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Gold and Silver - Real money buys more funny money

Submitted by Jive_Dadson on Tue, 10/13/2009 - 22:10
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Gold just hit another World Record in Federal Reserve Notes.

FRN$1069.82 spot.

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I hope you guys realize that gold can only buy currency.

Submitted by Henry on Thu, 10/15/2009 - 01:11.

If you have a basement full of gold coins and bars, what can you buy with it. Can you buy a tractor, a mink coat, or a new Toyota truck? I think that with rare exception, the only thing you can buy with it is a currency. So one thing you can say about gold is that its only value is in relation to currencies.

Fad drove people to overvalue tulip bulbs, south sea stocks, and more recently dot.com common stock and real estate relative to other assets, all of which eventually burst their bubble. Fad is now driving up the value of gold and silver in relation to other asset, and fad is psychological. So what you can expect is that gold and silver will be driven by fad to extreme values relative to other things, but when that fad ends, the only option owners of gold and silver will have is to buy the only thing gold and silver can buy, currencies. For those gold and silver owners in the USA, the purchase (sell their gold and silver) will be of US dollars.

So yes, gold should move toward $2,000 over the next twelve months, but at that point the fad will expire and something else will become the new fad. Gold and silver owners will panic as their holdings become unfashionable, and they will be just as stunned as those holding real estate today.

Financial life is a game of knowing where to place wealth so that fad will favor you. Most get caught up in the emotions of owning things like tulip bulbs, or real estate, or gold, and fail to understand which market is over bought and over sold. So if you don't have an exit strategy for your ownership of gold and silver, you are probably emotionally involved, being driven by fad, and you stand to lose your wealth.

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"The deepest sin against the human mind is to believe things without evidence." Thomas H. Huxley

you can buy anything with

Submitted by bad_karma on Thu, 10/15/2009 - 02:04.

you can buy anything with it... the other party has to agree.. you don't have a clue about gold or silver.. it wasn't to long ago that silver bought a candy bar or a coke out of a machine... if you are comparing gold to tulip bulbs, you're nuts!

A prudent man foresees the difficulties ahead and prepares for them; the simpleton goes blindly on and suffers the consequences. Proverbs 22:3

—

A prudent man foresees the difficulties ahead and prepares for them; the simpleton goes blindly on and suffers the consequences. Proverbs 22:3
Matthew 10:34 Think not that I am come to
send peace on earth: I came not to send peace,
but a sword.

We are not talking about when gold and silver were used as

Submitted by Henry on Thu, 10/15/2009 - 05:38.

a medium of exchange in the US. This is no longer the case; gold and silver are not now used as a medium of exchange, so you can only look at it as a store of value, and how do you determine that value. Value is determined relative to other things, and because Federal Reserve Notes are the only medium of exchange (legal tender laws) you are forced to convert you assets into that medium of exchange in order to transact. Of course you might on rare occasion find someone willing to trade with you for gold and/or silver, but that is made difficult by the federal government by the imposition of income tax on the disposition of your gold/silver based on the value of what you get for giving them up compared to what you paid of them.

Watch this play out and a few years from now see if you call me nuts as you hold gold all the way up to $2,000 and then all the way back down to under $300.

—

"The deepest sin against the human mind is to believe things without evidence." Thomas H. Huxley

Wrong, wrong, wrong

Submitted by akak on Thu, 10/15/2009 - 02:02.

First off, you make the mistake of every Keynesian so-called "economist", that gold and silver are just more commodities. But they are not --- they are ALSO currencies! They just happen to be stateless currencies, neither issued nor backed by any government, but by the market. The fact that we are prevented BY FORCE OF STATIST LAW from using them as everyday currency is besides the point.

You have it exactly backward: fiat currrencies only have (temporary) value in relation to gold and silver! Again, you are making the assumption, and mistake, that simply because gold and silver are not TODAY used in daily financial transactions, they are just another commodity, and not money. If gold, in particular, is not truly money, tell us then, why do central banks around the world still hold gold reserves? I haven't noticed any central banks holding coffee or copper or wheat as part of their monetary reserves.

You are also implicitly making the grievous error of assuming that the depression we are living through right now is just another in a long line of recessions and "panics", but it is not --- it is an ongoing financial and monetary collapse, the first worldwide fiat currency collapse in history. As such, we are in truly uncharted waters. One thing of which you can be guaranteed, however, is that both gold and silver will NOT loose value from this point, but most likely gain further value as they are inevitably reincorporated into the world monetary system from which they were banished by the conniving central bankers and their statist allies in the major Western nations during the late 19th and early 20th centuries.

It is not a coincidence that Ron Paul, the champion of liberty and personal freedom, is such an avowed advocate of sound money --- because he understands the critical and crucial link between liberty and the precious metals as money. Gold (and silver) are a thorn in the side of statist central planners and big-government lovers everywhere, because "hard money" (backed by precious metals) stands in the way of their corrupt and sociopathic desires to control and tax the population through the (ab)use and manipulation of fiat currency. It is also no coincidence that the most diehard pro-establishment shills and lackies are the most vocal in their attacks on gold and hard money --- because they know that it is a dagger pointed straight at their evil hearts.

The dollar continues to sink

Submitted by Jive_Dadson on Tue, 10/13/2009 - 22:15.

The dollar continues to sink like a stone vs. other paper money, but gold is gaining against all of them.

I want to see it at 25

Submitted by bravoseis on Thu, 10/15/2009 - 06:35.

just sayin'

Is life so dear or peace so sweet as to be purchased at the price of chains and slavery? Forbid it, Almighty God. I know not what course others may take, but as for me, give me liberty or give me death.”
– Patrick Henry, speech to the Virginia Convention

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“The Internet is the first thing that humanity has built that humanity doesn't understand, the largest experiment in anarchy that we have ever had." - Eric Schmidt

i'm hoping to see 8 again so

Submitted by bad_karma on Thu, 10/15/2009 - 02:05.

i'm hoping to see 8 again so I can load up again..

A prudent man foresees the difficulties ahead and prepares for them; the simpleton goes blindly on and suffers the consequences. Proverbs 22:3

—

A prudent man foresees the difficulties ahead and prepares for them; the simpleton goes blindly on and suffers the consequences. Proverbs 22:3
Matthew 10:34 Think not that I am come to
send peace on earth: I came not to send peace,
but a sword.

It

Submitted by gavination on Tue, 10/13/2009 - 22:12.

It just happened!!!

seriously

Submitted by Freedomfighter512 on Thu, 10/15/2009 - 00:45.

For the last month i was getting cold feet about the right time to buy and i bought 300oz last week when it was at 16.20 and then BAM! it shot up. Either im super-lucky... Or all the speculators are hinging their bets on me. Now I know that im pretty much THE most humble person alive... but i would lean torwards the latter.

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fortune favors the bold