What to do now?

Oh, I see. You've got houses (plural) and property in CA, and you're making $12.5K a year, and you're covering all your property taxes plus spending around $5K a year on gold.

So, are your houses on Boardwalk or Park Place?

 

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St charles place, I prefer the purple ones.

 

The last time Bernanke spoke he reitterated that the Fed Funds Rate will remain low until "late 2014". He made that same statement previously in December. But as the economy showed signs of growth economists speculated that rates would have to be raised much sooner. After the December announcement by Bernanke PMs jumped. But later PMs dropped again due to that speculation on a rise in rates due to radid economic growth.

The fact that recently Bernanke reitterated low rates until 2014 means that they will assuredly remain low for 2 years. This is fuel for inflation; which is fuel for PMs. No more speculation rates will be raised sooner. They are going to remain low for 2 years.

That means PMs will be a great investment IMHO. I hold to my previous prediction. Gold will break through $2K before years end. JMHO

 

That would only be about a 23% return annually in a compound account adjusted monthly. However just getting a 20% annual gain with a monthly compounded and supplied investment you would have 885271.66 by the end of those 5 years. Plus taking a very small portion of that money and using it to buy/sell items can easily account for just over 100k in 5 years time.

Never underestimate compound interest, it snowballs quite drastically.

 

Monetary policy is not likely to change soon, but it could. The Fed has pledged zero % interest rates through most of 2014. Operation Twist completes this June so they will probably need some sort of new money printing operation at that point to keep equity markets afloat. I cannot answer your question without some politics unfortunately, but I will try to keep it neutral.

One big reason for money printing being needed is to support the military industrial complex, which is necessary to enforce the petro-dollar and thus global reserve currency status for the USD, which is then used to prop up the currency that is being debased in order to support this paradigm. This scenario is a vicious circle in my opinion. I used to not see a way out of it other than either hyperinflation (current path) or deflation leading to default on the debt (abandoning ship), however recently Obama flip flopped on his stance regarding the Keystone Pipeline which rumor has it be able to provide decades if not over a century's worth of oil supply from untapped reserves in Prudhoe Bay. I am deferring to Lindsey Williams at this point as this was where and how he got his start with the elite providing him with inside information, and has since been correct in calling first for $150 oil, and then $50 oil in recent years due to his elitist friends' information he decided to share. The Keystone Pipeline could be important for distancing the US from foriegn oil dependency in which case the petro dollar may no longer be dependent upon the military industrial complex, and it may be possible that inflation would no longer be necessary for that end. However, if other nations still choose to bypass using the USD that may be moot and would only serve to keep oil prices subdued and prolong the inflationary scenario.

I am of the mindset that money printing will still be necessary in order to sustain the exponentially growing debt bubble regardless of the oil situation. Williams has also stated that the US will default at some point as well which, if true, means that inflation is not going to happen indefinitely, which of course it is impossible for that to be the case since GDP cannot match the speed of increase of the debt. The double edged sword with gold and silver is that they win in an inflation due to monetary expansion when valued in dollars, and they also win in a default due to the inability for a haircut to be applied to something you physically own unlike paper assets. The only way they lose is if we have deflation without default.

Another thing Williams indicated is that the dollar will be essentially worthless by the end of 2012, and a lot of people will end up renting their own houses after they cannot afford to pay their mortgage due to increasing cost of living in other areas. According to him, gold and silver are the elite's money, and that is the only way to protect yourself from the coming new world order. My suggestion is silver due to the gold/silver ratio being overweighted for gold as compared to historical norms, and even during those historical norms there was substantially more silver available than there is today.

 

Again, if you can get those returns, you'd be much better off starting your own mutual fund.

You're forgetting about taxes, fees, living expenses.

 

Not forgetting, my living expenses are already covered from other endeavors.

As for taxes yeah that could cut harshly into the profits. But then again might be able to pull some stings and lower the taxes drastically one way or the other.

When I said 100k a year turned into a million in 5 years, I meant 100k extra untaxed. Not I make 100k a year uncle Sam screws me out of 40k every year so I am left with 60k then I pay property taxes which are another 12k a year now im down to 48k Then I buy a car thats 25k now im down to 23k oh my kid need tuition thats 15k, down to 8k. Oh theres utilities and tv and phone thats 500 a month there gos 6k now im down to 2k for 12 months of food. Ok looks like its rice and beans for awhile kids and if your lucky a pack of gum.

No I didnt forget I was simply saying if I had 100k extra per year it would be 1 million in 5 years.

 

In other words, you're making a lot more than $12.5K/year.

You said, and I quote, "if I made 100k I would have over a million saved and put away within 5 years".

You forgot to say "if I made 100k on top of what I make now, including all those other endeavors that I didn't mention earlier, and if I could make consistent 23% returns with no taxes or fees".

I could've turned $100K into over $600K in just three years, by buying AAPL in early 2009 and selling today. Given ten years, I would've turned it into over $5 million. All it takes is that other all-powerful investing tool, "hindsight". Hindsight, coupled with imagination (which you've already displayed), is the perfect path to wealth -- well, it's subjunctive wealth, but that seems to be what we're discussing at this point.

 

I didnt mention anything that required hindsight knowledge O.O I said have the money in a compound interest bearing monthly adjusted account.

And I wish I made way more then 12.5k. I am just a very frugal person most of the time. Using what little I have to buy things and make money off them. If you include that money then yes I make more then 12k. But mostly I just reinvest it into my bullion and coin collection so its not really a profit yet. Im very content pinching pennys and continually selling then reinvesting my coins/bullion and making the pile grow bigger and bigger.

I grew up dirt poor so to me having a couple houses and being about to take 1-3 nice vacations a year is living like a king. To others I am still dirt poor

 

Man, "new world order", "elite insider information", "gold/silver ratio", "military industrial complex", "petrodollars", this post just about has it all.

Of all of this stuff man, how much of it is your own thinking or having you proven yourself? Whole lot of standard Larouche-isms from the 70's right there. I know for a fact Pruhoe Bay would not make the US self sufficient, so that bit of "elite insider information" is incorrect. You would destroy that field to try to pump that much oil off it so quickly.

I am just EXTREMELY leery of people saying they have "insider information" and the like. Sounds like a great way for people to think one or two correct calls weren't just a couple of good predictions, but "part of a conspiracy I have an in on, and for a few bucks can let you know about".

Chris

Btw Inflexion I apologize if this post seemed mean spirited or an attack. It was not meant to be, its just all of these buzz words and notions were well publicized in the 70's, nearly word for word. That is why I was asking how much of this was your own thought man. If you read it, agree with it, and have made an effort to verify it yourself that is fine. I am not trying to disagree with you necessarily, I was just reliving late night TV broadcast moment from 1978 in reading your words.

 

Yet you immediately responded with "Larouche-ism" & "insider information" in your very short attack on someone that said something you apparently disagree with. There is nothing wrong with words if they convey the meaning the party wishes to put forth, which is something that I notice that you didn't even attempt to address.

 

Well you gotta agree the manipulation in the silver market to get/keep the gold/silver ratio so lopsided is quite incredible. This is basically the only time in history we have have a higher gold to silver content above ground yet the price ratio is one of the most distant ever.

As for Inflex saying USD will be gotten away with for sure in 2012, well iono about them apples. I do know it will eventually happen, my personal thoughts where in 5-30 years it would lose most of its desire or all to be used as a currency. But to say 2012 for sure 100% that would entail the FED closing because a currency can not just naturally tank THAT fast. So all this insider info stuff... ummmm.. nah.

 

I just wanted to point out one fact about ratios. What good are they? Is the price of gold versus aluminum equal to its rarity in the earth? What about tin to copper? Lead to molybdenum? Palladium to hydrogen?

All are different markets and have different supply/demand curves, and really have NOTHING to do with each other for the most part. I am a firm, firm believer in the fact gold is about 10 times rare in the ground than silver, yet that bit of information today tells me nothing abotu what their respective prices should be. Platinum is about 5-10 times rarer than gold, does that information tell you anything?

 

Platinum does not have any history its a fairly new discovered metal. Gold on the other hand as well as silver have been viewed as money and as power, status symbols, you name it for at least 5000 years. Nobody views platinum in the same fasion besides bling wearing rappers.

Silver is viewed as status and money. Maybe not as eagerly as gold but it is. Plus its 5 times as rare as gold above ground with a ever growing depletion rate that will certainly expend the backstock (not including jewelry, coins and such) within 4-10 years. At that point silver mining and production will move in to a supply and demand commodity, which is vastly harder to manipulate prices with then a PM with tonnes and tonnes stockpiled would be.

I honestly keep trying to stack as much junk silver, cheap bullion, or crappy 925 jewelry as I possibly can. Not because i view it as money, mostly because I view it as a industrial tool which has more and more demand and usefullness in the modern world every day.

 

Well Cleveland Rocks, ( if you are still here after your first question) you see what happens when one discusses PM, you get the anti-Banksters, conspiracy specialist, insider info, the unreferenced quotes, a few well thought out answers, and about a dozen posts from those who think it is your problem not to have plenty of money to buy PM.

No one knows what is in the future for PM, oil, USD, housing, etc. It is all best guess scenario if you don't belong to a "special group " that get email telling them what to do. So I will add to the crud by saying diversify and spend what is manageable on PM. Limiting yourself to 5-10% PM, gives you a position that can be expanded later or sold if conditions change. Don't make a decision based on our answers unless you agree with them completely and have the financial reserve to deal with the outfall from their ideas.

Jim

 

If PMs crash and burn I am still ok (around 8 or 9% of net is PM) If houses crash and burn I am :dead-horse: gonna look like that poor horse (about 75% in housing) Its a good thing everyone needs a house though

I do wish I had more like 20% in PMs then I could fullfill my longtime childhood dream of filling up a swimming pool with silver and gold coins then going for a swim like scrooge mcduck. Oh when will the day come.

 

Platinum is consumed for jewelery especially in Japan. Silver is a mined as by product of mining base metals and right know below ground there is about 20 times as much silver as there is gold or platinum.

 

Wow, this thread got out of control fast. Thanks for the advice guys. I think i'll just stick to silver for now. I can't stomach paying 1700 an ounce for something that is so volatile.

 

I would say if you ran the numbers silver is much more volatile than gold is. Now, volatility cuts both ways, and you could win more on the upside, but I would still wager its more volatile.

 

Yeap silver is lot more volatile because it is industrial metal and it is much smaller volume than Gold, it will be interesting to see what will happen to Silver prices if Chinese economy starts cooling off.