Skeptical about gold

Actually more accurately some gold coins are Lawful Money, The only definition of actual money.

Legal Tender can be anything GOV says it is but Lawful Money is gold or silver coins minted by US Gov.

chaynes68 said:
Some gold coins are legal tender so their value can never hit zero.
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GIM is the place you want to go to learn about PM's.
http://goldismoney.info/
 
green_metalflake said:
The value of precious metals in a survival scenario seems dependent on time-line. Metals would likely have their greatest "value" in the beginning of an emergency when there is a lack of confidence in established currency(ies) but some belief in eventual order restoration. In other words metals might be converted back into stable monies sometime down the road. If things deteriorated completely however it would only be those in a secure long-term situation who could 'afford' to keep it and can tie-up value there. In other words, value not needed for more pressing survival uses. In the interim it would be basics that have the greatest utility to most, like a box of .22 LR as an example.
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That's a good point. I'd been thinking about a situation where everyone is struggling to meet their basic immediate needs, and not looking much past that. But people who are hopeful that "normalcy" will return and are preparing for that, might want to accumulate gold or other precious metals for that day. And as you say, that's most likely to be those few who started out better prepared. And they'll be the ones with lots of the stuff that others desperately need - the seller in a seller's market. And possibly the only seller around. So they can get whatever price in gold they demand for their stuff.
 
Chuck said:
So, if one did want to hedge his bets and convert some green pieces of paper into gold, where to buy? All I know are the hucksters on TV!
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There are a number of reputable online places. I use apmex.com. They seem to have consistently low prices for physical bullion in whatever form you want. You can get a good deal on shipping/insurance if you pay by check.

I've used them for years buying gold bars, gold eagles/maple leafs/kruggerands, silver bars, silver coins, etc. They lock in the price when you order, no minimum orders, they ship when they say they ship, insured, needs signature, well packed, as advertised. Couldn't be happier with them.

(no I don't work for them, nor earn a referral, though they SHOULD pay me because I talk them up all the time!)
 
Chuck said:
So, if one did want to hedge his bets and convert some green pieces of paper into gold, where to buy? All I know are the hucksters on TV!
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You can check out local coin shops by plugging in your ZIP code:
http://www.coininfo.com/coin_dealers/zip/01824

I would compare their prices against these online places though to see how they stack up, I have bought from these two before:

http://www.caminocompany.com/itemsweoffer.htm

http://www.bulliondirect.com/

I have also heard www.apmex.com is good to do business with.


Also probably a good idea to bear in mind the IRS rules when buying or selling precious metals:
http://www.golddealer.com/selected_facts.html

Selected Facts About I.R.S. Reporting


We have included this chapter because investors are not aware that your friendly government is interested in some aspects of the precious metals. Frankly they should be minding more important areas of the nation, but who are we to criticize Uncle Sam? Besides he is very serious about rules, most of which serve to confuse everyone.

There has always been speculation about reporting rules. Some say they were designed to track money laundering in the United States. We find this difficult to believe as most bullion transactions are done over the phone and paid by check. Large cash transactions have been non-existent since the 1970s when cash reporting rules were passed into law.

Most people will buy the idea that large cash reporting is a good idea if it is linked to something like trading drugs. But many think that such government prattle is just a cover up for a more clandestine notion. And here is what everyone is thinking but few will write about: The I.R.S. rules which apply to cash transactions are fine, but why are those same rules extended to cover certain bullion coins and bars? Why does the government want to know when you sell something that is rightfully yours?

If Uncle Sam has faith in the way he is handling our money supply why should he be interested in who owns gold or silver? The reason may relate to the fact that the last time our currency and country was in real trouble was during the depression. And it was during this time (1933) that the right to own gold was taken away from Americans. Use this link to view our special report entitled The Confiscation Dilemma & America's 8 Piece Gold Set.

Some now believe our government is nervous about its currency and wants to track gold ownership in case of an emergency. We will leave this speculation up to you but should something like this happen the price of all hard assets will move dramatically higher.

The following is what The Industry Council For Tangible Assets has to offer about what the I.R.S. wants in the way of paper work. They are describing the paper work provided by bullion dealers which relate to what you purchase or sell. These rules are taken from the ICTA newsletter Washington Wire dated December, 2004. Call Brent toll free at 1-800-225-7531 if you would like a copy.

First: You can place any size order and pay with a check. No one cares, not even the government. The only time they want to hear from us is if you invest more than $10,000 in cash. Then you must fill out I.R.S. Form 8300. There is nothing wrong with large cash transactions, but the government wants to know about them. And, by the way, you can't spend $5000 today and $6000 tomorrow, for Uncle Sam does not like to be fooled.

Second: There are rules which apply only to bullion and only when you sell. They have nothing to do with your purchases, and do not apply to rare coins. Kilo bars are 32.15 troy ounces of gold and are subject to reporting. We are also required to report any gold bar sale totalling 32.15 ounces are more. Concerning 1 troy oz. gold coin transactions: If you sell 25 coins or more of the Krugerrand, Maple Leaf or Mexican Gold Onza we are required to report them on I.R.S. Form 1099B. Such reporting is not required on transactions involving the U.S. Gold Eagle the Australian Kangaroo or the Austrian Philharmonic. There is also no reporting on any small gold bullion coins.

Third: We are required to report $1000 face 90% silver bags and 1000 ounce silver bar transactions only when you sell to us. We are not asked to report the sale of 40% bags or less than $1000 face in 90% silver coin. The 10 and 1 ounce silver bar is exempt as long as the sale does not exceed 1000 ounces.

Fourth: Platinum or palladium bars in quantities of 25 ounces or more are reportable. Platinum bullion coins like the Canadian Maple Leaf, the U.S. platinum Eagle, or the Australian Koala are exempt. Palladium bullion coins like the Russian Ballerina are exempt. If these rules seem arbitrary we don't blame you. We believe our government based their decisions on what was traded on the nation's commodity exchanges and had little to do with what was happening in coin stores across America.
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Does anyone on this list have experience dealing with the larger reputable exchanges (Monex, etc.) and, if so, what were you getting for the buy/sell spread?
 
Well a couple of dozen years ago "someone" I know bought like 20-30,000 worth of gold when it was "high" or a good investment thinking it would be a great choice.
A short time later the "value "of gold dropped to like 10,000, At which time the "stock pile" was sold at a loss to try and re-coop the loss, to this day the poor guy( who did make a few bad choices) has not lived the mistake down... so if your gonna buy gold and horde it ... make sure you have the "time" to horde it for your "killing"...
 
I read a good article on this very topic a while back. Cant seem to find the link or the article. The basic concept of the article was Keeping gold or silver for a SHTF situation is ok, but if you ask anyone that lived through a war in the own country they will tell you that Booze was always something that could be traded for food or fuel, bullets, ect.. In a war torn country Booze is always an acceptable form of currency.
 
phylor5333 said:
Well a couple of dozen years ago "someone" I know bought like 20-30,000 worth of gold when it was "high" or a good investment thinking it would be a great choice.
A short time later the "value "of gold dropped to like 10,000, At which time the "stock pile" was sold at a loss to try and re-coop the loss, to this day the poor guy( who did make a few bad choices) has not lived the mistake down... so if your gonna buy gold and horde it ... make sure you have the "time" to horde it for your "killing"...
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Very true. When I'm buying at $900/ounce, I'm not thinking about making a killing. I'm perfectly fine with it going back to $350/ounce. I think of gold as a very expensive insurance policy, hedging against the dollar collapsing. If the dollar doesn't collapse-- great!. Just because I pay thousands of dollars a year in home and auto insurance doesn't mean I'm hoping my car gets stolen or my house burns down! [grin]
 
JohnM said:
Very true. When I'm buying at $900/ounce, I'm not thinking about making a killing. I'm perfectly fine with it going back to $350/ounce. I think of gold as a very expensive insurance policy, hedging against the dollar collapsing. If the dollar doesn't collapse-- great!. Just because I pay thousands of dollars a year in home and auto insurance doesn't mean I'm hoping my car gets stolen or my house burns down! [grin]
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And I bet you are one of those crazy people who have a fire extinguisher in your kitchen on the off chance you have a fire! Or one of those nut jobs who carries a gun in case you're mugged!
 
Gold...

ok - gold. yes, it's a good hedge against inflation. But so are all commodities. If indeed your investment objective is to keep pace with inflation, then gold can work (although there are plenty of more efficient vehicles for accomplishing the same objectives - especially for short time horizons less than 3 years or so).

If your sole objective is to hedge against inflation, just by consumer goods that hold value. Guns (high quality ones) do just that... and since people on this board do seem to be into that hobby, that may make a lot more sense.

The issue with commodities like gold and guns (even though a gun is not "fungible" commodity as gold is) is the transactions costs. Like with any physical commodity, you need to pay to finance it, insure it, and store it. Those costs eat into your holding period returns.

The real reason to buy something OTHER than commodities, however, is that commodities historically generate ZERO real return (they generate nominal returns, hence the inflation hedge). Of course, stocks can generate negative nominal returns (and even more negative real retruns).. so the safety factor is a consideration...

Anyways. Don't buy gold. Just buy guns if you're concerned about inflation.
 
CambridgeGuy said:
Anyways. Don't buy gold. Just buy guns if you're concerned about inflation.
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That's foolish advice, even for a gun forum. Investing in a single commodity is a bad idea no matter the commodity. Guns have potential legal changes that can dramatically reduce (or increase) their sale value. Gold has been confiscated in the past. Other commodities have their own risks. Diversify at least into the major "survival" categories so you have that additional hedge against loss. The three Gs (Guns, Gold and Grain) or the three Bs (Bullets, Booze and Beans), pick your letter. Either way holding your inflation hedge in a single commodity is foolish.

-Nat
 
Gold have very few industrial uses. It's primary industrial use is as an anti-corrosion plating. In this use, a few microns of gold are electro-chemically plated onto the surface of a "base" metal to prevent oxidization from damaging or destroying the base metal.
Gold is inferior to other, more common and less valuable metals in EVERY OTHER ASPECT. The vast majority of gold mined and processed today is used for jewelry. If the adornment market for gold dissappeared, gold would plummet in value drastically. Copper and Silver are both more valuable to industrial manufacturing and processing than gold.

So, why has gold had "value" as a currancing for over 2000 years? Because it is a limited resource, nearly immune to enviornmental corrosion and degradation, making it "stable" and that "awe" of that has given in value. In addition, we have assigned it a huge sentimental value that is way beyond any intrinsic value.

From accounts that I have read about economic collaspe in several areas, gold has had value after the economic collasp, but pure gold bullion and gold coins were rarely given value above "cheap" gold rings - Making 10-12karat rings a better "SHTF" investment than bullion. Remember, during these local economic collaspes, the rest of the world economies were functioning and gold was the only "hard currancy" available in the collasped area since foreign contries wouldn't accept the local "legal tender" as its government had nothing of worth to trade the tender for.
If the entire world's economy collaspes, gold and silver may not hold their value as everyone expects since the senerio changes - If every economoy falls together, there's not wealthy nation out their to sell the gold to, and it's value plummets rapidly.

As many have pointed out, it's an insurance policy, a hedge against the legal tender becoming "soft" and losing value. It's advantage over other goods is that is doesn't corode over time, so in 100 years, your 1oz bar is still 1oz of gold and not 1/2oz of "metal" and 1/2oz of corrosion.
 
Put your money in waterfront recreational properties located in warm weather states. Greatest investment vehicle ever devised and it always stays at least decent (return) in the worst of economic times like these. The wealthy are largely unaffected by the economy and they give up their fun times last. I know this personally. I've owned South Florida income property in Key West since 1984 and have never lost a dime in any fiscal year. As for gold; my financial adviser and my accountant both tell me only the unimaginative buy gold except for jewelry.
 
SA John said:
Put your money in waterfront recreational properties located in warm weather states. Greatest investment vehicle ever devised and it always stays at least decent (return) in the worst of economic times like these. The wealthy are largely unaffected by the economy and they give up their fun times last. I know this personally. I've owned South Florida income property in Key West since 1984 and have never lost a dime in any fiscal year. As for gold; my financial adviser and my accountant both tell me only the unimaginative buy gold except for jewelry.
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Although I'm not an accountant,financial advisor or real estate mogul,I will make a SHTF investment strategy suggestion.
For as little as $19 per /year investment you can support the NES the shooters forum.
By going "GREEN" you are guarented high yield returns,commerodery & continuing to ensure liberties of the second amendment.[grin]
 
Atlas,

I'm on the same page as you. I'd feel more comfortable by stocking up on things like cigarettes, alcohol, food, spices, etc that you can use in barter in a shtf situation. The way I see it is that a lot of people will be struggling to just survive or meet basic needs with their family. People would be more willing to trade for something that will directly meet a need for them instead of shiny piece of metal that they may or may not be able to determine if it's authentic and then may or may not be able to obtain the thing they need with it.

Gold may retain a lot of its value, but it may be impractical for day-to-day use. Just my $0.02.
 
If in a SHTF scenario, where money is useless and people are all just looking for food to survive, and shelter for their families, gold will be useless. The only things valuable to trade will be survival tools, food, weapons, and transportation. Who would trade a gallon of water for an ounce of gold if it was their last gallon?

In an economic crash situation, where there is still an economy somewhere left, yes gold will have value and the dollar will not!
 
Gold is an effective tool for protection from local economic collapse because it will still have world value. It is not an effective monetary tool in a Total, End of the World as we know it. When the priority shifts from wealth accumilation to survival, gold becomes worthless to most of the population. The only ones who value it significantly are those already planning for the recovery.

Also, if you read the article about the more recent economic collapse in Venezula, the author points out that gold coins and gold bullion were valued similarly to cheap gold rings and jewelry. As a result, the later were more effective "wealth storage" vehicles since the prior are much more expensive initially.

A caution on most gold coins - most gold coins have a significant "collectors value" mark-up well above the metallic value of the coin. Even if the metalic value of the coin is maintained during a SHTF aftermath, this collectors value is almost certainly not going to be maintained.
 
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Gold is absolutely the way to go, especially when you have a larger amount of currency. Inflation will certainly happen with 3 more trillian dollars pumping into the market. Gold does have value because there is a limited amount of it throughout the world. Although it's only a rock, gold is used primarily for jewelry and people trust it as the standard. When the US first came off the gold standard (having equal value of gold behind each dollar), it protected the value of the currency. However, they came off the standard in order to devlop faster than they should because now money is "virtual". In that I mean for every thousand dollars you borrow from the bank, the bank could have a dollar in real savings. The banks were able to do this because the more they lent, the more theoretically they would receive in revenue from interest payments. When they started to lend more they started to lend to people that were not able to pay it back, and when the people can't pay back the loans the banks are pretty much worthless because they had little physical savings to begin with.
 

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