I am trying to wrap my head around the fact that PM are not 1) an investment and 2) are not appreciating in value.
1) Gold/Silver is money - and the price of Gold/Silver is a direct reflection of the depreciating purchasing power of the $. Therefor, as the value of fiat currency approaches 0 (that's another personal conundrum) the "price" or value of Gold will approach er... ammmm... infinity WTF
2) A given unit of Gold still buys the same amount of crude as it did in 1900. hmmmmm... this is easier to accept. However, we are not here to buy crude. We are here to gain purchasing power. When the "price" everything is going up (or as the value of fiat is going down) a unit of gold/silver will still buy the same amount of groceries. Looks like a couple of sliding scales going in opposite directions.
In and End-Of-The-World scenario, those holding PM will survive - perhaps even prosper. Are we really expecting the world to end?!
Let's say that you decided to stick with fiat, and your neighbor that is exactly the same as you (financially: income, saving spending%), has decided to save/invest in G&S. Let's say this began ten years ago when the metals bull began. The oil scenario is obvious excellent example. Ten years ago Gold was about $400, today $1550. Oil 2000' -$27, today $100. Again both you and your neighbor have the same income that is NOT adjusted for inflation. Your savings account today will buy little compared to your neighbors. (keep in mind as well that gold is not priced as high as it should or will be IMO.) So, to bring home the point of the above. What has changed? Is gold different? Does it look, taste, or smell different? What has changed is the "value" of the currency that is used as exchange. Devaluation through increased supply of those digits of fiat money. Twenty-five years ago I read this about gold. Gold is the Polaris, it is the North Star, always consistently stable and dependable. This is why they say an oz. Of gold will always buy a fine mens suit. As Far as the price of gold goes, I believe that there is a possibility that it could reach the point where those that hold it will not hand it over for any paper. ie. Priceless. I also think that at some point mining the metals may become pointless, as the in ground value will be worth more than bringing it to surface. This point may be a little extreme. I just try to view it this way. We are talking about a total collapse of the world's fiat currency system. And to date there appears to be NO PLAN to change/avoid that outcome. Those that own gold/silver will own real wealth, regardless how little they own.
Note that inflation is sporadic and spotty to date, but inflation on a massive scale across the board is just around the corner. Metals are going much higher when compared to things, SOON!
Precise metal is an insurance policy. It protect your value against HyperInflations and devaluations. People who live in Belarus would certain like to buy gold and silver a month ago. For those people who does not hold precise metal or foreign currencies, they saw their values went down 50% overnight.
Turk is an interesting guy but he runs a business. Getting people to buy Gold and Silver. Great investment. Even I have some. In the end though he's talking his book. We all sit around sites talking about Gold and Silver and feel a warm glow of self satisfaction but in the end he's only telling us what we want to hear.
I wonder the people who attended the conference were really interested in the subject or they were just hungry for the free lunch.
ReplyDeleteStooopid thought process alert!
ReplyDeleteI am trying to wrap my head around the fact that PM are not 1) an investment and 2) are not appreciating in value.
1) Gold/Silver is money - and the price of Gold/Silver is a direct reflection of the depreciating purchasing power of the $. Therefor, as the value of fiat currency approaches 0 (that's another personal conundrum) the "price" or value of Gold will approach er... ammmm... infinity WTF
2) A given unit of Gold still buys the same amount of crude as it did in 1900. hmmmmm... this is easier to accept. However, we are not here to buy crude. We are here to gain purchasing power. When the "price" everything is going up (or as the value of fiat is going down) a unit of gold/silver will still buy the same amount of groceries. Looks like a couple of sliding scales going in opposite directions.
In and End-Of-The-World scenario, those holding PM will survive - perhaps even prosper. Are we really expecting the world to end?!
Let's say that you decided to stick with fiat, and your neighbor that is exactly the same as you (financially: income, saving spending%), has decided to save/invest in G&S. Let's say this began ten years ago when the metals bull began.
ReplyDeleteThe oil scenario is obvious excellent example. Ten years ago Gold was about $400, today $1550. Oil 2000' -$27, today $100.
Again both you and your neighbor have the same income that is NOT adjusted for inflation. Your savings account today will buy little compared to your neighbors. (keep in mind as well that gold is not priced as high as it should or will be IMO.)
So, to bring home the point of the above. What has changed? Is gold different?
Does it look, taste, or smell different? What has changed is the "value" of the currency that is used as exchange. Devaluation through increased supply of those digits of fiat money.
Twenty-five years ago I read this about gold. Gold is the Polaris, it is the North Star, always consistently stable and dependable. This is why they say an oz. Of gold will always buy a fine mens suit.
As Far as the price of gold goes, I believe that there is a possibility that it could reach the point where those that hold it will not hand it over for any paper. ie. Priceless.
I also think that at some point mining the metals may become pointless, as the in ground value will be worth more than bringing it to surface. This point may be a little extreme. I just try to view it this way. We are talking about a total collapse of the world's fiat currency system. And to date there appears to be NO PLAN to change/avoid that outcome. Those that own gold/silver will own real wealth, regardless how little they own.
Note that inflation is sporadic and spotty to date, but inflation on a massive scale across the board is just around the corner. Metals are going much higher when compared to things, SOON!
http://inflationdata.com/inflation/inflation_Rate/Historical_Oil_Prices_Table.asp
Precise metal is an insurance policy. It protect your value against HyperInflations and devaluations. People who live in Belarus would certain like to buy gold and silver a month ago. For those people who does not hold precise metal or foreign currencies, they saw their values went down 50% overnight.
ReplyDeleteTurk is an interesting guy but he runs a business. Getting people to buy Gold and Silver. Great investment. Even I have some.
ReplyDeleteIn the end though he's talking his book.
We all sit around sites talking about Gold and Silver and feel a warm glow of self satisfaction but in the end he's only telling us what we want to hear.
SGS......TK.V you still buying
ReplyDelete