Precious Metals
Jud
closing in on $1300 gold, only $8 away.
Zapp Brannigan
"Jud" <numis...@aol.com> wrote in message
news:e210a0f9-b5b4-4bd7...@y31g2000vbt.googlegroups.com...
> Another benchmark attained! Silver closed at $21.13 per oz today, and
> closing in on $1300 gold, only $8 away.
By year end gold will be $1500, silver $25.
Thank you President Obama.
Bremick
"Zapp Brannigan" <ju...@one.more> wrote in message
news:aCtmo.15509$dh....@newsfe02.iad...
Getting close to a time when it may become prudent to remove the wedding
band and gold necklace and store them with the other goodies in the deposit
box. I think I will keep the silver bullets at home though.
My own prediction: gold will be slightly lower than today at years end,
while silver will be around $22.00.
Jud
> My own prediction: gold will be slightly lower than today at years end,
> while silver will be around $22.00.
Bruce, I too think that silver will fare better than gold on a
percentage basis. Unfortunately, my crystal ball is in the shop for
repairs and have no predictions.
Peter
> My own prediction: gold will be slightly lower than today at years end,
> while silver will be around $22.00.
I don't have a prediction. I think the question is really about the
risks.
There is some risk (I think small) that someone will want to unload a
large amount of silver or gold. There is some risk (getting larger in
view of Mr. Bernanke's recent remarks) that substantial entities
(other nations - esp. China) might rather hold metals rather than
paper. Both risks seem small, but they exist.
oly
The present metals prices are largely the result of buying and selling
"paper gold" and "paper silver" and the exchange of physical bullion
doesn't have as much to do with prices today as it would have a few
years back. Paper gold and paper silver are all forms of gambling and
not a desire to hold physical.
If you want gold and silver, buy the real deal and keep it in your
possession.
oly
Peter
After some thought I concluded that a combination of actual coins and
mining stocks may be near the optimum. I like the liquidity of the
mining shares and the tangible nature of the coins.
oly
>
> - Show quoted text -
The mining shares should have a much higher return or yield, but note
that there is greater risk. Q. What if your gold mine has a major
fire or explosion or shaft or equipment failure at the same time that
gold hits $2000 per troy ounce??? A. You won't be a beneficiary (or a
full beneficiry) of the price movement.
The more you get away from the physical, the more risks you are
taking, always.
oly
mazorj
"oly" <oly...@aol.com> wrote in message
news:ae33fc5f-e751-4283...@u13g2000vbo.googlegroups.com...
oly
========================
Yep. Not all that supposedly is gold glitters. If you're going to buy
stock in gold mines, apply the same criteria as you would to any stock.
You're not buying gold, so don't let the traditional attractive features of
owning gold cloud your purchase decision. The print-outs for a hundred gold
stock purchases don't equal the mesmerizing heft and beauty and warm-fuzzy
security of even a single 1-ounce honest to God gold coin in the palm of
your hand.
Ditto for gold certificates. If you're attracted to the idea of owning
gold, it can be the worst of both possible worlds: Most of the same risks
of owning mining stock plus the important downside that gold doesn't earn
dividends or interest; and none of the pleasures and relative security of
holding those gleaming, hefty disks in your physical possession. As oly
noted, gold held as part of a balanced investment portfolio should be in
your physical possession. Gold certificates make sense only if you want to
engage in relatively short-term speculation on the spot price of gold, or
want to hold gold as part of a 401k. In that case, the physical objects
must be held by a third party. You cannot hold 401k investments in gold in
your physical possession.
Most of my gold coins are numismatic acquisitions, not bullion, but I
confess that I always have one Krugerrand on hand that I like to play with
whenever the gold bug hits me. :-]
Peter
Q. What if your gold mine has a major
> fire or explosion or shaft or equipment failure at the same time that
> gold hits $2000 per troy ounce??? A. You won't be a beneficiary (or a
> full beneficiry) of the price movement.
>
> The more you get away from the physical, the more risks you are
> taking, always.
I understand the risks of mining. I also understand the benefits of
diversification.
Holding bullion coins and other coins minimizes some risks (and that
is an important part of my strategy). The coins are less liquid than
the shares. As you said, the mining shares pay dividends and I think
that shortly, they will pay big dividends. This rise in gold has
continued for quite a while and has, by now, overcome the rise in cost
of mining. I think the gold price will remain high enough and long
enough to permit generous dividends.
An ability to receive income on the shares and their liquidity also
means that they allow me more flexibility to protect my coin holdings
by trading shares if the price weakens.
I don't actually see a strong reason to hold the precious metal ETFs.
oly
Well, besides the myriad risks involved with mining and the possibiity
of bad or larcenous management, there is one more risk: it will be
much easier for the government to confiscate/nationalize the mining
companies than the bullion. I suppose one could buy only Canadian
companies or something like that.
I agree with your statement on the PM ETFs and personally, I am
skeptical that they own all the bullion that they claim to own and
need to have.
oly
Bremick
__________
You're free to use my prediction in the meantime. I arrived at it pretty
cheaply.
Bremick
"Peter" <w2...@hotmail.com> wrote in message
news:1ecd3d86-4f3d-4b8c...@k30g2000vbn.googlegroups.com...
__________
If there were no risks, all the "investment" gold and silver probably would
be scarfed up whenever it became available. Lately, trying to beat savings
bank or CD interest % by investing in gold and/or silver seems a minimal
risk.
dlhii
Maybe that's it, I have to find a crystal ball repair shop. Daym thing
doesn't seem to be working. ;->
Zapp Brannigan
"Bremick" <rem...@cox.net> wrote in message
news:i7oq54$5rp$1...@news.eternal-september.org...
European central banks, who had been unloading huge quantities of gold, have no
declared a moratorium on further gold sales.
Bremick
"dlhii" <dl...@here.net> wrote in message
news:6b20a65tc9tck7522...@4ax.com...
I tried the crystal ball but all I could see in it was my own distorted
reflection. I took that as an omen and have been using my "gut" for
predictions ever since.
Jud
oly
> Silver at $21.70 and gold over $1,308.20. Hope you bought early!
There will be surges and pullbacks, but as I see it, gold and silver
are still "buys".
The world (its central banks) is now in the process of conscious,
deliberate competitive devaluations of fiat currencies. This process
is still in its very early stages.
No country or currency is safe.
Nous sommes trahis. Sauve qui peut.
oly
Zapp Brannigan
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
The Fed is continuing to increase the money supply to keep up with
out-of-control Federal spending.
http://www.kitco.com/ind/Turk/turk_sep202010.html
Increased supply of dollars + lessening demand for dollars = decreased dollar
value.
It's only a matter of time until the dollar hyperinflates.
That will be a boon to the Treasury Dep't since they will be able to pay off the
trillions they borrowed for mere pennies on the dollar.
For anyone in a cash position, the outlook is bleak.
Those of us who bought gold and silver will weather the storm and perhaps even
wind up ahead of the game.
oly
> "oly" <oly2...@aol.com> wrote in message
>
> news:7364791f-1ab2-403e...@d17g2000yqm.googlegroups.com...
> On Sep 28, 12:14 pm, Jud <numismat...@aol.com> wrote:
>
> > Silver at $21.70 and gold over $1,308.20. Hope you bought early!
>
> There will be surges and pullbacks, but as I see it, gold and silver
> are still "buys".
>
> The world (its central banks) is now in the process of conscious,
> deliberate competitive devaluations of fiat currencies. This process
> is still in its very early stages.
>
> No country or currency is safe.
> ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
> The Fed is continuing to increase the money supply to keep up with
> Increased supply of dollars + lessening demand for dollars = decreased dollar
> value.
> It's only a matter of time until the dollar hyperinflates.
> That will be a boon to the Treasury Dep't since they will be able to pay off the
> trillions they borrowed for mere pennies on the dollar.
> For anyone in a cash position, the outlook is bleak.
> Those of us who bought gold and silver will weather the storm and perhaps even
> wind up ahead of the game.
FWIW, it isn't the U.S. Treasury calling the shots - it's the Federal
Reserve Bank.
Inflation and hyperinflation are not a continuous spectrum, methinks.
Incremental to strong inflation reflects bad monetary policy (and
stupidity) on the part of the central bank authorities, while
hyperinflation usually means that a government has very consciously
made the decision to screw their nation's middle and upper classes to
the fullest extent possible.
In other words, inflation can be unintentional, but hyperinflation
never is.
If gold and silver are worth having, there will be attempts to
confiscate it or attempts to impose "windfall profits" taxes.
Also, if all countries are simultaneously rapidly debasing their
currencies, it will be that much more difficult to perceive what is
happening.
It's very popular right now, although not quite as good a book as it
is often reviewed - get and read Adam Ferguson's "When Money Dies"
about the Weimar Inflation, now in inexpensive reprint.
oly
Zapp Brannigan
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Re-read my post. I clearly said the Fed is increasing the money supply.
I said the Treasury Dept is a direct beneficiary of that policy since they are
the ones who issue Treasury notes and bills that will be paid off in inflated
dollars.
I disagree with your assessment of inflation/hyperinflation not being a
continuum.
oly
>
> - Show quoted text -
Inflation is wishy-washy or weak monetary policy gone awry;
hyperinflation is a conscious political decision (or a series of
decisions) to rape the populace.
The fact that both are expressed in percentages don't reflect the
difference in reality. The confiscations of inflation are tiny at any
given moment and can be fought back against by the informed; the
losses under hyperinflation are sudden, vast and permanent.
oly
oly
>
> - Show quoted text -
I should have said "inflation is wishy-washy or weak monetary policy
gone awry hyperinflation is a conscious political decision (or a
series of decisions) to rape a nation's principal creditors and/or its
people.
In history, you do find that most of the people's collective wealth
has already been confiscated to a high degree, via the stealth of many
years of trotting monetary inflation, well before the
hyperinflationary stage.
For instance, a German in 1919 had already lost about 80% of their
1914-based purchasing power of their marks and fixed income
investments. What happened between 1920 to 1924 was almost anti-
climax.
Hyperinflation is always intentional. It cannot be started or
sustained without conscious political decisions. Remember that.
oly
Zapp Brannigan
a result of government policy.
Governments love fiat currency, since they can print as much of it as they like
and pay off their debts with increasingly worthless currency.
I believe the USA is headed toward a period of extremely high inflation, perhaps
not hyper but at least as bad, if not worse, than that experienced during the
Carter administration.
Having lived in countries that experienced hyperinflation, I can tell you that
it isn't the apocalyptic cataclysm you might expect.
Life goes on, people look for ways to maintain their wealth by spending their
fiat currency to buy other currency or good that will retain value.
When the USA gets to a 20% or greater inflation rate, look for gold to hit $3000
and silver $50 or more.
"oly" <oly...@aol.com> wrote in message
news:63b7b7d9-a035-403b...@i13g2000yqd.googlegroups.com...
Bremick
"Zapp Brannigan" <ju...@one.more> wrote in message
> In any country that uses fiat currency, inflation (hyper or otherwise) is
> ALWAYS a result of government policy.
> Governments love fiat currency, since they can print as much of it as they
> like and pay off their debts with increasingly worthless currency.
> I believe the USA is headed toward a period of extremely high inflation,
> perhaps not hyper but at least as bad, if not worse, than that experienced
> during the Carter administration.
> Having lived in countries that experienced hyperinflation, I can tell you
> that it isn't the apocalyptic cataclysm you might expect.
> Life goes on, people look for ways to maintain their wealth by spending
> their fiat currency to buy other currency or good that will retain value.
> When the USA gets to a 20% or greater inflation rate, look for gold to hit
> $3000 and silver $50 or more.
Just out of curiousity, which countries DON'T use fiat currency? And what's
the practical alternative?
Zapp Brannigan
AFAIK all countries use a central bank issued fiat currency.
The obvious alternative is a precious metal backed currency (which, BTW, is
called for by the US Constitution but ignored by the government!)
Fiat currency is created for the express purpose of inflating the money suppy.
It's easy to print more funny money, not so easy to increase your
gold/silver/platinum holdings.
Bremick
"Zapp Brannigan" <ju...@one.more> wrote in message
So in other words, is there no practical alternative in today's world
economy to fiat currency? I think I understand the definition and concept
of fiat currency, but if that's the only viable fiscal option for countries
today, are there any countries that are making it work? It especially
confuses me when I hear pudits warn about the dangers of America's fiat
currency in particular, when *all* countries would appear to be vulnerable.
Zapp Brannigan
Don't put words in my mouth.
I cited a very practical alternative: the Constitutionally mandated backing of
the currency by gold.
Precious metals backed currency worked for 100s of years.
Fiat currency is always doomed to failure due to the cupidity of the governments
that issue them.
Bremick
"Zapp Brannigan" <ju...@one.more> wrote in message
I didn't realize I was putting words in your mouth by asking a couple
questions. I don't see how it's practical if only a couple countries were
to do it, plus considering the erratic price of gold, silver, etc.. Could
you explain how it would be practical for the US to unilaterally return to a
gold-backed currency in today's world economy, the Constitution
notwithstanding?
> Precious metals backed currency worked for 100s of years.
So has "fiat currency" in this country from what I've experienced so far.
> Fiat currency is always doomed to failure due to the cupidity of the
> governments that issue them.
Always? That's a pretty definite statement. How long does it usually take,
and what happens in "failure"?
Zapp Brannigan
PLONK
"Bremick" <rem...@cox.net> wrote in message
news:i80lpn$kuk$1...@news.eternal-september.org...
Bremick
"Zapp Brannigan" <ju...@one.more> wrote in message
> Go find someone else to argue with.
> PLONK
Why is it that so-called economic experts always seem to balk and accuse
people of arguing whenever asked to explain or elaborate on their bold
statements to anyone who isn't an economist? Maybe there's no textbook
handy to quote. Or maybe they just don't know how. Here I thought I might
get some enlightening insight from this Zapp Branigan with an example or
two. I should have known better.