Someone make a good argument for NOT buying metals.
Dan Denning of the Strategic Investments newsletter says that a higher price for gold is just part of the picture. "Soaring gold and oil prices will be accompanied by soaring interest rates and inflation. The convenient fantasy world where consumer prices don't rise and the dollar doesn't lose purchasing power will collapse. As oil rises in dollar terms — whether from geopolitical tension or the growing realization that Peak Oil is real — the run on the dollar will grow. Hard assets like gold won't just be fashionable: They will be indispensable to wealth preservation. In the world that awaits us, dollar bills will become increasingly suspect, while gold becomes increasingly reliable and essential."
Listen to Greg Silberman at FinancialSense.com when he says "Silver had a low of $1.50 in 1973 and a high of $40 in 1980. Projecting forwards, Silver has a price target of $675. That’s a 6,600% increase from current prices. Gold had a low of $35 (1971) and a high of $850 (1980). Projecting forward, Gold has a price target of $13,000. That’s a 1,400% increase from current prices."
March 19, 2006
Miami condos? Google stock? Dollars? Some would say Gold and Silver
Subscribe to:
Post Comments (Atom)
14 comments:
Hello all,
In the short term (5-10 years) gold and silver will shine as "old exchange media of international trade" nevertheless of its tag as “Barbaric relic” until new media will be established. I think it’s going to be “basket of commodities unit”. That basket would consist of Uranium, Gold, Oil, Wheat and Sugar.
In the short term the potentials of Gold and Silver are $1000 and $50 per ounce. Depending of scenario, in case of default on US Treasure Bonds&Notes and following hyperinflation the gold and silver will be seized by government and/or prohibited “to prevent hoarding ” (remember FDR’s bank holyday ?).
The best strategy to prevent loss of everything is staying healthy, having a lot of ammo and learn how to farm.
Good Argument For Not Buying Metals-
1)Government outlaws possesion.
2) You can't eat/drink them...lost life skills worth more ultimately.
regarding Gold - it's still attractive for a couple years. That's a game - sell it time before government decide to take it from you.
I've been thinking about investment strategies. Some ideas came into my mind. Some of them I've completed, some not yet.
1. Buy land for farming and gardening, not for speculation but for use. Have good water source on it and some tools.
2. Buy hybrid or disel car (mark my words, guys, when gas hit 4-5 $/gallon it's gonna be a long waiting list for hybrids).
3. Buy some gold (bullions, US Eagles and silver coins) - sell them when time will come.
4. Teach your kids survavil skills and farm together.
The silver prices around 1980 were a bit of an anomoly so it is misleading to project that top forward with inflation. At that time there was a run on silver as one family tried to corner the market and drove prices through the roof. Best to cite the gold top and project forward with inflation giving you about 2k an ounce.
Even though I am a firm believer that gold will increase dramatically in the next year, I would like to urge caution when seeing numbers like "1400% increase".
First off there's some obvious sleight-of-hand to get that goal of $13,000 for gold. If the previous high was $850/$35 = 24.2 times the low, then a goal of $13,000 means that he's pretending that the low is $535, not 1999's low of $247 or so. That's just plain fraudulent.
Secondly, inflation was quite significant in the 1970's. The handy inflation calculator shows that $35 in 1971 was $65.50 in 1980 just by inflation (~7% average yearly?) alone. The inflation-adjusted increase would be ~$850/$65.50 = ~13x; applying that multiplier to the 1999 low of $250 would put the next mania high at $3250.
That said, $850 in 1980 -- the tippy tippy top of the gold mania, in practical terms probably more theoretical than actual (what would the bid/ask spread have been, 25 bucks?) -- is $2158 at the end of 2005. (But if one assumes that actual CPI since 1992 is 50% higher than what is officially reported, then a better estimate of a mania high would be more like $2600.)
"It is left as an exercise for the reader", as the math books say, to decide whether the monetary situation in the next year compared to the monetary situation in 1980 means that a contemporary gold mania would reach higher than merely an inflation-adjusted value or not as high. The situation IMO is more rickety on one hand but on the other hand the FOMC has had twenty years of practice in defying reality.
Gold like all commodities has an intrinsic value tied to mind share, not application.
After WWII Japanese sold their precious antiques and family heirlooms for a bowl of rice.
Fact is you can't eat Gold, and unless you are going to melt it into jewelry, or for wire it hasn't got many other practical applications.
I say wait for property to collapse and buy repos from Fannie Mae, preferably multi-unit dwellings (4 plexs), live in one and rent 3. Plenty of people will have foreclosures and therefore their credit ratings will be tanked. They have to live somewhere.
Cheap rents and block parties may be all the rage in the future...but NOT gold.
galad to see the unibomber set is taking over this blog.
oh uh. black helicopters are hovering over my house. next it'll be the UN blue helmets and the return of the Beast. I'm going to stock up on ammo so I can blow away those ATF devils when they come to take my guns and tobacco and bible.
oh uh. black helicopters are hovering over my house. next it'll be the UN blue helmets and the return of the Beast. I'm going to stock up on ammo so I can blow away those ATF devils when they come to take my guns and tobacco and bible.
No shit. Fuckin' gold bugs. Little do they know that all of their gold is going to be worthless anyway because the government is sitting on top of a 5 billion ton hoard of alien gold stored in a bunker in Area 51, and the CIA and Delta Force and the plunge protection team are going to dump it all on the market just after the housing bubble bursts.
I have been investing in precious metals since the 70s and have made some good money at the right times. However,the one sure thing that I have learned is that the gold marketeers will, years-after-year, be making the same old arguments about "fiat currency" and hyper-inflation no matter what the overall economic conditions.
When gold was at $850/ounce in 1980, these gold guys were saying that the gold bull move was just beginning as hyperinflation was a certainty. Well, Paul Volker killed the inflation in the economy and eventually brought interest rates down. These guys were holding gold all through the big stock bull of the 80s and 90s. Gold eventually went down to under $290.
Don't believe the talk of crisis and hyperinflation- it's usually just gold marketing sales talk.
GOLD= SOLD! Keith aren't you smart enough not to buy into this gold bubble? Man, you love hype and gloom/doom. You know it's a gold bubble when all the doctors and dentists are in, like they are now.
what about Platinum?
I also agree gold is the new bubble. Housing is so 2005.
Commodities have had a good run in the past few years. Gold seems a little pricey to me...silver may be the better value, however that has run up some too. Nothing is inexpensive anymore, I'm not in a hurry to buy anything just yet.
You anon posters are cracking me up. Thanks for the big laugh!
Post a Comment