Why Gold and Silver are dropping ...

Originally posted by Stewie
I might have missed it. Where can I find the story about people trading a wheelbarrow of gold for some groceries? I thought I had a pretty good handle on worthless currencies, but I am eager to learn the details of fiat gold.

If gold were such a good deal the wealthy would have bought it all up buy now. Or they did when it was cheep and now that its high they want you to buy it from them....what does that tell us.

Originally posted by hawkiye
reply to post by Gradius Maximus

 

Silver and gold wont feed you.

Yes they will they have fed billions for generations by enabling them to buy food. This always comes up on these thread and it is a logical fallacy. Unless it is the apocalypse gold and silver will buy you food when nothing else will as they have done for thousands of years of history. If it does turn out to be the apocalypse then it won't matter any way.

In an economic crash after inflation gold and silver will be the main recognized medium of exchange. Fuel, bullets, alcohol, cigarettes, and coffee will also be good mediums of exchange.

Yea here is the wheelbarrow full of gold so to speak. If it gets that bad, the guy with the goods can call his price. In other words I can ask 1oz or better even for a box of 500/ 22rounds that I paid 20$ for. They guy may protest that the oz is worth way more but I can always say not around here it isnt.

In this market gold is also subject to local supply and demand which could bring its value per oz down very low. Gold is only as good as what you can trade for it. Its more of a dependent trade insturment and less of a shot caller than most would think.

You can't eat gold or silver. If you want to hedge TEOTWAWKI .. buy bulk food, survival items, etc.
I've never understood the drive for people to buy silver or gold for TEOTWAWKI.

reply to post by FlyersFan


I think that if you surveyed them, you'd find PM holders to be pretty well set up. I am. I even have a few head of cattle (our pets for now) and I grew up in NYC

The question is what to do with disposable income? I already have all the food and supplies I need for us and the kids if TSHTF. Frankly, I can't store any more and we own three properties! My last major purchase was a 3-yard dumpster to get rid of all the packing from all of this stuff that we hope we will never use, lol

I'm not kidding ...

Originally posted by Student X
You seem to know a lot about this kind of thing, GirlGenius. For the average Joe, is it a good idea to get a few thousand dollars worth of gold or silver rounds now while the price is dropping, for barter when TSHTF?

edit on 20-1-2011 by Student X because: (no reason given)

Bought silver when it was $8 an ounce back in 2007/2008 and now the coin shop I used to go to is out of silver all together!!! They said they have not seen any in quite a while. I have about 150 ounces so I am okay for now. I would never accept paper for anything.

Have plenty of bottled water on hand and ammunition to trade with too. Dry goods are something I have to get more of yet. It won't be long and i can't wait till the party starts. Survivalist and wife with kids, we love camping and being out in the wilderness so that is not a problem.

reply to post by GirlGenius


Have you done the solar thing yet? Plenty of ways to spend money there. If you run out of ideas, I will
be happy to accept all your excess funds.....

reply to post by daddio


You can still buy silver coins or bullion on Ebay
if your local shops run out.

It is always the way TPTB work, start the price drop panic, people start to sell at a loss, then the bigwigs buy as much of it as possible at the low prices, then when it is all been snapped up, the prices jump to an all time high. Why do you think that there are so many places offering cash for scrap Gold over the past few years ? They are trying to claw in as much of the stray Gold as they can, from the hands of the worker ants, before they pull the plug on paper currency and de-value it. The ones left holding the Gold will be even more in control, I doub't that Silver will ever be as safe as Gold, there is too much of it around, for them to control the supply of it. Looks like this is the beginning of the latest wave of " crowd control ", People always say " over my dead body ", that's exactly the way they want it, we have passed our sell-by date, as far as they are concerned, they just need to find a way to " take out the trash ".

I would never accept paper for anything.

How does your employer pay you? Nuggets?


I’m not looking for financial advice, but I am curious since I have never bought PM.
Don’t you have to pay sales tax when you purchase PM from your local store? In my state (Ohio), I’m almost certain they would hit you with Sales tax.
About how much over spot is considered normal when you purchase? 5%? 7%?
About how much under spot do they pay you when you sell? 5%?

From the outside looking in, I see at least a 10% hit getting in. And another 10 getting out.

reply to post by manta78


Good point! We are working on a windmill/solar combo with nickel iron battery storage. We probably won't have as much disposable income this year because of this project (plus we, mostly hubby, want to power two of our properties).

reply to post by Qwenn


What if no one panics and sells at a loss?

In my humble opinion, gold, silver, art, and any other materialistic items are only worth what someone is willing to pay for them, not with dollars, but with their own time, hard work and knowledge.

They key here is empowering yourself with knowledge, and knowing how to apply it.

Example: I have a friend who put all his eggs in one basket, he build a new home in 1997 sold it in 2003 for a great profit, only then to build a much bigger house with everything he made, this house that was supposed to be valued at $900,000 US dollars upon completion in 2004, but has been re-assessed for $245,000. He can't sell it to anyone because of the size, so it's worth at this point is almost nothing, it is a liability because it costs to live there.

A house that produces zero income is a liability, so people that think a house is an investment stop BS'ing yourself. In order for something to truly be an investment it needs to produce more money than it costs to run, basic econ 101.

Invest in your heath, education and application of your knowledge. The market and everything around you can crumble, but if you have these things you'll be ok.

reply to post by Logarock


Don't forget drugs.
If the apocalypse does go down, you loot the pharmacy first. Then you can pay a whole junkie army to protect your fort, hunt, forrage. Pretty much anything you want.

Originally posted by GogoVicMorrow
reply to post by Logarock

 

Don't forget drugs.
If the apocalypse does go down, you loot the pharmacy first. Then you can pay a whole junkie army to protect your fort, hunt, forrage. Pretty much anything you want.

Kind of like Hollywood, the media, banks, and big pharma are doing now. Junkies on every level.

Sorry I couldn't help myself.

Originally posted by Qwenn
It is always the way TPTB work, start the price drop panic, people start to sell at a loss, then the bigwigs buy as much of it as possible at the low prices, then when it is all been snapped up, the prices jump to an all time high. Why do you think that there are so many places offering cash for scrap Gold over the past few years ? They are trying to claw in as much of the stray Gold as they can, from the hands of the worker ants, before they pull the plug on paper currency and de-value it. The ones left holding the Gold will be even more in control, I doub't that Silver will ever be as safe as Gold, there is too much of it around, for them to control the supply of it. Looks like this is the beginning of the latest wave of " crowd control ", People always say " over my dead body ", that's exactly the way they want it, we have passed our sell-by date, as far as they are concerned, they just need to find a way to " take out the trash ".

You make some good points. Consider this.....at the threat of inflation gold goes up mainly to get folks to spend cash on it. This lack of cash in the system in itself keeps inflation down. That is their main goal. Thats why gas is up disposable income down by defult...must regulate cash to fight inflation. They will get back around to the gold tied up in cash when the prices drop to the floor and you end up getting what you payed for it anyway. Want to make money at gold....know when to sell (it may be to late)....its the old solid economic idea of buy low sell high. The wealthy dont buy gold when its high they sel it to you and me and end up with it back in the end. They are protecting their cash not yours. Its a rich mans game. You are just holding it for them....they spread it around the people for safe keeping untill they need it back again. Or demand it back like FDR did.

reply to post by Qwenn


Watch the video I posted on the last page.

Originally posted by FlyersFan
You can't eat gold or silver. If you want to hedge TEOTWAWKI .. buy bulk food, survival items, etc.
I've never understood the drive for people to buy silver or gold for TEOTWAWKI.

My deal is you can only carry so much food and water. If you live out in the country then of course stock you place up to the max but if your in a city like me you need to get out when things go bad. I have the food and the water, first best investment. but once you get all your supplys whats the next best thing to invest in....gold and silver. this is the point im at now.

GG, you'll recall my post of 6 wks ago....around the time that Max Keiser was calling for everyone to go out and buy 1 oz of silver to bankrupt JPM (the major bank short). Typically it is the small investor who buys at the top and gets left holding the bag. There was the "expectation" of silver exploding 15 fold or more from then current prices but no realization that prices could correct up to $15 (~50%). Long term silver is still in a secular bull market but cyclically it was due to roll over. I recall in late Dec (gold at 1420+ & silver at 31+) that dealer inventories were short and sold out in many instances. One would normally assume that supply and demand would dictate that prices would accelerate not peak out. But "supply and demand" can be ephemeral. The dealers didnt have supply because investors were holding metals and not selling on the "expectation" of higher prices but buyers were exhausted and not chasing higher prices. When prices turned lower (cycles kicking in) then the supply materialized (dealers are stocked with inventory and trying to unload it)....it was there all along but wasnt being offered until the price action changed investor/speculator expectations and they had paper losses instead of gains. Markets almost always shake out the little guy before their final surges. The question is....is this a high like 2008 (which preceded a major move lower) or like most of 2010 where it chopped sideways to lower for months?? Time will tell. Things to consider in the meantime: there were shortages at the 2008 high also (rumors of gold contracts for delivery settling for $100s over spot) + the bankruptcy of Bear Stearns. Remember the fundamentals always looks most bullish at the top and most bearish at the low.

You can't eat gold or silver but that really isn't the intent, just as chucking a can of beans or tuna fish at an attacker might not be either. In that scenario, Just maybe lead tipped bullets might work better.


I Haven't seen much mentioned here at ATS about the true benefit of gold and silver and that IS......
As an inflation hedge.

We're always told about those two certainties in life ....death and taxes. But they seemed to have forgotten one....and that is inflation !

Prices seldom come down but they always go up.

Look at a 1960's Corvette for example. They cost $4000. back then !
Today they cost more than 10 times that (base price) in Dollars.
What happened ?
It's called Inflation.

It stems from the creation of Fiat currencies via debt instruments. The more that they create and print, the less worth each of those Dollars in circulation has. And there you have it.

So all in all. If you want to defend yourself ....buy and use a gun. Your food used as a weapon won't save you here.

But if you want to protect your money from going absolutely worthless, bit by bit. Then Silver or Gold works very well simply due to the fact that the Bankers can't just click a mouse and produce more of it.

It is also an efficient means of storing wealth AND If you ever had to pack up and move, as in escaping from the NAZIs, then carrying a few oz of gold would be much easier than cases of food and water.

But enough of the doomsday mindset, each of these items has a purpose. And yes, though one cannont directly consume gold or silver. Even though silver does have antibacterial properties and is used to kill MRSA virus in hospitals.

Use gold or silver to protect your wealth. It WILL fluctuate in price but due to it being produced by nature and in limited quantities, it will never go worthless as fiat money/currencies historically always do.

For those of you who are proficient in buying Gold and Silver, what do you think of these Ten Commandments of Gold and Silver Buying ? I've been interested in buying silver or gold for a few years now, but never took the plunge. Where do you buy your silver and Gold? How do you determine if the seller is trust-worthy? Thanks for any answers in advance.