I have never felt so much pressure in my life (Updated 10/25)

[JMapleton]

IMHO, it is too late to get into the precious metal game at the moment because it is pretty much plateau.

The laws of the market/physics anything that goes up must come down, and that also apply to gold & silver. I can't foresee precious metal going up for much longer, because it will eventually come back down to earth once the American economic turn around.

This is my personal opinion, do not act on it.

I disagree. The US Dollar is the driver on the precious metals rally and it is set for a continuous decline.

I can see gold at $20,000 (not a typo) an ounce 20 years from now. $3500 five years from now. All Western currencies will erode at a dizzying pace and people will realize gold/silver is the only true currency because it cannot be devalued or diluted like paper money. Although there will be a dip down between this run up and the "big" run up, which has yet to happen because the economy will improve before the US dollar's "big" fall happens. The next few decades are going to be a difficult transition for the United States.

This is all my personal opinion, do not act on it.

 

[Blackjack200]

This is my personal opinion, do not act on it.

I disagree. The US Dollar is the driver on the precious metals rally and it is set for a continuous decline.

I can see gold at $20,000 (not a typo) an ounce 20 years from now. $3500 five years from now. All Western currencies will erode at a dizzying pace and people will realize gold/silver is the only true currency because it cannot be devalued or diluted like paper money. Although there will be a dip down between this run up and the "big" run up, which has yet to happen because the economy will improve before the US dollar's "big" fall happens. The next few decades are going to be a difficult transition for the United States.

This is all my personal opinion, do not act on it.

Can't they just dig more out of the ground?

And besides, what happens when the alchemists figure out how to turn iron into gold?

 

[JMapleton]

Can't they just dig more out of the ground?

And besides, what happens when the alchemists figure out how to turn iron into gold?

There are currently not a lot of new mines opening throughout the world, so no they cannot. Also, the amount of gold entering the world market is minuscule compared to what is already in the world. Do you know of any famous gold mines currently open in the US? Most of them were mined out over 100 years ago. The world has resorted to mining dirt for the specs of gold and then they melt it down to form larger chunks of gold. Gold is scarce.

As far as the alchemists. I doubt it. I'm not a scientist, but I doubt they could turn one element into another (iron and gold a two distinct elements). I'm not even sure if that would defy the laws of science. (Gold is an specific scientific element). I think they would be able to tell the real gold from fake gold very easily. They figured out a way to make diamonds, but simple machines can tell the fake ones from the real ones based on some sort of "signal" they emit.

Turning iron into gold might be like turning carbon dioxide into oxygen without adding anything or having any waste left over.

This is all just my personal opinion.

 

[Blackjack200]

In March 2008, the gold price exceeded US$1,000,[9] achieving a nominal high of US$1,004.38. In real terms, actual value was still well below the US$599 peak in 1981 (equivalent to $1417 in U.S. 2008 dollar value). After the March 2008 spike, gold prices declined to a low of US$712.30 per ounce in November. Pricing soon resumed on upward momentum by temporarily breaking the US$1000 barrier again in late February 2009 but regressed moderately later in the quarter.

Later in 2009, the March 2008 intra-day spot price record of US$1,033.90 was broken several times in October, as the price of gold entered parabolic stages of successively new highs when a spike reversal to $1226 initiated a retrace of the price to the mid-October levels.

On October 14, 2010, Gold closed at a new nominal high of $1373.25 in NYMEX.[10] On October 14, 2010 gold prices touched an all time high with an intra-day spot price reaching $1,387.30.

Wow, 30 years with no real return. That's amazing.

 

[tcsenter]

Do you know of any famous gold mines currently open in the US?

Battle Mountain, NV.

Most of them were mined out over 100 years ago.

Almost all of them just shut down because it costs too much to get the gold out, relative to the price of gold. When gold prices increase to that point where they can make money at it, the mines start back up. e.g. Battle Mountain, NV recently started again

For every $500 that the price of gold rises, there are probably five mines like this around the world that become economically viable to start-up again.

 

[iGas]

This is my personal opinion, do not act on it.

I disagree. The US Dollar is the driver on the precious metals rally and it is set for a continuous decline.

I can see gold at $20,000 (not a typo) an ounce 20 years from now. $3500 five years from now. All Western currencies will erode at a dizzying pace and people will realize gold/silver is the only true currency because it cannot be devalued or diluted like paper money. Although there will be a dip down between this run up and the "big" run up, which has yet to happen because the economy will improve before the US dollar's "big" fall happens. The next few decades are going to be a difficult transition for the United States.

This is all my personal opinion, do not act on it.

There was similar sentiment when the US stop backing the dollar with gold, and again in the 80s when gold reached $500.

IMHO, life is not a constant so as gold, therefore it will go up and eventually drop as it did in the past.

PS. Gas also have similar prediction. It is not whether gold will reach $20,000 an ounce, but it is rather when it will get there.

 

[kranky]

Updated in OP.

 

[JS80]

Update 10/25:
Sat down with the relative the other day and explained in detail what I would recommend. He is against getting any "outsiders" involved, even in just an advisory role. His experiences with financial advisors has left a bad taste in his mouth (although none of them really did anything bad). His apprehension about not understanding investments makes him unwilling to trust anyone. He wants protection of capital first, and if there is any income, that's simply a bonus in his mind.

I explained it this way: I can invest the money in a way that's as safe as possible, but someone with more knowledge than me could get more income with the same amount of protection. He doesn't care. I said it would be possible to get $100,000 a year if he's willing to lock it up in multi-year CDs, and $50,000 a year if he wants to avoid anything with a withdrawal penalty. He said as long as he got $20,000 a year he is happy.

At the end I repeated that someone with more knowledge than I have could do better, again he said he doesn't want anyone else involved because he wouldn't trust them anyway. If the money is safe, he's happy.

I told him I would not be a signatory on any account. I will help him get it squared away, but I do not want any access to the accounts. He agreed to that and to review his estate plan with his lawyer, and asked if I would sit in on that meeting.

So the plan is this: $50,000 in a savings account for easy access, and the rest in laddered CDs through a CDARS account. CDARS gives you a way to deal with one bank, get one statement, but spreads your money out to multiple banks so no single bank holds more than the FDIC insurance limit. Safety is achieved, but growth is sacrificed. That's what he wants, so that's what will be done.
[/IMG]

Eh, I would have insisted he see an advisor, and offered to have gone with him.

Laddered CDs ain't bad. See here for the best rates and advice http://www.fatwallet.com/forums/finance/682884/

 

[dud]

OP, imagine holding your newborn baby the day AFTER you get a layoff notice.

That's pressure ... this is nothing.

 

[kranky]

OP, imagine holding your newborn baby the day AFTER you get a layoff notice.

That's pressure ... this is nothing.

I cannot disagree. That would be a punch in the gut.

 

[dud]

I cannot disagree. That would be a punch in the gut.

Kranky, so much of a punch that 23 years later it's still tender. Some things you never forget nor never get over.

Such is life ...

Thanks for your post.

 

[ponyo]

kranky, you're a good man.

 

[KingGheedora]

Send it to India. Govt. backed fixed deposits earn 7.5%.

https://www.hsbc.co.in/1/2/

http://www.icicibank.com/interest-rates.html

How would it work if someone from the US wanted to deposit into such an account? Can you simply open the account over the internet, wire funds from a US account, and then withdraw 400 days later with the interest earned?

 

[Sukhoi]

How would it work if someone from the US wanted to deposit into such an account? Can you simply open the account over the internet, wire funds from a US account, and then withdraw 400 days later with the interest earned?

I certainly wouldn't suggest it unless you think you can predict how exchange ranges are going to change.

 

[KingGheedora]

I certainly wouldn't suggest it unless you think you can predict how exchange ranges are going to change.

Yeah, thought of that too, but assuming thatw ere not a concern, is it as simple as what I outlined to invest in foreign deposits?

 

[JEDI]

Updated in OP.

why not just shove everything into laddered US Bonds and TIPs?
Why laddered CDs instead?

 

[JMapleton]

why not just shove everything into laddered US Bonds and TIPs?
Why laddered CDs instead?

Seriously? Why would you invest in something that has a rate of return doesn't even keep pace with the cost of goods? Anything less than 4% is breaking even.

 

[DaWhim]

read up fatwallet finance

I would put some in fixed income ETFs, energy MLPs, some fx grantor trusts, royalty trusts, etc

 

[mazeroth]

Seriously, go to fatwallet.com and post this in the finance forum. Lots of intelligent people over there.

 

[Blackjack200]

Yeah, thought of that too, but assuming thatw ere not a concern, is it as simple as what I outlined to invest in foreign deposits?

I doubt it. I'll state upfront that I have no direct experience in this, but my impression is that the U.S. is extremely touchy about foreign bank accounts. It might be more fun to just beat your head against a concrete wall than go through all the disclosures and paperwork for maintaining a legit foreign account.

Maybe I'm wrong, but it seems like a shitty way to get 7.5%