Gold

#127
#127
DC_Vol said:
IMO, precious metals are a bad hedge against inflation, because they aren't really tied to the actual money supply in any way. I suppose it can be used as an indicator of inflation because people tend to buy into it as a hedge, but it will be large institutions that drive the change. But the gold price itself not evidence of inflation or a lack thereof. Gold is often sold to individuals through infomercials! Red flag.
Click to expand...

How many gallons of gas would 4 quarters buy you in 1963?

863379-130633344959425-Richard-Bloch.png


Now take those same pre-1964 90% silver quarters today and tell me how many gallons of gasoline they would buy you today.

4 quarters had .723 troy oz of silver. Silver today is about $20/troy oz. So that puts the actual values of those quarters at $14.46. How many gallons of gas will that buy you today?

Still think it isn't a hedge against inflation?
 
#131
#131
DC_Vol said:
I could produce crackers at a cost of $20 per cracker. That doesn't mean the market value of the cracker is $20 or higher. The cost of production means very little when ascertaining the true value.
Click to expand...

If crackers had a 6000+ year history behind it of being used as a unit of exchange, then you may have a point.


DC_Vol said:
Do you not find it strange that gold is sold through infomercials? What if Coke or Apple started running radio spots advertising what a great investment their stock was? Would it change your perception of the investment?
Click to expand...

The Middle East and the Far East are buying gold and they aren't buying it through infomercials. And even if they were, what is the point? The fact that you have high demand and high consumption in Asia, yet you are seeing prices fall should make you scratch your head at a very basic level of understanding economics and the relationship supply, demand and price have on each other.
 
#132
#132
hog88 said:
Yes it could be I'm not an expert, never claimed to be just what I read and it made sense.

Please impart your wisdom on us.
Click to expand...

Jewelry takes up the lion's share at 49%, yet electronics and dental/medical only eat up 9% combined. The rest is used in bullion and investments.


gold-charts.png
 
#133
#133
Rasputin_Vol said:
Jewelry takes up the lion's share at 49%, yet electronics and dental/medical only eat up 9% combined. The rest is used in bullion and investments.


gold-charts.png
Click to expand...

Thanks but one question. How is physical gold consumed in investments?
 
#134
#134
hog88 said:
Thanks but one question. How is physical gold consumed in investments?
Click to expand...

To hedge against inflation. I am assuming that gold today is around $1300/oz plus whatever premium you pay. If you have $13,000 in cash vs 10 oz of gold, in a hyperinflation scenario, that $13,000 will not have the same purchasing power as 10 oz of gold.
 
#135
#135
Rasputin_Vol said:
To hedge against inflation. I am assuming that gold today is around $1300/oz plus whatever premium you pay. If you have $13,000 in cash vs 10 oz of gold, in a hyperinflation scenario, that $13,000 will not have the same purchasing power as 10 oz of gold.
Click to expand...

I get that, I just disagree.

In times of hyperinflation or if/when hyperinflation hits a worldwide scale I believe gold will be almost worthless.

You can't eat it, drink it, it will not keep you warm, it will not defend you and it will not keep you warm. It is my belief that if the US falls to that point (could happen) barter and force will be the currency. Basically all government structure and value in a shiny metal will be gone.
 
#136
#136
hog88 said:
I get that, I just disagree.

In times of hyperinflation or if/when hyperinflation hits a worldwide scale I believe gold will be almost worthless.

You can't eat it, drink it, it will not keep you warm, it will not defend you and it will not keep you warm. It is my belief that if the US falls to that point (could happen) barter and force will be the currency. Basically all government structure and value in a shiny metal will be gone.
Click to expand...

Entirely possible scenario. But even after the dust settles, there will have to be a starting point when things are ready to be reset.
 
#138
#138
hog88 said:
True.

I'm just too old to wait for the dust to settle in that scenario.
Click to expand...

Not many options available. Anything over 30 days worth of food storage and 500 rounds of ammo is a waste, imo. If all hell breaks loose and it drags on for longer than 2-3 weeks, we have bigger problems than gold/silver, ammo, food, water. You are basically talking about a Mad Max scenario... which isn't necessarily out of the realm of possibility. I don't poo-poo anyone that chooses to store food, water and ammo. But at the same time, it seems that most "preppers" read from the same playbook and use the same "you can't eat gold" arguement. what they don't understand is that you need a combination of all that.
 
#139
#139
Rasputin_Vol said:
Not many options available. Anything over 30 days worth of food storage and 500 rounds of ammo is a waste, imo. If all hell breaks loose and it drags on for longer than 2-3 weeks, we have bigger problems than gold/silver, ammo, food, water. You are basically talking about a Mad Max scenario... which isn't necessarily out of the realm of possibility. I don't poo-poo anyone that chooses to store food, water and ammo. But at the same time, it seems that most "preppers" read from the same playbook and use the same "you can't eat gold" arguement. what they don't understand is that you need a combination of all that.
Click to expand...

A person should have a tradable currency such as AU or AG along with ammunition, arms and food, 500 rounds is just a starting point and IMHO is unprepared.

I'm just not going to dump my retirement into a metal.
 
#140
#140
Rasputin_Vol said:
If crackers had a 6000+ year history behind it of being used as a unit of exchange, then you may have a point.
Click to expand...

I don't follow your rationale here. The dollar hasn't been on the gold standard since the 1970's. The government used to set the gold price. It's now on the open market.

The cost of it's production has nothing to do with its value. Otherwise it wouldn't be selling below it's cost of production, as you claim. That's just the marketing line you hear in the radio ads trying to sell you gold.


Rasputin_Vol said:
The Middle East and the Far East are buying gold and they aren't buying it through infomercials. And even if they were, what is the point? The fact that you have high demand and high consumption in Asia, yet you are seeing prices fall should make you scratch your head at a very basic level of understanding economics and the relationship supply, demand and price have on each other.
Click to expand...

Yes, it does have me scratching my head. If it's in such high demand, why do the spot prices keep going down? I'm interested to hear why you think that is happening.

I'm not trying to convince anyone they shouldn't buy gold. If it makes you feel good, fine, buy as much as you can afford. I don't purchase it myself, and I stick by my initial statement that it's a lousy move if your goal is to hedge inflation.

Arguing about Asians liking gold or how much it costs to produce it doesn't change the facts about it's past performance.
 
  • Like
Reactions: 1 person
#141
#141
DC_Vol said:
I don't follow your rationale here. The dollar hasn't been on the gold standard since the 1970's. The government used to set the gold price. It's now on the open market.

The cost of it's production has nothing to do with its value. Otherwise it wouldn't be selling below it's cost of production, as you claim. That's just the marketing line you hear in the radio ads trying to sell you gold.
Click to expand...

There are two sources of gold right now. Either the ground (mining) or bank reserves. The gold you are seeing right now on the market flowing to the Far East is coming from Western banks. The moment the banks are unwilling or unable (they run out) to sell gold, come holler at me then. You just had Germany ask the US for its gold back last year and we told them we would give it back to them in 7 years??? That is grounds for a war, my friend.




DC_Vol said:
Yes, it does have me scratching my head. If it's in such high demand, why do the spot prices keep going down? I'm interested to hear why you think that is happening.
Click to expand...

They are dumping paper gold on the markets. Each paper oz of gold has more than one claim on it. Depending on who you read or listen to, it could be 50 claims on one paper oz of gold (which would put the price of gold as high as $60,000/oz by some estimates). Investors/speculators that bought paper gold when it was $1500-1800/oz are shaken from their positions and those contracts are dumped on the markets with the original intent of scaring the actual gold holders (physical gold) into putting more gold on the market. The problem has backfired because instead of owners of physical gold getting rid of their holdings, they are taking advantage of the sale price and buying more. So they continue to bomb the markets again and again with paper contracts hoping to shake out more physical into the market. Eventually, they are going to run out of gold & time.

DC_Vol said:
I'm not trying to convince anyone they shouldn't buy gold. If it makes you feel good, fine, buy as much as you can afford. I don't purchase it myself, and I stick by my initial statement that it's a lousy move if your goal is to hedge inflation.

Arguing about Asians liking gold or how much it costs to produce it doesn't change the facts about it's past performance.
Click to expand...

And I just posted earlier how a dollar's worth of silver in 1963 would have bought you the same amount of gasoline back then as today... possibly slightly more today.

Merry Christmas
 
#145
#145
Rasputin_Vol said:
There are two sources of gold right now. Either the ground (mining) or bank reserves. The gold you are seeing right now on the market flowing to the Far East is coming from Western banks. The moment the banks are unwilling or unable (they run out) to sell gold, come holler at me then. You just had Germany ask the US for its gold back last year and we told them we would give it back to them in 7 years??? That is grounds for a war, my friend.
Click to expand...



Where is the gold? :unsure:

Germany Has Recovered A Paltry 5 Tons Of Gold From The NY Fed After One Year | Zero Hedge

On December 24, we posted an update on Germany's gold repatriation process: a year after the Bundesbank announced its stunning decision, driven by Zero Hedge revelations, to repatriate 674 tons of gold from the New York Fed and the French Central Bank, it had managed to transfer a paltry 37 tons. This amount represents just 5% of the stated target, and was well below the 84 tons that the Bundesbank would need to transport each year to collect the 674 tons ratably over the 8 year interval between 2013 and 2020. The release of these numbers promptly angered Germans, and led to the rise of numerous allegations that the reason why the transfer is taking so long is that the gold simply is not in the possession of the offshore custodians, having been leased, or worse, sold without any formal or informal announcement. However, what will certainly not help mute "conspiracy theorists" is today's update from today's edition of Die Welt, in which we learn that only a tiny 5 tons of gold were sent from the NY Fed. The rest came from Paris.
Click to expand...
 
New posts
You must log in or register to reply here.

VN Store



Back
Top