Thoughts on gold prices ...

[buzzhead]

Yes. Kitco


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[OWK]

I am 50 and I have been hearing about Jesus coming again, next week, next month etc for my entire life. Still waiting

I've been hearing about natural disasters sinking California into the sea for my entire life... Still waiting

I've been hearing about these huge government conspiracies to take over all parts of my life... Still waiting

I've been hearing about the collapse of the FRN for my entire life... Still waiting.

The one thing that these gold bugs don't seem to remember is that Deflation is far more destructive than Inflation ever was. We've been skirting a deflationary cycle for the last 7 years. If we had been on a hard gold standard, we would have been in a depression that makes the great depression look like a picnic. Paper money is not without its dangers, but gold is not a panacea to our economic ills.

Stop and analyze why gold has had a great 10 year run. Is there a shortage? no. Fall in production? no. Increase of use in industry? no. The only reason gold has run up over the last 10 years is the expectation of inflation fanned by conservative ninnies, barking on Faux News about how gold and silver maintain their value... Speculation has driven the price, and no real change in the fundamentals of the market. You would think that after 10 years of the boy crying wolf, the market would get over it...

Then again, prices are drifting down... perhaps the boy is losing his voice.

There is nothing... absolutely nothing behind US fiat currency other than the psychological faith of those who trade in it. When that faith goes, so also will go the currency. It is inevitable. Every fiat currency fails. There has never been one that hasn't. There will never be one that won't.

The Germans introduced fiat currency in the 20th century. They decoupled their currency from metals, and this allowed them to engage in unrestricted borrowing to pay for whatever government wished to do. Including wars.

In 1918 Germans Could purchase a loaf of bread for one Silver half-mark.

In 1920 Germany decoupled the mark and printed 1 Mark notes. Bread then cost 1.2 marks per loaf.

By June of 1922, Germany was already printing 10,000 Mark notes, and Bread cost 3.50 marks per loaf.

By May of 1923 Germany was printing 500,000 Mark notes, and Bread cost 1200 marks per loaf.

By July of 1923 Germany was printing 10,000,000 Mark Notes, and Bread cost 100,000 marks per loaf.

By September of 1923 Germany was printing 100 Million Mark Notes, and Bread cost 10,000,000 marks per loaf.

By October 1923 Germany was printing Billion Mark Notes, and Bread cost 670,000,000 marks per loaf.


When there is no finite anchor to a currency, and the only thing that defines it's value is a fiat by a ruling power, it will fail. Without exception. It may take 10 years. It may take 20. It may take 50. But it will fail. It is inevitable.

So you can enjoy your smug self-satisfaction, and have a good time ridiculing those who have enough foresight to provide for themselves and their families when the day that this particular fiat currency joins the long list of every historical fiat currency and fails. But I'll leave you with this piece of advice. Neither you or your family can eat smug self-satisfaction.

 

[OWK]

People will soon enough find out what that FRN is worth..........won't even make a good butt wipe!
Keep printing,to bad nothing backs it.

GOLD/SILVER maintains it's value.

It may be 1 yr... or 5... or 25.

But it will happen eventually. There is no greater magic in US fiat currency than there is in any other historical example of fiat currency.

And each of them has failed..

I'm sure there were millions of Germans who enjoyed laughing at their countrymen who warned them in 1919 that an unrestrained currency was a bad idea.

I'm sure they laughed right up until the day that they couldn't buy a loaf of bread with a wheel barrow full of their fiat currency.

They went from laughing to starving pretty quick.

 

[tamrock]

I've been hearing the easter Bunny is coming too.
but santa is the one to worry about,
he is so spiteful, he's making a list & checking it twice.

Gold & Silver will be dropping for a little while But I don't see them ever getting to the $265.00
and $4.00 an oz prices ever again

It's all manipulation by those planning on making a quick score

I don't think gold will ever fall very much below a thousand an once from here on out. That is if we don't figure out away to manufacture real gold like in the Twilight Zone's... The Rip Van Winkle Caper.

 

[Lost&Found]

I am putting my faith in this currency,

 

[theekman]

I don't think gold will ever fall very much below a thousand an once from here on out. That is if we don't figure out away to manufacture real gold like in the Twilight Zone's... The Rip Van Winkle Caper.

Good episode!

Pm's are manipulated just like every other currency on earth right now. All this crap with isis, when russia and the Ukraine started heating up, gold stayed at 1300 and currency exchange rates didnt fluctuate. Thats not normal. Time of crisis or uncertainty gold should have gone up at least a bit, exchange rates should have slightly changed.

 

[jeff of pa]

Good episode!

Pm's are manipulated just like every other currency on earth right now. All this crap with isis, when russia and the Ukraine started heating up, gold stayed at 1300 and currency exchange rates didnt fluctuate. Thats not normal. Time of crisis or uncertainty gold should have gone up at least a bit, exchange rates should have slightly changed.

Correct there is only one Logical explanation I can see
for pm's to be acting completely contradictory to the way they should.

someone is pulling strings

 

[dejapooh]

Logical falicies abound.

Short list. After the quote.

There is nothing... absolutely nothing behind US fiat currency other than the psychological faith of those who trade in it. When that faith goes, so also will go the currency. It is inevitable. Every fiat currency fails. There has never been one that hasn't. There will never be one that won't.

The Germans introduced fiat currency in the 20th century. They decoupled their currency from metals, and this allowed them to engage in unrestricted borrowing to pay for whatever government wished to do. Including wars.

In 1918 Germans Could purchase a loaf of bread for one Silver half-mark.

In 1920 Germany decoupled the mark and printed 1 Mark notes. Bread then cost 1.2 marks per loaf.

By June of 1922, Germany was already printing 10,000 Mark notes, and Bread cost 3.50 marks per loaf.

By May of 1923 Germany was printing 500,000 Mark notes, and Bread cost 1200 marks per loaf.

By July of 1923 Germany was printing 10,000,000 Mark Notes, and Bread cost 100,000 marks per loaf.

By September of 1923 Germany was printing 100 Million Mark Notes, and Bread cost 10,000,000 marks per loaf.

By October 1923 Germany was printing Billion Mark Notes, and Bread cost 670,000,000 marks per loaf.

When there is no finite anchor to a currency, and the only thing that defines it's value is a fiat by a ruling power, it will fail. Without exception. It may take 10 years. It may take 20. It may take 50. But it will fail. It is inevitable.

So you can enjoy your smug self-satisfaction, and have a good time ridiculing those who have enough foresight to provide for themselves and their families when the day that this particular fiat currency joins the long list of every historical fiat currency and fails. But I'll leave you with this piece of advice. Neither you or your family can eat smug self-satisfaction.

"It is inevitable" Past action does not predict future performance. I've been hearing doom and gloom forever. I used to prescribe to it. Nothing more than logical fluff. It is a logical leap of astounding proportions. It happened before so it must happen again.

History of German currency is not relevant. Germany was living in a world of gold currency, and their gold was pulled and exported by the terms of the Versailles treaty in the reparations that had to be paid in gold. Unless you haven't noticed, there are no specie currancies. The historic comparison is false.

We'll not be able to eat bits of paper, Nor can yours eat silver or gold. If food is THAN scarce, what makes you think that they will trade it for bits of metal rather than bits of paper.

 

[jim4silver]

Logical falicies abound.

Short list. After the quote.

"It is inevitable" Past action does not predict future performance. I've been hearing doom and gloom forever. I used to prescribe to it. Nothing more than logical fluff. It is a logical leap of astounding proportions. It happened before so it must happen again.

History of German currency is not relevant. Germany was living in a world of gold currency, and their gold was pulled and exported by the terms of the Versailles treaty in the reparations that had to be paid in gold. Unless you haven't noticed, there are no specie currancies. The historic comparison is false.

We'll not be able to eat bits of paper, Nor can yours eat silver or gold. If food is THAN scarce, what makes you think that they will trade it for bits of metal rather than bits of paper.

The mad max scenario as I call it, where society devolves into a state where people have to barter for existence is often brought up as a reason not to own PMs because "they (PM's) are worthless and you cannot eat them".

However, it does not have to happen that the world falls into such cataclysmic conditions. It is instead more likely that we at some point reach a time where paper backed promises start failing in large numbers and the sheep start to lose money in large amounts. As unbacked promises start to fall apart the idea of having an asset actually have some intrinsic value such as gold and silver which have been considered valuable for thousands of years becomes popular again.

The cycle of backed money to non backed money then back to backed money, etc has happened for thousands of years. The Roman Denarius that started out as pure silver over the years wound up in the end being made with less than 1% silver, which was about the time that the empire collapsed. Not much different in real terms as what has happened to our dollar over the last 100 years in terms of buying power.

Yes gold and silver are useless because the past 3 years have been down. Keep believing it.

Just my opinion.


Jim

 

[jtomes]

I have to stay on the band wagon that all fiats fail eventually. Now here is something i would like to point out. Until employers stop paying in electronic fiat. The dollar will not go away. Your bread might cost $1999764.87 but you make that at work in 15 mins so swipe that card! And enjoy. I would like to say its to bad so many worry about their own wealth and not who they will be giving it to when their are gone.

 

[ole miss rebel]

I've sold gold several times to this company in Memphis, TN
I shopped around and they do give you the best price in this area.
Great to deal with, here's their link: Sell gold in Memphis at Accent Jewelers l Memphis Jeweler

 

[dejapooh]

. I would like to say its to bad so many worry about their own wealth and not who they will be giving it to when their are gone.

That's why I like Bill Gates and Warren buffet's solution to that. Give it all away. Leave nothing to the kids. If my kids want to get rich, they had better work for it. I, personally am going to do a Ben Franklin with my money. Look it up...

 

[Peyton Manning]

I plan to leave my savings to my son so he can get a starbucks

 

[Silverslug]

Deflation is, by definition, when the things you buy become less expensive. How is deflation a bad thing? Deflation hits hard, and milk and gas go down to $2 a gallon. What a tragedy! Not.

 

[dejapooh]

Deflation is, by definition, when the things you buy become less expensive. How is deflation a bad thing? Deflation hits hard, and milk and gas go down to $2 a gallon. What a tragedy! Not.

When deflation hits, people's expectations will be for lower prices in the future. They put off buying anything and everything until absolutely necessary. The purchasing slowdown causes factories and stores to stop producing goods and selling goods. People lose their jobs and stop buying because they have no money. Lower demand causes lower prices. The circle continues. Most panics trigger deflationary cycles which are more destructive to the economy than the original panic itself.

 

[374digger]

The thing I've noticed is that when people buy precious metals they hang onto them, stubbornly, even when they can make a profit, and owning the ingots or coins make it more difficult to unload, the best financial advisors never recommend to own more than 5 to ten percent of your portfolio in precious metals, because of the volatility, Dave Ramsey says civilized people don't invest in that.
Silver was at 32 dls an ounce four years ago, it went to 48 in less than six months after that, and then it started going down again, today it is under 18 dls an ounce, I also remember when gold hit 1500 dls back in the late 70s, and then it dropped to 300 in no time.
It's better to invest in a Mutual Fund that invests in precious metals, and you can sell the shares anytime without having to pay a premium, also hanging on to gold or silver is called speculation, and most people who own them should not even mess with that

 

[jim4silver]

When deflation hits, people's expectations will be for lower prices in the future. They put off buying anything and everything until absolutely necessary. The purchasing slowdown causes factories and stores to stop producing goods and selling goods. People lose their jobs and stop buying because they have no money. Lower demand causes lower prices. The circle continues. Most panics trigger deflationary cycles which are more destructive to the economy than the original panic itself.

The current Fed Reserve led by Yellen has made it clear they will do whatever it takes to prevent deflation. They will print money before they let that happen. I have read that Yellen is like Bernanke was in that respect and maybe even more dovish. Bernanke gave a speech back in 2002 where he talked about what the Fed could do under bad circumstances to stimulate things. Pretty much all the things he mentioned then have since been fulfilled with the various QE's, etc. The one thing he mentioned they haven't done yet is devalue the dollar. He mentioned the last time the dollar was "devalued" back in 1933 when gold was called in and then later valued up, that it was a good thing generally.

I think any new devaluation would not have any thing to do with taking gold since we are not on a gold standard any more. I don't know how they would do it but that is the one thing they haven't done yet that he mentioned in that speech.

I have attached a link that discusses the speech. I would not worry about deflation until after they inflate as much as possible and we are not there yet.


US Dollar To Be Devalued ? Ben Bernanke Already Told US His Plans | alternative economics


Just my opinion.

Jim

 

[dejapooh]

The current Fed Reserve led by Yellen has made it clear they will do whatever it takes to prevent deflation. They will print money before they let that happen. I have read that Yellen is like Bernanke was in that respect and maybe even more dovish. Bernanke gave a speech back in 2002 where he talked about what the Fed could do under bad circumstances to stimulate things. Pretty much all the things he mentioned then have since been fulfilled with the various QE's, etc. The one thing he mentioned they haven't done yet is devalue the dollar. He mentioned the last time the dollar was "devalued" back in 1933 when gold was called in and then later valued up, that it was a good thing generally.

I think any new devaluation would not have any thing to do with taking gold since we are not on a gold standard any more. I don't know how they would do it but that is the one thing they haven't done yet that he mentioned in that speech.

I have attached a link that discusses the speech. I would not worry about deflation until after they inflate as much as possible and we are not there yet.

US Dollar To Be Devalued ? Ben Bernanke Already Told US His Plans | alternative economics

Just my opinion.

Jim

I don't think there are any plans for anything yet. They've been dumping cash, but that hasn't triggered inflation. Personally, I think that shows how bad a mess we were dug into. I think we may move to a recession soon. We've had slow and steady growth for quite a while now. Increases in productivity are not leading to increased demand for goods, likely because if you are not the boss or the capital provider (stockholder), you are seeing almost nothing of this period of growth. Those two groups are not effective drivers of demand. The poor and middle classes are, but they are not. I think with the new year, we will see a plateau of demand, then a gradual decline.

The big problem is that the whole process is wrongheaded. Increasing demand would drive growth. You can't increase demand by making the rich richer. Until they can break the gridlock and start to take care of business instead of tottering from manipulated crisis to crisis, we won't see any realistic chance of anything different.