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 Replies: 41 / Views: 5,479 |
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Valued Member
United States
171 Posts |
Quote:
CoinNut said,
" The last time gold was used as currency was during the Roman Empire. Yes, a very long time ago! I am still a newbie at coins but if this statement is correct, then you are telling me the St. Gaudens and every other US gold coin prior to 1933 was made for numismatic purposes? |
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Valued Member
United States
287 Posts |
That's the same thought I had.
I think there may be a difference in a "gold standard" and a "currency", but I'm not informed enough to give you the details.
"Here are a couple of facts that nobody can deny" - well, I'll deny some, as I do not fully agree with:
point #1: gold/silver may likely be the best/only way to buy bread if a currency fails
#2: what if the economy doesn't heal? It isn't a given you know.
#3: how do you know this is the peak? If sure, then short gold 100% and make a killing.
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Valued Member
United States
171 Posts |
Quote:
2: what if the economy doesn't heal? It isn't a given you know.
I agree with you Jimineez but that's not saying much given my prognosticating record, especially in football  I do think any serious discussion about the current state of the economy, not just ours but the world's, must include the fact that we are in relatively uncharted waters. Gold detractors will say that mutual funds always outperform gold over any length of time. However, mutual funds have been around for how long? Very small period of time in the history of the world. Gold supporters, especially those trying to sell it say that "gold has never been worth zero" but I am sure there are plenty that have lost their tails "investing in gold". I think when we evaluate today's economic crisis we have to consider the role of fiat money, inflation and the role of the Feds. I hope all turns out well and our economy returns to be as vibrant as it once was. p.s. We only have to look back at the Confederate economy's collapse when they began printing money like crazy. What was of real value when hyperinflation set in in the South? Food and other basic needs. |
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Bedrock of the Community
Australia
21788 Posts |
See if you can get hold of a copy of:
'How to Invest in Gold Coins' by Donald J. Hoppe, publ. Arco Publishing Co. Inc. NY, 1970, 298 pages. Original price $2.98.
ISBN 0-668-02999-4 Library of Congress Catalog card No. 70-115342. Perhaps your local library can get it on an inter library loan. It's certainly worth a try!
I got my copy from a specialist numismatic book dealer at a coin show in 2002, for $9.00. A real steal.
I gives the conditions of investing in gold coins in 1970, and suggested portfolios to various budgets. The principles of investing in gold coins then are exactly the same as they are now, but oh my! how the prices have changed!
The author is highly critical of fiat money.
Maybe FIAT's were even cheaper to buy in 1970!
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Valued Member
United States
58 Posts |
Jimineez,
you said,
"Here are a couple of facts that nobody can deny" - well, I'll deny some, as I do not fully agree with:
point #1: gold/silver may likely be the best/only way to buy bread if a currency fails
#2: what if the economy doesn't heal? It isn't a given you know.
My response to you for both of these points is, Would you trade your families resources for gold coins or other resources? Obviously we are talking about a complete collapse of the economy where nobody will accept paper money. If people would not take paper money, why would they take gold? What value does gold have as a metal? There is no value, you do not recycle it for a valid purpose except to make other gold things, there are tons of it, it serves no purpose. It is only valuable because we say it is. That is why I believe that in the event of a total collapse of life as we know it, society will not place gold high on their valuable list, they will want necessities. Hence gold will be worthless. Lets not forget that this post started as a gentleman wanting to know about gold as a investment and my point remains true that if you look at the ENTIRE history of gold, NOT THE LAST 8 YEARS, it sucks. It did not even keep up with inflation. Just look at historical charts.
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Valued Member
United States
171 Posts |
Quote:
If people would not take paper money, why would they take gold? Why would they take anything? If not gold, then bullets, etc.? Completely flawed example when you do not offer an alternative. You are the same person that said on this same thread that gold had not been used as currency since the Roman empire........I know people that are chromisomal deficient that would not have made such a foolish statement. Don't let your moniker reflect the person that appear to be in your statements, CoinNut. I am not a gold fan per se, but you are obviously an enemy of it. Gold is only valuable because we say it is? Under that assumption, the societies from the dawn of man has been wrong. And you are the messiah that has gotten it right? If you are indeed correct, sign up and run for office. I'll vote for you in a New York minute. |
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Valued Member
United States
171 Posts |
Quote:
and my point remains true that if you look at the ENTIRE history of gold, NOT THE LAST 8 YEARS, it sucks. It did not even keep up with inflation. Just look at historical charts.
Look at the entire history of gold, Nut. Answer me this, does it have a better track record than fiat money? or anything like it? A response would be greatly appreciated. Edited by bluemule31
01/26/2011 06:06 am
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Valued Member
United States
58 Posts |
1st, bluemule, I am not the enemy of gold. If you read my first post you will see that I clearly say that I have made plenty off of gold. A quick buy and sell. Not investing which was the original post. I am not a messiah that has figured it out. Give me an example of any financial "expert" that recommends gold as an investment that does not have an interest in a company selling it. I like gold. Its pretty and very profitable over short period of times. It just sucks over long periods of time.
2nd Bluemule, I have looked at the history of gold. Have you? before 2001, what is the annual rate of return of gold? Can you tell me? What is the point of bringing up fiat money? That was not the original question in the opening post. Why are you getting so upset?
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Valued Member
United States
171 Posts |
Quote:
1st, bluemule, I am not the enemy of gold. If you read my first post you will see that I clearly say that I have made plenty off of gold. A quick buy and sell. Not investing which was the original post. I am not a messiah that has figured it out. Give me an example of any financial "expert" that recommends gold as an investment that does not have an interest in a company selling it. I like gold. Its pretty and very profitable over short period of times. It just sucks over long periods of time.
2nd Bluemule, I have looked at the history of gold. Have you? before 2001, what is the annual rate of return of gold? Can you tell me? What is the point of bringing up fiat money? That was not the original question in the opening post. Why are you getting so upset?
CoinNut said,
The debate turned to gold as a currency when you erroneously said that it had not been used since the Roman empire..thus my reference in fiat money. As a speculator in gold, I hope you made a fortune. Seriously, I do. us common guys out here truing to make a dollar? Rock on brother! But before 2001 in gold? Take a look in the history of gold. Regardless, I look forward to you teaching, or debating, me in numismatics. I believe you will find me quickly to concede to a true expert, or more formidable opinion. |
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Bedrock of the Community
United States
10982 Posts |
Not trying to get in the middle of this but gold can only be viewed from the early 1970's forward in USD terms. Price controls (gold standards)were in place prior to that and what's happened from 1971 to 2011 is what needs to be considered. Looking at 1971 when price controls were lifted ($35/oz) to 2011 ($1338/oz today) yields a 9.5% return.
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Valued Member
United States
58 Posts |
ok, this poor guys thread has been hijacked and we need to stop. Lets just agree to disagree. Bluemule, as far as the average guy trying to make a buck, thats exactly what I am doing. If you read my profile you will see that I am in the military, it does not get much more "working guy" then that. Bherring, I am a little confused by your post. Are you implying that we were on the gold standard till 1971? Thats what it sounded like. Anyway, I enjoyed the debate guys.
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Rest in Peace
United States
9104 Posts |
Quote:
I have looked at the history of gold. Have you? before 2001, what is the annual rate of return of gold? Can you tell me? What is the point of bringing up fiat money? There are only two ways to calculate a rate of return for gold. One is against other items of value. Oz au = so many gallons of gas, hours of labor, loaves of bread, tons of coal, etc, at two different dates. Those comparisons won't show much change. Another way of saying this is gold is a store of value--one, ten, or fifty years later, the same amount of gold can be traded for the same other items of value. The other is to compare gold to a universally accepted bargaining unit, which is invariably a fiat money. Eighty years ago, oz au = 20 USD, today it = 1500 USD. The gold is the same as ever, so what looks like a 5.5% rate of return is really nothing more than the fiat money losing 74/75th of its value, or roughly 1% a year. You must compare the gold to something to calculate a rate of return. |
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Rest in Peace
United States
9104 Posts |
Quote:
Are you implying that we were on the gold standard till 1971? Thats what it sounded like. "We" as in "the US" was not on the gold standard, but "we" as in "the world" was, since any foreign country could buy US gold for $35 an ounce, later $42.22. |
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Valued Member
United States
284 Posts |
I agree with biggfredd. Gold is a store of value - not a currency. It is a commodity - not a practical money even if it does have $5 stamped on it. It is worthwhile to look at the buying power that the value of gold has. Can you correlate the price of gold to some consumer price index? Does the rising price of gold exceed the climb of the CPI? For example, if a loaf of bread cost $1 in 1980, how many equivalent milligrams of gold would it take to get that $1 loaf of bread. Track that year by year. If the number of milligrams to get a loaf of bread goes down while the price of bread goes up then you could start saying that gold is a good store of wealth.
Being a store of wealth is only half the story. The other half is translating that wealth into cash or money. Like I said before, gold is not money. No retailer in their right mind would take 1 gram of gold as payment for that $50 stereo you are trying to buy. Things are only worth what people are willing to pay for them. Gold can rise all it wants but that's useless if nobody wants to buy it or if you have to pay a premium to sell it.
Here's a counter argument to investing in gold. Gold is a shiny metal that is relatively rare which gets dug up out of the ground. It's pretty, it's soft, and it has a long history of being "valuable". But, gold doesn't do anything. It doesn't stimulate investment, feed the hungry, or employ the unemployed. That argument is used by investors who advocate smart stock investing. You have heard of many people making a fortune on the stock market but very few make a fortune in physical gold.
Don't get me wrong here. I like gold and I think it's a great thing to own in whatever quantity you feel comfortable with. Gold's long history, physical appeal, and usage in coins is enough for me to appreciate it. However, I don't know if I would stake my retirement on it.
Just some thoughts...
-- Boris
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Rest in Peace
United States
9104 Posts |
If you get a chance, look through newspapers from the 1930s. It's not at all unusual to find several gold buyers (often pawn shops) in a single day's classifieds, sometimes even with dwt prices quoted.
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Posted 01/23/2011 4:39 pm
