PMs: Irrational fear of PMs

C

Corydoras

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Sep 4, 2007
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Why is it so hard to get so many people to look into PMs? I've been telling my best friend to get into silver for a long time now, and he hasn't, and he won't tell me why (I know he has the money and it's just sitting in the bank instead of investments). I have other friends like this, and I know other people on this board have had the same experiences with their friends.

It doesn't seem to be rational. They never point at 1981 and say "look how PMs dropped." They just clam up and won't do anything. What is this about, do you have any insights?

It just chews me up to think of my friends' money shrinking into worthlessness sitting in savings accounts and CDs.
 
Fiat minds for a fiat age.

Enough said.

Corydoras said:
Why is it so hard to get so many people to look into PMs? I've been telling my best friend to get into silver for a long time now, and he hasn't, and he won't tell me why (I know he has the money and it's just sitting in the bank instead of investments). I have other friends like this, and I know other people on this board have had the same experiences with their friends.

It doesn't seem to be rational. They never point at 1981 and say "look how PMs dropped." They just clam up and won't do anything. What is this about, do you have any insights?

It just chews me up to think of my friends' money shrinking into worthlessness sitting in savings accounts and CDs.
Click to expand...
 
I think it's more about: "I tolerate your strange political views, and even agree with some of them, but I'm not comfortable with putting my money where your mouth is." There may be a variety of reasons for that which do not necessitate disagreement. I know a lot of people would rather lose money than lose a friendship they value, so they will hedge their bets by ignoring the advice...if they lose money by ignoring your advice then your friendship is undamaged. If they lose money by FOLLOWING your advice, then it would not be undamaged. So they take the safer bet.
 
Seraphim said:
Fiat minds for a fiat age.

Enough said.
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yea, i was trying to get one of my friend to buy when silver was at 17. You need to understand most humans are not logical. its like me asking, there is clearly no god, so why do people believe in that bullshit? its the same principle in why do people not buy in gold and silver?

also, somepeople just don't care, all they care about is money in, money out and a little bit saved over.
 
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MSM has stigmatized "gold bugs". No one wants to be a "kook".
 
In my opinion it's lack of understanding which causes irrational fears. They just don't understand how the fiat system functions and why the things that are happening are happening.

I think it's way better to get them to learn Austrian economics first which should remove those fears.
 
I would rather use my resources and grow them through my own actions, than buy something in the hopes that by sitting on it, it's value will go up. I don't keep cash in the bank, nor do I invest in stocks, or PMs. I spend money almost as soon as I get it to buy things I intend to use to earn more money. A new truck for the business. New signage, advertising, a new employee, tools, equipment, etc. In the rare occasions that I have extra money lying around, I tend to stock up on things I intend to use eventually. Firewood, fuel oils, ammunition.

I have no personal use for Gold or Silver. I am not a jeweler or electronics manufacturer so it's industrial use is no good to me, and I can't be sure I'll be able to trade it for something I do need when I'll need it. I can't turn gold or silver into anything useful for making me more successful, especially when I get a better rate of return on investing in my own skills and creative efforts. If I spend $400 on silver after 10 years it might be worth $800, but then again, it might be worth $320. If I spend $400 on lumber and Hardware, I can turn it into $5000 worth of useable product to sell or for personal use in about 3 days.
 
Icy, you are neither irrational nor fearful about PMs; you are making a reasoned choice against them in favor of something else.

The existence of so many different views of what makes people irrationally fearful of PMs suggests that it isn't something about PMs that sets people off-- it's that each person has their own reason to react that way to PMs.

That's very interesting, because it suggests again that PMs are the stable entity against which other things (or people) flicker and vary.
 
Icymudpuppy said:
I would rather use my resources and grow them through my own actions, than buy something in the hopes that by sitting on it, it's value will go up. I don't keep cash in the bank, nor do I invest in stocks, or PMs. I spend money almost as soon as I get it to buy things I intend to use to earn more money. A new truck for the business. New signage, advertising, a new employee, tools, equipment, etc. In the rare occasions that I have extra money lying around, I tend to stock up on things I intend to use eventually. Firewood, fuel oils, ammunition.

I have no personal use for Gold or Silver. I am not a jeweler or electronics manufacturer so it's industrial use is no good to me, and I can't be sure I'll be able to trade it for something I do need when I'll need it. I can't turn gold or silver into anything useful for making me more successful, especially when I get a better rate of return on investing in my own skills and creative efforts. If I spend $400 on silver after 10 years it might be worth $800, but then again, it might be worth $320. If I spend $400 on lumber and Hardware, I can turn it into $5000 worth of useable product to sell or for personal use in about 3 days.
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You are not saving, you are investing. You have no use for gold and silver at the moment. I dont think the op is referring to someone like you.
 
Icymudpuppy said:
I would rather use my resources and grow them through my own actions, than buy something in the hopes that by sitting on it, it's value will go up. I don't keep cash in the bank, nor do I invest in stocks, or PMs. I spend money almost as soon as I get it to buy things I intend to use to earn more money. A new truck for the business. New signage, advertising, a new employee, tools, equipment, etc. In the rare occasions that I have extra money lying around, I tend to stock up on things I intend to use eventually. Firewood, fuel oils, ammunition.

I have no personal use for Gold or Silver. I am not a jeweler or electronics manufacturer so it's industrial use is no good to me, and I can't be sure I'll be able to trade it for something I do need when I'll need it. I can't turn gold or silver into anything useful for making me more successful, especially when I get a better rate of return on investing in my own skills and creative efforts. If I spend $400 on silver after 10 years it might be worth $800, but then again, it might be worth $320. If I spend $400 on lumber and Hardware, I can turn it into $5000 worth of useable product to sell or for personal use in about 3 days.
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You do seem to have sound reasoning and most likely will profit if you take 400 and buy things and put labor into making something. You must admit though it is possible you take your 400 and make something and no one will buy it. My guess is you would have a very high chance that it would sell because what you made was something someone wants. I would say you have a good plan that will work for you.

Many people have 401ks and IRAs and buy stocks and bonds and would never consider getting mining stocks or PM's but will buy other things to invest in including houses. I think this is aimed at those people.

When you buy gold or silver it is an investment that is also a statement that says you don't trust our currency and or the current system. I believe most people hope things will get better and do not even want to consider what it means if gold and silver prices go way up. many people (Peter Schiff for one) talk about gold being a thermometer that tells you the state of our fiat based system. I also hope things will get better but I do not believe they will so I buy gold and silver with the fiat I have saved from working. I also have an IRA that I have that is 100% in mining stocks.

I have no desire to buy things to make things to sell to others. You enjoy doing that and make your money and wealth from it. It takes all kinds to make the world go round including people like me who will buy your products because I don't want to make things. By the way I used to build, sell and repair computers but I am retired now and I only do occasional repairs for friends and family.

I think the answer to this question is the people who really invest a lot of their wealth in gold and silver believe strongly that the economy and dollar is going to hell. When people get to that point they may start buying.
 
a liberal guy i work with likes to say at any opportunity that gold is in a bubble and will come crashing down at any minute... he never gives an explanation as to why he thinks it's in a bubble, other than the fact that its cost has gone up quickly over the past year. a lot of people probably think that. the value has gone up quickly in the past year or two, therefore it's close to a decline period...and no one wants to buy high.
 
The dollar is in a bubble and gold is just adjusting to it as we keep printing dollars.. He has his bubbles mixed up.
 
My dear friends, may there be a higher purpose to Au and other precious metals and minerals that extends beyond economics?

It matters not whether gold is $1 or $10000000

It has a use that is not understood by you here at this time. If your higher self, the one controlling "you" the character in this MMOG you find yourself, would like you to be aware then maybe you'll take notice at this message. Otherwise you can write it off as whatever you like.

Why are the noble metals worn? What is your Aura?

As I type this message my wrists are adorned with Carnelian and Turquoise. I sleep with Amethyst. Over my heart is lapis lazuli

Have a wonderful day and smile at those "strangers" that you meet and pass you by.
 
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There is no way that gold's price is going up entirely in response to the dollar. In 1970, gold was $30 an ounce. Now, it's $1400 an ounce. The money supply has not grown 40+ fold in 40 years. IcymudPuppy has it right. Gold is, by and large, worthless if you really think about it. 95% of gold is valuable "because it's pretty" and the remaining 5% for electrical connections. When the shit hits the fan, no one will want gold. If you're going to invest, invest in silver when it's low as a store of value. IcymudPuppy is right - silver is worth like 30/oz. But whose to say it won't be 15/oz or 45/oz next year? You aren't sure because the prices are based on speculation and confidence. But yes, silver can be used as a store of value since it's used in a large variety of applications, and thus will never be worth nothing. On the other hand, gold's value will plummet to near zero when people realize that it being sparkly will not help them survive whenever the global fiat system crashes.
 
kah13176 said:
There is no way that gold's price is going up entirely in response to the dollar. In 1970, gold was $30 an ounce. Now, it's $1400 an ounce. The money supply has not grown 40+ fold in 40 years. IcymudPuppy has it right. Gold is, by and large, worthless if you really think about it. 95% of gold is valuable "because it's pretty" and the remaining 5% for electrical connections. When the shit hits the fan, no one will want gold. If you're going to invest, invest in silver when it's low as a store of value. IcymudPuppy is right - silver is worth like 30/oz. But whose to say it won't be 15/oz or 45/oz next year? You aren't sure because the prices are based on speculation and confidence. But yes, silver can be used as a store of value since it's used in a large variety of applications, and thus will never be worth nothing. On the other hand, gold's value will plummet to near zero when people realize that it being sparkly will not help them survive whenever the global fiat system crashes.
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Perhaps the money supply hasn't grown 40-fold in 40 years. But remember, the US set the price of gold at $ 35 in 1933, and kept it there for almost 40 years. During that time, they were increasing the money supply behind the scenes, until some other countries called their bluff. So gold was just playing catch-up from that 1933-1971 period where the price was controlled.

And true, gold's value as an industrial metal is minimal. However, gold fits all of the properties of sound money. One reason being: its supply is very consistent - it doesn't disappear like silver. If you're going to have stable money, even silver can have huge fluctuations. Gold IS money, and has been for thousands of years. While it may not be useful for many other things, you can't print it, and it makes for a great store of wealth.

http://news.goldseek.com/GoldSeek/1194370818.php

So what is it about gold that fascinates us? First of all, it has unique physical characteristics. It is chemically inert so it is not subject to decay or transformation. It is essentially indestructible which accounts for why almost all of the gold ever produced is still in existence. It is extraordinarily dense (1 cu ft = ½ ton) which means that very small amounts can function as money of large denominations[7] and its consistency and malleability make it highly divisible for purposes of coinage and mobility. Most important, gold is incredibly scarce and “there has never been a moment when it has ceased to be scarce.”[8] The weight of all of the gold ever produced is approximately 160,000 tons, and as I learned on a recent trip to the Natural History Museum in New York, all of that gold could fit into 16 tractor trailers and if formed into the shape of a cube, the cube would have sides measuring only 20 meters. This last point seemed preposterous to me. How could all the gold produced in the history of the world occupy a space with such limited volume? Upon further investigation I discovered that the weight of one cubic meter of gold is 19.3 tons. The volume of a cube with 20 meter sides is 8000 cubic meters (20 x 20 x 20 = 8,000). 8,000 cubic meters x 19.3 tons per cubic meter = 154,400 tons which is pretty close to the estimate of 160,000 tons of cumulative world gold production!

Another of gold’s intriguing characteristics is that the growth rate of its cumulative production has tended to be very close to world population growth and the long-run, real rate of growth of the economy (demand for money). All three are approximately 2% per year.
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Kah, tell that to the people of Zimbabwe, or other countries that have gone through hyperinflations (as all hyperinflations are part and parcel of a fiat monetary system). The great thing about gold is it is unable to be counterfeited. People usually do not like their labor, and property being stolen and therefore use Gold as money since it fulfills all the necessary criterion for honest and sound money. At least with clipping you don't get hyperinflation and everyone realizes they are being stolen from.

You also fail to realize that Americans were not legally allowed to own gold until 1976! The price of 35$ an ounce was completely arbitrary and was a price control set by the Government. The market price of Gold is being reflected currently, and after Bretton Woods broke down, like it was enivitably going to do because when you print more fiat dollars, and keep the Foreign Market window set at 35$ an ounce, what the fuck do you think is going to happen? The actual money which has value will be bought and held onto -- this is called Gresham's Law. Of course, the Government and most the people have not one clue about economics.

Gold is valued because it holds its value and is very hard to debase. I think you need to learn what the purpose of money is before you start critiquing specific metals, or assets to be used for money. Only fiat money is built upon trust and confidence, not precious metal money. You have it backwards. The properties of metals disinclines itself to trust and confidence. Everyone knows that Gold will hold its value because it is unable to be printed. Simple as.

When SHTF no one will want fiat dollars. There will be a unit of trade that will become standardized throughout the economy. Could be gold, silver, or something else, but rest assured it will be something that is hard to devalue, and is something easily stored and traded. Gold fits this niche perfectly.

Anyways, if you would like to learn more I suggest going here:

mises.org
thefreemanonline.org
c4ss.org

Cheers.
 
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I understand WHY fiat currency is bad. I understand that people will not want fiat dollars when the SHTF. I'm simply asking - where is the intrinsic value of gold outside of jewelry? Most of the time, people see gold as valuable only because it looks pretty. When the SHTF, why would someone want gold? It's practically useless.

I am simply saying that, for the long term, I believe silver to be a much better store of value.
 
Kah, you would do well to read RP's book "The Case For Gold". Available free here-http://mises.org/books/caseforgold.pdf
 
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