Surprise...the game is rigged

[budpreacher]

gold is a safe investment... value goes up and up and up, safe and solid investment.. banks collapse, companys collapse, collapsing all around us but gold never collapses... stays solid and increases - gold is probably the safest investment there is

 

[Hemphrey Bogart]

gold is a safe investment... value goes up and up and up, safe and solid investment.. banks collapse, companys collapse, collapsing all around us but gold never collapses... stays solid and increases - gold is probably the safest investment there is

Really? Lets say I bought 10k worth of gold in late August of 2011. How much money would I have made so far?

HB

 

[budpreacher]

you would have made $10 617. 52

so 617 dollar profit give or take a few cents

 

[FlowerFarmer]

Really? Lets say I bought 10k worth of gold in late August of 2011. How much money would I have made so far?

HB

Anyone can cherry pick a date within the last year to meet their point (whatever that may have been). 1 year? Why don't you widen your picture a little bit.

The charts make it pretty clear. Those holding their savings in gold instead of paper dollars have made record gains over the last decade.

Gold 10 Yr

How is this even an argument?

10k in gold in 2001 = $52,800 in gold today
10k in paper in 2001 = $10,000 in paper today - but buys a lot less stuff.

Dont even get me started on Silver. Those whom purchased silver in 2001 (10k) and sold in last april have made nearly $80,000! Less inflation of course.. but a hell of a lot better then those whom stayed in paper.

Anyone who cannot see this is a fool. Its already been proven. Holding paper instead of precious metal over the last decade has been foolish. There is no other way to put it. Those whom traded in and out of metal on the spikes and dips have done even better.

Its not all profit unfortunately due to inflation and the decreased value of the dollar but it has been a great protection of purchasing power + some.

...

Gold has no use? Well many have been using it pretty well for some time now to protect their saving from evaporating due to debasement of the USD.

 

[Hemphrey Bogart]

you would have made $10 617. 52

so 617 dollar profit give or take a few cents

Closing price of gold on August 22, 2011: $1843.20

Closing price of gold on May 24, 2012: $1557.80

Your math is off a bit.

HB

 

[Hemphrey Bogart]

Anyone can cherry pick a date within the last year to meet their point. 1 year? Why dont you widen your picture a little bit.

The reason for that date is to illustrate that gold doesn't always go up, even in a bubble market like we're seeing right now.

Also, can you please explain how gold doesn't lead to inflation or deflation or any of those other bad things that "paper currency" does?

HB.

 

[DiscoBiscuit]

hmm i give you a ton of substance to respond to and all you come up with is child slavery and forest destruction.

the business not the gold makes those decisions, and with the conservation movement in full swing miners are becoming more environmentally and socially cognizant.



by the way child labor is not child slavery...

just because they get payed shit by your standards doesn't mean it's not leaving them in a better position then they were before, ya know likely living in a tree fort, short on food cause they are still small time farmers and big time hunter gatherers...

ever think their lives may be improved by their standards. maybe thats why they take the dollar a day over starving, hoping dad can bring some meat home out of the woods...

You've got the social Darwinism down pat.

Does anybody actually read this stuff? Narrative that speaks as authority. No less than 10,000 internet links chronicling human and environmental exploitation and suffering - can't knock a dent in gold-fever dogma.

IMO, you're better off sticking to all the financial pros and cons. Sarcasm off.

 

[Hemphrey Bogart]

How is this even an argument?

10k in gold in 2001 = $52,800 in gold today
10k in paper in 2001 = $10,000 in paper today - but buys a lot less stuff.



...

We can do this all day long. If I had taken that same 10k and bought MSFT at the IPO in 1986, I'd only be up a paltry $3.7 million or so with around $80k in dividends coming in.

If I had instead decided to spend my 10k on gold in 1986, I would be up by a substantial amount, but NOWHERE near 3 million.

HB

 

[DiscoBiscuit]

The reason for that date is to illustrate that gold doesn't always go up, even in a bubble market like we're seeing right now.

It's a case of, "I didn't see it so it didn't happen." History is just propaganda, unless of course it supports one's argument. Any references to history are Roman, Inca, Mayan etc. Vague references to ancient civilizations as opposed to more recent history, replete with monetary statistics, i.e. specifics.

Also, can you please explain how gold doesn't lead to inflation or deflation or any of those other bad things that "paper currency" does?

HB.

Few gold supporters examine flies in the ointment.

http://upload.wikimedia.org/wikipedia/commons/2/20/US_Historical_Inflation_Ancient.svg

 

[FlowerFarmer]

The reason for that date is to illustrate that gold doesn't always go up, even in a bubble market like we're seeing right now.

Your picking a date where Gold was short term a little parabolic. Paper profits have been taken bringing it down a bit to a more supported price.

But gold hasn't gone down per se off of $1800. The dollar is currently in a rally due to the eurozone issues. People are exiting the euro and into the USD making the USD appear strong. A stronger usd buys more gold.. so gold will appear to have gone down.

You act like gold is a bubble and it has popped. Rest assured Gold/Silver will continue its uptrend shortly.
Its a mathematical certainty that the FED will continue to inject liquidity into the markets = higher precious metal prices. The can will get kicked down the road a little further.

There is nothing wrong with normal inflation/deflation. Its just when governments continue to print and create money out of debt that we run into real inflation...regardless of how they want to skew the number to make it appear that everything is A'ok. If the government let it takes its natural course we'd see severe deflation followed by mass injection of liquidity to try to print our way out of it. This is likely to lead to severe inflation.
//

We can do this all day long. If I had taken that same 10k and bought MSFT at the IPO in 1986, I'd only be up a paltry $3.7 million or so with around $80k in dividends coming in.

Thats a risk trade... I'm referring to safe saving. Many ways to invest money to increase one's wealth...but gold is great for saving..with no counter party risk. Might not be making millionaires but it surely is circumventing the theft of your savings.

 

[Hemphrey Bogart]

There is nothing wrong with normal inflation/deflation. Its just when governments continue to print and create money out of debt that we run into real inflation...regardless of how they want to skew the number to make it appear that everything is A'ok.

I'll ask again. How does a gold standard keep things like inflation and deflation at bay? I'll throw in another question for you to ponder: What are the effects of having a gold standard on the business cycle?

Thats a risk trade... I'm referring to safe saving. Many ways to invest money to increase one's wealth...but gold is great for saving..with no counter party risk.

If you think you aren't taking a risk by investing and/or saving your money solely in gold and PMs, you're not thinking.

HB

 

[bombadil.360]

what's funny is that the price of gold is represented by paper money. and yet, the same crowd arguing in favor of gold, dismiss the value of paper money.

it's like wtf?

 

[Hemphrey Bogart]

what's funny is that the price of gold is represented by paper money. and yet, the same crowd arguing in favor of gold, dismiss the value of paper money.

it's like wtf?

Not only that, but they are digging new gold out of the ground everyday. The US and other countries are also printing paper currency. Makes you wonder why people think gold is so rare and hard to find when they dig those shiny rocks out of the ground every single day.

If I was betting against the Euro and the US, I would just go buy some ultra short ETFs and wait for the apocalypse, lol.

Makes me think of DeBeers. Diamonds are rare too....or maybe they're just hoarding them?? Of course, nothing like that would EVER happen with gold because gold is only held/mined/stored by honest people who would never lie about how much gold they have.

Whatever. I have to go work in the yard now.

HB.

 

[FlowerFarmer]

I'll ask again. How does a gold standard keep things like inflation and deflation at bay? I'll throw in another question for you to ponder: What are the effects of having a gold standard on the business cycle?

If you think you aren't taking a risk by investing and/or saving your money in gold and PMs, you're not thinking.

HB

Inflation and Deflation are normal economic cycles. Again.. I'm not saying the gold standard is necessary a good thing/the answer. But our current system is completely broken as are all fiat currencies that the government can dilute endlessly.

We are pressing all of the right buttons right now for massive inflation. Everything is propped to prevent deflation and it just doesn't work that way.

What risk am I taking in savings in precious metals? Is the dollar going to miraculously recover? Will its rapid debasement end? Bernanke is throwing in the towel and admitting defeat?

...

what's funny is that the price of gold is represented by paper money. and yet, the same crowd arguing in favor of gold, dismiss the value of paper money.

What is the value of paper money?
The USD has lost 98% of its purchasing power since the FED was created in 1913.

Your argument makes absolutely no sense. I'll take $50 an ounce gold if the dollar had the purchasing power it did when it was created. But it doesnt.. meaning saving in something else smokes the dollar every day of the week.

 

[FlowerFarmer]

Not only that, but they are digging new gold out of the ground everyday. The US and other countries are also printing paper currency.

Exactly

Gold represents true work / real value. It takes effort to procure.
Paper Currency takes nothing. A couple clicks on a computer.

 

[DiscoBiscuit]

The reference was to gold trading, especially trades that don't deliver.

 

[bombadil.360]

flower, if the price of gold goes up or down, with what do you measure said price fluctuation? with peanuts? gummy-bears? or paper-money?

it's paper-money printed by the feds that people are after when they invest in gold.

for example, if you travel to India, and only have dollars in cash with you, you will still be able to pay for your hotel, food, etc... no need to exchange for ruppies. something you cannot do with any other currency btw, well, maybe some will take euros too.

but no one will take gold. they'll look at you like: "you're crazy or what?"

this is also the reason why no other currency can replace the dollar atm.

it is accepted everywhere, more so than visa lol. and regardless if it was printed by the fed either. they'll take it, and in turn, they'll buy other real goods and services with it. etc... etc... etc...

 

[FlowerFarmer]

flower, if the price of gold goes up or down, with what do you measure said price fluctuation? with peanuts? gummy-bears? or paper-money?

it's paper-money printed by the feds that people are after when they invest in gold.

for example, if you travel to India, and only have dollars in cash with you, you will still be able to pay for your hotel, food, etc... no need to exchange for ruppies. something you cannot do with any other currency btw, well, maybe some will take euros too.

but no one will take gold. they'll look at you like: "you're crazy or what?"

this is also the reason why no other currency can replace the dollar atm.

it is accepted everywhere, more so than visa lol. and regardless if it was printed by the fed either. they'll take it, and in turn, they'll buy other real goods and services with it. etc... etc... etc...

I measuring my gold in what it can get me. Obviously it needs to be converted into paper dollars 1st as that is the currency we currently use and widely accepted.

I dont think your understanding the point of a hedge.
Its not about the price ..its about its purchasing power.

If 1oz of gold buys me 10 "things" when I first got gold.. and now 10 years later still buys me the same 10 "things"..I've held my purchasing power.
If $300 buys me 10 "things" when I first got gold, but 10 years later only buys me 3 "things", Ive lost quite a bit of purchasing power. Gold was the hedge against devaluation of the currency... Its a tool.

While maybe not entirely accurate the silver dime example sort of explains this. A 1964 silver dime still buys the same amount of gas as it did in 1964. A 2012 dime doesnt buy you anything really. See what I mean? The metal has kept up with inflation while the value of the currency has not.

Again the value of gold hasn't changed. The currency in which it is represented has.
If you cant wrap your head around that..then keep your savings in paper and buy less and less with it each year.

But .. I'm outta here for a bit. Chat with you guys later.

 

[bombadil.360]

flower, I get your point, but it is not true what you are saying.

the price of gold goes up since the paper-money becomes inflated, and so do prices of everything, so you'll end up getting more dollars for your gold, yes, but they will be inflated dollars, and you will have to pay higher prices as well.

the example you give of the silver coin is also flawed; as the value the coin maintains is because it is a collector's item, not because it is made out of silver.

the same ammount of silver that is in that coin will cost less than the coin basically.

peace

 

[dagnabit]

Todays melt value of a mercury dime is 2.05.
Not sure how bom came up with the idea that the metal is worth less than a dime?

http://www.coinflation.com/