally broke out and has changed the rules of the game again. If allowed to seek it's natural price, gold would likely settle out around $550/oz today. But there is still much manipulation going on...and the battle continues. As long as currencies are being inflated in the US, Japan, and China, gold will continue to move up. Central bank gold reserves have been used up to play the carry-trade. They have limited ammo left to keep the price of gold down at each resistance point.
To restate what Laura first metioned. The MS64 and higher saints are currently coiling up. The spreads between MS62's and MS64's is far too great imo. If gold moves again you'll see the 64's explode.
Within a week or two you won't be able to find a MS64/65 in any of the major gold dealers inventory. The MS62's and even 63's will be readily available however.
roadrunner
<< <i>Why bother with $700+ Saints when you can buy bullion for $420? I really don't get the concept of buying generic gold coins when bullion costs less. When push comes to shove, the numismatic premium is going to mean less than the bullion value. >>
Why bother with morgans when an ounce of silver costs 7 dollars
What's funny is how few even realize how far along the socialist path this country is, and that from an economic standpoint, it's going to continue, not improve no matter what you "feel" about the two political parties who are laughing all the way to the bank. Their bank.
Thank goodness for coins.
Tom
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
HELL NO! I assume your're joking, of course, but, after reading through this thread, I want to repeat my opinion and warning that I have posted here many times, and elaborate on some of the new comments, as some people might actually try this.
Gold has, as an investment, historically over the past 50 years, averaged LESS than the rate of inflation per year. So, the first problem is that gold, as an investment, historically has a HORRIBLE track record. In choosing an investment, you have to look at BOTH historical performance and future projections. Second, I don't think we're in some unique period in history where the economic conditions have changed drastically that would allow gold to somehow be a good investment for the future. I did read the opinions here. Yes, we have a huge budget deficit, and we are being taxed into oblivion. No, I still don't see gold as the answer. Those who think gold is the answer to these problems are looking for some quick fix or magic bullet. The real answer, IMO, is to print less money, curb spending, balance the trade deficit, and pay off the money deficit. No, I don't believe we had or have a "secular" gold market. We have, as there have always been in history, speculators who gamble their money on things like this. Yes, new world economies have risen from the ashes. No, they do not use gold as a means of exchange when this happens. When an economy collapses and a new one emerges, the people trade goods and services for other goods and services. Yes, a few of the very rich will have some gold, but the economy does not run on the whims of a few very rich people. Yes, the Euro is emerging as an alternate means of currency exchange on the world market. No, gold will have no significant role in this process. Economies use currency exchange rates to control the economic dynamics among different countries.
In general, I'd like to say that a lot of good points were made here. However, IMO, you cannot connect these events and facts with gold. I'd also like to point out that, under President Clinton, we actually had a budget SURPLUS. Do you remember? I do. In fact, the government tried to extrapolate this to say that these surpluses would increase over the years, and us Democrats wisely said we cannot do this. We need a Democrat in the White House to reverse the RECORD BUDGET DEFICIT that President Bush gave us. This would help stabilize the economic situation.
Check out a Vanguard Roth IRA.
HELL NO! I assume your're joking, of course
I am, of course, joking. Because I was ripped for a parody on the "Legend" thread, I should not assume that people have any sense of humor around here.
I am a firm believer in diversification. My retirement account is 65% stock funds and 34% fixed income and real estate funds, and 1% gold fund. My kids accounts are in traditional 529 plans, index mutual funds, and small cap value funds. My home mortgage is about 40% the value of the home, at 4 3/8% on a ten year note with 9 1/2 years to go. My gold bullion position consists of 10 gold American eagles. I have been known to be a rare gold coin now and then...
Check out a Vanguard Roth IRA.
We've discussed the same issues before. Looking at a 50 year window in anything is not the way to assess an investment. Stocks have had 15 year downcycles, so has gold. Frankly, "free" gold doesn't even have a 50 year history as it was only unleashed from its chains in 1974. And after a 6 year bull-run the govt instituted policies to keep it squashed while they printed money at will. It was clear from the early 1980's that gold was going to be down for a long time. Now after a 20 year stock cycle and a massive credit-pumped society, gold is looking awfully contrarian. Stocks had a good 20 year run, don't expect another one after a measly 3 year down cycle. Many more excesses need to be wrung out over the next 3-5 years minimum. Gold and stocks are "investments" only because we have invented an inflationary economy. Neither is an investment but speculation. But the speculation comes and goes in cycles. Depending on what side of the cycles you are on, you could have a very poor retirement nest egg.
The taxes we are ultimately going to face are nowhere yet to be seen. But to fund future Soc Security, medicare, and pensions, our current tax rates will have to double. You can count on that. Gold may not be the answer, but it has held it's own this century (from $20 in 1913 to $417 today) to account for the excess money supply. That factor of 20X exactly covers the increase in inflation since 1913. Funny how that works. It has exactly MET the loss in purchasing power of the dollar. Gold is there to protect the citizens from an unlimited printing press. Our dollar is now worth 6 cents compared to 100 cents in 1913. Gold has covered the spread....exactly. Our money supply has increased 30% in the last 3 years. Gold has covered that spread too. It's not magic nor is it a quick fix, just honest protection from a socialistic govt gone wild.
It has worked that way for centuries. It's all in the history books.
The real answer, IMO, is to print less money, curb spending, balance the trade deficit, and pay off the money deficit.
Other than Nader, which candidate is dealing with this in their platform? Bush needed to print money to get re-elected. It did nothing to fix the long term problems. It only has accentuated them
and ensures us a much harder landing when we do hit bottom.
No, they do not use gold as a means of exchange when this happens.
Central banks have always used gold to help control the economy.
They've been selling it off for the past 10 years to help keep inflationary effects at bay while printing presses were running and easy credit was handed out. It was the biggest con of the 1990's short of Enron and next, Fannie Mae. When the banks run out of gold (figure they've dumped half of their original amount over the past 15 years), and we are truly a fiat society, what then? Gold just keeps the printing presses honest. That is its function. Our founders knew that too. It's why they chose silver and gold coins to be the basis of our money supply. It's bankers and politicians that came up with the idea of printing money....to get something for nothing....from the rest of the world.
I'd also like to point out that, under President Clinton, we actually had a budget SURPLUS. Do you remember? I do.
I don't remember this and here's why:
What you haven't included in this statement that is that if you remove the $300-500 Billion or so in excess social security payments, we've NEVER had a SURPLUS. You're confusing smoke and mirrors with honest accounting. What should have been going on with the extra SS payments ALL AlONG is to start funding future liabilities via interest bearing accounts. Saving for the future retirees...not spending it today for the 6 bedroom home or 2nd SUV. But we have spent the excess every year to fund programs that don't deserve funding. I don't consider that a surplus.
Whether it's Bush or Kerry in the White House, expect more record budget deficits, at least for a few more years as the electorate continues to demand something for nothing. And they're men enough to give it to us.
roadrunner
Certainly the Euro has proven to be a competitor to the dollar and in the big picture will prove to be infinitesimal when the Yuan/RMB goes worldwide which has been in the making for quite some time.
That's going to be real interesting.
Tom
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
roadrunner
Currently there are 313 known to the public. If a few of these people decided that they were not going down with the paper money ship, and started buying Gold heavy, it would be very interesting. This 313 number is of course only U.S. billionaires.
Tyler
Just name your poison. They could make it illegal to own again but most people do not think that would occur. Then again, who would have ever dreamt of the Patriot Act, and then further ammendments to it?
roadrunner
From Mrearlygold: "Certainly the Euro has proven to be a competitor to the dollar and in the big picture will prove to be infinitesimal when the Yuan/RMB goes worldwide"
Yes earlygold, it is something that has yet to be dealt with. To be really controversial, I would say that the "west" has yet to respond to the fact that 1 billion chinese and easily that many other asians and their markets will dwarf the west when they find their comeuppance. And, to quote earlygold again..."That's going to be real interesting."
"comeuppance: A punishment or retribution that one deserves; one's just deserts: “It's a chance to strike back at the critical brotherhood and give each his comeuppance for evaluative sins of the past” (Judith Crist)."
What this does to investments is yet to be seen and anything offered right now would have to be a guess. The point is that I do not believe that we can accurately predict the markets beyond the 3-5 year range but by the same token, I do believe that we can accurately plan for the next few years.
The only sage advice that I can see is to keep the play short term a couple of years out or so. Keep it close to the chest, meaning don't lean out too far. Get out of debt, build reserves, have investments but don't lean out too far.
Good luck!
Mike
Try and buy construction steel right now...you can't (well, you can at 4x the price). Try and buy concrete or cement that will be used as concrete...hide and wait, there isn't any. Where is it? On it's way to china or already in the ground. And...they aren't just buying more of it, they are buying ALL of it. World oil crisis...hummmmm just wait till they become completely industrialized. They are sitting on a lit rocket and their economy is explosive, they are going to the moon.
The banks in china right now are under total lockdown by the govt., they have over loaned on questionable enterprises and they are in the beginning of a total makeover by the govt. When they recover and get everything back under control and when china has finished this growth phase then we will see the impact but how long it will take. How long can a 4000 year old civilization of 1 billion people take to get it together on the international scene? Hard to say.
An arguement for gold or some internationally recognized valuable commodity would be that it would stabilize an investment. This means gold to me. Paper in the bank is becoming less and less valuable here and in europe, it has less value over time. Keeping $5000 in the bank in cash is not a great investment right now but a metal commodity will be. Especially when you can take it and get yuans or dollars or euros or yen at the money exchange.
It looks like gold is going to hold a little of this upper flurtation it has been courting with and it may rise to $420 and hold it (+5%) for the year. It would be very suprising to see it below $400 but the point is that it is not going to depreciate like paper. So, for me...US gold at 2-2.5x melt is a pretty good deal. That formula will put you into ms 61-63 coins so not so bad. I get to collect, look for cool coins, not spend much money and have a soft downside.
Just thinking out loud...
1. 48% good growth stock mutual funds:
a. 12% growth + income
b. 12% growth
c. 12% aggressive growth
d. 12% international
2. 48% paid-for real estate other than your own house
3. 4% cash reserves (money market account)
I follow Dave Ramsey's plan:
1. $1000 cash in the bank as a beginner emergency fund
2. Pay off all debts except the house, smallest to largest (debt snowball)
3. Finish the emergency fund as 3 - 6 months of expenses (I'm estimating 4% of your assets)
4. Invest 15% towards retirement (matching 401k/403b first, then Roth IRA, then non-matching 401k/403b; good growth stock mutual funds only)
5. Invest for kids' college (ESA first priority, then 529 as the second best choice; good growth stock mutual funds)
6. Pay off the house early
7. Invest and give like you never had because you are completely debt-free
Furthermore, after making stupid mistakes investing in single stocks and precious metals in the past after doing fancy, time-consuming, yet useless research (yes, I tried it myself), here is what REALLY works:
1. Dollar-cost averaging (NOT trying to time the market or constantly trade into and out of stocks, mutual funds, and ETFs)
2. Automatic, monthly investments into Roth IRAs ($250/month/person), 401k's/403b's, and ESAs
3. Index mutual funds
In general, there are naysayers who are predicting an economic meltdown. There have been these people around for the past 50 years, and it hasn't happened yet. However, I enjoy these discussions. After making some mistakes myself and worrying about every economic thing that happens, I've now changed my investment strategy to greatly simplify it and make much bigger returns over long periods of time.
Check out a Vanguard Roth IRA.
You paint ONE picture, but as someone who has been in the securities business for 30 years I have to add that there are many "templates" to use, and no simple one is altogether correct. Certainly a shrewd investor can find many vehicles for long-term planning, and it takes more homework and study, but it's done everyday. Conservatism in the name of conservatism is a bit trite. The longer the time-horizon on a god investment the more even the scales become over time. I'm not advocating VC money, pure commodity plays, or leveraged investments, but some very smart people are putting together some rather creative portfolios that I would match to any simple text-book formula.
Just tyring to say that there IS room for creativity, which when intelligently done, with serious due-diligence, can reap great long-term gains with moderate risk. (as a footnote, I do see room in a portfolio for "select" rare-coins as a vehicle...)
While short term speculation and a falling dollar could drive the price of gold very high in US dollars, in the long term gold will be tied to production costs and exchange rates. If gold goes to $500/oz, much more will come out of the ground, from the large mining corporations to weekend prospectors.
Bill
The US increases its debt by that same 5.5 MILL ounces of gold EVERY day. Both equate to around $2 BILLION. Barrick also carried a massive hedge position on gold that subjected it to the possibility of a Billion or more in losses if they didn't start reducing it. Other companies still carry massive hedges. Should the price actually go up, their forward production is capped by the deals they have already made by fixing their future ounces at $300-350/oz. Many of those hedges are still out there. And such companies could go bankrupt in the process. Sad to say that rather than profiting from a gold price rise, these companies have to sell their hedges at $300-350/oz. rather than $400+/oz. They stand to lose $50-150/oz if prices move up much further. Going bankrupt is possible. I would venture a guess that there are many more hedged companies out there than unhedged. Maybe a gold mining expert could shed more light on this topic. There are less than 2 dozen companies on the "unhedged" gold index list. Newmont is probably the largest. They start dropping off in size pretty quick though.
roadrunner
I think RR gave lots of good answers, but my friend just seems to think that if a panic get going the market will react so quickly due to the huge Worldwide supply of paper money it just will not resemble the last big bull market in the late 70’s.He does not think the average person will even have a chance to buy on the way up. He believes dealers might see orders for 100,000 ounces at one time and perhaps many of those orders. One of his our comments to me was that Germany, Japan, England, etc. all have the very same problems we now have. Over the last few decades they have passed every social program the public wished for without the real dollars to pay for them, they all have large baby boom generations that have been paying all the bills, and are going to go from payees to wanting checks in the mail. My friend does not see a future Gold market where people buy, and sell as an investment, he sees lots of World wide Billionaires and centa-millionaires getting all panic stricken and wanting 25% of there holdings in Gold for asset protection. His scenario is not one of buy, sell or hold it is one of panic to protect. He sees buyers buying and hanging on because they don’t want to own paper until very large re-evaluations occur.
Nysoto, has some good points and perhaps he or RR could tell us how much Gold is currently on the planet as compared to 1980. If we can look at that compared to how much paper money is now on the planet as a comparison we might have a good idea what my friend is thinking. All I know is when I looked at just Billionaires in the U.S. in 1980 compared to now there were 30 times more now?
You paint ONE picture, but as someone who has been in the securities business for 30 years I have to add that there are many "templates" to use, and no simple one is altogether correct. Certainly a shrewd investor can find many vehicles for long-term planning, and it takes more homework and study, but it's done everyday. Conservatism in the name of conservatism is a bit trite. The longer the time-horizon on a god investment the more even the scales become over time. I'm not advocating VC money, pure commodity plays, or leveraged investments, but some very smart people are putting together some rather creative portfolios that I would match to any simple text-book formula.
Just tyring to say that there IS room for creativity, which when intelligently done, with serious due-diligence, can reap great long-term gains with moderate risk. (as a footnote, I do see room in a portfolio for "select" rare-coins as a vehicle...) >>
Saintguru, all I can say is that I tried investing in "non-traditional" vehicles like single stocks and precious metals (including actual metal, mining companies, etc.), doing a lot of homework and study, and with wise financial counsel. It failed miserably. All I'm saying is that I spent a great deal of time and effort doing research, and it was a waste of time because things like this don't usually do well in the long run for most people -- even if they do diligent homework and study. My personal experience has been that the simple, basic investment strategies like dollar-cost averaging and diversification work MUCH better than spending hours and hours of research on, for example, a single stock that could drop tomorrow at the drop of a hat for any reason. IMO, single stocks are gambling, not investing. So are precious metals. I challenge you to talk to self-made millionaires (I have). I can assure you that most of them did NOT get rich off of things like precious metals. The self-made millionaires I've actually talked to said they got that way using very simple investment concepts like dollar-cost averaging into good growth stock mutual funds and investing in paid-for real estate. I'm not saying its impossible to make money on things like precious metals. I am saying it is not likely, given past experience. Furthermore, I still don't see anything that says this trend will somehow magically reverse itself in the future.
Check out a Vanguard Roth IRA.
Check out a Vanguard Roth IRA.
To each his own, but don't say that money isn't made over the long term by creative investment advisors who don't go with the white-bread approach. You can have a secure and creative portfolio at the same time.
The coin thing is my own personal bias, not for the general population. Like all $$$ endeavors, one has to know when to hold 'em and know when to fold 'em.
Check out a Vanguard Roth IRA.
I also took up Goldsaint on his request and checked into the annual gold increase. It's about 2000 tons/year or about 1.7% per year.
So with that you could say, gold is also inflating at 1.7% per year.
You would think that it would constantly go down in price based on that assumption. But obviously that is not the case.
In the scheme of things that would say that gold has held its value and then some vs. the dollar over the past 91 years. While the average inflation rate has averaged just over 3.0% since 1913, gold has averaged an increase in its supply by 1.7% and still increased in value by about 20X. If you ratio those 2 interest rates over 91 years, gold should have only increased 4X over the value of the dollar. In fact it went up 20X. Hence there is more at work here even though the supply of gold is increasing. The gold-eagle web site estimates 120,000 metric tons of gold has been mined over the ages. That's a 60 ft cube to those who are interested. Value today is about $1.4 TRILLION. The 172 tons mined by Barrick is .14% of the total volume existing.
roadrunner