Discussion in 'Bullion Investing' started by Herberto, Jan 5, 2022.
Went to $2 a gallon as the Iraq-Iran War commenced.
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Gas was 30c in 1973, 45c in 1974, yes...up in 79, and in 88 back below $1. When recession started in 90, gas was way up, then down to around $2 by 97. Way back up again with the Gulf War, then down again in the mid 2000s. Way back up with the recession of 2009, then back to $2 -$3 until recently. Should be at $4 or more to follow the inflation rate...be glad we don't have to pay European prices at over $6.
In Lebanon I hear it's around $11.00 per LITER. Remember that a liter is approximately a quart.
In 1973 my Southern California house cost $39,000 (it was just over 1 year old at that time), and $39K checked on the inflation index for 2021 is just over $244,000. Thats about 527% inflation. The house is now in the $550K - 650K range if sold today.
Based on my humble experiences, the dates/type/mints/grades postings of the various denominations have significantly been reduced.
We are often seeing overgraded? generic listings as the total offerings (e.g. 1924 MS61-62 "toned"/bag-marked-rubbed/worn $20s, etc.) @ elevated pricing.
I've had one VERY prominent seller chastise/admonish me for ordering his best offerings, in his perceived absence.
He finally refused to accept my orders. In my opinion, sales loss of over-priced scarce coins, remaining unsold.
one reason only, it makes me money
Now I’m sure a lot of people would disagree with me but for me personally I want to buy more gold & silver.
For the older people who may be planning to cash out and retire I imagine they want gold & silver to sky rocket.
I don’t plan on ever becoming rich or anything with gold & silver I just see it as an alternative store of wealth to US Dollars.
Although I do keep USD & stocks too. Diversification is important!
For the last couple of decades though the US government has been spending more and more and printing more and more money and making existing dollars worth less via inflation.
I get that.
I don't think it happens, though. Barring some economic downturn, I think gold and silver have 15-20% downside, tops.
OTOH, 2 of these Fed Governor nominees are totally unqualified for the Fed and FOMC. You could have gold skyrocket in a week if their political leanings spark a crisis.
But the dollar is the global reserve currency and other nations have had their currencies weaken more.
Also, the velocity of money has fallen and this has offset big increases in the monetary aggregates.
Gold is fungible and liquid though. Unlike a house.
It can be sold immediately with minimal loss in value.
It’s true a house can also be sold. Usually not immediately though and if an attempt to sell immediately is made the price received would be much lower.
I mean try selling you house for $576K in 24 hours. You’d have trouble.
In other words even if someone has a house truly worth $1 million it will take some time to get that $1 million if needed.
But if someone had $1 million in gold they could sell it immediately on the spot.
Both gold & real estate have pros and cons but I just wanted to point out some differences.
Except you have to live SOMEWHERE....need to wait for title searches...closings....buyers back out on close day....moving contents out....etc.
particular asset can vary over time. Like @MDO, I live in an area where housing is going insane -- Apple is opening a facility that will hire around 3,000 people at salaries averaging something like $180K, and the median household income here is $59K.
But it was only a few years ago that houses here would sit on the market for months with no activity.
Then there are cars. This morning, I finally saw the news I'd been expecting -- for many car models, in many areas, the price of a used car is HIGHER than the cost of a new car. The catch, of course, is that you can't find those models new. It's a great time to sell your car! Except you still need transportation.
Gold's liquidity is probably more steady. Yes, there will always be someone ready to sell you gold, or buy your gold. But the amount you can get for your gold, or the amount you have to pay for more, at a shop in your town, will fluctuate a lot more than the spot price.
No idea why.....
Mostly they are selling around $270-$325K right now, it's mostly businesses and banks doing the buying, looking to tie up excess cash into property, I guess as a hedge against inflation, same way we use silver or gold but a bigger ticket item.
inflation is necessary, deflation or stagnation is REALLY bad. if inflation outpaces wages and costs rise too fast it hurts. but it is what it is. there was a major contractionend of 2019-2020. the rapid growth of demand will cause these issues, just kind of have to ride it out and weather it and it will all balance out again.
And to be completely fair about it, a lot of this has to do with tariffs on imports being handed down to consumers. it's not forcing domestic supply increase, or china to be better trade partners, it's just forcing a hand deeper in everyone's pockets.
How great was it first quarter 2020 when we had near 0% inflation. It wasn't so hot for me, I tell you what.
my opinion, yeah, everything goes up over time, gold, milk, bread, houses, silver, cars, whatever you buy, either it gets smaller or prices go up, or they add "new and improved", a business needs to do better this year than last year, a worker needs to do better this year than last year, if it's all on pace it balances nicely, when it gets out of wack, it stresses everything.
Where were all the people praising the low gas prices in first quarter 2020? Yeah, they were all working from home or jobless looking for stimulus money to pay rent and nowhere to drive to.
Now that demand is back up so is the gas price. Producing more to sell to the world market doesn't correct the issue either domestically, not for us, but that's capitalism. Heck they will sell it to another country then buy it back just to raise the price.
We all know wages have been held back a really long time not keeping pace with inflation or the Consumer Price Index.
$100 in 1913 is $3.87 today. NONE OF US, have seen it "good" if we were born after 1933. From 1983 until now that $100 in 1913 had the buying power of less than $10.
Anyways, a 3.51% inflation rate means $100 in 1933 is equivalent to $2162.68 today... I'd say gold is in the neighborhood of where it ought to be now. A new house modest house in 1933 cost $5750, that puts a modest house in the range of $150K today, an average care in 1933 was $600, today that would be about $15,600. also seems about right BUT there are demand spikes at play also.
Not sure where I am going with this, I'd say "it's transitory" and it will balance out in time, but I'm sure someone will call baloney on that. but the reality is, the stock market can't go up forever into infinity, and the money supply can't grow into infinity either, and neither can the CPI or inflation.
Oh yeah. If you had a $100 bill in 1933 its worth $3.87 today in buying power.
if you had $100 in gold in 1933, you'd still be doing well today on it, instead of $3.87 buying power, it would have... $1900 buying power, but still be less than it should be I think by around $200 or so.
I think you're saying "$100 in gold" when you mean "$20 in gold". $100 in gold would've been a bit less than five ounces.
yeah, I was rushing on my train of thought and typing. you are correct, it would be like 5 ounces for $100. thanks. now the whole post is wonky with the mathematicals. I was comparing an oz of gold vs. $100 bill. an oz of gold in 1933 was like $26 or so.
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