# Lifestyles & Discussion > Personal Prosperity >  My first silver investment

## Allen72289

Got 38+ oz of 90% purity morgans and quarters for 14.50 an oz.

A few really good Morgans. Valued at 32 dollars in a 2007 price guide.

A really nice .999 32 gram silver towne.



Good buy considering the fed is going to print as fiat much as they can?

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## jaybone

get it while you can, and try to pick up a little gold too.

During inflationary times both will do well
But in a deflationary collapse, silver may not do so great, you want a little diversification if possible.

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## Allen72289

Yeah, I'm having a hard time finding junk gold.

:/ I think my dealer is hoarding it know prices might skyrocket.

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## Dustancostine

get it on ebay.

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## jaybone

> get it on ebay.


+1 but be careful who you are buying from
I stick with 99% or better feedback and at least 200 sales.

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## diesirae

> Good buy considering the fed is going to print as fiat much as they can?


Where does this belief come from?

If you seriously believe this, you should not be buying silver -- you should be maxing out your credit cards, and applying for every loan you can.

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## manny229

> get it while you can, and try to pick up a little gold too.
> 
> During inflationary times both will do well
> But in a deflationary collapse, silver may not do so great, you want a little diversification if possible.


yeah and while you're at it... redeem those soda bottles under the desk....  I might not know much about silver but I do know plastic and I estimate about $0.10 under there

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## Allen72289

They're printing too much which leads to inflation of the dollar so by investing in gold and silver I secure my assets, right?

Lol @ soda bottle. XD

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## diesirae

> They're printing too much which leads to inflation of the dollar so by investing in gold and silver I secure my assets, right?
> 
> Lol @ soda bottle. XD


Inflation has been 2-3% for like two decades; what makes you think that it's going to increase it massively?

You can "secure your assets" by investing in anything with a greater than 2-3% marginal return.  Risk-averse, commodity-based, mutual funds would be a better investment if that's what you're worried about.

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## Allen72289

I don't want the irs knowing about my savings for now, so hoarding precious metals is the only way.

How come cost of living increased 10% last year and wages only 2%???

Isn't this the inflation tax??

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## jaybone

> They're printing too much which leads to inflation of the dollar so by investing in gold and silver I secure my assets, right?
> 
> Lol @ soda bottle. XD


Correct

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## jaybone

> Inflation has been 2-3% for like two decades; what makes you think that it's going to increase it massively?
> 
> You can "secure your assets" by investing in anything with a greater than 2-3% marginal return.  Risk-averse, commodity-based, mutual funds would be a better investment if that's what you're worried about.


So glad you have joined us Mr. Greenspan

sorry I could not resist

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## Dave Pedersen

> Got 38+ oz of 90% purity morgans and quarters for 14.50 an oz.
> 
> A few really good Morgans. Valued at 32 dollars in a 2007 price guide.
> 
> A really nice .999 32 gram silver towne.
> 
> 
> 
> Good buy considering the fed is going to print as fiat much as they can?


Where'd you get those Morgans? How many did you get? How much did you pay for them? What are your best dates? Thanks

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## brandon

> Inflation has been 2-3% for like two decades; what makes you think that it's going to increase it massively?
> 
> You can "secure your assets" by investing in anything with a greater than 2-3% marginal return.  Risk-averse, commodity-based, mutual funds would be a better investment if that's what you're worried about.



lol at 2-3%

Keep drinking the bernanke kool-aid. Everything is fine.

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## Tom228

> So glad you have joined us Mr. Greenspan
> 
> sorry I could not resist


Actually Greenspan would support a gold standard, I think he and Ayn Rand wrote a few essays about it.

2-3% inflation isn't that bad.it's at like 4-5% right now I believe. But with metals, you can get inflation and deflation, depending on the supply an demand of it.

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## diesirae

> lol at 2-3%
> 
> Keep drinking the bernanke kool-aid. Everything is fine.


Do you have any serious evidence to dispute this, or is name-calling AOK here now?

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## diesirae

> I don't want the irs knowing about my savings for now, so hoarding precious metals is the only way.
> 
> How come cost of living increased 10% last year and wages only 2%???
> 
> Isn't this the inflation tax??


No, that's not the inflation tax.  Cost of living increases for a variety of reasons -- the main motivator behind COL increases has been rising oil prices:




Note that the price is held constant, in terms of 2006 USD$, so this includes inflation.

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## Smiley Gladhands

lol @ 2-3% marginal return.  Food, oil, gasoline, housing, and medical cost increases would beg to differ.  I know that steak you could buy 10 years ago tastes just as good as the Big Macs of today thanks to great innovations in 'secret sauces', so they can be similarly reflected in the CPI [/sarcasm], but I call BS on the 2-3% stated inflation rate now, and in the future.

At the very least buying silver protects from the dollar dropping, which for many reasons will probably continue.

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## Dustancostine

http://ap.google.com/article/ALeqM5j...WS7zAD8U6D47G0

Wholesale inflation was up 6.3% last year. Do you think retailers are not going to pass that along to their customers.

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## diesirae

> lol @ 2-3% marginal return.  Food, oil, gasoline, housing, and medical cost increases would beg to differ.  I know that steak you could buy 10 years ago tastes just as good as the Big Macs of today thanks to great innovations in 'secret sauces', so they can be similarly reflected in the CPI [/sarcasm], but I call BS on the 2-3% stated inflation rate now, and in the future.
> 
> At the very least buying silver protects from the dollar dropping, which for many reasons will probably continue.


Yes, but it *costs more to produce* because of rising energy costs.  There is a difference between inflation (a monetary phenomenon) and increasing prices.  Prices can rise for a wide variety of reasons, and many of them, such as the link posted below, are not due to the Federal Reserve and have nothing to do with it.





> http://ap.google.com/article/ALeqM5j...WS7zAD8U6D47G0
> 
> Wholesale inflation was up 6.3% last year. Do you think retailers are not going to pass that along to their customers.


Read the article:




> wholesale inflation was up 6.3 percent for all of 2007, *reflecting a huge increase for the year in various types of energy costs ranging from gasoline to home heating oil.*


There is a difference between the monetary phenomenon of inflation, and increasing prices.

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## mleclerc

Nice silver purchase. If you can think in terms of years instead of weeks or months, your purchase will do extremely well. Right now the gold:silver price ratio is approx 56:1; and dow:gold is 13:1. Many who watch this over decades recommend you consider swapping silver for gold if it drops below 30:1 and gold for equities if the ratio drops near 3:1; depending on how conservative you want to be. A chart of this ratio ove rthe last 100 years is in an artcle on kitco.com, but I can't find it just now~ there's like 20 current market commentary articles! Wonder why???:

If you use the pre 1996 way of calculating the CPI, 2007 inflation ran approx 7% and is accelerating upward as the dollar index has dropped since the Fed started cutting last Sept. If the dollar peg to oil is broken, look out below!

See shadowstats.com for more info and Kitco.com for excellent market and precious metals commentary.

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## Dustancostine

So you are telling me that everytime that oil increases in price that it is due to other circumstances other than inflation?

Then why are prices going up across the board? 

And what is causing gold/silver to increase in value?

And why is the Canadian dollar now on par?

--Dustan

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## diesirae

> Nice silver purchase. If you can think in terms of years instead of weeks or months, your purchase will do extremely well. Right now the gold:silver price ratio is approx 56:1; and dow:gold is 13:1. Many who watch this over decades recommend you consider swapping silver for gold if it drops below 30:1 and gold for equities if the ratio drops near 3:1; depending on how conservative you want to be. A chart of this ratio ove rthe last 100 years is in an artcle on kitco.com, but I can't find it just now~ there's like 20 current market commentary articles! Wonder why???:
> 
> If you use the pre 1996 way of calculating the CPI, 2007 inflation ran approx 7% and is accelerating upward as the dollar index has dropped since the Fed started cutting last Sept. If the dollar peg to oil is broken, look out below!
> 
> See shadowstats.com for more info and Kitco.com for excellent market and precious metals commentary.


But...if you use the CPI measure of inflation in real terms, investing in silver will not help you.  You cannot insulate yourself from inflation caused by changing factor inputs, or real demand -- only inflation caused by monetary forces.  That's why the 2-3% rate of monetary inflation is your marginal target for a store of value in nominal terms.

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## jaybone

keynes was a fool

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## diesirae

> So you are telling me that everytime that oil increases in price that it is due to other circumstances other than inflation?
> 
> Then why are prices going up across the board? 
> 
> And what is causing gold/silver to increase in value?
> 
> And why is the Canadian dollar now on par?
> 
> --Dustan


Well, you've said a lot here:

Yes, and no.  The price of oil can rise for many reasons; it could rise because the supply of money has increased.  That's inflation as a monetary phenomenon.  However, it can also increase because of changes in real demand -- such as China and India's rising demand for energy.  This causes a price increase, and is inflation, but has nothing to do with the value of the dollar or money at all.

Prices go up across the board because virtually everything requires energy.  Monetary inflation will increase prices across the board -- however, very important commodities, such as oil or energy can do the same.  For instance, think about your class of fresh-off-the-tree Tropicana Orange Juice.  I'll bet you had a glass in the last week?  It takes an equal volume of oil to produce orange juice.  If the price of oil rises, so does the price of orange juice.  This is true of everything that has to be transported, harvested, mined, moved, cooled, heated, cooked, frozen, or anything that requires energy input.

Gold and silver increase in value for a number of reasons -- yes, some of it is because of increases in the money supply.  However, it is also because of increased demand -- views are that we are heading into a recession.  Gold is a good store of value, so it tends to increase in value just before a recession.

The relative value of currencies is extremely complicated, but suffice to say that it also says a lot about the relative strengths of our real economies.




> keynes was a fool


I haven't said boo about Keynes.

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## mleclerc

> But...if you use the CPI measure of inflation in real terms, investing in silver will not help you.  You cannot insulate yourself from inflation caused by changing factor inputs, or real demand -- only inflation caused by monetary forces.  That's why the 2-3% rate of monetary inflation is your marginal target for a store of value in nominal terms.


Where did you get 2-3% monetary inflation? M3 growth is estimated at > 15% currently. Besides this, many are putting a portion of their wealth into hard assets to protect against counter party risk... nobody knows whether the Fed will be successful in papering over the CDO's, SIV's, etc; estimated to be many Trillions yet to mature...

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## diesirae

> Where did you get 2-3% monetary inflation? M3 growth is estimated at > 15% currently. Besides this, many are putting a portion of their wealth into hard assets to protect against counter party risk... nobody knows whether the Fed will be successful in papering over the CDO's, SIV's, etc; estimated to be many Trillions yet to mature...


How are you estimating M3?   They discontinued tracking that in 2006?  2-3% is the real inflation rate -- you're estimating the growth rate of a given monetary variable, which may or may not translate perfectly into inflation.

I should point out that it's predicted to be 4%-ish by the end of the year.

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## lucius

You got a great deal on the Morgans--I like 90%!

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## mleclerc

> How are you estimating M3?   They discontinued tracking that in 2006?  2-3% is the real inflation rate -- you're estimating the growth rate of a given monetary variable, which may or may not translate perfectly into inflation.
> 
> I should point out that it's predicted to be 4%-ish by the end of the year.


Thanks for the exchange; Please check out shadowstats.com  
Many of the contributing commentaries on kitco.com refer to the data calculated there. You're right, the govt stopped reporting the M3 number, but the inputs they used in the calc are still public, so a decent estimate can still be made. You could also be suspicious why they stopped reporting it, as the last bullet in the inflationary bubble we are in is a gross inflation of M3...

I definitely agree also that when considering investing in precious metals, you need to consider the real inflation rate, and time horizon. In the last 40 years, for instance a silver dollar went from $1; exchangable for the paper dollar to $18 paper dollars for one silver dollar today... If you keep in mind the gold:siver:dow ratios noted in my first message, it helps the investor to recognize when silver or gold is "doing well" compared to equities, so that one can consider when to switch between asset classes.

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## diesirae

> Thanks for the exchange; Please check out shadowstats.com  
> Many of the contributing commentaries on kitco.com refer to the data calculated there. You're right, the govt stopped reporting the M3 number, but the inputs they used in the calc are still public, so a decent estimate can still be made. You could also be suspicious why they stopped reporting it, as the last bullet in the inflationary bubble we are in is a gross inflation of M3...
> 
> I definitely agree also that when considering investing in precious metals, you need to consider the real inflation rate, and time horizon. In the last 40 years, for instance a silver dollar went from $1; exchangable for the paper dollar to $18 paper dollars for one silver dollar today... If you keep in mind the gold:siver:dow ratios noted in my first message, it helps the investor to recognize when silver or gold is "doing well" compared to equities, so that one can consider when to switch between asset classes.


Hmm, I don't have a subscription to that site, but it's nice to know people are still tracking this.  If you look at your silver example, it's actually increased in real value since 1947 -- regardless of inflation -- you I can see what you're talking about with the real exchange rates.

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## jonahtrainer

> But...if you use the CPI measure of inflation in real terms, investing in silver will not help you.  You cannot insulate yourself from inflation caused by changing factor inputs, or real demand -- only inflation caused by monetary forces.  That's why the 2-3% rate of monetary inflation is your marginal target for a store of value in nominal terms.


I'm not sure why you place any faith in the CPI.  We all know as *Greenspan stated*, "The CPI has no basis in reality."

It is obvious we do not have the same 'measuring stick.'  I think the center of the financial universe is gold.  In my opinion, *Gold is the 'risk-free rate;'* not T-Bills like everyone is taught in school.  Why?  Because T-Bills are _money substitutes_ and contain payment risk (because it is a _financial asset_ and not a _tangible asset_).  Gold is a tangible asset, extremely liquid worldwide, contains no payment risk and no counter-party risk.  Like US$ gold goes in the cash section of the balance sheet. 

The savvy investor has to be an *amphibian* and calculate ROI, IRR and prices in dual standards, US$ and gold.  There are some charts and graphs giving examples *here*.

Gold has, in terms of US$, been averaging about 25% per year.  *Thus, the US$ risk-free rate is about 25-30%.*  That is what you should be earning on your checking account balance.  If you are not then your capital stored in a money substitute, the US$, is losing purchasing power.

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## jaybone

> I haven't said boo about Keynes.



And that was not addressed to you.


At any rate, don't take the word of some stranger on a message board, if you are not confident in your own research then the volatility in the PM market will give you an ulcer.

You may have heard of Jim Russell though: http://www.321gold.com/editorials/ru...ell011408.html

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## diesirae

> I'm not sure why you place any faith in the CPI.  We all know as *Greenspan stated*, "The CPI has no basis in reality."
> 
> It is obvious we do not have the same 'measuring stick.'  I think the center of the financial universe is gold.  In my opinion, *Gold is the 'risk-free rate;'* not T-Bills like everyone is taught in school.  Why?  Because T-Bills are _money substitutes_ and contain payment risk (because it is a _financial asset_ and not a _tangible asset_).  Gold is a tangible asset, extremely liquid worldwide, contains no payment risk and no counter-party risk.  Like US$ gold goes in the cash section of the balance sheet. 
> 
> The savvy investor has to be an *amphibian* and calculate ROI, IRR and prices in dual standards, US$ and gold.  There are some charts and graphs giving examples *here*.
> 
> Gold has, in terms of US$, been averaging about 25% per year.  *Thus, the US$ risk-free rate is about 25-30%.*  That is what you should be earning on your checking account balance.  If you are not then your capital stored in a money substitute, the US$, is losing purchasing power.


I don't believe that T-Bills are risk free, but that doesn't make "gold the center of my financial universe" -- I am trained as an economist, with specific training in finance.  I evaluate financial assets as they are -- the tangibility affects their risk profile, nothing more, nothing less.  Gold has _not_ been averaging 25-30% return per year; that's simply and demonstrably false.  In fact, if you'd invested in gold during the 1980s, you'd still be looking at less purchasing power today.

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## mleclerc

> I don't believe that T-Bills are risk free, but that doesn't make "gold the center of my financial universe" -- I am trained as an economist, with specific training in finance.  I evaluate financial assets as they are -- the tangibility affects their risk profile, nothing more, nothing less.  Gold has _not_ been averaging 25-30% return per year; that's simply and demonstrably false.  In fact, if you'd invested in gold during the 1980s, you'd still be looking at less purchasing power today.


Good points diesirea,
My guard always goes up lately when someone quotes the last five years in gold price then tries to extrapolate that performance into the future. There is little doubt that the "intractable" problems the Fed now faces could fuel a volitile gold price increase going forward, but the price must always be taken in context relative to other asset classes...if three years from now the Dow is at 7500 and gold is $2500 an once (3:1 ratio); history says its a good time to consider selling a few onces for equities... but you would only use this ratio as one variable in considering the swap.
That is why I really buy into the suggestion of using the 100 year historical ratios between dow:gold, gold:silver and (I did not mention earlier), the goldil ratio to assist in  buying "low" over a decade time frame, as I don't think it is wise to try to flip in and out of hard assets due to the spreads. This would include real estate if you consider taxes, commissions and maintenence.  Just compare the asset charts on a yearly or monthly instead of daily basis to smooth out the volitility, then the trends become clear.

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## diesirae

> Good points diesirea,
> My guard always goes up lately when someone quotes the last five years in gold price then tries to extrapolate that performance into the future. There is little doubt that the "intractable" problems the Fed now faces could fuel a volitile gold price increase going forward, but the price must always be taken in context relative to other asset classes...if three years from now the Dow is at 7500 and gold is $2500 an once (3:1 ratio); history says its a good time to consider selling a few onces for equities... but you would only use this ratio as one variable in considering the swap.
> That is why I really buy into the suggestion of using the 100 year historical ratios between dow:gold, gold:silver and (I did not mention earlier), the goldil ratio to assist in  buying "low" over a decade time frame, as I don't think it is wise to try to flip in and out of hard assets due to the spreads. This would include real estate if you consider taxes, commissions and maintenence.  Just compare the asset charts on a yearly or monthly instead of daily basis to smooth out the volitility, then the trends become clear.


Yeah -- if you look at some of the things which have been published, it's even harder to hedge if you're not American.  I always forget to ask this, when I give advice, but as you can see here:

http://www.blackwell-synergy.com/doi...urnalCode=jbfa

There's pretty strong evidence that "gold has only been an effective hedge against US inflation, and only over one and six month investment holding periods" and all non-US investors are SOL in the long run.

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## weatherbill

my first silver investment was back in the late 90s...... 6.50 per oz  8)

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## mleclerc

> Yeah -- if you look at some of the things which have been published, it's even harder to hedge if you're not American.  I always forget to ask this, when I give advice, but as you can see here:
> 
> http://www.blackwell-synergy.com/doi...urnalCode=jbfa
> 
> There's pretty strong evidence that "gold has only been an effective hedge against US inflation, and only over one and six month investment holding periods" and all non-US investors are SOL in the long run.


Sorry, I can't view the full pdf without purchasing... Do they cite the "CPI" deflator over time? If so, I think their conclusions are attempting to hide what GATA has been arguing for years; that global market manipulation has controlled the gold price relative to other asset classes since 1971 and now the debt bubble is bursting and they can't hide the monetary inflation overseas anymore. If the oil:dollar peg breaks down, there will be no reason for other countries to hold dollars, other than propping up the TBills long enough to unwind their dollar surplus through the purchase of hard assets worldwide, especially those assets denominated in dollars. Think about the $50 Trillion in unfunded entitlements on US books... it is desirable for the Fed to massively devalue the dollar now. When you see Jim Rogers pulling all his assets out of the dollar and JP Morgan and Citi getting cash infusions from Dubai, you know the imbalances are LARGE. Gold may continue to spike as these imbalances are corrected, but the cycle back into equities will begin anew as long as people don't completely loose faith in the paper. I am not counting on the paper right now...

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## youngbuck

Nice.  In the past several months I've aquired about 50 oz of pure silver all in 1oz pieces.  20 x 1oz Silver Libertatems, 1 roll of 20 American Silver Eagles (2007), a couple bars of 1oz bullion bars, and a few 1oz silver coins from http://www.libertydollar.org/

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## mleclerc

> Nice.  In the past several months I've aquired about 50 oz of pure silver all in 1oz pieces.  20 x 1oz Silver Libertatems, 1 roll of 20 American Silver Eagles (2007), a couple bars of 1oz bullion bars, and a few 1oz silver coins from http://www.libertydollar.org/


Nice job! 
Ted Butler, commenting on Kitco.com has been exposing the comex open short position in silver... eventually the banks shorting silver will need to close these positions, especially if the public begins eating into the physical silver stockpiles that are now already near all time lows... 
I too wish i had been paying more attention when silver was $4 a few years back... but even at today's prices, when you compare the known stockpiles of silver to gold, then to the outrageous excess of fiat cash looking to get out of the paper crash, I think its a screaming buy; IMHO.

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## tuckessee

> my first silver investment was back in the late 90s...... 6.50 per oz  8)


Fool. If you'd taken that money and put it on the Superbowl & NCAA champion every year since then you'd be a brazillionaire.

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## jonahtrainer

> I don't believe that T-Bills are risk free, but that doesn't make "gold the center of my financial universe" -- I am trained as an economist, with specific training in finance.  I evaluate financial assets as they are -- the tangibility affects their risk profile, nothing more, nothing less.  Gold has _not_ been averaging 25-30% return per year; that's simply and demonstrably false.  In fact, if you'd invested in gold during the 1980s, you'd still be looking at less purchasing power today.


Then what is the least risky, or in other words most accurate, measuring stick?

I reassert that gold is still the center of the financial universe (risk-free).  The purpose of currency is in being a tool to allow us to perform mental calculations of relative value.  Gold is just as effective at *communicating value* today as it was in 1970 or 1920.  Just because it is _effective at communicating value_ *does not mean* that it is a good place to allocate capital.  As with everything sometimes it is cheap and sometimes expensive.  But at all times and in all circumstances it is the best (least risky) measuring stick.

Look how ineffective US$ are at communicating value:


Your statement about the 80's is correct:


For now in general the best place to have capital allocated is in *cash denominated in gold*.  But the time will come to exchange cash denominated in gold for equities when you can buy the DOW for 1-3 ounces.

The work of *GATA* should not be underestimated.  As a result of central bank manipulation the distortions many but the opportunity is great.  Sure, you may be trained as an economist (they make meteorologists look good) with some finance but I think I heard a funny saying:  "If an economist and a billionaire are fighting bet on the billionaire."  Jim Rogers seems to have his own views.

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## Allen72289

Due to our current national debt, destruction of 68% of the world's wheat and barley crop due to natural disasters, conflicts in the middle east, fed and rumors of Asian lenders dumping the dollar I would rather have my assets in hard money instead of paper credits. 

The collapse will happen soon.

Especially if Ron Paul is not elected.

Ha. For gold to double in 3 years that tells you something is wrong.

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## diesirae

> Then what is the least risky, or in other words most accurate, measuring stick?
> 
> I reassert that gold is still the center of the financial universe (risk-free).  The purpose of currency is in being a tool to allow us to perform mental calculations of relative value.  Gold is just as effective at *communicating value* today as it was in 1970 or 1920.  Just because it is _effective at communicating value_ *does not mean* that it is a good place to allocate capital.  As with everything sometimes it is cheap and sometimes expensive.  But at all times and in all circumstances it is the best (least risky) measuring stick.
> 
> Look how ineffective US$ are at communicating value:
> 
> 
> Your statement about the 80's is correct:
> 
> ...


You didn't really answer the question; gold is not "risk-free" in real terms.  It just has extremely low risk.  If you invest in gold, and a large gold strike occurs, the real value of your gold will fall.

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## Tom228

> Due to our current national debt, destruction of 68% of the world's wheat and barley crop due to natural disasters, conflicts in the middle east, fed and rumors of Asian lenders dumping the dollar I would rather have my assets in hard money instead of paper credits. 
> 
> The collapse will happen soon.
> 
> Especially if Ron Paul is not elected.
> 
> Ha. For gold to double in 3 years that tells you something is wrong.


I hope that you are aware that about 70% of the national debt belongs to Americans. In other words, the Government owes money to its own people.

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