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Old 04-22-2020, 06:22 PM
rriley rriley is offline
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Originally Posted by Gulcher View Post

Read yesterday on a Financial Page that US GDP is projected to drop 30-40% by the end of 2020. .......... I am thinking of preserving some income in physical gold.
1. The posts on financial pages are meaningless.

2. In the last 20 years gold has gone from $250/oz to $1,900/oz in 2,011, back down to $1,050/oz in 2015 then back up to $1,700 now.

I am not sure how any commodity with that kind of volatility would be helpful in preserving wealth. Purchasing gold is a speculation more than a strategy to preserve wealth.
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Old 04-22-2020, 06:34 PM
Elvin Moseid Elvin Moseid is offline
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Wits and skills as well as real values. Land to farm and grow food. Oldschool...

If you live in the city you are already dead...
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Old 04-22-2020, 10:10 PM
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Who knows, we may find ourselves in a position where a lot of real estate (residential and commercial) goes vacant. Since real estate is price-propped by governments and banks alike, for the benefit of developers and speculators, it's quite likely we'll see enormous numbers of vacant buildings and store fronts. It'll be priced out of reach from the local economy, even if that means letting nature take it over and succumb back to the elements. This will be done to protect the absentee landlords (https://en.wikipedia.org/wiki/Absentee_landlord) and global real estate speculators.

There is something called "squatter's rights". Look it for up your jurisdiction. If a property has been abandoned by its owner for a certain amount of time, and someone else has moved in, improved it, etc. for a certain amount of time -- it is much more difficult to evict such a person. Maybe set up shop in an abandoned strip mall at some point, dealing in antiques or somesuch.
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Old 04-24-2020, 02:43 PM
Toyboy Toyboy is offline
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i moved all my stocks into defensive bond holdings on valentines day. I still lost money. Now I am buying the SP500. But I am also holding a lot of cash, to be flexible should some great buys appear, be they real estate or whatever. in the 2008 downturn, i bought a radio license, no one was buying the new ones, i held it 2 years and made 40%. nothing is guaranteed. pay off your debt, be liquid, be flexible. if the whole world collapses our money and likely gold wont mean anything. i am betting it wont.

one thing i am seeing around here is a lot of rentals that are empty. kids all moved home. the college age crowd has stopped spending, there is no where to spend their money. they still have it, and will spend once it starts again.

don't panic, use common sense and we all will be ok.
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Old 04-24-2020, 02:46 PM
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Quote:
Originally Posted by rriley View Post
1. The posts on financial pages are meaningless.

2. In the last 20 years gold has gone from $250/oz to $1,900/oz in 2,011, back down to $1,050/oz in 2015 then back up to $1,700 now.

I am not sure how any commodity with that kind of volatility would be helpful in preserving wealth. Purchasing gold is a speculation more than a strategy to preserve wealth.
a valid point about gold, add to that that something like 90% of the gold that was ever mined is still in physical existence. if someone wanted to buy metals id suggest silver. still cheap historically compared to gold, a large percentage of it is used in technology and manufacturing, and removed from the market in the process. i continue to feel like it is artificially low. but it is rare, it is being consumed, that gives it plus over gold.

as always, physical metals are what should be invested in, hold them yourselves
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Old 04-24-2020, 04:31 PM
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Quote:
Originally Posted by rriley View Post
1. The posts on financial pages are meaningless.

2. In the last 20 years gold has gone from $250/oz to $1,900/oz in 2,011, back down to $1,050/oz in 2015 then back up to $1,700 now.

I am not sure how any commodity with that kind of volatility would be helpful in preserving wealth. Purchasing gold is a speculation more than a strategy to preserve wealth.
Yeah, PMs have been up and down, basically useless.

However the stock markets and bonds have been solid like a rock, right?

Real estate hasn't been that solid over the last 20 years either.

Even bitcoin, the new guy on the block can't seem to find long term stable value.
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Old 04-24-2020, 05:25 PM
rriley rriley is offline
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Quote:
Originally Posted by sierra skier View Post
Yeah, PMs have been up and down, basically useless.

However the stock markets and bonds have been solid like a rock.

Real estate hasn't been that solid over the last 20 years either.

Even bitcoin, the new guy on the block can't seem to find long term stable value.

Looks like your research has paid off.

Well Done!
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Old 04-25-2020, 09:13 AM
Gulcher Gulcher is offline
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Just my opinion understand. And opinions are like buttholes everyone has one. But gold will move up in value as they debase the US Currency by printing and printing US Dollars as they have been doing. You buy gold physical. When the ratio of value of gold to US dollars increases. You convert the gold to worthless dollars and buy distressed real US assets.
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Old 04-26-2020, 11:23 AM
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Your logic is good for the most part. Planning for crisis should include what people want or need and being able to supply it or invested in it.

However, there is one caveat with your utility investments. While utility investments have been stable for decades, technology is going to wreak havoc on utility companies in coming years. In previous years there was no alternative. If you wanted power, you bought it from the power company. But that is about to change.

Analysts have recognized power utilities as an industry about to be up ended by disrupting technologies. Right now there are two costs to consider in public power distribution. The cost to generate the power, and the cost to distribute the power.

The cost to generate power onsite is expected to drop BELOW the cost to transmit it alone by the power company. This is going to wreak havoc on utility companies as they can never compete with a zero transmission cost model when onsite generating costs get anywhere near their own generating costs.

Power companies are not going to fail tomorrow, but you might want to reconsider your utility investments when looking 5-10 years out. And if you want to sell your stock before the market catches up to this trend, you should consider the shorter end of this time frame.
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Old 04-26-2020, 11:33 AM
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Quote:
Originally Posted by Toyboy View Post
a valid point about gold, add to that that something like 90% of the gold that was ever mined is still in physical existence. if someone wanted to buy metals id suggest silver. still cheap historically compared to gold, a large percentage of it is used in technology and manufacturing, and removed from the market in the process. i continue to feel like it is artificially low. but it is rare, it is being consumed, that gives it plus over gold.

as always, physical metals are what should be invested in, hold them yourselves
Good Points about gold.
Something a lot of gold bugs overlook is the fact the the paper gold market (futures) sells a quantity of gold every year almost as great as all the gold ever mined in history. It's nonsense really, but they do it. With that much selling pressure the price of gold is both controlled and artificially low giving it zero investment value. It's basically a hedge against crisis, but since it's price can stay flat for decades, it's an expensive hedge that loses value over time.

Yes, one day the fiat currency will collapse and it will take the gold futures market down with it, and then we'll see what gold is really worth. I'd expect well over $20k/oz. If you want to buy and hold some for that day, that's not a bad plan, but don't make it your only plan because you might be long dead before that happens ... on the other hand current events suggest it might happen a lot sooner
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Old 04-26-2020, 01:06 PM
rriley rriley is offline
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Quote:
Originally Posted by gtspm View Post

Something a lot of gold bugs overlook is the fact the the paper gold market (futures) sells a quantity of gold every year almost as great as all the gold ever mined in history. It's nonsense really, but they do it. With that much selling pressure the price of gold is both controlled and artificially low giving it zero investment value.

This statement is nonsense.

For every sell order executed in the futures market there is a corresponding buy order so the observation above is incorrect.
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Old 04-28-2020, 08:33 PM
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Quote:
Originally Posted by rriley View Post
This statement is nonsense.

For every sell order executed in the futures market there is a corresponding buy order so the observation above is incorrect.
But the physical precious metals are not transferred with these buy and sell orders. So who’s to know if the physical for each transaction truly exists? They’re just buying and selling paper. Not real PM’s. Kinda like the fractional reserve Ponzi scheme. Witness a run on the bank in a economic collapse and we quickly see the bank close its doors. It’s all 0’s and 1’s on a computer screen. Then the Fed steps in and bails out the bank putting the debt on the public. Right up until they can’t anymore.
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Old 04-29-2020, 12:26 AM
rriley rriley is offline
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But the physical precious metals are not transferred with these buy and sell orders. So who’s to know if the physical for each transaction truly exists? They’re just buying and selling paper.
Read this:

https://en.wikipedia.org/wiki/Futures_contract
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Old 05-02-2020, 05:37 PM
Mule Skinner Mule Skinner is offline
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Retaining value in a collapse:

If it is of utility to you, then it retains value, collapse or no.
I have a 20 year old car that I'm not looking to sell.
It works, and will probably take me anywhere in North America that
has normal roads ... so it has value, to me.

You could even argue higher than book value. Since I'm not about to
buy a new car, this old one is worth $20,000 or $30,000, or $60,000
or whatever they're asking these days, because having the old one means
I don't need the new.
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Old 05-03-2020, 02:40 PM
gtspm gtspm is offline
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Quote:
Originally Posted by rriley View Post
This statement is nonsense.

For every sell order executed in the futures market there is a corresponding buy order so the observation above is incorrect.
You're mistaken. The paper market allows the available supply of gold (new contracts) to expand to meet any and all demand (or beyond). This eliminates any possibility of shortage on puts a lid on prices. It's essentially unlimited supply as long as some one is willing to sell at a given price.

Without futures in the real world gold buying demand would have pushed the prices far above where they are today.

Don't get me wrong. I'm not a gold bug. As long as the paper market exists, gold is a terrible investment. It's a hedge against a fiat collapse.
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Old 05-03-2020, 03:00 PM
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Quote:
Originally Posted by Mogli View Post
But the physical precious metals are not transferred with these buy and sell orders. So who’s to know if the physical for each transaction truly exists? They’re just buying and selling paper. ...
Correct. Most gold futures contracts explicitly state they can be settled in currency (FIAT). The gold does not exist to fulfill them unless all the gold every mined in history was available for delivery.

Any one with deep enough pockets to stand behind the contracts could issue as many contracts as people will buy, and they can do it with very little risk. Consider the following (with made up values for simplicity).

Gold is $100/oz. I sell you 10 contracts for $100/oz.
+ If gold price drops to $50, your contract price drops and i keep the profit.
+ if gold price rises to $200, then I sell 10 at $200/oz in order to pay you (and I still have the money you paid). As long as prices keep going up, I sell enough to pay my liabilities. Every time gold price drops, I make a profit.

Since the market generally moves up and down, I profit on every down side.
My real risk is for the price to move up consistently to a point where i can no longer stand behind the contracts (If i don't have enough money to fulfill them, I won't be allowed to sell them).

But if i am Goldman Sachs that point is a long way off. And if it ever arrives the fed will bail me out. It's like the casinos. The house always wins in the end.
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Old 05-03-2020, 04:05 PM
rriley rriley is offline
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Quote:
Originally Posted by gtspm View Post
You're mistaken. The paper market allows the available supply of gold (new contracts) to expand to meet any and all demand (or beyond). This eliminates any possibility of shortage on puts a lid on prices. It's essentially unlimited supply as long as some one is willing to sell at a given price.

Without futures in the real world gold buying demand would have pushed the prices far above where they are today.

Don't get me wrong. I'm not a gold bug. As long as the paper market exists, gold is a terrible investment. It's a hedge against a fiat collapse.

You need to do some reading about how the futures markets work.
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Old 05-03-2020, 04:44 PM
rriley rriley is offline
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Quote:
Originally Posted by gtspm View Post
Correct. Most gold futures contracts explicitly state they can be settled in currency (FIAT). The gold does not exist to fulfill them unless all the gold every mined in history was available for delivery.

Any one with deep enough pockets to stand behind the contracts could issue as many contracts as people will buy, and they can do it with very little risk. Consider the following (with made up values for simplicity).

Gold is $100/oz. I sell you 10 contracts for $100/oz.
+ If gold price drops to $50, your contract price drops and i keep the profit.
+ if gold price rises to $200, then I sell 10 at $200/oz in order to pay you (and I still have the money you paid). As long as prices keep going up, I sell enough to pay my liabilities. Every time gold price drops, I make a profit.

Since the market generally moves up and down, I profit on every down side.
My real risk is for the price to move up consistently to a point where i can no longer stand behind the contracts (If i don't have enough money to fulfill them, I won't be allowed to sell them).

But if i am Goldman Sachs that point is a long way off. And if it ever arrives the fed will bail me out. It's like the casinos. The house always wins in the end.
You need to do some reading about how the futures markets work.
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Old 05-03-2020, 04:56 PM
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charliemeyer007 charliemeyer007 is offline
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I fix things. I make things. I design things. I could "mine" gold right here in my neighborhood.

I'm getting older and its harder for me doing hard physical work all day long. A chemical engineering degree offers some opportunists to use the brains instead of bronze.

The trick is to watch your out go, I know people that make lots of money but don't have 2 nickels to rub together.

Buying used stuff can be a very big discount, as in pennies on the dollar. You drive that new truck off the lot its USED and lost at least 10% of the value.
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Old 05-05-2020, 02:10 PM
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Quote:
Originally Posted by charliemeyer007 View Post
I fix things. I make things. I design things. I could "mine" gold right here in my neighborhood.

I'm getting older and its harder for me doing hard physical work all day long. A chemical engineering degree offers some opportunists to use the brains instead of bronze.

The trick is to watch your out go, I know people that make lots of money but don't have 2 nickels to rub together.

Buying used stuff can be a very big discount, as in pennies on the dollar. You drive that new truck off the lot its USED and lost at least 10% of the value.
Ain’t that the truth. I have a 2018 RAM 2500 6.7 Cummins bought new. I’m 10k underwater on it. Only bought new so I knew exactly what the maintenance was on it but still... ouch.
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