I've heard this thrown out there several times(on this board too), that we should all be stocking up on gold (Glenn Beck knows best!) as it is a safeguard against our soon to collapse economy and dollar. Currently at $1,544/ounce, gold is really valuable, and will most likely stay this way. The thinking is, when the other shoe surely drops in the next 2-3 years, this price will be over 3,000/ounce, being not only a hell of a hedge, but also fortunes will be made off the demise of the US. Here's my question though: What do you do when a country like Germany or the US decides in the next 2 years, "HEY! We have a nice little reserve of gold here sitting around doing nothing, let's sell it back to the market and make some cash off this!" So now in the matter of a minutes, this gold bubble (collapse or not), poof, gone. Intelligent responses and rebuttals to this scenario are welcome. [FONT="][/FONT]
They do this all the time to keep the price down... we would know how the FOMC manipulates metal markets if we could audit them. Metals are volatile, they are not a good short term investment. The markets are manipulated to encourage panics and selloffs. It is a longterm hedge against inflation, I suppose the end goal is to convert gold into a currency backed by gold.
People who are going to invest in gold are people who have a lot of money and they dont want to lose it due to the American economy crashing. Would you rather have 100 percent of your savings in american currency (if we fail as a country , you are now broke as fuck) or have 50 % of it tied into american currency and 50 % tied into gold. Think of the fact that your money in a bank is only insured up to a certain value as well. WHile gold price may drop, its still a limited resource and will eventually go back up . Which do you think has the potential to drop the lowest value(and fastest)? The american dollar , or a non-renewable resource? Think about it......
I guess I should've stated that I was referring to those that are putting most (if not all) of their eggs in one basket as a part of their survival plan, and not those that are buying gold as a hedging measure. True that this already happening now Aaronman, but I was referring more to the possibility of a mass sell off should the day come where gold reaches unbelievable heights (over 3000k as being predicted by some). And that's assuming no crash occurs. If a full-on collapse does occur, at that point the market value of gold will not be determined by speculators because the global economy will have crashed, so in a sense you are left with worthless certificates. Or you have a room full of cool looking metal bars. What good is this? There's a professor in my school that believes gold will be 5-6k per ounce in the next five years and he is pretty much stocking up on gold bonds, physical gold, guns, survival equipment. The guns and equipment I get, the gold...not so much. I don't think people will be civilized enough in the event of a crash to determine their own currency. There are too many people with limited bartering experience, and the principles of it. A lot of hypotheticals here, but something I thought was worthy of a blade discussion.
Gold will still have value elsewhere, it's always had a certain intrinsic value throughout human history. And, there is only so much of it to go around - you cannot simply print a trillion ounces more gold like you can US Dollars. For what your professor is doing, he might be better buying some silver. You should never put "all of your eggs in one basket". The Gov/Fed would like you to, that's why FDR confiscated everyone's gold in 1933 (executive order 6102) and we were only allowed to buy/own gold again thanks to Gerald Ford.
Truth, but how intrinsically valuable would a cachet of gold bars be in a collapse, where you need a trading partner to make use of its value in order to survive. My point is, I know there are a few survivalists out there that see gold as this foolproof bet in their plan to ride out what they feel is an inevitable collapse. I find that interesting, as in the collapse situation they envision, I don't see gold as being something people desire. They'll want food and necessary goods, and although eventually gold would most likely be the trading standard eventually, it wouldn't be an overnight thing. Angry mobs and desperate people don't care about dual wants and needs role in a common currency. Understood, but from what I know, these are generally small amounts being sold back to the market. I was referring to a scenario where the Fed gets desperate because of a crashing economy, and sells off mass quantities of gold as a sort of 'last ditch' measure. A hell of a hypothetical, but like I said I know there are people out there that have this scenario in their mind. I've had conversations with a few, unfortunately I cannot give you proof of them existing.
But you are acting like things collapse and nothing replaces it, ever. If that were true then yes, gold might not be the best thing to spend your money on "now". But assuming things improve, someday, it might not be such a bad idea to have something of intrinsic value. One thought comes to mind...after WWI in Germany. Those who held fiat currency vs those who held diamonds, gold, jewels, etc. This is in addition to being prepared for the worst case scenario, not saying holding those items make you impervious to it. In the short term, something like food, bullets, silver, etc would be preferred for smaller transactions. In the long term, gold is not a bad means to store ones wealth over say, paper money.
Aaronman is right. People are buying gold (or other precious metals) because they're betting that the dollar is going to decrease in value while gold is (more or less) going to maintain its value. Even if the Fed sells off a bunch of gold, that won't reduce the value of gold permanently. It might drop the spot price of gold temporarily (for several months), but in the long-term gold will continue to gain against the dollar so long as the Fed continues on the same route in terms of monetary policy.
As this professor points out, we will know when the fed gets desperate to flood the gold market when they release 22 karat gold bars (melted private gold coins confiscated from Roosevelt)
The US Treasury would never sell its gold for paper money. If they are desperate and need something of value, they will print up some paper money and force you to sell your gold, just like FDR did. Why would they give up gold for paper if they were desperate? Lately they've just been printing up paper money and acting like it's gold, but I think that will stop soon, by no other option.
The US may be in a position where the value of the dollar has fallen so far, another currency is worth way more. They would sell the gold to try to prop up the dollar in order to keep from total collapse. Instead of the dollar being backed by gold, it would be backed by, say the euro, for instance.
But the paper euro will never be worth more than gold. They just wouldn't sell their gold. If shit really hits the fan, they'll buy all your gold for US dollars, by force. Then they will scrap the dollar bill, introduce a new paper money, and back it with their gold. That would be my theory.
<sarcasm> but but but...that's just un-amerikan..fiat faith in paper is the way to go!! </sarcasm> It's a shame we dropped the gold/silver standard. Going back to it might just help for the long term.
Gold has peaked - SELL SELL SELL By quality land instead while it's cheap - and they aren't making any more of it. (10% commission would be appreciated in a few years - thanks!)
Gold isn't even close to peaking. It's been sliding the past 48 hours, but that's for various reasons. Inflation will continue to push the price of gold upward.
Land is good to own but it is also easier for government to take from you than gold. At least here in America.
The IMF has actually release a timeline stating that by 2016 the currency of international trade will be in the form of some new international currency. The US dollar no longer play that role. China, our greatest creditor, is currently in the process of trading is US dollar reserves into property, other forms of currency, and is also in talks to cut the US out of the world economy after how irresponsible we have been with our money as a whole. The world is beginning to think American's can't be responsible with money. I'm in agreement with several friends & family members that it is time to start stocking up on guns & ammo (& for me weed seeds too lol). I'm convinced that within the next 5 years America will see a depression greater than that of the 30's because of how complacent & dependent the average American has become on consumer goods. If i'm wrong i'll be very happy, if i'm right i'll be very prepared. I see that as a win-win. N if I am right, and it does happen; make your way to the land formerly known as new york to the place formerly known as poughkeepsie. I'll be the gun toting weed smoking outlaw living on the mid-hudson bridge with his newly formed tribe, ask for baked beans and you will be taken care of
Whether or not gold has peaked is irrelevant. Gold should be treated as a hedge against inflation. We're going through inflation, so holding onto anything other than USD is a good investment, and Gold is just excellent in the long term. As aaronman said, investing in metals is something that is long-term only. Let's say Gold did peak, and stays about even, or even declines a bit. It will still be worth more than the same amount of US Dollars in a few months or years--thus, the entire point of owning physical Gold.
Gold, silver, and real estate. I'm so angry that at 19 I have very little collateral. N I'm also pretty sure buying a gun made out of gold would be wise as well, 2 birds one stone