Gold Investments for the inevitable crisis to come!?!?!

Hello all.


It seems to me like we are on the brink of a third world war. In such a time I would much rather have gold in hand then worthless paper if there were ever an economic collapse or a run on the banks.

I am considering making a large investment into gold bullion but am a little unsure as to when I should make my move. I'm not all that keen on economics but I know a thing or 2.

It seems to me as though NOW would be a good time to dump all my extra savings into a gold investment. But as I say, I am not too keen on the subject and was hoping that we could get a discussion going on the different things to consider when planning a gold investment.....

With the temporary and " artificial " rise of the dollar, coupled with the drop in oil prices ...


IS NOW THE TIME TO BUY???????

I'm not a gold or silver bug by any means, but I do have a small amount of physical as a TEOTWAKI hedge. I think that ammunition, long shelf life food, seeds, tools, bandages, and maybe even tobacco and booze (for trading purposes) would be better for a real TEOTWAKI type event than gold. Silver is less valuable and more tradeable.

I may reinvest in gold if it breaks below $650 an oz but it looks like it may have peaked for the time being. I think that given its recent decline it is more likely to see $600 than $1000 any time soon. I know alot of people whom I really respect will vehemently disagree with me.

EDIT TO ADD

I've been known to be totally wrong before, but I wouldn't hop all in on gold until their is more clarity on the direction in price. Entering gold now requires a high risk tolerence given the scale and direction of the moves recently.

Before buying gold I recommend reading up on opinions both for and against gold, and going from there.

[edit on 19-8-2008 by jefwane]

reply to post by jefwane


Personally I prefer silver for a few reasons.

Cheaper.
More "tradeable"
Higher % increases.

Sure, Gold is worth more, but oz/oz Silver has far better investment performances. Essentially anyone can buy silver as well, making it easier to sell and buy .. not many average joes own Gold .. of course, I don't offer any investment advise, just giving my general opinion.

(by the way metals work the same way the so called "fiat" money works, as in order for gold or silver to be used as currency a fiat must place it's wealth on the metals.. meaning in the event of a crisis metals are worth nothing, unless there is a demand. Personally, if anarchy breaks loose and you come to me with metals.. first I might steal the metals just for kicks and giggles but I will be far more interested in provisions.. you would see trading of foods, tools and so forth. Whats a country folk gonna do with an ounce of Gold? -- I also don't advise stocking up on supplies, just rambling)

K im done.

Originally posted by kreese
Hello all.


It seems to me like we are on the brink of a third world war. In such a time I would much rather have gold in hand then worthless paper if there were ever an economic collapse or a run on the banks.

I am considering making a large investment into gold bullion but am a little unsure as to when I should make my move. I'm not all that keen on economics but I know a thing or 2.

It seems to me as though NOW would be a good time to dump all my extra savings into a gold investment. But as I say, I am not too keen on the subject and was hoping that we could get a discussion going on the different things to consider when planning a gold investment.....

With the temporary and " artificial " rise of the dollar, coupled with the drop in oil prices ...


IS NOW THE TIME TO BUY???????

If you are talking true TEOTWAWKI, gold will only do you any good if you actually have possession of the metal in your hands. It won't do any good to have it stored in a safe deposit box.

Also, consider how hard it will be to provide "change" from gold. Make sure you get SOME gold, but also get lots and lots of silver bars. MUCH easier to make "change" for when TSHTF.

Gold/Silver Disconnect between buyers/suppliers

found this today on reddit.com.

It would have been best to buy gold bout 2 years ago lol then you would be fat cat smiling. Now is never too late. Also from what I hear the US GOV isnt selling gold eagles anymore which is pretty interesting that has to do something to the market.

Actually got a solicitation for the Gold Eagles yesterday in the mail......

But aside from that I'm not trusting Gold as a panacea if the economy hits the fan.

Do you realize after the dpression it became illegal to won Gold? It had to be turned in (confiscated). In this day and age they have a pretty good handle on who is stcoking up on the stuff. What good will it be?

there seems to be a shortage of silver, at least in the commercial market. the industrial market, by what I read, is taken care of first, so I guess they're fine. but ampex, monex and the like have been having a hard time being stocked.
so, well, is this a clear indication that the market is rigged? I mean, go to ebay, and look at what an once of silver is going for, I guarentee you can't find it for anywhere near the $13.36 that the market says it's worth. and well...at the moment, it seems like it's ebay that has the largest inventory.
there is a shortage of silver, a large demand for the product, and well, prices are rather low....
what gives?

I heard yesterday that gold was headed down to 600$ or even 550. I would wait till the commodities (oil and corn) straighten out and you should see a bottom. Buy then.

I guess buying precious metals in the event we all become cave-dwellers would be one reason to accumulate...there are others though.

Since the opinions of either camp...both pro-Gold & anti-Gold...are equally subject to bias...as with any long-term investment, imo it's wise to have a personal grasp, and understanding of market fundamentals before committing a serious amount of net-worth. I wouldn't place all my trust anybody's direction for my $...especially some chump on the Internet...like me

Anyway, having done the requisite amount of research, a basic understanding of technical data can provide an advantage in defining a profitable entry point.

GOLD


Chart shows the bull-market-trend-to-date with corrections (circled). In May 06, Gold corrected -22% with a retest in Aug/Sept. For reference, the current correction from the March high to last weeks low...stands at -21%. So, while the last-leg of this recent down-draft was definitely violent in nature...bull-market corrections of this magnitude are not unusual.

What might be significant here, is Gold's historical reaction when trading at, or just below the green-line...the EMA-65...which, represented on this chart is $830.34.

With the understanding that anything is possible under Authoritarian Free-Market Enterprise...lets see what happens here

it sounds like you were waiting until Zero-Hour to make a commitment...


an earlier 911fnord post did a link to www.seeking alpha.com
(well worth reading, btw)
which goes on to explain that many metals suppliers & coin dealers , just do not have a on-hand supply...be it bars or coins of silver or old...


its also known that the US mint has suddenly ceased striking Gold Eagles...
And some months previous the mint stopped stiking the now rare Silver Eagles which are rationed to a mere 13 dealers/distibuters in the whole USA. ~(talk about fascist operations)~ !


this could mean that most everything to be hoarded is already being hoarded... both by the govt and private coin/PM dealers
or that the present inventory would be sold at a 'loss' -- which is unaceptable in a capitalist economy
blame the managed Gold price drop in the last 2-3 weeks for the current situation with gold-silver availability.



now here's a item that hasn't made the news yet :
'Vanguard' a major low fee Fund has suddenly 'closed' their
gold and precious metal fund [a Billion + in holdings!] to new investors
(i think it was Friday the 15th of August when that happened)



which leads me to think that the govt & PM dealers & gold funds
know that the prices of metals/coins are either going to skyrocket or collapse in the near future... And all parties are going to hold on to what they already own and not sell or trade at today's prices....

because the price of gold & silver is going to tank -or- they are attempting to create a scarcity in gold/silver in an attempt to drive up the price so they can unload without too much of a loss....



Your guess is as good as mine.....

Originally posted by St Udio
it sounds like you were waiting until Zero-Hour to make a commitment...

now here's a item that hasn't made the news yet :
'Vanguard' a major low fee Fund has suddenly 'closed' their
gold and precious metal fund [a Billion + in holdings!] to new investors
(i think it was Friday the 15th of August when that happened)

Hi Udio

If you are referring to the Vanguard Precious Metals & Mining Fund:

Closed 2002

Re-opened 2004

Closed again 2006

and apparently remained closed, at least as of August 7, 2008....

The following Vanguard funds remain closed: Vanguard Primecap Fund (VPMCX), Vanguard Capital Opportunity Fund (VHCOX), Vanguard Precious Metals and Mining Fund (VGPMX) and Vanguard International Explorer Fund (VINEX). Full Text

Maybe I'm quoting the wrong fund...or maybe you are referring to a non-Vanguard mutual like SCGDX, available through Vanguard's FundAccess® program

Ostensibly, Vanguard occasionally takes this measure to limit the in-flow of hot-money/volatility, ie..to preserve the integrity of these instruments (on behalf of shareholders), as reliable long-term investments. In this regard, the closures could indicate a defense against positive market sentiment...I might be missing the obvious, but really I don't see a related conspiracy here vis-a-vie the bullion banks.

I'm beginning to think the biggest conspiracy regarding this whole shortage issue, is the idea that all major dealers would disrupt the flow of business to valued, long-term clients by sitting on inventory. This implies that they don't hedge...that they conduct their high volume/high dollar/volatile businesses...naked-long. Kinda reckless, no?

Perhaps the most comprehensive, easy to fathom explanation I've read recently comes from an old, respected coin dealer....

The Disconnect Between The Physical Gold and 'Paper Contract' Markets

Whatever is happening under the skin...and whichever way the market turns...Gold, the barometer, seems to be signaling; something this way comes...and I doubt that it's good

Thanks for the info people. Much appreciated.

It's made me think that maybe gold is not what I should be looking at, because the whole idea of this investment would be to have something material/in-hand that is of trading value if there was an all out collapse. I think I will simply buy some silver coins and put them away.

On the other hand...

Gold as an investment at this point in time might not be a bad idea. I was watching mad money the other day, ol jim seems to think that gold is going to shoot up to 1600ish an ounce within the next couple years. If you look at the chart posted above, you'll notice that the price inevitably goes UP. sure, it rises and falls on the short term, but all in all, it goes nowhere but up!

Another thing to look at is inflation, as inflation rises, gold rises... this sort of relationship makes gold a safe investment for the long term.


I'd like to also point out a comment made about how gold was contracted in the USA shortly after the great depression. What a sad situation that was. The govornment contracted the gold, payed bottum dollar for it and then, when they had it all, they jacked up the price and started selling it back again! that is just lame!!! And they said they were keeping it " safe " in ft. knox... where they had a very large percentage of the worlds gold. As far as I know, there is currently no more gold in ft. knox. It seems to have just disapeared. This is just disturbing. Just a nice lil reminder of how " in control " we really are. If it was that bad back then, it must be much worse now!

another good investment I think, if you have the room for storage, would be to just buy double when the stuff you are always buying comes on sale. I think it's a pretty safe bet that the next time you go into the store, the price will be higher, so well, save yourself some money buy it now.

I think that's a great common sense idea dawnstar. Just don't let the neighbors catch you stockpiling...they might brand you a y2k-type...or worse...an evil speculator!

Interestingly, I think this is precisely the mindset that the Fed hopes to nip-in-the-bud with it's "we expect inflation to moderate" mantra...but in the face of $4 eggs, operation perception management eventually begins to break-down (we might be little people, but we do have a brain).

I see the hoarding impulse as a preliminary step in the creeping progression towards full blown inflationary expectations. A self-fulfilling prophecy of sorts, and imo, the next domestic challenge for an increasingly impotent US Fed.

Anyway, what I really logged-on to post is Peter Schiff's commentary on the market reaction in Gold/commodities. Without naming names, or attempting to detail underlying motives, he paints the picture of a purely technical bear-raid...I happen to agree.

Investors Chase Phantoms

good investment advice is hard to come by these days


dollar holders could hold metals as a hedge against a break in the petro dollar


the thing that concerns me is that the central banks and financial elite's may be very adverse to allowing the ASSET PRICE DEFLATION of the last year to continue much longer. The hyperinflation of CREDIT that has occured in the last 20 years , served as the gennie that provided the illusion of wealth ( stretched a few more years with dergulation/securitization of the last few years). not the unwinding of all this leveraged debt leaves asset prices very much subject to deflate in price)

When a large means of increasing money supply is credit creation and banks are (watching there capital base erode / since the houses (and there subsequent falling value) are banks collateral. option arm's resetting for a nother year or two (as well as oversupply) gaurantees more house price falls (at least until the GSE are offered a trillion to buy back mortages / a couple hundred billion won't do the trick), also the securitization business is dead and this was a large source of credit creation as well. also home equity lines of credit are down about ...oh 90 percent in the last 2 years.........so the typical means of extending more credit is having trouble creating monetary inflation (or will be very soon).

so when traditional measures don't work well enough, the trump card may be pulled out. perhaps that's why greenspan is warming up the OPEC's to cut a dollar peg, in the face of crippled bank capital the inflation that is needed to keep asset prices afloat (and in order to ensure ben B that deflation does not happen here lol) the best way to increase inflation may be to see a flood of central bank holdings rush back to america. when the oil becomes priced in a basket of currency's , central banks will have a significat chunk of dollars they will not need anymore. This will increase the price of everything pretty steadily. This is just speculation but i see the credit machine broken, and i see a dollar tsunami looming on the horizon. Inflation is always the easy way out for govt's, and with the mutli nationals okay the petro dollar will be severed. that situation may also be good for the Global economy, strengthening the purchasing power of all the currency's included in a "oil basket" like the yen (japan) yuan (china) euro (euro zone).

Originally posted by cpdaman
and in order to ensure ben B that deflation does not happen here lol

Tongue-in-cheek no doubt

I've only read excerpts from B's seminal Essays on the Great Depression, but ya know cp, I'm learning to take the spoken words of Fed Chairmen seriously. No, not the bs FOMC minutes, or the public congressional hearings, though there's plenty to be gleaned there too...if you stand most of what's said on it's head. I'm talking more about unofficial statements...information directed primarily to the movers & shakers...insider affairs...lunchons...banquets etc.

Interesting and notable that in 2002, Greenspan opened this speech with a comment on Gold

Remarks by Chairman Alan Greenspan
Before the Economic Club of New York, New York City
December 19, 2002

Issues for Monetary Policy

(opening statement) "Although the gold standard could hardly be portrayed as having produced a period of price tranquility, it was the case that the price level in 1929 was not much different, on net, from what it had been in 1800. But, in the two decades following the abandonment of the gold standard in 1933, the consumer price index in the United States nearly doubled. And, in the four decades after that, prices quintupled. Monetary policy, unleashed from the constraint of domestic gold convertibility, has allowed a persistent over issuance of money. As recently as a decade ago, central bankers, having witnessed more than a half-century of chronic inflation, appeared to confirm that a fiat currency was inherently subject to excess."

"Moreover, a major objective of the recent heightened level of scrutiny is to ensure that any latent deflationary pressures are appropriately addressed well before they become a problem."

"Although the US economy has largely escaped any deflation since World War II, there are some well-founded reasons to presume that deflation is more of a threat to economic growth than is inflation."

"the expansion of the monetary base can proceed even if overnight rates are driven to their zero lower bound."

"Clearly, it would be desirable to avoid deflation. But if deflation were to develop, options for aggressive monetary policy responses are available." Full Text

Well we know where Greenspan took interests rates through 2004. What's interesting is that it was the language in this speech, that signaled the secular bull market in Gold. Before the night was over, these statements had been parsed & posted on the Internet by a knowledgeable Gold trader/Fed watcher...and sure enough, after 22yrs, the Gold trade was back-on. If you scroll back-up to the chart I posted and match dates...you'll see that he called to a T.

Getting back to Bernanke and his deflation phobia, when I read statements like:

I am confident that the Fed would take whatever means necessary to prevent significant deflation in the United States and, moreover, that the U.S. central bank, in cooperation with other parts of the government as needed, has sufficient policy instruments to ensure that any deflation that might occur would be both mild and brief.

From: Deflation: Making Sure "It" Doesn't Happen Here

.....or his infamous 2002 'helicopter' speech...I'm paying attention.

The scenario you paint with respect to oil would sure seem to be dollar negative. The artificial dollar strength, and by extension, the artificially low oil costs we've enjoyed for over 30yrs would evaporate overnight

[edit on 23-8-2008 by OBE1]

I just went through the policeauctions site and noticed that there was a

Stunning 1-Gram .9999 Pure Gold Bar to add to your collection! Produced by the world-famous Pamp Suisse - this tiny gold bar weighing 1 gram comes in its original packaging, with Certificate of Authenticity. A great little investment piece for anyone looking to build their investments in Gold!

Current bidder is gonna have to wait until gold passes $3388.00 an ounce to make any money on it.

Originally posted by OBE1
"Although the US economy has largely escaped any deflation since World War II, there are some well-founded reasons to presume that deflation is more of a threat to economic growth than is inflation."

"the expansion of the monetary base can proceed even if overnight rates are driven to their zero lower bound."

"Clearly, it would be desirable to avoid deflation. But if deflation were to develop, options for aggressive monetary policy responses are available." Full Text

I am confident that the Fed would take whatever means necessary to prevent significant deflation in the United States and, moreover, that the U.S. central bank, in cooperation with other parts of the government as needed, has sufficient policy instruments to ensure that any deflation that might occur would be both mild and brief.

From: Deflation: Making Sure "It" Doesn't Happen Here

So there appears to be a standoff right now between the banks and the Federal Reserve.

Banks waiting for interest rates to go up before unloading thier inventory of foreclosed homes.

Fed supposably willing to drive interest rates to 0% in an effort to get banks to start unloading houses on the market in an attempt to avoid deflation. With every drop in the interest rates the banks lose more money, especially when they continue to have rising maintenance costs associated with holding inventory.

The more that interest rates head towards 0% the more it appears that the banking system will fail, thus making gold more favorable.

---

"Legal precident established for keeping your foreclosed house and suing the bank"

www.abovetopsecret.com...'

---

- If banks start unloading inventory at higher interest rates - deflation occurs

- If banks continue to hold onto inventory at current interest rates - deflation occurs

- If banks start unloading inventory at lower interest rates - deflation occurs (But for a shorter period of time)

[edit on 31-8-2008 by In nothing we trust]