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Gold has been on a tear this week

Up 30+. It's up 13 dollars already today and the USD is down 1+% today.
http://www.kitco.com/charts/popup/au0030lnb.html




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Be careful when buying Gold.

Be careful when buying Gold. Gold was confiscated in 1933- let me explain, Confiscation means The Government demands you sell your gold to the Government for the going rate and with a deadline. Anyone caught with Gold after the deadline goes to Jail for 20 years. Then, Boom, after the deadline expires, the dollar was devalued 40%. Americans were not allowed to own Gold after that until 1975.

I have been talking to a couple of Gold Dealers who say that if you buy Gold coins, only buy coins dated pre 1933-it has some goofy name I can't remember. They have already been recalled and cannot be recalled. I have heard this from 2 Gold dealers. Personally, I know that the Government can do whatever it wants, and I do not think they will care one way or the other what the date of gold coins is. The whole idea is to screw the peasants and apease the beasts. Do your homework before buying anything. I am think silver will be safer. I am still boneing up on all of this.

"The price of Freedom is Eternal Vigilance"- Thomas Jefferson

There is no Left or Right -- there is only freedom or tyranny. Everything else is an illusion, an obfuscation to keep you confused and silent as the world burns around you." - Philip Brennan

"Invest only in things that you can stand in front of and pr

my coworker is telling me the imf is gonna sell a huge amount

once it hits the 1000 mark. not sure if i believe him but it wouldnt surprise me

The sooner the IMF sells,

The sooner the IMF sells, the sooner China can be the buyer and the rest of us can move past this overhanging sales threat.

SteveMT's picture

It makes a lot of sense and here is why.The IMF wants currency..

...dollars right now. They want to buy and lend using dollars. The more dollars/ounce of gold the better for them. They want the price high because they are on the other side of the fence. Whenever gold hits their target price, they sell to obtain the highest number of dollars possible. The hedge funds were doing the same thing, i.e. forced liquidations to pay off their investors with dollars.

yeah, kinda funny that is

yeah, kinda funny that is what always happens when gold gets near 1000. Just treat it as a buying opportunity.

Did you see what happened in the last hour of trading today ?

Looked like a rocket taking off ! http://bigcharts.marketwatch.com/

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Live like you mean it ..... Your life is your own !
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They painted the charts with

They painted the charts with monster program trades in the last two minutes. Nasdaq finished over May 7 high, so it can run higher. Amazing show to watch!

I think silver is the better

I think silver is the better pick. Not only does it have more industrial uses, but it is actually also rarer. My understanding is that there are 6 billion ounces of gold above ground, but only 1 billion ounces of silver. So, gold is trading at a ratio of about 60 to 1 right now over silver in terms of price, even though it is 6 times as abundant. And, at only $15 an ounce, it's much easier for the average person to obtain a bit of silver here and there.

Both will rise, but silver is the more speculative play if you think that eventually the world will recognize its relative scarcity.

Industrial uses

If only it were that simple, one could simply go long silver and short gold. If only. Yep. Silver has industrial uses. So you think industry will rally? If you map the silver/gold ratio, you will see that its ups and downs roughly track the ups and downs in the SP 500. Silver lost big time vs gold during the crash, and has gained more than gold during the recent stock market advance. However, it has yet to re-attain its pre-crash ratio.

One should also consider the fact that most silver is mined as a by-product of base metals. Thus when the copper mines cut back on output, the output of silver declines. That is significant. There are small mines that produce mostly silver. During the crash, the price of silver bottomed at just a little under the production cost for those mines. Is that a floor beneath which silver cannot fall? I dunno.

Me? I have both gold and silver. I bought most of the silver when it was trading for about $9/ozt.

Ĵīɣȩ Ɖåđşŏń

"Fully half the quotations found on the internet are either mis-attributed, or outright fabrications." - Abraham Lincoln

Nice factual summary of the

Nice factual summary of the gold/silver ratio and industrial uses.
It's good to diversify and take positions in several metals and commodities.

What about just plain old

What about just plain old borrowing money in dollars, put it in x foreign currency, make min payments on borrowed dollars by converting x currency back into dollars to make the payments. When the collapse comes, then pay off the note.

Fiatroglycerene

Be careful covering a short position in one fiat currency with a long in another fiat currency.

If you are convinced that hyperinflation is coming (devaluation) borrow now at a fixed rate and purchase HARD assets. Or borrow now fixed and lend variable.

That's called a "carry

That's called a "carry trade." It's supper dangerous. One reason for the huge advance in the dollar vs. other currencies during the stock market crash was due to the dollar carry trade (a.k.a. "leverage") unwinding in a short squeeze. Many were wiped out.

If you really want to do it, there are companies that will do all the borrowing and interest payments (and collections) for you automatically, all from the comfort of your own computer. You can watch the value of your positions change in realtime by the second. Google for "FOREX trading." You can choose among many currency pairs. But tread carefully. It's too scary for me.

Ĵīɣȩ Ɖåđşŏń

"Fully half the quotations found on the internet are either mis-attributed, or outright fabrications." - Abraham Lincoln

SteveMT's picture

ALL currencies are fiat. There is some good evidence

though that China in accumulating high gold reserves, and they are moving to a gold-backed yuan. So perhaps the yuan is the way to go. China has been going on billion dollar shopping sprees, unloading dollars and accumulating hard assets world-wide.

according to

according to jeff45098977123409987546, gold is a fiat currecy also.. remember that post?

"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

Study closely, they break promises too.

Fǎbì Legal Tender (1935-1948)
In 1935, the Central Government enacted currency reforms to limit currency issuance to four major government controlled banks: the Bank of China, Central Bank of China, Bank of Communications and later the Farmers Bank of China. The circulation of Silver Dollar coins was prohibited, and private ownership of silver was banned. A new currency issued in its place was known as 法幣 (Pinyin: fǎbì) or "Legal Tender".
http://en.wikipedia.org/wiki/Chinese_currency#F.C7.8Eb.C3.AC...

My question is that even

My question is that even with gold backing, what impact would $1 trillion suddenly worthless dollars have on the Chinese economy and its currency and stocks? Certainly, the gold backing will help, but I'm wondering about timing.

SteveMT's picture

The longer that the dollar can be hold on the better for.....

everyone, every state, and every country who are preparing for this likelihood. China is liquidating their dollar-strong position. If they get it to half a trillion dollars soon, all the better to decrease this impact of the coming dollar-bust. Geithner is on his way to China today to reassure them that all is well, but they know better by now.
We are getting closer to this end time, but all the time in the world will not be enough if no one is preparing.

Buy silver

buy mostly silver, it is more volatile than gold but it should outperform it significantly in the long term and we have seen this over the past week or two.

Sentinel: Why silver?

Silver fell from $20 to $9 -- From Feb '07 to Nove '08

It's still down over $4 since it's high.

I don't trust silver -- gold is a traditional metal to hedge against the dollar so it has more driving potential (in that regard).

Over 90% of the use of silver is in industries that can change dramatically with perception of value and innovation -- referring to electronics and jewlery -- mirrors and cameras.

Octobox

Silver is the obvious pick.

It's all time high is around fifty an ounce. Thus, doubling right now is no record and very very possible. Gold is the sucker buy right now. It costs too much in a recession. Everyone is running around saying BUY GOLD BUY GOLD.... NOPE! Buy Silver... it has far more uses than Gold and FAR more potential for doubling.

I believe we are in for some serious times within the next few weeks. The metals should continue to inch up until one day soon they will SKYROCKET... better be in the game by then or else you will be left at the dock while the boat sails off into the sunset.

But make sure you have food and a weapon of some kind FIRST.

Does my burka make my butt look fatwa?

Does my burka make my butt look fatwa?

SteveMT's picture

Sage advice Galactic. Did you see what silver did today?

They all did well.

Metal Bid Ask
Gold $980.90 $981.90 up 17.70
Silver $15.75 $15.80 up 0.60
Platinum $1,186.00 $1,196.00up 43.20
Palladium $237.00 $242.00 up 5.50

Updated:5/29/2009 4:05:52 PM CST

If you are making min

If you are making min payments, then you want to time this pretty well. I think we are within a year's time of the collapse.

What about forming a company like an LLC or something (i'm so ignorant about this stuff). You can then borrow the money through the company, right? Start a real estate venture?

It is a really interesting idea that if you are willing to bet on hyperinflation to borrow as much as you can assuming you can make the min payments until the collapse occurs.

LLC borrowing

To borrow through an LLC (or any corporate structure) without personally signing the loan, the LLC will need a track record of revenue and profits or be able to put up a huge downpayment. If not, the banks won't deal with you. It is also good to have the LLC up-to-date with state/fed filings.

I know the good Dr. would

I know the good Dr. would not advise you to borrow money to turn a profit, this is a foolish scheme. Besides, there is no guarentee that you will be able to get your hands on FRNs in a hyperinflated economy. You will still have to chase after them.
grant

The most interesting thread

The most interesting thread I've read so far today! I'm looking at ways to play this collapse.

Going into debt is a very interesting idea. Heck, all I was planning to do was to wait for hyperinflation, take the loonies out of my etrade account, and then use these canadian dollars to pay off my house.

But, now you've really got me thinking about what other ideas are out there for profit plays.

SteveMT's picture

The idea is buy assets with credit using current dollars, and...

pay the minimum back while waiting for dollar devaluation. Then pay this debt back using deflated/devalued dollars.
This is an interesting concept.

Well...

from the looks of it, this is exactly what the Fed is attempting to do... inflate to pay off overseas debt. Ron has even pointed it out.

So why not capitalize on something that is being set up anyways?

:)

~Live life to its fullest, with an open heart, open arms and most important... an open mind~

SteveMT's picture

Appreciate thoughts Devon. Someone eventually pays for this.

I guess that is my bad feeling. Then, we become the same trash as the people who did this to us.
A compromise would be taking reasonable advantage of this situation on debt that could be paid back quickly. However, knowing the risks and having a fallback position. like everything else that we discuss here is the right thing to have in place.