Re: How did you get started?
AskAsa
8/28/2011 7:10:30 PM
Some companies are pushing the idea of owning gold in the form of bars or coins.
Both will prove to be quite uncomfortable stuffed under a mattress. What do you think Scott, what's the best way to purchase gold?
Hold the Gold
impactnow
8/27/2011 12:26:31 AM
Scott we are back over 1800 so as predicted the correction was short lived cash grab to address other issues. Hold on we are going to see $2500 by next year this time!
Gold is +15 or 1772 after bottoming this morning at 1705.
So it's up nearly $75 from this AM's bottom!
I didn't get it at 1700. But tomorrow should be volatile again with all the Fed business.
The macroeconomic world issues driving gold’s growth haven’t changed in the last few days so this correction is not long lived. For the strategic investor this is a time to buy and watch the inevitable increase.
Re: What about silver
mInvestor
8/25/2011 1:17:16 PM
Ashish,
Thank you for this detailed explanation. I didn't pay too much attention on trading vloume. You are right, even the gold ETF is trading in much higher volume than common silver ETF.
I can understand silver can be a good hedge as hard asset if there is a recession. I also agree that silver has higher usage for industry. But if we are heading to a recession, would the demand from silver in industries be lower? So it achieves opposite effect.
Silver is a poor man's gold in terms of jewellery? That's an interesting concept, but you might be right, hehehe...
I am happen you and Scott (probably plus many other people) think silver holds much higher potential in the near future. Let wait and see how it play out.
Re: How did you get started?
Drivewaygirl
8/25/2011 11:55:16 AM
Thanks Ashish. I don't doubt that gold is a good investment. I just feel overwhelmed by the idea of buying a bar. What do I do with it then? No seriously, I realize I pop it in a safe deposit box. But shares of a company just seem so much easier, no?
Re: How did you get started?
back2basicz
8/25/2011 10:52:29 AM
Driveway girl,
All you need to do is read History(for instance Milton Friedman's classic-Money Mischief);that alone will let you know that Gold is and always has been Honest money for thousands of years.
Everytime we have moved away from Gold/Silver the Currency has eventually collapsed because of inevitable debasement(as thats the only way Govts know to create growth).
Regards
Ashish.
Re: You missed another valid reason...Gold as collateral
back2basicz
8/25/2011 10:49:01 AM
Scott,
I agree entirely.
Lets face it Gold is a low-cost(politically atleast) way to extract Collateral from another nation.
Seizing other assets like Property/Land or stakes in major State owned institutions/companies could very well be very dicey and theres no saying how the Public will react.
In fact there is a historical precedent for this Gold Collateral story.
India.
In 1990 when the Indian Govt was on the verge of bankruptcy they went to the IMF with their Gold.They handed IMF the Gold in return for loans from the IMF.Also the country had to unleash reforms which propelled the country forward from the Hindu rate of growth[3%-4% per year] to the current 8%+ Growth rates which have now made India one of the largest Economies in the world as well as one of the most appealing destinations for Capital.
Could the same thing happen in Europe???
Lets just wait and watch.
Regards
Ashish.
Re: You missed another valid reason...Gold as collateral
Scott Raynovich
8/25/2011 10:15:47 AM
Ashish you are exactly right the loan collateral thing is a big trend. It was ironic to me that gold was falling $100 on a day when European banks were asking for gold as collateral.
Here's the way I look at it: You want to lend somebody money but they want collateral. They offer the following items as collateral, what do you take?
1) A stock portfolio
2) Their house
3) Treasury bonds
4) Bricks of gold.
#4 does not seem like a bad choice to me.
Driveway Girl,
I intend to publish the "Gold Update Report" next week but there are many factors which created the gold bull market:
1) Record levels of global debt. Gold is positively correlated with debt creation. More debt levels, gold goes up.
2) Negative real interest rates. Gold is positively correlated with negative real interest rates, which creates an incentive for a store of value because it devalues fiat currencies. If you are worried about gold crashing you must be worried about the Fed raising the interest rates ABOVE inflation (positive real rates), which doesn't appear to be happening any time soon.
3) Weak fiat currencies worldwide -- again creating the incentive to "hide" in a store of value of precious metals as currencies are devalued.
4) Technical strength -- gold chart has just built like a classic bull market
5) Commodities bull market/Asia -- related to 2, but enormous growth in Asia has created demand for gold, which is more revered in Asia countries than it is in the West.
To the point below about farmland, I agree. There is still a trend toward hard assets in this world. As everybody seens governments blowing up and printing money, the smart money is hiding in assets that are a store of value as paper assets lose the confidence of the public.
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