Gold prices and silver, 50 years?

Wishful thinking? Maybe. But a part of me knows that gold at $10,000 would be socially disastrous, maybe even for myself. This price would also imply high inflation, which means that amount of money will probably not mean as much as it does today.

I do like the idea of doing more backpacking and living like a king in, say, Prague. I suspect in a world of a dollar collapse there might be more capital and even travel restrictions, though. I picture something between what we have right now and Orwell.

I just think the global debt problems are coming to a head and that we will see a monetary reset sooner than most think. I also understand the skepticism, since the collapse has been predicted innumerable times in the past by silver gurus. I also understand that fear porn is irritating to some here, especially since some members have their life savings in stocks. Since gold/silver is anticorrelated with the dollar and other paper assets, my gain is their loss. But again, I do not wish for anyone to suffer. Actually, I hope for both paper and hard assets to do well, which might be the case in the current environment, especially if monetary inflation (QE) continues, which is more than likely.

 

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$10,000 gold by the end of the decade - would require an annual 40% increase in value every year between now and then.

 

First thing, For Gold to hit $10,000 by the end of the decade, things would need to get real bad, real fast. Also, as you haved eluded to, you probably don't want to live in that world anyway. The good news is, chances are very slim that will happen. Now I know things are a bit different globally now, but remember, as far as US debt goes, we have about the same amount of debt as right after WWII (when measured as a percentage of GDP) That was over 60 years ago, and the dollar has not collapsed yet. A monetary reset is far from inevitable and even if you are right you could have the timing all wrong as it might come 70 years in the future. These are not odds I am comfortable with.

Now the second thing and you will need to trust me on this one. The more convention investors do not get their feathers ruffled by the fear mongerers because they (we) are afraid of our stocks losing value. You could not be more wrong. We have been doing this a long time, we know the risks, we are diversified, let the chips fall where they may. The reason is purely ethics. It is my belief (and others) that the fear mongering is an unethical attempt at selling bullion, period. Many folks I know, have been suckered in, cashed out their 401k's bought into the bullion craze, and proceeded to lose 60% of their net worth. I even know two folks who got divorced over it. Think about it a second. The folks that the stacker community idolize like Jim Willie and Eric Sprott, well they got richer, while their followers got poorer. How did this happen. Well simple, they got rich by SELLING bullion, not by BUYING it, and this just plain ticks me off as they go running around telling everyone the sky is falling. Just don't sound right to me.

Mike

 

But mike it is ! Astronomers ( a new hobby of mine now estimate that the chances of a large asteroid strike in the next 100 years is 3 times larger than estimated before

 

Well lets hope it is one of those asteroids that is loaded with Gold If it hits close by we can be the richest people in a total disaster right before we die of starvation.

Btw, good luck on your new hobby, I was into it many years ago, and I would like to get back to it, but unforunately, here in central Jersey there is just way too much light pollution. It is a cool hobby.

 

I needed another expensive hobby like I do an extra mouth, but the theoretical aspects does intrigue me . Ok, back on topic

 

I think 1917 is when they tried to ban candles

 

Yes, it should have been 2017. Thank you.

 

Well if it is any consolation I agree that incandescent light is visually superior to my likes, as would probably everyone else. I wonder if it that is because we have become accustomed to it rather than if it is more representative of the actual sunlight spectrum we evolved with initially. Now stop hi-jacking.

 

Totally Agree... But I still hope not!

 

Well, from my real life experience, owners of stocks get nervous over doom-and-gloom talk. I also got nervous back when I owned stocks years ago. I do not wish financial pain on anyone, except maybe executives with golden parachutes.

As for bullion hawkers, I think people need to take responsibility for their own financial decisions. I also took a hit with silver's price drop, but I did not get mad at Jim Willie and other permabulls. I believe investing is a matter of timing, and so while the skepticism over PMs is understandable, we could see major down cycles within a secular bull market. I think it's a troubling indicator that gold is still well over $1,000 an ounce, from just a few hundred a decade or so ago. Despite talk of a recovery, gold refuses to go anywhere near $1,000, and silver has a hard time staying under $20.

Anyway, hopefully we can all be winners, whether hard or paper asset investors.

 

It is not an "OR" thing like a Mets OR Yankee fan. It seems to me it is prudent to be both

 

50 years is a long time from now. 2064 sounds like a distant time, but at 5 years old so did 2014. I wonder what will happen from now to then. I wouldn't be able to tell you, but it may not be so fun. That's good for PM's, but not so good for the rest of the economy.

 

That might not necessarily be how it works out. Fifty years from now, the mindset could be that folks view Gold as the near useless yellow metal that it is. It could happen. I don't think people today really understand that Gold is not nothing more than fiat, once removed. I mean no one really needs Gold, I just don't see a scenario where Golds buying power could increase 3x 4x 5x etc.

 

Gold and silver work when nobody trusts anything else. You have to remember that the world was like that until recently. After the revolution there was a phrase "not worth a continental" which disparaged the continental currency. The back of every one said that it was payable in gold and silver. Even that promise wasn't worth anything. The money we use now isn't payable in anything. I suppose you can still get 20 nickels, and they are worth about a buck. That may be what holds it's value up. People will only trade things of value for other things of value. They may not know it, but the value of a currency is held up with real things, or the value falls. Right now we are in a fiat trance, but when it wears off people will want something of value again.

 

What makes you think Gold has value? There are some minor industrial uses for Gold, but that is about it. For the most part Gold is valuable because other people say it is. It is not much different fron fiat. Sure most people value Gold now, but that was certainly not always the case. Entire civilizations deemed Gold worthless. Who is to say that mindset won't prevail in the future. We just don't know.

 

Let's talk about this one, since many like to toss this around to "prove" executives are greedy, corrupt evil people. Most "golden parachutes" are due to corporations recruiting employees from other firms. Let's take me as an example. I work at a firm I like, am very secure in my job, and very well can retire here. Now let's say another firm REALLY wants to hire me due to my experience/skills/they are stupid, etc. Well, I don't NEED another job, I really do not want to move, and there is a very high danger I would maybe not be a good fit on the new job. What happens to me if I quit my job I am good at and comfortable in and am not a good fit at the new firm? I not only lose my new job, I gave up my old job that could have lasted me the rest of my life.

So, against that background companies might offer me a "golden parachute". What this does for me is give me the security that if for some reason things do not work out with the new company I am not so severely penalized by leaving my old firm. Without such a thing, companies would never be able to attract the employees with the background and experience they need, since really good employees usually have really good jobs, and have no desire to leave where they are currently.

Sorry for the rant, I just see so much hate against employment agreements, labelled "golden parachutes", and I doubt most people REALLY understand why they are offered.

 

Those are all excellent points. I suppose I used the term too broadly and should be careful with it. I was referring to the financial execs who, in 2008, almost destroyed the national and global economy and still received enormous compensation packages.

 

Entire civilizations deemed gold worthless back in the 1400's. Since then they have figured out that it has value. Why did those Europeans want it so badly? It is the original money. It is a store of value now, and has been since at least the beginning of the civilization we happen to live in.