You're insane if you don't own gold, investors told

reply to post by ANNED


Did you claim it in your taxes? Guessing not.. but interested.

The taxation is ridiculous.

IDK much about the gold market, but something smells a bit rancid here. So, I have questions for those who do know...

1) I'm sure I remember reading, on a few occasions, that there isn't actually enough bullion held in vaults to cover the certificates that investors hold. Was that wrong? If not, did it get sorted out in some way?
2) As far as I know, the only commercial applications for gold are bling & electronics. Is there any reason why the price of gold to investors cannot far outstrip the ability of the market's (ie people who want to buy bling or electronics) ability to pay for it?
3) Something that's always intrigued me is that, for large gold investors, all they have is a certificate. They dont own a specific bar of metal somewhere, just a % of a pile of bars, right? Who pays for the security on that bullion & how do they make the whole ownership vs costs profitable?
4) Looking @the bigger picture, if this is, as ANNED suggests, a jump & dump, who is most likely to be left with paper worth less than they paid for it in the end?

reply to post by spacedonk


you are insane if you take advice on gold ownership from a gold broker - WTF do you expect them to advise ?

Originally posted by Bunken Drum
IDK much about the gold market, but something smells a bit rancid here. So, I have questions for those who do know...

I have been following Gold & Silver for some time.

1) I'm sure I remember reading, on a few occasions, that there isn't actually enough bullion held in vaults to cover the certificates that investors hold. Was that wrong? If not, did it get sorted out in some way?

You are correct, no where near enough Gold or Silver to cover the paper. By like a factor of 10 or more.

2) As far as I know, the only commercial applications for gold are bling & electronics. Is there any reason why the price of gold to investors cannot far outstrip the ability of the market's (ie people who want to buy bling or electronics) ability to pay for it?

This is soon to change. Gold is much more useful than they would have you know.

3) Something that's always intrigued me is that, for large gold investors, all they have is a certificate. They dont own a specific bar of metal somewhere, just a % of a pile of bars, right? Who pays for the security on that bullion & how do they make the whole ownership vs costs profitable?

They are buying on Margin and it is not their money. Gold is only a hedge against inflation, it does not intrinsically make money ever. It is worth the same now as it was 500 years ago.
They have so much paper they can control the market and hence the price.

4) Looking @the bigger picture, if this is, as ANNED suggests, a jump & dump, who is most likely to be left with paper worth less than they paid for it in the end?

Everyone except the Bank I am sure.

reply to post by aoi3610


Gold is a terrible hedge against inflation. What do you call 1980 - 2000 ?

reply to post by Dance4Life


Gold & Silver are not a must-buy. But, If I had extra paper money laying around, buying gold and silver would be smarter, IMO.

Silver in 2000-1 was about 5$ per ounce. Now about 30$. (600% increase)

Gold in 2000-1 was 300$ per ounce, now almost 1,400$ (467% increase)

Maybe silver is the better buy. Both with much higher pay-off that any savings account. I don't know much about stock markets, but I have a feeling you would have to be very good to make that type of return.

As the fed prints more money, more than they used to with the bail outs (which we're not done seeing the effects of), gold/silver don't necessarily increase in value, but the dollar goes down.

Just my own opinions, I know there are those that think it's a scam, it may be.

reply to post by aoi3610Cheers!

Some more thoughts then:
If there isn't enough metal to cover the paper, the paper is just another form of fiat currency, right? I'm pretty sure every country in the world has laws to prevent Jo/sephine Q. Public from buying an actual ingot of gold, burying it in a concrete block under their house & then selling it to 10 different people without even digging it up. So who gets to issue shares in non-existant metal?
Taking your points about gold being a "safe" investment & control of the price by market manipulation, I still wonder how owning gold can be anything other than a liability unless the price does constantly rise. Somebody has got to pay for the real metal's security. Then again, if 90% of it doesn't exist, then it requires no security. Still, the real metal does & probably insurance too. Are the owners of the real metal just sucking up these costs, or are they allowed to issue fiat paper to cover those costs & make a profit? Who are "they"?
Where I'm going with this is that it strikes me as another currency war.

reply to post by BenIndaSun


It isn't a scam. These metals just historically behave in these fashions.

Judging on the basis of historical data these instruments are dormant for long periods and exponentially rise (and fall) when not. I do not believe it has anything to do with inflation though if you really take a hard look.

I do not believe the run that started in 2000, during the era of the Nasdaq crash had anything to do with inflation. Moreover, I believe that with all the money destroyed during the last move down that ended in March 2009 coupled with economic data (CPI) shows deflation and we needed the FED to step in.

When these metals first made their moves inflation was not a factor. Especially 2001-2004.

I invested heavily in lead, and with lead i can have all the gold i ever wanted.

if you dont invest in lead you really must be insane

Whenever someone in the mainstream media tells you to invest in something, take it with a grain of salt and research it properly. Even though gold seems to be still a great hedge against inflation at the moment.

Fools have been saying not to invest in gold or silver the whole previous decade. They were entirely incorrect. Anyone who thinks that we're already at a peak is just as much of a fool, imo. I'm investing in silver, and don't care what the fools say. It's tripled since I bought my first ounce a little over two years ago at it's low. I see no good reason to think it will drop anytime soon. When I see true economic reformations, and a stable reserve currency in play, then I may think otherwise.

Originally posted by BenIndaSun
reply to post by Dance4Life

 

Silver in 2000-1 was about 5$ per ounce. Now about 30$. (600% increase)

Gold in 2000-1 was 300$ per ounce, now almost 1,400$ (467% increase)

So in loose terms gold was worth 60 times silver ten years ago and today it is worth 47 times. Anyone got an opinion on whether silver is overvalued? I do no think it is particularly personally. Without having the benefit of historic values for the two commodities to tell whether 60 times is a typical multiple of silver for gold then I cannot say if the following is true:

If gold is typically worth 60 times the value of silver then it has some way to go to get to parity with that benchmark and $1800 an ounce should be about where it should be.

As I say somebody may know if the 60 times is typical or even relevant.

reply to post by unityemissions


Not to sound like a jerk, but people were saying the exact same thing about real estate not too long ago lol. I really do wish that I started investing in gold and silver like 10 years ago though. Hindsight is 20/20 I guess

Gold is a great investment if you have the cash to invest into it... If you do not have the spare money IT is not a good investment... First investment should be food storage... If you have that and still have money to spare after expenses Gold is good to have. I do not think it is all it is being put up as but not a bad idea to own some gold.

reply to post by TKDRL


Yes well, I realized that bubble back in the early 2000's as well. They're simply not comparable. Only in that both appear to be a bubble. When you take into consideration the fact that no fiat currencies are likely to make it out of this situation alive when it's all said and done, gold/silver or other commodities are the only rational things to invest in.

reply to post by unityemissions


Personally I am investing in bullets, seeds, storage facilities and getting off the grid as far as I can first. If the time comes when I am pretty much self reliant, then I plan on investing in silver and gold coins.

reply to post by TKDRL


From a certain perspective, this is very wise. I've already invested in a few guns, ammo, and basic food supplies for the immediate family. I don't think the breakdown will tear society to shreds ... at least not just yet, but still think it's best to prepare for some transitional chaos which seems somewhat likely to ensue in the near future. I think if we don't set the system straight within the next five years or so, turning our backs on society and civilization may be the best thing to do. Start a strong, self-sustainable community somewhere. I just don't think we're at a point where we can reasonably see this as the only solution yet.

reply to post by unityemissions


I am honestly done pulling my hair out, worrying about it all. I want off the grid as much as possible regardless. I am sick of being a good little slave. If I was rich I would buy a huge plot on high ground, build a compound, and invite likeminded people to join my self sustaining community. Unfortunately I am just above the poverty line lol.

Originally posted by Anttyk47
You're insane if you don't own gold.
Yup.

Either this is true, and we're looking at a future Armageddon where we will have to come out of our fallout shelters with nothing but Gold to use as currency (or bottle caps!

)

War never changes.

I've always seen gold as the last resort investment, so that when everything else tanks, you'll still have something of value. Unfortunately, I've recently realized that that is a foolish way to look at it. Guns are your last resort investment, so that when everything else tanks, you can still get yourself food.

a link to a guy from Questor espousing the diamond market in a vid:
www.telegraph.co.uk... 8259486/Questor-plus-Deal-in-diamonds.html

more people saying a bag of gems and a sack of gold is the safest place for your money.