Posted on 09/25/2011 9:12:15 PM PDT by blam
“I had two deer within 20ft of my kitchen window, but sometimes I just like to see them.”
I like to see them too ... next to my mashed potatos and green beens. Um, um, um.
What do you get when you buy common stock? Keys to the front door of Boeing headquarters?
A real QE3 is around the corner. Then, Gold will take off.
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The $2T Greek bailout will be funded by the FedRes/IMF ,, that IS QE3 ...
The current drop in gold is due to reason #3 ,, margin calls , selling for needed liquidity ... Margin requirements on commodities were pumped up right at the time all other assetts were falling and causing margin calls .. a guaranteed way to cause selling.
Sell your gold ,, or not ... doesn’t matter to me .. but this is an engineered shakeout ,, for the central banks to get a better buy-in price ,, that is all .
$1610 gold price right now
$1915 was the peak interday gold price a few weeks ago probably September 6th
SILVER
$28.47 right now
SILVER
Peaked near $50 a few months ago
“So what do you get when you buy gold? A fancy piece of paper that says you have gold reserved in your name somewhere in a vault in other state or country?”
I’ve said it on other posts on FR. When it comes to Gold and Silver if you can’t reach out and ‘physically’ touch it then it’s not under your control. And to my way of thinking it isn’t ‘real’.
To my way of thinking in many ways the Gold and Silver commodities market is much like the Mortgage backed securities market. There is a small core that is ‘real’ and backed by ‘real’ assets the rest is all smoke and mirrors.
I think I am looking at it from a different angle than you.
My thought was that the purpose of buying gold was to have something of tangible value that would retain value even if the world goes to crap around you. In that case, only the actual metal is going to be worth anything.
I guess if you are looking at it as a regular investment... something to make money on or at least hold value as long as the system stays intact, a bearer bond type paper is good enough.
If the world goes that far into crap, then bits of shiny metal won't be of value. Canned food, seeds, ammunition, bottled water, fuel, and weapons will be of value. You'd be better off laying in a supply of cheap Hi-Point 9mm handguns ($165 suggested retail) and 9mm ammo (<$12/50rds) for trading purposes.
Physical gold will protect you from a shady hedge fund that goes under because they sold too many paper certificates. Buying S&P GLD SPDRs is, IMHO, not the same thing.
What happens to these hoards of physical gold if a future US Government pulls a "Roosvelt II" and bans private ownership of bullion, and forces government purchase at a fixed paper dollar rate?
Most “buyers” for the past 500 pts. or more are herd followers who got hyped “in”. They're getting out now in droves, but more to come soon as they are the ones who ALWAYS bail when anything upsets them - same ones that sell their stock funds/etfs near the bottom.
Sorry, gold is not going to the moon, it's tanking and will tank faster if there is any rally in stocks. All you have to know is that it was being power-sold and promoted all over the place to know there are MANY owners who are not “believers”. They go in because “they had to” or they'd miss “the next great thing” just like they piled on tech stocks at the end of the 90’s. Another classic bubble and burst.
if I did own gold I would like to have the genuine article in a safe place. And that is the problem...where would that be!
The answer is different for everyone, and for any individual, there may be multiple answers.
First, consider diversification, don’t put all your Krugerrands in one basket.
Home security safes, back-yard (or public land) buried stashes, allocated private storage, bank safe deposit boxes, and hidden household spots each have their benefits and risks.
My general thinking is that you’re better off burying your gold under a potted plant in your family room than under a tree in a national forest. My course has a bunch of other suggestions.
Long term, it is not going down.
There are lots and lots and lots of late-to-the-party holders of both silver and gold. There will be panic selling for a while here. That is a reality.
I am still buying gold because nothing has changed. Nothing...
A very good post. As a small aside, I believe DVDs and other such discs use aluminum, not silver.
I don’t know for certain, except that if there were silver in them, they’d be recycled.
>>If the world goes that far into crap, then bits of shiny metal won’t be of value. Canned food, seeds, ammunition, bottled water, fuel, and weapons will be of value.
We agree in principle, but gold has always held value, at least until the crisis has ended. And if you are fully stocked with guns, ammo, and food (say your garage and basement are full) what do you do if you have $100,000 in savings to secure? What if you’re worried about having to relocate, and bring some wealth with you?
>>What happens to these hoards of physical gold if a future US Government pulls a “Roosvelt II” and bans private ownership of bullion, and forces government purchase at a fixed paper dollar rate?
The answer is that you get paid in full at the current rate with those dollars, just like before. Of course, the dollars you receive (along with everyone else’s) can be debased, but that fact that you benefited from owning gold for a finite period doesn’t mean it should never have been bought.
I have a lot of other reasons why I’m not worried about a ban and buy-up of gold.
Most buyers for the past 500 pts. or more are herd followers who got hyped in.
I suggest you consider foreign nations, central banks, the big funds, China, India, and those who are actually doing most of the buying. They don’t watch Glenn Beck.
Aluminum won't work for DVDs ... not reflective enough. Given its relatively high cost (several dollars per ounce vs. a few dollars per pound) almost all of Ag's commercial applications depend entirely on its unique properties.
Not enough Ag to be economical to recycle. Think twenty cents worth of silver that cost two dollars to get out.
A Freeper asked me what I think of this decline. My reply:
I think this is a great time to keep buying regularly. I
I think the fundamentals are there for a future rise. Gold’s steady 10-year rise (15% per year) would put it at about $1400 today, which I’m prepared for.
I’m intrigued by the notion that the Euros are panicking into the dollar, which is thus in a bubble of temporary strength, which makes commodities drop.
Aluminum won’t work for DVDs ... not reflective enough.
I also know that telescope mirrors are aluminized, not silvered.
My property taxes (On raw land) went down this year for the first time. The tax appraisal went down by 10%, though still about 20% above my original investment. Gold purchased at the same time has doubled in value even with the current correction.
The hype about "physical" gold vs "paper" is just that--hype fuelled either by cynical marketers who want to sell you bullion coins or bars, or ETF traders in short positions wanting to talk down their instrument of choice.
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