# Is now the time to buy gold?



## cedarvalley (Feb 28, 2012)

Im wanting to invest in a significant amount of gold, does anyone think it could go lower, or is now the time to buy? I read a couple of articles that said China was buying large amounts of gold at the current prices, do they know something we don't?:shrug:


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## Nevada (Sep 9, 2004)

I'm sure you'll do well buying gold, but I think silver has more potential long term (5 years or more). Gold/silver is just over 70 now, so I see silver as a bargain.

Of course I'm only talking about buying physical metals. Paper gold and silver are both a mistake for anyone but very short term speculators.


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## cedarvalley (Feb 28, 2012)

Nevada said:


> I'm sure you'll do well buying gold, but I think silver has more potential long term (5 years or more). Gold/silver is just over 70 now, so I see silver as a bargain.
> 
> Of course I'm only talking about buying physical metals. Paper gold and silver are both a mistake for anyone but very short term speculators.


 I will probably buy some silver too. I will definitely not be buying paper.


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## plowjockey (Aug 18, 2008)

China and India have been buying large amounts for several years - while gold prices continued to drop.

Does not seem like much of an indicator, IMO.


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## cedarvalley (Feb 28, 2012)

plowjockey said:


> China and India have been buying large amounts for several years - while gold prices continued to drop.
> 
> Does not seem like much of an indicator, IMO.


You are probably right, but im just putting this out there, could it be feasible that they are buying up as much gold as they can, and then trying to make a play on the worlds currency (US Dollar), in the future, and trying to say it needs to go back to a precious metals backed currency. Remember the U.S. has been selling off their reserves. I remind you this is all just speculation.


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## Nevada (Sep 9, 2004)

plowjockey said:


> China and India have been buying large amounts for several years


I don't make that much of it. China has about half as much currency in circulation as we do, but officially China only holds 1/8th as much gold as we hold. China has a long way to go to come up to snuff on their currency. I expect them to buy gold.


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## Wild_Bill (Aug 4, 2014)

My best guess would be to wait a while. If the fed raises interest rates it will go up. Watch the stock market, and silver/gold markets. Currently they move in tandem. Stocks down PM's down. When they split thats when you know the buyers are moving out of the market. A solid week ok market down metals op will be near the mark. However by then you would have missed a bottom by 10% or so.

I dont know how much you want to buy but i would break it into smaller buys. Say if your talking $100,000 id buy over 15-20 weeks 5-7% or so at a time. If we are just talking about $10-15k just buy an ounce a week.

For smaller buys try to find a local dealer. You should be able to get eagles, or maple leafs for $50-75 over spot. Generic bars or rounds $30-40 over.

It is almost impossible to time the bottom. Anytime should be fine to start. I feel that gold my drop to $1100, and silver to $15. I could be wrong. It could rocket up tomorrow or tank way worse. If you don't plan on keeping it10 years or more i wouldn't buy any.

Not saying you might use it sooner but


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## Wild_Bill (Aug 4, 2014)

I wouldn't buy if thats the plan


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## Nevada (Sep 9, 2004)

Wild_Bill said:


> My best guess would be to wait a while.


OK, but the buying opportunity won't last forever. I buy a few ounces when I have a few bucks. That's my strategy, until silver & gold go up.


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## Riverdale (Jan 20, 2008)

Lids and lead. The precious metals I buy :gaptooth:


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## plowjockey (Aug 18, 2008)

Gold value as a speculative investment (which is it) has came and went, since 08', IMO. Those in the know, have made their money, they got in and out at the right time. The buy-and-hold waiting for the end of the world gang, are mostly left holding the bag.

Since 09' - for the most part, economic news has slowing been getting better, which is why gold has trending downwards, not upwards, since then. It would take something traumatic to drive prices up like crashing global economies. 

China and India are buying gold, because they can. They are flush with money so they are buying everything., including foreign real estate, U.S. treasuries, ships, whatever.


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## MoonRiver (Sep 2, 2007)

I doubt if gold and silver will be used much as currency in the event of a disaster. More likely, governments, whether federal, state, or local, will confiscate goods and redistribute them. They also will likely make it illegal to buy or sell goods or services outside of government sanctioned markets.

If you are in a rural, secluded area, you may be out of government's reach, but if in an urban or semi-rural environment, expect to be forced to share.

If I was buying precious metals as an investment, I would buy one that has a high industrial use.


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## BlackFeather (Jun 17, 2014)

Nevada said:


> I don't make that much of it. China has about half as much currency in circulation as we do, but officially China only holds 1/8th as much gold as we hold. China has a long way to go to come up to snuff on their currency. I expect them to buy gold.


What gold? Fort Knox is empty, that is why they won't do an audit. China has more gold than most people think, This year they have purchase almost the world's entire yearly production, and yes they are talking of backing their currency with gold. If Wille is right, at some point they will set the price of gold not London or New York.


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## Nevada (Sep 9, 2004)

BlackFeather said:


> What gold? Fort Knox is empty, that is why they won't do an audit.


It's not a question of whether there's gold in Fort Knox and the Fed vaults, because I'm certain that there is. The question is who owns it. Those vaults hold gold that's owned by foreign countries, large banks, and even commodity exchanges. Just because it's there doesn't mean it's owned by the US Treasury. A complete audit should determine that.


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## BlackFeather (Jun 17, 2014)

cedarvalley said:


> Im wanting to invest in a significant amount of gold, does anyone think it could go lower, or is now the time to buy? I read a couple of articles that said China was buying large amounts of gold at the current prices, do they know something we don't?:shrug:


Does it matter if it goes lower? It has in the long run only one way to go, up. Most experts say we have most likely hit bottom, but even if they are wrong, what is a few dollars or even a 100 dollars, when in the long run people like Jim Sinclare say it will hit 10,000. If there is hyper inflation, some even say it could hit 50,000. Gold is not an investment to make money, it is a protector of wealth. When the fiat dollar dies, gold, silver, platinum, and palladium will hold their purchasing value. I seem to remember a statement, about in ancient days it was about 350 loaves of bread to an ounce of gold. A good quality loaf of whole wheat bread today is around $4 a loaf or 311 loafs of bread. So we are in the ball park, but according to bread Gold should be about $1400. Over time Gold holds it's value it doesn't usually increase in buying power, but it protects your buying power. Silver on the other hand is used industrially and experts say when gold goes up silver may go up 2 to 3 times gold. Silver is not for the faint of heart, it is very volatile, up one day down the next, wild swings. Only wish I had some money to buy the metals.

http://www.coins-auctioned.com/lear...old-ounce-price-comparison-to-a-loaf-of-bread


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## cedarvalley (Feb 28, 2012)

Nevada said:


> It's not a question of whether there's gold in Fort Knox and the Fed vaults, because I'm certain that there is. The question is who owns it. Those vaults hold gold that's owned by foreign countries, large banks, and even commodity exchanges. Just because it's there doesn't mean it's owned by the US Treasury. A complete audit should determine that.


 You need to do more research on this, the commodity exchanges wont pay you in gold if you want to take delivery on it. They will pay you in dollars, and tell you to go pound sand if you don't like it. They are artificially depressing the gold price. There is much less gold being held by the U.S. than what they are reporting. China tends to under report how much gold they are holding, some analysts say it is many times more than what they say.


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## Nevada (Sep 9, 2004)

cedarvalley said:


> You need to do more research on this, the commodity exchanges wont pay you in gold if you want to take delivery on it. They will pay you in dollars, and tell you to go pound sand if you don't like it.


The contract says they have to right to pay you in dollars instead of gold, but traders take delivery on gold all the time. I've never heard of anyone being turned down for delivery on a commodity trade. Delivery is unlikely to be refused unless there is a crisis of some sort.

It's a safety valve in the event of a run on delivery, which I believe is in our future. Most commodity trading is uncovered, or back by a small percentage of gold. I believe that the day will come when there is a price gap between paper gold and physical gold. You'll see a run on delivery at the commodity exchanges when that happens, and they'll shut it down.


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## Bellyman (Jul 6, 2013)

While I can see value in precious metals, I also realize that in a real crisis, it's less than ideal in a lot of ways. You can't eat it. You can't burn it to keep warm. You can't wear it (well, not in a manner that's all that functional). 

In order for it to have value, someone must want it. I can see scenarios where no one will really have much use for a gold coin. Seriously, if the world was falling apart, would you really trade 200 bushels of potatoes for a gold coin? If I had 200 bushels of potatoes to trade, I think I'd want something in return that I actually had a use for... other food, cloth, shoes, lumber, bullets, livestock,... something that had some use to me or at least someone I might know if I didn't need it myself, maybe as something with which to trade with them.


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## Nevada (Sep 9, 2004)

Bellyman said:


> While I can see value in precious metals, I also realize that in a real crisis, it's less than ideal in a lot of ways. You can't eat it. You can't burn it to keep warm. You can't wear it (well, not in a manner that's all that functional).
> 
> In order for it to have value, someone must want it. I can see scenarios where no one will really have much use for a gold coin. Seriously, if the world was falling apart, would you really trade 200 bushels of potatoes for a gold coin? If I had 200 bushels of potatoes to trade, I think I'd want something in return that I actually had a use for... other food, cloth, shoes, lumber, bullets, livestock,... something that had some use to me or at least someone I might know if I didn't need it myself, maybe as something with which to trade with them.


In a true SHTF scenario gold & silver won't be worth anything. People are going to be concerned about food, keeping warm, and security. You're a lot better off investing in .22 shells if you're preparing for SHTF.


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## cedarvalley (Feb 28, 2012)

Nevada said:


> The contract says they have to right to pay you in dollars instead of gold, but traders take delivery on gold all the time. I've never heard of anyone being turned down for delivery on a commodity trade. Delivery is unlikely to be refused unless there is a crisis of some sort.
> 
> It's a safety valve in the event of a run on delivery, which I believe is in our future. Most commodity trading is uncovered, or back by a small percentage of gold. I believe that the day will come when there is a price gap between paper gold and physical gold. You'll see a run on delivery at the commodity exchanges when that happens, and they'll shut it down.


 Do a google search for, comex not delivering on gold contracts. There's no way I can link all the articles relating to this subject.


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## plowjockey (Aug 18, 2008)

Hmmm

Ignore real estate and stocks that one can make good money now, but instead overpay for gold, to hoard and use at the end of the world - whenever that is.

So, those with gold, will shave off a flake, to pay for the $300 pickup tank load of black market diesel fuel, or stolen insulin?

They will do that for how long?

Hard to imagine anything more ludicrous.


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## cedarvalley (Feb 28, 2012)

plowjockey said:


> Hmmm
> 
> Ignore real estate and stocks that one can make good money now, but instead overpay for gold, to hoard and use at the end of the world - whenever that is.
> 
> ...


 It's all about diversity. If you already have an large interest in real estate and the stock market, whats the logical step to hedge those investments? My opinion is PM's. What's your's?


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## plowjockey (Aug 18, 2008)

BlackFeather said:


> Does it matter if it goes lower? It has in the long run only one way to go, up. Most experts say we have most likely hit bottom, but even if they are wrong, what is a few dollars or even a 100 dollars, when in the long run people like Jim Sinclare say it will hit 10,000. If there is hyper inflation, some even say it could hit 50,000. Gold is not an investment to make money, it is a protector of wealth. When the fiat dollar dies, gold, silver, platinum, and palladium will hold their purchasing value. I seem to remember a statement, about in ancient days it was about 350 loaves of bread to an ounce of gold. A good quality loaf of whole wheat bread today is around $4 a loaf or 311 loafs of bread. So we are in the ball park, but according to bread Gold should be about $1400. Over time Gold holds it's value it doesn't usually increase in buying power, but it protects your buying power. Silver on the other hand is used industrially and experts say when gold goes up silver may go up 2 to 3 times gold. Silver is not for the faint of heart, it is very volatile, up one day down the next, wild swings. Only wish I had some money to buy the metals.
> 
> http://www.coins-auctioned.com/lear...old-ounce-price-comparison-to-a-loaf-of-bread


Perhaps it's just coincidence that those who tout the wonders of gold, just happening to be selling gold. 

This one is a real hoot - from someone hawking a gold "investment" newsletter.



> *1979:* Gold&#8217;s average price that year was $306.68. This bought an average-priced full size bed.
> 
> 
> 30 years later, $950 would still buy you a full size bed.


Gold has more than *tripled in price *-* over 30 years*.

Never mind that the cost of living is way more than triple what it was then, also.

http://www.caseyresearch.com/articles/what-you-have-common-king-nebuchadnezzar


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## cedarvalley (Feb 28, 2012)

I do have to agree, that you have to watch why certain people are pushing, buying PM's.


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## plowjockey (Aug 18, 2008)

cedarvalley said:


> It's all about diversity. If you already have an large interest in real estate and the stock market, whats the logical step to hedge those investments? My opinion is PM's. What's your's?


Good point

Im not a savvy investor, but if I was buying gold to buy-and-hold, buying almost anytime is fine. It will always be worth more later, presumably. Otherwise no one really knows where the price bottom will be at.

If i was planning to actually make money off gold, I'd buy, when gold prices are heading _upwards_, not trending _downwards, _as they have been in recent years. Any continued large gold price increases, will be driven by *signicant* world events, such as the global crash, of 08'. Hopefully we will not see any more of that.

I'd follow the gold markets and news events like a stalker, and sell when prices start to peak.


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## JJ Grandits (Nov 10, 2002)

The time to buy gold is long past. Now is the time to buy ammo.
If you have enough lead you can have all the gold you want.


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## Nevada (Sep 9, 2004)

JJ Grandits said:


> The time to buy gold is long past.


While I think silver is a better investment, gold is still a bargain right now. We'll look back as $1200 gold and see it as a buying opportunity some day. I don't care if it goes down in the short term, since that only reinforces my opinion that it's a great buying opportunity.

As for the seemingly high price of gold, many investors are looking at fractional ounce bars now, normally in gram amounts. In fact I own some fractional gold. You can buy gram bars for about $50, or even 1/2 gram bars for closer to $25.

http://www.ebay.com/itm/1-GRAM-999-...pt=US_Bullion_Bars_Rounds&hash=item33970362ba
http://www.ebay.com/itm/1-2-gram-Is...pt=US_Bullion_Bars_Rounds&hash=item2a44c96971

Other popular denominations are 2, 2.5, and 5 gram bars. As with silver, the brand of gold doesn't matter as long as the refiner/assayer is LBMA approved.

I just buy some gold or silver when I have a few bucks to invest. I'll keep doing it as long as it remains reasonably affordable. If I don't buy gold or silver I usually just spend it on things I don't need.


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## cedarvalley (Feb 28, 2012)

The only thing that worries me is if the shtf , would the gov. exercise that law to confiscate the PM's. Hmmm, me thinks if things got bad enough, then probably. How do we overcome that. If one were to buy small amounts, and have a good hidden safe storage place? I don't know the reporting procedures there are in place for tracking sales of PM's, maybe Nevada would know something about this.


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## Nevada (Sep 9, 2004)

cedarvalley said:


> The only thing that worries me is if the shtf , would the gov. exercise that law to confiscate the PM's. Hmmm, me thinks if things got bad enough, then probably. How do we overcome that. If one were to buy small amounts, and have a good hidden safe storage place? I don't know the reporting procedures there are in place for tracking sales of PM's, maybe Nevada would know something about this.


Maybe you & I have different ideas of SHTF, but I see it as a complete breakdown of society. No power or water service, no stores operating, and no gasoline anywhere. There wouldn't be any government to speak of either. In that case there would also be no currency that might need gold backing. All trade would be by barter.

FDR confiscated gold (really it was bought, for $20/oz) during the great depression. He had to do it because the dollar was still tied to gold and he needed to expand the money supply. That situation doesn't exist today. There is no situation were confiscating gold would make sense under our current monetary system. 

I don't see silver ever being confiscated the way it was for gold. There are too many industrial uses for silver to have that happen. It just wouldn't be practical.


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## plowjockey (Aug 18, 2008)

cedarvalley said:


> The only thing that worries me is if the shtf , would the gov. exercise that law to confiscate the PM's. Hmmm, me thinks if things got bad enough, then probably. How do we overcome that. If one were to buy small amounts, and have a good hidden safe storage place? I don't know the reporting procedures there are in place for tracking sales of PM's, maybe Nevada would know something about this.


If it ever gets to that point, lead will be more valuable than gold, as other have stated.

Besides, someone is going to have enough gold, to last them the rest of their lives? How will they guard that gold, 24x7?

Once shtf, we will never recover from it, ever. IMO. People will be killing one and other, over scraps of food.


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## plowjockey (Aug 18, 2008)

Nevada said:


> Maybe you & I have different ideas of SHTF, but I see it as a complete breakdown of society. No power or water service, no stores operating, and no gasoline anywhere. There wouldn't be any government to speak of either. In that case there would also be no currency that might need gold backing. All trade would be by barter.
> 
> FDR confiscated gold (really it was bought, for $20/oz) during the great depression. He had to do it because the dollar was still tied to gold and he needed to expand the money supply. That situation doesn't exist today. There is no situation were confiscating gold would make sense under our current monetary system.
> 
> I don't see silver ever being confiscated the way it was for gold. There are too many industrial uses for silver to have that happen. It just wouldn't be practical.


If and when this happens, people with gold, will be no better off, than those without.

A collapsed Government is going to confiscate gold? How? What are they going to do with it?


A person with gold well have the means to buy something, but it will costs 10 times as much as id did before.

"it's all over, Johnny" and having gold is not going to make any difference.


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## cedarvalley (Feb 28, 2012)

plowjockey said:


> If it ever gets to that point, lead will be more valuable than gold, as other have stated.
> 
> Besides, someone is going to have enough gold, to last them the rest of their lives? How will they guard that gold, 24x7?
> 
> Once shtf, we will never recover from it, ever. IMO. People will be killing one and other, over scraps of food.


 I would tend to agree, that if society broke down this far, then ammo, food, fuel, tobacco and alcohol may be the most valuable commodities.
The ammo for my high powered rifle's are getting so expensive, its about like gold now, LOL.


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## doingitmyself (Jul 30, 2013)

I think lead is a better investment, as in bullets......:runforhills:


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## Nevada (Sep 9, 2004)

doingitmyself said:


> I think lead is a better investment, as in bullets......:runforhills:


Maybe so, but I don't buy precious metals to prepare for SHTF. I buy silver because I think we'll run out of it in the next 5 years.


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## mmoetc (Oct 9, 2012)

Nevada said:


> Maybe so, but I don't buy precious metals to prepare for SHTF. I buy silver because I think we'll run out of it in the next 5 years.


You've made this statement repeated times. Exactly what new technology or combination of technologies do you foresee coming in the next five years to drive prices as you predict? Shortages might cause a doubling or tripling of prices but you're talking 10-15X increases. Wouldn't that, in itself, limit the use of silver as most people wouldn't be able to afford the price increases in the resulting consumer goods relying on silver and thus be somewhat self limiting?


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## Nevada (Sep 9, 2004)

mmoetc said:


> You've made this statement repeated times. Exactly what new technology or combination of technologies do you foresee coming in the next five years to drive prices as you predict? Shortages might cause a doubling or tripling of prices but you're talking 10-15X increases. Wouldn't that, in itself, limit the use of silver as most people wouldn't be able to afford the price increases in the resulting consumer goods relying on silver and thus be somewhat self limiting?


Silver will, of course, go through a transitional period as its price rises. Industry will use other materials where they can, and will also become more aggressive in recovery. People will also stop buying silverware. People who own silverware will sell it for scrap value when they learn it's worth enough to buy a new SUV.

But the prediction doesn't depend on new technologies using silver. The USGS simply evaluates the production, consumption and reserves of silver (as well as other metals) each year. Since 2009 the USGS has predicted that we're on track for consumption outstripping production and reserves by the year 2020. The past 5 year's reports have only reinforced that opinion.

Here is a good summary article about the USGS opinion. Understand that the article is hyped-up, since the USGS never actually used the term "extinct." But the article covers the basics in an understandable format.

http://siamkidd.blogspot.com/2013/01/silver-to-become-extinct-by-2020.html

If you wish to comb through the raw data yourself, the annual silver reports are available here.

http://minerals.usgs.gov/minerals/pubs/commodity/silver/

Of course not a lot of people around here will believe the reports. Conservatives don't believe the government and don't trust scientists, and the USGS is both. LOL

Actually, I'm not talking about 10-15X today's price in 5 years. I'm talking more like 20-30X today's price, with silver trading as high as $500/oz.


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## cedarvalley (Feb 28, 2012)

Nevada said:


> Silver will, of course, go through a transitional period as its price rises. Industry will use other materials where they can, and will also become more aggressive in recovery. People will also stop buying silverware. People who own silverware will sell it for scrap value when they learn it's worth enough to buy a new SUV.
> 
> But the prediction doesn't depend on new technologies using silver. The USGS simply evaluates the production, consumption and reserves of silver (as well as other metals) each year. Since 2009 the USGS has predicted that we're on track for consumption outstripping production and reserves by the year 2020. The past 5 year's reports have only reinforced that opinion.
> 
> ...


 I like your analogy, but what about those price levels, don't you think that will create more prospecting and mining of silver?


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## Nevada (Sep 9, 2004)

cedarvalley said:


> I like your analogy, but what about those price levels, don't you think that will create more prospecting and mining of silver?


The high price will inspire people to go prospecting, but it probably won't do them a lot of good. Most silver is produced as a byproduct of copper, lead and gold mining. If rich deposits of silver existed then we would know about it. Silver makes interesting colored minerals that catch your eye, like in the Comstock Lode or the Phelps-Dodge mine in Ajo ("au-au ho" meant paint in native American talk).


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## Evons hubby (Oct 3, 2005)

If you are already heavily vested in various stocks, bonds and real estate your next step is to do what all the other fatcats do.... start buying politicians who will protect your investments.


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## cedarvalley (Feb 28, 2012)

Yvonne's hubby said:


> If you are already heavily vested in various stocks, bonds and real estate your next step is to do what all the other fatcats do.... start buying politicians who will protect your investments.


 Sorry, not taking the bait in this thread.


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## Nevada (Sep 9, 2004)

cedarvalley said:


> Sorry, not taking the bait in this thread.


It's just as well. I can't afford my own politician anyway...


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## cedarvalley (Feb 28, 2012)

Nevada said:


> It's just as well. I can't afford my own politician anyway...


 Yeah, me neither. LOL


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## Evons hubby (Oct 3, 2005)

Nevada said:


> It's just as well. I can't afford my own politician anyway...





cedarvalley said:


> Yeah, me neither. LOL


I wonder how much one costs? And do you get your money back when the voters toss them out next election? :shrug:


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## Riverdale (Jan 20, 2008)

Nevada said:


> In a true SHTF scenario gold & silver won't be worth anything. People are going to be concerned about food, keeping warm, and security. You're a lot better off investing in .22 shells if you're preparing for SHTF.


What I said


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## Buffy in Dallas (May 10, 2002)

IF your house is paid off, car is paid off, you have no debt, you have plenty of ammo and food etc. saved, THEN it is time to invest in Precious Metals.

I was reading a site about investing and it said that the wealthy historically have invested one third in Precious metals, one third in Real Estate and one third in Art. The art surprised me but I guess it makes sense. Itâs portable. You can bug out with Metals and Art.

I guess it all really depends on what you're prepping for, Total SHTF, a depressed economy or an job loss. Metals and Art won't do you much good if we go back to the stone age but otherwise its good.

We should be planning for all of them.


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## Nevada (Sep 9, 2004)

Silver & gold way down today. Silver off 77 cents and gold off $24.

http://silverprice.org/


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## cedarvalley (Feb 28, 2012)

Nevada said:


> Silver & gold way down today. Silver off 77 cents and gold off $24.
> 
> http://silverprice.org/


 Didn't that break an important support line? I read that some analyst was predicting silver to go under $10, what do you think?


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## Nevada (Sep 9, 2004)

cedarvalley said:


> Didn't that break an important support line? I read that some analyst was predicting silver to go under $10, what do you think?


I'd like to see silver under $10 because it would be such a buying opportunity, but I doubt it will happen. But what do I know? I didn't think it would drop below $17.


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## Eagle-eye (Sep 16, 2014)

I like gold for the most obvious and simple reason; They are printing fiat money faster than they are mining gold. Supply and demand = price.

This has been going on since we left the gold standard and I expect it to continue at an exponentially faster rate through the long term. I do not buy gold because I expect TSTHTF. If it does then I don't need gold


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## Nevada (Sep 9, 2004)

Eagle-eye said:


> I like gold for the most obvious and simple reason; They are printing fiat money faster than they are mining gold. Supply and demand = price.
> 
> This has been going on since we left the gold standard and I expect it to continue at an exponentially faster rate through the long term. I do not buy gold because I expect TSTHTF. If it does then I don't need gold


I hear you on printing unbacked currency, but gold & silver are too volatile to be a reliable hedge against inflation. You can be right about inflation & gold, but still lose your shirt because a war breaks out, or investors simply find a better place to put their money.


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## Eagle-eye (Sep 16, 2014)

Nevada said:


> I hear you on printing unbacked currency, but gold & silver are too volatile to be a reliable hedge against inflation. You can be right about inflation & gold, but still lose your shirt because a war breaks out, or investors simply find a better place to put their money.


I disagree entirely about gold being too volatile to hedge against inflation. Gold has short term volatility but long term it is quite probably the most reliable hedge against inflation that exists.

In 1930 gold was about $20 dollars an ounce. An ounce of gold today has about the same purchasing power that it had back in 1930, while the $20 fiat piece has lost 93% of it's purchasing power.

There is an interesting interview with James Rickards, author of "The Death of Money" that touches on one theory about the Chinese hording gold. He doesnt believe that the chinese have any intention of wanting to become the next reserve currency. Their Gold purchasing is a hedge against default or inflation of our debt. If we try to inflate away the debt, they are 'hedged' by owning an equal portion of gold. If we stay solvent and make good, then they are covered by their US treasury holdings.

If there is a deflationary scenario and we still manage not to default, then the value of their treasury notes grow. But if there is deflation and we default, global financial panic and volatility guarantee a spike in gold. The Chinese strategy is one designed to protect their wealth by hedging.

I think many of us can benefit by following the same example. In certain scenarios, gold is king and can save you from losing everything. In other scenarios other types of investments will pay off much more. Since it is very difficult to ever know what is coming, it is a good idea to hedge against multiple outcomes. Gold and silver have a place in everyone's portfolio, IMO. But it can't be the only thing your security relies on.


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## Nevada (Sep 9, 2004)

Eagle-eye said:


> I disagree entirely about gold being too volatile to hedge against inflation. Gold has short term volatility but long term it is quite probably the most reliable hedge against inflation that exists.


If you bought gold a year ago today you would have lost 11% of your investment, plus the 7% or so loss due to inflation. That pretty serious volatility.

Silver is even worse, since you would have lost 28% of your investment, plus 7% or so loss due to inflation.


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## Evons hubby (Oct 3, 2005)

Nevada said:


> If you bought gold a year ago today you would have lost 11% of your investment, plus the 7% or so loss due to inflation. That pretty serious volatility.
> 
> Silver is even worse, since you would have lost 28% of your investment, plus 7% or so loss due to inflation.


Thats why I dont buy gold or silver.... I buy dirt instead. I have never seen the per acre price of decent farmland drop. It steadily increases due to supply and demand. They keep makin babies, but they aint makin more land.


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## Nevada (Sep 9, 2004)

Yvonne's hubby said:


> Thats why I dont buy gold or silver.... I buy dirt instead. I have never seen the per acre price of decent farmland drop. It steadily increases due to supply and demand. They keep makin babies, but they aint makin more land.


It's the concept of buy low and sell high. Some get it and some don't.

There will always be those who won't want it if they think nobody else does. They buy high and complain when they lose their shirts. I don't pretend to understand it, but I've observed it long enough to know that it's true.

Most financial pundits say you don't need precious metals in your portfolio right now. When gold takes off they'll say holding it is a necessity. It's a repeating pattern.

Just so you know, nobody is making gold or silver either. We don't make elements. It's every bit as finite of a resource as land is.


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## Oxankle (Jun 20, 2003)

Nevada; I know you buy silver--do you buy gold as well?????

I think silver may go up or down a bit, but it is an industrial metal and cannot forever stay down.


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## Nevada (Sep 9, 2004)

Oxankle said:


> Nevada; I know you buy silver--do you buy gold as well?????


I've got a little, but I don't have as high hopes for gold as I have for silver.

I normally buy gold at eBay. I get it for less than I can get it from jmbullion.com. Just buy PAMP Suisse or Instanbul Gold Refinery bars and you can't go wrong. Small bars of 1/2, 1, 2, 2.5 and 5 grams are available.


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## Eagle-eye (Sep 16, 2014)

Nevada said:


> If you bought gold *a year ago* today you would have lost 11% of your investment, plus the 7% or so loss due to inflation. That pretty serious volatility.
> 
> Silver is even worse, since you would have lost 28% of your investment, plus 7% or so loss due to inflation.


Again, SHORT-TERM volatility. Yes. Has gold been an excellent long term hedge against inflation and uncertainty? Without question, YES.

If your buying based on one year gains, you are gambling. Buy gold and silver and hold it over the next 20 years. Month to month, week to week, year to year fluctuations are near impossible to time. You'd have as good odds at the crap tables.


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## plowjockey (Aug 18, 2008)

Eagle-eye said:


> Again, SHORT-TERM volatility. Yes. Has gold been an excellent long term hedge against inflation and uncertainty? Without question, YES.
> 
> If your buying based on one year gains, you are gambling. Buy gold and silver and hold it over the next 20 years. Month to month, week to week, year to year fluctuations are near impossible to time. You'd have as good odds at the crap tables.


If I had purchased gold (i was broke) in 1980, even after it spiked from, $250 - $850/oz, I'd have gold worth about $1600/oz today.

That's basically an 88% increase - over 35 years, which averages out to about 2.5% per year. Even buying at $250, is only 15% per year, not that great, accounting for inflation. 

How do you figure gold to be an excellent long term investment, especially as a hedge against inflation?

The stock market is_ 17 times higher_ than it was in 1980.


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## Evons hubby (Oct 3, 2005)

plowjockey said:


> If I had purchased gold (i was broke) in 1980, even after it spiked from, $250 - $850/oz, I'd have gold worth about $1600/oz today.
> 
> That's basically an 88% increase - over 35 years, which averages out to about 2.5% per year. Even buying at $250, is only 15% per year, not that great, accounting for inflation.
> 
> How do you figure gold to be an excellent long term investment, especially as a hedge against inflation?


My grandfather bought 80 acres of good farmland in 1945 for 25 bucks per acre (2k) ...... today that same farmland is worth in the 4k per acre range. (320k) I think that outruns gold, silver, and most pieces of artwork when it comes to keeping pace with inflation over the long haul. That of course is just the buy and sell figures, not counting all those years of profit earned by adding ones labor to the equation.


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## Evons hubby (Oct 3, 2005)

Nevada said:


> Just so you know, nobody is making gold or silver either. We don't make elements. It's every bit as finite of a resource as land is.


True, but then we are still mining and finding more gold and silver all the time. It may be a finite resource, but we have lots more available to us than we have found so far. Its a bit different with land. We pretty much know how much there is now, and it wont be increasing much in the next 1000 years or so.


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## Nevada (Sep 9, 2004)

Yvonne's hubby said:


> True, but then we are still mining and finding more gold and silver all the time. It may be a finite resource, but we have lots more available to us than we have found so far. Its a bit different with land. We pretty much know how much there is now, and it wont be increasing much in the next 1000 years or so.


A lot of people lost their shirts in real estate during this recession. It was bad 5 to 6 years ago, and it's bad again today. There's a real estate correction going on right now.


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## Eagle-eye (Sep 16, 2014)

Yvonne's hubby said:


> My grandfather bought 80 acres of good farmland in 1945 for 25 bucks per acre (2k) ...... today that same farmland is worth in the 4k per acre range. (320k) I think that outruns gold, silver, and most pieces of artwork when it comes to keeping pace with inflation over the long haul. That of course is just the buy and sell figures, not counting all those years of profit earned by adding ones labor to the equation.


Yes definitely farm land can be a great long term investment. I hope it is since I have some of it myself. But you have to discount the property taxes paid since 1945 and compound interest on that money. I'm sure there is still a gain to be had from it, but not quite as high as 25 bucks to 4k suggests. You've been paying property tax on that land for 70 years. No tax on holding gold other than capital gains, which you'll get when you sell your land too.


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## Eagle-eye (Sep 16, 2014)

plowjockey said:


> If I had purchased gold (i was broke) in 1980, even after it spiked from, $250 - $850/oz, I'd have gold worth about $1600/oz today.
> 
> That's basically an 88% increase - over 35 years, which averages out to about 2.5% per year. Even buying at $250, is only 15% per year, not that great, accounting for inflation.
> 
> ...


Inflation is how much per year? It runs about 2%, if you believe the CPI. That would make gold a very accurate hedge against inflation.

Sure the stock market has increased as well and that also has a place in my portfolio. However, in times of financial uncertainty stock markets usually crash and gold spikes. Both investments are TOOLS that have their application in different types of environments.

Stocks are not BETTER than precious metals, gold isn't BETTER than farm land, or stocks, they are different.


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## Evons hubby (Oct 3, 2005)

Eagle-eye said:


> Yes definitely farm land can be a great long term investment. I hope it is since I have some of it myself. But you have to discount the property taxes paid since 1945 and compound interest on that money. I'm sure there is still a gain to be had from it, but not quite as high as 25 bucks to 4k suggests. You've been paying property tax on that land for 70 years. No tax on holding gold other than capital gains, which you'll get when you sell your land too.


In my case the property taxes and other expenses have all been covered by lease payments over the years... with a fair profit left over every year.


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## Evons hubby (Oct 3, 2005)

Nevada said:


> A lot of people lost their shirts in real estate during this recession. It was bad 5 to 6 years ago, and it's bad again today. There's a real estate correction going on right now.


I agree that some people lost their shirts in "real estate" the last few years, but those losses were primarily caused by artificially overvalued "improvements" on their land. Land itself has remained pretty stable through these recent recessions. I was also referring to long term investments, not the normal 3 to 5 year turnover rate in the housing industry.


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## Nevada (Sep 9, 2004)

Yvonne's hubby said:


> I agree that some people lost their shirts in "real estate" the last few years, but those losses were primarily caused by artificially overvalued "improvements" on their land. Land itself has remained pretty stable through these recent recessions. I was also referring to long term investments, not the normal 3 to 5 year turnover rate in the housing industry.


I doubled my investment on my house over the past 5 years. As I said, buy low and sell high. You probably forgot what your opinion of Las Vegas real estate was 5 years ago, but you weren't impressed with the opportunity at the time.


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## Sawmill Jim (Dec 5, 2008)

Thing I see in a real SHTF deal it would be hard to up and run somewhere in the world carrying a thousand acres of dirt verses a hundred oz of gold . :sing: Gov comes looking for land to confiscate going to be a little hard to move or hide too :hammer:

If one can afford it both at this point would be nice to have ,just not all ones eggs in one basket :thumb: Myself I don't need anything much longer but my grandchildren may


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## plowjockey (Aug 18, 2008)

I'd buy real estate or land, over gold any day of the week.


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## Nevada (Sep 9, 2004)

Sawmill Jim said:


> Thing I see in a real SHTF deal it would be hard to up and run somewhere in the world carrying a thousand acres of dirt verses a hundred oz of gold .


In a real SHTF scenario land ownership will be meaningless. Society will collapse and there will be no functioning recorder's office. If you show someone a deed for your land there's nothing stopping him from just killing you and moving in. After all, there aren't any cops either.

Your concerns will be eating, keeping warm, and security. Nothing else will matter.


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## Sawmill Jim (Dec 5, 2008)

Nevada said:


> In a real SHTF scenario land ownership will be meaningless. Society will collapse and there will be no functioning recorder's office. If you show someone a deed for your land there's nothing stopping him from just killing you and moving in. After all, there aren't any cops either.
> 
> Your concerns will be eating, keeping warm, and security. Nothing else will matter.


Correct .As I said I know I won't need many more years of any of it but in the coming days if one has mobile assets left where their grandchildren can lay hands on them it can be a possible good start for them :thumb:

Those living hand to mouth need not worry about these things .I know one person that has lots of 1oz gold coins speaks multi languages ,he is a young person and at this point in life this is just surplus to him . :thumb:


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## Eagle-eye (Sep 16, 2014)

plowjockey said:


> I'd buy real estate or land, over gold any day of the week.


Not me, I've got enough real estate. In fact I'm getting out of some right now as I expect a pretty good sized correction coming right around the corner. Zero percent interest rates and QE can't hold the markets up forever.

I'm limiting my exposure to the residential real estate market right now, keeping my farm land and increasing gold reserves.


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## Nevada (Sep 9, 2004)

Eagle-eye said:


> I'm limiting my exposure to the residential real estate market right now, keeping my farm land and increasing gold reserves.


I still think silver is a better investment.


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## Evons hubby (Oct 3, 2005)

Nevada said:


> I doubled my investment on my house over the past 5 years. As I said, buy low and sell high. You probably forgot what your opinion of Las Vegas real estate was 5 years ago, but you weren't impressed with the opportunity at the time.


I am still not impressed with your financial "skills". First off, how much did YOU invest in your house? I understood it was Alma's money that made that purchase. Secondly by what measure are you able to claim its actual value has increased today? We know you bought it cheap but what conditions have changed that would double its value? Obama is still president, your state is still in a deep hole economy wise, and the Las Vegas real estate market is still distressed according to all the data I have been able to find.


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## DEKE01 (Jul 17, 2013)

Yvonne's hubby said:


> I agree that some people lost their shirts in "real estate" the last few years, but those losses were primarily caused by artificially overvalued "improvements" on their land. Land itself has remained pretty stable through these recent recessions. I was also referring to long term investments, not the normal 3 to 5 year turnover rate in the housing industry.


In 2011, I looked at 249 acres of timber in N Florida. It had been listed at $12M in 2005. The seller turned down an offer of $10M in 2006. In 2011, he was asking $1.8M and IMO, it was worth about $600K since 140 acres were officially wet and not buildable. 

Farmland in the midwest has seen a recent small drop and it will get significantly worse if the gov't ever stops forcing corn-gas on the public. 

My only point is that ALL assets can get inflated for various reasons and money can be lost in any investment. But I do agree with your point in general that good land is (usually) a good investment. We'll need more food produced on farms until science comes up with a really good soylent green recipe.


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## mmoetc (Oct 9, 2012)

http://www.extension.iastate.edu/agdm/wholefarm/html/c2-70.html

Check out how great an investment land was from 1980-2000. The recent run up is probably unsustainable and due for a correction. If drought breaks in some areas and commodities prices fall with greater supply watch for land values to fall back.


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## Nevada (Sep 9, 2004)

mmoetc said:


> http://www.extension.iastate.edu/agdm/wholefarm/html/c2-70.html
> 
> Check out how great an investment land was from 1980-2000. The recent run up is probably unsustainable and due for a correction. If drought breaks in some areas and commodities prices fall with greater supply watch for land values to fall back.


Some areas are already getting hit pretty hard. South Florida is taking a serious hit right now. I've lost maybe 5% of my home value over that past few months here in Las Vegas.


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## Eagle-eye (Sep 16, 2014)

Nevada said:


> I still think silver is a better investment.


I haven't done enough research on silver, but the thing that concerns me is that a big factor in the price of silver is its use in manufacturing. If manufacturing slows due to reduced demand do you think the price of silver would drop?

In other words, silver isn't ONLY a precious metal. It is tied to the many products that are used in production.


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## Nevada (Sep 9, 2004)

Eagle-eye said:


> I haven't done enough research on silver, but the thing that concerns me is that a big factor in the price of silver is its use in manufacturing. If manufacturing slows due to reduced demand do you think the price of silver would drop?


Yes, but the opposite is also true. I have reason to believe that consumption will outstrip production and supply in the next 5 years. If that's true then we'll virtually run out of silver.


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## Oxankle (Jun 20, 2003)

Not so, Nevada. When the supply gets tight and prices rise new mines will be financially feasible. 

Further, with a big rise in prices the Indians and others who treasure silver bangles will start cashing them in; there is much more silver hiding in grass huts and brick mansions than you might think. 

The price will rise, but we won't run out.


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## Nevada (Sep 9, 2004)

Oxankle said:


> Not so, Nevada. When the supply gets tight and prices rise new mines will be financially feasible.


That would be true for gold, but probably not silver. Most silver is produced as a byproduct of mining for gold, copper or lead. I suspect that even at $500/oz that silver will still be a byproduct. 



Oxankle said:


> The price will rise, but we won't run out.


That's true. We will never really run out. Price will keep that from happening.


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## Tyler520 (Aug 12, 2011)

the value of gold stagnated years ago; the moment a commodity begins to plateau and violently fluctuate in value is the precise time to abandon it.

a story to keep in mind:

During the Carter admin, the value of gold escalated drastically, and people were snatching it up left and right; the moment Reagan was elected, its value plummeted by 75%, and it took 25 years for people who invested at the top of that bubble to just get their investment back.

I'd urge people to remember this come November, 2016. Depending on how the winds are blowing, it could be a very poor investment.

Gold has become as unstable a commodity as anything else.

If anything, now is the time to invest in land - particularly arable land


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