[quote=Reggieoo]Given my assumptions above, why would ANYONE who has any quantity of Gold metal EVER want to trade it for fiat currency?
[/quote]
Because right now you have to have fiat currency to buy other goods that you need or want. You can’t buy things directly with PM (yet). Also, the only true wealth is productive assets. Gold/Silver/Currencys are mostly intermediarys. Gold/Silver just happen to be better at holding their value than the fiat because they also have intrinsic value, particularly silver as an industrial metal.
This could almost have been posted in the humor thread…Hmmmm, Anybody here been on a hot date lately that they aren’t talking about?
Sorry I didn’t reply sooner, I hit the ignore user button on you after you offended me LOL.
Perhaps emotional is the wrong word to describe your reactions. I’ll try to think of a better one, but disconnected is certainly not it.
Truth is, I don’t give a rat’s , uh, tail about gold or silver specifically, I don’t wear it, carry it in my pocket, use it on a daily basis, look at my stash, count it, or interact with it in any way, it just doesn’t hold anything over me any more than a $100 bill does. I care about being able to do things like pay for healthcare in the uncertain future. I suppose this is a personal limitation that I have to deal with, but I just can’t figure out a better way to preserve my savings at this point, considering I am fully prepped and have physical cash as well. If a better store of wealth, outside the banking system, were to show itself tomorrow, I would quickly move to it. Yet, lumped in with the “gold bug mentaility” I go.
Looking at your OP, it starts off on what I percieved as a statement of emotion, but if you say that’s not true, I believe you. Gold Bug Baggage (GBB) ought to have a wiki, so I’m off there now to add one. Now, what would be the opposite of GBB, hmmmmmmmm, I’ll have to figure that out for the wiki. Not that anyone here has experienced that phenomenon!
[quote=saxplayer00o1]
OK…Who is that quote from?
This could almost have been posted in the humor thread…Hmmmm, Anybody here been on a hot date lately that they aren’t talking about?
[/quote]
Remember when Joe Kennedy said:
“When the shoeshine boys talk stocks its a great sell signal” in 1929?
I think this applies to the dollar here.
[quote=Denny Johnson]It would be interesting to test your proven wealth protection strategies going forward…
[/quote]
Looking back at my wording, I can see how you thought I meant my proven wealth protection strategies. But actually, I was referring to value investor Seth Klarman’s (and other value investors like Warren Buffet’s) proven strategies. And yes, these approaches to wealth conservation have been proven, to the extent that any idea can be proven outside of the hard sciences.
The point of my response to you was to emphasize that wealth preservation is an active process, requiring one to adapt to opportunities as they arise. The old buy-and-hold strategy just makes you a target for Wall Street exploits, especially if you didn’t get in before they did.
Also, if you like to sign up for the Captain Sheeple Investing Newsletter, just call 1-800-Panic-Now, lol.
Valid point. A friend recently offered ranchland in Wyoming, farmland in Iowa, or timberland in Georgia for gold or silver. My gut tells me that gold and silver will “appreciate” more than the property offered, so I am currently in the waiting mode.
IMHO, the time between a dollar collapse and the birth of a “real currency”, gold will be used for large purchases (homes, land, and businesses) and silver will be used for daily needs.
Nate
When I read something like, “Various factors lead me to conclude that gold is one investment that you can park for the next ten or twenty years, confident that it will perform well.”, I find it very difficult to read further. This is from someone who has done an excellent job of convincing us that the next 20 years will be nothing like the last 20 years (though that was a few years ago). Why is anyone here looking for an investment of up to 20 years (and probably more)? As I understood it, gold and silver are just a means of preserving wealth until you can prepare much better for an uncertain future.
Now, uncertain surely doesn’t mean a little like today; Chris has rammed home that message many times. Uncertainty is more, how bad is it going to get or how different will it be. What on earth will people do with their $60,000 per ounce of gold in a decade (assuming they can hold on to it or be allowed to use it)? Will they be shaving leaves off their bars and going down to the local supermarket to buy some delicacy from a far off land, or perhaps going to the local DIY store to start buying some stuff to dig a garden?
I have enough in savings to buy a reasonable amount of gold but, after several years of reading this stuff, I still remain to be convinced of the usefulness of doing so. In the short term, my savings are safe. In the long term, I expect to have spent as much of it as I can in becoming self-sufficient, or as self-sufficient as I can within a self-sufficient community. Well, perhaps “expect” is not the right word, more “hope”. But that seems to be a far better goal than having oodles of precious metals in 20 years.
I just keep getting mixed messages from Chris. It’s like he’s got the right mindset and then he ploughs back into the gold story. And I shake my head yet again.
Tony
[quote=sofistek]When I read something like, “Various factors lead me to conclude that gold is one investment that you can park for the next ten or twenty years, confident that it will perform well.”, I find it very difficult to read further. This is from someone who has done an excellent job of convincing us that the next 20 years will be nothing like the last 20 years (though that was a few years ago). Why is anyone here looking for an investment of up to 20 years (and probably more)? As I understood it, gold and silver are just a means of preserving wealth until you can prepare much better for an uncertain future.
Now, uncertain surely doesn’t mean a little like today; Chris has rammed home that message many times. Uncertainty is more, how bad is it going to get or how different will it be. What on earth will people do with their $60,000 per ounce of gold in a decade (assuming they can hold on to it or be allowed to use it)? Will they be shaving leaves off their bars and going down to the local supermarket to buy some delicacy from a far off land, or perhaps going to the local DIY store to start buying some stuff to dig a garden?
I have enough in savings to buy a reasonable amount of gold but, after several years of reading this stuff, I still remain to be convinced of the usefulness of doing so. In the short term, my savings are safe. In the long term, I expect to have spent as much of it as I can in becoming self-sufficient, or as self-sufficient as I can within a self-sufficient community. Well, perhaps “expect” is not the right word, more “hope”. But that seems to be a far better goal than having oodles of precious metals in 20 years.
I just keep getting mixed messages from Chris. It’s like he’s got the right mindset and then he ploughs back into the gold story. And I shake my head yet again.
Tony
[/quote]
Lots of kvetching there. Why would anyone NOT look for an investment of 20 years or more? I don’t see any inconsistency in Chris’s message. I do see misunderstanding in what you write. But if not holding any PMs and keeping your all your wealth in cash and self-sufficiency items floats your boat, who am I to argue.
There are a couple anti-gold posts here from repeat offenders (you know who you are). Trying to shoot holes in Chris’ story is admirable and needed for a balanced debate, but in the end, current trends and past history make a very compelling case for gold and silver. As members here, you are no doubt familiar with exponential growth. Our debt and monetary creation are compounding and turning the corner on that hockey stick as we speak.
How one can just stick their nose up at money that has served humanity for millennia makes me scratch my head. As Chris plainly shows, mine production can’t grow exponentially. Barter is extremely difficult, and yes, people have used gold to buy food, drink, land, whatever, since the dawn of civilization. Ignoring such a glaring trend seems a little reckless to me, particularly seeing we are headed to financial crazy town.
As a young man how am I supposed to save for my future? I’m working on many forms of resilience, but have to store something for lean times. It’s as simple as the grasshopper and the ant. Shall I save in dollars created by the keystroke of the Bernank or perhaps a rigid 401k competing against nimble black box traders. How do I save??
In the end, precious metals and currency are a matter of trust. I think that globally we are facing the death of debt based money. How many bailouts does Greece get before we just say they are flat broke? Maybe the tootsie pop owl knows. In the mean time, folks like me will remove physical metal from the market. This is not an attempt to become rich, but an attempt to beat a system that has failed us.
In closing I will note that everyone who claims gold isn’t worth $1500 an ounce or $60,000 for that matter should question how much a dollar is really worth. It’s worth increasingly less every decade and cruising toward the edge of El Capitan from what I see. There will be ups and downs, but the endgame looks dreadful. Chris’ premise is less energy and more monetary creation moving forward. I’m not claiming gold is a panacea, but if the shoe fits, wear it. I’ll be here in two years and we can see how this plays out.
TJ
Good debate everyone.
I am not sold on Bitcoin, nor is my ego so fragile that I have to rush in and defend any position that I might have taken.
Let me give my favourite analogy. The difference between hummingbirds and seagulls. Hummingbirds are glamourus specialists. Seagulls are do-anything generalists. Which one is more vulnerable? I try to emulate the seagull. So I walk and chew gum.
Gold and silver part of the mix.
The seagull serves his stomach, not his ego. Place a seagull on my pennant.
Not all. Some have a higher calling.
http://en.wikipedia.org/wiki/Jonathan_Livingston_Seagull
That being said, I’m a seagull admirer myself. They can survive bitter cold and oppressive heat, are equally at home in the air, on land, and on the sea, can survive on any type of food, and still look good doing it all.
Jag, you are saying that gold/silver are the “asset-du-jour”? I do not think you realize just how underowned and unpopular they really are. How many people do you know that own or are even considering owning any physical precious metals? I agree, when they do become the “asset-du-jour” it will be time to sell. But we have not even scratched the surface yet, unlike the internet bubble or the real estate bubble when everyone wanted in at any price. I meet or know very few people who would even know the first thing about precious metals investing or holding. In the mainstream investment world precious metals are still a seriously contrarian investment. Although it is amazing at the press they get. And very much mostly negative, especially silver. Jag, it is not too late for you to get on board. Don’t be upset you did not get in at $250 an ounce, very few did. Not even George Soros but look at the money he made off of gold.But what I really wanted to ask was, what else is there. Where should I put my life savings in order to keep it safe? Dollars? Bonds? Stocks? No confidence in any of it.
Not to put words in JAG’s mouth (that just wouldn’t be sanitary) but I think JAG would rightly tell you that today, PM prices are set by the financial markets, not the physical one. So, while you may be carrying around a 1 oz coin in your pocket, it is getting a ride up and down in value along with ETFs (GLD) etc. Massive quanitites of paper are being traded, and that currently is the price discovery mechanism for gold, including physical spot prices.So, if we are in bubbleland, and the paper market crashes, your dollar denominated value of the coin in your pocket crashes with it. At least going by today’s rules. In that respect, if it is in a bubble that fully crashes before the proverbial TSHTF event (whatever that is) PMs will turn out to be a poor wealth storage device.
At least I think that is the gold contrarian point.
But, the key thing to remember about folks that take that stance is that typically they have a trader mentaility. In order to maximize wealth, you must accumulate FRNs or their equivalent, a trader might say. And there may be better, less risky, less bubble prone ways to do it. From a trader’s perspective, the martket is being flodded with ads from goldline, the guys standing in front of pawn shops trying to get you to sell your gold chains, and ads for converting your IRA or 401k to gold. That is real, and honestly it is a little spooky if you really think about it.
So, the other side of the coin (see what is did there, punny, huh?) would be the long term “investor” who is not as concerned with profits as spendability. Not sure if that is a word, but hopefully you get my point. I need to know that I have an asset that would be accepted by Doc Peters for heart surgery, or Robbie for grain, regardless of what is happening in the financial markets, as long as I need to purchase goods and services. It will never go to zero. Can’t say the same for the USD, but I hold them too.
So, JAG’s points are actually valid (man it hurts to say that ) depending on your mindset. Where JAG and I start to spar a bit is when he tries to say that gold hatred is not the opposite of gold bug, and yes, hatred is an emotion.
[quote=Ready]Where JAG and I start to spar a bit is when he tries to say that gold hatred is not the opposite of gold bug, and yes, hatred is an emotion.
[/quote]
Great job in explaining my position Ready, thank you. I would also emphasize to “Jones” that the GLD ETF is the second largest exchange-traded fund in the world. I agree that the physical market is too small to be much of a factor, but bubbles are typically a byproduct of the Wall Street derivative markets. Just as Wall Street speculation fueled the housing bubble of a few years ago, it is fueling the current bubbles in commodities, stocks, bonds, etc…
Regarding hatred…I certainly wouldn’t waste my energy hating something as benign as a financial asset. What I focus my attention on is Wall Street marketing. Its sole purpose is to get you to trade your hard-earned money for an empty and undelivered dream. And the Wall Street marketing for gold is just overflowing with emotional triggers:
Buy gold because you fear the actions of the Fed.
Buy gold because you fear the hyperinflation that is just around the corner.
Buy gold because you fear a deflationary depression is upon us.
Buy gold because you fear global war or terrorist attacks.
Buy gold because you fear that the dollar will lose all its value.
Buy gold because you fear that the financial elite are planning a one world currency.
Buy gold because you hate the government and fear what the politicians will due next.
Buy gold because you hate Wall Street and don’t want any part of it (ohh, that’s just brilliant marketing)
Buy gold because you fear and hate missing out on easy-as-pie capital gains.
Buy gold because it will protect you and your wealth in the next economic crisis.
That last one just takes the cake. I figure that holding gold will protect you about as much in the next crisis as holding internet stocks did in the 2000-2002 crash and holding real estate did in the housing market crash in 2007. But here is the kicker, because most people hold physical gold not out of greed, but out of fear, they will never sell. So when the day comes when your gold coins are worth a $1000 less than what they once were, acknowledge the fact that you just contributed to the next round of Wall Street bonuses.
Though I haven’t read part 2, I would think that Dr. M has done everyone a big favor by defining an objective gold exit plan. If I hadn’t already sold my gold, I would certainly be willing to pay for that information.
[quote=JAG][quote=Ready]
Where JAG and I start to spar a bit is when he tries to say that gold hatred is not the opposite of gold bug, and yes, hatred is an emotion.
[/quote]
Great job in explaining my position Ready, thank you. I would also emphasize to “Jones” that the GLD ETF is the second largest exchange-traded fund in the world. I agree that the physical market is too small to be much of a factor, but bubbles are typically a byproduct of the Wall Street derivative markets. Just as Wall Street speculation fueled the housing bubble of a few years ago, it is fueling the current bubbles in commodities, stocks, bonds, etc…
Regarding hatred…I certainly wouldn’t waste my energy hating something as benign as a financial asset. What I focus my attention on is Wall Street marketing. Its sole purpose is to get you to trade your hard-earned money for an empty and undelivered dream. And the Wall Street marketing for gold is just overflowing with emotional triggers:
Buy gold because you fear the actions of the Fed.
Buy gold because you fear the hyperinflation that is just around the corner.
Buy gold because you fear a deflationary depression is upon us.
Buy gold because you fear global war or terrorist attacks.
Buy gold because you fear that the dollar will lose all its value.
Buy gold because you fear that the financial elite are planning a one world currency.
Buy gold because you hate the government and fear what the politicians will due next.
Buy gold because you hate Wall Street and don’t want any part of it (ohh, that’s just brilliant marketing)
Buy gold because you fear and hate missing out on easy-as-pie capital gains.
Buy gold because it will protect you and your wealth in the next economic crisis.
That last one just takes the cake. I figure that holding gold will protect you about as much in the next crisis as holding internet stocks did in the 2000-2002 crash and holding real estate did in the housing market crash in 2007. But here is the kicker, because most people hold physical gold not out of greed, but out of fear, they will never sell. So when the day comes when your gold coins are worth a $1000 less than what they once were, acknowledge the fact that you just contributed to the next round of Wall Street bonuses.
Though I haven’t read part 2, I would think that Dr. M has done everyone a big favor by defining an objective gold exit plan. If I hadn’t already sold my gold, I would certainly be willing to pay for that information.
[/quote]
Most Inimitable Captain Sheeple and Nemesis Ready -
I have greatly enjoyed following this thread and the spiral discussions. Jeff, I think you left what might be the skeleton key reason off you list. Some might argue that it is a subset of the last reason on your list, but I think it stands alone.
Cat and I bought our gold and silver (and continue to do so) not because we are investing and think/hope/know it is going to go up in price. The only reason we hold it is because it will store some measure of wealth when the dollar goes to zero. Gold and silver will have a value - it might be a fraction of it once was, but unlike the dollar that went ZOOF, it will have some value. We anticipate that it will take some time to come up with another form of currency or exchange medium, but I find it hard to imagine a credible scenario where gold AND silver are worthless as a form of barter to secure goods and services that we haven’t accounted and prepped for.
Our gold and silver are more of an insurance policy than any form of investment strategy. And just like any insurance policy, nobody buys it and goes out hoping to get into a car accident to see how good their policy is.
Why would anyone NOT look for an investment of 20 years or more? I don't see any inconsistency in Chris's message. I do see misunderstanding in what you write. But if not holding any PMs and keeping your all your wealth in cash and self-sufficiency items floats your boat, who am I to argue.Mmm, I'm not sure you read my post. The Crash Course makes a convincing argument that things are going to hell in a handbasket. The next 20 years, Chris argues, will be nothing like the last 20, meaning that we're heading for a very different kind of society, either planned or unplanned. Investing, in the sense of the last 20 years, for a period of 10-20 years makes no sense at all, because you have no idea of what the world will look like at that point. If you don't actually hold the physical precious metals, will you be able to get at what you nominally own? Will you be able to sell what you own, given that normal markets aren't functioning any more? If you're still heavily dependent on others for your sustenance, will they happily accept physical gold in payment for what you need to survive, especially if it comes from those who aren't dependent on others (so they don't really need to buy much of what they don't produce themselves)? And, if you don't actually have small physical pieces of gold, how do you expect to get "change" if anyone does accept payment in gold? Will you be able to complete your preparations in a collapsing society, just because you have some gold buried in your garden? All sorts of questions come to mind when the central theme of this blog is aired; that the next 20 years are going to be very different from the last 20. It would appear that you haven't grasped this central theme and it would appear that Chris is so into precious metals that he keeps diluting his main messages (though he has occasionally said the PM holders should consider liquidating some of their holding to finish up preparations for collapse - which kind of, again, goes against what he's saying here).
[quote=Montana Native]There are a couple anti-gold posts here from repeat offenders (you know who you are). Trying to shoot holes in Chris’ story is admirable and needed for a balanced debate, but in the end, current trends and past history make a very compelling case for gold and silver.[/quote]So you say. I didn’t realise that criticism was considered an “offence”. I’m not anti-gold, I just haven’t seen a convincing case for it that examines all sides of the argument. There seem to be the gold zealots who never appear to examine the counter story, including Chris.[quote=Montana Native]How one can just stick their nose up at money that has served humanity for millennia makes me scratch my head.[/quote]Well, this is the current meme but I’m not sure it’s correct. I’ve seen others comment on gold that say history is completely the opposite. Oh yes, the wealthy have always had gold but the masses didn’t and primarily used barter during times such as we’re facing. Survival and satisfaction doesn’t require such artifical wealth measures, it only requires self-sufficiency and community. I’d like to see a close examination of the conventional wisdom that gold has always served as a widespread means of exchange, because I’m not convinced that the conventional wisdom is accurate (most conventional wisdom isn’t). Also, it seems to me that this frenzy for gold will just lead to another, but different, highly unequal society as most people end up with nothing whilst some of the more forward looking investors have wealth beyond their imagination (with gold at $65,000 an ounce, or more, at least nominally).[quote=Montana Native]As a young man how am I supposed to save for my future?[/quote]What are you trying to save for? If you believe that the next 50 years will just be a continuation of the last 20, then you haven’t paid much attention to the central theme of Chris’s work. Why do you think that money (in some form) is what you need for the future? Sure, if you have property, you’ll have to pay property taxes, at least, whilst society holds together enough to have local governments that have central services to pay for but otherwise you should be aiming to not rely on anyone but yourself, your family and your community.
[quote=Montana Native]In closing I will note that everyone who claims gold isn’t worth $1500 an ounce or $60,000 for that matter should question how much a dollar is really worth.[/quote]Gold has no intrinsic worth. It’s worth only what people are prepared to accept it’s worth. Something like oil, on the other hand, has real intrinsic value because of what can be done with it (more or less) directly. Gold is funny money, sort of.
[quote=Montana Native]I’ll be here in two years and we can see how this plays out.[/quote]Chris is talking about a long term investment. Two years isn’t long term. I too expect gold to continue rising but I’m still not getting in that game. I have some savings only because I had the forsight to extract my pension funds at a time when I could do it without taking a penalty. I don’t expect to retire in the conventional sense, so I don’t need the money for that eventuality. It’s useful to have those savings, though, because they give me some form of independence and a fairly liquid wealth base, with which to prepare. I’ve taken on a low paying job to ensure that I have some stream of income, should I not be able to get to my funds, though I don’t see it as a long term thing as I continue my preparations. Gold still doesn’t feature in those preparations, until I see a convincing case made.
Tony
[quote=jones11] Where should I put my life savings in order to keep it safe?[/quote]Put them into making yourself as self-sufficient as possible. What else are you thinking of doing with your life savings as we start to enter a world where limits turn out to be real?
[quote=Dogs_In_A_Pile]Cat and I bought our gold and silver (and continue to do so) not because we are investing and think/hope/know it is going to go up in price. The only reason we hold it is because it will store some measure of wealth when the dollar goes to zero. Gold and silver will have a value - it might be a fraction of it once was, but unlike the dollar that went ZOOF, it will have some value. We anticipate that it will take some time to come up with another form of currency or exchange medium, but I find it hard to imagine a credible scenario where gold AND silver are worthless as a form of barter to secure goods and services that we haven’t accounted and prepped for.[/quote]That is, perhaps, the most sensible thing I’ve read from the gold advocates. It has a better chance of have some value (as agreed between participants in the exchange) than anything else you might hold. Except, of course, knowledge of how to look after yourself and others; that, surely, will always have the most worth of anything.
C’mon JAG, man-up, inquiring minds want to know.
What’s the alternative that you are not sharing, the one makes you so confident criticizing gold and Doctor M’s analysis?
When I asked:
JAG.........what do you recommend to protect wealth after one is comfortable that he is materially prepared for a tumultuous future?You danced around it.
When jones11 asked:
But what I really wanted to ask was, what else is there. Where should I put my life savings in order to keep it safe? Dollars? Bonds? Stocks? No confidence in any of it.You ignored him.
Looking at some of your past gold posts it seems that you’ve been a gold bear since at least Aug 15, 2009 (“Personally, my investment of choice is the USD. The market doesn’t reward herd behavior, it punishes it.” Gold at $948) and for most of the past 2 years a lot of your portfolio is w Sitka Pacific and the US$. They can’t be what you suggest for a good night’s sleep.
C’mon buddy, stop holding back, spill the beans, what’s that alternative, give us something we can objectively track as Doctor M has done, let us in on it before some folks here (especially the old timers who have listened to this for so long) get to thinking that it’s just cheap talk from a sour grapes troll.
There is something to be said for contrarian investing, but ask yourself this…how many people in the world w stored wealth own US dollars and how many own gold?