thegreekdog wrote:Phatscotty wrote:oh yeah, those gold bugs, they have been the most clueless.......riiiiiiggggghhhhhttttt
If you had purchased gold ten years ago, I would be with you on this one. But if you're purchasing gold now, you're making an investment in something that has already increased its value. It's like when someone buys a stock that has just shot up 10 points expecting it to shoot up 10 points again the next day.
There's that (i.e. standard investment practices) and then there's the idea that it seems to me most people that are buying gold right now are buying it because they think the economy is going to crash and burn and gold is the safest investment. Two problems with this:
(1) What makes you think gold will be the most valuable resource if the economy crashes and not something like food or clothing or housing or guns? And don't say "because gold will buy those things" because that's stupid.
(2) Do you have this gold in your possession right now? I know you have title to the gold, but do you have it in your possession, like in your house or on your person? Because if you don't, and if the gold is possessed by some investment company somewhere, what makes you think that the investment company is going to deliver the gold to your door in the event the economy collapses? Because you paid them in paper currency for it two years ago? Are you going to call the police?
I could refer you to my old blog that started in 2004, at which point you could easily tell when it was I got into anything according to an entire list of specific sectors.
There are so many things to comment on, from Gibsons paradox and the Cliton-Greenspan-Rubin fix, to the yen carry trade, to the undervalued/intentionally manipulated theories (for example there are more paper ounces of silver than there is silver for purposes of crippling volume short sales). Gold is the safest. It might go up or down in price, but it will always hold value, even if the gov't cannot rob gold of it's value. It can make it illegal but you can easily jump the USA fence built to keep you in and get cash for your gold in any currency in the world. Uncertainty, geopolitics, war/terrorism,
CURRENCY/DEBT ISSUES.
1)in your worst case example (barter system means total currency collapse) yes gold and most likely silver would be a universal mode of commerce, while also other highly tangible assets like sugar or water or gas etc would also be a mode of exchange. In short, Gold
is money. Call it what you want. I suppose we would be accepting Cando's far before that time tho.
2) I only wish I had some in my possession. I had a couple silver dollars rolling around at one time and they were stolen or lost a long time ago. The concerns you state are all valid, and metals companies/mines have a long history of fudging books and numbers and provable reserves etc. People have to do their due diligence and I would advise that gold, silver, food, or anything for that matter not be counted as yours unless it's in your hands/extremely liquid. The same can be said about keeping money in the bank during the wrong weekend, ask anyone in Argentina. Physical is the way to go, but if you are up to a challenge and have balls you can get into short term gold stocks. There are a few out there who are run extremely well and not leveraged to the hilt or caught up in reverse hedging their own product. In the event that gold is not delivered (as will happen in the end no doubt) then you are going to be wishing you had taken delivery on it at a sooner time. This is the reason we can not longer afford to be ignorant. Things move too fast and you have to be paying attention otherwise you might be out on your ass.
Overall, the goldbugs have been right about almost everything, usually in advance even. They are still harping on the same things, for the same exact reasons, now as in 1996,2000, 2004, 2008. Just ask Ron Paul.
Posted: Fri Aug 05, 2011 4:33 pm