Before the FIRE Gold Update: Is $1,237 the new $720? - Eric Janszen

[Debt-freeTICer]

Re: Before the FIRE Gold Update: Is $1,237 the new $720? - Eric Janszen

Would you rather own worth-less stock or worth(much)less paper dollars, than something worth much more, yet taxed much higher?

We all get to choose our poison - yet I do subscribe to diversification to an extent. Disclosure: I am mostly in cash, metals ETFs, and Gold.

I am leaning towards the view that in the upcoming years, there will be such a catastrophic destruction of wealth (think Exter's pyramid) that governments will not (over)confiscate gold, if at all, as it will be one of the few remaining "seeds" of wealth for future growth in the private sector.

Another argument: the plutocrats are not new to gold. Their accumulations probably rival those of emperors past. I would think they would have a say in how gold is taxed in the future.

Invest like these Giants do, and you will share in their fate. Or would you rather prefer to share in the investment fate of the remaining 95% of the population? Take your pick.

And one more, yet less likely scenario: gold effectively is remonitized. That is, you go to a bank, any bank, and exchange your gold for redenominated dollars. This would shift gold ownership back into the banking sector, as it used to be. This is a scenario I thought of when I was analyzing the possibly reasons for India and China to engage in a "gold ownership society" promotion. Something's up.

I would like the community's advice/opinion of how PM ore held in the ground would be effected by confiscation or remonitization.

To be specific, I have a friend/partner who is the sole owner of mining claims containing an old producing silver mine. He has reports from a major mining company, showing there are 1.6 million oz. silver "blocked out" and "probable" remaining in the mine. He is 80 years old and is looking to sell the mine. Is this a good time to sell? If silver is going to take-off soon?

I hold 700 acres of claims adjacent to his, and have recently made what appears to be a new silver discovery (only an indication at the surface) on my claims. If he sells, I will be inclined to piggyback my holdings on his and cash out.

Mining Claims are considered Real Property and are available for 1031 Exchanges. We recently sold some other claims on a 1031 Exchange.

If SHTF, I have thought of this as a possible hedge against a doomsday scenario, because the mining could be paid in silver produced.

[gnk]

Re: Before the FIRE Gold Update: Is $1,237 the new $720? - Eric Janszen

I would like the community's advice/opinion of how PM ore held in the ground would be effected by confiscation or remonitization.

To be specific, I have a friend/partner who is the sole owner of mining claims containing an old producing silver mine. He has reports from a major mining company, showing there are 1.6 million oz. silver "blocked out" and "probable" remaining in the mine. He is 80 years old and is looking to sell the mine. Is this a good time to sell? If silver is going to take-off soon?

I hold 700 acres of claims adjacent to his, and have recently made what appears to be a new silver discovery (only an indication at the surface) on my claims. If he sells, I will be inclined to piggyback my holdings on his and cash out.

Mining Claims are considered Real Property and are available for 1031 Exchanges. We recently sold some other claims on a 1031 Exchange.

If SHTF, I have thought of this as a possible hedge against a doomsday scenario, because the mining could be paid in silver produced.

I am now firmly in the remonetization of gold camp as the most likely scenario to play out. You bring up a good question. Honestly, I have no idea because of carrying costs and other factors that make your investment a lot more complicated than owning the metal in plain sight. I have owned gold miner stocks, but not an actual mine.

And your's is silver, not gold... But here's something you may find interesting. Hugo Salinas Price, a hard currency Austrian, wants Mexico to monetize silver. He has some very strong views on the subject that I agree with: http://www.rightsidenews.com/2010052...-currency.html

As you know, silver also has tremendous industrial uses so regardless of monetization, there will always be a strong market for it.

But also keep in mind that Australia is enacting a mining tax of 40% on profits. More countries could follow suit, especially if precious metals are remonetized. That's the only way to recapture one's national wealth in this day and age of foreign miners operating internationally. And you know what else? Countries are starving for cash... miners are a lot easier to pick on than the population at large.

I see Australia's scenario playing out as a more likely occurrence than FDR's scenario of individual confiscation.

Hopefully someone else will chime in here with better info than I provided.

Good luck with the mine!

[shiny!]

Re: Before the FIRE Gold Update: Is $1,237 the new $720? - Eric Janszen

I hold 700 acres of claims adjacent to his, and have recently made what appears to be a new silver discovery (only an indication at the surface) on my claims.

Will you be my new best friend?

[Ben]

Re: Before the FIRE Gold Update: Is $1,237 the new $720? - Eric Janszen

"I am now firmly in the remonetization of gold camp as the most likely scenario to play out."

The MOST likely?

Our debt problems are bad, but a 10% inflation (which could be partly concealed by fudging the figures) for 6 years would reduce them by about half. And then they would be in line with historical norms as a percentage of GDP. The dollar could also devalue.

This seems way more likely than monetizing gold.

Plus most mainstream economists won't consider the idea for a minute.

[gnk]

Re: Before the FIRE Gold Update: Is $1,237 the new $720? - Eric Janszen

"I am now firmly in the remonetization of gold camp as the most likely scenario to play out."

The MOST likely?

Our debt problems are bad, but a 10% inflation (which could be partly concealed by fudging the figures) for 6 years would reduce them by about half. And then they would be in line with historical norms as a percentage of GDP. The dollar could also devalue.

This seems way more likely than monetizing gold.

Plus most mainstream economists won't consider the idea for a minute.

Your analysis is too linear, and too sterile. It's a big world out there - lots of other moving parts.

There are way too many other factors at play that would destroy the casual 10% for 6 years scenario. It would turn into hyperinflation.

Your scenario neglects the bond market reaction, interest rate volatility, increased currency wars, CDS market, trade wars, oil costs, economic consequences of lost productivity, etc... it would be catastrophic. Actually, I would love to see government try this... (not really) but it would only make my most likely turn into most definitely!

Mainstream economists are the problem, not the solution. Either they will be forced out of the drivers seat, or the market will force them out. One way or another, they are done.

You know what else?

This is not a monetary crisis. It's a gold crisis.

[FRED]

Jeremy Granthum throws in the towel and joins Janszen nine years late

One man vs. the gold bubble

[c1ue]

Re: Jeremy Granthum throws in the towel and joins Janszen nine years late

The Dollar is neither a small or isolated currency. It is half of the world's currencies (give or take.)

TPC,

I'd just like to point out that if - for whatever reason - the rest of the world decided it didn't want US dollars anymore and 'return to maker' the lot, what do you think would happen regarding inflation?

[pescamaaan]

Re: Jeremy Granthum throws in the towel and joins Janszen nine years late

Bloomberg Article: Gold Rising as Euro Weakens Spurs More Speculation

http://www.bloomberg.com/apps/news?p...d=a6f.XxAJB0Rc

[LargoWinch]

Re: Jeremy Granthum throws in the towel and joins Janszen nine years late

One man vs. the gold bubble

I hate gold. It does not pay a dividend, it has no value,

Woa; talk about discrediting yourself. :eek:

[ThePythonicCow]

Re: Jeremy Granthum throws in the towel and joins Janszen nine years late

TPC,

I'd just like to point out that if - for whatever reason - the rest of the world decided it didn't want US dollars anymore and 'return to maker' the lot, what do you think would happen regarding inflation?

That would be a good time to be invested in what America euphemistically calls the "Defense" industry.

[FRED]

Re: Jeremy Granthum throws in the towel and joins Janszen nine years late

That would be a good time to be invested in what America euphemistically calls the "Defense" industry.

We prefer to call it the "disinfrastructure" industry. :cool:

[Jay]

Re: Jeremy Granthum throws in the towel and joins Janszen nine years late

TPC,

I'd just like to point out that if - for whatever reason - the rest of the world decided it didn't want US dollars anymore and 'return to maker' the lot, what do you think would happen regarding inflation?

Back to this argument are we? Look what a little use of the rating agencies has done to the Euro. The US has lots more options to keep the dollar from disintegration.