John Embry's 17 Reasons To Own Gold

Tyler Durden's picture

John Embry:Reasons to Own Gold

 

H/t Jing

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septicshock's picture

New to ZH, not sure if this is polite to ask or state... but I need to know...  How much gold should I purchase?   Every single ounce my dollar can buy?  I have about 50k worth of gold in silver and gold.. 90% gold.

 

boiow's picture

the more research i do on the subject of gold and silver the closer to 100% of my savings i put in them.

the important thing is to own the physical and not an etf.

from my perspective the only threat would be, 1/ the debt burden of the world is suddenly massively reduced ( not likely any time soon).  2/ a world currency of some description is introduced.

breezer1's picture

if a new world currency is introduced it will be met with scorn without some portion backed by something other than gold or even silver. either way we go to the moon or to jail.

DosZap's picture

boiow,

You need to keep your mind.

When we enter the Deflationary cycle(before High/Hyper Inflation), cash will be king..........you must be able to function day to day.

Rule of thumb,no one knows for sure what the ultimate HIGH for Gold will be, so use a guessimate..........

I seriously doubt we will not see it at least at $2500.00-$4,000oz, give or take.

Compare that to your total net worth, and pick a percentage relative to what # you choose, so that you will be able to at least stay EVEN on the Net worth side.

In normal times, 5-10%, with what is likely coming, you figure your risk tolerance.

Robt Prechter of Elliot Wave Analysis, say's we will see Gold at under $255.00 an ounce, in the coming Deflation cycle....

Personally I do not believe it for a minute, as you cannot(in the scenario the world is in), use PAST stats to give realisitic educated figures/ numbers.

We are entering totally uncharted territory...............Go with you gut, you usually will not go far wrong.

Gordon Geicko here, recommends 100% in........others, all over the charts.

septicshock's picture

appreciate the feedback.  I agree with holding physical gold - serves two functions:  1. At hand in case of emergencies.  2.  No fees being deducted yearly to dwindle its worth. 

I don't think jumping in with 100% of my net worth in gold is going to be productive either nor is holding a mere 10%.  I think a minimally diversified investment of gold, land, and cash will serve me well from the info I have been gathering from all of your postings, kunstlers blog and Tyler's posts.   Heck, my gambling addiction with the stock market is still so strong... Even after knowing how the odds are stacked against me, I still wager a small (10%) of my holdings. 

SWRichmond's picture

This is NOT investment advice; this only what I am doing.  I am about 40% in dollar shorts (physical, CEF/GTU/PHYS, and miners), and about 60% in cash or cash equivs.  The purpose of the cash is to avoid being forced to liquidate the PMs during any sustained deflationary period that could preceed the currency collkapse that I am expecting.  In other words, I believe firmly that the PMs are what I will need to hang onto come what may, so I don't want to be forced out of them to raise cash to eat / pay bills.  I am probably too conservative; like many others, I see evidence of the "next leg down" and intend to use it to increase my dollar shorts, especially miners, at reduced prices.

Neo-zero's picture

Like alot of people are overly fond of repeating you can't eat gold.  If things go really bad, Greatest Depression, Black Swan's blotting out the sun bad how long could you last.  Enough to eat for your family and maybe a friend or two for a month or 3 and the ability to grow more.  Have you a way to protect yourself from those who might want to take that food and gold from you???  A way to heat your house if Iran shuts the straights of Hormouz and Oil is 250 a barrel overnight?  If you've got most of those things figured out and cash for your everyday non end of the world lifestyle great.  After reading about the Saudi's giving permission to Isreal for overflight I'm worrying about those things a hell of alot more right now and I don't have half the PM's you do.  

For non end of the world just a real nasty Depression you might want to dollar cost average into some as the deflation takes hold.  Also mining stocks have a great upside as gold price's rise for those IRA accounts that you can't liquidate.  There's going to alot of different opinions but alot depends on what's right for you and what exactly your buying them for.  

Me I buy cash from local stores whenever I have enough for an ounce and 10 in silver.  Options expiration is usually a good time to buy as the naked shorts pummel the price to not have to pay out on the contracts.  

DosZap's picture

Neo,

Not to worry................

"After reading about the Saudi's giving permission to Isreal for overflight I'm worrying about those things a hell of alot more right now and I don't have half the PM's you do."

 

Obama has not given his OK, and that's part of the deal.

Israel foolishly made a deal with the AC, and gave the US the right to give the GO AHEAD.

If they were smart, they would take off now.As long as we have Obama (an Islamic apologist), as POTUS, this will never be approved.  

Neo-zero's picture

Doc its just adding to the wall of worry.  If we had a real POTUS this wouldn't be an issue along with alot of other things.  When you look at the state of the world from the view of someone other then a frog whose being slowly boiled and see the precarious state things are in there's more uncertainty than at any period in my life (38) since the cold war ended.  Maybe its just a symptom of being an news junkie and knowing 10x more about what's going on then most everyone else I know.

 

 

Lord Welligton's picture

“Obama has not given his OK, and that's part of the deal.”

I do not believe that Saudi Arabia made this public unless sanctioned by the USA.

http://www.timesonline.co.uk/tol/news/world/middle_east/article7148555.ece

I believe the “Green Light” for an attack has been given

Maybe not tomorrow. But soon. Within twelve months.

The Saudis would not take such a momentous decision without the approval of the USA. The consequences are too great.

If the SHTF the Saudis will need the USA to “contain” Iran.

If this news is correct I would consider it most concerning.

What I do not understand is why it has been placed in the public domain.

Why would you let Iran know that the air attack would come from Saudi airspace?

http://oak.cats.ohiou.edu/~hartleyg/ref/images/middle_east_951.jpg

I would also suggest that Israel, the USA and Saudi Arabia know that they cannot control the outcome.

They know that destroying the nuclear facilities will be insufficient. They will have to mortally wound the Republican Guard.

This means all out war.

Iraq is 60% Shia.

It won’t just be the Straits of Hormuz that will be brought into play.

The entire Middle East will be at war.

Geoff-UK's picture

Mid-east war is inevitable.  Better we start pounding Iran in the ass before they have 50 nukes versus 5.  Prepare for the strike sometime between Obama's 40% approval rating and the 2012 election.  America loves a wartime president.

dogbreath's picture

Iran could't win a war against saadam.  what makes you think that they think they can beat anyone else or come out ahead by pursueing a particular avenue of action.  Only westerners are stupid enough to believe the iranians are crazy enough to provoke a war.   Like you said the US need a war.

What war heads btw?????????

Junk u

 

 

DoChenRollingBearing's picture

If Israel does go ahead, I hope they bomb the hole (cave?) in Qom where their Twelfth Imam is supposed to come out of...  Their Imam thingy is like Christianity's Jesus Christ coming back.

Maybe they can blow away Ayatollahs there in Qom while they are at it.

Plug the hole in Qom, take out enough Ayatollahs, and Shi'a Islam is decapitated.  The Shi'ites, of course will go berserk, but taking out their hole would demoralize them in the longer term.  Reality: no 12th Imam from the hole.  Bummer!

septicshock's picture

options expiration, appreciate the tip Neo.

Adam Neira's picture

1.       When fashioned into a gold chain and worn prominently with a hairy chest it makes you look like a gangster-rapper.

2.       As a male Indian seeking a pretty bride the more gold you have the better.

3.       Gold teeth go well in certain poker circles.

4.       Goldfinger is going to be remade by the Broccoli Family Franchise in 2011 and the price will boom.

5.       If lost on a desert island a tiny piece will be able to save the broken transistor radio.

6.       Fort Knox is overflowing and needs a spring-clean.

7.       "All that glitters is not nickel" does not sound as good.

8.       Gold should be a girl’s best friend but women are not that into commodities.

9.       “Silverlocks and the Three Bears” was thankfully rejected by various publishers.

10.   There is nothing like the sound made when a gold nugget is found by a metal detector.

11.   You could never call a model "a platinum-digger" for marrying an 89 year old billionaire.

12.   Gold has a wondrous texture, feel, weight and gravitas.

13.   Gold is a fixed, finite mineral in a fluid, transient world where real value is not appreciated.

14.   Gold hypnotises people to think that it is more important than trust in making the world go around.

15.   Caveman Gronk first stubbed his toe on a quartz laden sample in 40,000 BC, so you should own some for anthropological humanistic-identification sentimental reasons.

16.   Gold bullets, not cheap silver ones, will be needed in the not-too-distant future to kill the new breed of super-resistant vampires of the twenty-first century.

17.   The value of the stuff will remain above USD $1000 over the next six months and is thus a good harbour for the safety first inclined.

ozziindaus's picture

As part of 17, what does "is anyone's liability" mean? I hear this a lot.

Mr Lennon Hendrix's picture

John, you know how I was house sitting for you?  I lost your dog and drank your liquor.  Its ok, I will make up for it next time you let me house sit, I promise.

JohnG's picture

My dog will bite you.

Please do have a drink :)

Still can't open my safe, eh?

Maybe next time.

:)

ozziindaus's picture

I'm not trying to be a dick but how is that any different to a house or car or even a pack of cigarettes?

Mr Lennon Hendrix's picture

Ozzi, someone just broke your car window with a rock and burnt down your house. 

ozziindaus's picture

and smoked my cigarettes while I went for a piss but my neighbors gold ring just got swiped. 

nuinut's picture

I've heard anecdotal reports of people being robbed of their fiat cash too.

If that is the condition of your decision making process, good luck to you. You're going to need it.

Hephasteus's picture

Until gold runs out and you are no longer able to buy it with fiat money. Then you can carry it around safe as a lion cub.

nuinut's picture

May be useful for lighting the fire, too.

Or building money forts.

chevetain's picture

Don't forget wallpaper, can be also used for origami, paper planes, papier-mache (you dont have to reinforce it with textile either, because linen is already in the mix). You can also light a pipe or cigar with it. One of it's uses, that of snorting cocaine is pretty valid too.

I don't think you could use it as toilet paper or hankie though... too small, and i wouldn't recommend using it as cigarette rolling paper either, but i guess you could always compost it.

You could keep a bunch of coins for poker, and a bunch of notes for monopoly... i take that back, don't keep any notes! Just wait a little and sweep the streets for some, they'll be all over the place blowin in the wind :DDD

Mr Lennon Hendrix's picture

naw, I couldn't figure out the safe.  Got too drunk off of John's wild turkey.

breezer1's picture

i buried mine a few years ago and forgot where i put it. today i'm a successful landscaper.

SWRichmond's picture

Took mine out on a boat and dropped it!  I'm a crappy boater.

DoChenRollingBearing's picture

Yeah, I keep reading about those boat trips.

I'll have to be REAL CAREFUL when I take my gold and guns out on the boat.

nuinut's picture

No different in the respect that they are all physical assets.

Plenty different with respect to their durability, portability, and general public acceptance as a store of wealth and occasional use as medium of transaction.

Also likely to be currently undervalued by the market (gold), as opposed to your examples.

Gold can also function to recapitalize as equity, after the imminent collapse of debt, which your examples cannot.

dereklutz's picture

and don't forget.......when your trying to bust out through the holland tunnel when the shit goes down, those rolls of maple leafs tightly packed in over the calf business socks swung around your head at 20 mph could unleash some major pain on some dudes high on meth trying to block your path to safety in secaucus

JohnG's picture

Secaucus is never safe anyway.

NJ: 3/4 of the state is nice! 1/4, not so much. :)

hyundaijesus's picture

Secaucus is the safest (and nicest) town in Hudson County.

Hudson County: 1/100 of the county is nice! 99/100, not so much. :)

By the way, ever wonder why you can enter NJ for free, but have to pay a toll to leave?

nuinut's picture

If it is a form of debt, it is someone's liability.

And they may, potentially, default.

At this juncture, that potential is increasing in likelihood at an exponential rate.

Physical gold has no such risk.

DosZap's picture

nuinut,

your first three sentences explained FRN's to "T".

Amish Hacker's picture

You can't say we weren't warned. Every greenback says, "Federal Reserve Note" right on it, and a note is a debt instrument.

nuinut's picture

They even put the little pyramid on it, for cryin' out loud!

I would like to direct all those not familiar with it already to FOFOA.

I'm sure most of you have visited already.

 

Also a bit of related discussion here: NNW, which some ZH's may wish to join.

#409115 is relevant, too.

RockyRacoon's picture

You are so right.  It is a debt intrument.  There is no term, no interest rate, and no collateral.  If you or I wrote the same type of note we would be jailed for fraud.

technovelist's picture

Technically, a FRN is a zero-coupon perpetual bond. :-)

RockyRacoon's picture

...and there is a really useful financial instrument for ya, eh?

Bay of Pigs's picture

Mr. GOLD himself John Embry. I've had the pleasure of hearing him many times at the Vancouver Resource Conference. The guy's logic and reasoning are ROCK SOLID. Care to take him on point by point Johnny B?

Mr Lennon Hendrix's picture

shhhhh.  he just went to sleep.

RockyRacoon's picture

That pizza delivery gig is tiring. 

Sleeping on Mom's sofa in the basement is where he belongs.

Freebird's picture

Physical means no third party risk as long as your storage mechanism is secure, unlike derivs, securities, banks etc.

Nice warm fuzzy feeling for a Friday afternoon but nothing new really, although it reminds me to buy more.

Unable to bring myself to say it....G B