Posted on 09/22/2014 7:50:29 PM PDT by MeneMeneTekelUpharsin
Gold shined brightly at the beginning of 2014, with bullion prices jumping by about 13% from New Year’s Day until mid-March. But since spring, and particularly since July, gold prices have been on the decline. Last week, the precious metal settled near lows not seen since Christmas 2013. So should investors consider this sell-off as an opportunity to buy precious metals on the cheap? Or is gold really tarnished for some time to come? Sadly for gold bugs, it’s the latter.
There’s always a big argument for gold as the only alternative amid overpriced stocks, a weak U.S. recovery and a fragile dollar that will collapse at any time. If you want to make those arguments in the face of the facts, feel free to scroll down to the comments section and make fun of my receding hairline. But for those interested in reality, it’s important to note how much those arguments have missed the mark over the past few years and how they ignore recent data to the contrary. The stock market, U.S. economy and the dollar are all doing quite well. Judging by recent data, all three look like they will improve.
Here’s why I wouldn’t expect gold to rebound anytime soon, and why the outlook for this precious metal is quite tarnished:
(Excerpt) Read more at marketwatch.com ...
Sure, there would be a black market but how would gold retain its market value if it is subject to confiscation and its owners are arrested?
“Tarnished for good”.
LOL. Idiot. When fiat paper is worthless, what are people going to turn to?
Gold and silver are done. Good for jewelry only.
Apple came out with their phone that encourages and rewards you to use virtual credits to buy and sell things. It’s fast and convenient. It is the dawn of virtual money and the only thing that could stop it is a nuclear war.
We’re in the future now and cash will be for collecting only.
Once the baby boomers are gone, it will be a fast and furious road to data.
You do realize that these magic readers have existed for quite a long time. Used to have a dongle on the keychain for getting gas, then they started showing up in cards; just tap and pay. Then many android phones had it - that was the great time, used to get loads of free things for paying with the phone or tablet. Then the machines started breaking. Maybe now that Apple is finally in the boat two years later, some of those machines will get fixed and for a little while I can reach for my phone instead of my card.
But I figure it will be pretty much a repeat of two years ago, everything will be fab for a couple months, and then the machines will start breaking again and we'll just pull out the cards again.
People do change, debit cards were a massive game changer - hardly see anyone under 40 using a check anymore. Amusing watching someone write a check, the clerk taking it, running it through the machine and handing it back to the customer. 'What's wrong with my check?' and the clerk replying 'Nothing is wrong, you've paid for your item, we've already gotten the money from your bank, and now I'm handing back the used check for your records. It is a security risk for us to keep checks now.'
But ease of use is always going to be the champion. First time someone comes across a broken paypass machine and held up a checkout line banging their watch against the reader, they're going to pause next checkout and go 'huh, I know the card will work, the gadget might not, maybe I'll just use the card - plus I want to get cash back anyway.'
Who knows, maybe this time will be different and all will be rosey. Doubt it.
Anyway, digressed from the topic - virtual money is already king. I have checks for one place - a local pizza place that doesn't accept credit cards, just cash or checks. Even the local donut shop which led the way in refusing credit cards has finally given in and now accepts them. I pulled $600 from the bank three weeks ago, and still have $560 of it in my pocket.
And barter is becoming a dying art - it is very difficult to budge anyone off of their marked prices anymore. Heck, look at eBay, the 'biggest online auction site' has reduced the number of auctions to a small percentage of the overall items available for sale. And while 'best offer' is accepted on a lot of auctions, getting someone to actually accept the best offer is rare.
There will be some people who will accept gold and silver as a medium of exchange if the S does HTF. But don't expect change, and I guarantee the guy who has loaves of bread will find more takers than someone who has a double eagle.
Or is it because nearly all of the Gold Bullion is now ‘adulterated’ with tungsten and the traders and government are worried... heading to terrified, that there will be an accounting soon?
Gold is far from risk free. Stocks represent shares in a productive enterprise, i.e., they are capital. Gold is simply a form of savings. Gold does not produce anything and it has no real “intrinsic” value, only the value a willing and able buyer will give it. It is your mission not to be the biggest fool.
You were wise.
Modern democrats are rough as sin on the free market. I knew that with the rats in complete power [and BO as leader], gold would almost certainly go WAY up and hinted strongly to my FRiends.
When we took back the House, I warned my fellow freepers that gold was no longer a sure thing. With divided power, hedge your bets. If we win the senate and keep the House, I would hint that maybe the gold % needs to be trimmed more tightly.
It seems to me that a big problem with virtual $$ is whether “security” can stay ahead of the hackers, without it all becoming too much of a “hassle” for average people to deal with.
Actually, I’ve been fairly successful in buying off eBay by making “Best Offers” that have been accepted. Granted, I try to make a low but fair offer, and not offer 1/10th of what the item is worth.
Still, it is true that the % of auctions on eBay has decreased markedly - but I wonder about the absolute number???
I don’t need gold to “rebound”. I just have it. And if it comes down more, I will have more.
The answer.
I just love these people who are waiting for gold to hit $600! One natural floor to the price of gold is that as the average grade level has come down, this has increased the cost of production per ounce. Mines will not remain open if the price of gold remains below the cost of production for an extended period of time.
The fact is that over the last few years things have been so tight for gold miners that hardly any exploration has been conducted. Eventually mines will run out of gold, with no replacement in sight.
All of the above will restrain supplies. Once the price starts rebounding, mines will be put back in production. But as to discovering new gold, it’s not like that can happen overnight after the price rebounds. That’s why the next rebound will take years going up.
The declining price of gold is related to lessening U.S. dependence on oil imports from countries that hate us?
Hoodathunkit!!? And I couldn’t agree more.
I too have silver eagles but lately all I buy is scrap silver; US dimes, quarters and half dollars from before 1965. $100 dollars face value of these coins contains about 71-1/2 troy oz of silver and if the SHTF, they are recognizable currency which may facilitate trade and bartering.
You mean like cocaine or heroin? Yeah, no one has any of that or trades in it. Believe me, drugs have an established street value which is its market value. Like gold and silver, it changes daily but that's the market.
Ping for later
Do you realize that when everyone is buying, selling and otherwise being paid electronically that in combination with electronic health care and records there will be ZERO privacy?
The government will own you totally.
And the government can declare gold and paper money to be illegal.
And that is when smart people will barter exclusively.
I think that rather than enthusiastically accepting cyber money, we should be scared to death of it.
Well maybe funny mirrors like the ones at the fair that make little skinny women look like fat amazons.
Other than that, smoke and lots of it.
By the way, too much smoke is toxic....fatal.
Your point is very well made.
Exactly. Heard all of this before. Umpteen times. Means nothing.
In 2314 the Ferengi and the Romulans are selling Gold pressed Latinum for bargain basement prices. Same problem?
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