Gold and gold scrap as an investment
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Noxx
Well-known member
The advantage is the interest you make at the end.
Yes, keeping gold is more risky because you never know when it will fall. But you get more profits as it takes value days after days.
If we take the last year evolution of gold price:
Gold was about 640$US/oz in January 1st 2007
355 days later, gold was at 830$US/oz.
This is a benefit of 23% 8)
It's a lot more than what regular banks offer.
Also, when you buy scrap gold, I suppose that you buy it under spot (I hope lol) So, if you buy it at 80%, and resell it at 95%, you get another 15% there...
Let say you bought for 10 000$ gold at 80% spot.
This means you have 11 500$ worth in gold.
Then add the 23% the gold took last year, you would end up with 14 145$ worth of gold.
4 145$ profits
But if you chose your bank, you would end up with 10 500$, so 500$ profits.
But like I said, you'll never know when gold price will fall...
Yes, keeping gold is more risky because you never know when it will fall. But you get more profits as it takes value days after days.
If we take the last year evolution of gold price:
Gold was about 640$US/oz in January 1st 2007
355 days later, gold was at 830$US/oz.
This is a benefit of 23% 8)
It's a lot more than what regular banks offer.
Also, when you buy scrap gold, I suppose that you buy it under spot (I hope lol) So, if you buy it at 80%, and resell it at 95%, you get another 15% there...
Let say you bought for 10 000$ gold at 80% spot.
This means you have 11 500$ worth in gold.
Then add the 23% the gold took last year, you would end up with 14 145$ worth of gold.
4 145$ profits
But if you chose your bank, you would end up with 10 500$, so 500$ profits.
But like I said, you'll never know when gold price will fall...
Seamus
Well-known member
Precious metals are the best investments to hang on to.
istari9
Well-known member
What happens when you burn paper money? What happens when you burn Gold? Gold is remarkable in that it has a currency value no matter the Dollar return. Gold and the other PMs are redeemable for goods and services anywhere they are accepted. As dollars begin to have lesser value the metals will be more valuable. I hold my metals not for todays market price but for the value they represent. Currency comes and goes but gold remains, no matter what it trades for. I would rather see the gold have a lower value because that means the dollar would purchase more. Or we could burn the dollars to keep warm in the winter of the government waste. But our metals will purchase the bread we need for life. Or oil to get to our jobs, or gold mines...
I realize this is a bit far fetched but this is how I see metals. I feel more secure holding metal. I can build things with steel or wood. I can plant with seed, but the currency tastes bad.
Ray
I realize this is a bit far fetched but this is how I see metals. I feel more secure holding metal. I can build things with steel or wood. I can plant with seed, but the currency tastes bad.
Ray
Rag and Bone
Well-known member
I like holding metals to. The bigger the pile the better. Play the market right and you make the pile bigger. Hold it forever and it does nothing for you.
NuggetHuntingFool
Well-known member
Paper currency is not bad as long as it's backed by something. Our currency is not. We were taken off of the gold standard a long time ago. Now our money is just a bunch of 1's and 0's in a computer that can be manipulated at any moment.
We need the gold standard again because if these crooks have free reign with the value of our money then our economy is certain to collapse eventually. No nation with this type of monetary system has ever survived.
We need the gold standard again because if these crooks have free reign with the value of our money then our economy is certain to collapse eventually. No nation with this type of monetary system has ever survived.
Perhaps an easier way of looking at it is that gold will hold its value and paper fiat currencies will devalue. There are indeed temporary fluctuations in the value of gold but as long as you have it as an investment that you do not need to liquidate on the short term you can avoid severe drops in price.
As to paper money, the old rule of thumb was that you had to earn 5% on your money before taxes to break even with inflation eating up your buying power. In today’s world inflation is higher than the traditional average of 3% annual inflation to make the above true today. The government even admits it is currently above that by creative accounting but I would put us at 7% at a minimum currently.
I guess in summary you must be aware of the taxes you will pay on your interest in paper money deposits of dollars and the reduced buying power of your dollar over time, compared to holding gold and being able to take advantage of the long term value holding ability of gold accepting that there will be moments in time that it is not liquid at the rate you desire. Long term a non perishable commodities will out perform a fiat currency in maintaining its purchasing power.
As to paper money, the old rule of thumb was that you had to earn 5% on your money before taxes to break even with inflation eating up your buying power. In today’s world inflation is higher than the traditional average of 3% annual inflation to make the above true today. The government even admits it is currently above that by creative accounting but I would put us at 7% at a minimum currently.
I guess in summary you must be aware of the taxes you will pay on your interest in paper money deposits of dollars and the reduced buying power of your dollar over time, compared to holding gold and being able to take advantage of the long term value holding ability of gold accepting that there will be moments in time that it is not liquid at the rate you desire. Long term a non perishable commodities will out perform a fiat currency in maintaining its purchasing power.
Rag and Bone
Well-known member
OZ, Nug Fool, and all the other Fiat currency nay-sayers,
What should I do with my little gold stash...sell high and buy low over and over, or, keep it forever?
I tend to have faith in the U.S. dollar. Sometimes it is stronger than others but it spends like an Uzi in a liqour store. :lol:
What should I do with my little gold stash...sell high and buy low over and over, or, keep it forever?
I tend to have faith in the U.S. dollar. Sometimes it is stronger than others but it spends like an Uzi in a liqour store. :lol:
Your Uzi will continue to shoot faster and faster requiring more bullets for a diminishing effect.
Kidding aside, there are no guaranties in this world. But for hundreds of years gold has maintained its purchasing power and fiat currencies have lost their purchasing power. Beyond that of course buy low and sell for cash when you need it is a realistic approach to hold value based on past history.
But anything is possible. If you buy into the doomsayers with a true “s__t hit the fan” scenario you will find food, medicine, bullets, cigarettes, booze, and toilet paper to be the new ruling currencies.
Rag and Bone
Well-known member
Uzi's are not subject to inflation. Unless people get more bullet-proof.
I hope all you currency scaredy-cats are buying local (and selling global). Keep that money and production close to home and you don't need to fear catastrophe.
I hope all you currency scaredy-cats are buying local (and selling global). Keep that money and production close to home and you don't need to fear catastrophe.
My point was comparing the bullets in your Uzi to dollars, you will need more of them to get the same effect.
I would be very pleased if you are correct, and I am wrong Rag. It is only my opinion and I do not claim expertise. Forgetting about all the recent hype you see in the mainstream media and from the FED or doomsayers for a moment and try this experiment.
Pick any 10 commodities and look at what they cost today. Then check the prices on these same items 50 and 100 years ago. Then get back to me on your choices and the difference in the amount of US dollars it cost to buy them at those 3 times in history. Let me know why you think their price changed.
Oh I would so love for someone to show me where I have made a mistake!
I would be very pleased if you are correct, and I am wrong Rag. It is only my opinion and I do not claim expertise. Forgetting about all the recent hype you see in the mainstream media and from the FED or doomsayers for a moment and try this experiment.
Pick any 10 commodities and look at what they cost today. Then check the prices on these same items 50 and 100 years ago. Then get back to me on your choices and the difference in the amount of US dollars it cost to buy them at those 3 times in history. Let me know why you think their price changed.
Oh I would so love for someone to show me where I have made a mistake!
A
Anonymous
Guest
Us North Americans do not have a clue on long term investments, we think in the short term when other nationality's think in the longer term.
As individuals we often build vast fortunes only to neglect teaching our offspring how to take over the reins.
When my father passed on, I came to the conclusion on my inheritance.
What you receive is not yours to use and abuse, but to use to build upon for those we leave behind.
Keep your gold.
As individuals we often build vast fortunes only to neglect teaching our offspring how to take over the reins.
When my father passed on, I came to the conclusion on my inheritance.
What you receive is not yours to use and abuse, but to use to build upon for those we leave behind.
Keep your gold.
Oh so very true Gustavus. When I lived in Germany I was in a town that had average land prices. One square meter of ground cost about $7,000.00 US at that time when the dollar was stronger by far than it is today. As to value over time, there was a small area in a vineyard near my house that was purchased by the queen of England in the 1200’s over 200 years before Columbus was born to even consider sailing into the west and the unknown. The crown still owns that plot to this day. I wonder what money they have made from the wine made in this select location over the years not to mention the appreciation value of the land that is still providing dividends to this day.
enragedcow
Active member
Commodities aren't "investments" in the traditional sense. You don't buy them expecting to make money on them - or if you do, you're missing the point.
With a interest bearing savings account, bonds, etc, you count on the set interest payments to increase your account value.
For stocks, you count on dividends, or that the fundamentals of the company indicate that the value of the company will increase.
For commodities, there's nothing like this. Buying them expecting value to increase is essentially gambling. Yes, if you hear that some big gold mine somewhere shuts down, you can expect gold prices to go up (as an example)- but in terms of raw investment status, commodities aren't expected to do the same thing as "normal" investments.
The point of commodities is to retain a fixed buying power. In times of inflation, the money you have held in commodities doesn't devalue, like it does in other places.
The point is, don't make the mistake of plowing a bunch of money into gold/silver/etc expecting to make huge profits, or to retire on it.
With a interest bearing savings account, bonds, etc, you count on the set interest payments to increase your account value.
For stocks, you count on dividends, or that the fundamentals of the company indicate that the value of the company will increase.
For commodities, there's nothing like this. Buying them expecting value to increase is essentially gambling. Yes, if you hear that some big gold mine somewhere shuts down, you can expect gold prices to go up (as an example)- but in terms of raw investment status, commodities aren't expected to do the same thing as "normal" investments.
The point of commodities is to retain a fixed buying power. In times of inflation, the money you have held in commodities doesn't devalue, like it does in other places.
The point is, don't make the mistake of plowing a bunch of money into gold/silver/etc expecting to make huge profits, or to retire on it.
Shecker
Well-known member
One point only and any good economist would agree with this. Fiat currencies fail, gold and silver do not. The ultimate value of gold and silver is what they can do for you and how they can protect against inflationary/deflationary spirals. I would love to see a strong dollar and a lower price for pm's but that is living dream world. If the dollar stabilizes temporarily I am all for it -- but I also understand that it has exactly nothing backing it but the word of our government as to it's value. What happens when that word is no longer accepted anywhere. Hyperinflation coming to your town soon.
Randy in Gunnison
Randy in Gunnison
Seamus
Well-known member
The banks can squander your investments away. The gold you have will always be valuable and the banks can't take that away from you. The depression taught our families in the thirties that banks and the dollar can fail. Paper money can burn to ashes being worthless. Gold will still be there in a different shape when it cools. The back of a dollar bill says, In god we trust, all others pay cash. The golden rule says, those with the gold rule. Any questions?
The government can only back the printing press that makes the money. The all mighty dollar is backed by the gold standard, wwhhhooooppppss, I mean the US Mint and bureaucracy.
The government can only back the printing press that makes the money. The all mighty dollar is backed by the gold standard, wwhhhooooppppss, I mean the US Mint and bureaucracy.
istari9
Well-known member
Lets not forget the government's buyout of gold in the 20's. They declaired it against the law to have gold and paid penneys for any you had. They then raised the price of that same gold. Use what you must hide the rest.. The boys in blue are watching you!! :twisted: Or not, I do think we are subject to the wims of those who have the real power. The power to force us to their bidding.
Ray
Ray
