Gold 26% off its peak. Does that mean that inflation is down 26%? I’ve never been a fan of ‘fiat’ money as you call it because it has some major issues, but I’ve never understood why people think some yellow metal that is found and sometimes lost is the magical answer.
Is there some great conspiracy at play? Central banks selling bullion on the down low to get the high price and not ruffle the market? Shouldn’t something like Cypress make gold higher?
I never got why people think that gold would be the currency if everything went to crap. If things got that bad it’s only God’s mercy and ammo that will save you.
While I am not without some financial means, I do not consider myself a particularly “savvy” investor. From my somewhat precarious position in the cheap seats, it seems virtually all the old maxims of capital investment have been thrown out the window. It’s just a whole different ballgame given the sheer number of investments available, the number of players, the volume of trades, and the rapidity with which the markets move and react. Add to that the ability of a very small number of big players to leverage huge positions and effect massive market moves by triggering automated trading algorithms across the board and the whole thing has taken on the atmosphere of a crap shoot.
Gold was considered a safe haven when markets became too volatile (the proverbial “flight to safety”), but with the interconnectivity of global markets I don’t see anyplace where a person can hide their assets when things start slipping across the board.
My own admittedly cynical opinion is that there are a very few select wolves at the top of the heap that reap the financial rewards by positioning themselves to profit from the volatility and the rest of us are simply sheep to be sheared as we scurry about, shifting our meager crumbs from one basket to another.
Your arguements are naive to the the point of gross ignorance.
It’s well known fact that the metals markets are manipulated. Mostly due to the fact that most of the trading done is in paper only, not physical. In fact the drop last week was in part to a large play made by a single unknown seller of 500 tonnes of silver paper. Today a $20 BILLION paper sell order is tanking the market further. It’s well known that central banks are aquiring physical silver, so a play in paper to kill the price make good sense and allows central banks to win at buying cheap and win on thier short positions. win on sell, win on buy.
To further bolster the manipulation argument, on the 10th the largest US silver mine had a massive landslide effectively shutting down production of 16% of US silver production. by all common sense measures the price should have spiked… but it didnt… it dropped… A LOT. and continues to plummet ANOTHER $2 today!
Does that make sense to you?
as to usefulness ask yourself this question… “if all my needs were otherwise met, what would I take in trade for something I wanted to sell? What could I trade off easily to get my value back?”
I submit the following four items would be high on your list:
1-gold
2-silver
3- common caliber ammunition
4- assault rifles
so, to answer your question… Gold has value because everyone else percieves it has value and that perception is worldwide. THAT is the reason the US dollar has value and the reason trade moves in an efficient fashion… PERCEPTION of value.
Look, the dollar is being DELIBERATELY destroyed. we can see that clearly now. in fact it’s stated policy of this administration. If you want to keep your saving and hold any wealth you may have, you need to cash out your 401k plan and get into physical assets NOW. when the crash is over there will only be those who have assets and those who do not. paper is worthless and they have stated their plans to raid private accounts and retirements.
Folks that try to time the market average around a 7% return, if I recall correctly. That’s a poor return.
Gold will do absolutely nothing for you if the economy collapses. It only means something when you can attach something of value to it. For example, today I could “theoretically” buy some water or a truck with gold, but only because the seller can take that gold and buy what they want with it. Our money is only paper, and at least right now, it still has value. But the government is doing its best to fix that.
In Katrina, or Sandy, or the Japanese earthquake/tsunami, gold would have gotten you a kick in the balls and a pimp slap for your mama.
But if you had some water, or food, or maybe a gun or ammo, you, sir, were King of the Hill.
While fantasy, Walking Dead makes a good point. They ain’t out there loking for, or buying stuff, with gold.
Outside of a pure investment (buying low and selling high), gold speculators need to wake up and smell the roses. It is no hedge against a failed economy. :stop:
What most people do not understand is that the price of gold and silver are not determined by how much gold and silver is being sold. It is how many gold and silver IOUs are being sold. And you can write as many IOUs, futures contracts and options, as you want. Those are unlimited. The supply, though, of physical gold and silver is quite limited, and so when people actually start asking for it and they want the physical, then there is a divergence of the paper price versus the physical price, and we are seeing that right now.
We are in a back-order situation with all of the suppliers. Spreads are going up. Silver eagles cost about fifty cents over spot more than they normally cost because all of the suppliers have had to raise their price to try and find the supply/demand equilibrium that the markets are for. The markets are there to try and find a supply/demand equilibrium, so then price is the arbitrator. Price rises; that draws more supply and reduces demand. Price falls; that reduces supply and increases demand.
So the price discovery mechanism of the markets is what is supposed to ensure that things are in equilibrium. We have this broken system where there are a few big players that manipulate the market, and it always shows up when shortages start developing in the physical market. You know that the price of gold and silver right now are too low to be realistic. And the good thing about that is that it cannot last.
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As another member stated prior in this thread- it is ALL MANIPULATION!
This is realistically the signal that China/Russia and the rest of the world powers are aggressively building gold reserves to dump the US dollar and create their own gold backed currencies to trade with…
This is what the USA did long ago; it really grew our economy and we had a good equilibirum for a LONG while, until the inevitable tinkering Governments start doing and screw everything up for everyone but the very few who are profiting off of the tinkering.
We are about to see the death of the US dollar pegged to the petro dollar and reserve world currency…
Gold makes a lousy day to day currency. just miserable. where it excels is exactly where world banks use it… as a reserve of wealth.
A good way for the individual to use gold would be to put a portion of ones savings or assets into it as long term savings.
example: you have $1 mil in net assets. you might keep $100K for high risk investments, $400K in precious metals, $300K in land or other assets and $200K in liquid savings or cash of various currencies.
I have to take exception to your Walking Dead analogy here. your assumption and the assumption that program makes is that society has broken down and NO TRADE exists at all. This has NEVER happened and is frankly impossible for longer than the very short term in anything but the most catastrophic of circumstances.
We accept that death and taxes are inevitable as teh sunrise then we must by extension accept that there is commerce to tax. Follows further that with commerce comes currency, which in all historical situations has meant some form of gold or silver or gold backed paper.
A step further to bolster this truth is the fact our own constitution mandated it, which may give some credence to the assertions that gold has value.
Further still, Gold, silver and even coppers value in industry means it has INTRINSIC value.
So, before you take your valuable bullets and assault rifle and go to rob someone of something, consider what you might take beyond food… perhaps some private gold or silver to trade with other folks fro more ammo.
This is a mind exercise. you need to get awya from total collapse walking dead scenarios as being “highly likely” or “the reason for prepping”. they are very unlikely and making choices based on assumptions about the value of gold or silver in those puts you in a very very weak position. In every other case gold and silver makes at least a net zero investment over time.
Most people don’t know or forget that Silver is used in water purification extensively; it is being used more and more in water purification applications as we learn more about how effective it is at increasing the life of filter substrates and aiding in the purification process.
Some posit that Silver is a “Stand alone” water purifier. Although much debate surrounds these claims.
The anti-bacterial properties of silver- and ability to drastically increase water filtration effeciency and filter substrate lifecycles- will make it an absolute necessity in any TEOTWAWKI/monetary collapse situation.
There most definitely WILL be a place in any society for Silver, and gold. Especially given enough time for things to balance.
There have been economic collapses for millenia. Gold always comes out on top as the basis for currency/trading. It is a cycle that has been going on forever!
So, yeah your gold might not be worth too much during the short term when all you need is food and water/guns & ammo to survive. But shortly thereafter when the world begins to come out of the darkness- GOLD will be necessary and the dominant form of currecny/trade.
Those who have the gold will be in a great position- as long as they also planned ahead and stored enough food/water/guns/ammo to survive and rebuild society.
Just like any physical commodity- gold has its ups and downs. But there is a reason gold has been around and retained its value better than any other single commodity for our entire history on this planet…
Essentially it is human nature and we like shiny shit.
Don’t forget, human beings have used gold for milennia as a means of trade when it was basically worthless to them (They didn’t have electronics that required gold for its conductive abilities either…), outside of being shiny and they wanted it.
Gold has been used in dentistry and medicine since at least 700 BC.
Most of the ways that gold is used today have been developed only during the last two or three decades. This trend will likely continue. As our society requires more sophisticated and reliable materials our uses for gold will increase. This combination of growing demand, few substitutes and limited supply will cause the value and importance of gold to increase steadily over time. It is truly a metal of the future.
Gold has some interesting superconductive & “high spin” properties that could potentially open up some interseting scientific finds in the future.
As a add-on to THCCDDM4’s post…this is exactly what BRICS is all about…Keep in mind the French signed a trade agreement with the Chinese, to trade in yuan…Britian did so last year, Australia is also considering signing on as well…I hate to say it, but, get ready to join the third world… This a currency war we are going to lose…The collaspe of the U.S. dollar is going to be stunning, and painful…And I expect those who are collecting “entitlements” are going to be the first ones rioting,just as soon as they figure out the check’s NOT going to be in the mail…
Gentlemen-
THANK YALL for the great info you all are posting in this thread. I would like to ask that those of you educated & knowledgeable in this subject to please continue posting, and any links you can add so that that I & others can further our education would be greatly appreciated.
I think even a “semi-educated layman” such as myself…I drove OTR for 13 years:D…can tell that the basic economic principles our country were founded on, and ran on for well over 200 years, are eroded to the point of near collapse. Every single principle of economics 101 seem to have been tossed out the window. And The American people asked for it…TWICE.
Shame shame shame on us.
Jack-O, I thought about what you posted, about trading gold/silver for ammo. RESPECTFULY, I just do not EVER see a situation at all where I would do that. Again, just as an example, in a Walking Dead scenario, those things aren’t only LAST on my list, they aint even ON the list of stuff Id trade for. IMO, precious metals woul be utterly, completely useless, but again, Im just a “semi-educated layman”.
Thousands of years of human history show this to be kind of misguided. People have been after gold for literally millennia. They took whole expeditions into the jungles of S America, with 16th and 17th Century technology only, and no industrial need for gold, just to get it. And some of those expeditions never came back. To them, it was similar to an TEOTWAWKI situation but they kept going.
While you may not value gold itself in a Walking Dead/SHTF scenario, other people likely will… Having some is not a bad backup plan.
Thank you for all the info you’ve provided. I’ll admit I’m not up to par on my financial/investments understanding, so it’s good to hear it in “layman’s terms”.
All of you guys mentioned to an extent the collapse of the dollar, trade treaties being signed, countries hoarding gold to facilitate a “world currency” shift, ect. I agree that we are on that path, and with my limited knowlege, have known this for a while now…just not so much to what extent like you guys seem to…
This statement above seems to have a sense of urgency attached to it. My question for you guys is this: How long would a total shift in world currency/collapse of the US dollar take at this point?
You can sometimes, but it hasn’t been terribly useful over the long term. If you look at what it was doing back in the 1980’s it was miserable.
Gold, if you have it in your portfolio is there to help mitigate risk, just like bonds. It often works in reverse to other asset classes.
Gold doesn’t “do” anything, it doesn’t create anything, it doesn’t make the next Iphone or the first Plasma Rifle in the 40W range. People and companies that are creating something generate new wealth.
You need to set a Asset Allocation and stick to it. When one of your asset classes becomes overweighted by whatever tolerance band you have chosen to work with, you sell some of it and buy one of the underweighted asset classes.
The big reason it has been dropping off it’s high is because people are selling it, to buy other asset classes. Right now it is stocks, the market for stocks looks “bullish” so people are going to the “next big thing”. Unfortunately, most people don’t stick to an Asset Allocation, the just “buy the bubble”.
Lots of people have been buying the hype that they could make money speculating in commodities. You can, but only if you bought the commodities when they were undervalued.
Personally, I don’t buy gold for investments. Although, when the price comes back down, I am going to buy some coins just because I want to.
If someone is REALLY worried about inflation, he should take out as much debt at fixed rates as possible. That is how my uncle made lots of money back in the 1970s. He was highly leveraged, but he was paying 1970 prices with 1979 dollars. He was completely debt free before the decade was out and sitting on a ton of cash after selling out all but his lake property/house. Retired and did nothing but golf and fish for 30 years.
NEVER put all your eggs in one basket, no matter if it is commodities/stocks/bonds/real estate/business.
I can understand how people would come to this conclusion, but- it just isn’t reality.
During a catastrophic collapse (Even a short term collapse like a food chain disruption or energy oil/gas shortage) water purification & proper hydration is THE most important issue. Period.
Can you imagine if people had to purify there own drinking water for any amount of time greater than a few weeks?
Do you realize how much help silver lends in purifiying water and keeping filter substartes clean of algea, mold, legionnaires desease, 750 types of bacteria (Known and tested), etc?
Silver enables these systems to be smaller, lighter, more efficient purifyers and MUCH easier to clean and re-use.
The availability of Silver could very well be the difference between having ample supplies of purified water & easily maintained purification systems versus having less than the needed amount of purified water & purification systems to survive. A BIG deal.
Also consider the long term for a moment. Obviously in the short term gold and silver will have LESS value, but when one thinks long term, rebuilding society and all that jazz- there is ABSOLUTELY a need for gold and silver.
We always default to gold/silver as a commodity for trade when we rebuild after collapse; the cycle has been going on for millenia- and isn;t going to change anytime soon.
Those who plan short term for the future will SURVIVE in the short term. The long term will/could be questionable.
Those who plan long term for the future will survive in the short term and THRIVE in the long term.
I’ll make an ammo comparison.
Consider it the difference between having 1 thousand rounds of ammo the day the shit hits the fan versus having said 1 thousand rounds and enough components to manufacture 1 million MORE rounds of ammo in the future on that very same day…
You sir, need to read your history on currency crisis/devaluation, coin clipping, money printing, etc. gold and silver are a store of your wealth for when the new currency is created. We’ve had 3 or 4 in the last 200 years. Anything physical that takes labor to produce is a store of value but one can only store so much food before they head into crazy town. This is where other assets come in, land, gold, silver.
Yes there are good points being made here, but again, I am not relying on a total collapse scenario. I mostly speak about the more realistic ones like the natural disasters I mentioned above. Again, in those short term events, gold was meaningless.
Sure it has some intrinsic value, and maybe for getting an economy restarted, but I don’t see us remaining on a gold standard, for the same reasons we got off. Gold is seen as a limiting factor to economic growth. Too few have/will have it. Gold is not a savior.
what would you accept in trade and what would you offer in trade in lieu of currency/cash?