Gold prices.

[Bill Douglas]

What are your thoughts regarding gold prices?

A few people, who think of themselves as being in the know, feel it could go up another 50% in three years time. I don't see why because it is not really needed, it's just a way to safe guard against the government printing money and collapses of economies. I kind of see it as the currency of the "world wide bank" and doesn't pay interest, but I accept this is a simplistic view.

The beauty of gold is it doesn't dissapear when you get it wrong - quite unlike the stock market.

I know it's creeping up at the moment, but what rate for the next three to five years in your opinion?

[RPKESQ]

Almost any rare metal commodity works as a investment. Gold is not anything special. I love hearing people say that if they have gold they are protected when the currencies fail. This is a joke of the first order. With gold investments you are much more at the mercy of "doomsday" wacko investors than other rare metals.


Gold has far more value for industrial usage then for money for the last 50 years and there is no sign this will change. What about value in other rare metals? They make far more sense to me.

[legion]

I see with TARP and STIM I, there is no way we won't experience hyperinflation.

[RPKESQ]

Originally Posted by legion

I see with TARP and STIM I, there is no way we won't experience hyperinflation.

And how will gold help? If you sell it when it is driven up by speculators (gold is far more affected by speculation than other rare metals) you only end up with inflated dollars. If you hold it, you have nothing to spend.

[legion]

Correct, you will end up with roughly the same money in real buying terms before and after the sale.

This is as opposed to holding your cash in a savings account, which will be worth LESS in real terms.

[Dantilla]

I've invested in precious metal- It's called a long-hood 911.

[RPKESQ]

Originally Posted by legion

Correct, you will end up with roughly the same money in real buying terms before and after the sale.

This is as opposed to holding your cash in a savings account, which will be worth LESS in real terms.

IF your timing is correct. And no net gain. Buying important rare metals (other than gold) will provide the same benefit without the wild gyrations of "doomsday wackos", which means your timing is far easier and net gain far more likely.

Who uses a savings account for investment????????????????????

[Porsche-O-Phile]

Originally Posted by legion

Correct, you will end up with roughly the same money in real buying terms before and after the sale.

This is as opposed to holding your cash in a savings account, which will be worth LESS in real terms.

My thoughts exactly.

From a practical standpoint, gold is a pretty stupid place to put money - it's a largely worthless metal, unless you're a reconstructive dentist or a guy who makes high-end audio connectors or circuitry. It has little practical use. Mostly its value is based in convention because us hairless monkeys have liked sparkley shiny things since the day we learned to walk on two legs. But it's probably a way better place to put one's money than most others these days.

Hyperinflation WILL happen. The pressures building are enormous. They're only being kept in check right now because our economy is in the grip of the worst downturn since the Great Depression (possibly even worse than the G.D. before it's all over, too).

Once any kind of turnaround occurs - real or perceived, it'll blow the lid off of inflationary pressures. I'd bet money on it (and I have, actually).

There are very few really good hedges against rampant inflation. Precious metals aren't a bad one though...

[djmcmath]

Hmm. So maybe I shouldn't be shorting gold right now?

[alf]

Originally Posted by Porsche-O-Phile

My thoughts exactly.

...

Hyperinflation WILL happen. The pressures building are enormous. They're only being kept in check right now because our economy is in the grip of the worst downturn since the Great Depression (possibly even worse than the G.D. before it's all over, too).

Once any kind of turnaround occurs - real or perceived, it'll blow the lid off of inflationary pressures. I'd bet money on it (and I have, actually).

There are very few really good hedges against rampant inflation. Precious metals aren't a bad one though...

Interesting analysis. Why do you think hyperinflation will happen and how do you hedge against it?

[Gogar]

Originally Posted by RPKESQ

Who uses a savings account for investment????????????????????

I noticed that if I put money in a savings account, it stays there until I take it out. Not exactly "investment", but that's better than my "investments" did.

[dan88911]

You may want to consider SPDR Gold Trust (GLD)

[Bill Douglas]

bump

Interesting thoughts guys. Thanks, keep 'em coming.

[2.70Racer]

I have bought and sold gold over the last several years and I've learned a few things along the way.
First, unlike stocks, the value of gold has never gone to zero.
That said, the value of gold is in it's relationship to the dollar for American investors.
From my point of view buying gold is a bet against the US Dollar as well as a bet against the US economy. However these two aren't necassarily related.
Further gold is a world commodity.
Countries like Russia hold very large quantities of gold, which can be put on the world market at any time pushing down the price.
I first bought gold shortly after the stock market tanked, when was it, October 2007.
I had got out of all stocks and mutual funds, no thanks to those at Merrill Lynch.
I was concerned at that time that this wasn't going to be an ordinary recession.
Unfortunately for most investors, the boys in the silk suits paid to advise investors kept their mouths shut.
Shame on them. Jail is too good for the buk of those thieves.
Anyway, gold made its move upward from $600 an ounce to touch $1,000 briefly.
This took place over several months, I don't have the exact time frame available to me.
Since then gold has been wallowing around the high $800's to the mid $900's.
I suspect many people, including myself, have decided this recession is not dropping into a depression.
I have in fact been out of gold for over 6 months.
Gold still may make a run when the predicted inflation rears it's ugly head.
I feel the real inflationary run is still at least a year or more into the future.
In the meantime I'm in the stock market and I'm happy to report I have done quite well.
I'm listening and watching things carefully, gold is still a smart play if the world economy slips and/or the US dollar hits the printing presses bigtime.
Unfortunately any real conflict between nations could also drive me to gold.
I see gold as my insurance policy, when things around me look dark.
It's not going to make me wealthy, but it will hold me and my family through hard times.

[on2wheels52]

I don't hear as many people saying "it'll be $2000/oz soon" as I used to. I'm buying as much scrap gold as ever (it's putting my kid through colege) but not seeing much 1 oz gold lately.
Jim

[dan88911]

The time to buy is when no one was interested in gold.

[legion]

Gold is about preserving value with very low risk. There are plenty of other things to invest in that will actually make you money for a little more risk.

And there is always the change (no matter how remote) that gold will make you money if a new used for it is discovered.

[Hugh R]

Don't know about as an investment, but a gold dealer once told me that if you do buy, take posession, no certificate, hold the bullion in your hand.

[Pazuzu]

Originally Posted by dan88911

The time to buy is when no one was interested in gold.

So, 10,000 years ago?

[Porsche-O-Phile]

Guns, ammo, water, food and energy (or the ability to produce it) are things that will always be in demand.

There's really no "good" place to invest in a hyperinflating economy. It's all about cutting losses and that means staples.

Gold is considered a stable "staple" commodity but I still maintain that this is more because of tradition than because gold has much practical use. In a real, honest-to-goodness SHTF scenario, gold won't be all that valuable at all. Maybe for barter/currency as a convention, but not beyond that. The survival type necessities would be far more valuable in terms of "real world" value.

Certain services too - people who can build or repair stuff, perform medical treatments, etc. Those will be valued. Lawyers, accountants, project managers, etc. won't see much value in their services in that sort of situation.

We MIGHT be heading for a scenario like that. Maybe. I think it's not likely, but it's a possibility depending on how deep and long this recession drags on.