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Guest Post: Time to Accumulate Gold and Silver?
Submitted by Jeff Clarke of Casey Research
Time to Accumulate Gold and Silver
Do you own enough gold and silver for what lies ahead?
If 10% of your total investable assets (i.e., excluding equity in your primary residence) aren't held in various forms of gold and silver, we at Casey Research think your portfolio is at risk.
After speaking at the Cambridge House conference last month and talking with many attendees, I came away convinced that most investors fall into one of two categories: those that hold an abundance of gold and silver (which tends to be physical forms only), and those with little or none. While both groups need to diversify, I'm a little more concerned about the second group. Here's why.
Regardless of what you think will happen over the remainder of this decade, one thing seems virtually certain: the value of paper money will be affected, perhaps dramatically. Even if the economy slips into deflation, the deflation wouldn't last long. A panicked Fed would print to the max and set off a wild rise in prices. This is why we're convinced currency dilution will not only continue but accelerate.
Let's take a look at what's happened so far with the value of our currency vs. gold, after accounting for the loss in purchasing power.
Both the US and Canadian dollar, after adjusting for their respective CPIs, have lost about a quarter of their purchasing power just since 2000. Concurrently, gold has increased dramatically in buying power, far outpacing the effects of inflation.
This is the core reason why I'm convinced we should hold our savings in gold and silver instead of dollars. Let's take a brief look at how gold and gold stocks might perform if the economy takes a turn for the worse…
What If We Enter a Recession or Depression?
Mayan prophecies aside, many of our panelists last month, including most of the senior Casey staff, believe economic, monetary, and fiscal pressures could come to a head this year. The massive build-up of global debt, continued reckless deficit spending, and the lack of sound political leadership to reverse either trend point to a potentially ugly tipping point. What happens to our investments if we enter another recession or – gulp – a depression?
Here's an updated snapshot of the gold price during each recession since 1955.
Clearly, one should not assume that gold will perform poorly during a recession. Even in the crash of 2008, gold still ended the year with a 5% gain. And with the amount of currency dilution we've undergone since that time, it seems more likely gold will rise in any economic contraction than fall. Indeed, if the response of government to a recession is more money printing, precious metals will be a critical asset to have in your possession.
Even if the gold price ends up flat or down this year, the CPI won't. Gold's enduring purchasing power is why we hold the metal.
How about gold stocks?
In spite of the debilitating 1970s that suffered from stagflation, price controls, three recessions, and the Vietnam war, gold producers rose over 600% while the S&P was basically flat. And that includes a roughly 65% fire-sale correction, much like we saw in 2008. To be clear, gold and silver stocks won't be immune to selloffs if a recession or worse temporarily clobbers our industry. But in the end, we're convinced they will prevail.
Don't lose patience with, or confidence in, your gold holdings. What happens to the price over any short period of time is only one chapter in the book of this bull market, and we think you'll be happy by the time that last chapter is written.
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If the price dropped by 70% tomorrow you would get...........just an ounce.......since you just admitted it is all you can afford.
Never been quite rich and I don't have much to my name, so of course when I first went into silver I got enthusiastic even though I had no job to provide further liquidity. Had to sell a year later when the going got tough, didn't lose money but I was still pissed to part with physical I knew was going to appreciate much more in the future.
It did teach me a lot about the concept of weak/strong hands which I kept reading about here (for the record I started lurking in ZH about a year before I created this account, but knew zilch about economics as a trained physicist). So I learned fast and now I make sure that I never compromise the strength of my hand when ditching some fiats for PMs. Otherwise, 100% with you on this - the minute I can afford half a grand of either Au or Ag while keeping a minimum threshold of liquidity, I go for it.
It's a shame I lost all my stash on my last whitewater rafting accident, I knew I should never have brought it to show off to my friends on that 5+ river...
Please accept my sincere condolences about losing your PMs in a boating accident. I keep hearing such heart-breaking tales. Seems like these are the oldest stories in the book.
The Spaniards sure knew how to show the way with their unfortunate galleon accidents...
We need a ZH scuba team. It might only cost $5 to pull out of the water.
Previous attempts to run at 40 silver was smashed down.
I continue to buy what I can. I am a absolute, resolutely unstoppable Silver Perma Bull. I care not where the prices are anymore, only that they will one day break 50 and keep going.
Gold will sell a little bit and then make another run for 1900.
Ebay indicates a rising interest in junk coins with 90% silver the kind that you can pay someone with for a tank of gas in melt value.
Copper and nickel tubes of brass to drive them down precision barrels is also very good to have.
I buy whatever Au and Ag I come across. I don't give a shit about the price either. Any chance to get rid of this green toilet paper I take. I have a lot of restocking to do after the accident in the surf. I have been working the Ebay trade for 3 years and although a few deals still come up, the vig on Ag and Au is much greater than it has been. I think the mail order from the big shops is the best way to go.
Buying or selling for cash at a coin show is the best.It's what Timmy would do. Turbo Tax doesn't ask about coin shows. So it must not be taxable.
My friend calls when they have some nice stuff. They buy at their price sell to me at current market. I buy pretty much every time they call. No sales tax. The difference on what i save on sales tax and buying with no markup makes up for the timing price differences.
I recommend becoming a very good customer of one person who will treat you right.
My state's Constitution has a provision written into law that precious metals are exempt from sales tax.
Sometimes government does get it right.
..if we had zero tax Govt would be spot on
Copper is beginning to act like a precious metal. It's interesting to watch. Penny hoarding, copper bullion, etc. People calling it a poor man's silver, and they're picking it up because they feel it's better than dollars. Can't argue there. It'll be interesting to see how copper behaves in the coming decade. Does it remain an industrial/base metal, or does it become a semi-precious? Same with nickel...though copper seems more popular right now.
If you're gonna buy Cu, might as just well buy sheet copper & make yourself some copper stills (to have a 2nd use for it)...
Also ~ some silver solder...
I'm a big fan of copper! Big Fan Indeed!
I like to buy 0,007% copper rounds with 99,993% silver in it.
No longer considered "junk". Just compare a '64 dime to a '65 dime.
“Which in turn when considering the huge selloff of US Treasury paper by China in the last few months, indicates that the world's fastest growing economy no longer has an interest…. to fund purchases of US paper, but is in fact converting US fiat into real, hard goods. Such as crude….And most likely gold.”
http://www.zerohedge.com/news/china-posts-biggest-trade-deficit-1989-cru...
Watch for the "new" nickel as the 75% contained in a nickel if wirth more than the nickel.
It is illegal to deface currency unless it increases the value,
if you drive a hole in a pre-'83 penny it is now a copper washer and worth more than a penny.
gotta love the funny money
brilliant, a hardware store will charge close to $1 for six washers. I just realized I've got a drill press and thousands of washers. thanx
@ali ali
Here is information on the legality of altering coins:
http://www.coinflation.com/is_it_illegal_to_melt_coins.html
I am already there.
Nickel will be the one War Material that will be VERY hard to get, much less use.
Goled iz een eh bauble.
Submitted for you reading pleasure.
http://www.zerohedge.com/news/gold-bubble-14-charts-facts-and-data-sugge...
http://www.zerohedge.com/news/chris-martenson-interviews-robert-mish-fro...
http://www.zerohedge.com/news/infographic-gold-bubble
Gold is in the bubble the same way the dollar in the bubble. US economy is that of phony illusion. It's difficult to say what is geniune economic growth, and what is phony, though bubbles clearly have been the result of inflation. US economic growth is contingent on how much money printing will exist. The dot com bubble, and the housing bubble were result of money printing, new money being given to speculators. Ironically, where China knows that it's housing bubble is the result of inflation, purely from inflation, many people in the US thought the US housing bubble was the result of genuine economic growth, many people suckered into the one of the largest bubbles in US history thinking that economic growth was not of a result of inflation, with the Fed even denying creating inflation, or having no part in creating it. Though M2 money stock says other wise. There is a reason why Bernanke has a policy of promoting inflation, because inflation can be construed as economic growth.
Contrary to mainstream belief that inflation is just purely rising prices, the Austrian view is that inflation is just a creation of new money, nothing more, which doesn't need to create wage inflation, or create inflation generally across the entire economy. Inflation can create employment, create stock market booms, etc, just the same as inflation created the housing bubble, and everybody foolishly wanted to get in on the action of american prosperity. We live in a age of inflation, which not only includes higher prices, but bubbles blowing, increased consumption, questionable investments and the Federal Reserve sees inflation as a tool to create economic prosperity in the eyes of many americans. If I print money to give to a consumer, he spends it, is that growth? If I print money to a real estate investor, is that growth? If I print money to give a to a stock market player, is that growth?
While Bernanke plainly tells everybody he wants to create inflation, which Obama wants so it can appear to be like growth so he can brag on the campaign trail, everybody who only sees the surface sees a recovery, when it could be just money printing, record low interest rates, and other manipulations by the government, and federal reserve that only giving the illusion of economic growth.
I say from realizing this, I think gold will have a long run to go. I think gold is in a new era. Where inflation is growth, forget fighting inflation, we want inflation. I would say the evidence suggests so far that gold is a good bet for many years.
I would say you are wrong and some inflation is needed for wages to increase and new money to enter into the system. Deflation is much much worse. Gold is a massive bubble way overpriced. The economics and supply / demand doesn't make any sense. Most people are selling, which means there is no demand for it. Check out Chris Martensens post on this same page. Didn't you take Economics in college?
Tom Green Swedish
Gold is a massive bubble way overpriced.
( I CALL BS, and your smarter than that, compare that to the trillions printed, and then tell me where the bubble is).
The economics and supply / demand doesn't make any sense.
Most people are selling,
(Check the YTD figures from the US MINT!,selling my ass)
No their not, major colleges and Pension funds are adding, PLUS the Asians are sucking it up like crazy, as are the Europeans.
The East is SUCKING the real wealth out of the world, and stockpiling Crude,while we do the OPPOSITE.
which means there is no demand for it.
Plenty of demand, but folks are so broke their selling it to LIVE .
Check out Chris Martensens post on this same page. Didn't you take Economics in college?
Chris is just taking a SNAPSHOT in time with his figures...................................
I'd love to see an analysis of the legal, practical and political limitations on Fed money printing. How creative can/will Bernanke get and what can he get away with? What can he buy and from whom? QE doesn't seem to work very well -- what else will he try to stave off deflation when Eurozone implodes?
The Obama banker complex is immune from the law. Math and the world market will decide all in the end.
Are you reefering to the Hussain/Busch/Krinkton/Karter/Nickson/etc etc back to Rosenvelt banker complex? Phone call for Mr. Baruch, you have a phone call in the lobby sir!
Ah my fellow pm bugs do not appreciate the power of the paper. If Benny can conquer the world with fiat notes, like getting Iraq/Zimbabwe/Panama/South America etc etc to use fed notes, then he has essentially accepted all their labor as tribute. It's better than any military occupation ever was. It's like a new Rome only better.
Then With increasing parts of the world as fiat slaves to the fed, they (fed ponzi masters) can use the power of the paper to buy and sell PM, controlling the price, and owning the market and us in the meantime. We are basically skrewed, if more sheople don't come into the pm game, and maybe even if they do.
http://pricedingold.com/us-home-prices/
Precious metals will always be precious. Hedge or die.
Best line I've heard for a while.
Yes
Try this one weird trick to keep your national sovereignty and sleep at night.
The impeachment of Barack Hussein Obama is underway!! The MSM will be silent..
Gold will ^
H.CON.RES.107 -- Expressing the sense of Congress that the use of offensive military force by a President without prior and clear authorization of an Act of Congress constitutes an impeachable high... (Introduced in House - IH)
HCON 107 IH
112th CONGRESS
2d Session
H. CON. RES. 107
Expressing the sense of Congress that the use of offensive military force by a President without prior and clear authorization of an Act of Congress constitutes an impeachable high crime and misdemeanor under article II, section 4 of the Constitution.
IN THE HOUSE OF REPRESENTATIVES
March 7, 2012Mr. JONES submitted the following concurrent resolution; which was referred to the Committee on the Judiciary
CONCURRENT RESOLUTION
Expressing the sense of Congress that the use of offensive military force by a President without prior and clear authorization of an Act of Congress constitutes an impeachable high crime and misdemeanor under article II, section 4 of the Constitution.
Whereas the cornerstone of the Republic is honoring Congress's exclusive power to declare war under article I, section 8, clause 11 of the Constitution: Now, therefore, be it
Resolved by the House of Representatives (the Senate concurring), That it is the sense of Congress that, except in response to an actual or imminent attack against the territory of the United States, the use of offensive military force by a President without prior and clear authorization of an Act of Congress violates Congress's exclusive power to declare war under article I, section 8, clause 11 of the Constitution and therefore constitutes an impeachable high crime and misdemeanor under article II, section 4 of the Constitution.
Let me put this in context,,,,watch this video..for the one who junked..
http://www.youtube.com/watch?v=hxT5xcfCQpI
I didn't junk you. I would love to know a link so I can follow the progress of this myself. Thanks :O)
edit: It's OK, I found it. Oops, no I didn't.
Panetta is being utterly disingenuous in your clip claiming Libya and Syria are about "the national defence of this country"
Neither country has threatened America in any way shape of form whatsoever
Which is the ONLY international legal basis for war he keeps dribbling on about: a direct threat to America where it is legal basis to defend itself.
The US President (a lawyer by training but obviously not by practice) has no Congressional authority for Libya, Syria or Iran (he has sought no authority from Congress) and has no legal basis for these 3 illegal foreign wars under international law
Govt is anarchy
Maybe one day Panetta will be where he blongs if we get honest courts: a long fall on a short rope.
Congress gave up their right to bitch about approving of any war a long time ago. Oh! So now they're all concerned.
Gimme a break.
I have been scanning the MSM: ur right, no attention to this resolution. My congressman is very Libertarian-oriented. I forwarded the information to him.
Maybe this won't help, but contacting your conservative representatives is the only way this can be pushed forward. Most people simply do not understand the gravity of Panetta's assertion to Sen Sessions that O'Blowme has just nullified the Congress.
If these idiots don't get it, they will find themselves dissolved (as Hitler did the Reichstag) and any dissenters will be hustled off to an NDAA renditon camp in Sunny Egypt.
If corruption had not reached the present level, O'Blowme would be gone, Impeached and convicted.
I think Barry X wants an uprising to consolidate Absolute Power. Or a false-flag attack. He is now only 1 capital E-Event from assuming Absolute Power. But: He'll still look like a scrawny fag in his 400-medal new Field Marshall uniform.
Marxists control the Senate. The Putz from Chicago will have to be voted out.
Say it ain't so
70% is more like it... however note in the chart above that the end of a depression or major recession invariably is followed by gold price collapse. Calling the exit point will be the trick.
"Time to Accumulate Gold and Silver?"
There's an old Chinese saying (I probably learned it at ZH) that says; The best time to plant a tree is twenty years ago. The next best time is today.
Nope. The best time to plant a tree is in the spring. If you plant it in the fall or winter, it dies. In other words, timing matters a lot.
Same with gold. The chart is parabolic with a few small corrections. The best time is after a much needed major correction or sideways move.
Unfortunately, "to accumulate" is inherently "to save", and is part and parcel of thinking ahead, seeing the big picture, looking at the long term, and planning for the future, all concepts and actions which are currently not just highly unfashionable but are frowned upon and actively discouraged by the status-quo Powers-that-be.
Am in 80% excluding home.
35% including commercial land.
That last fiat chunk keeps me on edge.
God bless USSA & all the terrorista.
Am in 80% excluding home.
35% including commercial land.
That last fiat chunk keeps me on edge.
God bless USSA.
Accumulating gold and silver sounded like a great idea. Then I realized that it had already been accumulated in the ground and accounted for via Vector Gold(tm). Your prorata share will be funding the new global "divorced" currency. Just think how rich you are already and you didn't even realize it.
http://tradewithdave.com/?p=9499
Here's a few zeros and ones.
Put me down for my share.
010101010001100011110
Whatever the fears of gold, I'm certain that printing $2t or so in the last couple of years is more deadly. And that's just what they own up to.
Guns Gold and Seed, the new currency.
...and why not some cash (and Silver coins) for your daily needs?
From solid countries like Norway, Thailand, even the Chinese Remimbi. Just drop into any money changer if and when needed
The time is the last TEN YEARS. NOW, NOW, NOW. It's the TIME before the the FALL.
I thought the attached article was informative. Figured there'd be a weekend gold post here to pin it to. I was right. http://www.marketoracle.co.uk/Article33481.html
It is indeed a good article and the charts tell ya all ya need to know.
Funny DoChen
How about you throw in the value of a share of Apple stock just for comparison purposes. I know gold is shiny and makes good jewelry but I really don't know what else it was gold for.
Or how about throw in a Case shiller real estate index for bubble comparison purposes.
Apparently, you don't know much.
"don't listen to what they say just watch what they do" china is the largest gold miner in the world, all gold mined in china must be sold to the government. China imported 475 tons in 2011. What else do you need to know?
fuck it, countries cant make war on a gold backed currency, we need fiat to wage war!
its all humans duty to reject fiat and buy gold and silver,. reject paper. anyone making war are sociopaths and need to be jailed or killed.
if govs cant make war on gold, and we use gold, no more war.
Shit... Never thought it that way. All wars NEED fiat. Without fiat there would be NO WARS. Fug...
If you like to ride the coat tails of the banksters then it is time to buy Gold. If not then it is time to buy Silver.
New downtrend forming in GSR:
http://saposjoint.net/Forum/viewtopic.php?f=14&t=2626&p=36816#p36816
accumulate phyz
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