# Lifestyles & Discussion > Personal Prosperity >  Why I don't trust gold

## Jordan

http://finance.yahoo.com/banking-bud...&asset=&ccode=

Some gems here...

Warren Buffett put it well. "Gold gets dug out of the ground in Africa, or someplace," he said. "Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head."

It's a currency "substitute," but it's useless. In prison, at least, they use cigarettes: If all else fails, they can smoke them. Imagine a bunch of health nuts in a nonsmoking "facility" still trying to settle their debts with cigarettes. That's gold. It doesn't make sense.

Yes, it's a "hard asset," but so are lots of other thingslike land, bags of rice, even bottled water

As for being a "store of value," anyone who bought gold in the late 1970s and held on lost nearly all their purchasing power over the next 20 years.

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## Travlyr

That's interesting.  If that's the case, then maybe the international bankers will be willing to divvy up their gold with the rest of us.

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## JoshLowry

> As for being a "store of value," anyone who bought gold in the late 1970s and held on lost nearly all their purchasing power over the next 20 years.


And what happened the 20 years after that?  People live much longer than 3 or 4 decades.



In the long run, any on hand tangible assets are better than the paper federal reserve note.

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## Jordan

> And what happened the 20 years after that?  People live much longer than 3 or 4 decades.

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## squarepusher

ill give you the same argument for paper money?  what would martians think of that

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## Pennsylvania

> It has no utility


http://en.wikipedia.org/wiki/Gold#Industry

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## brandon

> 


Beat me to it. Keep this up and I can retire from posting soon.

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## bluemarkets

that's a buy signal from yahoo news

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## libertybrewcity

he has a good point, but that's because gold has been kicked to the side. if a dollar bill was solid and lasted for millions of years, we could say the same thing about that. it's all about the current state of system. warren buffett will be sorry when the us dollar becomes worthless and gold is skyrocketing.

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## libertybrewcity

> http://en.wikipedia.org/wiki/Gold#Industry


yes, and this is excellent.

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## JoshLowry

> In the long run, any on hand tangible assets are better than the paper federal reserve note.


My point which you excluded when you quoted me still stands.

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## klamath

Yeaw I am getting a little tired of hearing Gold has no value. Gold is a valuable industrial metal. Anything with the physical properties of gold has very high value. Just the one, the highest malability of any metal on earth. You're are probably making your statement through the gold wires in the IC's in you computer.

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## jon_perez

Just Warren Buffet trying to talk up the price of silver (which has more industrial use than gold)...  which he owns a heck of a lot of...

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## tmosley

Gold's inherent lack of utility, when combined with it's rarity, are what make it useful as money.  Martians understand this, as have people for thousands of years.

Gold, when used as money, serves as an excellent, incorruptible economic indicator.  It measures precisely society's time preference for spending, allowing highly accurate economic calculations by individuals.  When governments print and steal money via inflation, an additional variable is introduced, such that the value of the currency no longer gives a clear definition of time preference.  Without that indicator, individual economic calculations go awry, and the errors compound upon themselves as the government prints more and more money to intervene, until the currency collapses.

Get it?

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## Danke



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## fatjohn

> 


Anyone DUMB enough to have bought this $#@! over the last 12 years lost out. With gold, you only have 1 period of 6 months during the last 40 years, where you can say that you lost accounting for inflation.

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## tmosley

> http://finance.yahoo.com/banking-bud...&asset=&ccode=
> 
> Some gems here...
> 
> Warren Buffett put it well. "Gold gets dug out of the ground in Africa, or someplace," he said. "Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head."
> 
> It's a currency "substitute," but it's useless. In prison, at least, they use cigarettes: If all else fails, they can smoke them. Imagine a bunch of health nuts in a nonsmoking "facility" still trying to settle their debts with cigarettes. That's gold. It doesn't make sense.
> 
> Yes, it's a "hard asset," but so are lots of other thingslike land, bags of rice, even bottled water
> ...


If you don't trust gold, what do you trust?  

Think back to when gold collapsed in the early 80's.  What caused that to happen?  Volcker raised the interest rate to 20%.  You think Bernanke is going to do that?  You think these United States could stand to have their tax rate doubled, or tripled to pay that interest?  Note that the current tax rate is something like 40-50%, depending on your state, not including sales taxes.

Also take this into account--last time gold ran up so much, it could be partially attributed to the Hunt Bros actions in the silver market.  This time, there are no big players buying on margin, it's sovereigns and individuals buying with cash.  Big sales are now met with enormous demand rather than trepidation in the market.  People are starting to lose faith in the currency itself.  What do you think will happen then?

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## Acala

Saying gold has no utility is the same as saying money has no utility when in fact money was one of the most useful inventions in human history.  And gold has historically been the best money the world has ever known for very good reasons that are fundamental to the metal itself.

Buffet is a lying scoundrel.

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## Jordan

> My point which you excluded when you quoted me still stands.


I quoted you before you edited.

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## Jordan

> 




Nothing like showing a really short term chart to prove your position.

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## Bruno

"We pay some loggers to cut down some trees, other people to shave the trees up into little bits, turn it into paper, print magical numbers on them, then say those paper bills have value just because we say so.  Then we dig a hole, store a bunch of paper bills in there, and pay someone to guard it.  Paper money is worthless.  It has no utility.   Anyone watching from Mars would be scratching their head."

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## Jordan

> "We pay some loggers to cut down some trees, other people to shave the trees up into little bits, turn it into paper, print magical numbers on them, then say those paper bills have value just because we say so.  Then we dig a hole, store a bunch of paper bills in there, and pay someone to guard it.  Paper money is worthless.  It has no utility.   Anyone watching from Mars would be scratching their head."


The importance of the quote is that neither gold nor paper currencies are investments.

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## Bruno

> The importance of the quote is that neither gold nor paper currencies are investments.


Most gold purchasers don't consider it in an investment, either.  

"As for being a "store of value," anyone who bought gold in the late 1970s and held on lost nearly all their purchasing power over the next 20 years." 

The same could be said for anything purchased at its highest price.

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## Jordan

> Most gold purchasers don't consider it in an investment, either.  
> 
> "As for being a "store of value," anyone who bought gold in the late 1970s and held on lost nearly all their purchasing power over the next 20 years." 
> 
> The same could be said for anything purchased at its highest price.


A store of value shouldn't be so volatile.  That is the point.

Gold, despite being known as a safehaven investment, has been more volatile than even the "risky" stock market all the while producing lower returns.

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## EndDaFed

Gold is a good measure of fear. The second there is any form of confidence in other areas of investment the price of gold is going to tank. It costs somewhere between $400 - $600 dollars an ounce to mine. The money supply is still in a deflationary cycle. Those that claim it's due to inflation are wrong given that the M3 dropped by 5% the year over. The next time there is a dip in commodities copper would be a better bet. It's production has peaked a decade or so ago.

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## Bruno

> A store of value shouldn't be so volatile.  That is the point.
> 
> Gold, despite being known as a safehaven investment, has been more volatile than even the "risky" stock market all the while producing lower returns.


Considering all the manipulation in the gold and silver markets, it is no surprise that it is so volatile.

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## SooperDave

no matter what has intrinsic value or not, to diversify is the key. I think that's the lesson learned. if u had started investing in 1970 with a split of :

25% stocks
25% gold
25% us/state/corp bonds
25% collectibles

you'd have been feeling pretty good all along the way. 

never put all your fiat eggs into one basket!

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## PeacePlan

The thing about gold and silver that sticks out to me is it holds it value.

Take say in 1926 a 16oz tbone steak meal - it would cost you about an oz of silver and today it would still cost about an oz of silver.

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## Cowlesy

There is nothing wrong with owning gold or silver in your portfolio of assets.

That being said, I look for growth when investing.  If we enter an inflationary environment, then the value of equity concurrently increases if I am selling my products with proportionally increasing revenues/expenses (we could get a lot more complicated here but for the sake of argument let us keep it simple).  I want my investments to capture profit, and I do that by investing in companies that are growing their profit margins as well as their top-line.  It yields me a % rate of return.  Gold's return is zero for economic growth, however it can grow in value relative of declines in other commodity values like FRNs.

The question raised by the index of the SPX is a good one, and is one of the conundrums of investing.  Guys like Ben Stein say, "I'm not smart enough to buy stocks so I buy indices," but it is all about *when* you buy an index.  Also, there can be companies that suck in an index that hurt you.  However, are you smart enough to correctly screen for stocks on your own?  If one just picks those out of the public air on Yahoo Finance, most of the yield has already been picked clean by professional investors.

The thing I like about gold is its long-term story.  I think everyone should have some, because it seems inconceivable that our politicians as a whole will ever implement austerity measures in the United States.  Doing so would cause a lot of pain to the economy.  It's highly likely that in the future, precious metals will be implemented as a widely used measure of value.  

However, people were heading to the hills in the 1970's thinking S was going to HTF, moving to Alaska, etc with all the stagflation, oil embargoes and geopolitical instability.  Ultimately we survived.  

Which invites the question, how long can we continue to survive, and do you want to miss out on capturing some economic growth for yourself.

S&P 500 Return (+ dividends) 30 years= 10.1% per year
S&P 500 Return (ex dividends) 30 years = 6.6% per year
Nasdaq Return 30 years = 10.2% per year
Russell 2000 (+ dividends) 30 years = 11.2% per year

So I do own some metals for some of the reasons mentioned above, but I also search for companies that I think I can earn some yield from, and hopefully capital appreciation.

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## brandon

> The thing about gold and silver that sticks out to me is it holds it value.
> 
> Take say in 1926 a 16oz tbone steak meal - it would cost you about an oz of silver and today it would still cost about an oz of silver.


This is a myth. Even if what you said is true, it would mean gold has lost tons of value since 1926.

With all of the technological and agricultural advancements in society, and the continued accumulation of capital, steak should be much less valuable than it was 90 years ago.

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## Acala

> This is a myth. Even if what you said is true, it would mean gold has lost tons of value since 1926.
> 
> With all of the technological and agricultural advancements in society, and the continued accumulation of capital, steak should be much less valuable than it was 90 years ago.


Yes, this IS a myth.  In 1926 you could buy a multi-course meal for a dime.  I've seen a menu.  I'll see if I can find one to post.

edit:  Here are some actual prices.  I chose 1910 rather than 1926 because inflation was rampant in 1926.

http://www.gti.net/mocolib1//prices/1910.html

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## buck000

Isn't it interesting at all that when Zimbabwe blew up their paper money, citizens wound up panning for gold in their rivers in order to afford food?

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## tmosley

> The importance of the quote is that neither gold nor paper currencies are investments.


I guess you don't have a savings account, then?

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## Jordan

> Considering all the manipulation in the gold and silver markets, it is no surprise that it is so volatile.


The only rational "manipulation" that I've seen (yes, I do read all the goldbug threads) is that the futures market may have 50-100 times more silver/gold than is actually available in physical form.

However, to suggest that prices will skyrocket because there is 50-100 times more interest in gold than actually exists is asinine.

Consider this...the derivatives trade is worth as much as $600 trillion.  Of that, the housing market may be worth as much as half of that.

Does that mean there are $300 trillion waiting on the sidelines to buy physical houses?  HELL NO.  What does it mean?  It means there is $300 trillion of funny money that the bankers and traders want to WAGER on the housing market.  

Do you really think these people give a $#@! about having a cute little white fence, a high-numbered suburban street address and newly installed crown molding?  HELL NO.  They don't even want the house itself!  They just want the opportunity to bet on it.

To say that gold is going to skyrocket because all the interest in the futures market wants physical holdings is crazy.  They don't care about the gold.  They care about the bets on it.  They want to gamble...it's just another thing to bet on.

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## Jordan

> Isn't it interesting at all that when Zimbabwe blew up their paper money, citizens wound up panning for gold in their rivers in order to afford food?


No.  If I were starving and if I could go to a public place and be able to find things of value in the ground that I could trade for food I most certainly would.

If you were starving, and there was a tiny stream of oil flowing through your yard, would you not try to barrel it up and trade/sell it?

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## Jordan

> I guess you don't have a savings account, then?


Are you implying that gold is your form of a savings account?

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## tmosley

> The only rational "manipulation" that I've seen (yes, I do read all the goldbug threads) is that the futures market may have 50-100 times more silver/gold than is actually available in physical form.
> 
> However, to suggest that prices will skyrocket because there is 50-100 times more interest in gold than actually exists is asinine.
> 
> Consider this...the derivatives trade is worth as much as $600 trillion.  Of that, the housing market may be worth as much as half of that.
> 
> Does that mean there are $300 trillion waiting on the sidelines to buy physical houses?  HELL NO.  What does it mean?  It means there is $300 trillion of funny money that the bankers and traders want to WAGER on the housing market.  
> 
> Do you really think these people give a $#@! about having a cute little white fence, a high-numbered suburban street address and newly installed crown molding?  HELL NO.  They don't even want the house itself!  They just want the opportunity to bet on it.
> ...


Of course, why would anyone assume that someone paying for a futures contract would ever want delivery at some point.  No-one ever takes delivery on futures contracts.

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## Jordan

> Of course, why would anyone assume that someone paying for a futures contract would ever want delivery at some point.  No-one ever takes delivery on futures contracts.


And all the people betting on housing want 1,000,000 houses.

edit:  Just got a phone call, someone wanted to tell me to go pick up my 10 S&P500s for my ES contracts.

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## tmosley

> Are you implying that gold is your form of a savings account?


I am.  My father has about one hundred thousand dollars in his savings account (in addition to his investments), drawing a paltry amount of interest, and has kept that amount in that account for more than ten years.  He has lost a huge amount of purchasing power in this manner.  If he had held 400 oz of gold instead, he would be doing much better.  In fact, it would have made up for the losses he experienced in his portfolio over the same time period.  

I started buying gold in college, around $450.  I'm quite happy with what has has happened to it since then.  My stock portfolio, not so much.  Of course, since I started learning about what was actually going on in the gold and silver markets, and shifted my money into those sectors, I started to do much better.  Now, I'm completely out of the market, and all in metals.

If I got paid with gold, I might be more inclined to invest in something that gives a return, but I'm not.  So I have to save, save, save all I can for a rainy day, one that will make the Great Deluge look like an April shower.

Further, if you studied history, you would know that the best place to have you money in during a depression is cash.  Of course, with the currency being just paper these days, the best place is gold, which used to be cash.  Your purchasing power will only continue to increase as we spiral into a 1-2 decade depression, which threatens to be inflationary or hyperinflationary.

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## tmosley

> And all the people betting on housing want 1,000,000 houses.
> 
> edit:  Just got a phone call, someone wanted to tell me to go pick up my 10 S&P500s for my ES contracts.


No, the people "betting" on housing are lending money to people who are buying homes, they aren't buying homes for future delivery.

SOMEONE HAS TO TAKE DELIVERY of any given futures contract.  You might speculate in oil futures, but when you "roll" your contracts, you are selling to someone who WILL take delivery.

The problem with the gold market is that the net flow per day of gold in a given day is equal to the annual gold production of the world.  This does NOT mean that that is the amount traded, that means the NET movement, at the end of the day.  If gold mines are producing enough for one day, what the hell is being traded the other 249?  Gold recycling might account for another one or two days at the most.  You really think that that many people are selling their gold?  They are bringing hundreds of tons per day from their vaults and selling?

Allow me to roll my eyes a few more times.

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## Jordan

> Your purchasing power will only continue to increase as we spiral into a 1-2 decade depression, which threatens to be inflationary or hyperinflationary.


How does your purchasing power increase if your investments only track the rate of inflation?

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## tmosley

> How does your purchasing power increase if your investments only track the rate of inflation?


Where did you get that idea from?  Gold beats the crap out of inflation.  Or did I miss the part where all goods are up 400% from 2000?

Gold is a defined market (by weight) that is currently very small in dollar terms, and in terms of market participation.  If/when the dollar and other fiats start to falter, both dollars and market participants will flood into gold and blow the lid off of it.  Since it can not be reproduced easily, they will be comfortable enough to stay there permanently.  Other bubbles in history have only occurred in goods that can be endlessly reproduced.

Think of it like going back in time and buying up land for a penny an acre back in the 1800's, and then going though the westward rush, and selling your land at the end for a hundred dollars an acre.  Are those bubble prices?  No!  People moved out there, and stayed!  Prices never went back down to a penny an acre.  Now you're lucky to unimproved land in a farmable climate for less than $300 an acre, and you're more likely to pay $1500+.

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## Jordan

> No, the people "betting" on housing are lending money to people who are buying homes, they aren't buying homes for future delivery.


Well, no, actually they aren't.  They're betting with some other person who has an opposite view.




> SOMEONE HAS TO TAKE DELIVERY of any given futures contract.  You might speculate in oil futures, but when you "roll" your contracts, you are selling to someone who WILL take delivery.


Can I borrow a forklift?  Maybe a dump truck?  500 companies in the S&P500 are sure to weigh a lot when I go take delivery.  That's cash settled, which I understand gold isn't.  You actually have to go pick it up..oh, wait, no you don't.

The exchange's clearing house acts as *counterparty on all contracts*, sets margin requirements, and crucially also provides a mechanism for settlement.  The exchange can just roll it over, and so can the eventual buyer.





> The problem with the gold market is that the net flow per day of gold in a given day is equal to the annual gold production of the world.  This does NOT mean that that is the amount traded, that means the NET movement, at the end of the day.  If gold mines are producing enough for one day, what the hell is being traded the other 249?  Gold recycling might account for another one or two days at the most.  You really think that that many people are selling their gold?  They are bringing hundreds of tons per day from their vaults and selling?
> 
> Allow me to roll my eyes a few more times.



Even if the futures market went bust as you say it should, it doesn't mean it is going to explode in value.  If that were true, then when the derivatives market pops every home should be worth millions of dollars a piece, regardless of how $#@!ty it is.  Since so much is being bet on it, that means that all those bettors are just pent up demand, demand that will flow into the housing market when the derivatives market blows up.  You might want to diversify into housing!

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## Jordan

> Where did you get that idea from?  Gold beats the crap out of inflation.  Or did I miss the part where all goods are up 400% from 2000?


No, you just missed the huge number of years before 2000.




> Gold is a defined market (by weight) that is currently very small in dollar terms, and in terms of market participation.  If/when the dollar and other fiats start to falter, both dollars and market participants will flood into gold and blow the lid off of it.  Since it can not be reproduced easily, they will be comfortable enough to stay there permanently.  *Other bubbles in history have only occurred in goods that can be endlessly reproduced.*


OIL!

Also, gold didn't bubble in the late 70's early 80s?




> Think of it like going back in time and buying up land for a penny an acre back in the 1800's, and then going though the westward rush, and selling your land at the end for a hundred dollars an acre.  Are those bubble prices?  No!  People moved out there, and stayed!  Prices never went back down to a penny an acre.  Now you're lucky to unimproved land in a farmable climate for less than $300 an acre, and you're more likely to pay $1500+.


Terrible analogy.

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## tmosley

> Well, no, actually they aren't.  They're betting with some other person who has an opposite view.


There is another side to every trade, and they can always borrow someone's portion of a given loan and sell it, and buy it or an equivalent back at a later date.  So what?  The fact is  that there is still a loan being made for someone to buy a home.  No-one is taking delivery of homes in these contracts, save to same extent in the event of a default.




> Can I borrow a forklift?  Maybe a dump truck?  500 companies in the S&P500 are sure to weigh a lot when I go take delivery.  That's cash settled, which I understand gold isn't.  You actually have to go pick it up..oh, wait, no you don't.
> 
> The exchange's clearing house acts as *counterparty on all contracts*, sets margin requirements, and crucially also provides a mechanism for settlement.  The exchange can just roll it over, and so can the eventual buyer.


You can carry the shares of those companies in a briefcase (idiot).  




> Even if the futures market went bust as you say it should, it doesn't mean it is going to explode in value.  If that were true, then when the derivatives market pops every home should be worth millions of dollars a piece, regardless of how $#@!ty it is.


There is a loan for every one of those contracts that have been issued.  The average American probably owes more than a hundred thousand dollars in mortgage debt.  That is why the figure is so large.  But that doesn't matter, you keep going into stupidland when you try to use housing as an example.  In that market, you are purchasing a right to collect, backed to some extent by force of law, not an actual commodity.  The leverage is in the opposite direction in that example.




> Since so much is being bet on it, that means that all those bettors are just pent up demand, demand that will flow into the housing market when the derivatives market blows up.  You might want to diversify into housing!


The right to collect a debt is not worth the full amount of the debt.  Period.  This is different from the situation where someone thinks they are purchasing the right to take delivery of a commodity only to find that they have been oversold by a factor greater than 100.

Allow me to roll my eyes until they bleed.

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## Distinguished Gentleman

Hey guys,

Where is the best place to learn about the commodities markets and investing in general?  I used to have an account on updown.com where I invested pretend money and did exceptionally well, but I really just got lucky/followed Jim Rogers advice.

Any suggestions?

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## tmosley

> No, you just missed the huge number of years before 2000.


Inflation was subdued prior to 2000, and gold was still being actively suppressed by central bank selling (ie the supply was going up).  This is no longer the case, and probably won't be the case for the foreseeable future.





> OIL!


Surprise!  There's a lot of oil out there!  You can fit all the gold mined in the last year in 5 barrels.




> Also, gold didn't bubble in the late 70's early 80s?


This is a common mistake.  The dollar was failing during the 70's, having come off of the gold standard.  Interest rates were artificially low, and inflation was roaring due to overspending on war and welfare programs.  Back then, the US had very little debt, so they were able to handle the situation by cranking up the interest rate to 20%.  If they try that today, the whole continent will sink into the mantle under the tax burden.




> Terrible analogy.


Only if you're a moron.

My eyes are now bleeding, so I'm going to stop rolling my eyes at you.

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## peacepotpaul

> And what happened the 20 years after that?  People live much longer than 3 or 4 decades.
> 
> 
> 
> In the long run, any on hand tangible assets are better than the paper federal reserve note.


if it was you, would you sit on and with that much faith when you had 20 years of bills to pay?

you might if it's only a fraction of your investments.

if you bought in 1970s, you were unlikely 2 years old, you were more likely 20, to have any money to spend, assuming you didn't have smart parents. 

if your belief is, "so what, after 20 years, things will be better" then you ought to put your money in dollars, because it can crash to crap, but what happens after that? Why chase short term profits if you have that kind of long term patience?

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## peacepotpaul

> The importance of the quote is that neither gold nor paper currencies are investments.


so what is? housing? food? cars? water?

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## Jordan

> There is another side to every trade, and they can always borrow someone's portion of a given loan and sell it, and buy it or an equivalent back at a later date.  So what?  The fact is  that there is still a loan being made for someone to buy a home.  No-one is taking delivery of homes in these contracts, save to same extent in the event of a default.


They don't own any of the loan.  Not a bit.  They're just saying, hey buddy, I bet you $1 million this portfolio goes down 20% by 2012.  Then the buddy is says, "ha, ok, shake on it."





> You can carry the shares of those companies in a briefcase (idiot).


Fooled you.  S&P futures are settled in cash only.





> There is a loan for every one of those contracts that have been issued.  The average American probably owes more than a hundred thousand dollars in mortgage debt.  That is why the figure is so large.  But that doesn't matter, you keep going into stupidland when you try to use housing as an example.  In that market, you are purchasing a right to collect, backed to some extent by force of law, not an actual commodity.  The leverage is in the opposite direction in that example.


Stupidland?

I'm just saying that just because someone bets on something doesn't mean they want to own it.  I don't want to own gold, but I don't have enough money to get in on the derivatives exchange.  So what do I do?  Futures here I come! 





> The right to collect a debt is not worth the full amount of the debt.  Period.  This is different from the situation where someone thinks they are purchasing the right to take delivery of a commodity only to find that they have been oversold by a factor greater than 100.
> 
> Allow me to roll my eyes until they bleed.


Not everyone, probably a minority, is in the futures market to actually own something.  They're speculating.  

Again, I don't care about owning gold, I care about replicating its returns.  I don't have enough money to trade derivatives, so I hop in on the futures market.  No big deal.

And even again, my point is that just because someone trades something on the futures market doesn't mean they want to own it.  Just because speculators put 10% down on a home to be built in the future didn't mean they wanted to own it.  (Futures are obviously more liquid, ha, ruined your reply)

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## Jordan

> Inflation was subdued prior to 2000, and gold was still being actively suppressed by central bank selling (ie the supply was going up).  This is no longer the case, and probably won't be the case for the foreseeable future.


Inflation was subdued LOLOLOLOLOL






> Surprise!  There's a lot of oil out there!  You can fit all the gold mined in the last year in 5 barrels.


Unit conversion, pl0x.  You can fit all my eyelashes from the last decade in a thimble!  Holy $#@!!




> This is a common mistake.  The dollar was failing during the 70's, having come off of the gold standard.  Interest rates were artificially low, and inflation was roaring due to overspending on war and welfare programs.  Back then, the US had very little debt, so they were able to handle the situation by cranking up the interest rate to 20%.  If they try that today, the whole continent will sink into the mantle under the tax burden.


Cranking the interest rate to 20% didn't do $#@! to control the money supply.  Nope.  I mean, if we're following your logic, Gold's move should suggest the money supply exploded then contracted by a similar amount.  Too bad that's false.

BTW, your explanations get more and more ridiculous.




> Only if you're a moron.
> 
> My eyes are now bleeding, so I'm going to stop rolling my eyes at you.


You're just assuming today's prices will stick.  Because they totally stuck in the 70's and 80's.

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## Jordan

> so what is? housing? food? cars? water?


Anything that produces an income.  Housing can.  Food not so much.  Cars? lol.  Water, no, unless you build a generator.

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## Jordan

> Hey guys,
> 
> Where is the best place to learn about the commodities markets and investing in general?  I used to have an account on updown.com where I invested pretend money and did exceptionally well, but I really just got lucky/followed Jim Rogers advice.
> 
> Any suggestions?


Listen to Tmosley, he has this stuff down pat.

----------


## peacepotpaul

> Anything that produces an income.  Housing can.  Food not so much.  Cars? lol.  Water, no, unless you build a generator.


what the hell is producing income?

doesn't paper currency and stocks produce income?

isn't inflation producing income?

*give me one good example.*

----------


## Jordan

> *give me one good example.*


A gold mine.

----------


## peacepotpaul

> A gold mine.


or coal mine or oil mine? before the product becomes obsolete?

are you serious?

----------


## Cowlesy

> Hey guys,
> 
> Where is the best place to learn about the commodities markets and investing in general?  I used to have an account on updown.com where I invested pretend money and did exceptionally well, but I really just got lucky/followed Jim Rogers advice.
> 
> Any suggestions?


Kevin Kerr wrote a book called "A Maniac Commodity Traders Guide to Creating a Fortune."  It is a great soup-to-nuts explanation of commodities trading.

Jimmy Rogers also has a book that should be read in tandem with Kerr's guide.

----------


## Jordan

> or coal mine or oil mine? before the product becomes obsolete?
> 
> are you serious?


Typewriters became obsolete, doesn't mean someone didn't make a $#@!load from them.

----------


## Cowlesy

> A gold mine.


That's why I like Aurizon Mines Ltd.  A nice boring gold mine generating a decent amount of EBITDA.

http://finance.yahoo.com/q/is?s=AZK+...atement&annual

----------


## peacepotpaul

> Typewriters became obsolete, doesn't mean someone didn't make a $#@!load from them.


so whats wrong with gold? it'll be a bubble but someone will make a $#@!load of money for a short period of time. 

what good is a gold mine if you're going to be paid with paper currency and people like you 'dont trust gold'?

----------


## peacepotpaul

> That's why I like Aurizon Mines Ltd.  A nice boring gold mine generating a decent amount of EBITDA.
> 
> http://finance.yahoo.com/q/is?s=AZK+...atement&annual


did u buy it at a dollar?

----------


## Cowlesy

> so whats wrong with gold? it'll be a bubble but someone will make a $#@!load of money for a short period of time. 
> 
> what good is a gold mine if you're going to be paid with paper currency and people like you 'dont trust gold'?


So you are using an extreme hyperinflation situation where all fiat currency is worthless?

Thank goodness I own stock (equity) (ownership) in a gold mine.

----------


## Jordan

> so whats wrong with gold? it'll be a bubble but someone will make a $#@!load of money for a short period of time.


Nothing.  Thanks for agreeing with me.




> what good is a gold mine if you're going to be paid with paper currency and people like you 'dont trust gold'?


That was an example of an investment (gold miner) as opposed to something for speculation (gold).

"Why I don't trust gold" was the headline of the article I posted.

----------


## Cowlesy

> did u buy it at a dollar?


I bought it using dollars

----------


## Jordan

> Thank goodness I own stock (equity) (ownership) in a gold mine.


Too bad the government will come and steal the company.  You should always buy physicals, and bury them 200 feet deep in 30" thick steel.

----------


## Cowlesy

> Too bad the government will come and steal the company.  You should always buy physicals, and bury them 200 feet deep in 30" thick steel.


That's true.  If we completely abrogate from a society based on contract law I am boned on that.

----------


## peacepotpaul

> Too bad the government will come and steal the company.  You should always buy physicals, and bury them 200 feet deep in 30" thick steel.


wtf?

----------


## tmosley

> They don't own any of the loan.  Not a bit.  They're just saying, hey buddy, I bet you $1 million this portfolio goes down 20% by 2012.  Then the buddy is says, "ha, ok, shake on it."


One of them owns some portion of that portfolio, or has access to it, or that is illegal.  Either way, no-one is taking delivery on houses, so it's irrelevant.





> Fooled you.  S&P futures are settled in cash only.


Paper for paper, so what?  Paper for paper that's represented as gold?  That's fraud, and just waiting to be exposed.  





> Stupidland?
> 
> I'm just saying that just because someone bets on something doesn't mean they want to own it.  I don't want to own gold, but I don't have enough money to get in on the derivatives exchange.  So what do I do?  Futures here I come!


You know Stupidland.  You've got a timeshare there (because you can't tell the difference between debt and commodities).  People who own gold futures implicitly want to own gold.  People who own products like GLD implicitly want to own gold.  Period.  If you own gold futures, but don't want to own gold, then you must be posting from your timeshare.





> Not everyone, probably a minority, is in the futures market to actually own something.  They're speculating.


Yes, but they are speculating in something REAL.  If they find out that their futures contracts don't entitle them to delivery, or only to 1/100th the amount they thought, they won't be able to sell them to the end users, the people who want to take that oil, or wheat, or frozen concentrated orange juice, package it, and sell it at the wholesale level.  If it turns out that the contract isn't backed by anything, and that the actual commodity is rarer than the market though by a hundred fold, then the price for the real thing will EXPLODE.  I understand that you won't understand this, as you are soaking in the culture of Stupidland (careful not to drown in your own drool, that's the number one killer there).  When you get back to the real world, hopefully you will understand what I am talking about.




> Again, I don't care about owning gold, I care about replicating its returns.  I don't have enough money to trade derivatives, so I hop in on the futures market.  No big deal.


You're a rare bird, and a stupid one.  You ought to change your avatar to a dodo.  To replicate the return on a given commodity exactly, you have to own it.  You can replicate price action by purchasing other things, but it's a sloppy and expensive business, and you're likely to lose a lot of money unnecessarily to management fees.




> And even again, my point is that just because someone trades something on the futures market doesn't mean they want to own it.  Just because speculators put 10% down on a home to be built in the future didn't mean they wanted to own it.  (Futures are obviously more liquid, ha, ruined your reply)


Any given speculator might not want to own it, but SOMEONE does.  If the person who DOES want it finds out that there's nothing there, then it becomes worthless, ALL THE WAY DOWN THE CHAIN.

I would suggest you not reply to this until you get back from Stupidland.

----------


## peacepotpaul

> Nothing.  Thanks for agreeing with me.


so your statement "i dont trust gold" just means "I dont believe anything is forever"?




> That was an example of an investment (gold miner) as opposed to something for speculation (gold).
> 
> "Why I don't trust gold" was the headline of the article I posted.


please tell me the difference between investment and speculation.

----------


## Jordan

> I would suggest you not reply to this until you get back from Stupidland.


I'm currently away, traveling through time, I should be back last Tuesday.

----------


## buffalokid777

> Anything that produces an income.  Housing can.  Food not so much.  Cars? lol.  Water, no, unless you build a generator.


While I don't agree with you on your views of Gold.

I do agree that housing can produce a decent income if you buy the property in the correct place.

If you are looking for rental property in California, or Las Vegas, or the other boom spots, good luck.

One place there is opportunity is the NE spots of the rust belt. A property in a ghetto will not produce income, but spots around areas of demand such as major colleges will produce income.

I live in Buffalo NY, a traditional rust belt spot in decline. I bought my first house from a friend who inherited it from a relative on a private contract, a 7 year mortgage all private no banks, for $44,000, my payments are a little over $600/mo, I originally bought it because it was cheaper than my rent of $800/mo for a 2 bedroom home. It needed some work, and I CAN DO DIY, so I took it, with a little less than 3 years to go, I could now rent this house for $1500/mo with the improvements I have made while not spending any more than I did on my former house I rented, with it's close proximity to the local medical school and students from other countries who are looking to rent while they get their medical degree, this was a wise purchase. Once it is paid for, I look forward to using the income from renting this property to get more in the neighborhood. It really is a nice place for rental properties because of the need for student to have a nice place to live close to where they go to school. You could never replicate what I have done here in San Francisco, the same property would cost 10x what I paid for this one even now, but there are pockets of opportunity in the rust belt even now, you just need to choose the right place.

I still think though gold is a better store of wealth than your local bank, and the stock market is a fool's gamble as long as the president's working group on financial markets continues to exist.

----------


## tmosley

> Inflation was subdued LOLOLOLOLOL


Look at your own graph.  See where the curve flattens?  The 90's.  Thank you for proving my point.




> Unit conversion, pl0x.  You can fit all my eyelashes from the last decade in a thimble!  Holy $#@!!


You don't get it (Stupidland, I know).  All the oil ever drilled is now CO2, or on its way there.  All the gold ever mined is still around.  I know you won't get it, so I'll leave it at that.





> Cranking the interest rate to 20% didn't do $#@! to control the money supply.  Nope.  I mean, if we're following your logic, Gold's move should suggest the money supply exploded then contracted by a similar amount.  Too bad that's false.


It restored faith in the currency.  That was enough to stop the run on gold.  You could get a better return by holding on to dollars.  This is not the case anymore, and won't be for the foreseeable future (surely even you can understand this).




> BTW, your explanations get more and more ridiculous.


No, you're getting dumber.  The tax burden is high now, with rates at zero.  What do you think they are going to look like with rates at 10%?  




> You're just assuming today's prices will stick.  Because they totally stuck in the 70's and 80's.


If you refuse to understand history, it's going to come back and beat you with a lead pipe, probably to death.  I'll buy you a nice arrangement for your funeral (if you're not just left to rot in the street).  The prices didn't stick because they raised the interest rates to such an extent that it made more sense for people to save in dollars (I'd be all in on dollars in a simple savings account if I was able to get a 23% return).  THAT CAN NOT HAPPEN WITH A $13 TRILLION DOLLAR NATIONAL DEBT.

----------


## Travlyr

Jordon's arguments aren't too convincing here in this thread.

Central banks own gold.
Governments own gold.
I would bet $100 that the Rothschild family owns gold.
I would bet $100 that Warren Buffet himself owns gold.

The debt society was forced on the people through fraudulent techniques and is not likely to last much longer IMHO.

PM's have been used as money for 5k to 6k years until 1964 - 1971 or so.  

George Soros claims that the U.S. is bankrupt.

Silver historically has been worth about 1/16 the price of gold when free markets were allowed to operate.  

Owning PM's over paper or electronic money has a much better track record.

----------


## Original_Intent

> This is a myth. Even if what you said is true, it would mean gold has lost tons of value since 1926.
> 
> With all of the technological and agricultural advancements in society, and the continued accumulation of capital, steak should be much less valuable than it was 90 years ago.


You got one side of the equation, what about the vastly increased demand for steak on the other side of the equation due to vastly more population?

----------


## Distinguished Gentleman

The example used in the Meltup video was a top of the line suit being worth about an ounce of gold throughout the history of the dollar.  I can't vouch for the accuracy of that claim, though.

----------


## buffalokid777

> You got one side of the equation, what about the vastly increased demand for steak on the other side of the equation due to vastly more population?


Good point,

Was world population even close to today in 1926? I don't think so.

----------


## keh10

> Good point,
> 
> Was world population even close to today in 1926? I don't think so.



We also produce a lot more cattle (a volatile market in and of itself). I think a better way to think of it is that the amount of gold produced is smaller than the amount of total goods produced over time. Therefore, there is a smaller amount of gold chasing a larger amount of goods inevitable leading to deflation. The same would be true for paper currencies if we stopped printing.

----------


## jclay2

> A store of value shouldn't be so volatile.  That is the point.
> 
> Gold, despite being known as a safehaven investment, has been more volatile than even the "risky" stock market all the while producing lower returns.


Switch around your yardstick. Maybe, just maybe, it is the dollar that is volatile.

----------


## Bossobass

Posted last year in response to a similar OP:

If you're gonna talk about gold as an investment, then talk about gold as an investment.

In the 70s, I scraped up $10K, a big sum back then for a schmoo from the West End of Pittsburgh. I bought Krugs for $125 each.

A couple of years later, they were $800. I wasn't greedy, I sold when they reached $680.

A couple of years after that, they were $300, so I bought them back.

In 2008, I sold them for $1000. Later in 2008, I bought them back for $750.

They're now worth $1200+. 

Following the line of reasoning in all of the "gold is not an investment" comments, I would have simply held the original 80 Oz at $125 ($10K) and today they'd be worth $96K. Instead, as a result of actually using gold as an investment, 80 Oz @ $10K is now 241 Oz @ $291K.

That's 29 for 1.

When looking at the DOW, I would have had to sell stocks (as they were dumped from the average) and purchased new stocks (as they were added to the average). 

IOW, if I bought and held the DOW with $10k back then, I'd have a big pile of nothing. Buying and selling as the DOW evolved from then (DOW = 1000) to today (DOW = 10,000) would have yielded 10 for 1.

Now, what's this bull$#@! about gold?

Bosso

----------


## jclay2

> Yes, but they are speculating in something REAL.  If they find out that their futures contracts don't entitle them to delivery, or only to 1/100th the amount they thought, they won't be able to sell them to the end users, the people who want to take that oil, or wheat, or frozen concentrated orange juice, package it, and sell it at the wholesale level.  If it turns out that the contract isn't backed by anything, and that the actual commodity is rarer than the market though by a hundred fold, then the price for the real thing will EXPLODE.  I understand that you won't understand this, as you are soaking in the culture of Stupidland (careful not to drown in your own drool, that's the number one killer there).  When you get back to the real world, hopefully you will understand what I am talking about.


I don't think that it is as bad as you think. A lot of the people that go long these contracts are only interested in going for the cash/paper profits. While these markets are sometimes used for physical delivery, they are many times and especially in pm's used as a venture to make bets (ala casino). The thing that you should remember about this casino, is that there are always two sides to a trade. Sure, in the short run big players (JPM HSBC) can come in and increase volatility for their own manipulation/profit, but in the long run the prices seem to be relatively consistent with REAL supply/demand. If these markets were so out of wack, no physical buyers and sellers would look to them as a reference points. Now back to the leverage you mention in these paper markets. The problem that I see with these paper products is that they increase the chance for incredible short squeezes. I am talking comex/lbma default (gold/silver to the moon TEMPORARILY). Look no further than the hunt brothers for that. This is a very serious thing to be worried about if you are in the paper markets. However, until a majority of the market participants want physical delivery, this probably won't happen. 

Basically, the prices for Gold and Silver are real. They can be manipulated in the short run but in the long run, there is not much the manipulators can do. As far as the naked contracts, they do help in price discovery, but expose the exchange and market to unbelievable short squeeze (should the preference for physical begin in mass among the mainstream).

Just look at what gold has done since 200. The reason it is up so much is because it is reflective of physical supply and demand.

----------


## peacepotpaul

> Posted last year in response to a similar OP:
> 
> If you're gonna talk about gold as an investment, then talk about gold as an investment.
> 
> In the 70s, I scraped up $10K, a big sum back then for a schmoo from the West End of Pittsburgh. I bought Krugs for $125 each.
> 
> A couple of years later, they were $800. I wasn't greedy, I sold when they reached $680.
> 
> A couple of years after that, they were $300, so I bought them back.
> ...


what sign in 70s told you to buy gold? or was it just one of many other investments?

----------


## Jordan

> One of them owns some portion of that portfolio, or has access to it, or that is illegal.  Either way, no-one is taking delivery on houses, so it's irrelevant.


No it isn't.  Again, my only point is that just because you bet on something doesn't mean you want to own it.  You can't seem to get that through your head.






> Paper for paper, so what?  Paper for paper that's represented as gold?  That's fraud, and just waiting to be exposed.


No its not.  If me and my friend want to make a sidebet on gold there isn't anything wrong with that.  And no, it isn't fraud, and no, it doesn't mean I want to own gold.






> You know Stupidland.  You've got a timeshare there (because you can't tell the difference between debt and commodities).  People who own gold futures implicitly want to own gold.  People who own products like GLD implicitly want to own gold.  Period.  If you own gold futures, but don't want to own gold, then you must be posting from your timeshare.


Why do they implicitly want to own gold?  Why can't they just want to speculate on something, anything, that they think will rise in value in the future?





> Yes, but they are speculating in something REAL.  If they find out that their futures contracts don't entitle them to delivery, or only to 1/100th the amount they thought, they won't be able to sell them to the end users, the people who want to take that oil, or wheat, or frozen concentrated orange juice, package it, and sell it at the wholesale level.  If it turns out that the contract isn't backed by anything, and that the actual commodity is rarer than the market though by a hundred fold, then the price for the real thing will EXPLODE.  I understand that you won't understand this, as you are soaking in the culture of Stupidland (careful not to drown in your own drool, that's the number one killer there).  When you get back to the real world, hopefully you will understand what I am talking about.


Subtract the attacks, you'd almost have an argument.  

If what you say is true, the price of EVERYTHING should explode when the derivatives market falls over and dies.  Since, of course, all those people who are speculating actually want to own something. 





> You're a rare bird, and a stupid one.  You ought to change your avatar to a dodo.  To replicate the return on a given commodity exactly, you have to own it.  You can replicate price action by purchasing other things, but it's a sloppy and expensive business, and you're likely to lose a lot of money unnecessarily to management fees.


Again, not true.  Look at the exchange-traded NOTE DGP.  I can track the twice the daily change in gold, and the issuer doesn't own a single ounce. 

Now, there aren't any unleveraged gold ETNs..yet, but DGP costs just .75% per year, and tracks the daily change quite well.  Besides, .75% is far less than you're paying in premiums for physicals..so you'd have to hold for years before making up the difference.  





> Any given speculator might not want to own it, but SOMEONE does.  If the person who DOES want it finds out that there's nothing there, then it becomes worthless, ALL THE WAY DOWN THE CHAIN.
> 
> I would suggest you not reply to this until you get back from Stupidland.


Doesn't really matter if they want to only own it to just roll it over again.

----------


## Jordan

> so your statement "i dont trust gold" just means "I dont believe anything is forever"?


You can't read.  "I Dont Trust Gold" is the name of the article I posted here in the OP.






> please tell me the difference between investment and speculation.


An investment is something that produces.  For example, a mill takes components, wheat and power, and turns it into something more valuable, flour.  It produces wealth, and profits.

Speculative investments are those that don't produce.  1 oz of gold is always 1 oz of gold.

----------


## Jordan

> Look at your own graph.  See where the curve flattens?  The 90's.  Thank you for proving my point.


Inflation wasn't under control in the 1970s.  The money supply was growing almost as fast then as it was in the 90s.  Problem is that you don't understand the difference between linear and exponential. 





> You don't get it (Stupidland, I know).  All the oil ever drilled is now CO2, or on its way there.  All the gold ever mined is still around.  I know you won't get it, so I'll leave it at that.


How much oil has been created since 2007?  Not much.




> It restored faith in the currency.  That was enough to stop the run on gold.  You could get a better return by holding on to dollars.  This is not the case anymore, and won't be for the foreseeable future (surely even you can understand this).


If the FED starts raising rates, even by a small figure, you can bet your ass that gold gets whacked.





> No, you're getting dumber.  The tax burden is high now, with rates at zero.  What do you think they are going to look like with rates at 10%?


I say inflate away the debt.  At least one-time inflation only costs once, whereas debt costs forever (until you pay it off).




> If you refuse to understand history, it's going to come back and beat you with a lead pipe, probably to death.  I'll buy you a nice arrangement for your funeral (if you're not just left to rot in the street).  The prices didn't stick because they raised the interest rates to such an extent that it made more sense for people to save in dollars (I'd be all in on dollars in a simple savings account if I was able to get a 23% return).  THAT CAN NOT HAPPEN WITH A $13 TRILLION DOLLAR NATIONAL DEBT.


Funny how frequently you say I refuse to understand history, when I can implicitly remember your rebuttal to my claim that gold is more volatile (risky) and less rewarding than stocks over the same long term period was that you don't care about history because you didn't buy your gold then.  

Thanks for the offer.  But I'm sure I'll be just OK to pay for my funeral.

----------


## Jordan

> Jordon's arguments aren't too convincing here in this thread.
> 
> Central banks own gold.
> Governments own gold.
> I would bet $100 that the Rothschild family owns gold.
> I would bet $100 that Warren Buffet himself owns gold.


Central banks own land.  Governments own land.  I would bet $100 the Rothschilds own land.  I would bet that Warren Buffet owns land.  No, I'm not saying that land is a good investment, I'm just saying that I can put anything in there.  Appeal to authority much?




> The debt society was forced on the people through fraudulent techniques and is not likely to last much longer IMHO.
> 
> PM's have been used as money for 5k to 6k years until 1964 - 1971 or so.  
> 
> George Soros claims that the U.S. is bankrupt.
> 
> Silver historically has been worth about 1/16 the price of gold when free markets were allowed to operate.  
> 
> Owning PM's over paper or electronic money has a much better track record.


How?

People have wiped their ass for years with some sort of fiber, maybe they'll switch to a bidet.

Who cares?

Historically its also been more volatile (risky) and provided smaller returns than that of equities.

But its still not an investment.

----------


## Jordan

> Posted last year in response to a similar OP:
> 
> If you're gonna talk about gold as an investment, then talk about gold as an investment.
> 
> In the 70s, I scraped up $10K, a big sum back then for a schmoo from the West End of Pittsburgh. I bought Krugs for $125 each.
> 
> A couple of years later, they were $800. I wasn't greedy, I sold when they reached $680.
> 
> A couple of years after that, they were $300, so I bought them back.
> ...



Hey cool!  You timed the market!  Me too, I've churned 2600%+ in stock options in the last 7 years.  Am I going to claim that as ordinary?  No, because I'm not a dumbass.




> When looking at the DOW, I would have had to sell stocks (as they were dumped from the average) and purchased new stocks (as they were added to the average). 
> 
> IOW, if I bought and held the DOW with $10k back then, I'd have a big pile of nothing. Buying and selling as the DOW evolved from then (DOW = 1000) to today (DOW = 10,000) would have yielded 10 for 1.
> 
> Now, what's this bull$#@! about gold?
> 
> Bosso


I'm not even going to bother responding.

----------


## libertybrewcity

> Hey guys,
> 
> Where is the best place to learn about the commodities markets and investing in general?  I used to have an account on updown.com where I invested pretend money and did exceptionally well, but I really just got lucky/followed Jim Rogers advice.
> 
> Any suggestions?


i also would like some suggestions! ive been reading a lot on kitco for gold and silver, this guy is the only daily blog i can find on the gold price.

http://silver-and-gold-prices.goldprice.org/

----------


## FrostyLeaf

The question here ultimately is:

"What is real wealth?"

----------


## Travlyr

> Central banks own land.  Governments own land.  I would bet $100 the Rothschilds own land.  I would bet that Warren Buffet owns land.  No, I'm not saying that land is a good investment, I'm just saying that I can put anything in there.  Appeal to authority much?


Investment definition:  An asset or item that is purchased with the hope that it will generate income or appreciate in the future.
Land can be a good investment.  All wealth comes from the land.  But this thread is about gold.  Gold can be a good investment too.




> The debt society was forced on the people through fraudulent techniques and is not likely to last much longer IMHO.





> How?


Everybody knows that the Federal Reserve Act of 1913 was implemented fraudulently.  The creation of the international central bank was designed to enrich a few at the expense of the many.   Read:"The Secret of the Federal Reserve" by Eustace Mullins.




> Historically its also been more volatile (risky) and provided smaller returns than that of equities.


Only in the last 100 years... since the inception of the FED.
Historically (for 5000 years) gold has ruled.  The Rothschilds did not go to Russia to destroy Tsar Nicholas II and his entire family in 1917 for equities or paper.  They stole his gold!

----------


## peacepotpaul

> An investment is something that produces.  For example, a mill takes components, wheat and power, and turns it into something more valuable, flour.  It produces wealth, and profits.


Is production of new items always producing or increasing value?
What if a mill makes items that are useless, would that be a failed investment?
So is a printing press that counterfeits money "productive" and an "investment"?




> Speculative investments are those that don't produce.  1 oz of gold is always 1 oz of gold.


speculative investments? so speculation and investment can meet? not mutually exclusive?

----------


## peacepotpaul

> Investment definition:  An asset or item that is purchased with the hope that it will generate income or appreciate in the future.
> Land can be a good investment.  All wealth comes from the land.  But this thread is about gold.  Gold can be a good investment too.


so that'd be synonomous with speculation, am I wrong?

----------


## peacepotpaul

> Central banks own land.  Governments own land.  I would bet $100 the Rothschilds own land.  I would bet that Warren Buffet owns land.  No, I'm not saying that land is a good investment, I'm just saying that I can put anything in there.  Appeal to authority much?


Calling what the rich own and invest in "appeal to authority" is like calling a elected official "appeal to popularity". 

Voting is all about the popular numbers, and investment is all about money, more specifically, with supply and demand, where the big spenders land their money is by definition what is valued (and valuable).

----------


## tmosley

> Inflation wasn't under control in the 1970s.  The money supply was growing almost as fast then as it was in the 90s.  Problem is that you don't understand the difference between linear and exponential.


Wow, you really don't know how to read charts, do you?  The chart you posted was linear, not a log scale graph.  It clearly was going up steeply in the 70's and was flat in the 90's, proving my point that gold went up fast while inflation was out of control, and went down as faith in the currency was restored.





> How much oil has been created since 2007?  Not much.


What planet are you living on?




> If the FED starts raising rates, even by a small figure, you can bet your ass that gold gets whacked.


Not going to happen.  It would CRUSH the Federal Government.  And no, a small figure won't work, it would have to go up to AT LEAST 5% to beat real inflation, and should lending resume and/or should there be a run on the dollar at any point then you will have to raise it to 10, then 20, then 30%.  Gold actually increased in value as they raised rates until they finally increased them well above the inflation rate.





> I say inflate away the debt.  At least one-time inflation only costs once, whereas debt costs forever (until you pay it off).


And what do you think monetization of 13+trillion dollars of debt is going to do the dollar?  This is exactly what is going to happen in the end.  If you think this is going to happen, then you shouldn't be in anything except for PMs!




> Funny how frequently you say I refuse to understand history, when I can implicitly remember your rebuttal to my claim that gold is more volatile (risky) and less rewarding than stocks over the same long term period was that you don't care about history because you didn't buy your gold then.


Your memory must be going.  Perhaps the drool is blocking your oxygen supply.  I never said that.  But you are wrong there as well.  Gold is only highly volatile when you include the big drop in the 80's, which occurred as a result of a one time rescue by Volcker, something that CAN NOT BE REPEATED DUE TO THE MASSIVE NATIONAL DEBT.  You also fail to recognize that the conditions match those of Weimar Germany in the year leading up to their famous currency collapse, except that we don't have an industrial economy any more (welfare state, increasing government spending, and a massive, unpayable debt).




> Thanks for the offer.  But I'm sure I'll be just OK to pay for my funeral.


I very seriously doubt that.  You might be able to afford a stick of gum, or maybe a whole pack if you get lucky in the stock market, but a casket will be out of your reach if you continue on the path of paper without any security.  5% in physical PMs in your possession will ensure your survival, at least.

----------


## tmosley

> Doesn't really matter if they want to only own it to just roll it over again.


I just noticed this gem.  You can't roll it over if there aren't any buyers.  Any given contract is for delivery at a certain date.  If you possess the contract past that date, you have to take delivery.  The contract disappears.  

You are so used to "trading" that you can't even see the real function of the market anymore.  You can't see that it is dysfunctional.  You can't see the forest for the trees here.  And you have totally missed the forest fire, having convinced yourself that the raging flames and chocking smoke are a normal part of market operations.

Enjoy these markets, they'll be your funeral pyre one day, and soon.

----------


## Bossobass

> what sign in 70s told you to buy gold? or was it just one of many other investments?


There was a local businessman who knew my father, also a local businessman. My father bought rental property on a very small scale, but methodically, as others would instead have a savings account or a stock portfolio.

The local businessman was a member of JBS. When Nixon removed the Breton-Woods gold standard, the JBS guys saw the handwriting on the wall and he sold all of his real estate holdings and bought gold.

My father bought a duplex from him for $25k. I remember my father saying that he thought the JBS guy was crazy ( "Birchers" were considered nutjob extremists back then to the majority, as TPTB had done a thorough job of painting them as communists, etc.) and that he wished he could have known earlier and bought more of his properties.

The JBS guy bought gold at $35-36/Oz. I was in HS at the time and had zero money. It took me 5 years to scrape up $10k or I would have done it sooner.

As a young man, I listened intently to my successful elders. I had no credit or history to be able to buy real estate at that time, so I bought gold. Both of them (my father and the JBS guy) did well in their investments, but the JBS guy won that round, hands down.

As the 70s turned into the 80s, I learned a lifetimes worth about the inflation/recession cycle and the importance of gold. None of what I learned as a young man has changed at all.

I wish I had bought more over the years. Alas, I was bred to be an American Consumer, and wasted a lot of $$ in that worthless pursuit. 

Bosso

----------


## YumYum

Isn't sliver and gold supposed to go through the roof since last Monday?

----------


## peacepotpaul

> Isn't sliver and gold supposed to go through the roof since last Monday?

----------


## YumYum

> 


*lol!!!*

----------


## xd9fan

> that's a buy signal from yahoo news


no $#@!......cause when you boil away the bull$#@! it really comes down to two choices.
Gold (which bankers will tell you is in a 6 thousand year bubble)
or
paper money.....now of which the IMF is creating to replace sovern paper
YouTube - Managing Market Volatility, SDR's or Gold?
1:50 in the video

----------


## tmosley

> Isn't sliver and gold supposed to go through the roof since last Monday?


No, it's supposed to go up slowly, which it is doing.  If it had closed above 1200 such that those options expired in the money, they would have had a lot more redemptions, and may have been forced to scramble for physical bullion.  There may still be a scramble, but it certainly won't be as large.

----------


## Jordan

> Wow, you really don't know how to read charts, do you?  The chart you posted was linear, not a log scale graph.  It clearly was going up steeply in the 70's and was flat in the 90's, proving my point that gold went up fast while inflation was out of control, and went down as faith in the currency was restored.


You said inflation was subdued prior to the 90s.  Which isn't, wasn't, nor will ever be true.






> What planet are you living on?


Not sure.





> Not going to happen.  It would CRUSH the Federal Government.  And no, a small figure won't work, it would have to go up to AT LEAST 5% to beat real inflation, and should lending resume and/or should there be a run on the dollar at any point then you will have to raise it to 10, then 20, then 30%.  Gold actually increased in value as they raised rates until they finally increased them well above the inflation rate.


The perception of a tight monetary policy is just as good as tight monetary policy.






> And what do you think monetization of 13+trillion dollars of debt is going to do the dollar?  This is exactly what is going to happen in the end.  If you think this is going to happen, then you shouldn't be in anything except for PMs!


Well, it's going to devalue it.  But that's better than spending a few hundred billion every year in interest payments overseas.  And no, then I shouldn't be investing in anything that won't appreciate.  Businesses can appreciate due to inflation.




> Your memory must be going.  Perhaps the drool is blocking your oxygen supply.  I never said that.  But you are wrong there as well.  Gold is only highly volatile when you include the big drop in the 80's, which occurred as a result of a one time rescue by Volcker, something that CAN NOT BE REPEATED DUE TO THE MASSIVE NATIONAL DEBT.  You also fail to recognize that the conditions match those of Weimar Germany in the year leading up to their famous currency collapse, except that we don't have an industrial economy any more (welfare state, increasing government spending, and a massive, unpayable debt).


Excuses, excuses.  That one time move wasn't nearly as damaging to stocks as it was gold.

So, then, can I say that stocks are deflation resistant?  I want to make excuses too!






> I very seriously doubt that.  You might be able to afford a stick of gum, or maybe a whole pack if you get lucky in the stock market, but a casket will be out of your reach if you continue on the path of paper without any security.  5% in physical PMs in your possession will ensure your survival, at least.


Paper has done quite well for me in the past 7-8 years.  I'm still able to use it at the store, it's still the medium of exchange, and unlike you goldbugs, I'm fairly confident its reign as a medium of exchange will only continue.  Sure, maybe it might lose a little value due to inflation, but that's why nearly all of my net worth is invested, to pick up the pieces as they break off each dollar over time.  Just as the markets have worked for quite a long time.

----------


## Jordan

> I just noticed this gem.  You can't roll it over if there aren't any buyers.  Any given contract is for delivery at a certain date.  If you possess the contract past that date, you have to take delivery.  The contract disappears.


Mmmmmmkkay.  So, once that contract expires you can't make a new one?




> You are so used to "trading" that you can't even see the real function of the market anymore.  You can't see that it is dysfunctional.  You can't see the forest for the trees here.  And you have totally missed the forest fire, having convinced yourself that the raging flames and chocking smoke are a normal part of market operations.


You're so used to conspiracy theories and the drivel at ZeroHedge you've lost view of reality.  Oh how attacks solve nothing.




> Enjoy these markets, they'll be your funeral pyre one day, and soon.


Why are you so obsessed with death?

----------


## tmosley

Look, Jordan, I'm not going to dissect your posts anymore.  You've shown that you have no sense.  I don't need to raise my blood pressure by arguing with someone so emotionally committed to hating gold.  I can only hope that people read this thread, and realize that your arguments make no sense, and preserve their wealth and their lives with gold and silver.

The bubble is clearly in Treasuries, which are now at their maximum possible price, even as the government spirals into debt oblivion, not gold, which is at 1/3rd its high inflation adjusted, and is trading at 40% off compared to nations in turmoil (Greece, Vietnam).  When the treasury bubble pops, it's going to take all US paper, including the currency with it.  All of your investments will be wiped out in an instant.  If you don't want to believe it, as a man who walks out into where the ocean used to be refuses to believe that a great wave will come and sweep him into the jagged rocks, that is your business.  You should take that $#@! elsewhere though, because you are going to leave everyone who follows your advice utterly impoverished.  You asked why I'm obsessed with death--it's because early death is the result of poverty.

----------


## Jordan

> Look, Jordan, I'm not going to dissect your posts anymore.  You've shown that you have no sense.


Keep attacking.




> I don't need to raise my blood pressure by arguing with someone so emotionally committed to hating gold.


I don't need to raise my blood pressure with someone so emotionally invested in gold.




> I can only hope that people read this thread, and realize that your arguments make no sense, and preserve their wealth and their lives with gold and silver.


I can only hope that people read this thread, and realize that your arguments make no sense, and grow their wealth and their lives with proper investments.




> The bubble is clearly in Treasuries, which are now at their maximum possible price, even as the government spirals into debt oblivion


Don't disagree.  So why aren't you shorting treasuries?




> , not gold, which is at 1/3rd its high inflation adjusted, and is trading at 40% off compared to nations in turmoil (Greece, Vietnam).


Goldline has gold marked up 90%.  Do they know something we dont?




> When the treasury bubble pops, it's going to take all US paper, including the currency with it.  All of your investments will be wiped out in an instant.  If you don't want to believe it, as a man who walks out into where the ocean used to be refuses to believe that a great wave will come and sweep him into the jagged rocks, that is your business.  You should take that $#@! elsewhere though, because you are going to leave everyone who follows your advice utterly impoverished.  You asked why I'm obsessed with death--it's because early death is the result of poverty.


Your advice is to sit in imetals that track inflation.  My advice is to grow some balls and invest in something that beats inflation.  I don't hate gold miners, leveraged gold, or other products.  Just plain, old, overpriced, overtaxed, gold.

I don't know very many people who save enough to retire.  And that's what gold is.  You're not investing, you're tracking. You're not gaining, you're just not losing.

I don't like to just avoid a loss, I'd rather win.  But to each their own.

----------


## YumYum

One thing that is missing in this discussion is the interest rates. What will happen to gold when interest rates go up?

We haven't even begun to see a bubble in the dollar, compared to where the dollar will go once interest rates go up.

The dollar is worthless right now, and yet that lady down the street at the convenience store keeps taking my worthless dollars.

----------


## ctiger2

> Don't disagree. So why aren't you shorting treasuries?
> 
> Goldline has gold marked up 90%.  Do they know something we don't?


1. Owning Gold is equivalent to shorting treasuries. 
2. Goldline is a business that preys on ignorance. Many do.

----------


## Jordan

> 1. Owning Gold is equivalent to shorting treasuries.


Not true.  Gold is up, treasuries are up.  And even when they are the "equivalent" there isn't that strong of a correlation.




> 2. Goldline is a business that preys on ignorance. Many do.


Tmosley said this:

not gold, which is at 1/3rd its high inflation adjusted, *and is trading at 40% off compared to nations in turmoil (Greece, Vietnam).*

As if that was any indicator of what current market price should be.  I'm just asking if since Goldline charges 90% premiums, then shouldn't gold's market price be 90% higher?

----------


## ctiger2

> Not true.  Gold is up, treasuries are up.  And even when they are the "equivalent" there isn't that strong of a correlation.
> 
> Tmosley said this:
> 
> not gold, which is at 1/3rd its high inflation adjusted, *and is trading at 40% off compared to nations in turmoil (Greece, Vietnam).*
> 
> As if that was any indicator of what current market price should be.  I'm just asking if since Goldline charges 90% premiums, then shouldn't gold's market price be 90% higher?


I guess I was thinking _end game_ for Gold VS Treasuries. Sure, both will go up and down but I don't trade so it doesn't matter to me. I haven't followed this thread to see what other have said. Sure, physical Gold bullion is selling for a premium in other countries but Goldline is pushing high margin collectible numismatic coins to ignorant people.

Schiff talks about Goldline here:

YouTube - Peter Schiff: Glenn Beck Doesn't Know That GOLDLINE Is Ripping People Off!

----------


## tmosley

> I don't need to raise my blood pressure with someone so emotionally invested in gold.


I am not emotionally invested in gold, I simply recognize that the system is crumbling.  The best way to avoid watching my investments crumble is to purchase things that can not be easily reproduced.




> Don't disagree.  So why aren't you shorting treasuries?


In what?  Dollars?  You can't short anything in a medium that is being printed like there is no tomorrow and expect to come out ahead.  If our government wasn't interventionist, then shorting treasuries might be viable.  As it is, the Fed is buying them with freshly minted dollars through foreign intermediaries.  They wil destroy the currency before they let the price come down.  They are 100x more committed to this bubble than to the housing bubble.




> Goldline has gold marked up 90%.  Do they know something we dont?


No, they don't.  They sell both reasonably pried bullion and overpriced crap.  In addition, Goldline is a retailer, not a market.  Greece as a whole is a market.  I don't know how you can claim to be some sort of financial professional yet not be able to see that.  But then, you're well past the point of making real arguments, and are insead focused only on tearing down gold.




> Your advice is to sit in imetals that track inflation.  My advice is to grow some balls and invest in something that beats inflation.  I don't hate gold miners, leveraged gold, or other products.  Just plain, old, overpriced, overtaxed, gold.


You might recall that I said that gold has kicked the crap out of inflation over the last ten years, and will continue to do so.  I explained why this is the case (ie gold is a small market, with a market cap smaller than many individual stocks on the S&P, and as more people began pouring in, pushing the market cap upto the level where the sector becomes competative with other sectors, the relative shares of those who got in early will become enormous, just like those who came in and bought up land in Southern California in the 1890's--an idea you scoffed at).  Playing with leverage is fine, except that you can get wiped out by short term manipulation, which is RAMPANT throughout every portion of the market.  What are you going to do during a banking holiday, or when the miners are hit with windfall profits taxes?




> I don't know very many people who save enough to retire.  And that's what gold is.  You're not investing, you're tracking. You're not gaining, you're just not losing.


Again, you show your profound ignorance on the subject.




> I don't like to just avoid a loss, I'd rather win.  But to each their own.


Well, enjoy your "win".  I hope you make a hundred trillion dollar bill.

----------


## tmosley

> Tmosley said this:
> 
> not gold, which is at 1/3rd its high inflation adjusted, *and is trading at 40% off compared to nations in turmoil (Greece, Vietnam).*
> 
> As if that was any indicator of what current market price should be.  I'm just asking if since Goldline charges 90% premiums, then shouldn't gold's market price be 90% higher?


"It can't happen here."

----------


## Jordan

> I guess I was thinking _end game_ for Gold VS Treasuries. Sure, both will go up and down but I don't trade so it doesn't matter to me. I haven't followed this thread to see what other have said. Sure, physical Gold bullion is selling for a premium in other countries but Goldline is pushing high margin collectible numismatic coins to ignorant people.
> 
> Schiff talks about Goldline here:
> 
> YouTube - Peter Schiff: Glenn Beck Doesn't Know That GOLDLINE Is Ripping People Off!


Well aren't the Greeks then equally ignorant seeing as they could buy gold online and have it shipped directly to them for far less than they're paying in Greece?

----------


## Jordan

> I am not emotionally invested in gold, I simply recognize that the system is crumbling.  The best way to avoid watching my investments crumble is to purchase things that can not be easily reproduced.


Ok.





> In what?  Dollars?  You can't short anything in a medium that is being printed like there is no tomorrow and expect to come out ahead.  If our government wasn't interventionist, then shorting treasuries might be viable.  As it is, the Fed is buying them with freshly minted dollars through foreign intermediaries.  They wil destroy the currency before they let the price come down.  They are 100x more committed to this bubble than to the housing bubble.


That may be true, too.  However, the Fed has stopped QE, so most of the demand is coming from people who want treasuries.  Of course, goldbugs can't fathom why people would actually want to own treasuries.





> No, they don't.  They sell both reasonably pried bullion and overpriced crap.  In addition, Goldline is a retailer, not a market.  Greece as a whole is a market.  I don't know how you can claim to be some sort of financial professional yet not be able to see that.  But then, you're well past the point of making real arguments, and are insead focused only on tearing down gold.


I bet Goldline services as many clients as the whole Greek "market." 

From what I've read, owning the coins that they are buying and selling is illegal.  Does that not add at least something to the cost?  

Also, I never claimed to be a professional, and neither did you.  I suppose I am an "investing professional" at least in some sense of the word, since I earn all of my income from my investments and businesses I own.   At any rate, I think it was your "professional" advice that said the Dow was going to 3000 repeatedly after the financial crisis.  That's pretty crazy.

I don't care to tear down gold either.  It has nothing to do with gold, it just has to do with terrible investing strategy.  Tracking inflation gets you nowhere.





> You might recall that I said that gold has kicked the crap out of inflation over the last ten years, and will continue to do so.


Even after "kicking the crap out of inflation" for the past 10 years gold is still right in line with inflation throughout history.  Returns that equal inflation are no returns at all.





> I explained why this is the case (ie gold is a small market, with a market cap smaller than many individual stocks on the S&P, and as more people began pouring in, pushing the market cap upto the level where the sector becomes competative with other sectors, the relative shares of those who got in early will become enormous, just like those who came in and bought up land in Southern California in the 1890's--an idea you scoffed at).


Gold is a small market.  And is worth less than most individual stocks, because individual stocks are partially priced to future projections.  Again, businesses produce income, they aren't speculative.  Gold is speculative, since its value is dependent only on what someone is willing to pay.

Stocks are too, in some cases, but I'm sure anyone will be willing to buy Walmart at 3 times yearly earnings.  You can't say that for gold.  Gold's value is dependent on actual uses in production of electronics, as well as the amount of fear in the financial markets.  If gold exceeds its worth as "value-added" in production, it is bubbling due to speculation.




> Playing with leverage is fine, except that you can get wiped out by short term manipulation, which is RAMPANT throughout every portion of the market.  What are you going to do during a banking holiday, or when the miners are hit with windfall profits taxes?


You don't have to use 50:1 leverage, not even 5:1.  At 3:1 you are exceeding inflation by a factor of 2, earning you actual returns rather than just tracking inflation.





> Again, you show your profound ignorance on the subject.


No, I'm not.  Most people don't save in vehicles that track inflation in the hopes of actually improving their standard of living.  If I have $1000 in purchasing power now, and then $1000 in purchasing power later, what have I gained?




> Well, enjoy your "win".  I hope you make a hundred trillion dollar bill.


Silly.

----------


## qh4dotcom

So if gold is no good how come people have trusted gold for thousands of years then? How come the founders trusted it to be the constitutional money of this country?

----------


## JosephTheLibertarian

> Warren Buffett put it well. "Gold gets dug out of the ground in Africa, or someplace," he said. "Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head."


Well I'm not going to take advice from someone that believes there's advanced life on mars!!

----------


## YumYum

> So if gold is no good how come people have trusted gold for thousands of years then? How come the founders trusted it to be the constitutional money of this country?


It isn't that gold is no good, the problem that the goldbugs don't get is that gold is not a medium of exchange in the world. What Jordan is pointing out is that there is substantial risk when you chase gold to counter inflation. You wanna make money? There are lots of ways to make lots of money that don't involve gold. tmosley was spot on about food. Guess what? I listened to his advice and I'm going to get rich in farming. But, if you are worried about Armageddon, then you need to buy lots of gold.

----------


## Jordan

> So if gold is no good how come people have trusted gold for thousands of years then?


I don't have anything against gold.  Really, I don't.  Not a single problem with it.

But the simple fact is that through history it has only tracked the change in inflation, which doesn't provide for any gain.  Again, if I have $1000 of purchasing power now, and $1000 of purchasing power in the future, I have gained nothing.




> How come the founders trusted it to be the constitutional money of this country?


Turn gold into money, it really doesn't matter to me.

My point is that gold has proven to be more volatile (more risk) while providing far less returns than even the "risky" and "manipulated" stock market.  

Gold isn't an investment.  It is a hedge.

----------


## YumYum

> I don't have anything against gold.  Really, I don't.  Not a single problem with it.
> 
> But the simple fact is that through history it has only tracked the change in inflation, which doesn't provide for any gain.  Again, if I have $1000 of purchasing power now, and $1000 of purchasing power in the future, I have gained nothing.
> 
> 
> 
> Turn gold into money, it really doesn't matter to me.
> 
> My point is that gold has proven to be more volatile (more risk) while providing far less returns than even the "risky" and "manipulated" stock market.  
> ...


That's all you had to say from the very beginning. Everybody knows its a hedge. I just can't take the name calling anymore from tmosley. I have a hundred thousand dollars that I will bet him that the dollar will go up. Wanna make some money?

----------


## tmosley

> I don't have anything against gold.  Really, I don't.  Not a single problem with it.
> 
> But the simple fact is that through history it has only tracked the change in inflation, which doesn't provide for any gain.  Again, if I have $1000 of purchasing power now, and $1000 of purchasing power in the future, I have gained nothing.
> 
> 
> 
> Turn gold into money, it really doesn't matter to me.
> 
> My point is that gold has proven to be more volatile (more risk) while providing far less returns than even the "risky" and "manipulated" stock market.  
> ...


The thing is, throughout history, we've been on a gold standard, so there was enormous demand for gold.  Currently, we are not, so there is very little demand for gold.  Eventually, the fiat system will collapse, and demand for gold will skyrocket, right back to gold standard levels.

But if you don't want to buy, I won't try to convince you.  I'm done trying to argue with anti-gold trolls on the internet.  You guys can ALL die, for all I care.  Starve to death, even.  I'll not give a silver nickel to save a one of you.

----------


## JosephTheLibertarian

Answer me this: would you rather have a million in gold bricks or a million in cash?

The gold will always retain its value. The cash loses 4% [average] a year, maybe moreso these days..hedge, yes. but isnt a hedge considered an investment? stocks fluctuate, no? so does gold, but it will never become worthless like paper

----------


## rockandrollsouls

I don't like gold for a number of reasons. That's not to say I don't think it's inherently valuable, but I believe one must think like the thieves and criminals to find a proper investment.

First and foremost, you're not going to make a huge return with any metal. Secondly, no matter ho bad the fundamentals are, the dollar will never collapse. Finally, the money makers in the stock market will always have their say. Do you really think Goldman is ever going to go bankrupt, or any of the other corporations connected to them or the government? Not a chance. I wish someone would do a study on how successful any company related to Goldman is....

There are a few ways to make money with corruption and manipulation so rampant. Follow the thieves, or find an investment vehicle that's largely free from manipulation.

----------


## Bruno

> I don't like gold for a number of reasons. That's not to say I don't think it's inherently valuable, but I believe one must think like the thieves and criminals to find a proper investment.
> 
> First and foremost, you're not going to make a huge return with any metal. Secondly, no matter ho bad the fundamentals are, *the dollar will never collapse.* Finally, the money makers in the stock market will always have their say. Do you really think Goldman is ever going to go bankrupt, or any of the other corporations connected to them or the government? Not a chance. I wish someone would do a study on how successful any company related to Goldman is....
> 
> There are a few ways to make money with corruption and manipulation so rampant. Follow the thieves, or find an investment vehicle that's largely free from manipulation.


Wow.  Sure hope you're right there.   No fiat money is safe from collapse.

----------


## Jordan

> The thing is, throughout history, we've been on a gold standard, so there was enormous demand for gold.  Currently, we are not, so there is very little demand for gold.  Eventually, the fiat system will collapse, and demand for gold will skyrocket, right back to gold standard levels.


So you're saying that it should be obvious that following a dollar crisis, hyperinflation, or whatever scare tactic you're using for the day, that metals will be the new currency and paper (fiat) money won't?





> But if you don't want to buy, I won't try to convince you.  I'm done trying to argue with anti-gold trolls on the internet.  You guys can ALL die, for all I care.  Starve to death, even.  I'll not give a silver nickel to save a one of you.


I'm not an anti-gold troll.  I thought it was a good investment a decade ago, now it has caught up to where it should be and we should expect little more than returns that track inflation.

Also, you talk about death too much.

----------


## tmosley

> I don't like gold for a number of reasons. That's not to say I don't think it's inherently valuable, but I believe one must think like the thieves and criminals to find a proper investment.
> 
> First and foremost, you're not going to make a huge return with any metal. Secondly, no matter ho bad the fundamentals are, the dollar will never collapse. Finally, the money makers in the stock market will always have their say. Do you really think Goldman is ever going to go bankrupt, or any of the other corporations connected to them or the government? Not a chance. I wish someone would do a study on how successful any company related to Goldman is....
> 
> There are a few ways to make money with corruption and manipulation so rampant. Follow the thieves, or find an investment vehicle that's largely free from manipulation.


lol, good luck with that investment thesis.  "It can never happen here" (as in a dollar collapse) is not a good way to invest. 

A better way to invest is to find those areas that are being manipulated downward, and buy them up.  Going short is foolhardy, as they can print an infinite amount of money.  Buying those things which are price suppressed, on the other hand, will yield superior results in the long run.  Precious metals are one such sector.

Or you can do whatever you want to.  I don't care.  More for me.  I no longer care when the dishonest go penniless to their miserable deaths.  I have to thank YumYum, and all the other foolish anti-gold trolls with whom I have struggled for years to reach for teaching me that.  Never try to help a fool.  Better just to let Darwin do his work, and let them die in a ditch when the time comes.

----------


## Danke

> 


Gold has been such a terrible investment for me...

----------


## Zippyjuan

I bought during the 1980 bubble because people said it would continue to go higher. "Gold will go to $2000. Gold is heading to $5000.  Gold will soar to $10,000- you can't lose!"  Well, you can.   I have not done well with gold. Paid $650 for one ounce then and $700 for another.   Adjusted for inflation, I am still losing money on that.  I have seen stock and housing bubbles since.  These make me highly skeptical of "can't lose" investments.   That said, most of my money is in stocks and housing (paying off my home- should have that done in about two and a half years). I do still have the gold I bought then but do not intend to buy more.  That is my own personal investment opinion.  Everybody else will have their own. We won't know who "wins" until we are dead.

----------


## ctiger2

> I bought during the 1980 bubble because people said it would continue to go higher. "Gold will go to $2000. Gold is heading to $5000.  Gold will soar to $10,000- you can't lose!"  Well, you can.   I have not done well with gold. Paid $650 for one ounce then and $700 for another.   Adjusted for inflation, I am still losing money on that.


Well, it looks like you bought in at the tail end of the Bull market and held into the Bear market and all through the Bear market. We've been in a Bull market since 2000 and they say it has 5-10 yrs left to go.

----------


## Danke

> 


I'm losing my shirt!!!

----------


## jclay2

> lol, good luck with that investment thesis.  "It can never happen here" (as in a dollar collapse) is not a good way to invest. 
> 
> A better way to invest is to find those areas that are being manipulated downward, and buy them up.  Going short is foolhardy, as they can print an infinite amount of money.  Buying those things which are price suppressed, on the other hand, will yield superior results in the long run.  Precious metals are one such sector.
> 
> Or you can do whatever you want to.  I don't care.  More for me.  I no longer care when the dishonest go penniless to their miserable deaths.  I have to thank YumYum, and all the other foolish anti-gold trolls with whom I have struggled for years to reach for teaching me that.  Never try to help a fool.  Better just to let Darwin do his work, and let them die in a ditch when the time comes.


Nice tmosley. I like your posts on zerohedge as well. I rarely post on there (mostly read), but if you look for AndrewJackson thats me.

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## Stary Hickory

For Gold to go down the Central Banks of the world and the governments would have to show REAL(believable) resolve to stop printing and take severe austerity measures. There is no way they will reverse what they are doing.

The bear market did not just happen it was a result of high interest rates and a determined Paul Volcker to reign in inflation. Until i see someone come along who will do just that it's pointless to worry about the price of gold.

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## jclay2

> For Gold to go down the Central Banks of the world and the governments would have to show REAL(believable) resolve to stop printing and take severe austerity measures. There is no way they will reverse what they are doing.
> 
> The bear market did not just happen it was a result of high interest rates and a determined Paul Volcker to reign in inflation. Until i see someone come along who will do just that it's pointless to worry about the price of gold.


And the problem is, this ponzi scheme is well beyond the point of saving. Ironically, outright default of debt would be the best thing for the dollar.

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## AmericasLastHope

Let's see gold was $1200 when this thread was made, now it's pushing $1400.  I trust gold a helluva lot more than US dollar.

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## Sonny Burnett

> As for being a "store of value," anyone who bought gold in the late 1970s and held on lost nearly all their purchasing power over the next 20 years.


Anyone who has invested in U.S. bonds in the last 20 years has lost purchasing power.   The price of gold never changes it is the metric that you are measuring it by that does.

I guess that if you invested in tech stock funds in the late 90's and held on to them until 2002 that you would have been better off than buying gold.  Warren is a myth whose time has passed.

The one sure thing that you can count on is that the U.S. Government will screw everything up as they always do.  That is called having common sense.

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## legion

I would say Buffet's purchase of an entire railroad would be a far better bet than gold, for whatever you gold bugs are anticipating happening.

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## Bruno

> I would say Buffet's purchase of an entire railroad would be a far better bet than gold, for whatever you gold bugs are anticipating happening.


lol.  You would have likely said the same thing back 2 years ago when gold was at $700.  What happened?  We're at nearly $1400 now.

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## Sonny Burnett

> I would say Buffet's purchase of an entire railroad would be a far better bet than gold, for whatever you gold bugs are anticipating happening.


What is going to happen is right in plain sight and the majority of people still can't see it.

The U.S. doesn't have sound money, we have currency based on nothing except the worlds belief in our government.  We have run up a massive amount of debt to foreign nations that in reality we can't service.  We keep borrowing to pay off what we owe, just like a ponzi scheme.  The rest of the world squanders their savings to support our country of 300 million over consumers.  Too make it even worse our central banker has publicly stated that he is going to once again expand the money supply to purchase more government debt.  The more you have of anything the less that it is worth aka: inflation.

What is going to happen when the rest of the world wakes up to our game and publicly states that they know that there is no way that the U.S. can pay them back and also stop buying our treasuries?  The Federal Reserve and its' printing press will step up and buy everything by continuing the expansion of the money supply and that is when it will all unravel.

We have lived beyond our means for way too long at the expense of the rest of the world and it is coming to an end right before our eyes.  Since the dollar is losing value all commodities are going up not just precious metals.  Look at corn up around 60% over the last three months.

I am sure that something else will happen that will cause another temporary dollar rally and a gold pull back and it may happen more than once but the age of American economic dominance is passing right before our eyes.  I am looking for the dollar to be trading in the 40's before the next presidential election and gold to be around the $3,000.00 mark at a minimum at that time as well.  Who knows it may take 4 or 5 years to get there instead of 2 but based on our government's poor monetary policy and total lack of understanding of basic economic principals there is no way that they will change their current direction and try to head this off.  Why?  because they would have to get the public to accept a much lower standard of living than they are used to for a prolonged period of time.  It just isn't going to happen and we are screwed.

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## JoshLowry

> lol.  You would have likely said the same thing back 2 years ago when gold was at $700.  What happened?  We're at nearly $1400 now.


Zing.

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## Petar

I don't trust gold either.

I keep getting this weird feeling that the Federal Reserve is just going to print up tons of it, and not allow us to use anything other than it as money.

Oh well, at least I'm trading my gold for these really rare pieces of colored paper, while the getting is still good...

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## Danke

> 


Help me!

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## TomtheTinker

I think Warren misses the point of why gold is valuable...

a couple things that come to mind are 

1-Gold is money..!..ok Warren

2- The fact that gold has no other use besides its use as money.. is the same fact that makes is a fair measuring stick over time when trying to figure the value of other goods.

That is why you can't use bags of rice or bottled water..the supply of these goods vary to often making them to unstable to use as money over the long term.

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## enoch150

> Warren Buffett put it well. "Gold gets dug out of the ground in Africa, or someplace," he said. "Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head."


Total lies, falsehoods, innuendo, and misdirection of the worst sort. Everyone knows Martians are economically and historically illiterate. But Sumerian records make absolutely clear that the Anunnaki (from the planet Nibiru), came to earth specifically looking for gold to mine. The Anunnaki genetically engineered humans to work for them, so you might say that seeking out gold is hard wired into our DNA. SOME aliens know exactly why we pay people to stand around guarding gold. 

Warren Buffett blatantly lied about both gold and aliens and therefore, all of his statements on every other topic are also called into question.

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## redbluepill

> http://finance.yahoo.com/banking-bud...&asset=&ccode=
> 
> Some gems here...
> 
> Warren Buffett put it well. "Gold gets dug out of the ground in Africa, or someplace," he said. "Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head."
> 
> It's a currency "substitute," but it's useless. In prison, at least, they use cigarettes: If all else fails, they can smoke them. Imagine a bunch of health nuts in a nonsmoking "facility" still trying to settle their debts with cigarettes. That's gold. It doesn't make sense.
> 
> Yes, it's a "hard asset," but so are lots of other thingslike land, bags of rice, even bottled water
> ...


To a point I agree. But I wonder if Buffett would say the same thing about a paper dollar...

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## Seraphim

Yeah exactly. 

I've seen Jordan argue a lot of points against gold - I think he isn't grasping that most of the precious metals enthusiasts around these parts merely express their monetary valuations IN GOLD/SILVER.

No different then he does in USD. That's fine...Don't trust gold as money. I'll continue not trusting the USD as money. 

Danke's graph of the 10 year gold chart (international money) and the 10 year S&P 500 chart (which is an expression of the productive value of the banks and major corporations that have centered their power around the USD) tell a rather convincing story.






> To a point I agree. But I wonder if Buffett would say the same thing about a paper dollar...

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## Seraphim

Post 138 by Danke.





> Help me!

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## JasonC

> Total lies, falsehoods, innuendo, and misdirection of the worst sort. Everyone knows Martians are economically and historically illiterate. But Sumerian records make absolutely clear that the Anunnaki (from the planet Nibiru), came to earth specifically looking for gold to mine. The Anunnaki genetically engineered humans to work for them, so you might say that seeking out gold is hard wired into our DNA. SOME aliens know exactly why we pay people to stand around guarding gold. 
> 
> Warren Buffett blatantly lied about both gold and aliens and therefore, all of his statements on every other topic are also called into question.

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## Warrior_of_Freedom

What does it matter if your gold is worth 3x as much if everything costs 3x as much to buy?

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## Diurdi

> What does it matter if your gold is worth 3x as much if everything costs 3x as much to buy?


 If the alternative is that you hold Federal Reserve notes that are worthless, then it does matter.

P.S. Gold $1616

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## Godisnowhere

The finest furnishings in billionaires jets are covered with Gold. Wedding Rings are Gold and the most treasured memorial to a human being union. I could go on and on. Gold has been money for a long time and has great value for many things. Granted Silver is better from my view because it is a money metal and is used in every single computer, cell phone, solar device, ... But to say Gold is useless other than money is a completely ignorant statement. However, Silver is the better deal folks. And the alternative to Gold and Silver, the US dollar or the Euro, real estate, stocks all based on fiat currencies is not a smart bet now. But if you really think Gold is useless just buy some T-bills and wait until they make you some real money. You will be in for a long wait.

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## hazek

To the moon!:

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## Sola_Fide

http://mises.org/books/Gold_is_Money_Sennholz.pdf

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## inibo

> Total lies, falsehoods, innuendo, and misdirection of the worst sort. Everyone knows Martians are economically and historically illiterate. But Sumerian records make absolutely clear that the Anunnaki (from the planet Nibiru), came to earth specifically looking for gold to mine. The Anunnaki genetically engineered humans to work for them, so you might say that seeking out gold is hard wired into our DNA. SOME aliens know exactly why we pay people to stand around guarding gold. 
> 
> Warren Buffett blatantly lied about both gold and aliens and therefore, all of his statements on every other topic are also called into question.



I'm glad _someone_ else gets it.   

*Anunnaki!*

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## LibertyEagle

> Total lies, falsehoods, innuendo, and misdirection of the worst sort. Everyone knows Martians are economically and historically illiterate. But Sumerian records make absolutely clear that the Anunnaki (from the planet Nibiru), came to earth specifically looking for gold to mine. The Anunnaki genetically engineered humans to work for them, so you might say that seeking out gold is hard wired into our DNA. SOME aliens know exactly why we pay people to stand around guarding gold. 
> 
> Warren Buffett blatantly lied about both gold and aliens and therefore, all of his statements on every other topic are also called into question.


Uh, what???

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## JasonC

> Uh, what???


That's what I said... lulz.

Care to elaborate, enoch?

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## Bern

> ... Everyone knows Martians are economically and historically illiterate. But ...


Hmm... Your ideas are intriguing to me and I would like to subscribe to your newsletter.

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## enoch150

> Care to elaborate, enoch?


Just something I read once, back when everyone was still using dial-up.

http://en.wikipedia.org/wiki/Ancient...charia_Sitchin

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## inibo

It's in our DNA.  That's bullish.

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## Jeez

> The finest furnishings in billionaires jets are covered with Gold. Wedding Rings are Gold and the most treasured memorial to a human being union. I could go on and on. Gold has been money for a long time and has great value for many things. Granted Silver is better from my view because it is a money metal and is used in every single computer, cell phone, solar device, ... But to say Gold is useless other than money is a completely ignorant statement. However, Silver is the better deal folks. And the alternative to Gold and Silver, the US dollar or the Euro, real estate, stocks all based on fiat currencies is not a smart bet now. But if you really think Gold is useless just buy some T-bills and wait until they make you some real money. You will be in for a long wait.


 Since silver is industrial metal if this demand plunges (global recession) so will its value. Hence you can't use silver has hedge against economic instability.

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## JackieDan

I don't agree with Warren buffet. Gold must be attached to money because if not then governments can create inflation that drives prices up and distorts the market and it leads to an inevitable recession. We have to use gold to make sure our prices and purchasing power stand strong and even so that it does not benefit one group or another. This is the problem with paper money as it does not function as a preserver of value, but instead diminishes. He has a point, but he gives you the illusion to simply deny that gold has no value, it has value because it has been used as money for 6,000 years, and its value has always been the same. Gold is an interesting metal too. It never corrodes, it leads electricity better than copper and other metals (except for silver), but we use copper because it's cheaper. 

Anyways, this is why we must use hard assets attached our money so that governments and central banks cannot print money out of thin air and bailout their friends just because they have a printing machine. They would never be able to do this if gold was there to face up to them. This is why Gold saves us from economic insanity as it ensures value. We need value so that we can save, and provide for ourselves and future generations.

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## Acala

> Since silver is industrial metal if this demand plunges (global recession) so will its value. Hence you can't use silver has hedge against economic instability.


Except that silver is not ONLY an industrial metal.  It is also a monetary metal and has been for thousands of years.  A global collapse is likely to be precipitated by a paper currency collapse.  As the supply of trustworthy paper currency falls dramatically, the demand for HISTORICALLY trustworthy metallic currency goes through the roof while supply remains stable.  Rising demand and stable supply.  Voila!

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## libertyjam

> http://finance.yahoo.com/banking-bud...&asset=&ccode=
> 
> Some gems here...
> 
> Warren Buffett put it well. "Gold gets dug out of the ground in Africa, or someplace," he said. "Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head."
> 
> It's a currency "substitute," but it's useless. In prison, at least, they use cigarettes: If all else fails, they can smoke them. Imagine a bunch of health nuts in a nonsmoking "facility" still trying to settle their debts with cigarettes. That's gold. It doesn't make sense.
> 
> Yes, it's a "hard asset," but so are lots of other thingslike land, bags of rice, even bottled water
> ...


I'm sorry but gold has immense industrial value and use, just the rarity and expense of alone, like with platinum, make other alternatives frequently more attractive.

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## junkmonkey

> http://finance.yahoo.com/banking-bud...&asset=&ccode=
> 
> Some gems here...
> 
> Warren Buffett put it well. "Gold gets dug out of the ground in Africa, or someplace," he said. "Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head."


Humans havent lost interest in gold in 5000 years. For some reason we have a natural attraction to it. Maybe its proof of God and God wanted us to have a stable currency form.

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## richgrise

It's simple. Its intrinsic value is in the fact that people will trade goods and services for a few pieces of it.

Yes, it's really that simple.

It's called the FREE MARKET!!!!!!!

Hope This Helps!
:collins:

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