Ditch Gold & Silver as an investment

[PaulConventionWV]

Why not just keep gold and silver as a small percentage of your portfolio? say 5-10%

That's okay if you feel like it's worth it to put 5-10% of your money into keeping value, as opposed to increasing it. The stock market is more likely to increase your net worth because it regularly beats inflation. If you feel you have enough money to put a significant amount of money into merely keeping value, that's your decision. However, 5-10% seems like a rather paltry number that wouldn't really pose as much of a hedge because, if you lost 90% of your wealth due to hyperinflation, it would still be completely devestating to you.

 

[PaulConventionWV]

My girlfriend is buying rental properties in MS, GA, and TN for nothing down and that all have net positive cash flows. The returns on investment are very very large. I mention it from time to time on the forums because it appears that quite a number of people are looking for investment opportunities. Very few seem interested, however. A nice fellow I used to work with is now in real estate and he walked my g/f through the process. He earns a small commission out of the deal. He would be happy to explain it to anyone who is interested.

Real estate investments can be quite lucrative. That's what I'm getting into now.

 

[P3ter_Griffin]

My girlfriend is buying rental properties in MS, GA, and TN for nothing down and that all have net positive cash flows. The returns on investment are very very large. I mention it from time to time on the forums because it appears that quite a number of people are looking for investment opportunities. Very few seem interested, however. A nice fellow I used to work with is now in real estate and he walked my g/f through the process. He earns a small commission out of the deal. He would be happy to explain it to anyone who is interested.

We haven't had the correction we need in housing. Fed still holds ~ $1 trillion in MBS, Fannie and Freddie are still operating, FHA is still backing new loans, etc etc. That said, rentals are the foundation of my investment plan, but I'd suggest paying in cash or staying away. That way even if market rates for rent drop enormously your not underwater and can afford to drop rent prices where they need to go. You miss out on mortgage interest deductions and the ability to use the capital elsewhere, but the increased cash flow makes a second fully paid for rental attainable in much shorter time. Tis my $.02 at least.

 

[LibForestPaul]

That's okay if you feel like it's worth it to put 5-10% of your money into keeping value, as opposed to increasing it. The stock market is more likely to increase your net worth because it regularly beats inflation. .

over what time from 500 years, 1000 years, hell 30 years. why is it suddenly having exponential growth spurts and then levels off...hmm, yes regularly beats inflation. "regularly" such a subjective term...

 

[LibertyRevolution]

If dollar inflation is good for gold, then why isn't dollar deflation bad for gold?

When gold is up, the US dollar is down, and when dollars are up, gold is down.
That is just how it works most times...

You got to remember, as shitty as our dollar is, the euro is a fucking mess...

I love this sign.. It pretty much sums it up.

 

[DEGuy]

That's okay if you feel like it's worth it to put 5-10% of your money into keeping value, as opposed to increasing it. The stock market is more likely to increase your net worth because it regularly beats inflation. If you feel you have enough money to put a significant amount of money into merely keeping value, that's your decision. However, 5-10% seems like a rather paltry number that wouldn't really pose as much of a hedge because, if you lost 90% of your wealth due to hyperinflation, it would still be completely devestating to you.

http://www.multpl.com/s-p-500-price/

Not so much, for the average investor (S&P 500) at least. With the recent IPO disaster's, like Facebook, I've lost a lot of faith in the stock market and it's ability to be free from manipulations from the big banks and the upper 1% of the wealthy. Maybe that's a little bit too conspiracy theorists, although when it comes to gold, you should really read about....

http://en.wikipedia.org/wiki/Gold_Anti-Trust_Action_Committee

Basically, they maintain that the majority of gold that is traded is not backed by anything physical - also known as fractional reserve banking. What does that mean? Well, the "market" that determines the "price" of gold is flooded with imaginary gold supplies, which acts to suppress the price of physical gold. If enough individuals trading on that market asked for physical delivery of gold, the prices of gold would skyrocket. The volume of gold traded every single day is about equal to the amount of gold mined in a year. Either the majority of large investors are day traders who enjoy fees eating away their principal, or there majority of traded gold doesn't physically exist.

 

[papitosabe]

I agree that gold and silver are bad bets.

Do this: SEND ALL YOUR GOLD AND SILVER TO ME. I'll take it off your hands and send something even more valuable in return: toilet paper.

LMAO!!!

 

[Simple]

The central banks of the world have been buying gold and now Turkey is using gold to pay for Iranian oil. Both actions indicate to me that gold is replacing the dollar as the reserve currency of the world and the demand for gold is not going to plummet any time soon.

 

[Bossobass]

I believe there's veracity to the claims that some elite banking cartel has planned a single global currency. I also believe personally that in order to sell this ridiculous idea of trading many fiat paper currencies for a single one, something has to be thrown into the pot to sweeten the out-of-the-frying-pan-into-the-fire opposition to such a massive move.

That something will definitely involve gold/silver, as well as, I suspect, other natural resources like water, timber, coal, oil, etc. Each country will have to pledge a certain percentage of the resources basket to buy into the new currency, giving it the appearance of having actual asset-backing.

That's just a wild speculation on my part. The bottom line here is that, since 2000, the DJIA is up 15% while silver is up 600%. Many here talk about silver as though it's a bubble and overpriced, or at least gone flat. Bull Snot. It's worth at least 2-1/2 times what it's currently selling for against the dollar.

Buy it cheaply while you can.

 

[freedomordeath]

Are you aware of a thing called legal tender laws?

Have you heard of Utah, we work with what we've got.

The problem is that nobody will take gold as currency right now.

Thats the point of this post, we need to start somewhere, I was looking at some farmer markets in Utah and was thinking of phoning a couple of poeple and running the idea past them. Have some gold sellers near by and convince farmers to lower prices slightly to take the hit above spot. Run the 2 currencies prices intially to get poople used to the idea and then phase out fiat. Also convince them to pay the stall workers in gold and silver, ideally it would be better in a small town esp with tourists and evenetually turn a small town into only taking gold and silver. With so many nutters aroiund the world, surely we can find enough of them in Utah keen to take this on. I mean if mountain hours can do well, gold and silver sure as hell should do even better in a state like Utah.

 

[LibForestPaul]

I believe there's veracity to the claims that some elite banking cartel has planned a single global currency. I also believe personally that in order to sell this ridiculous idea of trading many fiat paper currencies for a single one, something has to be thrown into the pot to sweeten the out-of-the-frying-pan-into-the-fire opposition to such a massive move.

That something will definitely involve gold/silver, as well as, I suspect, other natural resources like water, timber, coal, oil, etc. Each country will have to pledge a certain percentage of the resources basket to buy into the new currency, giving it the appearance of having actual asset-backing.

That's just a wild speculation on my part. The bottom line here is that, since 2000, the DJIA is up 15% while silver is up 600%. Many here talk about silver as though it's a bubble and overpriced, or at least gone flat. Bull Snot. It's worth at least 2-1/2 times what it's currently selling for against the dollar.

Buy it cheaply while you can.

SDR's already require a gold subscription.

 

[anaconda]

We haven't had the correction we need in housing. Fed still holds ~ $1 trillion in MBS, Fannie and Freddie are still operating, FHA is still backing new loans, etc etc. That said, rentals are the foundation of my investment plan, but I'd suggest paying in cash or staying away. That way even if market rates for rent drop enormously your not underwater and can afford to drop rent prices where they need to go. You miss out on mortgage interest deductions and the ability to use the capital elsewhere, but the increased cash flow makes a second fully paid for rental attainable in much shorter time. Tis my $.02 at least.

But aren't the conditions you're referring to potentially highly inflationary? Which in themselves would not cause nominal rents to drop. But maybe I'm missing something.

If aggressive inflation comes at some point (like Peter Schiff and Ron Paul suggest) you end up paying back your low interest, fixed rate mortgage with increasingly worthless dollars. Also, my g/f is buying rehabilitated foreclosures that appraise for about $70-90K, so the downside is not so large in terms of magnitude. My naive layman's assessment is that it's a trade off right now between the housing market dropping a bit more in value over the coming months, versus interest rates skyrocketing at some point. Inflation will obviously also have an upward pressure on rents.

 

[freedomordeath]

That's just a wild speculation on my part. The bottom line here is that, since 2000, the DJIA is up 15% while silver is up 600%. Many here talk about silver as though it's a bubble and overpriced, or at least gone flat. Bull Snot. It's worth at least 2-1/2 times what it's currently selling for against the dollar.

Buy it cheaply while you can.

Wouldn't it be nice to earn in silver and spend in silver, then you need not worry about waiting for silver to go up 2 1/2 times. Utah is like a gift, where are socialists when you need them, we can trick socialist to set up self-sustaining towns in Utah, using only gold and silver, to help pave away for the rest of the country.

 

[Zippyjuan]

SDR's already require a gold subscription.

No, actually they don't. http://www.imf.org/external/np/exr/facts/sdr.htm/ It used to but does not anymore.