Posted on 07/25/2008 2:10:29 PM PDT by Diana in Wisconsin
>>>I always wonder, if the economy collapses and there is a general downfall of the country WHO can take their gold as payment of anything?
If you read their stories, the escaping Vietnamese boat people used gold to buy their passage out of a Communist dictatorship. It might not work for small purchases like buying bread and clean water on a daily basis, and it may not be very portable. It also requires the owner to know too much about the purity of the metals involved.
It would be interesting if one calculated the difference from 1968 until 2008 of the change in gold prices with no taxes (assume nothing was sold), less stated CPI... to the receipt of interest on the same amount of money at the quarterly prevailing 1 Year Treasury rates, less annual tax payments on the interest, less stated CPI for those years.
Also, if you want to eliminate the risk of holding gold (good idea), then you can simply buy one of the funds or ETFs that invest in gold indexes or diversified gold stocks and futures contracts. This would be the preferred way to go if you only predict high inflation and not total breakdown. If you are forecasting a lower dollar, perhaps certain US manufacturing companies that sell overseas would be a better bet. They’re having a half-off sale right now! (after factoring in our lower USD).
How much would $35 of the S&P buy you? [Value of 1 oz. of gold in 1965].
Could you buy S&P ETFs in 1965?
What were the brokerage fees for buying $35 in stocks in 1965?
According to BLS [http://www.bls.gov/bls/inflation.htm], $35.00 in 1965 “has the same buying power as $243.13 in 2008.”
See #24
Just a thought, but instead of watching the price of gold, I track the price per bullet of 7.62mm NATO ball ammo.
And boy has it gone up in the last four years!
As an old Cold Warrior, I remember fallout shelters and Conelrad. At the time, one author suggested using .22 long rifle as a form of currency. Another wrote,
“The day may come, in the aftermath of nuclear war, when a pound of tobacco is worth more than a pound of gold.”
Exactly. When people need STUFF in a time of collapse, money is useless... no matter if it’s gold of paper. If I need bullets and milk and bread and so does the next guy, which of us needs gold or dollars?
Totally irrelevant, since what ever they were, you would still be way ahead today.
Remember who told ya.
Gotta go now. Good luck.
Perfect! Econ 101 right there.
Bought all the gold I own, mostly coins, back when it was selling around $400.00 an ounce. Buying it today at current levels is probably not a good investment. One thing I didn’t see mentioned ... the demand for gold in China. That will go a long way toward sustaining gold at it’s present level.
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