Why I don't trust gold

[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 shit 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 shit 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.

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

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.

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

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.