Buying Gold

[RandyR]

The US has a monopoly on producing mines.

 

Not true

[Condor]

OK, Another question. Obviously I'm not looking at investing, but more a long term hedge against inflation if the poop hits the fan. Beside silver and dirt, what other areas exist where someone can put their money and get the same results. Just trying to toss around some other ideas.... The one thing that bothers me about gold is the uncharacteristic rise in the value caused by panic buying. I don't want to end up roadkill...

Edited November 18, 2010 by Condor

[GolfVenture]

One thing to remember about high inflation and hyperinflation is that no one really benefits except a select few. The majority of us, people will be financially ruined because we do not understand inflation and will be left dependent on the government for food, shelter, and medicine. The only thing the average person can do is to preserve their purchasing power through the ownership of hard assets like precious metals and commodities and lead to protect your family.

 

Commodies - http://money.cnn.com/data/commodities/

 

Good Luck!

[RandyR]

If you own or control the basic necessities of life, then you can sell or rent them to others at whatever the future inflated rate becomes, assuming that you can find those working and needing the necessities. There are also a few luxury items, like alcohol that always seem to be in demand no matter how hard times become.

 

A complete meltdown of society is a different scenario than just runaway inflation.

 

The thing working in our favor against the runaway inflation (which should have happened already based on historical precedents) is that international investors (Chinese and Saudis) have so much of our money that they are able to keep us more stable than we would have been on our own. ie: they don't want to lose their held dollar's value and are able to exert pressure on the US Gov't to avoid inflation and currency wars.

 

Trying to avoid turning this political.

 

For some insights into how the 2008 economic meltdown occurred everyone owes it to themselves to see the documentary movie "Inside Job" by director Ferguson. Its non-political (or throws equal mud on all politicians) http://www.sonyclassics.com/insidejob/

[royalstarjac]

During times of high inflation, people with their assets in cash are hurt the most. People with assets like real estate, gold or MOTORCYCLES etc fair better.

 

In times of high inflation, it is actually good to owe money at a fixed interest rate because you are then paying off your loan with cheaper dollars, especially if your income keeps pace with inflation. It's not a good time to be on a fixed income though.

[RandyR]

The documentary "Inside Job" which won the acadamy award for best documentary will be released this week and is available at pre-release price of $15 dvd shipped on Amazon.com

[Guest]

Shoulda bought it back in the 70's and 80's when it was down below $250, I coulda been somewhat less poor by now!

 

 

Funny story here from that era. in 1975 I was driving for a freight company based in JFK airport and I regularly went to pick up air freight at Alitalia airlines which shared a hanger with Airlift Intl airfreight. There was a door seperating the two operations which was usually closed so we had to hoof it around the building. One day we came in and the door was held open by a brick. Now, this area was extremly dirty since no one really used this door for a long time. We were overjoyed and that brick remained in place for almost a year. One day we walked in and the door was once again closed and the area was cleaned out. Airport police were on scene. Turns out that a gold shipment had come through and someone bright used one of those full size gold bricks to prop open the door and forgot all about it. I think the story at the time was that the pallet was opened for customs and since they were on the other side of the building, said door was opened for their easier access. And to think, all of us poor truck drivers making 2 bucks an hour then walked past this "brick" all that time thinking it was a brick. Sure would like to have that now.....

[Condor]

Well when I started this thread I planned on buying a pretty good quantity of gold. I got right down to the point where I was to put the money in my dealers account, and at the last minute I got a gut feeling and didn't do it. I think a big dose of common sense kicked in. My thinking is the dollar in the last 10 years had lost 25% of it's buying power while gold had gone up 400% in selling price. Notice I said selling price, not value, because it's only worth what someone will pay for it. I believe it's a bloated value and will eventually start to decline. Especially when no one can afford to buy it. A room full of gold is not going to help when the pantry is empty. You can't eat it, and I don't remember ever buying a tank of gas with gold. The world is still running on the dollar as the international exchange. I really don't believe we will get into a run away inflation. We probably will have a short term rise, but when sales start to fall off because no one can afford to buy the item, prices will start to deflat. I think I'll go buy dirt in Montana and Wyoming....

[JPM]

Dirt is good. There is a limited supply and it's very useful.

 

Inflation is really the loss of value of currency in relation to other currency. So, if you think the dollar is going to fall relative to the Euro, put your savings in Euros. Maybe a better choice would be the China Yan. After all, the US is trying to pressure China to let the Yan float to higher value in relation to the US dollar. Much less risk in holding the Yan then dirt, I'm thinking. A lot of risk in Gold right now. It has gone to the point that every major currency was about to be devalued by 50% or more.

 

Joe

[ragtop69gs]

if i were going to invest in gold, i would certainly only buy "hard/tangible gold".

gold "bonds", or certificates, are nothing more than paper.

they are NOT backed by "real" gold bars, as in Ft. Knox!

just jt

 

 

:rotf::rotf::rotf: You don't actually think there's any gold in fort knox, Do You ? There were several senators and congressman that tried to get an audit done 5-6 years ago, of the gold reserves, the fed flat out told them NO. What China didn't get, has been pillaged. Our currency is worth no more that the paper it's written on!

[GolfVenture]

About 18 months ago I bought Silver, at of course, at an all time high. In about a month the prices went down about 15%. Today my investment is up over 100%. This last week I again bought some more silver at an all time high again. Can't seem to time it and buy it a dip. However it has gone steadly up. Guess I'll see what Silver will do in about a year.

[rod]

Remember that the price you see is 1/2 of what you get selling. You have to go big on futures to make mony and it can go south any time. Rod

[GolfVenture]

14,000,000,000,000 dollars is the US debt. If one could save a Dollar every second.

 

Lets see

 

= 233,333,333,333 minutes

 

= 3,888,888,888 hours

 

= 162,037,037 days

 

= 443,937 years.

 

Just think about that. I'm betting that congress will lift the debt ceiling. Up Up and Away to the next Trillion.

 

You are only fooling yourself if you think that congress is going to balance the budget. I would invest in something but the US Dollar. Writing is on the wall. Diversify your investment.

[Bobby G]

Several economists have all come out lately in support of gold hitting the $2,000 mark before it levels off. It's trading today at about $1,600, so there might still be some very positive upside, as with silver. I've also heard that several foreign currencies are a very good hedge investment right now, including Canada, Australia and Brazil. And real estate of virtually any kind - as long as it has a mountain or ocean view, or at least ready access. And with interest rates at historic lows, these same economists also support borrowing as much money as you possibly can, as long as you can cash flow the interest, which is minimal. I took their advice, maxed out my HELOC with a 3% interest rate, banked it, and borrow from myself when needed. No more high interest credit card debt, car or bike payments, or anything else. And the money I save each month on now-retired high interest debt gets plowed back into the HELOC cash fund, so I'm basically paying myself back, and I get a nice tax break at the end of the year. Under normal circumstances, I would never be a proponent of borrowing for anything, but these are NOT normal times we live in. Savings rates are terrible, money is cheap and very available, and the market is just too unnerving for me to get too deep into.

 

On a side note, I did hit a bit of a home run with oil stocks last year, but I'm throttling back on them too. Way too much crazy crap going on, even though we are seeing record oil prices. Scares the crap out of me.