What Happens To Gold And Silver Next? Look Out Below?

Ive heard the opposite of that with regards to profit. In his case hes heavily invested in a bunch of different mining stocks I dunno how hes going to get out of that without seeing some real loses but if he does good for him.




Thats not really an argument though. Thats 5 times higher than the highest gold level ever including during the great depression and no one would be buying at those levels. If you see 10k gold the plague has wiped out 60 percent of the the world again

I guess in fairness it could hit 10k in some insane spike of people buying into all this stuff in which case everything except the fear buyers will sell heavy and fast and itll be back down over night. A lot of money would be lost in such instances.

But completely agree kendall. This isn't our first economic hardship, its not even our worst but somehow new never imagined highs are supposed to happen?

Maybe not in 1966 since we still had some gold currency link but when Nixon took us completely off gold a not so great thing. Ron Paul has tried to help out there basically since then and many thought he was a crackpot until recently when many more realized he is correct

"If you see 10k gold the plague has wiped out 60 percent of the the world again"

Youve got it backwards. Actually the exact opposite is true. Depopulation would tend to lower gold 's relative scarcity and hence its value.

"Ive heard the opposite of that with regards to profit. In his case hes heavily invested in a bunch of different mining stocks I dunno how hes going to get out of that without seeing some real loses but if he does good for him."

Anyone who owns gold mining stocks should have their head examined. Actually you really don't want to produce much in a - interest environment. The idea is to try to produce less and create a shortage to boost margins. That is good for a firms debt, but generally bad for the owners. Gold mining will simply not be profitable in most places unless gold goes a lot higher. If you are really bullish then buy a few exploration stocks, but anyone actively engaged in gold mining is going to lose money big time. Gold prices have gone up and up and all these companies did was mine the pockets of their shareholders. It's probaly one of the worst buinesses there is. Negative interest rates means you needto produce things of immediate value very cheaply. It was far more profitable to mine when gold was $400. Thats why food has been a good investment and thats where a majority of my equity has been. I won't invest in too much else until rates rise. Mining is very capital, cost and labor intensive on top of depleting reserves. Its really hard to find a worse investment. But thats very very bullish for gold prices. While I like Ron Paul I would have thought he'd be smart enough to avoid gold mines. I guess the poor guy is getting old.

angel2004

Most people know Nixon nixxed gold convertibilty, but they did not know what that meant. It didn't mean gold was no longer being used. Quite the contrary. It meant that gold would stop flying around the world, and equity would accrue or be drained from the sovereign's bonds via price.

"You couldnt have bought the dow for once ounce of gold just like you couldnt buy it now for 14-15k. Its number isn't a price tag. You would probably need trillions to do so if not more. "

The dow is a type of index, i.e a unit of account of a weighted average of equities.

@ WJI: It sounds like real estate in your area still hasn't turned around and may not for a while due to fundamental problems with the local economy. I grew up in Saginaw, Michigan and my parents still live there. It is an area of the country that has a huge oversupply of real estate and they are rapidly seeing their house value fall to what they paid for it in 1975. There will not be any short term recovery there, the market will continue to fall until the stock is reduced match the massive outflow of people. The local government can't find the money to knock down houses fast enough and can't even give them away for $1. It is different in my area. You have condo's on the gulf that were overbuilt massively during the boom. I condo that may have sold for $150K in 2008 could be had for $85K a couple years ago. That is changing though and you have people (a lot of Canadians and Europeans) and real estate companies that are buying properties and paying cash with the idea of renting them and waiting for the values to rise. You have gentrification downtown with developers buying houses, gutting them, and selling them for 3 times the purchase price. You have spec houses in the exurbs that still aren't selling because people have realized they don't want to spend hours in a car getting to work. Real estate is local and when house prices in California were doubling every couple of years my parents house was still falling in value.

The problem with using local real estate as your gauge for gold prices is that gold is a global commodity and your local price is effected by the price in London, Mumbai, and Shanghai. It doesn't matter how depressed your local economy is, if India and China are booming. My parents housing woes doesn't keep Boeing from selling jets to rapidly expanding airlines in Asia.

Both my wife and I work for companies that sell internationally. I work for a company that sells products to electrical utilities. We saw a pull back in transmission line construction in 2009 but it has been taking off since then. In the US a new 100 mile transmission line is a big deal but that is child's play in the developing world. The developing world is building lines that are 1000's of miles long or more. Projects like Brazil's 2375km (1485 mile) HVDC line. The developing world is electrifying like we were in the 1950's and 60's.

My wife works for a company that makes dental implants. Again, business around the world is booming for a product that costs thousands of dollars and isn't covered by insurance. There are plenty of wealthy people willing to spend thousands to fix their smile.

I look around and see people all around the world spending money. I see companies making record profits. I see my company spending millions in equipment to increase production capacity. I see companies spending billions to build plants in my state. I see (just yesterday) GM announcing that they are going to build 4 new auto plants in China while Toyota announced they will be building a new plant in Kentucky. None of those companies would be making those investments if they believed that the global economy is about to collapse.

We also seem to disagree what gold is. I believe that gold is a commodity like any other. Maybe even less valuable than others because it has very little industrial use. Gold's value is that people think it has value, not because it is exceptionally rare or useful. You seem to believe that gold is money, or at least a metal that has real intrinsic value.

I am actually a person that is looking for places to invest money. However, I can't see putting any money into gold. Not today when the price of gold is double what is was 5 years ago and gold is coming off one of its sharpest rise ever. I just don't see the upside.