Panic Is Near if "The Gold Is Gone"

Insight ^ | 3 March 2003 | Kelly Patricia O'Meara

[Quix]

Ah so.

Wellllllll, it seems to me you'll likely make the best sense of it all. Glad you're a FREEPER!

Thanks.

[WatchNKorea]

"As I told someone the other day, can you imagine what would happen if just 20% of savers went to the bank and tried to close their accounts and asked for cash?"

About two months ago there was another gold bullion thread running here at FR and at that time gold was hovering around $320 per ounce. In that thread there were some of us predicting gold would be at or above $450 to $500 within a year. I called some of my immediate family members and relatives to invest in American Eagles that same week and they did. Hmmm, I think I'll call these same family members and ask for my commission now ...rofl.

[WatchNKorea]

"Last person out the door turn off the lights cause the party is over."

Could very well be.

[SauronOfMordor]

My ex mother-in-law used to keep 10 cartons of cigarettes in her extra freezer. That was her "gold" in the event that the social order broke down and she needed something that would have purchasing power no matter what.

I'm with you on this. If things turn completely to hell, we won't go to gold, we'll go to barter. The prime barter goods will be things that have intrinsic value: cigs, scotch, ammo, food, a warm place to sleep. You can't eat gold, nor will it be useful in fending off the bad guy who's climbing in your window to see what he can take from you.

[equus]

Interesting thread.
But I agree, essentially, it's like any trade--you can gamble stuff on possible news (cartel will be outed etc), but if you lose your gamble....
So its better to ride waves up and down based on technical analysis, which is the same whether you're dealing in metals, stocks, options, indexes, whatever.

I think gold's gotten a good ride so far, and those who invested autumn of 2001 were smart. I'd probably be getting out of that position now or in the last few months. Of course, I sat on the sidelines, I was too nervous to do anything.

[goldilucky]

I invested in gold around the time I was a junior in college to help pay my student loans. Although the stock, asl, went down the tubes. It is currently at $6.15. I remember buying a block of it in '95 at $1700. Now I'm just waiting to break even as this stock has been hedged.

Try myng.ob, and nem; both are gold ticker symbols. I bought 10,000 shares of myng at .05 and .06 just a year ago. So far I've trippled my profit. I'm waiting for it to get to $1.00 then I'll sell.

[WatchNKorea]

10 American Eagles, purchased for $287, sold for $362.2,less than 2 yrs. turnaround."

My best free advice is to act fast! Buy ten (or 30) Am Ealges tomorrow and watch gold be right back at $380 to $395 within the next ten days. (my logic in pushing for prompt purchases in gold bullion is that I'm considering the coming war with Iraq and Kim Jong Il's next move)

[arete]

You can't eat gold, nor will it be useful in fending off the bad guy who's climbing in your window to see what he can take from you.

Gold and silver will be used as the common medium of exchange in a barter system (Argentina). As far as the bad guy, just show him your latest mutual fund statement -- that will scare him away.

Richard W.

[unixfox]

Forget the gold and silver, I'm gonna use alcohol and tobacco as a bartering tool. When all is said and done, a piece of metal won't do jack squat, but alcolhol...now you have something.

[WatchNKorea]

"If things turn completely to hell, we won't go to gold, we'll go to barter."

Not trying to run horsetrod through this thread, but during the 9 years I was in the numismatic business in a retail store I had many, many investors who were purchasing bags of U. S. silver coins (pre-1964) so that they could use the small silver coins (dimes for instance) to barter with (if they needed to). I believe back then - in early 1979, a U. S. silver dime (90% silver) was being traded for about 4 times face value. Hence...investing in U S silver coins by the bag or quarter bag of $1000 is also an inviting idea. In times of turmoil, one of these silver dimes could purchase a loaf of bread, three/four of them -a gallon of gasoline, etc, etc.

[goldilucky]

Thanks for this post, Publius. I was right all along about the gold market being rigged by J.P. Morgan, Goldman Sachs and others. They are undervaluing the POG so that people like myself will, in despair, sell. Then they raise to POG only to the point that those who can afford to own stock have real wealth. A lot my buddies are investors in gold. I see it rising but I also predict that in order for it to rise, something must happen first. Like a "correction" in the markets.

[WatchNKorea]

So far I've trippled my profit. I'm waiting for it to get to $1.00 then I'll sell.

Considering the direction gold bullion is heading now you'll do quite well. But do not sell too soon. Be just a wee bit greedy and wait till gold moves above $470 to $480 an ounce (though I think gold is ultimately headed towards $800 or more per ounce)

[Quix]

I agree with you.

On unpaid sabbatical doesn't leave me with much to do anything with! Will see if Dad is interested. He's been diddling around with gold futures.

Appreciate your kind response.

Great success to you.

[Hammerhead]

maybe im woefully stupid, but I really never understood the value of gold. Water, oil, food? yes. but gold?

Seriously, what is gold really good for besides it's conduction properties.

given the choice of what I would want on a deserted island, a heavy chunck of metal is LAST on the list.

[Publius]

Then they raise to POG only to the point that those who can afford to own stock have real wealth.

"They" aren't letting the price of gold rise. "They" have no choice. Things got away from them.

First the Howe/Bolser Report was released to the press. The next day Bush fires O'Neill and Lindsay, and an 8 week bull run in gold takes off.

Then "they" raise the margin requirements for gold options trading, thus forcing the little players to cover while "they" hold on to their shorts and dump more gold on the market. "They" force a good correction -- which they hoped would turn into a rout.

Then this Insight article comes out, and for the first time a major reputable publication covers a story that only the samizdat Internet sources covered. Gold went up today, and I believe this story will drive it much farther.

Of course, when the price explosion comes, "they" will blame it on Iraq. You can see what excuses "they" are lining up to avoid a scandal, congressional investigation and jail time. I'll be interested in seeing how many of them board their private planes to head for places with no extradition treaty.

[Citizen of the Savage Nation]

On that note, if you say gold is going to rise because of Iraq, then the converse must be true, when Saddam is gone, gold will plummet. Are you saying that? Of course, I made the same comment to Rohry a few weeks back and I was told that I didn't know anything about gold. Maybe not, but its down $30 per ounce since then.

[Publius]

If you live alone on a desert island, then you're right. Gold is useless.

But if you live among other people who need things when you need things, and the local currency is heading to Weimar and Continental levels, then gold is the key medium of exchange. Silver and platinum are good, too. Oil is consumed, as are pork chops and ground steak.

A day may come when an ounce of gold will buy something that you'd need a wheelbarrel of Federal Reserve Notes to pay for.

[Publius]

Before Treasury Secretary Hamilton minted our first coins in 1792, this country used coins of foreign or state manufacture.

On the frontier, which in those days was western Pennsylvania and New York, barter was the rule, and the frontier functioned on the alcohol standard. A barrel of beer, ale, porter, stout or cider had a fixed value in terms of flour, salt beef or a side of bacon. So did a cask of brandy or whisky.

This is why the federal excise tax on whisky and the resulting Whiskey Rebellion was such a big deal.

But in a pinch, that gold you spurn will buy you a well-defined quantity of spirits. Some things never change.

[Publius]

See posts #77 and #78.

[Publius]

See posts #77 and #78.