Gold and the almighty dollar?

Unfortunately we have just had two countries with earthquakes back to back. Of course the US has stepped up and offered aid, as it should. Cha ching! Does anyone here sense the decline in paper money buying power? Is it really time to stockpile some gold?

Well to me, this is a great time to buy and stockpile gold for a rainy day, without a doubt! Heck for the quick liquidity reasons alone it's one of the best ways to save money without Uncle Sam getting his mitts in it, the whole world knows that! Congress and the president are spending money at great neck speed without the comfort of having money in the bank to cover all that spending. You see where this is going?

Sure maybe the earthquake analogy was not a good one, but the truth is this economy and the dollar keep inching downward with no relief in sight. Anyone?

 

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Yeah, they have great necks. LOL. If the system had a neck, you know I'd gladly break it.

 

Ironically, this is one of the worst times in the past ten years to buy gold, but it's still a pretty good time because the bull market seems to be continuing. Better late than never.

 

Do a little math please ....

Long term vs. short term

Gold - Jan 21, 1980 - $850 per oz.

30 years later - at ONLY 1% interest - it would be worth 1147. /oz

UM - anyone else see the wrong in this? We are not talking about valued coins - simply gold as a commodity.

If you love gold, buy something MADE of gold to see an appreciation over the years - and coins of denomination are exactly that.

Otherwise, put your money in the bank, and see a greater return!!!!

 

Thats one way to view it... although when I put money in the bank I generally spend it. If I buy something like a bar of gold or a gold coin then I save it... Coins and metals are the perfect way to save for someone like me with a perpetual hole in their pocket. I can spend as much as I like and feel good knowing in 20 years if I need money there will be some around. Much better than my gun hobby that eats money every time I go to pull the trigger.

 

A person really needs to look at a line graph to see the bigger picture on how to invest in gold. Shortly after that gold rush in the early 80s, gold dropped like a rock. That was the time to buy. I don't believe gold was ever a good long term investment.
Timing is the key for making money in gold short-term. When the dollar shows weakness, or consumer confidance is down, you will make money on gold you already own. But chances are good that the best time to buy was before people are talking about it.

 

Wait until it get's in the $700, $750 range - then it will be a good time to buy it.

 

A value investor would look at the same data as you and conclude that gold has a high probability of being undervalued at $1100 since it has underperformed inflation for such a long period of time. But the real flaw in the analysis is the assumption that gold always has to be owned, and therefore should be evaluated on that basis. But the reality is that there is a time to own gold and a time to sell gold.

The stock market went noplace from 1929 to the mid 1950s. Some people concluded that this meant stocks were no good. Others concluded that they were undervalued. The stock market broke 1000 in the mid 1960s, and was 1000 in [I think] late 1982. Business Week concluded in a famous cover story that "stocks are dead," just when they began a historic bull market. So it isn't enough to possess the data, you also have to know what it means.

 

Just to high!!

 

As long as precious metals follow almost lockstep with the Dow Industrials, I believe the safer investment is in stocks, especially well diversified, multinational companies ( dividends are a bonus) in an account that can be liquidated or moved instantly, unlike most bullion.

One can speak of the devaluation of currency, but I do not see YET any value appreciation to the side of precious metals. The PM price just seems to reflect any perceived change in stocks. Below are comparisons for a 5 year period and also for 1 year. My key would be when stocks go down and PM goes up accordingly, or the reverse(for a move in a dollar valuation gain over precious metals).

JMHO.

Jim

1 Year:

 

http://finance.yahoo.com/q/ta?t=my&s=GLD&l=on&z=m&q=l&c=dia

A lot depends on the time period used and the exact proxy for gold. Personally, I don't think anything is "safe" these days.

 

Maybe that is why I invested in a dog last November. He is a Great Pyrenese, a 5 year old male, with heart trouble. I walked into the animal shelter like I walk into coin shop - just looking. (most the time I walk out of coin shop without a coin).

Well, I have digressed. The word "safe" and thoughts of mounded national debt can get me stirred up.

 

Isn't that on Long Island?

 

Do you think that there are any fair deals out there for pre-1933 gold pieces, or foreign stuff? How about California Fractionals/MS rated?

 

If times get really tough, at least you can eat the dog.:thumb:

 

SICK! But way, way too funny - ROFLMAO - :eat:

 

Yes, you choose the time in history when gold was way inflated. How about comparing the price just 4 years later, like 1984 to present and see what you come up with. If you purchase anything when it is inflated, you get a bad deal. Take real estate in 2006, how does that investment look now?

 

Congratulations :smile. I love older dogs. I have had two over the years (Airedales), and they were fabulous. They love having a home, and they are great for keeping things in perspective, as well as keeping an eye on you and yours.

I agree that gold bought and sold at the right time can be a good investment, just like anything else. But I think many people these days see it more as insurance. From that perspective, it doesn't matter so much what it has done or hasn't done since 1980.

 

LewR wrote:

***Er, with interest rates at zero, the interest paid by banks on savings accounts is right around 1%. If I have 10K I'd sure as hell rather buy gold eagles that I bloody well know are a store of value than have something denominated in greenbacks which have lost 96% of their value since 1913.

Curious fact about gold. An ounce of gold would by a nice toga and sandals for a Roman . . . in the 1920's a nice suit of clothes for a gentleman . . . and today at $1100 will still buy the same suit of clothes.

Or, I used to be able to take a quarter back in the late 1950's and buy a loaf of bread. That same silver quarter will today buy . . . a loaf of bread.

Er, it's called STORE OF VALUE.

peace,

rono

 

here's an interesting article from Forbes website about Gold
http://www.forbes.com/2010/02/01/forbes-india-gold-bubble-burst.html
http://www.forbes.com/forbes/2010/0315/finance-gold-value-starwood-korea-portfolio-strategy.html

Thought these articles were interesting and osmething to think about.