A question about Gold

[Zeeder]

I've been buying some silver and gold for months now, but after looking at historic price charts it looks like Gold has actually gone down in value for the last 30 years.

It is only now matching the 1983 price. So, if you bought gold in the early 80's, you actually lost value factoring inflation. You can buy less with gold now than you could then. 800 dollars bought a whole lot more than it did now.

I do understand having gold and silver if the dollar tanks completely. But if it doesn't aren't we just wasting a lot of money? Isn't the only scenerio in which gold hold's it's value, this one for as long as it lasts?

 

[TruthisTreason]

Don't buy into bubbles. What was the price of gold 40 years ago? What about if you bought into GOLD in 1999?

 

[ILUVRP]

In the early 80's the gold move was a phony rally.

Gold was really only going along with the Silver move because Bunker Hunt , an Arab and someone in South Amer trying to corner the Silver market.

The COMEX changed the margin req and limited the number of contracts a non-headger could hold, the were forced out .

This GOLD market is much different.

This move in GOLD is for real.

The price of GOLD never changes.

The only thing that changes is how many pieces of paper it takes to buy GOLD.

 

[Zeeder]

Thank you for your responses.

 

[tmosley]

Actually, I think that the price of gold shot up due to problems with the dollar, which had recently finished detaching itself from gold. Monetary policy was going wild at the time. The gold price crashed because Volcker (Fed Chairman at the time) put a stop to stagflation by raising interest rates. By doing that, he restored confidence in the dollar.

Of course, his actions, combined with the deficit spending of the Carter and Reagan administrations, just kicked the can down the road a bit. Volcker was probably the closest thing to a "good" Fed chairman as you can get. In a vacuum (ie minus massive government borrowing), his policies likely would have kept the dollar running for hundreds of years.

 

[hugolp]

Actually, I think that the price of gold shot up due to problems with the dollar, which had recently finished detaching itself from gold. Monetary policy was going wild at the time. The gold price crashed because Volcker (Fed Chairman at the time) put a stop to stagflation by raising interest rates. By doing that, he restored confidence in the dollar.

Of course, his actions, combined with the deficit spending of the Carter and Reagan administrations, just kicked the can down the road a bit. Volcker was probably the closest thing to a "good" Fed chairman as you can get. In a vacuum (ie minus massive government borrowing), his policies likely would have kept the dollar running for hundreds of years.

I agree. Volcker was key to restoring the faith in the paper dollar. But I dont think the same solution (raising the interest rates) could be aplied now. USA has too much debt for that.

Hugo

 

[AmericasLastHope]

I've been buying some silver and gold for months now, but after looking at historic price charts it looks like Gold has actually gone down in value for the last 30 years.

It is only now matching the 1983 price. So, if you bought gold in the early 80's, you actually lost value factoring inflation. You can buy less with gold now than you could then. 800 dollars bought a whole lot more than it did now.

I do understand having gold and silver if the dollar tanks completely. But if it doesn't aren't we just wasting a lot of money? Isn't the only scenerio in which gold hold's it's value, this one for as long as it lasts?

See: http://www.ronpaulforums.com/showthread.php?t=161533

 

[tmosley]

I agree. Volcker was key to restoring the faith in the paper dollar. But I dont think the same solution (raising the interest rates) could be aplied now. USA has too much debt for that.

Hugo

Definitely. Raising rates now would force them to either monetize the interest payments, or raise the tax burden to unreasonable levels (think 75% of your income going to taxes, up to 90% for the richest people). It would sink the nation like a stone.