Are You Buying?

Heh, I must be reading the same articles as you, Angel. I understood how the Calif pension, CALPERS, got itself into trouble. It was the usual thing of promising a lot while delivering little. People seem to forget that the stock market returns this or that average only over a long time period. Over short time periods, there are many up and down jumps. A market that returns 30% over a 5 year period may well have yearly returns of +16%, -8%, +15%, -12%, and +19%. Given this, they should not be promising to deliver 10% EVERY YEAR. Recent market returns have been pretty poor compared to what was returned in the 1981-1999 time period. As with ALL other financial activities, spending more than they make is their undoing.

What I do not see, however, is why Calif's pension problems should affect other states... unless the CALPERS problem is so huge that it literally crashes the market or some of the big custodians. I don't even know if that is possible but maybe it is.



I agree, Barry. We are in the same situation. We still owe about $50k on our mortgage. We refi'd that in 2007 at 4.6% and could pay it off any time but choose to pursue other more lucrative interests with that money.

One modification to paying off debt is that you should pay off bad debt, which is usually plastic. Good debt, like a mortgage at a low %, or money borrowed to make more money in a business, is fine. Maybe even au, considering you'll pay it back with near-worthless fiat money.

No point paying off a 4% mortgage so you can get 0.5% in a CD.

Yes I have many 1964 and prior silver coins saved as a young child as well as bank rolled uncirculated Kennedy halves from 64 and 65. Never had the need or want to sell all that old silver (or wheat pennies)

Well both Gold and Platinum Eagles came down $100 on the mint website

Yes, Angel, I see what you mean. Federal money coming in to "save" CALPERS from themselves is not beyond the realm of possibility. I sure hope that they don't, however, as that would set a really bad precedent. Not that this would be a 1st for the feds, of course.

It is for reasons such as this that I collect silver coins and bars. They should do well over the years and I don't have to worry overly much about the feds printing too many of them... unlike dollars.

My wife and I recently got a great lesson in inflation and what it can do. We buy a cooking oil product made from grape seeds. It is remarkably good cooking oil. We were buying a 1-L bottle of the stuff for $6.49. This is better than olive oil but costs less. Well, not any more! Our last visit to the store showed that the very same size and brand was now $11.79. That's over 80% higher in cost and in only about 2 months or so. Not sure how this would average out over a longer time frame, such as a year, but that is still a HUGE jump in a short time.

It is so bad we now go down to da creek and use stones and a wash board.

Until you control your debt really any investing should be secondary. I know this mild winter is giving me some extra money right now so I am tossing it into Maples. This would be money that normally would have been used to heat the farm house for the past three months. So I find ways to come up with a few extra dollars to toss into silver or gold.

If I had a choice between paying the credit card off or buying pm's I am paying on the card.

I wonder how many people took a beating buying gold & silver when it was heading north? I know there had to be more than a few that lost their shirts spending money they did not have on PM's thinking they would make some money.

All right, I don't know if I'll be doing any more buying of PM this year, but I did just go out and purchase a bigger safe to store it all in:

16-Gun Safe with Combination Lock

I got it at Dick's Sporting Goods for $349.99 (on sale) and in-house delivery will run me another $120. It's not fireproof, but it does seem secure enough and the price was right. Plus, it's wide enough so that I can put my 25th Anniversary ASE sets in the OGP inside!