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 Replies: 69 / Views: 4,387 |
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Pillar of the Community
United States
1083 Posts |
'And if gold dropped to $280 during times like this, that would mean that every other investment would be in far worse shape... "
Must take issue with this statement. Gold usually moves inversely to other insvestments. If gold were $280 and ounce, fear would be way down and the stock market would be way up.
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Pillar of the Community
United States
2734 Posts |
When I said "dropped to $280 in times like this", "times like this" means bad economic times, and that's when gold is normally strong.
The way you phrased it, if gold was $280 again, all the other investments would be strong and then we wouldn't be in bad economic times.
And that is the way it would 'normally' work.
To clarify, what I meant is: what if gold dropped 66% in value (to $280) during bad economic times when everything else was also weak? That's when 'everything else' would undoubtedly be in even worse shape. And if that ever happened, that's when I'd be worried! Because that would not be the usual cycle of gold being high-priced in bad times, and then all bets would be off...
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Valued Member
United States
168 Posts |
when katrina crippled the lower part of the country it wasn't gold that people were seeking, they sought the essentials of life...gold wasn't worthless, but it wasn't what people needed. if the economy crashes and it gives all apearances that it's possible with the spending theory that the govt. appears to subscribe to then gold isn't the answer, but rather being prepared for bad times...growing your own food, taking care of livestock, etc...of course currency whether it's gold or goods and services has ther place, but if the economy crashes...who cares how much gold you have if no one can ascribe value to it? I would rather have water and food than hoard up gold that no one wants or needs.
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Valued Member
United States
81 Posts |
Hey, for any of you guys that actually buy gold....please <<<start an appropriate sale thread in the B/S/T section>>> Thanks...
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Pillar of the Community
United States
1130 Posts |
Gold does not follow the inverse of the stock market.
During the big market swings last November, gold dropped everytime the market crashed.
Why ?
Investors play the market on margin. When the stock crashes beyond what was "borrowed", there is a margin call, where you have to settle an amount with the brokerage either by depositing more money or selling existing positions to cover the loss. Investors had to sell their gold in some cases, lowering the price of spot gold. Gold also has industrial applications in electronics. So when demand for those products are low, industrial use of gold drops too.
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Pillar of the Community
United States
1083 Posts |
The demand for gold is determined by a number of factors and economic conditions. Right now the increase in demand for gold bullion, in the absence of low demand for industrial use since the world's GNP is dropping, is fear. Fear of inflation primarily, but also fear of chaos ahead. The stock market goes down for a number of reasons also, but right now investors are fearful of unemployment and prolonged hard times. Those who have excess funds are buying gold and silver bullion rather than investing in stocks. Margin calls are a tiny fraction of what is driving the demand. Generally speaking, averaged out over the long term, gold prices move inversely to the stock market. If fear goes down people will again make financial investments in equities and move out of gold and silver. I have many examples to make my point, but I offer just one. Why was gold $350 to $450 an ounce during the most recent highs in the market several years ago? Because there was absence of fear and high consumer confidence.
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Pillar of the Community
United States
1121 Posts |
Quote:
I used to work with a psychiatrist who was a faculty member at Harvard University. He also smoked cigarettes. Go figure...
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Pillar of the Community
United States
2600 Posts |
Don't worry about whether or not you have gold tucked away if we ever reach the point where the US economy falls and the dollar is worthless. When that happens, you will be busy shooting at your neighbor as he tries to steal tomatoes from your garden and all the gold in the world won't buy two cucumbers.
Jim
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Pillar of the Community
United States
1083 Posts |
I am known in my neighborhood for sharing my tomatoes. There will be no stealing and shooting here. On the other hand I do agree, in the event of a total collapse, gold and silver aren't going to help much. People socking this stuff away seem to envision a continued orderly world where you pay for your groceries at the local supermarket with your hoarded junk silver while the vast majority with worthless dollars gaze longingly at you through the window. Maybe they need to think this through. In my personal opinion a collapse is highly unlikely.
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Pillar of the Community
United States
6326 Posts |
Eaglefoot ponders hoarding vegetable seeds now.....  |
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Moderator
 United States
6563 Posts |
Tempting but I don't think my apartment complex would like the idea of me planting corn
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Valued Member
United States
245 Posts |
The Mad Max theory is quite improvable, unless you live in NY, or LA. Never know when people are going to act out in mass panic over the absence of a venti chi tea with skim milk.
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Pillar of the Community
United States
1083 Posts |
" venti chi tea "
Man there hasn't even been a collapse yet and I don't even know what that is? Perhaps the word Okie in my handle would give you a clue. Thanks, that was very funny!
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Valued Member
United States
245 Posts |
I'm glad I made you laugh. We could do with a lot less material things in life, like Starbucks and fast food take out. IMO forget about the gold, lock and load! I don't see a issue with the monetary system collapsing, as I do a few large riots and mass crime / thieving. Keep and eye on unemployment. Edited by Figman
02/06/2009 09:52 am
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Pillar of the Community
United States
1026 Posts |
Hmmmmmmmmmmm
Well my small damaged brain thinks US currency is just like the beads and shells the Indians use to use to trade for goods and services it will still be good.
As far as it's true worth it has none. ( Just my 2 cents)
That said you are better off just stashing cash than gold and silver because if things get worse they will not take credit cards but will always take your USA cash.
Edited by Brucec
02/06/2009 10:01 am
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Replies: 69 / Views: 4,387 |
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Posted 01/31/2009 10:04 pm
