Thursday, September 30, 2010

Gold! It's not just for paranoids anymore!

Apparently weirdo goldbugs have taken over Eurozone banks and are wandering the corridors at the UN building.

And remember: You're standing on the quarterdeck of the U$$ Dollar, and that's not the sea level rising.

25 comments:

staghounds said...

Remember Baruch and Rothschild's principle- when EVERYONE says buy, bail!

m said...

Yeah, I have a certain sense of foreboding. Hopefully We as a "force of darkness" can overcome whatever wicked this way comes. :)

staghounds said...

I've been almost physically holding myself back from buying a bucket full of Eagles for six months now. I hope I'm right...

Anonymous said...

@staghounds...BR principle is commonly restated as...

"When Main Street gets in, Wall Street gets out."

Having been in the middle of the last gold/silver boom/bust, I can vouch for the veracity of that old homily. The conditions that caused the run-up then are the same as now, but different. But the conditions that caused the bust then are nowhere in sight.

So being in the middle of this cycle too (I buy/sell $10-20K week of the stuff) I think we've got a ways to go before this bust; there ain't no Reagan on the horizon that I can see.

But I'm not a hoarder or speculator, I'm a broker...buy it and sell it for my 10-20% margin, and then do it again and again.

Do I wish I was still holding the maybe 10K oz. I've brokered in the past few years? No...I can still hear the critics saying I was wrong to dump my real estate early in THAT boom/bust cycle; look where the buy-and-hold folks are now in that arena.

So what's the top and when to sell? Let me know when you've figured that one out, and I'll talk to you about the next umm, "investment opportunity".

AT

Boat Guy said...

Nope gold isn't just for paranoids anymore; it's for RICH paranoids.
I was hoping to see a dip at or below $1K/oz last summer to buy some. Didn't happen. There's NO WAY I'm gonna pay $1300+ even if I think it will go several times higher (and I do).
I do buy silver, but not as an "investment" to realize some kind of "profit by selling it back for increaingly worthless fiat dollars but as a way to have some real money - in addition to "ballistic wampum".

Anonymous said...

I've always treated lead as a better investment.

Gmac

Desertrat said...

I like to think I'm a halfway-smart speculator. In 1980 I cleared out all my bullion gold and silver on the Saturday before "Black Monday".

Absent some sort of government stupidity, I don't see another Black Monday coming along any time soon.

That central bank folks are buying gold means they're scared spitless of the future buying power of fiat money. As long as the buying power continues its decline, the price of precious metals--and other commodities--will continue to increase.

Fun game to watch...

Joanna said...

Times like this, it's okay being young and single and broke -- if everything goes tits up, I won't be much worse off than I already am.

Boat Guy said...

"Absent some sort of government stupidity, I don't see another Black Monday coming along any time soon."
REALLY???
If you think we're "absent some sort of government stupidity" you've not read a SINGLE word that Ben Bernake has said or written.
Stand by...

"Ballistic Wampum" has lead as one of the ingredients - with others being brass and usually coppoer

Anonymous said...

Joanna:

I see we are paddling the same canoe--except for the "young" part...

cap'n chumbucket

Blackwing1 said...

Just looking at the volume of fiat dollars that already have been or are going to be pumped into the economy tells me that Carter-era inflation isn't going to be very far behind.

The problem is that (as usual) prudent people who have anything in a savings account will be losing money (value) hand-over-fist if that kind of inflation kicks in. Being an economic dummy, and not knowing what else to do with some cash, I've opted for putting a portion of our savings into physical gold (1 oz and 1/2 oz Eagles, mostly).

The rest of it is in food, vitamins, seeds, clothing, needles and pins...plus blued and stainless steel, copper, brass and lead in the forms noted by everybody. The only problem I've got is figuring out their actual value. Just how many .22 cartridges is a can of beans going to be worth?

(WV = "dencest"...that's a nice way of saying I've got rocks for brains)

David said...

I just wonder exactly what one would exchange their gold for in a total economic collapse? Dollars? Won't be worth a thing. Gonna slice off a sliver to pay for your groceries? Ammo, food, fuel will be the new currency when we truly go bankrupt...

Joanna said...

If I stock up on gold, it'll be in jewelry form. Much more conducive to barter/hock, and I get to look fabulous in the process.

Anonymous said...

If you want to hold some gold/silver, here's some of the simplest and truest advice you'll find:

http://the-moneychanger.com/commandments.phtml

The gist being, 1. Take physical possession of what you buy. 2. Buy recognized, small units of metal. 3. Don't pay much premium above metal content (Eagles are beautiful but carry the largest premium among the bullion coins, while karat jewelry carries an unrecoverable premium of 50 to 300 percent and is not nearly as fungible as bullion...don't do it, Joanna; besides, you look fabulous without it.

AT

Will said...

Joanna,
if buying your gold in jewelry form, don't forget that virtually none of it is 100% pure gold, so beware of using just weight as a measure. I would be careful about relying on the marked carat of it, also. That can be fiddled easily.

That's why bullion and coins are the primary forms used. Even they can be suspect, as doctored coins, etc, have a long history of swindles.

My father bought a couple cartouche rings in Egypt in the 80's, and we later discovered they were hollow. He thought he was getting a good deal, as they looked like a substantial amount of gold. He had never encountered hollow rings here in the states, and wasn't experienced enough to realize the heft didn't match the visual.


wv: contra. As in -indicated

Anonymous said...

I don't know about things elsewhere, but around here, the local Tiny Roman pizza joint has a guy, out front, waving a sign. So does the gold store. (No, not jewelry, not pawn shop, not even a Dollar Gen.) A gold store. I doubt they store very much.
--
Jerry

Ed Foster said...

Some of my meager stash of gold (thank you Mr. Obama, it was only worth a bit over $700/oz. the week before you were elected) is getting converted to silver. Considering the traditional relationship of silver to gold, I think the silver has a bit more upside, and, as has been pointed out, you can't easily buy a can of Spam or a brick of .22's with an ounce of gold.

It's sad really. Money put into gold or silver is money that isn't invested in something, that isn't working for the individual and collective good by growing wealth. So the flight from fiat currency justy speeds the decline.

It's not that the valuta is gaining greater value, it's that it's standing still while everything sinks around it. It's all relative I guess.

80 powdered eggs on E-Bay for about $25 post paid, good for up to 10 years.

Yoder's canned bacon, 2.5 to 3 pounds cooked down to less than a third of that, for less than you would pay in the store for the same amount of uncooked goodness.

Just about anything meaty in a can, kept in a dry cellar, down low but not touching a floor or wall. Remember, there will be lots of starch available down in the line in front of the welfare office or off the tailgate of the National Guard truck.

Start eating and rotating it now, so you can economically build up to a 6 month reserve. Hell, the Mormons have to carry a year's worth, they chip in to buy it in train lots, and every one of their homes is a friggin' arsenal.

If you can stomach theology even sillier than the average, perhaps a false conversion might not be amiss. Especially if you don't have kids to be brainwashed.

Anonymous said...

Will: Your comment to Joanna regarding most gold jewelry being alloyed (diluted) down to about 40% to 75% pure is accurate; that and the difficulty in an individual determining that purity is why I said earlier it is not as fungible as other forms. But very rarely do I see *recognized* bullion that has been "doctored" and it is obvious to the experienced eye and hand when it has. The key to all of that is to buy from a trusted dealer/broker and to have a working knowledge of precious metal before investing.

Ironically, your dad's purchase in Egypt might be better than you think; much of the jewelry from that region is nearly pure gold, usually about 90%. And being hollow has no bearing on value at all; nor does the "visual" aspect. It's all about fineness and weight, or as you say, "heft". If he bought by the gram or pennyweight at a fair 80's price, he should realize triple his investment now, even allowing for dealer profit on both ends when buying and selling. Again, an experienced dealer can test the gold and determine its actual value. Unless he was hustled, he'll make a handsome profit.

AT

Bubblehead Les. said...

I find it interesting that George Soros, the UberCommie Billionaire Financier who has funded most of the Commie Groups that surround the Anointed One said a couple of days ago that "People should not invest in Gold, that it's a Bubble waiting to burst". Since that scumbag help set up the Mortgage/Derivatives schemes that nearly put us into Depression, then made Billions off it, I'd get as much real gold and silver into the home safe as I could afford before the Gooberment seizes it and Soras gets even richer, 'cause his stash is in Switzerland.

Anonymous said...

Well of course in a total economic collapse, you can't buy cans of Spam or beans with gold.

Gold is what you'll buy the slaves with.

Will said...

Al,
I don't think he got swindled, as far as the actual gold value. I think it was more along the line of him being led to believe he was actually getting more gold for his money than the regulated gold price. IIRC, gold dealers there were required to use govt set prices.

He had a bunch of cartouche necklaces made for my sisters and stepsisters. They all had the recipients name in hieroglyphs, as did the rings.

It's suspected that he swapped or sold his ring some years before he died. He wasn't sentimental about anything he owned, so I'm not too surprised.

Mine weighs around 7-8 grams, IIRC. Long time since I measured it.
By heft, I meant that held in your palm, it's weight doesn't match it's size. This is especially noticeable when compared to a typical solid ring. A jeweler told him they were 22 carat.

Anonymous said...

That's good he didn't get hustled, Will...I've bought many a 22K heiro piece in the last several years; a testament to the bilateral influence of and immmigration of so many from the eastern/asian nations.

Your ring is probably hollow because the "lost-wax" method was used to cast it, rather than because the seller mis-led your dad. And again, as long as he bought by weight, he got what he paid for. At 7-8 gm. your ring weighs about 1/4 troy oz. Accounting for its 90% purity and the assay/refining fee if it was sold for melt, it's worth about $250. Obviously worth more than that to you; I talk people out of selling heirlooms every day. You wouldn't believe how sentiment goes out the window for some folks (oddly, especially the more affluent ones), when they see dollar signs.

An aside, karat is the correct term for the measure of fineness in the US, while carat is a measure of weight most often used for diamonds and gemstones. Don't take offense when I mention the confusion in Tam's Rant, Part Two; it is aimed at editors and professional wordsmiths whose job it is to know better, but don't.

AT

Anonymous said...

Will's ring his dad brought back from Egypt is 22 karat gold; if he wanted to add more bling, he could have a nice 1 carat diamond mounted in it.

(n/a for our euro brethren; they use carat or simply c for gold fineness, also while standards in the US are set at 10, 14, and 18K for jewelry, 9C is common in TPWGBUTB, and there's a ton of 8 karat (and lower) flooding in from Mexico)

AT

epochelyptikal said...

BlackWing1,

Figuring how many .22 shells will buy a can of beans is just a function of math based on current value:

Just make a note, now, of how many .22 shells equals the can of beans (a gallon of gas, a dozen eggs, a loaf of bread, etc) in current dollars. If a can of beans costs $2 now, and a brick of .22 shells (500 round count) costs $20 dollars, then a can of beans "costs" about a 50 count box of .22 shells in current inflationary, fiat dollars.

This will hold true through hiper inflation, in theory. Although food or ammo may have a higher "value" depending on local demand during the end times. :)

Epoch

Joanna said...

My point re: jewelry was that I don't have the scratch necessary to buy real gold, nor do I anticipate having the kind of expenses that would require cashing it in. I would be operating at the level of "Hey, wanna trade me [small amount of something]? I've got this nice gold ring here ... " If nothing else, I can work off the "ooh shiny" factor.