Gold is the best investment

[Nick Young]

The time to buy gold was the year 2000, now it is retarded to do it when everyone is buying it, wait for it to go on a minicrash from where it is now before you stock up.

[KevinNYC]

Everyone should buy gold. It has gone up 600% in the last 20 years. If you understand that our way of life is built on FAKE MONEY you understand the importance of gold. the government prints money out of thin air and your money will always lose value because they are just making as much as they want . You can bet as more and more people realize this they will buy gold which is not somethng the government can just print up. i know theres some ron paul people on this forum and though i disagree with him vehemently on social issues he is 100% right about gold.

again the price of gold has been only going up for the last twenty years and there is no reason for it to go back down because it is not fiat money. Also the eurozone crisis will probably send it soaring to record highs


disclosure: i bought gold

Gold is now down $300 from its peak last September.

[mika]

I keep purchasing silver, it's pretty addicting. I like collecting silver American Eagles & Canadian Maple Leafs. I'm thinking about saving up and getting a monster box of Canadian Maple Leaf silver coins, there is 500 per box.

I have five Canadian Maple Leaf gold coins & one Canadian Maple Leaf platinum coin. I like playing with my silver

Anybody else collect silver?

[joe]

GOLD is valuable because many people value it. It's that simple. People across time, culture, race, and creed have valued gold. That was true in Ancient Rome, it was true to the Native Americans, and it's true today.

Now yes, you personally might not value gold. You might think it's the most hideous looking thing you've ever seen. All well and good! But "currency" doesn't have to be something that you value; it just has to be something that MOST or MANY people value.

Take the example of cigarettes in prison. Not everyone in prison smokes, but even non-smokers trade cigarettes between each other. Why? Because cigarettes are considered valuable to MANY inmates (smokers), therefore it's easy to find a trade partner as long as you yourself have cigarettes. Non-smokers want cigarettes because they know others want cigarettes.

Apply that same logic to gold. Gold is considered valuable to MANY people (those who think gold is attractive looking, want gold jewelry, etc), therefore it behooves even those who find gold unattractive to collect it. If you have gold, you will easily find a trade partner, and can exchange your gold for products you actually want. That is the entire purpose of currency, to facilitate trade.

You might ask, but then why is paper money any different? You don't want paper money necessarily, but you know other will accept it in trade. Isn't that the same as gold or cigarettes in prison?

Yes, in many ways it is the same. The big problem with paper money is that it can be easily counterfeited, with no real cost taken by the counterfeiter. To mine gold, it takes actual time, money, and human resources. Cigarettes are not easily obtained in prison. In other words, scarcity is what gives them their worth. If the prisons were flooded with cigarettes, who would trade you a porno magazine for one? If every person in the world had 2 tons of gold, what good would it be in trade?

Paper money on the other hand can easily be printed, with very little cost to the counterfeiter. The temptation to print is always too strong for the government/central banks. ALWAYS. They gain HUGE benefits by printing money in the short term, and the pain isn't felt until later. Before that happens they're filthy rich at the public's expense.

In theory, paper money could work if the government didn't debase it. But in practice, that is never and will never be the case.

That is why paper money only occurs by government force. The market would never choose paper money, because the risk of dishonesty is too great. The government has to mandate the paper money, and inevitably they debase it, impoverish the citizens, and enrich themselves.

[joe]

Saying "gold is a relic of the past" is ignorant. That's like saying "gravity is a relic of the past." Gold has traditionally been currency for a very good reason. It wasn't by accident, or because people were dumb in the past and now we're geniuses who can print money. It's because the natural course of the market inevitably favors gold or precious metal as money. There's nothing scary about it. Gold money is honest, efficient, trustworthy money. There's nothing about a gold standard that inherently crashes the economy. That's all BS made up by the federal reserve and government propagandists, to justify robbing us blind with their printing press.

Fact is, the world WILL return to a precious metal standard, like it or not. Paper money will always go back to its real value, which is NOTHING. Zero! Nadda! There is no documented case in world history of a paper currency not eventually becoming WORTHLESS. The only reason gold standards end is because governments make it illegal, or remove all the actual gold from the money and horde it for themselves. That's it.

[Jackass18]

Gold is now down $300 from its peak last September.

I think he was looking at it as a long-term investment.

Gold does have a number of uses: http://geology.com/minerals/gold/uses-of-gold.shtml

[joe]

This sort of talk is liable to get you fined 5000 credits.

Sadly I can see that kind of talk being illegal in the future.

[Pinkhearts]

Does this Joe ever know what he is talking about?

Sure paper money is just currency and has no value other than what the govt tells you its worth

Then you say gold is a currency? So it only serves to represent value, and not have actual value itself?

If you think gold's actual value is reflected in its price now you're doing crack. It is just an alternate currency. What's the point changing from one currency to another?

[joe]

Does this Joe ever know what he is talking about?

Sure paper money is just currency and has no value other than what the govt tells you its worth

Then you say gold is a currency? So it only serves to represent value, and not have actual value itself?

If you think gold's actual value is reflected in its price now you're doing crack. It is just an alternate currency. What's the point changing from one currency to another?

Paper money can have value. Its value is that governments accept it, and they enforce private contracts that use (for example) dollars as the payment. Governments can also tax things like gold or silver to make them less attractive as currency. Paper money doesn't get its value from the free market, but it does have value nonetheless. In a vacuum, it can work as a currency.

The problem with it is that politicians/central bankers/Kings/dictators end up debasing the currency to their own benefit. Either by printing the money, or by literally removing the gold from "gold coins." In either case, the purchasing power of the money is stolen from the people, and transferred to the ruling class. That is the case today, and is the main cause of the worlds economic issues.

[KevinNYC]

I think he was looking at it as a long-term investment.

Gold does have a number of uses: http://geology.com/minerals/gold/uses-of-gold.shtml

You try not to buy long term investments at the peak of their market and any one who had been paying attention knew that there had been a decade long bull market in gold. Also the llast time gold peaked, it dropped and stay low for a Looooong time.



Look at this chart, if you bought Gold at the peak of the last bull market in gold, you would have to hold on to it for over 25 years just to get your money back. And that's before adjusting prices for inflation. If adjust the prices for inflation, the price in 1980 was still higher than the peak last year. So that would have turned out to be a very bad investment compared to say a Treasury Bill or a even a bank account with interest. That's a historical perspective that folks on this board who tend to be younger might not have, especially at the end of a decade long gold rush.

This thread wasn't made two or three years ago when gold was still climbing, it was three months ago after gold prices had a fallen a bit.

If you look the 1980 gold market and this one, you see that both developed in time of fears of inflation, the 1980 market happened right after the 1979 "oil shock" that occurred right after the revolution in Iran. The recent run up in gold really kicked into gear after 2008 economic crisis. When Fed Chief Paul Volcker followed a tight money policy to deliberately break high inflation in early 80's, it caused a severe recession in the US, but gold prices fell and kept falling because inflation went from 13% in 1981 to 3% in 1983

[KevinNYC]

I think he was looking at it as a long-term investment.

Gold does have a number of uses: http://geology.com/minerals/gold/uses-of-gold.shtml

You try not to buy long term investments at the peak of their market and any one who had been paying attention knew that there had been a decade long bull market in gold. Also the last time gold peaked, it dropped and stay low for a Looooong time.



Look at this chart, if you bought Gold at the peak of the last bull market in gold, you would have to hold on to it for over 25 years just to get your money back. And that's before adjusting prices for inflation. If adjust the prices for inflation, the price in 1980 was still higher than the peak last year. So that would have turned out to be a very bad investment compared to say a Treasury Bill or a even a bank account with interest. That's a historical perspective that folks on this board who tend to be younger might not have, especially at the end of a decade long gold rush.

This thread wasn't made two or three years ago when gold was still climbing, it was three months ago after gold prices had a fallen a bit.

If you look the 1980 gold market and this one, you see that both developed in time of fears of inflation, the 1980 market happened right after the 1979 "oil shock" that occurred right after the revolution in Iran. The recent run up in gold really kicked into gear after 2008 economic crisis. When Fed Chief Paul Volcker followed a tight money policy to deliberately break high inflation in early 80's, it caused a severe recession in the US, but gold prices fell and kept falling because inflation went from 13% in 1981 to 3% in 1983

[joe]

If you look the 1980 gold market and this one, you see that both developed in time of fears of inflation, the 1980 market happened right after the 1979 "oil shock" that occurred right after the revolution in Iran. The recent run up in gold really kicked into gear after 2008 economic crisis. When Fed Chief Paul Volcker followed a tight money policy to deliberately break high inflation in early 80's, it caused a severe recession in the US, but gold prices fell and kept falling because inflation went from 13% in 1981 to 3% in 1983

Exactly. But the fear many 'gold-bugs' have today is that the federal reserve has no intention of turning off the inflation hose. Especially in the US. If the Fed were to raise interest rates like Paul Volcker did, right now, it'd be catastrophic in the short-term. The politicians don't want that, the people don't want that, and the banks don't want that. So there's no foreseeable scenario in which the Fed will tighten.

If you accept that premise, the endgame would be a debt crisis/currency crisis. And then you'd really see high gold prices.

[KevinNYC]

Exactly. But the fear many 'gold-bugs' have today is that the federal reserve has no intention of turning off the inflation hose. Especially in the US. If the Fed were to raise interest rates like Paul Volcker did, right now, it'd be catastrophic in the short-term. The politicians don't want that, the people don't want that, and the banks don't want that. So there's no foreseeable scenario in which the Fed will tighten.

If you accept that premise, the endgame would be a debt crisis/currency crisis. And then you'd really see high gold prices.

That's the problem when you have to accept a premise for an investment to make sense. There's a difference between "Trust me, this a good investment because of these reasons" and "Trust me, this is a good investment, because I'm secretly the exiled Crown Prince of Malta." Gold prices are not necessarily based on supply and demand like any other commodity.

You also have to understand in the past few years you had lots of people running to buy gold because the US dollar was going to collapse AND you have lots and lots of people running to buy Treasury because US debt was the safest investment in the world.

However, I'm not sure what you mean by "inflation hose" though, because it kind looks like a inflation grade-school water fountain to me.

Year 2012
Jan 2.93%
Feb 2.87%
Mar 2.65%
Apr 2.30%

[-p.tiddy-]

[COLOR="Red"]Saying "gold is a relic of the past" is ignorant. That's like saying "gravity is a relic of the past." [/COLOR]Gold has traditionally been currency for a very good reason. It wasn't by accident, or because people were dumb in the past and now we're geniuses who can print money. It's because the natural course of the market inevitably favors gold or precious metal as money. There's nothing scary about it. Gold money is honest, efficient, trustworthy money. There's nothing about a gold standard that inherently crashes the economy. That's all BS made up by the federal reserve and government propagandists, to justify robbing us blind with their printing press.

no it's not...that is a REALLY REALLY horrible comparison

Fact is, the world WILL return to a precious metal standard, like it or not. Paper money will always go back to its real value, which is NOTHING. Zero! Nadda! [COLOR="Red"]There is no documented case in world history of a paper currency not eventually becoming WORTHLESS. [/COLOR]The only reason gold standards end is because governments make it illegal, or remove all the actual gold from the money and horde it for themselves. That's it.

yes there are many cases...how about the US Dollar

[falc39]

Guys keep in mind that gold is demanded worldwide and there are a bunch of other reasons/factors for the demand to own gold. It's a worldwide 24hr market and not just tied to federal reserve policies

http://www.usdebtclock.org/gold-demand-by-country.html