# Lifestyles & Discussion > Personal Prosperity >  Dave Ramsey's started an anti-precious metals thread...

## Peter4Paul2016

Dave Ramsey's attacking Gold on Facebook...  Just thought some of you may want to chime in! 

https://www.facebook.com/daveramsey/photos/a.135002570885.111058.30592180885/10152039574805886/?type=1&theater

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## DFF

I'm not a sadist, but it's going to be really enjoyable listening to these anti-gold tools cry out in pain when the dollar gets devalued overnight by 25-50%.

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## Ronin Truth

Some of life's lessons are more expensive than others.

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## oyarde

> I'm not a sadist, but it's going to be really enjoyable listening to these anti-gold tools cry out in pain when the dollar gets devalued overnight by 25-50%.


That could happen too .

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## Matt Collins

Well, Dave's first mistake is terminology. Neither gold nor Bitcoin are investments; they are speculation.

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## oyarde

> Well, Dave's first mistake is terminology. Neither gold nor Bitcoin are investments; they are speculation.


The Dow is over 16K , gold is about $1330 . I would think , if someone has accrued a lot of wealth they may want to take some steps to preserve some of it , just in case . Not sure I would call it speculation ?

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## Cap

He's a friend of yours isn't he Collinz?

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## Ronin Truth

> Well, Dave's first mistake is terminology. Neither gold nor Bitcoin are investments; they are speculation.


  With gold, it's more like insurance.

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## PRB

> Well, Dave's first mistake is terminology. Neither gold nor Bitcoin are investments; they are speculation.


aren't all investments speculation? when you put something (time, labor, cash) in with expectation of return, you're both investing and speculating.

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## PRB

> The Dow is over 16K , gold is about $1330 . I would think , if someone has accrued a lot of wealth they may want to take some steps to preserve some of it , just in case . Not sure I would call it speculation ?


any time you do not know something, you're speculating, aren't you?

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## Zippyjuan

When you buy stocks, you get a piece of a company. You hope (speculate) that company will do better in the future. Buy lots of stocks (or a fund of stocks) and you are hoping (betting) that the economy will do better in the future. A stock may offer you a dividend- a guaranteed return (as long as the company keeps their dividend).  Buy gold and you get a rock you hope somebody will be willing to pay you even more for in the future. No dividends. 

Nothing is guaranteed on either but stocks have had more up years than gold has.  Since gold was free to float against the dollar (beginning in 1972) it has been higher in half of those years and lower in half of those years.  Stocks have been up most of those years.

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## PRB

> When you buy stocks, you get a piece of a company. You hope (speculate) that company will do better in the future. Buy lots of stocks (or a fund of stocks) and you are hoping (betting) that the economy will do better in the future. A stock may offer you a dividend- a guaranteed return (as long as the company keeps their dividend).  Buy gold and you get a rock you hope somebody will be willing to pay you even more for in the future. No dividends. 
> 
> *Nothing is guaranteed on either but stocks have had more up years than gold has.*  Since gold was free to float against the dollar (beginning in 1972) it has been higher in half of those years and lower in half of those years.  Stocks have been up most of those years.


but stocks didn't exist until 1300s, gold has been currency forever.

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## Zippyjuan

Gold isn't a currency today. What countries use gold for currency?

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## PRB

> Gold isn't a currency today. What countries use gold for currency?


gold is a currency regardless of whether people use it, ask any ancap! any country that has ancaps uses gold as currency.

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## Zippyjuan

> *gold is a currency regardless of whether people use it,* ask any ancap! any country that has ancaps uses gold as currency.


Umm- no.  Currency is what people use for money.  If they aren't using it for money, it isn't currency.  Ours is mostly electronic- like most of the rest of the world.

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## PRB

> Umm- no.  Currency is what people use for money.  If they aren't using it for money, it isn't currency.  Ours is mostly electronic- like most of the rest of the world.


yeah but, that's all going to collapse because paper and non-physical money always does, eventually, so we know it will, even if I never live to see it.

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## Zippyjuan

How many non- physical money currencies have there been and how many have collapsed?

How many metal backed currencies have collapsed?

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## devil21

> aren't all investments speculation? when you put something (time, labor, cash) in with expectation of return, you're both investing and speculating.


I call physical PMs a "legacy investment".  I don't expect a return of anything except the expectation that it will always have value.




> Gold isn't a currency today. What countries use gold for currency?


Misleading question since multinational bankers don't consider themselves to be of any country.  They don't mind shuffling gold around as a currency equivalent though.

RP: Is gold money?  Why do banks hold it?
BB: No, it's tradition.

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## oyarde

> aren't all investments speculation? when you put something (time, labor, cash) in with expectation of return, you're both investing and speculating.


Actually , I consider my old GM stock more speculation than a gold coin.One you actually have something that people will honor as value in your hand and the other , you do not .

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## oyarde

> any time you do not know something, you're speculating, aren't you?


I do not really consider myself much of a speculator with the exception that I do put 3 % of my gross , pre tax into the markets and it is matched . Most of my other earnings are in  a job ,land , timber , farmland , few homes..... there really is not much speculation in growing blackberries , blueberries , potatoes , tomatoes , corn , green beans , pumpkins , cucumbers , squash , onions , radishes , turnips , apples , persimmons, paw paw's  etc, bacon , eggs , smoking deer , grilling doves , fileting Pumpkinseed , Crappie , Bluegill , Warmouth ,  security , lead , copper , silver , gold .

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## Brian4Liberty

> Actually , I consider my old GM stock more speculation than a gold coin.One you actually have something that people will honor as value in your hand and the other , you do not .


My Webvan stock has retained it's value just like a Zimbabwe dollar...

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## devil21

Metals are a physical representation of your labor, your physical and mental energy expended to acquire it.  Paper and numbers in a computer are not and are eroded over time.  Metals are not eroded.  This is why banks hold it.  It's a really simple economic principle.  He who owns the gold makes the rules.

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## Cap

That was kind of fun watching PRB trolling Zippy.

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## PRB

> I do not really consider myself much of a speculator with the exception that I do put 3 % of my gross , pre tax into the markets and it is matched . Most of my other earnings are in  a job ,land , timber , farmland , few homes..... there really is not much speculation in growing blackberries , blueberries , potatoes , tomatoes , corn , green beans , pumpkins , cucumbers , squash , onions , radishes , turnips , apples , persimmons, paw paw's  etc, bacon , eggs , smoking deer , grilling doves , fileting Pumpkinseed , Crappie , Bluegill , Warmouth ,  security , lead , copper , silver , gold .


investing in crops is speculating and expecting that weather and climate will be stable enough to allow plant growth. 

some speculations may be more risky than others, but I don't see how not all investments are speculation of some sort.

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## ctiger2

> Nothing is guaranteed on either but stocks have had more up years than gold has.  Since gold was free to float against the dollar (beginning in 1972) it has been higher in half of those years and lower in half of those years.  Stocks have been up most of those years.


Yes, if you conveniently look at only a selected period of time to support your flawed viewpoint.

This well thought out video debunks that viewpoint:

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## oyarde

I bet Ramsey has some PM's .

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## angelatc

> Umm- no.  Currency is what people use for money.  If they aren't using it for money, it isn't currency.  Ours is mostly electronic- like most of the rest of the world.


I think that it is fair to call gold a currency.  I have never tried it, but I think that I could travel anywhere in the world and buy anything I needed plus most things I wanted using nothing but gold.

And if you guys want to send me some gold, I will happily conduct that experiment, reporting back from a wide variety of locations.

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## helmuth_hubener

Here it is for your comments:

*Will Dave Ever Change His Mind About Gold?*

QUESTION: A Twitter listener asks Dave if the price of gold continues to rise, will Dave change his stance on buying gold as an investment? Dave says no.

ANSWER: No. I wont because there are philosophical problems with investing in gold. There are two of them that will keep me from doing that in my lifetime. One of them is that I buy investments that are very conservative that have long track records. That doesnt say that they never go down and they never go up. They do have some cycle to them, sometimes rather extreme cycles. But they have a long track record that is very positive and very predictable. On the short term, when it goes down, that means anything Im buying is on sale. Gold, on the other hand, has a long track record of suckinga very long track record of that. Gold has given us about a 13% rate of return in any 10, 20, or 50-year period except the last eight years. If you take out the last eight years of gold, it is unbelievably horrible. The only numbers that make gold even reasonable to look at are the last eight years, and of course the last eight years have been fabulous. The last three years have been bonkers. But I dont buy stuff based on the short term. I dont buy a single mutual fund that has a three-year track record or a four-year track record. A five-year track record is the minimum, and the concept of stocks in growth stocks in a mutual fund has an 80- and 100-year track record that is excellent, by the way. I dont buy stuff that has, in the scope of its investing lifetime, had one little blip on the radar. I look at long histories on things. I dont get caught up in the latest fad that way.

When you buy segment funds or funds of certain segments of the economysector fundsor you buy certain investments that have lousy track records on the long haul just because theyve had a recent spike, youre going to get burned. Thats an investment philosophy right there. Another investment philosophy that keeps me from buying gold is it doesnt have any intrinsic value. Stock represents a share of ownership in a company, and that company owns things and makes a profit. So there are mathematics you can do to determine the actual value of a company, thus what one share of ownership in that company is worth. So yeah, stock does have value. Gold is a shiny rock. The only reason it has value is that some of you think it has value. Diamonds are a shiny rock. The only reason they have value is that some of you assigned them value.

Let me put it this way. All of your gains in gold are based on peoples perceptions. Theyre not based on math. Your gains in gold are based on fearpeople freaking out and thinking the worlds coming to an end, the governments going to spend us into bankruptcy, were going to be at war, the lower class is going to arise, there are going to be riots in the streets, and all this other socialistic crap. Extreme right-wing, extreme left-wing breaks down the economics of life to the point that they dont even make sense anymore.

I dont buy any gold, because it has a lousy track record and with the fact that it doesnt have intrinsic value, what thats going to lend itself to is extreme volatility. It can move instantly for no reason. As soon as people start feeling secure again in the economy and in economic growth, gold is going to go in half. Its going to happen so suddenly that some of you are going to lose all your money. Im not going to change my tune because its not going to start having intrinsic value, and its not going to start having a long-term track record, at least while Im alive.

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## Danke

Here is a guy who doesn't like any investment in this economy and thinks cash is king for now.

http://harrydent.com/

He was on AJ a few days ago:

http://archives2014.gcnlive.com/Arch...es/0318143.mp3

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## Matt Collins

> aren't all investments speculation? when you put something (time, labor, cash) in with expectation of return, you're both investing and speculating.


No... an investment is something that will give you a return because it's productive, and the risk is not high and the return is calculable. 

Speculation is very high risk where the outcome is unknown and not really able to be calculated.

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## PRB

> No... an investment is something that will give you a return because it's productive


Productivity is measured by value, which is determined by the demand of a market. Burning a tree will turn it into ash, is ash more or less productive than a tree? Depends on what your goal is.




> , and the risk is not high and the return is calculable.


So speculation is merely a high risk investment with low predictability.




> Speculation is very high risk where the outcome is unknown and not really able to be calculated.


So investment is a speculation with low risk, right?

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## KCIndy

> Gold isn't a currency today. What countries use gold for currency?



Well, there are the wizards in the Harry Potter books.  Gold Galleons, Silver Sickles, and Bronze Knuts!  Personally, I've always been a little envious of Harry, although I'll admit it probably can't be easy to be a wizard if you have to go through life carrying Bronze Knuts.

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## devil21

After reading some of one of Ramsey's more popular books, I put him in the category of tightly controlled bank mouthpiece.  Any financial adviser that is as adamantly anti-bankruptcy as he is, is just pushing the bank mantra to pay all debts even if you have to go hungry.  BK is for the elites, not for the proles.  Pay your usury slave!

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## LibForestPaul

> Gold isn't a currency today. What countries use gold for currency?


All. only little people use notes.

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## PRB

> After reading some of one of Ramsey's more popular books, I put him in the category of tightly controlled bank mouthpiece.  Any financial adviser that is as adamantly anti-bankruptcy as he is, is just pushing the bank mantra to pay all debts even if you have to go hungry.  BK is for the elites, not for the proles.  Pay your usury slave!


what's BK? and what's wrong with being anti-debt?

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## devil21

> what's BK? and what's wrong with being anti-debt?


BK=bankruptcy=discharging debts   

Not sure what you mean about being anti-debt though.  Do you mean Ramsey is anti-debt?  Or I am?

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## PRB

> BK=bankruptcy=discharging debts   
> 
> Not sure what you mean about being anti-debt though.  Do you mean Ramsey is anti-debt?  Or I am?


yes, dave ramsey is anti-debt, he's pro-investment, and anti-borrowing.

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## Zippyjuan

> I think that it is fair to call gold a currency.  I have never tried it, but I think that I could travel anywhere in the world and buy anything I needed plus most things I wanted using nothing but gold.
> 
> And if you guys want to send me some gold, I will happily conduct that experiment, reporting back from a wide variety of locations.


Take some to the grocery store.  See what they will give you for it.

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## Zippyjuan

> Yes, if you conveniently look at only a selected period of time to support your flawed viewpoint.
> 
> This well thought out video debunks that viewpoint:



Before 1972, the price of gold was defined as a certain amount of dollars so it was not a free market price.  We can't fairly look at what the price of gold did then. Now if I REALLY wanted to be selective, I could say that from 1980 until 2003 (OVER 20 YEARS), the price of gold declined (a bit of wiggle up and down on the way). IF you toss out the 1980 bubble, it really didn't change much until 2004- a 30+ year period. The current rise is not a historically normal pattern. 

This chart shows both nominal and inflation adjusted prices for gold since then (well, until 2010 anyways):


http://www.rapidtrends.com/2009/09/2...tion-adjusted/

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## devil21

> yes, dave ramsey is anti-debt, he's pro-investment, and anti-borrowing.


So he's "pro-give-the-bank-your-money-in-some-form".  He's also very much against bankruptcy and against credit repair.  Like I said, he's a bank mouthpiece.

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## Zippyjuan

From my viewpoint, being against bankruptcy means being for personal responsibility and not walking away from debts.

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## PRB

> So he's "pro-give-the-bank-your-money-in-some-form".  He's also very much against bankruptcy and against credit repair.  Like I said, he's a bank mouthpiece.


ask yourself, what's the dumbest way to give your money to a bank?  I think debt is. Dave Ramsey may not be Ron Paul or Peter Schiff, but he's one of the biggest voices in America against borrowing and paying interest, and for living within your means. I don't agree with him on investment, but I think he's done more good than harm by telling poor people to avoid borrowing.

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## DFF

> Well, Dave's first mistake is terminology. Neither gold nor Bitcoin are investments; they are speculation.


Ron Paul would disagree. And he would point out that if gold were indeed "speculation" then central banks wouldn't hold it.

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## Matt Collins

> Ron Paul would disagree. And he would point out that if gold were indeed "speculation" then central banks wouldn't hold it.


If Ron feels that way, then he would be incorrect.

Regarding the banks, they hold it in order to manipulate the market.

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## Zippyjuan

The US Central Bank (Federal Reserve) doesn't hold any gold.  Well, technically they HOLD it- they do store it for the US Treasury and some foreign governments, but they don't own any of it.

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## PRB

> The US Central Bank (Federal Reserve) doesn't hold any gold.  Well, technically they HOLD it- they do store it for the US Treasury and some foreign governments, but they don't own any of it.


you know that saying? Possession is 9/10 of the law.

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## helmuth_hubener

> No... an investment is something that will give you a return because it's productive, and the risk is not high and the return is calculable. 
> 
> Speculation is very high risk where the outcome is unknown and not really able to be calculated.


 This is all undefined.  "Return is calculable"?  What does that mean?  

Most importantly, you haven't defined "high risk".  Tell me, how does one go about measuring risk?  Could you share with me the experimental protocol?  What measuring equipment should I use?  How do I make sure the equipment is calibrated properly?

If you are thinking about putting your money into something and are asking your broker or anyone else "Is this risky?" or "How risky is this?" or "Is this investment low-risk or high-risk?" you are asking the *wrong questions.*  You haven't thought things through.

Instead, you should ask: 
Under what conditions is this asset likely to perform well?
Under what conditions is this asset likely to perform poorly?

Answer both those questions, and you will have some _rational basis_ for making a decision and be better off than the great majority of investors.

As for the difference between investment and speculation, we can define words however we wish depending on what we want to accomplish.  As for me, I find Harry Browne's differentiating definition highly insightful and productive:

Any time when you accept the rate of return that anyone -- _anyone_ -- can get, with no special knowledge or skill, you are *investing*.  An example of investing would be: putting your money into a typical bank savings account.  Any Joe Plumber can do that.  Anyone can get that rate of return.
Any time when you try to _beat_ the rate of return that anyone can get, you are *speculating*. An example of speculating would be buying a mutual fund that purports to give "above-average" returns.  You're trying to use your superior knowledge and cleverness to get more return than the average Joe can get.

Holding gold bullion is generally an investment.  Anyone can do that.  Billions do.  You get the same return as every other holder of gold.
Holding cash (liquid US dollars) is generally an investment.  Anyone can do that.  Billions do.  You get the same return as every other holder of dollars.
Holding US Treasury Bonds is generally an investment.  Anyone can do that.  Billions do.  You get the same return as every other holder of bonds.
Holding a stock market index fund is generally an investment.  Anyone can do that.  Billions do.  You get the same return as every other holder of the index.

Holding Bitcoins is, in my opinion, a speculation.  It is esoteric enough, difficult enough, and obscure enough that I would not say "anyone" can hold bitcoins, though a case could be made that technically, anyone "can" (technically, anyone can do pretty much anything).  Only a very small cadre of knowledgeable and technical elite are buying bitcoins at the moment.  It is not a very broad ubiquitous holding, in contrast to the things I listed above, which are.  No one with any understanding would hold it in an attempt to simply protect their savings and get a very boring, pedestrian return -- the same boring, pedestrian return available to the general populace at large.  But those are precisely the very reasons why one holds an investment: to protect one's savings and get the same boring, pedestrian return available to the general populace at large!   In contrast, one buys into Bitcoin because he thinks it will vastly, vastly outpace the general rate of return available to the average Joe, and often for other ideological reasons.

So, for now, Bitcoin is a speculation.  This could change.  If the vision of the Bitcoin community comes to pass and Bitcoin becomes a ubiquitous, widely-used money, like the dollar, then holding cash as liquid Bitcoin would be every bit as much of an investment as holding liquid dollars is today.

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