In times of crisis, never forget the value of gold
Last week was a bad one for bank shares; after the HBOS £8.5 billion loss, Lloyds shares fell by a third and other bank shares fell as well. Yet it was a very good week for the gold price, which closed on Friday at $935 an ounce, after reaching what was nearly a seven-month high of $953.30 on Wednesday.
Barclays Capital commented that gold prices were resuming their long-run bull trend after eight consecutive years of gains. For longer than the past eight years I have been arguing that investment in gold is an essential insurance against financial shocks. Last week was a classic example. Respectable British bank shares have now fallen by up to 90 per cent, while the gold price has risen by more than 200 per cent since Gordon Brown began selling the Bank of England's gold reserve.
I have been following the gold price since I published The Reigning Error, a short book on inflation, in 1974. I have not consistently advised people to buy gold - like all other assets, gold can become significantly overvalued, as it did in 1980. However, I have found that the movements of the gold price are one of the most useful pieces of evidence about the health of the world economy. Mr Brown's sale of gold was an avoidable error. My friend the MP Peter Tapsell repeatedly warned him in Parliament not to do it.
People buy gold when they are nervous about the economy, and they are right to do so because gold is a unique commodity. It has to a high degree two qualities that are seldom found together: liquidity and reality. It has strong liquidity; it can almost always be bought, sold or exchanged. There are other liquid assets, of which the US dollar is probably supreme, but they lack gold's quality of real value.
Dollars do not constitute a real asset, such as property or “real estate”. The dollar is simply a piece of paper. Gold has been a much better store of value than the dollar.
In 1873 one of the leading British economists, William Stanley Jevons, published a short book, Money and the Mechanism of Exchange. By 1887 it had reached its eighth edition. Unfortunately, there are few modern economists who do not suffer from the delusion that new truths make old ones obsolete.
Read the rest:
http://www.timesonline.co.uk/tol/comment/columnists/william_...
They don't have to pay you in gold if you hold paper.
If you are going to invest in metals, buy physical, not paper. I would suggest studying a little about palladium, the other precious money and currency.
grant
My broker has cost me a bunch of money during this crisis. Would
you move what is left of an IRA into any gold stocks right now, or is that the next bubble. I hate to lose what's left. Looked at moving into cash and was warned I might miss the rebound. ?? What rebound??
IT IS NOT A WASTED VOTE!
Gold is excellent, but don't wear blinders.
There is an estimated 120,000 to 140,000 tonnes of gold ‘above ground’.
There is an estimated 4,000 to 5,000 tonnes of palladium "above ground".
In the earth's crust there is roughly 1.8 times more gold than palladium.
Palladium is useful as a storage unit for hydrogen.
California is investing billions in fuel cell infrastructure.
China is also investing billions in fuel cell infrastructure.
Europe as well.
Obama supports clean energy technology.
The writing is on the wall, all we have to do is read it.
Watch out for the Japanese and Chinese, they are buying palladium.
grant
Thank you very much, I
Thank you very much, I appreciate your words. I am back for a while, but I am about to make my move into the backwoods, so I will be offline for a few weeks until I can get my computer connection set up.
http://www.1776solution.blogspot.com
"Don't worry, we've thrown out the Weimar Republicans and elected the Zimbabwe Democrats." Billy Joe Allen
http://militantjeffersonian.com
"Men do not willingly read unpalatable truths of themselves. The People like those best who fool them most, by pandering to their vices and flattering their foibles" Raphael Semmes
I echo others' thoughts about being glad to see you here!.
Please do stay in touch when you're settled. Thanks again for patience and wisdom shared with us.
I appreciate it Qwerk...I
I appreciate it Qwerk...I will be making my move at the end of this month and will definitely stay in touch.
http://www.1776solution.blogspot.com
"Don't worry, we've thrown out the Weimar Republicans and elected the Zimbabwe Democrats." Billy Joe Allen
http://militantjeffersonian.com
"Men do not willingly read unpalatable truths of themselves. The People like those best who fool them most, by pandering to their vices and flattering their foibles" Raphael Semmes
You heading back to alabamastan?
If so contact me, I'd like to meet you
Thank you Dr. Paul for making me act on what I already knew was right.
*May the only ones to touch your junk, be the ones you want to touch your junk.*
something to think
some thing to think about...... in 1913 100,000.00 would have bought 5000 ounces of gold.... today that 100,000 dollars will buy what 4800.00 buys to today.. your 5000 ounces of gold is worth 4,836,500.00
"When governments fear the people there is liberty. When the people fear the government there is tyranny."
-Thomas Jefferson
I am more concerned about the return of my money than the return on my money. --Mark Twain
“A prudent man foreseeth the evil, and hideth himself: but the simple pass on, and are punished.” (Prov. 22:3; 27:12 KJV)
Hey McCain-----┌П┐(◣_◢)┌П┐
No offense SIERRAHPBT
but the number of little green pieces of paper needed to get an ounce of gold is misleading. A better measure would be to look at what an ounce of gold bought in 1900: a suit, a hat, a fine cigar, a good meal and a night of drinks at the bar and you'd have change left in your pocket. In 2009, that same ounce of gold would buy you a suit, a hat, a fine cigar, a good meal and a night of drinks at the club and you'd still have change in your pocket.
That $100,000 in 1913 would have given you the lifestyle of a millionaire today - and consequently, it take millions to buy an equivalent amount of gold. While it does fluctuate a bit, the purchasing power of gold has been effectively stable over the last few thousand years. It's the only real (read: no counterparty risk) wealth preservation vehicle out there.
Silver follows the same path; I'm "down" about a dollar an ounce on my silver holdings, but I'm "up" on what I can buy with that silver (when I bought the silver, I could get 4 gallons of gasoline per ounce; now I can get about 5 1/2 gallons for that same ounce.)
If there was only one piece of advice I could give that would be followed, it would be to encourage people to start looking at wealth in other ways than the amount of paper you have.
isn't that what I said
isn't that what I said above?
"When governments fear the people there is liberty. When the people fear the government there is tyranny."
-Thomas Jefferson
I am more concerned about the return of my money than the return on my money. --Mark Twain
“A prudent man foreseeth the evil, and hideth himself: but the simple pass on, and are punished.” (Prov. 22:3; 27:12 KJV)
Hey McCain-----┌П┐(◣_◢)┌П┐
Oh
I read it as "if you would have invested in gold in 1913, you'd be a millionaire now", which is why I posted what I did. I didn't realize you were trying to say that the dollar had devalued that much compared to gold over the same period. Or was that what you were trying to say?
actually both.. having
actually both.. having almost 5 million bucks in the bank right now would be nice!
"When governments fear the people there is liberty. When the people fear the government there is tyranny."
-Thomas Jefferson
I am more concerned about the return of my money than the return on my money. --Mark Twain
“A prudent man foreseeth the evil, and hideth himself: but the simple pass on, and are punished.” (Prov. 22:3; 27:12 KJV)
Hey McCain-----┌П┐(◣_◢)┌П┐
Personally..
..I'd prefer the 5000 ounces of gold :)
lol too!"When governments
lol me too!
"When governments fear the people there is liberty. When the people fear the government there is tyranny."
-Thomas Jefferson
I am more concerned about the return of my money than the return on my money. --Mark Twain
“A prudent man foreseeth the evil, and hideth himself: but the simple pass on, and are punished.” (Prov. 22:3; 27:12 KJV)
Hey McCain-----┌П┐(◣_◢)┌П┐
Great to see you back
Great to see you back posting Republicae! I think I speak for many when I say we missed you!
--
Get Prepared!
Only dead fish go with the flow...
-----
End The Fat
70 pounds lost and counting! Get in shape for the revolution!
Get Prepared!
Thanks Hawk, it's
Thanks Hawk, it's appreciated I assure you.
http://www.1776solution.blogspot.com
"Don't worry, we've thrown out the Weimar Republicans and elected the Zimbabwe Democrats." Billy Joe Allen
http://militantjeffersonian.com
"Men do not willingly read unpalatable truths of themselves. The People like those best who fool them most, by pandering to their vices and flattering their foibles" Raphael Semmes
great article
right now gold at 7 month high 972$ and heading up...
"(Better) to be confused in the search for truth than fully confident and sound asleep in a dream of lies." ~ Michael Nystrom
http://www.votenader.org/blog/2008/09/10/statement-to-ron-pa...
http://www.flickr.com/photos/57925480@N00/2660779139
Website:
http://www.libertypoet.com/
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"How can we justify to the unemployed and underemployed in the United States the incredible cost of maintaining a global empire?" - Dr. Ron Paul
Great article!
Here is some more on this topic... http://www.youtube.com/watch?v=pW-Db0mGTmI
"Do you want to know who you are? Don't ask. Act! Action will delineate and define you."
Thomas Jefferson
www.LibertySpammer.com
"Do you want to know who you are? Don't ask. Act! Action will delineate and define you."
Thomas Jefferson
www.LibertySpammer.com
I've been
very happy with my gold and silver investments that I purchased a few years ago. Had that money been in a 401k it would be decimated right now. I keep trying to drive the point home over at the Krugman blog on the NY Times website, but they keep deleting my posts. At least they stay up for a few hours.
"The credit expansion boom is built on the sands of banknotes and deposits. It must collapse.", www.mises.org
"Endless money forms the sinews of war." - Cicero, www.freedomshift.blogspot.com
lol....... keep doing
lol....... keep doing it!
"When governments fear the people there is liberty. When the people fear the government there is tyranny."
-Thomas Jefferson
I am more concerned about the return of my money than the return on my money. --Mark Twain
“A prudent man foreseeth the evil, and hideth himself: but the simple pass on, and are punished.” (Prov. 22:3; 27:12 KJV)
Hey McCain-----┌П┐(◣_◢)┌П┐