Once the Depression is in full gear people will be rushing to their safedeposit boxes to sell their gold. There is 1000 times more gold in safe deposit boxes than in Ft. Knox. No one is buying gold jewelry either. There will be such an oversupply of Gold it’s going to crash so hard! My advise is sell now before the stampede begins…
Buying and saving gold is a typical east indian culture!I was raised in india and moved to USA.My parents presented me gold for my wedding which I keep with me even after 5 yrs with double value in the present market!I would suggest anyone to buy and save GOLD..which is much better than any other savings!!and safe in ur hand for the next generatin too!!we always exchange the gold to the next generation or use it for economic crisis like this!!!goo thinking!
God and Silver are a GREAT investment in the short and medium term. The question is all about timing and now is the time to BUY! However, there will come a time like the early 80s when Gold and Silver crash. That being said right now we are in the stage where ALL governments around the world are printing fiat money to such an extent that Gold and Silver have nowhere to go but up. However, once the world begins to emerge from this Hyper-inflationary Great Recession the prices of Gold and Silver will plummet.
So in closing BUY GOLD AND SILVER NOW! However, you must time it right as to when to sell at the peak.
I hear good arguments from various perspectives, but my ultimate preference is the argument for the gold standard, which is inconceivable with so many sheep in the world. Anyway, gold is good to have, not because it will increase return or because it is a great investment; no, in fact gold is just a safe investment, if the person has the money of course. Certificated currency (gold and silver backed currency) and fiat currency can be depreciated regardless; and there is not enough gold and silver to go around for the entire globe, so paper currency will always be around. The inflation does not begin with governments, but with central banks, which governments help create. Nasty little buggers, both are thieves in nature, bankers and politicians (bad mix), who needs them? My suggestion is broaden the portfolio because the dollar has a strong possibility of becoming worthless, not only because of stagflationary pressure but the bond market bubble threat. Still, do not rid of all your greenbacks, just start buying a bit of precious metals and foreign currency. China, for instance, has good GDP growth, low deficit and so on.
The reason why China is well taken care of is because the US sold its soul to a long time ago. When will we Americans destroy governments for building statues and infrastructure we did not need in the first place? This country seriously needs to repeal books of Bull SPIT laws legislators enact recklessly.
If you can afford it buy gold NOW! I wish I had bought more in 2005. I suggest all doubters read “The Coming Collapse of the Dollar and How to Profit From It”.
Not only that, when gold hit it’s $1000+ high, the VIX was at a relatively moderate (by today’s standards) mid 30’s.
If this guy screws up something so simple that I know about, how can I trust him=s pronouncements concerning something I don’t know about?
“A surge in gold prices always corresponded with an increase in investor fear.”
If this dipwad could read a chart, he’d notice that the gold hit its lowest point in the last 12 months in the Oct-Nov timeframe, when the VIX (i.e. fear meter) was highest.
Gold’s going above $1000, but it doesn’t have anything to do with fear in the markets.
Do you suppose our political leaders that we the people elected are smart enough to realize that the potential outcome of their next move will most likely be so inflationary that this could harm folks more than help?
I understand the argument that as the US Gov hyperspends to get us out of the recession, and lowers the fed funds rate to zero, the dollar becomes worth much less, and gold (denominated in dollars) costs more dollars to buy, everything else being equal. But over the next several years, I just don’t think people will have the extra cash to buy gold, which really has no essential function (as opposed to oil, corn, steel, timber, etc.). So, while there might be a short-term pop in Gold prices, over the next few years it is going down, in my view.
Please everyone e-mail your elected
officals and request that they eleminate Federal taxes on unemployment for 2008 and 2009.
Unemploment pay isn’t a wind fall by any means and taxing it is adding another burden the laid off don’t need at this time.
I agree, it’s not a question of if, it’s a question of when.
Will gold go above $1000? Yes, because governments right now are creating money and credit at alarming rates. Gold’s rise is due to 1) popularity as a hedge against inflation (money creation) and 2) increased demand by people concerned about item number 1.
The value of all these fiat currencies declines when you create more of it, that’s where the new money gets its value, from the existing quantity in circulation. The more money you create the more the existing currency value goes down, and gold protects against that devaluation.
I would suggest that gold and silver will both eventually be reconsidered as monetary metals. We have to get back to a currency that has integrity and fiat money does not. Eventually all fiat currencies die because they’re inflated to death.
Yes, Gold just may go up and beyond 1K dollar soon once again…1200$ maybe..It all depends on currency exchange…and when problems in Europe get worse (I expect that, I live there…big probs!) The dollar will make a recovery to about $1.15 per euro…Only!! Only when recession hits harder in Europe, Latest indicators hints at that though, gold will stay at current levels.
For USA and western Europa…still 4-5 months of bad news, I know people in construction, home/shop custom interior design up to Metal cutters and bending…After june 2009 = no more contracts or orders…bad thing!!
I will keep investing….I look at a 5 year bad interval news….We will live!! And our ways of living too!
Your article shows a lot of misperceptions about gold and about what’s happening in the economy. From the article:
1) Gold hit a record high last March, rising above $1,000 during the height of the Bear Stearns meltdown. But gold retreated to around $900 over the next few months as investor worries subsided…temporarily
My response: Gold did not retreat due to investor worries, but rather from deleveraging and the need to liquidate to cover leveraged positions. Gold was one of the few places where profits actually existed in portfolios. And investors worries have not subsided. The problems continue to increase.
2) In fact, both Sanchez and Laidi said that — somewhat paradoxically — if the economy gets substantially worse over the next few months, investors may take profits in gold and flock to Treasurys as a way to preserve cash.
My response: Flock to Treasuries ?? That’s the worse possible place to be given the huge increase in the Federal budget deficits (I expect $2Trillion for this fiscal year once the $150Billion cost of the wars, the $400Billion cost of the stimulus package, and the $200Billion stolen from SS are added to the $1.2Trillion OMB estimate of the deficit). As Obama has said, we will have $Trillion deficits for several more years. As of Jan 7, the Federal debt was 10.7Trillion. The supply of treasuries is going to overwhelm the buyers (and the foreign CBS are buying much fewer treasuries). Add to the that, the Federal reserve is creating money at a 20% annual rate. They’ve already added close to $8Trillion in committments and acutal cash. And Schumer was quoted as saying he was told that the banks need more than $3Trillion more. We are digging a hole that we will not be able to climb out of and the economic problems will continue to worsen for the foreseeable future.
3) Or will investor fears diminish once this dreadful fourth-quarter earnings period is over and hopes turn to the possibility of another economic stimulus package?
My response: Gold is going up because of all of Trillions of dollars in spending due to both the bailouts and the stimulus. Who’s going to pay for this recklessness ? We are, one way or another and the most obvious way will be from a collapsing currency. I know the US$ has been strong recently due to the need to get to cash, the buying of Treasuries as a perceived safe haven, and due to the greater weakness of other currencies. But the US$ fundamentals could not be worse and gold is the one currency which will far outperform all other currencies in this environment of currency devaluations. There is no free lunch. I fully expect gold to exceed $2000/oz and I’m continuing to buy at these price levels. The Fed has created the mother of all crises over the past 20 years by continually adding excessive amounts of liquidty to address every financial crisis which only assured that the next crisis would be larger than the last.
It is not a question of if, but when. Even adjusted for inflation gold could go to $1800 an ounce just to be equal to where is was in the early 80’s when it was at %875 an ounce and inflation was at double digits. We are headed there again. The government has run out of options. Congress now believes we need to deficit spend our way to prosperity. Never been successful in the past and will not succeed again. We are monetizing the debt which means more money in the system that is going to be worth less = inflation. We are going to try and inflate our way out of this mess. We are going to be sold a bill of goods again that this is going to need to happen quickly or the economy will collapse tomorrow. We are going to be witness just how terrible our government is at allocating capital. When our currency becomes worthless, gold will be the place to be.
Gold is just another bubble, and will fall down far lower than most people expect (think ~$200/oz). Look at what happened in the 1980s.
Gold a horrible long term investment, as it only preserves value, but doesn’t grow it (bonds or stocks tend to easily outpace gold long term).
A standard argument goes that you could buy a really fancy suit for 1 oz of gold. You could do that 2000 years ago, 100 years ago and you can do that now. Well, if you put that money into stocks (or gov bonds), you’d be able to buy many suits now.
Short term, we are facing a deflation (the money supply is -decreasing- due to less folks borrowing from banks). Fractional reserve banking ensures that (less loans, less money flowing around). The Fed knows this, and is trying to do all it can to increase the money supply [lower rates to 0%, encourage lending, etc.], but until people’s perception chances [and their maxed out credit cards are paid off, credit histories forgotten, etc.], that won’t happen.
Gov spending (debt) will increase money supply, but that’s a drop in a bucket compared to the overall money supply—unless gov spends 10x the amount of national debt (ie: ~100 trillion) in the next 12 months, it won’t matter.
If gold does get close to $1000 dollars, it will create another problem to add to all the problems that exsit. Retailers mark up jewerly even more and consumer stops buying gold jewelry. Before this happens, Obama will do something and we will watch gold drop by $80 dollars or in a day.
I understand the tangible aspect of gold but I think gold is as perception worthless as paper money. Hear me out. 1000 years ago gold had value because you could DO something with it. It is a soft pliable metal used for multi-purposes besides the aesthetic aspect. Hence the “value” of gold. I think in today’s world (with all sorts or materials and metals around) that if the world economy did fail I’d argue gold is worthless. The only value it would have for me would be to use it as a throwable device for protection or for accumulating food. I’d argue that lead for guns and clean water would be more valuable then gold.
GARY NY YOUR ARGUMENT ALMOST SOUNDED THE SAME AS THE “REAL ESTATE IS NEVER GOING DOWN” ARGUMENT BACK IN 2005.
Remember wam pum? How quaint.
Do you recall what proceeded wam pum as a store of wealth and still remains one today? That’s right – gold. Hmmm.
No surprise there. Wam pum was just some beads and shells. But instrinsically it was probably worth more than paper. And what serves as wam pum today? That’s right – the US dollar – just a piece of paper really.
A dollar is worth something because it can be exchanged for goods and services and afterall there is only so many of them – or are there?! Obviously everything is fine when people have a little faith that there is something behind the dollar – that is that they could get something in return. But if you print up enough of them as they did in Germany in the 30’s and they become worthless. Sure the US is one of the most wealthy countries in the world, but how long can you just print money as we are currently doing with quantitative easing and not expect people to at some point come to realize – let’s call it perceive – the fact that we are just kind of making this stuff up. No one is going to want to provide any goods and services to dollar holders when the perception is that it really is just a piece of paper. Now you could argue that it would never come to that. Well we are in uncharted territory right now, printing far more money and running up far more debt than ever before. And people will believe in the value of the dollar right up to the very moment that the sentiment shifts and then it will never be the same.
Enter gold. A store of wealth for thousands of years. SOmething that is finite – unlike that paper dollar – and has quite a track record. Sure it is unwieldy and doesn;t earn interest, but there are a lot of folks around the world that would gladly take it in exchange for something.
And the dollar, well we print it by the trillions it seems every month or so. So when will people wake up that the currency is being debased and may at some point be worthless? I am not sure, but when that day comes the value of gold will be quite a bit higher than today – unobtainable really.
So if you were to ask me, if things do not start to improve fairly quickly around here gold will not only surpass the $1,000 level, but actually rise much higher than that.
Yeah, you should buy some gold now so you will actually have something of worth to pass down to your children!
With all the world currencies falling (yep, the USD only looks good *relative* to worse ones such as the Pound and Euro) gold is starting to resume its place as the currency of last resort.
The Treasury bubble is about to burst due to oversupply and Treasuries are gold’s biggest competitor as a safe haven asset.
I expect gold to go above $1000 before the end of March.
As the economy worsens the price of Gold will increase. In a world where the “sure thing” has virtually disappeared gold is a tangible asset. It’s guaranteed to be there.
It’s not just the dollar price of an ounce of gold, it is what can be bought with that ounce of gold. Maybe gold drops to $500/ounce, but if that is enough to buy a shiny new Chrysler, then that will be something indeed.
It’s good to be diversified in a free market, and with the govt changing the rules and throwing around money willy-nilly, it’s hard to guess what will turn out to be a good or bad investment.
Gold prices may hit a new all-time high in the next few months. In fact, given a long enough time period, gold will definitely hit a new all-time high in terms of dollars: inflation.
But, gold is not a great investment; it is just speculation, kind of like horse racing, roulette, etc. Money in a mattress outperforms gold.
A better place to stash money is TIPS: they provide current yield that is greater than the rate of inflation, and they never go below face value.
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I just bought some gold today and I can;t predict what will happend but
1. I think it is a good idea to diversify your investment portfolio and put 10% in gold
2. The government is printing money – no secret there and the fear is – other countries will stop trusting dollar (it is happening already in many 3rd world countries where people prefer Euro)and all those bucks will flood back.
3. For the government it makes sense to create unstable dollar and just print it because it is the easiest way to make it worthless and pay off dollar debts to other countries – I am afraid it will be the only option, taxpayers just can;t pay off govnt debts at this rate.
These are just some of my thoughts. I think it is wise to have some money in gold.