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As Gold ATMs Get More Popular, Is Gold Still "Still Worth It"

Reggie Middleton's picture




 

Reggie Middleton at Emirates Palace in Abu Dhabi Reggie Middleton at Emirates Palace in Abu Dhabi

 Last spring I took a trip to Abu Dhabi and Dubai on a fact findng mission. It was interesting, as the luxury centers in those cities are arguably unmatched  in terms of opulence bling. On the topic of bling, there were several vending machines of interest, one of which in particular caught my eye.

When I was there (March '12), the gold was priced above spot (or at least above what I was able to get it for), but the ability to buy ingots retail, relatively anonymously for cash did intrigue me. The UAE is a cash town, so this should not be a surprise. Now, the question remains, is gold still a worthwhile pursuit considering its run up and subsequent recent correction? Will it really provide practical hedge against the inflation that so many see coming down the pike? Well, let's dabble in the BoomBustBlog archives for some insight...

As excerpted from Deflation, Inflation or Stagflation - You Be the Judge!

In continuing the rant on the possibility of the US entering a stagflationary environment, as was hinted by Alcoa's quarterly report (see "Is My Warning of the Risks of a Stagflationary Environment Coming to Fore?"), I have decided to graphically illustrate the historically most successful inflation hedges. Click graphic below to enlarge.

inflation_correlation.png inflation_correlation.png

As you can see from the excerpt above, unless gold breaks its historical correlation with inflation vs other assets, it stands to be outdone as an inflation hedge. Then again, there are many moving parts to this puzzle. We explored an interesting, in depth (although admittedly self serving) perspective on this topic in Trading Physical Gold: Is Gold In A Bubble? - BoomBustBlog

Trading Physical Gold As Easily As You Trade Stocks: Is Gold Becoming A Tradable Currency After All?

Trading Physical Gold vs Investing In A Physical Gold Trust: Which Is Better?

Reggie Middleton Interviews GBI: Gold Bullion International part 3 of 5

Reggie Middleton's Take on Investing for Inflation, pt. 1

Economic contractions AND rising prices, dare Reggie utter the "I" word - Enter a global phenomenon

Global Recession - an economic reality

 

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Wed, 12/26/2012 - 19:59 | 3097710 SAT 800
SAT 800's picture

No. what he's saying is rational. not easy. it's never easy to implement correctly; but he is correct. You don't know how to speculate on markets; that's your problem; it doesn't mean he is dancing in the dark. Once again; I am saying the Long Bond Contract already put in its thrity year high in July, 2012. I make money every time I short a rally in these bonds; the rallies are easy to read on the price chart. We are now in a bear market in long term Treasuries; as the poster said; "some of this is happening now". Definetely. Definetely happening now. When The Long Bond sells for the same price it did in July, I will apologize publicly. But don't hold your breath. Predicting the future is not impossible; also you vision that "someone is playing the music, and 'knows things"; is quite crazy. the people in charge are stupid; they have false theories, they have painted themselves into a corner by adhering to their false theory for generations; there is no conspiracy of finance; only whatever seems expedient. "Kicking the can down the road" is not a plan; but it's all they got. Your conspiracy theory is just a defense for you.

Thu, 12/27/2012 - 03:10 | 3098298 silverserfer
silverserfer's picture

NO, I deliberatly choose not to trade paper markets out of protest to their corrupt origins. You have a significant lack of understanding for what is planned by the "people in charge" who are not stupid. Your are trading in a virtual world they own. You think politicans are running around like chickens with their heads cut off. They are scripted to talk ambiguously and act impotently. You have patted yourself on the back enough to create a sense of safety for what you are dong. Hopefully you can find your financial sucess and get out before the reality that you are gambling in a glorified casino comes in and your computer screen apologizes to you for not being able to access your acount and it has been closed.   

Wed, 12/26/2012 - 19:38 | 3097667 WhiteNight123129
WhiteNight123129's picture

I perfectly know that the thing can blow up at any moment, so you have to withdraw gains and store them in physical form. Once the system has blown up, we can go back to good banking, that is not permanent securities but self liquidating short term credit funding a real purpose.

But you are correct it is extremely difficult in the current environment to figure what investment is inflated and about to burst and what securities should be acquired because they already trade as if it was the end of the world. I believe the short treasuries trade is not too crowded yet...

If we had redeemable currency system, the rules of engagement would be far different, Buffet would be bankrupt at the first occurence of 5 years of large deflation, securities would plunge while the insurance float liability would harden like mad. I believe though that guys like Dalio or Rogers would make as much money as today.

Wed, 12/26/2012 - 20:24 | 3097762 SAT 800
SAT 800's picture

You're well informed; your reasoning is good.

Wed, 12/26/2012 - 15:35 | 3096823 JustObserving
JustObserving's picture

In China and India, gold and silver are money.  As long as the middle and upper classes continue to grow, demand for gold and silver will grow.

Just the land value of Beijing was $20 trillion in January 2011.  That is enough to buy all the gold bullion in the world 5 times over.

It is said there are 143,000 multimillionaires and 8,800 billionaires in Beijing.

Only an idiot believes that gold will get cheaper.  Western central bankers will relentlessly attack gold as it is a threat to their fiat currencies.  Some say Gaddafi was targeted for his plan to introduce the gold dinar in Africa.  But the huge demand from China and India will overwhelm all central banker intervention.

Now the cost of gold mining is $1200 an ounce.  Gold may have a temporary downside to $1450 but the upside is almost unlimited.

Let the collapse of the corrupt confetti commence.

PS 6.24 yuan to the dollar

http://www.chinadaily.com.cn/china/2009-08/24/content_8606004.htm

Thu, 12/27/2012 - 02:35 | 3098289 cynicalskeptic
cynicalskeptic's picture

BTW...what ever happened to Libya's gold?      I wonder where the bars sent to Chavez came from.....

Wed, 12/26/2012 - 15:21 | 3096797 Bicycle Repairman
Bicycle Repairman's picture

"There just is not much gold to go around."

There is infinite paper gold and tungsten-gold.  Until phony gold is repudiated, physical gold will continue to be under-priced and completely controlled.  I envision a cliff, not a slope.

Wed, 12/26/2012 - 17:29 | 3096792 Kastorsky
Kastorsky's picture

cmon!

just tell us to buy your news letter - spear reading that junk.

What kind of "inflation index" is it? last month?, last 100 years? it's crap.

And didn't you bombarded us with "commercial real estate bubble" all of last year? Well where is it? Is ti still there? Than why are you pushing "office space"?

Wed, 12/26/2012 - 19:45 | 3097687 steelhead23
steelhead23's picture

I too find Reggie's argument a bit confusing.  A year ago he was warning of bank risks in CRE and suggesting we stay away from, or short bank stocks.  Now he's telling us that CRE is the best inflation hedge?  Reggie, you got some splainin to do.  I happen to think that Reggie is sharp as a tack and is right more often than not - but this post has me scratching my head.  On the other hand, I happen to agree that income-generating property is about the best inflation hedge around - until occupancy drops into the 70s or below.  Then you go broke.  But, folks gotta live somewhere, so apartments seem pretty safe.

Wed, 12/26/2012 - 15:21 | 3096790 Quinvarius
Quinvarius's picture

Gold is an inflation hedge.  Gold is also a deflation hedge.  Both kill a fiat currency.  That is some gold 101 for you.  For every 1 gold vending machine there are 100,000 paper money machines.  If you are looking for a bubble based off of vending machines, fiat and fritos are your shorts.

The gold bull has not even started yet.  Don't trade it.  Don't listen to any hack telling you how to trade it.  But, there is strong correlation between hacks mentioning gold vending machines and gold bottoms. 

Thu, 12/27/2012 - 03:51 | 3098322 MeelionDollerBogus
MeelionDollerBogus's picture

goldpricemodel 2013 projection

2012 06 18 277week roc 02 goldpricemodel 2011 Jan to 2012 Dec 28

I don't have a problem trading it but if you're scared or can't do math, don't.

Wed, 12/26/2012 - 20:21 | 3097758 SAT 800
SAT 800's picture

Yes, the pms; both gold and silver are highly multiplied hedges against both inflation and deflation; because there can be no quiet, or controlled, deflation. they only way we're going to get deflation is in the form of a falling series of national domino defaults and massive bank failures; not the kind of thing you can keep out of the mass media; it will be highly visible; and visceral. These markets respond to fear. They're highly multiplied hedges because the amounts available are so small compared to the desperately frightened capital that will remain even half-way through a deflationary crash. The amount of silver available to the market is so small it's crazy. David Morgan told Sprott well, you can order this silver for your fund, but it take two months to get delivery. Sprott, who was fairly well informed, scoffed at him. It took two months to get delivery; and a lot of the bars were still warm. Basically he was buying current mine production; the days when the warehouse contents were significant in dollar terms are gone.

Wed, 12/26/2012 - 15:10 | 3096764 2 cents
2 cents's picture

Apartments are a great idea for inflation.....however you can't pick them up and leave the country if you had to, you're a sitting target for Government edicts. Also, few can afford the price of buying an apartment building.

Whereas anybody with $1710 can buy an oz of gold, put in in their pocket and walk off protected from currency failures and inflation to a large degree.

Thu, 12/27/2012 - 02:39 | 3098290 cynicalskeptic
cynicalskeptic's picture

Have fun wirth an apartment filled with unemployed people unable to pay rent protected by laws favoring tennants....  you know how long it takes to evict a tennant for non-payment of rent (and you still have to provide heat and such as long as their freeloading butt is there).  

There's a reason so many landlords walked away from NYC apartments in the 70's and 80's (times of high inflation BTW)

Wed, 12/26/2012 - 14:39 | 3096676 jeffgroove102
jeffgroove102's picture

Reggie forgot the chart that shows crap spewed out of bankers and politicians mouths versus the price of gold, haha. If I were DR. Strangelove, then maybe I would consider selling. Consider this, roughly 85% of new businesses that are started fail, but what about the performance of political toads running a country? Can anyone see where I am going with this?Love or hate the politicians, they do have a hand in how things are valued.

Does anyone see a top banker or corrupt official going to jail? At least in 1980, they started raising interest rates, and Charles Keating and his ilk got the orange jump suits. Even if Ron Paul would have won, I am not really sure that things would be any different. I might have considered selling if this event had happened.

Anywho, I always welcome arguments contrary to my own, but given whom runs things with so little skin in the game, I continue to be a skeptic.

Wed, 12/26/2012 - 14:37 | 3096668 lasvegaspersona
lasvegaspersona's picture

'Gold'...if you are using GLD or futures to hedge a portfolio...well that is one thing. If you hold physical bullion you are getting a whole different hedge.

Any article about 'gold' should define the 'kind' of gold being discussed....for me there is a big difference.

Wed, 12/26/2012 - 14:36 | 3096664 ejmoosa
ejmoosa's picture

How did those rent-controlled apartments fare in New York City?  Because when government gets involved, all bets are off.

Wed, 12/26/2012 - 15:07 | 3096753 FEDbuster
FEDbuster's picture

As long as you have property taxes, they are always involved.  You are a sitting duck for the parasite tax collectors.

Wed, 12/26/2012 - 20:12 | 3097740 SAT 800
SAT 800's picture

Yes. Buying real-estate is like painting a bullseye on your back.

Thu, 12/27/2012 - 04:30 | 3098327 MeelionDollerBogus
MeelionDollerBogus's picture

highly ignorant article, not sure if you shared it just to share that there's still mass market ignorance out there.

For one, the article neglects understanding that UST like many other assets can be and actually are rehypothecated for margin trades in billions of dollars by large institutions.

For another, the article says that inflation is low BECAUSE treasuries are in high demand despite that demand being from freshly printed & network-transferred funds from the Fed Reserve (which is inflation) with few other real buyers.

"Generally, the biggest threat to gold investors now is the improving economy"

And that's the biggest load of all. There is no improving economy. Only an idiot would actually believe that dropping labor participation rate combined with stagnant wages and rising fuel+food prices is any kind of improvement. It isn't. Add to this bad mix that debt isn't deleveraging for households & you've got the fact of recession in the face propaganda.

"Investors looking for reassurance in their gold piles can take comfort in the fact that no one seems to fully understand what moves the metal these days"

Wrong again, 2012 11 05 277week ROC -goldpricemodel , goldpricemodel 2013 projection , but few would know better. I'll see if I can adjust that.

Wed, 12/26/2012 - 14:32 | 3096649 q99x2
q99x2's picture

Ammo is the best hedge against central banksters

Wed, 12/26/2012 - 15:05 | 3096742 FEDbuster
FEDbuster's picture

Plus, the means for rapid, accurate physical delivery of said ammo.  Brass, lead and copper, the other precious metals.

Wed, 12/26/2012 - 14:28 | 3096639 Bastiat009
Bastiat009's picture

Saying that gold ATMs are popular is like saying that mega-yachts are popular. They are but among 0.00000001% of the population.

Wed, 12/26/2012 - 16:17 | 3096996 Treason Season
Treason Season's picture

Let's see. It's takes about 41 euros to buy a gram of gold from a vending nmachine and it takes aboiut 4,000,000 to buy a yacht. Who in the fuck gave this idiot 6 up votes.   

Wed, 12/26/2012 - 14:25 | 3096633 garypaul
garypaul's picture

 "You can now get gold ingots at ATMs" -RM

Actually Reggie I can't. I don't live in Abu Dhabi (or Geneva etc.). Poor examples.

 

Wed, 12/26/2012 - 16:13 | 3096981 Spitzer
Spitzer's picture

Everyone is a bubble hawk these days... RM is another one. Yet again they are still missing the real bubble

Govt bonds.

Wed, 12/26/2012 - 20:01 | 3097714 WhiteNight123129
WhiteNight123129's picture

Absolutely, a bubble needs to be pervasive,very widely held yet not bothering much people holding the assets in the bubble, lastly very few want to go against it despite the lopsided returns.

 

Wed, 12/26/2012 - 18:04 | 3097403 DoChenRollingBearing
DoChenRollingBearing's picture

+ 1 

Yes, but LOTS of people have had beaten up but good by shorting Treasuries.  If anyone had asked me 5 years ago if the 10-Year bond would sport a yield of about 1.75% I would have called them crazy...

***

If you look around, you see more "We buy gold" signs than "Buy our gold: 1-800-xxx-xxxx" ones (or even gold ATMs!).  It's worse in Italy, families are even selling heirloom jewelry, comments and pictures at my piece from September: "Compro Oro in Italia -- Parte Due":

http://tinyurl.com/ckffdn3

 

Thu, 12/27/2012 - 05:24 | 3098351 WhiteNight123129
WhiteNight123129's picture

Well, given the ILBE inflation expectation at 2.55% if the treasuries were to go below inflation expectations the precious metals would have to go to the moon. No if it is the ILBE inflation expectation which plunge, some of my stock short should do great.

 

Wed, 12/26/2012 - 19:03 | 3097578 NotApplicable
NotApplicable's picture

Call me crazy back then? For that insanely high rate?

Whatcha gonna call me when it hits zero?

Remember, they'll do it... "for the childrens."

Isn't it obvious that sovereign debt service costs have to go to zero, otherwise the facade of the sovereign dies?

For any rebuttals along the lines of "But, that will cause [disaster]!" I say...

"Well, now you've been warned."

What will be interesting is to watch how TINA will walk down the 30. Will they add a 50 first?

Wed, 12/26/2012 - 14:22 | 3096628 DavidPierre
DavidPierre's picture

 

 

Central Banks are now significant buyers.

Through most of the current bull market for gold - and it remains a bull market despite the current trading range, dreadful sentiment, and short term down trend - the CBs were mostly sellers. This year CB buying became a significant force soaking up a lot of the bullion that has been dishoarded by discouraged longs.

One year does not a trend make.  However the number of participants on the buy side, some of them countries that were not even formerly big players in the bullion story, is what has me convinced that gold has much, much higher to run. There just is not much gold to go around. People float numbers about 170,000 tons of the stuff, give or take a few million ounces... But still that amounts to a tiny fraction of the metal compared to paper money, or relative to world GDP, or on a per-capita basis.  There is less gold coming out of the ground now that in years past, even despite the much higher trading range lately.

These facts tell that gold demand will be the force to break out of the trading range.  CBs buying mine supply will compete with the specs playing paper metal.  The weakness across the board is a function of paper metal dumped and shorted on thinly traded exchanges.  This cannot be sustained for a longer term trend as the inventory of physical bullion is being depleted by aggressive buyers with a different agenda.

Yes, it is discouraging to see the non-stop bearish commentary on gold, and watch the metal driven lower in big chunks.  But this too shall pass.  There was plenty of gold demand several years ago to absorb all of the selling from CBs - more than 400 tons per year.  Plus the dangled threat of the IMF gold sales, which amounted to a mere blip in the trade when it happened. Now we have aggressive CB buying putting a floor under gold.  When the spec buyers step up and start getting aggressive again, that is when we see a new all-time high.  That can happen sooner and move faster than most people understand.

The mining stocks are once again sold out in this range.  Spec players have fled the sector for the third time in 5 years.  It will take a catalyst of higher metals to break the downtrend, as has occurred twice in the last 5 years and created rapid gains along the way off the lows.  Some junk stocks are doomed.  Most of the real juniors and solid mining plays are just marking time and will recover with a vengeance.

I have a very aggressive investment style.   I can live with the rollercoaster ride and stay on board during these severe down trends.  Many others cannot bear this kind of market action, and that is why the Cartel has been so successful for so long.  If they can engineer a nasty decline even for a few weeks, they know they will trigger selling from the weak longs and spec tourists that wade into this sector. But this kind of meltdown has a shelf life and it will clear the path for a strong run higher.

In the quest to get-rich-quick people tend to focus on the now and forget the big picture. There have been many examples in the last few years of the Cartel getting run over. Manipulation is a big factor in what is going on, but the Cartel is not in control of this market, and gold would never have traded above $500 if they were.   At worst they can time raids and pound on the market to break the resolve of weak specs. Accept this reality and stay focused and sleep well at night.

Last year stunk. This year has been worse. However the long term amounts to a time horizon longer than a few weeks. I will still be around when new all time highs are being recorded in gold and silver, and the juniors are sector leading the entire market. I do not believe there is anything that a criminal Cartel or inept regulatory organization can do to change that outcome.

I can wait.

http://www.lemetropolecafe.com

 

Wed, 12/26/2012 - 18:18 | 3097440 DoChenRollingBearing
DoChenRollingBearing's picture

FOFOA suggests that it is when SELLERS decline to sell their gold into incresing demand for physical that the real price explosion will occur.

 

fofoa.blogspot.com

Wed, 12/26/2012 - 13:12 | 3096474 Bullionaire
Bullionaire's picture

Poor Reggie...perhaps you had better stick to Facebook IPO analysis?

Wed, 12/26/2012 - 14:37 | 3096670 Jack Sheet
Jack Sheet's picture

Right. Reggie seems to think of gold primarily as an inflation hedge- such analysts are, to say the least, misguided (how do you define "inflation"?)

Reggie, Try looking at graphs of money supply, or government debt, or real interest rates vs. time combined with the (paper) gold price vs. time. That should give you a clue.

Wed, 12/26/2012 - 14:53 | 3096703 OutLookingIn
OutLookingIn's picture

Gold. Prime real estate. Fine art.

This is the "Rule of 3."

Every great family fortune in the world has followed this rule.

First and foremost is ownership of physical gold, held by yourself.

It is what they recognize it to be - wealth protection. Down through the centuries of time, and will be well into the froeseeable future. Now that is some empire evidence you can take to the bank! 

Wed, 12/26/2012 - 16:37 | 3097072 Jack Sheet
Jack Sheet's picture

True, but there is the thing about fine art. I saw the following recommendation in an article in a European finance magazine:

- invest a MINIMUM  of €100000 per year for 5 years (not including valuation, forgery lab tests and insurance). Decide what to buy and hope you are right. There is a MEGA amount of worthless "art" out there.

- 5-8% of total liquid assets should be invested

That means you have to start off with € 15- 20 MM. Good luck with that first Modigliani (it it's genuine).

Wed, 12/26/2012 - 13:04 | 3096443 BlueCheeseBandit
BlueCheeseBandit's picture

None of the post WWII data includes a time when currencies around the world were so suspect. Fiat currency has always been a temporary phenomena. That's the best argument for owning gold, not inflation hedging.

Wed, 12/26/2012 - 19:00 | 3097573 SAT 800
SAT 800's picture

Yes the chart itself is a perfect example of some statistics that somebody cooked up somewhere; if you're doing real reasearch; charts like this don't get it. You need to know the metric of inflation; the time frame comvered, the sources of the various data blocs; original un-tamered with sources, then you need to make judgements as to the quality and meaningfulness of the data sets; etc, etc. As it stands, it's a typical "global warming chart". Some cherry picking, some cute time frames cut out of the overall picture, some slightly, but significantly corrupted data streams, and voila; I can prove anything you want. global warming, global cooling, global nothing, gold is first, gold is last, literally anything you want. I'm sure we can produce a "hockey stick" showing the "bubble" in ill-informed gold investing. Research is just not as easy as looking at a pretty colored chart on a blog page; too bad, but that's the way it is. The most important thing you need to understand is that markets are driven by psychology and the answer to the question is the mass market psychology different and more sensitized to inflationary data, or predictions of inflation; and the answer is yes. the market is primed. I would say the donut here, rather than arguing about the donut hole; is the 300B$ that Mom and Pop dumped into fixed interest plans in the last year; and also; the chinese. When either one or the other of these groups is dis-appointed with their current hedge; bonds in the US/Euro case; real-estate speculation in the chinese case; and they will both be disappointed; t hen we'll see the phenomenon of "the money has to go somewhere". We have already seen pulses of this. I would also say; that the alternative to inflation is a deflationary crash; there is no possibllity of a deflationary soft landing; and this will also cause a huge run up in the PM's. In many ways; we should be praying for Stagflation; it's probably what we'll get, at least for a few years. This, at least has the potential to avoid SHTF day; which we really don't want to see.

Thu, 12/27/2012 - 04:45 | 3098339 Escapeclaws
Escapeclaws's picture

Great comment which needed saying! Thanks

Wed, 12/26/2012 - 14:40 | 3096678 OutLookingIn
OutLookingIn's picture

Agreed.

Paper, average full-life is about 40 years.

Physical Gold is what it is. Paper? Can be used for compost, or lining the bottom of bird cages, or indoor puppy training, or...  

Wed, 12/26/2012 - 14:37 | 3096666 Pareto
Pareto's picture

This cannot be overemphasized enough.  Currency (fiat) confidence is why you own gold.  Not rising prices.

Wed, 12/26/2012 - 19:16 | 3097615 SAT 800
SAT 800's picture

I think there's room for both causes; the slowly declining respect and un-shakable faith in Fiat Currencies is probably caused by the constant, albeit, slowly rising prices. Everyone knows that their money is not a store of value because it declines in value. Typically, when prices are not rising, there';s not a lot of interest in pms. Also, there's the concept of competing investments; when you could get 15%/year on a T-Bond; and then sell the Bond for substantially more than you paid for it; after many years of collecting this interest; there really wasn't much interest in pms. even tho. the underlying inflation never did go away. So, it's kind of a complicated question; Personally, I think so much has been revealed about the actual conditions of the European and American Banking systems, and so many people, more all the time, realize; that it's not a done deal, it's not a guarantee that they can keep this whole insolvent-undercapitalized mess going, that more people all the time start getting interested in pms. The reason that Warren Buffet bought apprx. 1/3 of the Comex warehouse stocks of Silver in the 90's; is that he had the best financial analyst that was available; who used to fly over to Switzerland on their company jet and have private conferences with the Swiss Bankers; I mean some people have known all along that some kind of day of reckoning was coming and it would involve massive financial crisis; I feel like every week that goes by without a major breaking news story from the European Banking system is another amazing grace miracle. But skating on thin ice and getting by on miracles, (and lies); usually comes to an un-happy end; so I bet that way.

Wed, 12/26/2012 - 15:21 | 3096796 fasTTcar
fasTTcar's picture

Gold, silver (or oil / corn for that matter) prices are not rising.

The number of US dollars it takes to buy a unit of them is rising.

Wed, 12/26/2012 - 17:51 | 3097348 DoChenRollingBearing
DoChenRollingBearing's picture

There is a gold ATM at the "Town & Country Mall" ("Town Center"?), (a tony & upscale mall) in Boca Raton, FL.  And I read that the company (German IIRC) is slowly putting in more around the USA.  There is at LEAST ONE photo you can find via Google.

Wed, 12/26/2012 - 18:34 | 3097493 Muppet Pimp
Muppet Pimp's picture

Concur with income producing property meme, however, that is a business (it will not just sit tight like some other 'hedges') and requires time or a management team.  If one is up to the task, sure. 

Single Family is also ripe in CFL as the 54% cash purchases suggest (TD post last week).  Not to mention prices will appreciate at some point.  At present one can put minimum down, get a $600 mortgage and lease out for 1400-1600 per month.  Those willing to take on 'fixer uppers' and/or brave the courthouse steps (experience pros only!!!) can do far better than that.  A fed up NY'er with 1M invested could realistically get 8 good homes in say 6 mos with 10k+ per month cash flow.

ICE FTW

Wed, 12/26/2012 - 19:34 | 3097655 ultraticum
ultraticum's picture

These Gold vending machines are, at least at present, a joke. . . . There is an identical one at the Nugget in downtown Las Vegas which I visited personally.  They require you to scan a passport or ID to make the transaction, and the premiums are so stupid only a complete muppet would transact there.   I don't think they are going to get very "popular" under those conditions.

Thu, 12/27/2012 - 02:35 | 3098288 Nage42
Nage42's picture

The ID requirement is prolly a USSA-specific artefact... in that they want to put you on the short-list of t3rr0r1st suspects, along with anyone else with 7-days of food, more than one gun, people who are suspicious of their g00bermint, etc.

If you buy from a vendor that requires your ID, you are breaking one of great reasons to buy the asset, that of "off radar" asset... so ya... that's st00pid.

 

Ditto for places that require a name for sales-tax reasons... 

Ditto for using your CreditCard on a purchase, even for just guarentee purposes.

 

Holy friken data trail batman~!

 

Wed, 12/26/2012 - 19:28 | 3097641 SAT 800
SAT 800's picture

I'm not going to disagree with you. I know there are pretty smart Europeans over here right now buying up distressed properties; and that in many cases you can rent them for enough to cover the expenses; well, enough to buy them, actually! But, I'm really lazy, and old and I prefere to just wait until the whole mess goes bang; or flop; and somebody offers me enough "new World Dollars"; or whatever for my Silver. I'd like to see a lot more stable situation with a sustainable future before I got interested in any form of "business as usual". And this country, in particular is really disgusting; not the people, for the most part, but the government. If you have enough money to buy houses I think you should ex-patriate. Buying Silver at 30$oz. seems likely to be at least as profitable as trying to manage real estate while the local, state, and federal government goes out of their collective minds. But as I say; I am really lazy.

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