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Tylerdurden
10-22-2009, 10:43 AM
It is now time for the tables to turn once again. It is now time for the paperbugs to take their medicine. It is now time for the "Don't Worry, Be Happy and Invest in Stocks Forever" crowd to come to realize they were not only wrong, but arrogant in the face of overwhelming evidence to the contrary.
The paperbugs, as I am now going to start calling them, place all their belief in a paper system destined for failure. Paper fiat money has never worked throughout history and central banks have never benefited society over the long term. Kenneth Gerbino exposes the ridiculousness of paper money in one brilliant quote:
"If you don't trust [G]old, do you trust the logic of taking a beautiful pine tree, worth about $4,000 - $5,000, cutting it up, turning it into pulp and then paper, putting some ink on it and then calling it one billion dollars?"
Yet, such is the logic of the paperbugs. They believe confidence in men is eternal and more reliable than nature. Hasn't history exposed the folly of such beliefs over and over? Gold is money not because any one individual calls it that but because people and societies over the past few thousand years have figured out that it functions well in this role for multiple reasons. The main reason is basic: people in power are not to be trusted! Why is the collective wisdom of millions of people and hundreds of societies less valuable than the decree of a few scheming bankstaz and their paid-for bureaucratic bozos?
I am not saying that we will return to a Gold standard monetary system any time soon. I am saying that this crisis exposes the folly of the paperbug. Believing in paper money when it can be created out of thin air with no work required is childish. If it is not childish, then it can only be nefarious (i.e. if one is an insider, paper money makes perfect sense). The ability to print money out of thin air is intoxicating and highly addictive. Our government and its drug dealer, the federal reserve, have taken the road more frequently traveled and are now in the terminal stages of addict and enabler, respectively.
The paperbugs believe in fairy tales like the fact that the non-federal, for-profit federal reserve corporation is smart and knows what it is doing. The paperbugs believe government apparatchiks know how to "stimulate" an economy. I guess this is because governments have always been the driver behind economic prosperity, growth and innovation in "free" markets, right? This is why communism, fascism and socialism have always produced the strongest and most innovative economies throughout history!
It is time for paperbugs to admit that their beliefs are bizarre and not worthy of serious economic discussion. Monopoly money cannot be the basis for a sound society. Look at what has happened to the United States since we severed the final tenuous link to Gold in our monetary system in 1971! We have lost our advantage over the world. We have lost our prosperity (no, it's not coming back soon for the "average" American), lost our manufacturing base, been through a horrible inflation (the 1970s) that required usurious interest rates to tame, and have been through serial unprecedented bubbles in stocks and then real estate that are now going to continue exploding for a decade or two.
I am not saying Gold would have prevented all of these things, but Gold brings stability. It is boring. Paperbugs know that paper money is never boring. It is a manic-depressive master over society. Loose money fuels a boom and tight money results when the speculation has exhausted itself. The swings are getting wilder precisely because our money is not real. Our monetary system is a fantasy better told as a bedtime story to gullible children than as a basis for a "modern" society.
Paperbugs believe CNBC and Larry Kudlow are telling the truth. Paperbugs believe the U.S. Dollar will maintain its grip over the world and is a viable global reserve currency. Paperbugs believe government "stimulation" is anything besides a complete oxymoron that drains the lifeblood of an economy. Paperbugs believe Gold is worthless and the paper promises of corporations are priceless. Paperbugs believe "stocks for the long haul" is something besides a marketing campaign designed to "rip your face off" over the long haul. Paperbugs believe Ben Stein knows something about economics and the stock market. Paperbugs are permabulls on financial markets.
What paperbugs don't understand is that promises have to be kept consistently by the entity making them to maintain their value. The U.S. government, in aggregate, has past the point of no return. They cannot live up to their promises. They have promised too much and cannot deliver. That means every promise inherent in the currency units of the United States has much less value to the rest of the world. Paperbugs fail to understand that paper is about confidence. Confidence in the United States and its financial system is declining rapidly, which means our paper games are being exposed for the fraud that they are. We can recover, yes, but it will take a decade or two and we will likely be a much weaker nation on the other side.
As the pendulum of time and greed swings in different directions, the Dow to Gold ratio (http://goldversuspaper.blogspot.com/2008/10/dow-to-gold-ratio-aha-moment.html) will continue its inexorable decline towards one. Paperbugs will cry and scream and continue to call Gold worthless or a bubble until it is in its final blow-off stage. Then CNBC will tell the paperbugs to buy Gold and Gold stocks right near the top so that their corporate masters can sell to the frenzied paperbugs - sort of like what's happening right now in the general stock market.
The trick for Gold bulls will be to recognize when the final peak in the relative value of Gold is near, then to trade that Gold for stocks, real estate, or some other undervalued asset class of interest. We are a LONG way from that point.
http://www.safehaven.com/article-14781.htm

huisjen
10-22-2009, 01:14 PM
Thanks Norm. I looked here for your response, which I figured had a good chance of being interesting.

Mark will, of course, think I read his jibberish and pretend, but I'm really starting to get used to the smooth flow of things when his and Jack's posts are blocked.

Dan

Mrleft8
10-22-2009, 01:57 PM
Silverfish!!!!!! I HATE those things!!!!

Dave Wright
10-22-2009, 02:17 PM
Gold responds to uncertainty. All is normal in the world.

Tylerdurden
10-22-2009, 02:38 PM
Here's another perspective. In the day a roman soldier could by a fine suit of armor for a one ounce gold coin. Today that same gold coin will by a fine suit. Gold doesn't change in value except in relation to fiat economy's.

If one was paid in gold in 1982 dollars today they would have triple the purchasing power if redeemed today. If paid in US dollars in 1982 they would have lost near 40% of value if redeemed today.

If you want we can do comparisons back to 1913 when the federal reserve was established. Doing the same if paid in dollars back then you would get 4 cents today.

Dave Wright
10-22-2009, 02:52 PM
.

...If one was paid in gold in 1982 dollars today they would have triple the purchasing power if redeemed today. If paid in US dollars in 1982 they would have lost near 40% of value if redeemed today....


So you own gold? If so, I'm curious as to what form it might be in? No I'm not just being a nosey bastard, I'm curious. I think actual ownership gives you a different view, just like owning a boat gives you a different perspective.

Tylerdurden
10-22-2009, 02:54 PM
So you own gold? If so, I'm curious as to what form it might be in? No I'm not just being a nosey bastard, I'm curious. I think actual ownership gives you a different view, just like owning a boat gives you a different perspective.


Ye, no , maybe. I think you need to worry about what you hold.

Tylerdurden
10-22-2009, 03:02 PM
If someone paid in US dollars in 1982 stuffed those dollars into a mattress until today.... they'd not only have lost 40% of their value... they would have been blithering idiots!

If, on the other hand, that person invested in the Dow, they'd be up 1000% in dollars..... the same thing, invested in gold: 282%.

(To be completely fair, the time period includes a long period where gold outperformed the Dow, as well as a long period where the Dow outperformed gold).


Nice to skip over the 2000 year value though Norm?;)
I can show where cow patties have out performed the Yen too.
Figures lie and liars figure.

Keith Wilson
10-22-2009, 03:10 PM
But not all figures are lies, and most of those who figure are not liars.
The trick is to tell the difference.

Dave Wright
10-22-2009, 03:13 PM
I bought Austrian Coronas in 1975 and 1976. I still have them. It's been a sterile investment. If I'd bought in 1980 it would have been worse. Their ownership is OK for me, but I wouldn't generally recommend it.

I worked with guys who bought bags of junk silver coins in late 1979. They have an interesting view of buying and holding metals. That's why I asked you if you owned gold.

Tylerdurden
10-22-2009, 03:17 PM
I bought Austrian Coronas in 1975 and 1976. I still have them. It's been a sterile investment. If I'd bought in 1980 it would have been worse. Their ownership is OK for me, but I wouldn't generally recommend it.

I worked with guys who bought bags of junk silver coins in late 1979. They have an interesting view of buying and holding metals. That's why I asked you if you owned gold.

I would say that holding precious metals silver is more practical in trade and if what is speculated comes to pass silver will more than likely out perform gold. I consider silver to be the poor man's gold.

JBreeze
10-22-2009, 03:28 PM
Another perspective is to view gold as a currency, somewhat inversely related to the US dollar......strong dollar, weak gold and vice versa. Don't worry about the "world" - just look at your own market and decide for yourself.

If everything collapses, I doubt I would be able to access or defend any physical gold holdings.....but I've done very well buying jr. gold miners over the past couple years....since 2008, WGW --> acquired by NGD went from .59 to $4.00+ and EGO went from $5.00 to $12.00+.

The point of this message is there are times to hold some assets related to gold or actual gold, and other times to get rid of it.....to make blanket statements or quote some specific period isn't instructive....gold has done wonderfully 1999-present, while the Dow is flat. Some miners have done much better than the physical gold.

Don't make investments to hold "forever" because you won't be around forever:D

Tom Montgomery
10-22-2009, 03:31 PM
Diversify. A percentage of one's investments should include gold coins.

Keith Wilson
10-22-2009, 03:33 PM
silver is more practical in trade and if what is speculated comes to pass silver will more than likely out perform gold. I consider silver to be the poor man's gold. Ah, NOW I understand. It has nothing at all to do with the performance of precious metals as an investment relative to other investments. If, as Mark has so often predicted, the US government and financial system collapses completely and dollar bills become not-very-good toilet paper, then he thinks it might be good to have bags of silver coins buried in the backyard.

OK, that clears things up; carry on.

Tom Montgomery
10-22-2009, 03:38 PM
Ah, NOW I understand. It has nothing at all to do with the performance of precious metals as an investment relative to other investments. If, as Mark has so often predicted, the US government and financial system collapses completely and dollar bills become not-very-good toilet paper, then it might be good to have bags of silver coins buried in the backyard.

OK, that clears things up; carry on.

Gold coins are simply insurance in the event of catastrophe. Perhaps I should have said "a small percentage of one's investments should include gold coins."

Dave Wright
10-22-2009, 03:51 PM
Since I bought gold in the 70's I was very much aware of the gold bugs back then, and their advice to stock up on silver and gold. It was interesting to watch the precious metal sellers and their hype as fools bought high. I remember one gold bug in particular, Harry Browne. I even bought one of his books (used paperback of course).

After 1980 the hype disappeared as gold prices dropped at least as fast as they rose. I think Harry Browne, the goldest of the gold bugs, became a lot quieter too. He started hawking new advice where gold was only a part of a portfolio of stocks, bonds, and CD's. I thnik he's dead now.

The gold hype is coming back. I notice silver is being pushed again too. If you're inexperienced you might be attracted by the hype.

Joe (SoCal)
10-22-2009, 03:54 PM
You can't eat a chunk of metal. You can't burn it for fuel, you can't wear it, and you can't treat an infection with it. In a true economic collapse, all of those things will be far more important.

Right on Norman. The whole thing reminds me of an old Twilight Zone Episode
The Rip Van Winkle Caper

http://upload.wikimedia.org/wikipedia/en/2/2d/The_Rip_Van_Winkle_Caper.jpg




Synopsis
To escape the law after stealing $1 million worth of gold bricks, a band of four gold thieves, led by foreign-accented scientist-mastermind Farwell (Oscar Beregi, Jr. (http://en.wikipedia.org/wiki/Oscar_Beregi,_Jr.)), hide in a secret cave in the desert. Farwell has designed suspended animation (http://en.wikipedia.org/wiki/Suspended_animation) chambers and set them for 100 years, figuring that by 2061, nobody will remember the robbery and the gang will be in the clear.
When they wake up, everything starts to go awry. Mister Erbie is already dead, a mere skeleton, because a rock had fallen and shattered his glass chamber. Greed soon begins consuming the others. Brooks demands that DeCruz drive the getaway car. DeCruz kills Brooks by running him over with the getaway truck, but then finds that the brakes do not work and barely escapes before the vehicle crashes into a ravine. Consequently Farwell and DeCruz must walk through the desert in summertime, carrying as much gold as they can.
Later, Farwell, who is older and somewhat obese, loses his canteen, and DeCruz forces him to ante up one gold bar for each sip of water. When the "fee" goes up to two bars, Farwell strikes DeCruz with the gold bricks, killing him. Farwell then continues to a highway, lugging the gold he refuses to abandon. Finally, weak and dehydrated, he collapses. A futuristic car drives up and Farwell offers his gold to the couple inside in exchange for water and a ride to the nearest town, but expires a few moments later.
As the man gets back into his car to report Farwell's death to the police, he quizzically remarks to his wife, "Can you imagine that? He offered this to me as if it was really worth something." The wife vaguely recalls that it had, indeed been valuable sometime in the distant past. The husband replies, "Sure, about a.... hundred years or so ago, before they found a way of manufacturing it," and tosses the gold bar away.


Closing narration

“ The last of four Rip Van Winkles who all died precisely the way they lived, chasing an idol across the sand to wind up bleached dry in the hot sun as so much desert flotsam, worthless as the gold bullion they built a shrine to. Tonight's lesson...in the Twilight Zone. ”

JBreeze
10-22-2009, 03:54 PM
You could have done just as well by investing in hundreds of stocks that have risen by similar percentages since 2008, though.... gold's price appreciation wasn't unique.



Only presuming that you knew, aforehand, just what those times were! :)

Like I said, look at gold as a currency, and use the same tools to evaluate this investment as any other investment

And gold sucked wind from around 1980 to around 1999. Once again, it's no different than making any other liquid investment.

So what is your point? You can't suddenly switch from comparing broad market averages to specific individual companies. People make an investment, evaluate their investments over time and make decisions to buy, sell or hold during each review.

" If you're jumping on the gold bandwagon, be mindful of the possibility that gold could turn negative once (if?) the world economy has rebounded strongly and central banks are ready to tighten monetary policy."

My point is that one should watch the $US currency vs. Gold as a currency, and take a position. Holding physical gold can be difficult because of transaction costs and security costs. However, one can "indirectly" buy, hold and sell gold through miners, ETFs, stock and options. As I stated, I've done very well by buying some miners, and have reduced my positions by 50%, based on MY analysis of the risks of those two "currencies".

Norman, you are always bashing gold whenever anyone discusses the topic. I specifically remember your smarmy remark to Ish a while ago...."what are you going to do - eat it?" in the context of a world-wide calamity. So you don't like gold. What is your recommended alternative investment?

Captain Blight
10-22-2009, 03:56 PM
The thing about a fiat currency, mark, is that it depends on everyone agreeing to ignore that it isn't backed with metals. In the case of the dollar, it is backed by "the full faith and credit of the United States." Okay, what does that mean? Different things to different people. For you, maybe, not so much. For the businessman in Zimbabwe, it might mean something completely different.

Gold does indeed hold its value over time, paper does not. In that regard we may well be better off going back to a commodity-backed currency. Silver, maybe?

Tylerdurden
10-22-2009, 03:57 PM
What the hell are you talking about? The price of gold in 1982 was $375.91. Todays price is around $1060, right? That's an appreciation of 282%.

The Dow was 901 on 1/4/1982.... today, it's 10,076... an appreciation of 1,118%.

So, tell me again how I'm lying.



We'd all like to see you demonstrate that.

If I'm lying, prove it. I'll apologize. (I'd ask the same of you, butI know that would be fruitess).

Base it in something other than other fuzzy numbers and the picture looks completely different.
This may help you gain some perspective in reality, except I don't think that's you goal. I thinking gaming others with bull****e for partisan gain is.

So for their benefit......
Inflation, statistics and the DOW compared to gold


http://caps.fool.com/Blogs/ViewPost.aspx?bpid=19191&t=01004553487438585767

and...
The performance of the S&P 500 from the point of view of foreigners - and vice versa


http://caps.fool.com/Blogs/ViewPost.aspx?bpid=12386&t=01004553487438585767


As we know Clinton changed how the government calculates statistics. This leads to misleading info in Unemployment which is closer to 20% by original data CPI and GDP and so on.
A good source for reality is http://www.shadowstats.com/

He figures things like the FEDGOV used to before lying and conniving began to rule the day like Norman is trying here.

Tylerdurden
10-22-2009, 04:02 PM
Gold does indeed hold its value over time, paper does not. In that regard we may well be better off going back to a commodity-backed currency. Silver, maybe?

The more I read the more inclined towards a peg of a basket of commodity's including precious metals.

Tom Montgomery
10-22-2009, 04:05 PM
It doesn't clear it up, for me. In a true armegeddon, where fiat money is genuinely worthless, usable commodities will far outweigh gold as something with useful value. 5,000 gallons of diesel oil in a tank buried in my back yard will have more value than gold.... because people can heat their homes with it, or drive thier diesel vehicles. Canned or preserved food, batteries, clothing, weapons, medicines... those are the things which will be worth owning.

You can't eat a chunk of metal. You can't burn it for fuel, you can't wear it, and you can't treat an infection with it. In a true economic collapse, all of those things will be far more important.
Well... I have in mind the possibility, slim as it may be, of an economic/political difficulty short of armegeddon. I don't have a backyard in which I can bury a tank full of diesel fuel. Nor do I have space in which to store more than about six months worth of foodstuffs. While it is true that I "can't eat a chunk of metal" the fact remains that gold has historically proven to remain an acceptable currency in hard times. It is simply prudent to include gold coins in one's investment portfolio.

Of course, if a gamma ray burst hits Earth the entire discussion of investment strategy will be rendered moot.

Tylerdurden
10-22-2009, 04:06 PM
If it can be described as hype, it sounds to me like it's the perfect time to SELL gold, not BUY it.

I think J. Has it right and you exhibit an unusual abhorrence to Gold.

The question is.. is it related to personal experience or political motivations?

The way you twist numbers based in no reality I will go with politically motivated. It goes along with everything else you post too.

Tylerdurden
10-22-2009, 04:20 PM
So what is your point? You can't suddenly switch from comparing broad market averages to specific individual companies. People make an investment, evaluate their investments over time and make decisions to buy, sell or hold during each review.


J, Did you catch this? I think it flew over a lot of heads here but you would understand the significance.

http://www.woodenboat.com/forum/showthread.php?t=104275

Tylerdurden
10-22-2009, 04:23 PM
Fuzzy numbers? I gave quite explicit numbers... what was 'fuzzy' about them? Are you saying that the numbers are wrong?

Prove it, and I'll apologize.


Sorry, but that doesn't pass the smell test. Inflation affects paper currency... but if you want to make ANY kind of argument about the relative merits of stocks versus gold, inflation affects them in precisely the same way. What's the value of gold? Here's a hint: we know it's value... in dollars! :)



Once again, tell me where I'm lying about the numbers, and I'll apologize.


Like I thought. Your posting numbers that are not based in reality and cannot accept the fact your completely wrong.

Like the talking heads on TV you will keep parroting outright lies by deception even when the smokes clearing.

JBreeze
10-22-2009, 04:24 PM
........ but, in general, I like companies that Warren Buffett likes, for long term holdings. I stay away from speculative issues, like newer technology companies whose stock price reflects unrealistic expectations. Sometimes, that works against me... for example, Apple grew by 142% in the past 18 months or so... but, so be it.


OK, fair enough answer. And I'll continue to invest in precious metal stocks as a hedge against a declining dollar.

But I can't stomach an investment in Apple, irrespective of how well it does, as Steve Jobs backed dated options, and somehow gamed the system to find an area of the country where he could jump to the top of the transplant list. He lives in California, and I think the transplant was done in Tennessee.

Similarly, Warren invests in Goldman Sachs and Wells Fargo among others. Warren has a fiduciary responsibility to his shareholders, but I can make ethical choices and avoid those companies like the plague:D

Tylerdurden
10-22-2009, 04:25 PM
I am going out and I will leave it to the reader to decide what is common sense and what is one big basket of deception.

Tom Montgomery
10-22-2009, 04:27 PM
Oh well... different strokes for different folks.

I do not consider holding gold stocks to perform the same function as possessing gold coins. I maintain a small percentage of my total investment portfolio in gold coins. Do I expect these to outperform a similar investment in stocks? No. Do I hope they will? Absolutely not! I hold them as insurance, pure and simple.

I am going to say something that I hope everyone will take as intended: if I were a member of a religious or ethnic group that historically has been either ostracized, discriminated against, or worse, I would be sure to have gold coins as part of my investment portfolio.

The point is: economic/political catastrophe can befall me and my family even as the world as a whole is OK. That is one of the lessons of history.

seanz
10-22-2009, 04:36 PM
What if you were a member of an ethnic group that had been doing quite well financially recently......and that ethnic group really likes gold?
Would the demand for gold go up (along with the price) perhaps?

JBreeze
10-22-2009, 04:51 PM
Oh well... different strokes for different folks.

I do not consider holding gold stocks to perform the same function as possessing gold coins. I maintain a small percentage of my total investment portfolio in gold coins. Do I expect these to outperform a similar investment in stocks? No. Do I hope they will? Absolutely not! I hold them as insurance, pure and simple......

No disagreement from me....if it gets to the point where physical gold is a necessity, and fishing and gardening aren't sufficient, then i'll have to use my insurance policy - Jamestown: Two Bridges - No Waiting:D

JBreeze
10-22-2009, 04:56 PM
I hope someone from Oz can chime in here....i'm betting the price of gold has been stagnant vs. the Aus $ for the past eight months. At the same time, the Aus$ has appreciated from .64 to .92 vis-a-vis the US $.

As Tip O'Neil might have said "All currencies are local'.........

The Bigfella
10-22-2009, 05:11 PM
I hope someone from Oz can chime in here....i'm betting the price of gold has been stagnant vs. the Aus $ for the past eight months. At the same time, the Aus$ has appreciated from .64 to .92 vis-a-vis the US $.

As Tip O'Neil might have said "All currencies are local'.........


Oh yeah baby.... its been a nice ride. :D:D

I really shouldn't check the daily figures because its either black or red by a substantial amount depending on the day, but I've been wondering whether its time to lighten the load a bit? What I've got owes me precisely zero - both the physical (Sovereigns / Koalas) and the mining stocks.

The only problem with stocks here is that we have a Capital Gains Tax which is an abomination. I'm definitely in favour of no investment taxes, just consumption taxes. Any money being put to good use should be encouraged.

There's talk here of our currency exceeding parity with the USD in the near future. Some say $1.10.

Milo Christensen
10-22-2009, 05:18 PM
There's no point in either investing in or physically owning gold. Although you will make out like a bandit in the run up to the crash. After the crash the investments are just gone. Physical gold won't do you any good at all until you've managed to survive a year or so in the post hyperinflation crash. There are no gold coins in circulation "small" enough to be usable as the limited barter system begins to use precious metals in transactions. But if you survive long enough for the local barter system that will develop to need a currency and you have several thousand dollars in silver dimes, now you're talking about being the banker for a surviving community of several hundred.

Keith Wilson
10-22-2009, 05:30 PM
now you're talking about being the banker for a surviving community of several hundred. History indicates that under those (let us hope hypothetical) conditions, the local warlord's boys will just come by and take your silver, and shoot you down like a dog if you object too loudly.

ishmael
10-22-2009, 05:41 PM
In a "Mad Max" scenario I don't see how much will hold its value except skills and food. Maybe firearms.

I don't think it's on the horizon. An interesting fantasy that has been lingering around the edges of the psyche forever, and in limited ways has already happened. Various nasty disruptions, from war to famine to collapse of an economy, sure seem like the apocalypse if you are in the middle of them, which a lot of folks have been over the centuries. The apocalypse of the Christian Bible, on which much of the fantasy is based, is a bizarre read. One wonders if its author got into the stash of sacred mushrooms.

JBreeze
10-22-2009, 06:18 PM
This shows the relationship of gold to the US trade-weighted dollar:

http://4.bp.blogspot.com/_H2DePAZe2gA/St7ixlZZdqI/AAAAAAAAKFM/IKIa0PaYWeE/s1600/golddollar.png

Another interesting graph - Buy high, sell low:

http://2.bp.blogspot.com/_H2DePAZe2gA/St7I5EetgUI/AAAAAAAAKE0/zDCpQOi6TF8/s320/goldsales.jpg

http://4.bp.blogspot.com/_H2DePAZe2gA/St7JAi2ZbMI/AAAAAAAAKE8/O6JOZrpU5yE/s400/goldmono.PNG

JBreeze
10-22-2009, 11:38 PM
If you would expect to vet each and every investment for the ethics and morality of it's management, you're going to have a very small number of choices. I think it's noble to care about that, but I don't think it's a very practical perspective. Then again, there are mutual funds, for example, whose investment philosophy respects ethics and morality in it's choices.

By the way, do gold mines operate ethically?

The ones I invested in seem to do so.....in particular, WGW is in S. California, operated by Canadians. A couple of explorers that I'm now invested in are Canadian, in the St. James Bay lowlands, and appear to be supported by the First Nations people.

Yes, it is hard to invest or consume without some compromise, but in the Apple vs. Microsoft situation, I'll always pick Microsoft, knowing that Gates is giving everything away (along w/ Buffett's, too) while I think Steve Jobs is a creep and a crook.

ishmael
10-23-2009, 05:24 AM
I made some decent returns in gold stocks during the last run up. I didn't know what I was doing, but I subscribed to the newsletter of a guy who'd been around the mining business all his long life. I just bought and sold on his recs, and quadrupled my money in about six months. Small money in, and a bit bigger money out. I later lost some too, while following a different fellow after the first fellow croaked.

If you've got some pin money it can be fun, but I wouldn't bet the farm. Volatile is a good word for the gold market. It does seem, if Obama's spending proposals keep getting traction in the Democrat controlled Congress, that gold has some upside potential just now. Inflation and uncertainty, as mentioned above, are the key drivers. If we keep the money printing presses running we'll have them both, in spades.

All forms of currency, paper to precious metals, are fiat currency and matters of faith. Gold seems more real, but isn't really. What's it good for? Nice jewelry, tooth fillings if you're well to do, a few industrial applications. However, what matters is the psychology, not the pragmatics, and psychologically gold IS seen by many as a store of value when things are looking bleak for paper.

Two cents.

ishmael
10-23-2009, 08:14 AM
"It does appear to occasionally spike upwards."

It doesn't just appear to, it does. Playing the precious metals markets is not for the faint of heart if you are putting in big money. Big money meaning what's big to you. I played with small money, and came out ahead of the contemporary savings rate. I could have as easily lost my shirt. Be careful out there, it's a jungle. LOL.