The gold debate in a nutshellgreenspun.com : LUSENET : TB2K spinoff uncensored : One Thread
One of the big, raging debates in the bygone days of ye olde TB2K was the significance of precious metals -- gold and silver -- when you are preparing for the END of the world as we know it. Or, just what would happen if and when people figure out that the monetary systems of the world as we DO know it is just a paper fantasy, backed by nothing but the "full faith and credit" of the governments that print up the funny money (e.g., the USA) -- i.e., backed by nothing but hot air.
FWIW, here is a recent (10/13/00) series of articles, that tend to argue against holding or investing in gold. If there are any goldbugs still with us on this spinoff forum, I'd be interested in seeing your responses. (Personally, I'm undecided. But, if the price would ONLY go up, I'd love to sell off my 1/10th oz AEs and bags of pre-'65 quarters. I think...)
"The gold debate in a nutshell" http://www.mips1.net/MGGold.nsf/Current/4225685F0043D1B242256977002A9FFE
-- King of Spain (firstname.lastname@example.org), October 15, 2000
KOS, it's really very simple: Them that has the Gold makes the rules. Don't sell, yet. But don't buy anymore just yet, either. A bunch of folks over on Sleazy Board seem to think that the world is going to end on October 28th. When the world is still standing on October 29th, I suspect that you'll be able to get some real deals. Go for it! Long term, the economy *is* gonna tank, but it's not going to do it until the current leadership plays out their scenarios.
-- (email@example.com), October 15, 2000.
People are saying the world may end on Oct 28???? Gawd!!
I don't know about how this would affect my gold/silver selling/buying, but I will definitely hold off on buying any Halloween candy until right after the 28th safely passes...
-- King of Spain (firstname.lastname@example.org), October 15, 2000.
It wasn't Oct 28,it was the 29th! Get with the program guys-h
-- h (email@example.com), October 15, 2000.
King of Spain - you seem to be quite
-- Bimi Thanton (Bimit@littlerock.con), October 15, 2000.
Well, the fact of the matter is
-- King of Spain (firstname.lastname@example.org), October 16, 2000.
I'm a gold bug and have been for several years. Y2K had nothing to do with it for me. I currently own 142 ounces and made my last purchase of 8 ounces last weekend, after it closed at $268.90 on Ftiday. Physical gold is about 65% of my total assets. I don't do stocks.
Gold is now selling at near it's all time modern low. It will go up. When is the question. Some believe, myself included, that the price of gold is being manipulated. You can read about this theory here.
Gold Anti-Trust Action Committee
If you're interested in what other gold bugs have to say, check out the following sites.
Kitco gold forum
If you want to buy gold, I recommend Tulving. I've been using them for about 6 months and I'm very happy with the service.
-- (email@example.com), October 16, 2000.
I can second your recommendation of Tulving. Also, I have dealt with AJPM, and have been equally impressed.
Whether the end of the world is coming or not, man has only been completely off of the gold standard since 1971. Less than 30 years out of the thousands of years that man has used gold and silver as money. If you trust the U.S. Government to stop inflating the number of dollars, then there is no reason to hold gold and silver. However, if you know better than to trust the U. S. Government not to run the printing presses, then I believe you should be patient with your holding of gold and silver.
Not intended as investment advice, etc.
-- J (Y2J@home.comm), October 16, 2000.
If you don't trust the government not to run the printing presses, it seems to me that you should put your money in assets (e.g. real estate) which will earn a return. Gold as an inflation hedge not only won't provide a return to those holding it, but there are carrying costs (small, I know) associated with this strategy.
-- Peter Errington (firstname.lastname@example.org), October 16, 2000.
still: Thanks for the links!
J: Excellent points.
Peter: The thing about real estate is that, obviously, it is highly illiquid. Gold coins are easily transportable, near-cash assets, which gives quite an advantage. (And do you trust the government to not seize your property if it decides it wants to? Can we say, "drug forfeiture laws"??? Especially when the seizure is done due to drugs that are "found", but you are never even charged, much less convicted, of the supposed criminal offense?)
-- King of Spain (email@example.com), October 16, 2000.
I hate to argue but gold has the potential to provide a huge return. In 1996 gold hit a high of $414, about 50% more than it is today. In 1980 gold went for $850 per ounce, more than THREE TIMES it's current price. And that doesn't consider inflation!
Gold price history chart
Beyond possible price manipulation, several other factors have kept the price of gold in check in recent years. The largest impact comes from banks selling parts of their gold reserves. Just a few days ago the bank of England sold more than 800,000 ounces. It's the old story of supply and demand. But the fact is that demand today exceeds new production capacity. When this dumping of old stock into the market ends, the price will go up.
Gold is a long term investment for me. Some hard core gold bugs believe that the price of gold could increase 10 times over the next few years. I think that may be a little far fetched, but I do believe a 2 or 3 time increase is very possible. That's not a bad "return".
The one thing that I really like about gold is that the risk is very low at today's prices. Very few believe that the price will ever be much lower than today. You can't say that about stocks. Look at Intel or Xerox. Or look at Priceline. It was going for $100 in March, and $5 today. Like any other investment, gold is a "gamble". But with gold, the risk is very limited, while thr return could be huge.
-- (firstname.lastname@example.org), October 17, 2000.