New President's Policies

[Starving Steve]

Re: New President's Policies

Eventually everyone dies, period. Those whose time has not arrived will develop survival skills or they won't.

Can you imagine yourself surviving old age but having just your last couple ounces of gold left. You have made it to age 99. You sit in a chair in a nursing home with Nurse Ratshit down the hallway. You sit there, staring at a twenty dollar gold piece--- like you did at age fourteen when you bought your first twenty dollar gold piece for $45 US.

You still have human needs. You just pooped your diaper, so you tap on your chair for Nurse Ratshit: "Nurse, nurse, nurse."

Your loving children threw you in a nursing home a few years ago when you turned 90. It was their birthday present to you. They sold your log house in the forest and told the Adult Social Services Department that you were too old to keep it. "He couldn't manage," they told the government social worker.

You bought gold years ago to survive, and you did survive. And you made it to age 99 too.

Nurse Ratshit won't come.... She's on lunch break.:rolleyes:

[tombat1913]

Re: New President's Policies

I happened to come across an old Navy "Global War on Terrorism" medal this morning. Didn't know I still had it laying around but it felt damn good to throw it off the balcony!

[tombat1913]

Re: New President's Policies

Those medals aren't made of valuable metal are they? :confused:

[c1ue]

Re: New President's Policies

Starving Steve,

I feel your pain - that the money you used to be able to derive an income from is now in grave danger of losing a lot of its intrinsic value, much less being able to actually provide a living.

But survival is all relative.

Sure, if hyperinflation occurs - your stash of gold will diminish as you spend some to survive.

But in contrast, anyone who keeps their money in cash dollars gets impoverished.

Those in real estate better pray that their renters will stick around and be able to pay.

Those in stocks will get spanked by the bear market first, although they might survive as certain companies will thrive in an inflationary environment for a time.

Those in bonds might do ok, but they'll have to have chosen the right bonds at the right time. Too early, and they lose purchasing power and interest rate. Too late, and they get eroded before buying the bond.

So if you've got the gold to live on for a few years and some extra, you can then start looking at buying from those without when TSHTF. That's how you might gain with a gold investment.

Not that it is the only way, just pointing out that reaping interest on a cash pile is not the only way to make money.

[Starving Steve]

Re: New President's Policies

Starving Steve - can't understand your reasoning. In any hyperinflation or even very high inflation, the rise in the premier inflation hedge assets far outstrips the deflation of that currencies' buying power. In the 1970's plain bullion rose 50% - 100% annualized over 15 years, no? That's far out ahead of the compound inflation rate in those years. Why do you surmise it is that owners of gold in a hyperinflation can go in during the aftermath and buy tons of real property with the proceeds?

Look up ounces of gold or silver to buy a home at the end of the inflationary 1970's for a glimpse of the elementary point. Your preoccupation with yield is a red herring. You overweight the premier inflation hedge (PM"s or Oil, this time around) and as they outrun the degradation of purchasing power you sell small portions for modest "interest income". If the "interest income" you would have been conservatively drawing from an interest bearing investment in a paper asset is only 5%-7%, you can most certainly draw down your gold holdings by that amount yearly while the remainder rises at a considerably faster clip than your withdrawals.

I have noticed this oversight on your part before with puzzlement, as it's probably the basis of your deep skepticism that gold is a good investment in just about any structurally inflationary environment. The proof is littered throughout history, and this community has already done all of the exhaustive spadework to evidence why inflation will be the order of the day for years to come - it's not just an oil embargo induced inflation this decade, it's global / structural, hence the inflation is baked into the pie in a way it never was in the 1970's. Hence the reluctance to accept the premise that "lack of income" is a fatal flaw in gold as a high-performance asset seems to me to evidence more prejudice than level headed reason.

Structural Global Inflation = gold outperformance = "annual interest income equivalent" within the degrading currency zone, which today is "everywhere". What's not to understand here?

The theory of gold as a hedge against inflation is great, but the practice of the theory--- i.e, how well gold has really performed--- leaves a bit to be desired.

Yes, gold is up 200 to 300% in US dollars over what it was in the 1980s and 1990s, depending upon the year that you bought gold. But the worst case is a gold purchase in Jan 1980 at $800+, and in the worst case, you would have been little more than even in nominal dollars after holding gold 28 years.

The worst case is actually even uglier. Most people--- I couldn't stop these people because I am Starving Steve and have no credibility--- were buying slabbed uncirculated US $20s for much of this period. Even when gold was down around $400, they were buying uncirculated slabbed US $20s for horrendous prices--- like $1200 per MS 65 coin.

In the ugliest worst case, the people are still buried. And there are many people in this circumstance.

Yes, gold is a nice inflation hedge if you buy cheap gold and sell the tops. But who knows where the tops or the bottoms are? Maybe $1000 gold is still not the top, who knows?

Meanwhile, the bills come every day. You need reliable income every day.

Yes, gold is wonderful, but oil is wonderful too. So is land. So is rental housing. So are a great many things.

Every investment has its season, and no investment stays in season forever.

The trouble with gold is that it becomes a religion, and when gold becomes a public religion, I want to sell it. This is the season for gold, but for how long who can say?

[Chris Coles]

Re: New President's Policies

The theory of gold as a hedge against inflation is great, but the practice of the theory--- i.e, how well gold has really performed--- leaves a bit to be desired.

Yes, gold is up 200 to 300% in US dollars over what it was in the 1980s and 1990s, depending upon the year that you bought gold. But the worst case is a gold purchase in Jan 1980 at $800+, and in the worst case, you would have been little more than even in nominal dollars after holding gold 28 years.

The worst case is actually even uglier. Most people--- I couldn't stop these people because I am Starving Steve and have no credibility--- were buying slabbed uncirculated US $20s for much of this period. Even when gold was down around $400, they were buying uncirculated slabbed US $20s for horrendous prices--- like $1200 per MS 65 coin.

In the ugliest worst case, the people are still buried. And there are many people in this circumstance.

Yes, gold is a nice inflation hedge if you buy cheap gold and sell the tops. But who knows where the tops or the bottoms are? Maybe $1000 gold is still not the top, who knows?

Meanwhile, the bills come every day. You need reliable income every day.

Yes, gold is wonderful, but oil is wonderful too. So is land. So is rental housing. So are a great many things.

Every investment has its season, and no investment stays in season forever.

The trouble with gold is that it becomes a religion, and when gold becomes a public religion, I want to sell it. This is the season for gold, but for how long who can say?

For a start, take India as an example. Take an ounce of gold over their border and find it will sell at two or three times what you pay for it.

Gold has a property that takes all the fear out of the transaction - everyone recognises the value.

Now you have to do the exact opposite to the tyre kicker. You hold an ounce of gold in your hand and you are in control of the market at that moment. YOU name the value if TSHTF. So wise up. Take control of your predicament. It is no good holding a valuable asset if you cannot make it work for you. Period.