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deleted
146 Posts |
 Posted - 08/03/2007 : 03:52:17
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Hi,
Haven't been here in a while.
I was taking a look at various charts and Web sites and realized that gold and silver seem to be more monetary units than investments.
Stocks and funds are investments. If you look at charts of the Dow, S&P, etc. they only go up in the long run, though there's still a risk of short-term problems.
Gold and silver are not investments. If they are, they are terrible investments. With few exceptions, the prices of gold and silver fluctuate but generally remain the same (with few exceptions, such as the early 80s and the present). If you "invest" in gold or silver and then sell the bullion, most of the time the difference will be slight, which (when taking into account fiat money inflation) will most of the time be a loss.
Gold and silver are monetary units, not investments. While they are not officially considered money by any government anymore, they are not investments. They are monetary units because they have more industrial value than cheap paper.
What do you think?
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"The best way to destroy the capitalist system is to debauch the currency. By a continuing process of inflation governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens." -John Maynard Keynes
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pencilvanian
1000+ Penny Miser Member
USA
2209 Posts |
Posted - 08/04/2007 : 17:22:05
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I think you are right Old Nickel, gold and silver (and to a lesser extent, copper) were money for centuries, to think of silver & gold as mere commodities seems out of place. Granted, both gold & silver have their uses in industry and medicine, but these metals are still viewed as money, or better than the money that circulates today.
Even though gold & silver had their prices fixed in London for decades and were viewed as commodities, the metals still served as both money & as an investment (or more accurately, as speculation.)
Sorry for the late post, I needed time to consider what you said about investment v money.
I should have chosen "Cut-n-Paste" as a forum name, since that is what I do, mostly. |
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Ardent Listener
Administrator
USA
4841 Posts |
Posted - 08/04/2007 : 18:33:28
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IMO,I think that is more true for gold than for silver. Silver has far more practical industrial uses than gold. Unlike gold, a lot of silver is consumed never to be recycled again. The dumps are loaded with it. PMs may have been terrible investments in the past due, in my opinion, to price manipulation that continues to this day. For example, the federal goverment sold off their huge reserve of silver to keep the price down. They no longer have such a reserve but the silver market is small and those in power are able to keep it in check by going short in the market. How long this can go on is anyone's guess. Those who doubt that the silver market can be manipulated only need to remember the Hunt brothers in the late 70s when they drove the price through the roof.
As pencilvanian said, PMs are a speculation. Will silver mining be able to keep up with demand or are we about to see higher prices as mining and recovery starts to lag behind? How fast and how high silver prices will go is debateable. I'm not calling for $100 silver in today's dollars anytime soon. But perhaps $ 20-25 dollar silver within a few years is realistic if the world ecomomy can continue to grow.
But I guess a lot of us buy PMs mostly as an insurance policy just incase SHTF and all of a sudden they become real money again.
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Fanaticism is doubling one's efforts, yet forgetting one's purpose.
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c140cessna
Penny Collector Member
USA
419 Posts |
Posted - 08/05/2007 : 12:24:46
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The reason PM has been a poor investment in the past, it that the world if chocked full of fools. Why on earth would anyone trade their hard work or real items for a worthless, unbacked piece of paper? It is insane, and not too far down the road, the world will wake up to this fact as all fiat currencies will seek zero value. Our US dollar only has 4% of the real world purchasing power it had in 1913 when the Fereral Reserve and our Government really started putting the screw to us. If civilization survives long term, people will look back at this crazy period in history and see just how nuts we were.
Because of this general ignorance of most folks....PM has been a very poor investment and also a very poor money form.....Silver and Gold don't really even keep up with inflation...but this is about to change.....and change in a very big way.
What do you think the values of our metal would be if our Government reported the true rate of inflation, which is currently around 13%....not the outright lies of 3%. Heck, the M3 money supply (which our govt stopped reporting over a year ago) is increasing at 13%/yr alone. Look at the costs of Food and Energy...which are both excluded from govt inflation numbers.......but the Sheeple continue to just eat these numbers up and slog on like mindless slaves....
Count your blessings to be informed and have an opportunity to get out of paper and into real metal money .....at a current fantastic discount!
Look at the US Dollar Index - that measured our dollar against a basket of foreign FIAT currencies...all of them in an inflationary free-fall....the US Dollar is now at 80ish...and was 120ish just 4 years ago. They are all going down but ours is screaming downward. My brother took a job in Germany about 4 years ago....for every $100 he got 125 Euro.....today $100 will buy about 73 Euro....The world knows our dollar is dropping in value very fast...and it will not be long before it is felt here in the USA.....I'm feeling it right now....but what about when it really hits home and you start to feel the 13%+/year purchasing power loss.
Do you realize that at 13%/yr purchasing power decline, it only takes about 5.5 years for the value of something to go to 1/2 the original value? A major reason OIL is now $75/bbl is that our dollar is only 2/3 as powerful as it was a few years ago....if we had the same dollar we had 4 years ago, oil would probably "only" cost $50/bbl...the rest is due to current supply issue and growning world demand.
MY PREDICTIONS: Gold will be several thousand dollars within 5 to 10 years ($3000 - $10,000+) and Silver will be nearing 33% the value of gold...or perhaps even EQUAL to gold. Why? There is currently LESS SILVER THAN GOLD in our real world....and silver is useful (to industry), while gold is mostly useless. Silver is a super deal these days at 1 oz gold = 50 oz silver.....when they COULD be 1 oz = 1 oz. Now talk about an investment! A chance to make 50X or more!!!! Over 95% of all the useless gold ever pulled out of the ground is still here today....because it is useless (jewlery and teeth...). All the gold in the world (dug up over the past 5000 years!) would cover a football field 4.5 feet deep...or for an even more shocking picture, would make a 60 ft cube. One the other hand, there are some expert opinions that think there is just 50% this amount of Silver.....yet the world values silver like there are 50 football fields of silver...yet there is just 1 football field and it is possibly just 2 feet deep!
The first small increase in Silver as an investment device, and it will go up like a rocket. There is less than 1000 Million Troy Oz of silver in the world right now.....that is just $13B dollars in metal....Bill Gates alone could buy all the silver in the world 6X if he wanted....just a little investment demand by Joe Sixpack in his weekly 401k and it will go to the moon.
Mind you, I'm a nut bag and probably do not know what I'm talking about....follow my rantings at your own risk....
Buy all the silver you can .....trade all the gold you can for silver. Swap all stocks for gold or silver. Hoard all the base pennies you can as you get them for just 40% of spot price. Before the SHTF....trade all metals for Food and Energy and other items needed to survive.....you can't eat metal and if it gets really bad, all the metal in the world will not buy you items to keep you alive....I would not trade my items of life for chunks of metal.
Good Luck!
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Edited by - c140cessna on 08/05/2007 12:42:18 |
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deleted
42 Posts |
Posted - 08/14/2007 : 15:53:34
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quote:
Originally posted by Old_Nickel
Gold and silver are monetary units, not investments. While they are not officially considered money by any government anymore, they are not investments. They are monetary units because they have more industrial value than cheap paper.
What do you think?
Money and investments are not mutually exclusive, they can be both. The Liberty Dollar advertises itself as money not investment, but they are de facto worse than investment, rather a 'buy only' non-refundable silver commemorative.
Collector coins, investment coins and money can be all in one or shared properties. REMEMBER that money and value is ONLY as good as it's recognized and agreed upon. Today people agree on paper money, if you can convince people gold and silver are worthless, it will be. |
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Gold and silver: Investment or money?
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