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Gold, Silver other PMs taking a major dump today

Discussion in 'The Furball Forum' started by Dragline, May 8, 2012.

  1. Value is a subjective matter. However, when I see Central Banks around the world clamoring for gold and delivery of it, that is good enough for me. They do set monetary policy after all.

    Actually, GDX and GLD are perhaps the worst way to get exposure to gold. Physical gold has no counter party risk and is no one's liability. You can't say that about paper gold (GLD) or mining companies. MF Global? How did that work out? If you don't hold it, you don't own it.


    Gold is also money. That is why it is on the books with Central Banks. It is a reserve currency that has been used for thousands of years for international trade settlements. The last 40 or so years are the exception, not the rule. And guess what, we are heading back to the rule. And when we do, gold will have to be priced considerably higher to absorb all the fiat that has been printed over the last 40 years. That is why $50,000 gold is not unreasonable at all.
     
  2. Atlas

    Atlas transmogrifier

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    You don't need to value gold at all.
    I feel compelled to point out though that some very large, extremely rich corporations have massive investments in digging for gold also...
    They send people to the ends of the earth and dig two miles into the ground using hundreds of millions of dollars in machinery to do just that. Must be a reason, huh?


    A former GT member (now deceased) made this observation on the perceived value of gold:
    (paraphrasing here)

    "Gold is valuable because young women have always, since the beginning of human history been willing to do amazing things for little trinkets of gold. For this reason alone men will always go to extreme risk to explore for gold, and be willing to fight and die for it."

    If anyone has a rational argument against that, I would like to hear it.

    No, I am not. I make no such assumptions.
    I said only that I was posting the bit about gold panning by the poor in Zimbabwe only to make a point about the frequent posts proclaiming that in extreme economic conditions, "gold will be worthless, everyone will be bartering bullets for toilet-paper and food"

    That same silly assertion has been made many times in discussion here at GT, usually by people who clearly had no knowledge at all about economic history.


    Forget Zimbabwe, as I said it is a recent but extreme example.
    To you I will ask directly: When and where in all of human history has gold not been highly prized and valued?
    Why would you assume that would change today?
    You seem to be making certain assumptions about the modern historical counter-relationship between gold and the dollar vis-a-vis that gold will only have a higher price in times of economic panic.
    Good luck with that, I wish I could see the future so clearly.


    You assert that gold has no use other than as "a hedge against crisis"?
    That would be grossly incorrect, and if you believe that then perhaps you should do a little research.


    You do realize that you are using and dependent upon countless millions of little nuggets of almost pure gold at this very moment, right?
    Without gold there would not be, could not be an internet.
    But you knew that, right?
     

    Last edited: May 23, 2012

  3. Nothing lasts forever. Not even reserve currency status:

    [​IMG]

    So, it's not a matter of if the US Dollar will be abandoned, just when. Some of us think sooner than later. Evidence? Have you seen any of the bi-lateral trade agreements between Russia, China, Brazil, Iran, India? They all avoid using US dollars. And with the US kicking Iran out of the Swift system, other countries will start their own.

    The writing is on the wall. Hee hee hee. Gonna be fun!!
     
  4. Peace Warrior

    Peace Warrior Am Yisrael Chai CLM

    29,177
    5,522
    Jan 12, 2007
    outside the wire perimeter.
    This^ +1,000
     
  5. Peace Warrior

    Peace Warrior Am Yisrael Chai CLM

    29,177
    5,522
    Jan 12, 2007
    outside the wire perimeter.
    I'll buy you a gallon of gas here in Florida for every 4 mercury dimes you give me. :supergrin:
     
  6. Glotin

    Glotin

    940
    43
    Aug 16, 2011
    That's true. But they do that because people are willing to pay ridiculous amounts of money for that gold. Notice they are selling it, not hoarding it.

    I see. That is more clear. Still, you're affirming the consequent.

    People in Zimbabwe are digging for gold because there is a market for it. If the economy of the US collapses, the world economy will have collapsed. There will be no outside international market demanding gold at today's prices.

    I've never said anything about bartering bullets for TP....

    I don't have to see the future; all I have to do is look at an inflation adjusted historical chart of gold prices.

    I'm not saying that gold hasn't always been valued. I'm saying that long term, equities are better at storing and growing wealth. I'm also saying that if your "investment" strategy consists of buying gold at any price, and thinking that someday it will be pegged at $50,000, you're in for a rude awakening. I'm saying that at today's prices, gold is overvalued compared to just about anything else. The risk/return is completely upside down.

    Yes, I did know that. You do realize that the industrial demand for gold comes nowhere close to absorbing the supply, right?

    Sure. But like Devil Dog said, while the dollar will someday be replaced by something, there is no viable replacement currently available.
     
  7. Dragline

    Dragline

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    Coastal SC
    I would too. Melt value on four Mercury dimes is over $8.
     
  8. Atlas

    Atlas transmogrifier

    12,512
    11
    Oct 1, 2001
    north of the equator

    "ridiculous amounts of money for that gold"..
    By your personal valuation. Apparently a large segment of the worlds population doesn't agree.

    You remind me of other GT members who've posted in past discussions more than a few times "if gold is so valuable, why is it that those selling gold accept dollars for it"?

    :rofl:

    You say that the fact that mankind has valued gold throughout history is not a valid reason to believe it has value, and then use arguments like "all time historical highs" and make comparisons to the historical performance of equities.
    Hmmm.

    I've said nothing at all about "investment strategies".

    That is an extremely simplistic binary view..
    You assume that the only possible way that gold could ever be valued greatly higher in the world market is a very sudden and complete collapse of the U.S. economy.

    On what do you base that?
     
    Last edited: May 24, 2012
  9. certifiedfunds

    certifiedfunds Tewwowist

    52,388
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    Houston
    Atlas - just let em go. Keep stacking it. When the inevitable happens, you will own men.
     
  10. Glotin

    Glotin

    940
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    Aug 16, 2011
    Not according to the other guy who keeps claiming that only 2% of Americans are buying gold...

    Right, because there are no ancillary reasons to support gold having value. It is not productive and has little use. When have I said "all time historical high" in this thread?

    Seriously, you kept saying "Gold has always been valued!!!" over and over and over. I said I'm not disputing that. I said that over time, equities outperform gold. Is your reading comprehension really that bad?

    What? That's actually close to the opposite of what I've said.

    To be frank I don't think you have the reading comprehension or education to have an intelligent discussion about this. At least Paul was bringing up some good points. Even Glocksanity raises a few interesting points amid his $50,000 crazy talk.

    I've offered my view for the benefit of people who may be reading this thread in an effort to steer them clear of this gold mania by offering a historical long-term perspective. I'm trying to submit information for the benefit of people who are actually trying to educate themselves, a category you don't fall into.

    You're not going to change my mind and I'm not going to change yours, so there's no point discussing it when you don't even understand what I'm saying and aren't offering any information of your own... you're just challenging a misinterpreted view of what I'm saying, and randomly comparing me to "people you've heard before".
     
  11. Atlas

    Atlas transmogrifier

    12,512
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    Oct 1, 2001
    north of the equator
    And do you assume that only the holdings of private individuals of average means (the world average or the average in the U.S., either one) matter to the market?

    Not your exact words, sorry if you feel I was deliberately misquoting you but...



    http://geology.com/minerals/gold/uses-of-gold.shtml
     
    Last edited: May 25, 2012
  12. Okay, not to belabor the point, but you are totally missing the point. Not using the US Dollar is real easy.

    From the AP: "Japan and China are expected to start direct trading of their currencies as early as June as part of efforts to boost bilateral trade and investment, according to reports.

    With the planned step, exchange rates between the yen and the yuan will be determined by their transactions, departing from the current "cross rate" system that involves the dollar in setting yen-yuan rates, Kyodo News said on Saturday.

    The two governments are eyeing setting up markets in Tokyo and Shanghai, the Yomiuri Shimbun said."


    You see, there does not need to be a new fiat reserve currency to replace the US Dollar. Countries can go bi-lateral, bypassing the US Dollar altogether. They can also us gold as well. This is going to be an economic disaster for the US...and soon.


    Get gold and hold on for dear life. It is your life boat. US Dollar denominated financial assets are in a bubble that is getting ready to burst. Ha ha ha for those that stick with them. You have been warned.
     
    Last edited: May 26, 2012
  13. Peace Warrior

    Peace Warrior Am Yisrael Chai CLM

    29,177
    5,522
    Jan 12, 2007
    outside the wire perimeter.
    Zactly, and people say precious metals don't hold value.
     
  14. cowboy1964

    cowboy1964

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    Silver and gold down today. Buy! Buy! Buy!
     
    Last edited: May 29, 2012
  15. cowboy1964

    cowboy1964

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    U.S.A.
    Gold back to $1600 already today on the bad economic data.

    Seriously people, it ain't going back to $700 ever again. And gas isn't going back to $1.80.