5 reasons to buy gold again
Gold and precious metals prices had been falling amid a rebound in the good old dollar, but things are turning around. Tighter supplies and several political factors are making gold a buy right now.
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Historically Specie (Gold/Silver) was money. Around the time of the founding of the country paper money circulated that was backed by gold and silver. I.e. you could present the paper and get Specie.
Speice has always been a store of value. It is not an investment. It is meant to store purchaing power. And for the most part it has. That $20 gold piece in the 1930's was worth $20. Today it is worth $1500. The rest is INFLATION over time. That is why the 75,000 house and 6,000 car in 1975 is now 300,000 and 24,000 today. These items didn't increase in value. And surprisingly Specie has held its value far better. In 1962 a gallon of gas was .30 (3 silver dimes). Today those 3 silver dimes will still buy you a gallon of gas.
That said Specie is not an investment. It cannot actually grow in value. A very important difference.
Also Specie tend to be accepted in times of dire economic problems, because people feel it will be worth something when paper money loses all value... Not worth a Continental... ring a bell
House of Cards,
Throughout the millenia and the many civilizations that have come and gone, some intrinsic and agreed upon medium of exchange has been the singular guidepost for every economic model that has ever been deployed. The building or accumulation of wealth is simply a manipulation in the perception of value between entities at any given moment in time. If one looks closely at the methods and the mechanics of the world's economic activity, the entire scenario is little more than a house of cards held together by the confidence of people and nations in their respective systems. If and when that bond and that confidence wanes, so to does the economic system.
Peace to all
Gold is an important part of a balanced, but diversified investment portfolio in that it serves as a hedge against inflation and systemic geo-political risks. However, we all need to remember that Americans emerged from the great depression with a burning desire to succeed in creating a stable economic future for themselves and their families through the application of incredible work ethics, innovation and faith. Unfortunately, liberals in America have allowed or even encouraged the removal of faith from every facet of our society while simultaneously fostering a pervasively “festering” entitlement mentality dependent on big government handouts rather than self-reliance and acceptance of personal responsibility. When policymakers consider America's grave social problems, including violent crime and rising illegitimacy, substance abuse, and welfare dependency, they should heed the findings in the professional literature of the social sciences on the positive consequences that flow from the practice of religion. There is still great hope for America if we can remove Obama and the other morally bankrupt liberal democrats from office in the upcoming election. However, whatever the outcome, our faith must not be in gold or the dollar, but rather in the creator!
".If you can live without oil you let me know."
If someone would try to convert this glut of natural gas into a new industry, we would be able to live without as much. The first companies to convert fleets to natural gas are going to be huge winners (UPS, Fedex, Cities, State, anyone who runs trucking fleets).
Following that will be an offering of passenger vehicles. Just like what happened with diesel in the 70s. Diesel was far cheaper, it took about 4-5 years for the trucking fleet to convert over, then passenger vehicle offerings followed in the 80s.
At these prices, it's stupid cheap compared to gasoline.
April of 2008 as soon as it became apparent, that we were going to elect a quasi socialist, either Clinton or Obama, I cashed everything out and bought gold.
Took physical possession.
You will see a drop int he market in the next 6 to 7 months, that will make 2008 look like a high school prom.
Reality has arrived in Europe, the nanny staters will inevitably try to spend their way out and Obama will push for it, more QE.
I stay in Gold until the quasi socialists have imploded the various economies and the money printing stops.
These MSM bought & paid for lackeys tell you to "buy gold again" after the horse has left the barn.
Will the chumps ever learn that EVERYTHING you read & hear from the MS financial media is designed to seperate the lumpen from their hard earned money. GEESH! As the farmer said to the city slicker.."the 2nd time you're kicked by a mule....you don't learn anything new".
"I think some of you can't afford to buy any gold or maybe you work in the stock market or mutual fund industry."
There are plenty of ETFs that are affordable to buy that mimic gold. So whiff, that's a swing and a miss. In fact, how most people actually invest in gold is not the buying of the physical asset. When you exclude central banks, industrial demand, and look only at how investors buy Gold, you will find they mostly use financial instruments.
"Gold has outperformed mutual funds and stocks by a huge margin the last 10 years no matter how you measure it."
That's like picking one stock and saying it's outperformed the market. Gold had been dead for 20+ years when it started to rise. Anyone saying they saw it coming is simply a liar (with a very few exceptions). I'm sorry, but at the beginning of the 2000s no one here had any idea that suddenly gold would take off. It looked as though the US would pay off its debt and carve a way to capitalisms utopia (and environment in which gold would be very, very dead).
"With the world economy in turmoil and every currency in trouble it would be foolish not to have gold or silver."
A) Not every currency is in trouble. Read Fitch, Moody's, or something sometime. There are countries having their credit rating upgraded even now.
B) I don't think people dispute that. Having a variety of commodities, precious metals, etc in ones portfolio makes sense in some ways. Though, Gold hasn't traded opposite the market recently, which is one very saving feature of it during those bad times.
The stockers and the speculators almost ruined the economy in 2008 and was headed that way just recently till
election year came in to play and it turned around and I am thankful for that.
Banks, speculators,politicians and Big stockers really seem to hurt the economy because they tried to get rich quick.
"They may be buying "later" gold or other things but I feel that we are still in a current downtrend, including for Gold and precious metal."
Until someone somewhere releases a ton of speculative money into the global financial system, I would agree. Whether the ECB finally starts buying up huge amounts of government debt and securing it, or the Fed launches QE3, or China decides to release hundreds of billions or trillions from their current account surpluses. Those will be the catalysts for higher commodity prices in a near term/mid term situation.
On the long side (5+ years), commodities are becoming more scarce, people are consuming more, global population is still growing. So there's fundamental reasons to see some prices go higher (gold isn't necessarily a commodity though).
Reason1: I don't see the trend turning when looking for the last 4 months at the price charts of GDXJ or even GLD. For these ETF, the recent bounce is still within the trading range around a downtrend that remains in my eyes. GDX has breached the ceiling of that trading range a week ago but has resumed its downhill path ...
Reason2: Yamana (AUY) is forecast to grow gold production by about 70% from 2010 through 2015...
Shortage of supply is in question. On the other end, production cost is said to be rising from $1100 to $1900 per oz . Isn't it going to cut into the Gold miners profits ? Shouldn't those stocks go down then?
Other Reasons: Some may look like short term but they may still take months to play out. The global market is in for a deepening correction and people are selling. They may be buying "later" gold or other things but I feel that we are still in a current downtrend, including for Gold and precious metal.
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