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This Is What Gold Does In a Currency Crisis
Submitted by John Rubino via Dollar Collapse blog,
To say that gold is in a bear market is to misunderstand both gold and markets. Gold isn’t an investment that goes up and down. It is money in the most basic store-of-value sense. Most of the time it just sits there, and when its price changes in local currency terms that says more about the local currency than about gold.
But when currencies collapse, gold shines.
Consider the above from the point of view of a typical Russian. The ruble is tanking (no need to understand why — all fiat currencies go this way eventually and the proximate cause is almost irrelevant). Russians who trusted their government and kept their savings in, say, a bank account, are losing their shirts. But those who own boring, doesn’t-pay-interest, in-a-bear-market gold have seen their capital appreciate in local currency terms by about 60 percent in just the past month. They’re not “making money,” but they are preserving wealth.
This is how it has gone always and everywhere when governments have destroyed their currencies. In the Roman Empire, revolutionary France, revolutionary America, most of Latin America in the 20th century, and now big parts of the developing world, local currencies evaporate but gold just sits there, buying the same amount of stuff as ever, impervious to the games governments play.
It won’t be long before this chart is replicated in a whole lot of other places. But by then it will be too late to prepare. The gold will be gone and those who trusted their governments will have to make do with promises.
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They would have done better if they held USDs or US treasuries. Only a matter of time before Putin dumps his gold.
That must be Ted Putin from Detroit you're talking about.
Impervious; I love that word.
Actually ~ this is what gold does in a currency crisis
http://ironmikemag.com/wp-content/uploads/2013/06/gold-confiscation-roos...
but who listened?
I don't ever recall my grandfather telling me any stories about boating accidents. Only stories I remember were ones about going off to fight scary bloodthirsty Krauts & Japs
- & later about scary Gooks
- & later about scary coke dealers
- & later about scary towelheads
...the movie never ends.
Everyone has to determine where they draw their line. I would draw it there.
I'd draw it here
https://www.youtube.com/watch?v=zkzWyOaS8kU
The top comment on that video is pretty great.
Silver Short Seller wow, you have been here for at least 6 weeks and six days, so knowledgeable. LOL Meanwhile gold has been money for 6000 years, a bit longer than the Fed Reserve Note.
There there, LL ...it was probably your atavar that convinced him to sign up...LOL
The top comment on that video is pretty great.
Government must constantly remind us how much we need it. We might otherwise be inclined to ignore it.
That is one of the reasons we entered WWI.
Well ~ that & they'd already, finally, after more than 100 years of trying, succeeded in establishing the FEDERAL RESERVE, & a way was needed to get 'MERICA' onto the counterFIAT money paper debt treadmill asap.
That + Louis Brandeis & his fellow tribe had 'seedy' goods on Woodrow Wilson [from back in the Princeton days] to force his hand in the matter cause ol 'Woody' couldn't control his 'Woody'.
The rest, of course, is [rewritten] history by the heirs of the scribes who brought you the Old Testament.
Boating accidents are a recent phenominon.
Historically untested and more akin to bravado boasts like: "They will get my silver out of my clenched, dead fist after my guns are all unloaded".
It is better to be quiet....
Experience tells me that not too many Americans took that "executive order" seriously. Considering the volume of old gold money that crosses my desk, I have to wonder who, if anyone; turned in their specie?
What is most remarkable about this is the value that the greenback had in 1933. Folks were generally not stupid enough back then to believe what their government told them.
The banks turned in the gold they had on deposit because they had a real good scam going with fractional reserve banking and to ignore the rule would have put that scam at risk. Even so we hear about bags of gold coins that were "forgotten" in some bank vault only to be rediscovered presently.
Gold will be around long after this credit based money scam is a distant bad memory.
Consider that the executive order contained a sectioned which allowed each citizen to retain up to 5 oz of gold. At the 1933 price of $20 per oz this would allow the holding of $100 of gold per person. Given that this amount was just under the average monthly salary of Joe Sixpack, and that he could spread 5 oz to each of his family members, I would think that not many of the 'goldbugs' of that day turned in anything to the government except those paper claims on gold known as Gold certificates.
@ short silver above, from Bloomberg on today's press conference.
Somewhat ironically, Putin said that Russia shouldn’t waste currency reserves protecting the ruble as the country prepares for a downturn brought on by the collapse of the oil price and sanctions over the Ukraine conflict, he said. “Under the most negative external economic scenario, this situation can last two years,” Putin said. “If the situation is very bad, we will have to change our plans, cut some things.”
This doesnt sounds like someone in a rush to sell ... in exchange for your trouble of typing a few zeros in your laptop. Good luck to you, though i very much doubt it besides your internet rhetoric you are short ... are you?
Do you really expect Putin to come out and say "we are fucked" to the entire world?
If he actually believes this will all go away in 2 years then he's making the same mistake twice by listening to those who told him Russia will be strong enough to tolerate sanctions for invading Crimea.
Well Gordon Brown did, using different words
They did tolerate those sanctions, and the false flag murders. That's why oil is falling now. 2 years of suppressed prices would be a long time. I'd expect shortages to arise before then.
The original "Motor City Madman?"
That would be correct - only to be followed by the much more well known "Ted Nugget" ;-)
Detroit is now 'chic'.
If by 'chic' you mean a place where 50% of the population is functionally illiterate, then you would right.
Misspell? Did you mean chit?
I live in(near) Detroit. I know Ted....He's no dumbass. He's not selling. Go Redwings!
dumps paper gold for phyzz - happening all the time
@ SSS
If Putin dumps his Gold..................It would mean he would have been schooled in the USA
But as he has not.......................he won't
Notice from the chart...........it is a counter ballance for any devaluation.
Good luck
You are going to need it
SSS - member for 6 weeks and 6 days.
Thanks for pointing that out Meat. The trolls have been busy on ZH lately. They were especially busy on the Mike Krieger piece about the poll showing a majority of Americans support the post 9/11 torture policy. They were falling all over themselves to justify the evil being perpetrated.
Milliondollarbonus by another name?
"They would have done better if they held USDs or US treasuries. Only a matter of time before Putin dumps his gold."
such a trollish nick and statement deserves some attention
the CBR does have USDs. They are just not willing to spend them, or too fast. and the same applies to the Russian gold
Putin himself talks about two years. That's the minimum time frame
I can't do two more years Gordo......I just can't do it.
Can you put a good word in to the warden for me?
I can try to bribe that warden. Question is, why can't you wait for two years? Of "low" oil prices, that is
2 Years. I wonder why.
Any ideas what might be happening 2 years from now?
A presidential election in which ObeyMe won't be standing, and a whole new President elect.
Coincidence, obviously.
imho Putin is talking about "low" oil prices. I doubt he is thinking about US Presidential elections, but perhaps I'm wrong
C’mon.
Putin ‘knows’ 9/11 was an inside job by Bush and company. Why would Putin give a second thought to American elections?
Maybe Jeb called? lol
succinct and true. thank you, Mr Rubino. gold is a saver's friend. it is not for speculation but to insure ones savings against the inevitable course of all currency.
it is the west that has turned it into a speculative commodity. but gold is patient and boring. it loves to collect dust in its solitude, and these qualities seem to grate and agitate the western mindset, so they created a synthetic market. but these paper promises are pornographic in their nature: no matter how many glossy Playboy magazines you have, the girls are always out of reach.
@ ZH Snob +1000
Good analogy
Paper holders looking at porno................Love it
Bunch of "Merchant Bankers"
Excellent! Paper = Gold Porn.
It's true that over over the limited duration of the last month they would have done better in Yellen-Single-Ply than physical gold, but that is a short duration and single f/x cross. The capital pulled out of RUB has to go somewhere, and a lot of it is going to USD, but the flows into USD aren't just RUB, most of the EMs are seeing outflows, and there are only 3 sizeable "safe havens" USD, EUR, JPY -- so the cleanest dirty shirt is the short-term beneficiary.
But what happens if there is contagion?
Or the losses from toxic HY energy debt aren't "contained" or are "contained" like HY residential mortgage debt was a few years ago? (i.e. subprime)
That said the out-performance of fiat over physical gold in a currency crisis is well established. The most notorious case, and likely to piss off the PM pimps here is of course -- THE WIEMAR HYPERINFLATION... When the average suffering German serf would have done far better (25%) buying John Maynard Keynes-Single-Ply banknotes and stuffing them under the 0% bank-of-mattress... (which JMK was actually quite busy devaluing at the time to help pay for Britain WWI debts, then the same average suffering German serf would have done buying ounces of gold and stuffing them under the same 0% bank-of-mattress.
You're forgetting one significant point here --
during the Weimar Hyperinflation, gold and silver coinage was official US currency.
So, please explain to me how a $20. US Silver Certificate was worth 25% more than a US $20. gold coin??
So what?
The US was a bi-metallic Emerging Market.
Why would a German interested in protecting their savings speculate in an EM currency?
The E-Trade crowd would have taken the options available in Frankfurt, while the GS/JPM full price/service crowd would have used London - the finance capital of the world at the time...
The US was an emerging market in 1923??
Hardly.
In 1923 the US had the largest total GDP of any country in the world.
In 1923 the US had the largest per capita GDP of any country in the world,
(20% higher than #2 -- Switzerland).
Emerging market my ass.
In 1923, GBP was world's reserve currency.
In 2014, USD is the world's reserve currency.
In 2014, China is the world's largest economy.
I'm sorry Jim O'Neil wasn't around to come up with some catchy acronym like BRICS in 1923, but the US was still "emerging" in 1923, and did not become the world's reserve currency until after WW2.
"Out-performance of fiat vs physical gold during a currency crisis is well established."
huh?
Yes. Look at the spot price of gold in London during the period in question, versus the GBP-Mark crosses (since the currency changed in Germany and GBP was the reserve currency of the time).
More broadly, capital desires to move freely and quickly (more quickly than mobilizing armed couriers and insurance policy and steamship back then, or a 747 now) and since capital dwarfs the available money supply or bullion supply and bankers offer "alternatives" to facilitate the mobility of capital - fiat will generally outperform (unless one picks the wrong cross - like a pegged or currency dependent on trade with the nation in crisis).
http://en.wikipedia.org/wiki/Hyperinflation_in_the_Weimar_Republic
If the value of a paper Mark went down in relation to US money (which was actually gold and silver) then how does the value of the paper Mark outperform gold and silver?
And if that paper Mark was so widely printed that it became worthless (and was outperforming gold and silver) then surely the spot price went to zero too?
What is with the US-centric naivety around here?
The official price of gold in USD has changed only four times from 1792 to 2014. In the US, the official price of gold is currently $42.22. Yet the market price of gold has actually every business day for centuries.
Read what I wrote and get back to me.
Ummmkay, so in relation to that non-changing price of gold, the Mark went down. You said "outperformed". So ya, read what you wrote and get back to reality... I mean me.
Or
The value of that paper mark approached zero so the spot price of gold on the Lodnon exchange surely went to zero. Remember, YOU said it outperformed.
I think you're conflating the number on the Mark notes as value.
No, I'm not conflating anything.
What I said was that GBP (the original Keynesian fiat) outperformed physical gold in the Wiemar Hyperinflation.
Or, if you're mathematically inclined - I'll just quote myself on Fergusson's Fallacy... (the original discussion also involved equities). However, the key point was the gold declined from 535p/oz in 1921 to 427p/oz in 1925, so gold lost to fiat banknotes.
http://www.zerohedge.com/news/2013-10-21/peter-schiff-asks-green-light-g...
But he's the rather more substantial problem I have with the gold-bug line- If granny had simply sold her marks and bought GBP in 1921 when gold was trading at 535p/oz she could have sold those very same fiat that JM Keynes himself was busy devaluing to pay off Britain's War/Empire debts and then bought 25% MOAR GOLD! with the same supply of JMK's finest 1-ply in 1925 at 427p/oz after the hyperinflation.
If granny had a stock broker and wanted to look beyond the Continent or the Frankfurt exchange, in 1921 the US was just coming out of a depression and kicking off the Roaring 20's -- she could have ridden the DOW from a low of 63 up to just over a hundred, and then bought EVEN MOAR GOLD! without her broker outperforming his benchmark. And if she was Jewish then she would already have the paper share certificates to burn at over 150 prior her flight from the Nazis in the later 30's (and that price includes the unrealized losses in the 1929 crash, and bypasses the risk of George Soros or his daddy finding the finding the gold Charlie Munger thought it was wise to sew into their clothes, after the Nazis had already slammed the exit door closed on that maneuver).
In order to say stocks didn't do as well as gold (which didn't do as well a Keynes) you have to confine yourself to the local stock market (priced in a hyper-inflating currency) and pick losers (either by virtue of timing or bankruptcy). It's certainly possible, and there is no bankruptcy risk in physical gold, but that doesn't make gold the "best investment".
That's a mighty fine argument...if you have the luxory of hindsight, an all knowing magic eight ball, or a time machine to see into the future. Without those devices, I would choose the safety of Gold in that situation (as with the current musings of any market of your choosing).
Which stock broker or market do you recommend in today's casino. I am anxious to find the perfect play so I can sell my safety and gamble with the algos for the house odds. Then I will be able to buy back my safety, +25% more.
Great plan. Can i pay you for advice?
My argument has nothing to do with the safety of gold in a currency crisis - it's that the lunatic fringe who argue that gold is the best/winningest investment/gamble in the event of hyperinflation are either full of shit or factually challenged. No viewpoint or ideological perspective should be allowed its own version of reality that goes unquestioned (and incorrect to boot), even if it has a lot sympathizers around here.
Given the peculiarities and legal frameworks (i.e. rehypothecation/MFG and the big SIPC lie) of many equity markets today - I wouldn't recommend any broker today. However, even back in during Wiemar, paper certificates proved their worth to the Jews a few years later.
TPTB have thoroughly corrupted the clearing and settlement as well as trading functions of the industry, but they haven't gotten to transfer agents yet.
What I said was that GBP (the original Keynesian fiat) outperformed physical gold in the Wiemar Hyperinflation.
That is not what you said. You said "the out-performance of fiat over physical gold in a currency crisis is well established" and you specifically pointed to the Weimar Hyperinflation. Now you're trying to make it about the Pound vs weimar gold? WTF are you talking about?
the key point was the gold declined from 535p/oz in 1921 to 427p/oz in 1925, so gold lost to fiat banknotes.
http://www.historylearningsite.co.uk/hyperinflation_weimar_germany.htm
In 1922, a loaf of bread cost 163 marks.
By September 1923, this figure had reached 1,500,000 marks and at the peak of hyperinflation, November 1923, a loaf of bread cost 200,000,000,000 marks.
If you want the exact quote (but you seem to have missed it or misunderstood it the first time, which is why I paraphrased it), it is: The most notorious case, and likely to piss off the PM pimps here is of course -- THE WIEMAR HYPERINFLATION... When the average suffering German serf would have done far better (25%) buying John Maynard Keynes-Single-Ply banknotes and stuffing them under the 0% bank-of-mattress...
If you want more examples - you need look no further than Russia (or Ukraine) today, and their USD crosses.
liar
Your Literacy and Rhetoric would both appear to be more suited to places like YahooFinance or Marketwatch.
Please cite the supposed myriad of instances where gold has outperformed the alternative safe haven currency in a currency crisis.
Shirley you're not Serious!?
It could NEVER happen here! USA! USA! USA!
You're real bright, aren't you?
Silver Short Seller, 6 weeks and six days and you are soooo smart.
Does anyone else find it ironic that we're being force-fed fiat toilet paper and told that precious metals are just rocks by a bunch of Goldbergs and Silversteins?
You are just like most of the fools in this video
https://www.youtube.com/watch?v=z7usCHnZ-8c
"As BRICS are in the processes to decouple economies from the Western neoliberal monetary monopoly, they could bring back the gold standard as a base for their transactions, which is much more steady than the paper money unstable financial bubbles. They are ready, because they are emerging economies with billions of potencial consumer tanks and can attract other countries too being victims of the international financial mafia, like Argentina and Greece."
http://failedevolution.blogspot.gr/2014/12/russias-moves-to-decouple-eco...
The graph appears to depict the CRIMEX paper (non-delivery) price multiplied by a USD/RUB "exchange rate".
As long as central banks in the West have negative deposit rates like the ECB and now the SNB, gold in USD terms has NO chance to outperform. NONE! I am not saying that the moment for gold will not come. What I am saying is that we are FAR from getting there. And yes, there is a chance that we get that FAR very quickly, if things get out of control. But they have not yet. When there is a sell off in stocks, money still goes to US treasuries.
Money still goes to US treasuries because the banksters still have a "paper asset" mentality and physical metal useful to the average citizens is still fractional gold coins, not bars. I'm seeing increased premiums on physical gold coinage which, at least to me, reflects a tightening availability in the physical market.
In case you haven't figure it out by yourself, here it is: most treasuries are nowaday bought by FED itself. That's why your purchasing power is going to hell in a handbasket, even as the economy is collapsing all around you. Be a proud American, and go buy some !
With Gold and Silver sales booming you think we are "far from getting there"?
It's like fishing, you're fishing, you're fishing, you're fishing, and then in an instant you're catching!
Done, over, kaput!
Ah promises, I remember those.
You only know you have a Woman when you hold her.
who's the idiot that voted a 1 dot rating above? it's a simple, short, factual piece. no intellectual treatise but certainly nothing to disparage
Yellen?
The cliche is 'the truth will set you free'. That is why some, particularly those holding the reins (chains?) prefer lies to truth and seek to disparage truth. Sometimes they're called trolls when it's done online.
ZH statement here is trivial - in the long run gold is better than fiat
But, but the dollar is different...
Why bother buying insurance...................................................what could possibly go wrong in Western economies? :-0
If I dug up a Continental dollar from the revolutionary war and also dug up a Gold Spanish doubloon which would be worth more today
If you sold both on eBay probably the Continental. ..
Not likely
Continental Congress Note. February 17, 1776. Four Dollars. Choice Very Fine104.50
1556-98 SPAIN SEVILLA CAYON 4 ESCUDOS NGC FD GOLD COIN SPANISH COLONIAL DOUBLOON2,999.00
Touche'
Yea, you cherry picked the shit outta that didnt ya
AU50, which is a much higher grade than EF45 = $379
http://www.ebay.com/itm/NGC-AU50-CERTIFIED-1783-SPANISH-GOLD-1-2-ESCUDOS-DOUBLOON-/201242292892?pt=US_World_Coins&hash=item2edaf9b29c
Extra fine 45 = $495
http://www.ebay.com/itm/CONTINENTAL-CONGRESS-MAYOR-of-PHILADELPHIA-CLARKSON-1775-PENNSYLVANIA-SLAB-EF-45-/230962277805?pt=LH_DefaultDomain_0&hash=item35c66cadad
If you dug up a 'Gold Spanish doubloon' the Spanish government would try to claim it still belongs to them. Better to just melt it down without telling anyone.
http://www.cnn.com/2012/02/01/world/europe/spain-u-s--treasure-dispute/i...
And the US guv sides with Spain as long as they return paintings to the tribe-
http://www.tampabay.com/news/humaninterest/odyssey-angry-us-tried-to-tra...
You would have to consult a numismatist.
If the troy amount was the same, the bullion value would be the same in that part.
so next move is for the Fed or EU to make it difficult for investors other than Central banks to hold Gold... A Gold Tax?? like the Tobin tax?
"Gold isn’t an investment that goes up and down." That may be one of the most inane statements I've ever read. Seriously.
@CFMcConnell
Not over an inane period time frame
CF, that's the most inane comment I've ever read, seriously!
Why doesn't anyone take me serial?
Sorry Marc! If you don't hold it, you don't own it! Hope you likee flied lice, ah so!
Gold bullion held in your own hand is safest.
Gold bullion held in your own hand is safest.
In never ceases to amaze me how this site gets value wrong continually. Gold does not have intrinsic value. It's value is extrinsic, and (pace its industrial uses) it's value is just like that of fiat currency - it's worth what people will give you for it. It may well be that since people can't just make more of it, it's value (what people will give you for it) is more stable than dollars, et al. But there is no inherent value in gold, any more than there is in rubles.
ajkreider: you are incorrect. Gold holds its value unlike fiat currencies.
Since the early 1700's till today , for example, an ounce of gold will purchase a good man's suit.
So over 300 years and the value holds; this nullifies your meagre argument.
Stop. You're both correct, depending on the type of logic you're using. If you're using deductive logic, then yes, gold has no 'intrinsic' value - you can't eat or wear it, it doesn't make good tools, etc. (It is good for attracting women and getting you sex if all other needs are accounted for, but that's not a really strong argument in favour).
However, if you use inductive logic (e.g. gold held its value when the French Louis dropped after the Mississippi Bubble, after the Tulip bubble, after the Russian/German/etc. hyper-inflations of the 20's, during the post-WWII hyper inflations in Hungary/Yugoslavia, during the many inflations in Argentina, Zimbabwe, etc., etc.) saying it worked in these other cases, therefore it's going to work again, you're correct.
In this particular instance, I put more faith in the inductive case.
The spanish empire went bust because it took all the gold from America.
No, no no! It was because the Incas cursed the gold. Haven't you seen Pirates of the Caribbean?
Actually, it's neither intrinsic nor extrinsic, but subjective.
Where does it's subjective value come from? All of the reasons that make it money par excellence.
Simply put, there is no better thing available to serve as money (as evidenced by economic history). Nothing else competes in durability, portability, divisibility or stability of the stock to flow ratio.
While it has no more intrinsic value than fiat, it certainly has far more subjective value as money.
Thank you.
I have typed something like this before. We use and value gold because its properties have made it the most consistent barter exchange intermediary over time.
@Ajkreider, you are dead wrong. Gold does have intrinsic value simply because of the work and energy involved in extracting it from solid rock. Try arguing a well made suit, sword or sewer pipe has no intrinsic value. If you don't want to buy it, that's your call, someone else will. And, best of all, it holds its value forever, particularly in times of stress.
That's true, you can't eat it. Old argument.
But what it does do is serve as a standard of value. Like mentioned above, gold will buy about the same amount of clothes, food, labor or goods as it did 100, 200 or 500 years ago. It is the standard by which currencies and other mediums of exchange are valuated.
About 3/4 of the worlds population will gladly and quickly buy your gold if you were to offer it at even a small amount under spot price.
The intrinsic value of something is said to be the value that that thing has “in itself,” or “for its own sake,” or “as such,” or “in its own right.”
Few things have inherent value. Food, water, shelter, energy, and life itself, but gold does have stable purchasing power. It may not be perfectly stable, but compared to the stability of the purchasing power of fiat currency, it's like the Rock of Gibraltar.
Why does the U.S. mint still sell shiny gold coins if it has no value? Why is it everyday in the MSM there is always an article comparing gold to some other investment? Why do central banks buy gold? Why do citizens ask their central banks to get their gold back??
I believe that you would rather live within a society that was run by a gov. that could print, ad debase your savings as well as indebt your children and grand children than in a golden monitary society that would prevent this.
Hmm?
Next time we see this: first XAUJPY then XAUUSD and XAUEUR.
On a long enough timeline,
all currency rates,
for everyone drop to zero. (GSBB)
Ya right, so folks who piled into gold at 1700 bucks sure have done well with that store of their original value.
Gold is as much a vehicle for speculation as any other asset.
$273 here.....it was just me and a couple others.
You wouldn't believe the grief I got for that.
It was touch and go for about 6 months....but I figured I'd be OK after that.
They have done much better than the folks who bought into Bitcoin at $1,240. BTC $312.80 this morning.
There's a sucker born every minute.
But hey, its worth it to "stick it to the man"!
This is the mistake you make. You buy gold to stay close to even. So if you live in the US and you hold currency you have lost 30 percent in your buying power in the last 3 years and if you take 30 percent of 1700 it gives you 1190 so you stayed even. But if the dollar crashes you still have the shinny metal instead of a handful of worthless paper.
The Fed steals the currency so slow you don't know it happening until its to late.
Coldcall-
Or Enron stock in 2000?
The Russian people who piled into $1700 gold are sitting pretty happy right now. Those still holding Rubles . . . not so much.
I find it hard to believe that any Russian with a bit of cash wasn't diversified out of Russian assets into a basket of Western currencies and Gold. And you can bet the really rich Russians had LOT'S of their capital outside the country.
This is the point missed by the majority of the anti Gold bug mob. The majority of Gold bugs probably hold 5% - 20% of their assets in Gold. That's enough a) to offer some great insurance should it be needed, and b) have little or no effect if the price moves lower. It's pure insurance, not an asset play. But what an insurance product it is because it's a one time fee and the policy stays valid FOREVER. Try buying car insurance, paying once and that lasting you 10, 20, 50+ years.
Then remember the other point. Many Gold bugs have been bugs for years, ie many were buyers sub $500. And yes, if they had any sense they were also buyers all the way to the top as in try to buy every month at high or low prices with money you won't really need (unless major emergency).
Of course, most market participants are complete morons and tend to forecast the major long trends from the most recent move. Laugh away morons, some of us taking advantage of the lower prices and will continue to do so at potentially even lower prices. High or low prices, the price of Gold is really immaterial to a proper Gold bug until Gold shows its real value under an insurance perspective. That time might never come in some of our lifetimes but then we've lost nothing and we can all pass away with the knowledge that our heirs are FULLY INSURED....
Gold, you have to LOVE IT!
Well, I watch the mainstream media and they tell me the smart people are putting their rubles into high quality particle board furniture from Ikea.
As long as it's not a piece of paper saying you own gold. Plus no tax on physical, at least in Canada up to $1000. And good luck for them trying to prove what capital gains I would have on that.
Stupid thing is, if there was a stock out there that promises no tax on capital gains, it would be the largest owned on the planet.
https://www.youtube.com/watch?v=sZ4sR4S74xQ
I'll take my gold and silver, that can't be tracked, and can never be destroyed.
"Plus no tax on physical, at least in Canada up to $1000"
Say What? Wrong! No tax period
I just read a fundamentals of the ruble article by Simon Black that contradicts this. This is the money changers ganging up on Russia with the help of the saudis. Gold has gone from $300 to $1800 to $1100 in a short amount of time relatively speaking so to say that gold is some super steady buy at any time and don't worry, that it's only the currencies that move is just plane wrong. I know that's what you learned and that's what's been preached ad nauseum.
Unfortunately, it is you that is "plane" wrong. So sorry. For your information, Simon Black, is an entertainer, much like Reggie Middleton.
Da plane, da plane!
Gold was $850 in 1980. Today, $1,200. A rise of ??%.
In 1980 a Camaro Sport Coupe went for $5,498.60.
Asking on the cheapest 1980 Camaro according to http://www.autotraderclassics.com is $11,990.
Irrelevant argument. An ounce of gold mined in 1980 is exactly the same now. No Camaro made in 1980 is the same now as it was then. Also, all the gold ever mined is still available as gold in some form, and they keep making new stuff. The 1980 Camaro had a limited production (less than 500,000), and most of those are now gone, either totalled in accidents or rusted out or smashed into scrap.
Why does it matter who kills it or how your paper money dies. The fact of the matter is that it eventually all dies.
Sure gold goes up and down, but the dollar will only go down! and never back up!
It's really not gold that is going up and down so violently, It is the violence of holding paper that is changing. Gold is gold it never changes, never corrodes and never multiplies, unlike fiat.
One more thing as geopolitical issues gett off table, Gold should drop....
Putin even says that Iran deal is almost complete
http://www.reuters.com/article/2014/12/18/us-iran-nuclear-putin-idUSKBN0...
Or to put it another way, those that buy Gold hoping to make money are not that intelligent (unless they're trading it).
Whereas those that fully understand that Gold is NOT an asset play but simply an insurance policy (who's value will fluctuate as all markets do), those are the ones you have to be watch because they understand economics, history, including economic history, politics and its cycles, and above all, and pay attention because this is the most important part, they realise they know both NOTHING about the future and that anything can happen(good, neutral and bad).
See, that's the mistake so many make, they a) think they have an idea about the future and b) that idea is normally good and constructive (let's hope it is, but it might not be).
Gold, you have to love it.
Que the haters of gold as they deny their mathematically certain, yet unthinkable, future.
Looks more and more to me Gold/Silver is like The Kraken. When things are worst you rouse it from it's sleep deep below the waves. Crushing all.
True Dat!
The price of eggs does the same thing in a currency crisis. Doesn't mean eggs are a good investement.
Depends if your hungry and you already have all the toilet paper your gonna need for the rest of your life.
Correct title should be:
This Is What Gold Does In a Currency Crisis IN A NON-RESERVE COUNTRY, EG RUSSIA
I know many ZH'ers & gold-fanticizers belive that this will happen in the USA, but IT WILL NOT as long as the Regime retains control over the government apparatus of power - and they won't give it up unless removed by force.
"Store of Value" ?
Here are the FACTS, Not OPINION and RHETORIC, that PROVE otherwise:
GOLDEN MYTHS.
"Store of Value" ?
Here are the FACTS, Not OPINION and RHETORIC, that PROVE otherwise:
GOLDEN MYTHS.
You don't get it. It's insurance against the evidence presented above in the chart. Take a look at the ruble rube.
As this article predicted in the face of gold hate...
"Gold and Silver should both make substantial moves soon. The selling pressure of the last few months has subsided and the gold market should reflect a renewed interest in the yellow metal."
http://www.globaldeflationnews.com/gold-elliott-wave-update-for-week-end...
and here...
http://www.globaldeflationnews.com/investors-hated-gold-at-precisely-the...
Only problem in the West is they sell naked short contracts on GLD Futures every morning!
At some point is that bluff going to get called?
My financial mantra for the coming "troubles" for the American country: "Gold is money, bankster heads are repayment."
An American, not US subject.
Everything you can trade gets a price. The intrinsic value doesn't matter. People bargain, people have interests, so prices can change. Everyone who thinks like the author is just in love with a metal. Nothing else. If fiat money is just paper, so gold is just a metal. In the end, everything is made of atoms. We define the value by our personal choices, not by any intrinsic value, or the amount of protons it inhabits.
So the illusion becomes real and the more real it becomes, the more desperate they want it... You know the rest
This is classic gold behavior during hyper-inflationary defaults.