This Time It's Different!!!

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Narcotized

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That's what all of the Gold Bears are telling you; "This time it's different!!!" Don't listen to them; it's not different. They want you to believe for the first time in history that as an insolvent Treasury hyperinflates currency it will be different this time; that gold will actually crash in value relative to hyperinflated toilet paper currency.

It's not going to be different this time!!! It basically never is. The Zimbabwe dollar was once approximately equal to the US dollar. As Zimbabwe hyperinflated, gold eventually became worth infinity per ounce. Same in Weimar; a wheelbarrow of bills bought you a loaf of bread and gold became worth infinity of whatever their worthless currency was. Same here, unless you want to believe it's different this time; that for the first time ever, hyperinflated increasingly worthless paper bills will actually buy MORE gold, not less.

This time is NOT different. The long term target price of gold once again, as always throughout hyperinflation history, is infinity.
 
Narcotized said:
That's what all of the Gold Bears are telling you; "This time it's different!!!" Don't listen to them; it's not different. They want you to believe for the first time in history that as an insolvent Treasury hyperinflates currency it will be different this time; that gold will actually crash in value relative to hyperinflated toilet paper currency.

It's not going to be different this time!!! It basically never is. The Zimbabwe dollar was once approximately equal to the US dollar. As Zimbabwe hyperinflated, gold eventually became worth infinity per ounce. Same in Weimar; a wheelbarrow of bills bought you a loaf of bread and gold became worth infinity of whatever their worthless currency was. Same here, unless you want to believe it's different this time; that for the first time ever, hyperinflated increasingly worthless paper bills will actually buy MORE gold, not less.

This time is NOT different. The long term target price of gold once again, as always throughout hyperinflation history, is infinity.
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uhm, maybe there will be a deflationary collapse instead. 10 yr. treas bond yields 1.9 or so. Gold will tank if that happens.
 
dr doze said:
uhm, maybe there will be a deflationary collapse instead.
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Maybe Monkeys will grow wings and fly to the moon. Hey, I admit, anything is possible. But you are betting on default over printing, and while possible, it's highly highly unlikely. Without default, any short term effects of deflation will be more than offset long term by massive money printing.
 
Narcotized said:
Maybe Monkeys will grow wings and fly to the moon. Hey, I admit, anything is possible. But you are betting on default over printing, and while possible, it's highly highly unlikely. Without default, any short term effects of deflation will be more than offset long term by massive money printing.
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Japanese treasury bonds have been 1-2% (10-30 year maturity) for more than a decade. Their debt to GDP ratio is even higher, Why couldn't it happen here? If you believe in hyperinflation, Shorting Treasury bonds would be much cheaper transactionally than buying, storing, and selling Gold. Bid-Ask spreads in the Treassury market are minimal, unlike physical gold.

Go ahead, short treasuries...I dare you...
 
dr doze said:
Japanese treasury bonds have been 1-2% (10-30 year maturity) for more than a decade. Their debt to GDP ratio is even higher, Why couldn't it happen here? If you believe in hyperinflation, Shorting Treasury bonds would be much cheaper transactionally than buying, storing, and selling Gold. Bid-Ask spreads in the Treassury market are minimal, unlike physical gold.

Go ahead, short treasuries...I dare you...
Click to expand...

So not only are you saying this time is different that hyperinflation WONT cause the price of gold to rise, but you are also saying this time is different that the monsterous treasury bubble won't pop.

There is basically nothing similar between Americans and Japanese, and they owe pretty much all of the money to themselves. Shorting treasuries will be a no-brainer. All about timing. As truly worthless as internet stocks were, people lost their entire savings shorting them at the wrong time on the way up. Holding treasuries is synonomous with idiotic on a risk/reward basis.

Get back to me in a year or 2, or maybe a decade or 2, about your 2 instances you say will be different this time. You'll smile to yourself and say, yeah he was right. I don't know or care when the time is, but I know for absolute certain it's not going to be any different this time when it does happen.

btw- Gold could easily be well ahead of pace right now. Who cares, do you trade your bank savings in and out of currencies on a regular basis depending on which is doing better? As for storage, a $70 a year safe deposit box holds all the gold 99% of us would ever hold in a lifetime. It is incredibly simple to buy and own physical gold: a phonecall, a check, a trip to the post office, and a trip to the bank; totalling an hour or 2.
 
Narcotized said:
So not only are you saying this time is different that hyperinflation WONT cause the price of gold to rise, but you are also saying this time is different that the monsterous treasury bubble won't pop.

There is basically nothing similar between Americans and Japanese, and they owe pretty much all of the money to themselves. Shorting treasuries will be a no-brainer. All about timing. As truly worthless as internet stocks were, people lost their entire savings shorting them at the wrong time on the way up. Holding treasuries is synonomous with idiotic on a risk/reward basis.

Get back to me in a year or 2, or maybe a decade or 2, about your 2 instances you say will be different this time. You'll smile to yourself and say, yeah he was right. I don't know or care when the time is, but I know for absolute certain it's not going to be any different this time when it does happen.

btw- Gold could easily be well ahead of pace right now. Who cares, do you trade your bank savings in and out of currencies on a regular basis depending on which is doing better? As for storage, a $70 a year safe deposit box holds all the gold 99% of us would ever hold in a lifetime. It is incredibly simple to buy and own physical gold: a phonecall, a check, a trip to the post office, and a trip to the bank; totalling an hour or 2.
Click to expand...

I neither assume or predict inflation or deflation. The arguments for both are reflected in the price of stocks, bonds and gold. My portfolio asset allocation is exactly the same as it as 10 years ago except for 10% more of bonds as I am 10 years older. All of those bonds are short or intermediate term.

Shorts are mostly correct...eventually. It is that 'eventually' that kills most of them. The people who screamed short the NASDAQ @ 3000 were absolutely right. I doubt there were many of them who were able to hold their positions @ NASDAQ 5000... they had been devastated, as those who have been shorting Treasuries have. Again my comments are about financial markets NOT Economic growth.

BTW: http://www.apmex.com/Category/290/Gold_Eagles___1_oz_2011__Prior.aspx

1 oz American Eagles are going for 4.7% over spot. This is the cheapest I could find on the internet. I assume the sale commission will be 4.7% under spot price of gold. Doesn't include insured shipping. Also Bullion is taxed @ 28% special collectibles. Regardless of holding period. Gold has to go up 10% for you just to break even.
 
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Gold coins like the U.S. Eagle Can be sold at spot price and not spot minus 4 percent. Some dealers are glad to get the coin at spot as they pay more than spot themselves.

Second, some dealers will give you cash in exchange for gold coins. No paperwork needed. It's up to you to pay Uncle Sam.

Third, you can purchsase Gold Bullion online with minimal shipping costs and no taxes.
 
dr doze said:
1 oz American Eagles are going for 4.7% over spot. This is the cheapest I could find on the internet. I assume the sale commission will be 4.7% under spot price of gold. Doesn't include insured shipping. Also Bullion is taxed @ 28% special collectibles. Regardless of holding period. Gold has to go up 10% for you just to break even.
Click to expand...

Gold transactions are not submitted to the IRS. I paid about 4.5% over spot, shipping including, and as Blade says they can easily be sold at spot or greater, so a meager 4.5% is break even. We are in a slow eventual dollar collapse, so 4.5% gains will occur often just in a single day.

I don't consider gold an investment. I just consider it "stuff." I want to own "stuff" and not paper. Stuff can be my house, land, cars, guns, food, oil, gold, cows, whatever. It's something you have of value WHEN the dollar collapse occurs.
 
Narcotized said:
Gold transactions are not submitted to the IRS. I paid about 4.5% over spot, shipping including, and as Blade says they can easily be sold at spot or greater, so a meager 4.5% is break even. We are in a slow eventual dollar collapse, so 4.5% gains will occur often just in a single day.

I don't consider gold an investment. I just consider it "stuff." I want to own "stuff" and not paper. Stuff can be my house, land, cars, guns, food, oil, gold, cows, whatever. It's something you have of value WHEN the dollar collapse occurs.
Click to expand...

Narco,

Just out of curiosity what percentage of your portfolio is stocks?
what percentage cash/bonds/CDs?
what percentage gold/precious metals equity?

By your own post the treasury bond meltdown and dollar collapse might not happen for a "decade or two"
 
Narcotized said:
Gold transactions are not submitted to the IRS. I paid about 4.5% over spot, shipping including, and as Blade says they can easily be sold at spot or greater, so a meager 4.5% is break even. We are in a slow eventual dollar collapse, so 4.5% gains will occur often just in a single day.

I don't consider gold an investment. I just consider it "stuff." I want to own "stuff" and not paper. Stuff can be my house, land, cars, guns, food, oil, gold, cows, whatever. It's something you have of value WHEN the dollar collapse occurs.
Click to expand...

Besides Gold other "stuff" includes U.S. Silver Coins, Oil, Coal, Copper, Fertilizers, etc. Right now you can buy the companies which control/own most of this stuff for a huge discount as we are in a recession. The stocks of these companies are selling at a discount to fair value.

I'm not as pessimistic as Narc but realistically, holding hard assets is a good idea as part of your portfolio.
 
Holding gold or other commodities is not a means to "invest" its a means of wealth preservation. Say if you make 10% gain in gold don't think about it as a 10% gain in gold rather think about it as not loosing 10% in dollars. Its obviously not quite that simple but gold is rising due to a loss of confidence in the dollar and devaluation.
Premiums are expensive in gold but now we are having regular swings of 2% moves in gold in a day and that's with gold around 1850. Volatility is the name of the game now more than ever and can be hard to stomach but is much better than the alternative.
 
Holy tomatotes. Gold and silver down with the market. Dji @ 10,700. 😱

Whose has the balls to jump in?

Whacha think blade? You buying gold and silver at these levels? Or r u waiting for them to drop further?
 
sevoflurane said:
Holy tomatotes. Gold and silver down with the market. Dji @ 10,700. 😱

Whose has the balls to jump in?

Whacha think blade? You buying gold and silver at these levels? Or r u waiting for them to drop further?
Click to expand...

If it drops a little further I will be selling a few of my munis and buying international stocks. Not quite outside my tolerance band yet. Notice again that high quality bonds are the only thing going up.
 
Narcotized said:
I say history and he shows me a chart 2 weeks later... 🙄

Gold for past 6 years or so has been in a upward channel growing about 18% a year; doubling about every 4 years. It has hit the peak of this channel on a few occasions (around 700 and 1000; 1000 being a bit more than half of 1900, and a bit short of 4 years ago). It then took up to a couple years to break through these points, so 1900 could prove to be resistance for quite a while. The bottom of the channel is maybe 1400, so a large drop would not be surprising.

It will keep its 18% a year average chugging along as our currency devalues to nothing. I'm sure along the way a lot of people will point out a few week or few month bad period as proof that its run is over.

Treasuries, especially long term treasuries, are probably about the worst investment of alltime. Well, maybe a hair better than lightbulbs.com or some other ridiculous internet stock of 10 years ago.
Click to expand...

BUMP

Narco,

Just out of curiosity what percentage of your portfolio is stocks?
what percentage cash/bonds/CDs?
what percentage gold/precious metals equity?

By your own post the treasury bond meltdown and dollar collapse might not happen for a "decade or two"

Still waiting to see. You preached your beliefs. I really want to know what the above numbers look like. You have avoided the question several times now.

BTW Silver down nearly 10% today.
 
I think this is just a little pull back from some serious run ups in PM's.

As time goes on, the enevitable bad news will keep coming and countries will do what they have no other options (or political will) to do, which is to inflate their currencies. So, eventually, people will move back into PM's. For now there are enough distractors which tend to "cover up" just how bad things are in many countries as well as some of the biggest banks in the West.
 
Yep. Slv @ 29.78... but I think it has room to drop. One of my partners put in 100k into silver when it was 15. It may not get there again... but he thinks it might get close, especially if the market tanks. 🙄
 
sevoflurane said:
Yep. Slv @ 29.78... but I think it has room to drop. One of my partners put in 100k into silver when it was 15. It may not get there again... but he thinks it might get close, especially if the market tanks. 🙄
Click to expand...

Nobody knows nothing.
 
Lets face it, things have changed a hell of a lot from the times of investing in a "good" dividend paying stock, during times of reasonable market stabilty.

As much as I know Doze hates me cause I'm "anti-Semitic", it's true, his last statement.
 
cfdavid said:
lets face it, things have changed a hell of a lot from the times of investing in a "good" dividend paying stock, during times of reasonable market stabilty.

As much as i know doze hates me cause i'm "anti-semitic", it's true, his last statement.
Click to expand...

שקית מקלחת
 
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A Greek default seems almost inevitable. But, what happens when their austerity measures simply fail? Will the ECB STILL be willing to restructure (i.e. take on more debt on their behalf), or will the Germans say enough is enough, as they already have been. When will THEY start marching in the streets?

http://www.nytimes.com/2011/09/25/w...s-suffer-and-fear-future.html?pagewanted=1&hp

But, now the stakes are even higher, and I can see how it might be harder and harder to let a default happen since so many European banks are exposed to this debt. So, will European banks get "bailed" out? Will the EU keep this charade going?

Volatility.
 
I always thought the right thing to do was to buy before they go up, not after.
 
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