Gold tops $1,400/ounce per my prediction.

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DominionSeraph

Diamond Member
Jul 22, 2009
8,386
31
91
But eventually, probably within a short time of a major event, society will re-emerge and being to rebuild and they will need a currency. Gold and silver are the only two options to serve as an international currency if all governments collapsed.

Paper still works.
 

LunarRay

Diamond Member
Mar 2, 2003
9,993
1
76
Used to be that gold was a currency just like dollars but with the intrinsic catch that it was a limited thingi... only so much about.

Seems to me it is far easier to bring a bit of gold to the guy at Starbucks than a chicken or head of lettuce...
I think that based on the ratio of various things like 10 ears of corn equal a moose the only change in value is based on how many are around and the demand will order it all.... and moose makers will make more of them if the demand is there?...

How many ducats of gold for that Chariot did you say?
 

JMapleton

Diamond Member
Nov 19, 2008
4,179
2
81
Paper still works.

Two part fail.

Paper doesn't work now and it certainly won't work then. Fiat currency destroys the middle class, encourages unnecessary debt on a consumer and government level, and can be manipulated by politicians to rack up debts to buy votes future generations will have to pay for.

Now. Right now, you're witnessing the failure of paper money. You're not economically literate enough to see it, but you'll look back one day and see all that occurred to lead up to the disaster that will become.
 

Docnasty

Member
Jan 25, 2009
105
0
0
You really have a limited grasp of what you're talking about.

Here's a fun chart of gold commodity purchasing power (ie how much stuff you can trade a unit of gold for, no currency involved).

42557125354577397517adr.png

Yep, and here's a fun chart for the purchasing power of the dollar.

ppd_lg.png


Go ahead smart guy, invest in that paper money! Yeah!
 

senseamp

Lifer
Feb 5, 2006
35,787
6,197
126
You could have individual factors that could alter the real cost of either, but they share commonalities in the baseline standard that is what would be used to tell you that they changed in real cost, and once that change is compensated for you'd find that they remained in balance.

Bad harvest leading to less feed corn, leading to fewer eggs, doubling the cost. But you have references that tell you it was the eggs that doubled and not the housing that halved.

Gold doesn't care since it's valueless.

Gold is valued, just not for it's utility. It's valued because people agree that it's valuable. Just like we agree that dollars are valuable, even though they are pieces of paper or computer bits. The nice thing about gold is that unlike dollars, you can't just print $1 trillion more, or add an extra zero to an account with a key stroke. You have to work hard to mine it, and even if you find some, it's not going to fundamentally alter the supply of gold, since it will only be a small fraction of gold that has already been mined over the ages.
 

Tequila

Senior member
Oct 24, 1999
882
11
76
so the gold coins i bought in 2002 for $450 bucks that are now worth 1400 bucks each was a bad investment?

does not compute.

No but it wasn't a particularly good investment either. As I said in an earlier post gold is considered a collectible so you'll be paying a larger capital gains tax when you sell it. You also don't get paid any money for holding that gold either like with a dividend stock.

If you want to use 2002 as a starting reference I got plenty of stocks that have killed gold in that time frame. I accumulated some DO back in 2002 in the 20s. In 2006 they started paying a special dividend at $2 a share then it went up to nearly $6/share in 2007 and again in 2008 then fricken $8/share in 2009. This year they finally cut back to half.

Ok, that was a bit lucky but take my largest energy holding CVX which I've held since 1991. Over the long haul 20, 30, 40 years do any comparison and it crushes gold. Not only did the stock appreciate but it pays dividends and those dividends increased every year and I reinvested so I made even more dividends the next time. Chevron represents a productive company, paying people and providing them benefits and spending billions every year on capital expenditures. Gold is a shiny metal that does jack for shit aside from electronics coating and jewelry.

Gold doesn't pay you to hold it(unless you buy the miner stocks and most have lousy dividends) and eventually it corrects in a very big way. It's a horrible long-term investment and to buy it now is pretty risky. I'd much rather buy more CVX, DO and a lot of blue chip dividend stocks that are selling at bargains and swimming in cash like JNJ(also owned since '91), INTC and MSFT. They pay me to hold their stock and keep increasing those divvies every year while gold waits for the inevitable correction.
 
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senseamp

Lifer
Feb 5, 2006
35,787
6,197
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No but it wasn't a particularly good investment either. As I said in an earlier post gold is considered a collectible so you'll be paying a larger capital gains tax when you sell it. You also don't get paid any money for holding that gold either like with a dividend stock.

If you want to use 2002 as a starting reference I got plenty of stocks that have killed gold in that time frame. I accumulated some DO back in 2002 in the 20s. In 2006 they started paying a special dividend at $2 a share then it went up to nearly $6/share in 2007 and again in 2008 then fricken $8/share in 2009. This year they finally cut back to half.

Ok, that was a bit lucky but take my largest energy holding CVX which I've held since 1991. Over the long haul 20, 30, 40 years do any comparison and it crushes gold. Not only did the stock appreciate but it pays dividends and those dividends increased every year and I reinvested so I made even more dividends the next time. Chevron represents a productive company, paying people and providing them benefits and spending billions every year on capital expenditures. Gold is a shiny metal that does jack for shit aside from electronics coating and jewelry.

Gold doesn't pay you to hold it(unless you buy the miner stocks and most have lousy dividends) and eventually it corrects in a very big way. It's a horrible long-term investment and to buy it now is pretty risky. I'd much rather buy more CVX, DO and a lot of blue chip dividend stocks that are selling at bargains and swimming in cash like JNJ(also owned since '91), INTC and MSFT. They pay me to hold their stock and keep increasing those divvies every year while gold waits for the inevitable correction.

I don't disagree with your investment philosophy in core portfolio of value dividend paying stocks that you can just leave there and not worry about. I do that in my retirement accounts. That said, over a more intermediate term gold has performed perform pretty well, and nimble investors have made money they can at some point deploy back into more conservative core investments:

z
 

Tequila

Senior member
Oct 24, 1999
882
11
76
I don't disagree with your investment philosophy in core portfolio of value dividend paying stocks that you can just leave there and not worry about. I do that in my retirement accounts. That said, over a more intermediate term gold has performed perform pretty well, and nimble investors have made money they can at some point deploy back into more conservative core investments:

z

You are using the GLD ETF as a reference which only came out in 2005. If you compared that to DO from 2002 DO would kill it just from the special dividends alone. Also GLD is subject to the same collectible status. I know a few peeps at work who bought and sold it and weren't' prepared for big hit on cap gains.

P.S. Why are you comparing INTC and MSFT over the past 4 years to GLD? I said those are good bargains right now going forward and wasn't trying to compare them over the past 4 years. Plug in 20 years of INTC and MSFT vs gold and I doubt gold would even register as flat line compare to those two runups in the 90s :)
 

senseamp

Lifer
Feb 5, 2006
35,787
6,197
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You are using the GLD ETF as a reference which only came out in 2005. If you compared that to DO from 2002 DO would kill it just from the special dividends alone. Also GLD is subject to the same collectible status. I know a few peeps at work who bought and sold it and weren't' prepared for big hit on cap gains.

P.S. Why are you comparing INTC and MSFT over the past 4 years to GLD? I said those are good bargains right now going forward and wasn't trying to compare them over the past 4 years. Plug in 20 years of INTC and MSFT vs gold and I doubt gold would even register as flat line compare to those two runups in the 90s :)

Why is MSFT and INTC a good bargain? Just because they performed well over past 20 years?
 

Tequila

Senior member
Oct 24, 1999
882
11
76
To follow up on that. This is the power of JNJ with reinvested dividends using an example of 100 shares in '91.

http://www.investor.jnj.com/calcula...ear=1991&ReinvestDividends=1&Submit=Calculate

What was gold back then? About $350 an ounce? That same amount of money would be worth $28,500 in gold from my quick calculation so I could be off.

Long term gold just plain sucks balls and you can get burnt easily by the corrections. Short term means you'd have to sell at just the right time and then you pay the large cap gains from the collectible status.
 

JMapleton

Diamond Member
Nov 19, 2008
4,179
2
81
Long term gold just plain sucks balls and you can get burnt easily by the corrections. Short term means you'd have to sell at just the right time and then you pay the large cap gains from the collectible status.

Gold is not meant to be a long term "investment." It's meant to be a safety net against instability, government confiscation, and corporate mismanagement.

JNJ can go bankrupt. The Dollar can become worthless. Gold can do neither of those things. It can be smuggled out to foreign bank accounts in case of socialist tyranny, it can be hidden in basements for decades, it can be traded for goods or any currency in any part of the world. It's a way to protect wealth.

Owning JNJ in modern society is simply having another digit on a computer screen in some "brokerage account" and you hope will still be there when you need it most. I advocate stock ownership, but gold plays an important "what if" role in a portfolio.
 

senseamp

Lifer
Feb 5, 2006
35,787
6,197
126
Gold is not meant to be a long term "investment." It's meant to be a safety net against instability, government confiscation, and corporate mismanagement.

JNJ can go bankrupt. The Dollar can become worthless. Gold can do neither of those things. It can be smuggled out to foreign bank accounts in case of socialist tyranny, it can be hidden in basements for decades, it can be traded for goods or any currency in any part of the world. It's a way to protect wealth.

Owning JNJ in modern society is simply having another digit on a computer screen in some "brokerage account" and you hope will still be there when you need it most. I advocate stock ownership, but gold plays an important "what if" role in a portfolio.

Exactly, gold is a monetary metal. It's an alternative to holding cash, not investing in stocks. You make some money, valuations and risk get too high, you want to cash in and wait for a while, you gotta decide what currency you want to keep, or if you are better keeping gold. Right now, holding cash is not very rewarding. It pays no interest, and Bernanke is printing tonnes of it. People understand that gold is not actually working to pay them dividends.
 

gingermeggs

Golden Member
Dec 22, 2008
1,157
0
71
So says everyone else on ATOT. You're being short sighted. You're thinking of the first few days after a major event that changes civilization. Actually a good "hiding spot" would probably be the most valuable. Maybe a cabin in Montana or something.

But eventually, probably within a short time of a major event, society will re-emerge and being to rebuild and they will need a currency. Gold and silver are the only two options to serve as an international currency if all governments collapsed.

In reality, we will probably not see such a "major event." We are more likely to see a "major economic event," like a default of a major currency (ie US Dollar). This will drive the price of silver and gold to an astronomical level.

I can see gold at $20,000 an ounce, maybe $50k if such an event happened. Laugh if you want but it's possible.

Thanks for your great advise mate,
but I think I'll just stick with the titties and beer for now!
 

halik

Lifer
Oct 10, 2000
25,696
1
0
Yep, and here's a fun chart for the purchasing power of the dollar.

ppd_lg.png


Go ahead smart guy, invest in that paper money! Yeah!


Inverse cpi... did you come up with that yourself?

Look up a chart for the average nominal income for you tax bracket and let me know which way that trends.
 

halik

Lifer
Oct 10, 2000
25,696
1
0
Gold is not meant to be a long term "investment." It's meant to be a safety net against instability, government confiscation, and corporate mismanagement.

JNJ can go bankrupt. The Dollar can become worthless. Gold can do neither of those things. It can be smuggled out to foreign bank accounts in case of socialist tyranny, it can be hidden in basements for decades, it can be traded for goods or any currency in any part of the world. It's a way to protect wealth.

Owning JNJ in modern society is simply having another digit on a computer screen in some "brokerage account" and you hope will still be there when you need it most. I advocate stock ownership, but gold plays an important "what if" role in a portfolio.

Quoted for posterity. Had a guy say the same thing in 1982...

Japanese investor's store of value
monthly_yen.gif


Your store of value
monthly_dollar.gif
 
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hiromizu

Diamond Member
Jul 6, 2007
3,405
1
0
So how many of you own real bars of gold?

I'm sure many of us own gold ETFs but many of them do not even store gold in its physical form and most of them won't pay you back in physical gold unless you have significant amount invested (ie: over 250k). Even then, the delivery charges and other fees would be pretty expensive.

Anyone read the recent article about Roubini's commentary on gold as a bad currency?
 

Zebo

Elite Member
Jul 29, 2001
39,398
19
81
say someone has 100K of paper in safe what would you do?


Gols is weak compared to assets people use.

Oil - go to O&G auction in Houston

Commodities. Corn is very low.
 
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Phokus

Lifer
Nov 20, 1999
22,994
779
126
So how many of you own real bars of gold?

I'm sure many of us own gold ETFs but many of them do not even store gold in its physical form and most of them won't pay you back in physical gold unless you have significant amount invested (ie: over 250k). Even then, the delivery charges and other fees would be pretty expensive.

Anyone read the recent article about Roubini's commentary on gold as a bad currency?

Great point, when shit hits the fan, who is going to give a shit about the contractual obligations regarding gold? I really want to get into the gold selling business because it seems like you can rip off libertarians with ease like Glenn Beck does.
 
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Zebo

Elite Member
Jul 29, 2001
39,398
19
81
So how many of you own real bars of gold?

I'm sure many of us own gold ETFs but many of them do not even store gold in its physical form and most of them won't pay you back in physical gold unless you have significant amount invested (ie: over 250k). Even then, the delivery charges and other fees would be pretty expensive.

Anyone read the recent article about Roubini's commentary on gold as a bad currency?

Not much 13oz....has no cash flow
 

halik

Lifer
Oct 10, 2000
25,696
1
0
say someone has 100K of paper in safe what would you do?


Gols is weak compared to assets people use.

Oil - go to O&G auction in Houston

Commodities. Corn is very low.

This. Couple drums of oil would do you a lot better during nuclear holocaust than a house made out of gold bricks.

I'd take chocolate gold coins over real gold coins as well.
1065509_6e1a_625x1000.jpg
 
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bamacre

Lifer
Jul 1, 2004
21,029
2
61
I think it's next to a penny to show the relative SIZE of the absurdity of gold. What the fuck could that small piece of gold do? Nothing.

auction.jpg


Can't really do much with that. Can't eat it. Doesn't even give off much heat if you burn it.
 

bamacre

Lifer
Jul 1, 2004
21,029
2
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The reason the gold standard won't work has more to do with societal stability problems for member states than anything else. It's a nice tool for international trade, but it doesn't allow countries to alter their fiscal policy to deal with crisis, and that has some seriously terrible consequences.

I wasn't suggesting a gold standard.
 

bamacre

Lifer
Jul 1, 2004
21,029
2
61
100% reserves is a ridiculous system that cannot work.

Name a single country using it. Name a single modern economy that can use it without utterly collapsing and becoming an agrarian one over night.

You can't see past the 10 seconds it takes you to say "fractional reserves" (you're slow), otherwise you'd see the logical conclusion.

Your summary of the GD places all blame on the monetary expansion (though, as already shown, there wasn't much inflation), but don't blame anything on a variety of other factors. This is typical libertopian behavior.

LOL, the current system isn't working. And I wasn't suggesting that the monetary inflation was the only cause of the GD. But your strawman is typical LegendKiller behavior.
 

Phokus

Lifer
Nov 20, 1999
22,994
779
126
LOL, the current system isn't working. And I wasn't suggesting that the monetary inflation was the only cause of the GD. But your strawman is typical LegendKiller behavior.

Then why are you even arguing. Whatever flaws we have with the current monetary system, it's far superior than the unstable gold standard system we previously had. Government may be doing 'bad things' with FIAT currency, but nowhere near as they would if we were on Gold.