Stock broker friend of mine, says all traders are buying land, gold, silver....

So sad to read the posts by all the kids on here who think that gold, silver and some land is going to save them. ALL YOU WILL BE DOING IS MAKING YOURSELF A TARGET.

The gov (or whatever collection of folks who are in power at the time) will come in and take your ish. It will be even easier to recruit "troops" in those times because all you have to promise them is something to eat and provisions.

So all you folks "preparing", just be prepared to have ur stuff taken from ya. I dont care how many rounds of ammo you have and how many cans of tuna fish you have stored and how many solar panels are on your roof. IT WONT MATTER.

Those things would only be good in a "I Am Legend" scenario when its just you or a few folks left after a mass extinction type event. Not after the collapse of the US. There will still be LOTS of people here, LOTS of military equipment, and no structure. Your little provisions wont do anything.

reply to post by JR MacBeth


How was gold reflecting the value of the dollar from 1981-2000? Not very well as the dollar lost it's purchasing power by about 150% and gold fell from $950 to $300. During that period if you bought all your goods with gold your purchasing power dropped about seven fold.

Gold is not a currency, but believe what you want. Once the fear subsides and all come to the conclusion that the world will not end, then gold will be valued by it's industrial demand only. You may even see it fall further than industial use warrants as mom and pop start dumping one more losing trade all over again.

I will wager that anyone who does not sell gold before year end will have to wait until 2027 until they break even on their position. I will go a step further and wager that the S&P 1500 (only true protector of purchasing power) will outperform gold by at least 500% during this time.

Those being afraid of being hoodwinked are just getting hoodwinked all over again.

I also have to say your arrogance is overwhelming. Just because I disagree with your thesis does not make me undeducated on the history of gold. In fact I would say your thesis shows your ignorance about the true history of gold.

reply to post by sligtlyskeptical


Not being rude or confrontational, but cherry-picking dates and using fictional values and mathematics is just getting a bit silly and illogical.

First, gold never reached 950, it reached 850 – and mind you, that was a parabolic spike; it only reached that for a very, very fleeting moment. Only a handful of trades ever actually paid 850. In other words, you’d have had a one in a million chance of buying gold at that price, physical I’m talking, on that day, at that precise moment – and for the dealer to know it hit 850. Just prior to this fleeting peak, prices doubled in five weeks. And before that, in only 1979 gold’s average price for the year was $304. So effectively, no one (except say four or five unlucky traders) ever paid this much for gold back then!

Cherry-picking your dates is basically a meaningless act as far as long-term gold and the current global situation goes. Why not pick 1971 when gold was at $35 or so? Or 1976 when gold was $105?

So first up, that is one thing many in gold would be looking for to sell some portion, a parabolic spike which happens in all bubbles; we are not there by a long shot.

And you know one of the key catalysts of gold’s decline in 1980? Volker coming in hard and rapidly increasing interest rates. But nearly everything then - re debt issues, credit expansion, lack of derivatives, amount of global funds available and what not – was a completely different ball game to what we have now, so it’s almost like comparing oranges and apples. I don’t see interest rates either getting up to the high double digits like they did in the 1980s anytime soon.

Second, gold is a currency. But I don’t think the world is ending – if I did I’d say stuff gold and just go out and party for the next few years instead of working. But if you are going to deny the unprecedented, out of control debt and derivative issues that the world is facing, and the very very high likelihood that Q.E.2 (quantative easing mark II) is not staring us down the barrel, and that currencies are beyond volatile and only getting worse, then I’m sorry but all is lost.

Third, I will accept your wager without hesitation! Thank you. You do realize you are saying gold is going to $400-500 this year, don’t you? And that it will not be worth anything more than this for the next 17 years? Wow. If you are so sure of yourself, you should be shorting gold like mad from here and you could be a billionaire by Christmas.

But of course you won’t. Because you do not know what you are talking about, nor do you trust what you are actually saying.

Just FYI, the Erste report, which I provided a link to earlier, outlines that currently some 0.8% of all global financial assets are invested in gold, gold shares, and ETFs. In 1932 the allocation was 20%, and in the last bull market at the beginning of the 1980s it was 26%. Ok so this is only a numeric model, but it illustrates how unfounded the myth of a gold bubble is.

There is an old saying, that one tends to see the bubbles wherever one is NOT invested.

Anyway, please do not take my tone in the post as disrespect or antagonism to you personally, but it's being influenced by the bizarre tragedy that there are still millions, maybe billions, who can’t fathom that gold has intrinsic value, and paper is a depreciating con-job. Thankfully this is changing.

Originally posted by JR MacBeth
reply to post by cloudbreak

 

But thankfully, the "base" of this upside-down pyramid (really the apex, when the pyramid is righted), is quite solid. From this "foundation", the world can always "recover", because when the dream is gone, when everyone knows that it has all been a big lie, they won't accept mere "promises" anymore. In a recovery period, we will refuse to accept paper (or smoke!), and we will logically demand something tangible, again, such has it ever been.

Yes you are right - people should really think about the scale of the problem and financial shell-game out there, and realize the system is far from a point where we can say it is fixed and all is well. There are so many diabolically large sectors of funds/financials at risk, that increasingly more funds are seeking refuge in the foundation you mention, which is of course gold.

When the final rush or scramble for gold is on, if it gets there (and it could be any time, completely unexpected as to when the next sector blows up) gold will do extraordinary things I imagine.

Let's see anyway. All I know is the chances of it being 400 this year are mind-blowingly remote. Anything is possible, but...

reply to post by sligtlyskeptical


Are you sure you even git it?
Value is in the eye of the beholder. What the beholder values will depend on various factors, but one thing for sure beanie babies are not likely to hold perceived value as universally as gold. When it becomes clear that a govt prints money to attempt to pay debts with useles dollars then that money becomes worthless. Sometimes you have to look at the big picture and the big picture is unique in the course of history where everything is connected and there is nowhere to run to get away from it. As long as young women like gold, gold will retain its value. In fact, you can determine what somethings relative value is in any situation and at any time by what use the girls have for it. everything men do, we do for access to hottest babes in one form or another, and that's the real engine of the economy.

reply to post by kozmo


I think Kozmo has hit the nail on the head. Knowledge will be power. With knowledge of land, plants, farming, natural remedies etc. you could become a leader of a "clan" after the "population adjustment".
Land will not be a problem as there will be so fewer people around to utilise it!
Invest in hand operated equipment, farm animals, books on survival. Knowledge will be the key to the future!
The first book I would invest in, if I didn't already have it, is "Back to Eden" by Jethro Kloss!

reply to post by wiser3


You know, once survival is assured then your scenario as thin as it is, is somewhat plausable. The real trick however is survivng the transition from today to a new less populated and uncontested place, if that s really likely.
The critical thing remains having the set of circumstances that allow you to step locigally from now to the future and, if as suggested that at least 90% of the population has to disappear to make the elites feel more comfortable, that's not gonna be such an easy task, I mean, assuming that you get through it in one functional piece is kinda assuming that all the real hard work is successful. Survival of crisis of worldwide nature is more likely to have very little resemblance to plans made beforehand and more about dumb luck and ability to esploit situations and resources as they present themselves

reply to post by sligtlyskeptical


I understand your reaction to the term I used concerning your ignorance on this topic. Certainly, no disrespect is intended in a civil discussion. And yet, I would have to stand by my assessment, especially in light of your "clarification."

The minute you say that gold is not a currency, you have unwittingly identified yourself as someone who literally has no clue regarding the subject. Again, no disrespect intended, but there are no two ways about it, you really need to study-up on this one.

Perhaps there will be those who will read all this chatter, and conclude that no one knows what the heck is going on. After all, it's ATS, everyone has an opinion, people have dreams, make predictions...but more on that in a minute.

I notice the very able cloudbreak has already pointed out to you the fallacy of using arbitrary periods of time to support your notions. And yet, I can almost see that your feelings are justified in a sense, because we did pass through a relatively short period where gold seemingly "failed". It's also likely that you would not be alone in your feelings about gold, although I would recommend getting beyond feelings, and looking to facts, they are likely to serve you better going forward.

Obviously, what I have to say about gold, what cloudbreak has been saying, what mordant1 and others have been saying, is falling on deaf ears. Of course, we don't matter! So, who DOES matter? What do they think I wonder?


"Gold was not selected arbitrarily by governments to be the monetary standard. Gold had developed for many centuries on the free market as the best money; as the commodity providing the most stable and desirable monetary medium."

Murray N. Rothbard


"The history of fiat money is little more than a register of monetary follies and inflations. Our present age merely affords another entry in this dismal register."

Hans F. Sennholz


"The desire for gold is the most universal and deeply rooted commercial instinct of the human race."

Gerald M. Loeb


"Those entrapped by the herd instinct are drowned in the deluges of history. But there are always the few who observe, reason, and take precautions, and thus escape the flood. For these few gold has been the asset of last resort."

Antony C. Sutton


"Gold would have value if for no other reason than that it enables a citizen to fashion his financial escape from the state."

William F. Rickenbacker



"You have to choose [as a voter] between trusting to the natural stability of gold and the natural stability and intelligence of the members of the government. And with due respect to these gentlemen, I advise you, as long as the capitalist system lasts, to vote for gold."

George Bernard Shaw


"The dollar will be wiped out."

Dr. Franz Pick


"With the exception only of the period of the gold standard, practically all governments of history have used their exclusive power to issue money to defraud and plunder the people."

F.A. von Hayak


"We are in a world of irredeemable paper money - a state of affairs unprecedented in history."

John Exter


"Of all the contrivances for cheating the laboring classes of mankind, none has been more effective than that which deludes them with paper money."

Daniel Webster


"If you don't trust gold, 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?"

Kenneth J. Gerbino


"Deficit spending is simply a scheme for the 'hidden' confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights."

Alan Greenspan


"To prefer paper to gold is to prefer high risk to lower risk, instability to stability, inflation to steady long term values, a system of very low grade performance to a system of higher, though not perfect performance."

William Rees-Mogg


"Gold is as steady as a rock, a standardbearer by which all currencies can be accurately measured."

Mark Skousen


"Regardless of the dollar price involved, one ounce of gold would purchase a good-quality man's suit at the conclusion of the Revolutionary War, the Civil War, the presidency of Franklin Roosevelt, and today."

Peter A. Burshre


"Gold will be around, gold will be money when the dollar and the euro and the yuan and the ringgitt are mere memories."

Richard Russell


"By common consent of the nations, gold and silver are the only true measure of value. They are the necessary regulators of trade. I have myself no more doubt that these metals were prepared by the Almighty for this very purpose, than I have that iron and coal were prepared for the purposes in which they are being used."

Hugh McCulloch


"Water is best, but gold shines like fire blazing in the night, supreme of lordly wealth."

Pindar


"There are about three hundred economists in the world who are against gold, and they think that gold is a barbarous relic - and they might be right. Unfortunately, there are three billion inhabitants of the world who believe in gold."

Dr. Janos Fekete


AND LAST, BUT NOT LEAST...

"Although gold and silver are not by nature money, money is by nature gold and silver."

Karl Marx


Seems like even the famous rabbi's son was not ignorant of the true nature of gold. Hmmm.

SO, I would have to say that it looks like quite a few notable people have a "different" perspective on this subject matter than you may have. But all is not lost. There are a host of "greats" who would likely be solidly in your "camp". For example...

"Gold is not necessary. I have no interest in gold. We'll build a solid state, without an ounce of gold behind it. Anyone who sells above the set prices, let him be marched off to a concentration. That's the bastion of money."

Adolf Hitler


Well, that's enough quoting! Back to your "prediction" concerning gold. Oh, I'm pretty sure cloudbreak is dead-on, you are a long ways from putting your money where your mouth is. Which is a good thing, since you are clearly not ready to make any moves concerning this issue. But good luck nonetheless!

JR

Originally posted by cloudbreak
reply to post by sligtlyskeptical

 

Cherry-picking your dates is basically a meaningless act as far as long-term gold and the current global situation goes. Why not pick 1971 when gold was at $35 or so? Or 1976 when gold was $105?

The point is we saw a 20 year period where gold did not exhibit the relationship you say exist. Even from that $305 base in 1980, gold did not increase at all although consumer prices rose 150%.

I will accept your wager without hesitation! Thank you. You do realize you are saying gold is going to $400-500 this year, don’t you? And that it will not be worth anything more than this for the next 17 years? Wow. If you are so sure of yourself, you should be shorting gold like mad from here and you could be a billionaire by Christmas.

That is not what I said. I said that if you are still holding at end of the year it will take a long time to get even. Eventually $400 will be reached again, although it could take a while. I even accept the possibility that Gold goes higher by year end but it won't last much longer than that. Those who hold long term, even gold bought at $400, will trail the returns of most other financial assets over the long term.

I would short gold but I feel being long equities will bring me a greater return in the time gold falls to $400.

I don't want to use up any more space on this board but I do want to say one last thing. In every bubble you have the bubble bulls pulling out data that supposedly proves their point on why their bubble asset will go higher. As history shows that is never the case and a flaw in their thinking becomes exposed. Gold is no different. The flaw here is to think that gold has much, if any, value as a currency because it doesn't. It is a fear trade and that is it. Just look at all the spikes in gold. They all occurred during fearful economic times and the spikes all retreated once the economic enviroment settled down. We are near the end days of the fear and the retreat is just around the corner.

reply to post by sligtlyskeptical


Currency requires a stable and generally positive environment of most everyone following the rules to maintain and enforce its value so no, gold is not used seriously as currency anywhere, but it is value dense to some degree relative to printed paper because everyone would want some for some reason or other.
Much of the posts on this thread assume there is some benign authority somewhere that places value on everything in some objective fashion. THere would be no such agency if things hit the fan, even if there were one at all.
THere is no majick philosophers stone for survival in collapse, net even gold, but you may get at least a step further ahead handing out gold than poo

Gold crash by, or into October...interesting wager especially since October coincides with strong cyclical/seasonal demand, not to mention that today, Bernanke [officially] let the cat out of the bag with respect to QE.2 and the need for additional stimulus.

[atsimg]http://files.abovetopsecret.com/images/member/f6636f35063d.png[/atsimg]

Most financial advisers will tell you that a 10% Gold allocation is adequate portfolio insurance against currency debasement (curiously, 10 about matches their Gold IQ). The remaining 90% of your investment capital should be in dollar denominated assets like US stocks/bonds.

[atsimg]http://files.abovetopsecret.com/images/member/fd0e350d0f05.jpg[/atsimg]

[atsimg]http://files.abovetopsecret.com/images/member/3a22f0d051c5.jpg[/atsimg]

I say they have it backwards

Anybody that proclaims dollar denominated stocks (S&P), a "store of value" has never studied long-term stock valuations adjusted for inflation (real returns).

*Charts courtesy of Dave In Denver*

reply to post by mordant1


I fully agree. Chances of survival, should the most extreme scenario come about, will probably be a case of in the right place at the right time, sheer luck!
But at least if you did have some sort of stock of seeds, knowledge, fresh water etc. your chance of survival will have increased hugely, money/gold/silver or diamonds is not going to fill a belly, but corn, potato, nuts etc. will be a huge plus!

Originally posted by OBE1

Anybody that proclaims dollar denominated stocks (S&P), a "store of value" has never studied long-term stock valuations adjusted for inflation (real returns).

"Store of value"...sheesh. Good job OBE1, great graphic info, very timely considering Bernanke and crew have no intention of letting their hockey stick approach to debasing the currency go limp anytime soon. Of course, they really can't, considering the dire alternatives, but that's another story.

Stocks. You bring up a great issue. How many realize that the Dow Jones today, bears no resemblance to what it was when it started? Or even 30 years ago? Etc. Almost all these companies eventually go out of business, for one reason or the other. Another way to put it, the value of their stock goes to Zero. Store of value? Well, this would be no store of value in any classic sense, but as an index, at least one gets to avoid the calamity of having all your eggs in one basket.

Also, they continually change out companies on these indexes, not just because the companies go out of business, but because if they failed to "manage" in this fashion, people might catch on that it's just more smoke and mirrors. You can't legitimately compare index numbers over any great length of time, thanks to these machinations.

Add to this, the "inflation" that is simultaneously hitting the dollar (or whatever fiat currency your stock in denominated in), and it's no wonder so much financial info out there becomes meaningless very fast.

How is it that so few see through this monstrous con game? Everything is "managed" to the point that you are either a simple contrarian, or you have your hands full with research, trying to get to the bottom of what's really going on. Of course they don't publish M3 anymore, not that it was ever an honest reporting to begin with. Did anyone think that was a telling sign?

On top of all this, as if it wasn't enough already, if you look into any one of these large publicly held companies, it's all just fraud, on top of more fraud. Even recent news is letting the regular Joe that the CEO's are on the take, big time, everywhere you look. The shareholder is laughed at, as the big executives award themselves massive salaries, for poor performance. And then, you have the big CPA firms, aiding and abetting the fraud, with "generally accepted" practices, that upon closer examination, are simply agreements to call spades diamonds, or whatever.

And then there are massive, off-shore operations. All these multi-nationals, that are supposedly under some scrutiny, since they are publicly traded after all, all of them have things going on far beyond the reach of the governments that they supposedly must answer to. In fact, the very term "off-shore" becomes ridiculous, because it is in fact the essence of what they have become. And to put a name on it, these multi-nationals are basically not answerable to anyone.

And all this fraud and deceit, is the reality behind the investment we call "stocks". Surely, they are asking us to trust Satan himself. Why do so many do it?

I think the answer is to be found in the vast "info wars" going on all around us. Not trying to invoke Alex Jones, but the term has a lot of merit. When someone on this thread says something like the S&P is the "only" "store of value", my goodness, the propaganda simply works. No doubt about it.

Saying all this, I'm not necessarily "against" stocks, or bonds, or anything else (depends upon the particular investor's needs). Even the despised "derivatives" have their place, and hedging strategies, etc. There are responsible parties who have in fact allowed these things to address the particular needs of their operations. Of course, "responsible" is the operative word, and obviously, everything has been abused to the max, but that's another issue.

I liked what you mentioned about reversing the investment ratio. I would put it this way: It is very imprudent to follow conventional advice when it comes to these things. As you pointed out, the mantra is only "10%" to precious metals, "90%" to stocks?? Yeah, I can see how an analyst who ignores the propaganda might easily conclude that the opposite ratio might be a better bet!

Of course, someone reading this will see an "extreme", and next thing you know, we'll hear about what we're smoking or some such silliness. But really, perhaps people need a reality check, with a few extreme examples.

I posted a reply earlier with quite a few quotes, from famous people, over a long period of time concerning gold. One in particular, says we are entering an "unprecedented" period in history (due to universal irredeemable fiat currency).

Take heed. In some important ways, the world has never been here before, certainly never to this extent. But it's more than just a "quantitative" thing. Because the situation is essentially "universal" today, we are now in uncharted waters.

Has there ever been a more risk-ridden era? Not just in the investment sphere, but generally so, as the many "fox-hole / gun & gubmint" posts seem to confirm. What better time than to just be CONSERVATIVE. Take it easy. Stop "trusting" the propaganda, and gain the full perspective of history, even as we admittedly enter a period like nothing the world has ever experienced before.

JR

reply to post by JR MacBeth


As always an informative and insightful post. However, the required elements to consider when cleptocratic govt merges seamlessly with corporate cleptocracy, any promise to pay and any promise of due dilligence is out the window and if it isnt on your property you dont have it and if you do, somebody from the gubmint will be around shortly to take it from you allegedly for the less fortunate. You have to face up to the possibility that you may very well really have to chose to die in your home trying to maintain possession of what you have earned or trade it with various and sundry grim gubmint representitives granting you their indulgence for the next (short) extention of remaining time above the turf.
When it becomes clear they want value and not a pal you dont have much more I can tell you

Wait..

How are you guys saying the SP500 doesn't store value or better yet beat inflation?

Since 1980 the SP500 is up over 1000%.

I believe that beats every high watermark standard in existence at this point, doesn't it?

Log. Chart Of SP500 Since 1960


Show me some better things to dollar cost average into over your lifetime than that, they must not be accredited investments either.

reply to post by GreenBicMan


Personally I dont find that enough evidence that the emperor has a stitch of clothing on.
What was that? What? OOhh, Past performance is no indicator of future performance?
THis is a conspiracy site and in keeping with that tradition, why exactly is it that gubmint doesnt actually allow you to keep real relative valuables as investments, only paper promises. Did the chrysler or generous motors investers get any satisfaction being pushed back to the end of the line while Dear leaders supporters got the goodies a la zimbabwe?
The real deal is that the long con in coming to a close, the earlier oned got out before the scam is evident and all else playing by the rules of propriety and honesty will be skint like rabbits as the value in the system is already secreted away and unavailable for the cash donors thinking someone in the gubmint has their back.
Sometime focussing on smaller and smaller details just makes one lose the big picture, you know, the one that really counts

[edit on 23-7-2010 by mordant1]

reply to post by mordant1


So are you agreeing with me or not? I can't tell.

But if you are not, you surely can not disregard actual historical performance. Performance that is easily verifiable and has created trillions of dollars of wealth around the world?

Originally posted by GreenBicMan
reply to post by mordant1

 

So are you agreeing with me or not? I can't tell.

But if you are not, you surely can not disregard actual historical performance. Performance that is easily verifiable and has created trillions of dollars of wealth around the world?

"Great, So far so good. we'll be docking for sure on the 15th"
Capt HMS Titanic, April 13

reply to post by mordant1


Your logic > mine. (jk)

But lets get real. The past 30 years don't mean anything for the next 30 years, no doubt, anything can happen.

But then how would one come about a better solution? Would you rather go long the worst performing things over the past 30 years? Then what quote would you have to back your opinion?

Isn't the best idea to be a sane, rational person and be a good investor and dollar cost average into the most optimal liquid securities tool (spy) that mimics the long term growth of the equities market in the most sought after bellwether of the world?

Since this is a conspiracy website does that mean we have to lose rational thought and opinion, toss all well thought out ideas to the side?

Pretend for just one second that we are not in a conspiracy website. What would your answer be?

The S&P 500 is a good representation of US economic growth.

And yes you can see studies how it "always wins over the long run" or something like that.


However, historically this is definitely not true for countries in general. Specifically the high performance is due to massive "selection bias". You look at the stock market in the nation which did the best from 1880 to 2000.

But what if you had invested in major markets in say 1910? Those would have been U.K., Germany, Austro-Hungary, Russia, and emerging markets like USA and Argentina.

Argentina was, at that time, richer than France.

What was the long-term return on Argentine stocks since then? Very lousy. What about German investments? Obliterated in the Depression & WW2. Russia? Expropriated by revolution. Austro-Hungary? The nation was extinguished by WW1. UK had many decades from 1930 - 1980 going nowhere. Only the USA turned out to do very well in that entire time.

[edit on 23-7-2010 by mbkennel]