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 Replies: 16 / Views: 3,663 |
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Pillar of the Community
United States
2424 Posts |
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Pillar of the Community
United States
2120 Posts |
Diversification, the name of the game.
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Pillar of the Community
 United States
2424 Posts |
he has a good point about gold vs equities investment gains... its true golds % increase is less than some equities... but also, the point about the $75B/month for 6 months... I think we will see a climb in metals, but after that, if this Quantitativ easing worked, then we will see the USD gain strength AND like he pointed out through history, the trends spiking and falling, we will see the same sometime in the near future... so again, the big question here is, " will the $600B bailout work, and WHEN will we see the USD gain strength, if at all..
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Pillar of the Community
United States
1450 Posts |
It really comes down to whether you believe in paper or hard assets. For me,gold and silver are a wealth protection play. I got into gold at $600/oz. so I have protected my buying power over the past 5 years. Did I make money? I can't say for sure but I know that the dollars I did not spend on that gold and silver have dropped in buying power at the grocery store and gas pump. I can sell that gold and silver for dollars at least equal to the purchasing power of todays dollar. Comparing stocks and precious metals is really moot because the investment objectives are different. I have some stock investments also but I can tell you I have lost my butt in those stocks by comparison over t5he same time frame but my investment objectives were different with those dollars. If I can't afford to lose it these days,I am betting on physical PM's until the government and Wall St. show they can be trusted with my money,which probably ain't gonna happen anytime soon!
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Bedrock of the Community
United States
10982 Posts |
Quote:
...but also, the point about the $75B/month for 6 months...I think we will see a climb in metals, but after that, if this Quantitativ easing worked, then we will see the USD gain strength AND like he pointed out through history, the trends spiking and falling, we will see the same sometime in the near future... so again, the big question here is, " will the $600B bailout work, and WHEN will we see the USD gain strength, if at all..
Buying is pushing demand too. QE2 is the tip of iceberg because we're de facto bankrupt as a nation with no hope of ever re-paying our debt. QE3...QE4...QE5...or whatever you want to call will happen. It's not if, it's when. The thought that QE2 will "work" is almost comical. The Fed already spent $2 trillion in the last 2 years. Another $600 billion over the next 6 months won't "work" but it will drive prices of most everything higher. Ready for $4 gallon again next summer? We better be ready because it's coming. To reiterate, the USD has 15 years to live tops and probably will only make it 10 years. Our expenditures are so far out of whack with our revenue that there is little hope. The growth rate of outflows combined with a populace that demands more and more "entitlements" leaves us a few alternatives. A wise economist in the 19th century stated, "The American Republic will endure until the day Congress discovers that it can bribe the public with the public's money". We're not far from that point. |
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Pillar of the Community
United States
757 Posts |
indeed. bherring is correct. in austrian terms, we've really been bankrupt or in a controlled recession since our money stopped being backed by precious metals, and many argue since the fed came about.
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Pillar of the Community
United States
2661 Posts |
Here is something for you guys to think about. China, India, and who ever else was buying up gold by the metric tonne last year and earlier this year when it was still around 1K an oz. They probably got it for below spot in those quantities. Back in the early 80's the Hunt brothers dumped millions of ounces on the market all at once causing a correction, some say crash, in the precious metals market. What is going to stop these countries from doing the same? They cannot be brought to court like the Hunt's could.
Another scenario would be for the U.S. and other western nations to adopt a metals backed currency. They then dump all this bullion on the market sending our money plummeting to it's deepest depths ever making it virtually worthless, pretty much as it is now, sending us into a depression that we will never recover from.
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Pillar of the Community
United States
2335 Posts |
Here's something you don't hear people talk about that pertains to the price of gold.
Suppose you are an average joe that works for a living making $40k/year. You have managed to save $10k & use it all to buy gold. Over a period of a week the dollar is devalued to the point that your gold is now "worth" $40k. Here's the question:
Are you happy your net worth is now equal to a years salary, or are you devastated to realize that the $40k you make in a year will only buy what $10k could buy last week?
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Valued Member
United States
364 Posts |
I think of it this way: the government is going to kick us all in the crotch. But with bullion, at least I have my cup on.
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Pillar of the Community
United States
2734 Posts |
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Back in the early 80's the Hunt brothers dumped
millions of ounces on the market all at once. Then ask: Would all those countries who have gold dump it at once? (absent a return to a Gold Standard) Personally, I consider a return to metal-based currency only slightly more likely than a spaceship full of Bigfeet landing in my front yard and handing out free 1000-oz. COMEX silver bars to all passers-by.  That said, a dedicated world reserve currency backed by metal would make "way too much" sense. The governments could have their floating fiat currencies, and hard money fans across the world could buy the world reserve currency. Why not make the metal copper? That way, even third-world citizens could easily hold the actual bullion that the currency would be based on. The more hands the metal is diversified in, the better the long-term outlook is for the market. A copper world currency would be diversified to many millions of hands across the world... The Hunt Bros. depressed silver spot for 20 years with their giant dump. Silver probably would have been $10/oz. by the year 2000 if not for them. Silver is now in many thousands of hands. Who can't dump it all at once on a 1980 Hunt Brothers scale. Even if silver slid from $50/oz. back down to $20./oz, we still wouldn't see a sell-off nearly as large as theirs. Those who obtained their silver in the $4/$5 oz. days could easily afford to keep holding it, even if it dropped from $50 to $20 at some point. And as for silver going back to $4/$5 an oz., refer to my second paragraph above...  Quote:
But with bullion, at least I have my cup on. TenSense = 2
Everyone Else = 1 Edited by DNA
11/08/2010 8:52 pm
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Pillar of the Community
United States
2424 Posts |
so with silver fast approaching $30.. would this still be the time to buy silver?
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Valued Member
United States
364 Posts |
I'd wait for the inevitable correction back a few dollars.
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Pillar of the Community
United States
2734 Posts |
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I'd wait for the inevitable correction back a few dollars. Part of the reason why silver is shooting up is because the "inevitable" annual September correction simply didn't happen this year. Now with QE2, talk of some kind of world gold standard, and the possible end of the JP Morgan/HSBC COMEX manipulation, the rules have changed. If you don't want to wait for a correction that may be years in coming, I suggest buying "better-date" silver coins that presently trade for double bullion value ($40-50 Morgan/Peace, $10 Quarters, $5 Dimes). That way, if silver passes $50/oz., you'll have better dates for melt value. If silver retracts to $20, you'll have better dates known to carry a price premium in times of lower-valued silver. |
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Valued Member
United States
364 Posts |
That's entirely true, to be fair; we might not see a correction. I'm just talking about a short-term pop back to $24-25 or so at the most.
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Pillar of the Community
United States
2335 Posts |
I don't know if a correction is inevitable but do believe it's likely. Although I don't have the chart in front of me I'm pretty sure silver was at the $18 point less than 60 days ago....as of this morning that's in the neighborhood of a 50% increase.
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Pillar of the Community
Canada
598 Posts |
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Personally, I consider a return to metal-based currency only slightly more likely than a spaceship full of Bigfeet landing in my front yard and handing out free 1000-oz. COMEX silver bars to all passers-by.
DNA I'd also hafta see it to believe it... but, strange days indeed. I have been buying spot/junk for neigh on a decade... okay, I eventually got a bit of a numismatic bug, but I've been a bit of a tightwad, uhm, a shrewd type buyer and have had p.m.'s unbury that ugliness that occurred in October 2008... you know... that Global Fiscal Crisis Thing. Now, I'm actually giddy with the "markets" I've chosen... and this... this almost brings me to tears! VVV http://www.marketwatch.com/story/wo...d-2010-11-07 wooohoooo! |
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Replies: 16 / Views: 3,663 |
Posted 11/08/2010 1:39 pm
