Does anyone think jewellery, containing gold, platinum and/or diamonds could also be a good investment for maintaining purchasing power in the coming decades? It might be easier to obtain in the pm-plaques scarce conditions we face now at dealers. But I have no idea how these things would hold up.
CHM -I'm not an expert in diamonds, but my understanding is, resale value is far below initial cost. In other words, its a wide spread, and they're difficult to sell. I heard numbers like 50% haircuts for diamond sales, but have no actual experience.
In asia, gold jewelry (96% pure) is a very common way to store wealth. You can get 97% of spot price by selling your gold chain back to the original shop. I'd guess this would be true in US Chinatowns as well. Many years ago I bought an almost-pure chain in SF chinatown by negotiating spot x weight x purity + $50. I've never tried selling anything back, but I would guess you'd have better luck there than at some American chain store that just isn't set up for it. Important to find a very reputable store before buying, and if its a concern, ask them what the exchange value is for your chain. And bring cash.
One thing I like about gold jewelry is that it skates around a possible future prohibition on bullion ownership and/or confiscation. You might get questioned about your gold bullion bar, but likely not about your gold necklace, or belt buckle, or whatever.
live in your paradigm any longer. You can't change the system by playing within. In order the change the system, you must leave it, and never look back.
As I said, I'm glad I no longer live in the paradigm that you seem to enjoy. And sadly, it's that paradigm that's slowely (but intensifying quickly) enslaving 99.9% of the citizens of the world.
Very good way to invest in Au (Gold). The asians/indians have been using this style of jewelry for centuries as investment. Here's an example: Baht Investment Jewelry
I used to buy from a local jeweler a similar form, that you could twist off pieces (each piece was 3g of 23k) in order to purchase items. The Baht Jewelry has some of the same characteristics.
Okay, thanks a lot everyone!
A very interesting thread.
I have the exact same reaction to davefairtex's posts as JimH noted above. Thanks for expressing my exact sentiments Jim.
I do appreciate davefairtex's analyses and him taking the time to explain them in detail but I'm just of a different mindset. As LogansRun stated, I'm just not interested in being part of that paradigm anymore.
I like reading robie's posts. He's become a hero of sorts to me. The quintessential American who, by his actions, tells TPTB to go **** themselves, builds his resilience, and forges onward. I love it. I'm moving more there myself but just cannot find the right piece of land yet. I know though that when the buyer is ready, the land will appear, lol. I just feel it.
I often feel like Jan, like I'm from a different planet, because most folks just don't fully comprehend what is going on and find all sorts of ways to deny what their eyes, their brain, and their heart are telling them. I've given up trying to convince them. I've worked with people for many years and have learned that the majority will keep on doing what they have been doing, no matter how dysfunctional, until reality smacks them hard between the eyes and wakes them up … and even then, sometimes they still sleep. Enjoy that flyfishing Jan. Returning to nature is one way of effectively dealing with all this craziness. Do things you love to renew and restore your soul. We're doing something together as a family that is going to cost more money than I know I should spend but it will build lifelong memories that nothing and no one can take away. We should work hard but never forget to enjoy the precious gift of life.
In so far as Chris's comments on Matt Taibbi's article, if I may make a recommendation, it would be for everyone to read or buy Sharp's Dictionary of Power and Struggle: Language of Civil Resistance in Conflicts by Gene Sharp.
http://www.amazon.com/Sharps-Dictionary-Power-Struggle-Resistance/dp/0199829888
If we're going to make a difference, at some point, more organized, wide scale, and effective political action will need to be taken. This reference provides perspective, context, and content for such actions.
More so than any prepping or political action though, I'm increasingly finding the most important thing for me and my family is to build ourselves and others spiritually. Things that are eternal are more important than things that are temporal. I'm in this thing for the long term … the longest term in fact … and that requires keeping the highest standards and goals in mind … which are generally at odds with what TPTB want us to have in mind. If they're promoting it, I'm generally heading in the opposite direction.
LR I am citing a weight conversion for Baht to grams and ounces, apologies if incorrect just trying to help
interesting option as it can be broken down into small pieces easily and looks very nice.
"The baht is still used as a unit of measurement in gold trading. However, one baht of 96.5% gold bullion is defined as 15.16 grams rather than the generic standard of 15 grams."
http://en.wikipedia.org/wiki/Thai_units_of_measurement
so 1 baht is .53 ounces roughly. there is some premium for getting the jewelry but interesting option
http://www.metric-conversions.org/weight/grams-to-ounces.htm
[quote=VeganD]LR I am citing a weight conversion for Baht to grams and ounces, apologies if incorrect just trying to help
interesting option as it can be broken down into small pieces easily and looks very nice.
"The baht is still used as a unit of measurement in gold trading. However, one baht of 96.5% gold bullion is defined as 15.16 grams rather than the generic standard of 15 grams."
http://en.wikipedia.org/wiki/Thai_units_of_measurement
so 1 baht is .53 ounces roughly. there is some premium for getting the jewelry but interesting option
http://www.metric-conversions.org/weight/grams-to-ounces.htm
[/quote]
Thanks for the conversion help. One refinement, however, is that we need to convert Baht to Troy ounces, so the conversion is slightly different.
When I convert one Baht, or 15.16 grams, I come up with 0.4874 Troy ounces … so… the premium is even higher than you first suspected.
I see a storage fee of 0.5%- to 0.7% of holdings per year. Is there an explicit sales fee too or is that assumed in the storage fee?
ChrisI think I got the ratios reversed-much appreciated
Denise
There is a premium for sure on Baht! No doubt. The nice thing about it is, it can be worn and is quite beautiful. My wife wears a couple of her favorite pieces on a weekly basis so…that's worth the premium to me;-)Diversification is key. And everyone should look at Baht Jewelry as just another form of such.
BTW: A couple of my wife and daughters favorite pieces are their rings. Here's an example of one. Theirs are more elaborate than the example. But I bought them in Istanbul a few years back so I had a huge selection. But depending upon how elaborate they are, the premium online can be little.
Chris,Thanks for addressing the issue of manipulation and value determination. The whole purpose of an economic system is determining value. Central planning inevitably fails because values is assigned rather than market-determined, Our policies are making it increasingly more difficult to determine value.
I don't worry so much about the inequality issue per se since I attribute that to human nature. However, I am concerned that all this printing, easing, lending and redistributing have fundamentally changed the nature of our society. We've gone from an aspirational society to one in which the best you can hope for is keeping ahead of the bill collector.
I and a friend are planning to take part in the May 1 effort to strike back at the cartel by buying more Silver. You can learn more about the movement here;
http://www.youtube.com/watch?feature=player_embedded&v=QGZ5f1G1Ep0
It was May 1, 2011 that the cartel brutally attacked the advancing Silver price, with a combination of naked short sales, and coordinated margin hikes. I know it's kind of silly, and probably just pulls ahead demand without changing the big picture… but I am going to do it anyway purely as an act of defiance. The problem is, as I see it now, almost no Silver to buy. Here is what I am seeing;
Apmex has the most stuff on the shelves, but that is because their premiums are OUTRAGEOUS. $6.49 each for Canadian Bison Maples… $6.99 each for regular Maples in roll quantities. No wonder they have stock.
Texas Precious Metals is an interesting reference point, because they won't sell you anything that is not actually in stock and able to be delivered to you in three days. They have only two forms of Silver in stock; Perth mint 10 oz kook's and 1 Kg Koalas, the latter at $2.39 over spot. Reasonable, desirable.
Gainesville Coins may have the best deal going right now for small quantity, 1 oz coins… they have Canadian Bison on special for $3.09 over spot. This may be what I buy if they are still in stock Wednesday.
Otherwise, I am seeing stocks become more depleted by the day… not less so. There had been some NTR bars at Texas within the last few days… gone. There had also been some 100 oz JM bars on Gainesville earlier today. Also gone. Very interesting.
[quote=Jim H]I and a friend are planning to take part in the May 1 effort to strike back at the cartel by buying more Silver. You can learn more about the movement here;
http://www.youtube.com/watch?feature=player_embedded&v=QGZ5f1G1Ep0
It was May 1, 2011 that the cartel brutally attacked the advancing Silver price, with a combination of naked short sales, and coordinated margin hikes. I know it's kind of silly, and probably just pulls ahead demand without changing the big picture… but I am going to do it anyway purely as an act of defiance. The problem is, as I see it now, almost no Silver to buy. Here is what I am seeing;
[/quote]
A few things…
What is "Naked Shorting" of a Futures contract? I see this term used with futures all the time but it seems that the people using it don't understand the difference between "Naked shorting" a stock and "shorting" a future (and there is a big difference).
What percentage of futures contracts ever take or make delivery?
Futures are all about leverage so why is it evil when someone uses that leverage to push the price down when at other times (like in a bubble) that same leverage is used to push prices up? Doesn't increasing margin requirements, decrease leverage? If so, what is the complaint?.
Why would anyone wait until May 1st when you can front run and get it today before the May 1 squeeze?
Naked shorting is simply selling something you don't own, or don't necessarily have the ability to make delivery on at some point in the future. Before actually shorting a stock, you are supposed to borrow the shares. Bullion banks have the ability to create and "sell" futures contracts at will… because the casino is theirs. Shorting is not inherently evil, it has legitimate purposes for companies dealing in Silver (or any other commodity that is traded this way) that want to hedge. The problem is that Silver is one of the most heavily shorted of all commodities, and most of this short position is held by a few large entities (including JPM). This is manipulative, and illegal… yet the CTFC won't act. This has all been discussed at length before.A chart of the degree of short positioning in each market can be seen by looking down this link;
Investing Strategies, Insights and Newsletters | Legacy Research Group
Increasing margin requirements pushes out leveraged longs that had no intention of taking delivery… which in these markets is the vast majority of holders… therefore, in conjunction with price declines, the margin hikes tend to accelerate the process of long capitulation, creating a self-sustaining waterfall decline… all while no physical holders of Silver are actually selling : )
I will hold my purchase until May 1 to make my point. You are welcome to front run me today. My purchase will be a market moving 25 ounces I think.
Bullion banks have the ability to create and "sell" futures contracts at will.But, but, but the issue that is never addressed is who are the buyers of these futures contracts? The intent may well be to manipulate PM prices down but a better understanding of the parties on both sides of the buy/sell transaction would be really helpful. Chris? Jim H? Erik T.?
It sounds exciting and vaguely scandelous to talk about naked shorting, but its really not too exciting. Anyone making a straightforward downside bet is a naked short. The "naked" bit just means your position is unhedged by either a mine producing the commodity, or a batch of bars you plan to drop on the COMEX at expiration, or an offsetting option or futures position.On the other hand if you have 10 sacks of 90% silver sitting in the basement, and you think POS is going to be hammered in the next few weeks, you might consider shorting the silver market to hedge that position. You aren't naked at that point - although from the point of view of the futures market, you are.
Its common to write "naked puts" and "naked calls" in the options markets. All it means is that the writer has to actually take delivery (in case of a naked put) or go out and find the stock (in the case of a naked call) at expiration.
Prior to expiration, "naked short" positions are closed out by the short. Closing out a naked short is done simply by going long - buying an equivalent number contracts.
Being naked is really about risk. If you are naked short, it means you are exposed to effectively unlimited losses if the underlying item goes ballistic. If you protect yourself by buying a equal number of call options, you cap your risk at the strike price of the call you've bought. And at that point, you're no longer naked.
Bottom line - a straightforward downside bet on a commodity is a naked short. Anyone can create a "naked shorts" through the miracle of margin. Which is another subject.
The issue I have with Big Money going short - or long - is not about the nakedness, its about position sizes. If your position is massive enough - short or long - you end up dictating prices, and if that's your goal, the futures markets stop being about price discovery of important commodities, and instead turns into a gambling circus.
Compare this sort of organization and low spread to what you can get in the US.
I called my Thai friend who has that stack of kilo bars. He got them from this site: http://www.ylgbullion.com/th/index.php
The 99.9% kilo bar is currently bidding 1,384,800 / asking 1,386,800 (current price incl currency, etc: 1,385,504). He explained: you deposit cash from your bank in an account at YLG. At some point, you place an order. Price is set at that point. Then you drive over a day or two later and pick up your kilos.
When you sell your kilos, you do the same thing, just in reverse. Call the store, set the price, and bring your kilos in within a few days. Your account gets credited. You can transfer your money in and out using ACH to your bank account in 2 days.
USD/THB is 29.25 right now, so that bid/ask spread is about $68, or about $2/ounce - 0.136%. How's that for a low premium?
He told me that the gold shops in Thailand buy their gold from places like YLG.
Thanks for the explanation. and to think all this time i thought it was what happened to me during a high school basketball game warm-up. Right in front of the home team crowd, we ran outa the locker room when a team mate from behind me…LOOK OUT ETHYL… too late… i was naked shorted
Dave and Jim,
What you say is true BUT you ignore the big difference between "Naked Shorting" a stock and what you are calling "Naked Shorting" a future. When someone "Naked Shorts" a stock which they don't own and have no ability to borrow, they still have the stocks T+3 rolling settlement to deal with. The person on the other side of that Trade needs a real stock or at least needs to be paying to borrow someone elses (not just an IOU) at settlement because the new owner may want to sell it themselves in the future. So what happens if the "Naked Short" does not have access to the stock? There is a "failure to deliver" but the long side still gets a magically created long share of stock ( I think from the DTCC ). Eventually these get cleared up but in the meantime an abusive short seller can effectively create shares (without paying to borrow someone elses) which has the net effect of lowering the stock value.
Nothing like this is possible in the Futures markets because their is no limit to the number of contracts that are created. There is no need to find a long contract to borrow, to short the market because they are created any time a person buys or sells a future.
The meaning of the "naked" in this context strictly means unhedged which is completely different than what it means for stocks. Basically because futures are leveraged derivatives, it is easy to argue that both sides are "naked" in that sense unless the long has the full contract value in cash sitting around or the short has metal waiting to deliver.