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THE Silver & Gold Thread (merged)

Discussions about the economic and financial ramifications of PEAK OIL

Re: Is gold and silver worth investing in?

Unread postby Keith_McClary » Fri 12 Jun 2015, 02:01:07

GregT wrote:There is no such thing as hyperinflation, and the peak oil theory has been debunked.
Yah, fiat currencies and oil are infinite.
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Re: Is gold and silver worth investing in?

Unread postby davep » Fri 12 Jun 2015, 04:28:52

Gold and silver are a useful store of value for when the monetary system starts unravelling, but they earn you no returns. So, like peak oil, it's a question of when. If you have lots of spare cash, put some into gold and silver. But I doubt you do, so it's a bit irrelevant really.
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Re: Is gold and silver worth investing in?

Unread postby Revi » Fri 12 Jun 2015, 08:17:05

I think most people say that you should put 10% of your assets in gold and silver. I like silver better, because it's going to more marketable when things start to happen. I like what is called "junk silver", which is pre-65 US or pre 1968 Canandian silver coins. US are 90%, and Canadian are 80% silver. It sounds complicated, but it's pretty easy to figure out what to pay for coins if you check out this website: http://www.coinflation.com
Scroll down for silver coin values. You can find junk silver in most coin shops for a little more than the price you find on Coinflation. It consists of dimes, quarters and half dollars. Silver dollars usually have a little extra "numismatic value" or collectors value.

The trick is to catch silver on the downside and ride it up, if it ever goes up again. Good luck with it!
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Re: Is gold and silver worth investing in?

Unread postby Revi » Fri 12 Jun 2015, 08:20:32

Check out the Canadian silver values. These make it really easy to buy. A dollar for a dime, $2.50 for a quarter and $5.00 for a pre-68 fifty cent piece. How hard is that? 10 times face value.

http://www.coinflation.com/canada/
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Re: Is gold and silver worth investing in?

Unread postby AgentR11 » Fri 12 Jun 2015, 08:30:24

Gold and silver are NOT investing. They are a reset switch protection. If you use the word "investing" you are talking within the current working system, making or losing money based upon price; and for that purpose, you live in a country where any random citizen can deposit a little money in a cash basis trading account and start direct investing.

The point of gold and silver, is that if the idiots in charge take their stupidity to the max and trade nukes, or crash the entire financial system, or go to war with Mexico, or find space aliens and start shooting at them; when its all over, if you're still alive, you have a small, portable package of tradable objects that almost all humans have recognized as a store of value for as long as humans have known what refined metal was. For whatever reason, we generally LIKE gold and silver; and even in a post civilization hell, you'll find someone that will trade you some dried meat or a sack of grain for an ounce of silver... and thus, they'll always be tradable for some object of immediate or productive use.

If you have some, do not think of their value in $; ignore it. Put them in a safe somewhere hidden and forget they exist. They don't exist to pay your next vehicle down payment; they exist to buy a sack of wheat at a moment when you are really going to want that sack of wheat. With any luck, you'll never use them, pass them on to your kids, and they'll use them to buy some stupid electronic toy. LOL. THAT would be the ultimate success in my book.
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Re: Is gold and silver worth investing in?

Unread postby Revi » Fri 12 Jun 2015, 09:20:42

I agree with you, but I also think that silver could be useful before things go really crackerdog. We live in a slowly collapsing world, so any kind of thing we can do to preserve our ability to survive in the future is great. In the past 50-100 years it was enough to pile up paper assets. These paper assets were used as we got older for the necessities of life. I think of it as a big warehouse where all you need is stored. We all pile up paper chits which we think will be redeemable when we need things. Unfortunately we aren't thinking that the warehouse might not have all we need when it's time to turn these chits in. The value of the chits might go down as well. Gold and silver shouldn't go down in terms of what they can buy. An example is that a gallon of gas in 1964 cost about a silver quarter. Right now a 1964 silver quarter is worth about $2.87, which turns out to be the price of a gallon of gas around here.
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Re: Is gold and silver worth investing in?

Unread postby Ulenspiegel » Fri 12 Jun 2015, 11:50:04

Keith_McClary wrote:
GregT wrote:There is no such thing as hyperinflation, and the peak oil theory has been debunked.
Yah, fiat currencies and oil are infinite.

At least fiat currenc actually is, what is your problem? :-)
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Re: Is gold and silver worth investing in?

Unread postby Pops » Fri 12 Jun 2015, 12:03:44

Interesting, I looked up metal prices just recently, maybe for the first time ever. That was after I started thinking about the value of housing re: Piketty. My thinking is to downsize drastically and put away several forms of "cash." Here are my convoluted thoughts in the midst of reevaluating the wisdom of holding "wealth" (such as it is) is housing or switching to something else.


I'm pretty sure no one knows what happens in a big US crash. In the great depression the government "bought" up all the gold and made metal illegal to use as money or even to hold as savings. In '08 they used fiat currency as it is designed to be used and increased it's availabilty in order to revive a frozen credit market — yet to know if it was successful or not.

Inflation happens when there are too many dollars because either .gov mishandles things or because the economy is too hot, prices and wages are climbing too rapidly, the economy is expanding from increasing wages chasing too few products. Deflation happens when there are too few dollars because there is too little work, too little demand, too few dollars circulating — doesn't matter how many dollars there are under various mattresses, elevatored garages, offshore accounts, corporate coffers — all that matters is how many are circulating in and out of your hands. In a scenario where the economy is shrinking and people are scared, dollars become more valuable because people hang on to them.

That is the real danger, Weimar was isolated to one country when Germans were forced to make reparations and made to do it in something other than marks, as they traded for other currency (that still had value), the mark fell so they traded more and so it fell further and further. Global deflation will likely be the result of global de-growth, there will be no "other" currency.


Doomers and apocalyptic fantasizers have this idea that metal has some intrinsic value that is immutable. Fact is, when used as a currency it is just like any other, be it paper, sea shells or buffalo chips; it is only worth as much as the parties to the transaction decide it is worth - and therein lies the biggest problem.

Let's say it is the end of the world. You whip out your sack of hoarded pre-64 silver to buy some beans, toss a quarter out on the counter and the kid says, "Sorry, the beans are $5, not 25¢."

Or, you and I both want to buy our neighbor's wheelbarrow to bug-out to the Territories. I whip out a couple of Franklins and you whip out a handful of dimes. Honestly, which is he gonna want? Or you go to the friendly local money changer to redeem some gold for seashells and he tells you that everyone and their brother is selling gold these days so it's value is pretty well nil.


Beyond that, it doesn't make sense to me to buy a commodity at retail and sell it at wholesale, which is what happens buying and selling gold – if you're lucky. If you aren't lucky you buy high and sell low. Metals are a speculative bet, and "traders" bet on every conceivable thing in the world (including other bets) it is hard for me to believe they don't speculate on metals.


The great dollar apocalypse was 1970's thinking after Nixon took the dollar off gold completely. US has "debased" the currency terribly yet the US$ price of gold has fallen by 25% in the last couple of years, that's deflation.

Image

But overall, the value of gold is directly linked to global inflation. If you think the global economy is going to boom and inflation is going to take off then buy gold and sunglasses, if you think something different is going to happen there are probably lots of things that will store value better.

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Re: Is gold and silver worth investing in?

Unread postby Lore » Fri 12 Jun 2015, 12:13:53

Great points Pops! I say we should move back to wampum. After all with the oceans acidifying sea shells are going to get rare.
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Re: Is gold and silver worth investing in?

Unread postby AgentR11 » Fri 12 Jun 2015, 12:39:53

Why such short spans of time on the charts though? The gold I have was bought in the $200-$400 /oz range; silver was $4-$6 or something like that. Even still though, most of the examples you're using are in the presence of a working currency market; so of course gold or silver will be a very poor second in comparison. As long as people are performing transactions and paying taxes in a government managed currency; that currency will be far superior to the commodity with regards to trade.

The question arises, if there is no managed currency to use; that is when silver or gold can enable you to purchase that small piece of land or shop that you need to restart a life devastated by war or other calamity of the scale that kills nations. Its not a guarantee of course; there aren't even guarantees that some ten year old male won't just shoot you for amusement in such an event; but it does permit possibilities that would otherwise be unavailable.

To use an ag pov; say we're in the world where dollars and euros and pesos have no value because collapse has taken their managing bodies down into oblivion; but I still have x-odd acres to plant, and seed, so I put down 60 acres of corn, (say lowtech yield gives me 1500 bushels) plus my house garden (East Texas 1-2acre version of garden with lots of calorie yield). Well, the chance of being able to barter the production of my "money" crop efficiently is mediocre, but I bet I can get some silver for it; and I bet the local warlord will accept silver for the taxes, and I bet the local merchant Bob will accept silver from the warlord for goods and services. Its not efficient, its not scalable, but it will keep the warlord flush with rations, water, and repaired gear, it will keep the blacksmith in coal and recovered scrap; and it will keep the local warlord from viewing me as a pest to eliminate as opposed to an asset to own and keep alive. Eventually real, fiat money enables a local economy to resume; but silver and gold have always functioned as a store of value in extremis; long before countries even existed; a shiny bobble would get you a meal or some arrows made.

Traders and speculators are a different kettle of course; they do what they do; but unless you're putting big chunks of money in play, and trading very fast; you'll always be holding the short end of the stick...
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Re: Is gold and silver worth investing in?

Unread postby Pops » Fri 12 Jun 2015, 13:16:17

AR, I'm not arguing that floating fiat doesn't lose value over time. Contrary to popular opinion, that's a feature, not a bug or tptb would not be concerned that inflation is below target.

When you bought your gold a $300, you could probably have bought oil futures for $10 as well, right?

I guess my question is when does the currency market stop working?

Not many folks own gold or silver. This gold-bug article guesses certainly less than 10%, maybe only a couple. Can't make much of a market like that.
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Re: Is gold and silver worth investing in?

Unread postby AgentR11 » Fri 12 Jun 2015, 13:29:35

Pops wrote:When you bought your gold a $300, you could probably have bought oil futures for $10 as well, right?
I guess my question is when does the currency market stop working?


It was oscillating in the 10-40 range across those years if I recall. $40 was considered an awesome price. As a payee as opposed to a payor, of course.

As to when it stops working. That would be the day when the Army guys don't show up at Fort Hood. Till then, USD is the coin of the realm and is superior in any and all respects to a commodity based trade.

Can't make much of a market like that.


Enough of a market to avoid starvation is sufficient. People that think they'll be high on the hog because they have some gold or silver are delusional. The point is to have enough to be not dead.
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Re: Is gold and silver worth investing in?

Unread postby Outcast_Searcher » Fri 12 Jun 2015, 13:51:29

GregT wrote:
DesuMaiden wrote:Some people argue that gold and silver can help you survive hyperinflation. But I doubt gold and silver will do you very much good. What's your opinion on investing in gold and silver? Is it a good or bad idea? Will investing in gold/silver help you survive peak oil? That's all I'm asking.


There is no such thing as hyperinflation, and the peak oil theory has been debunked. Nothing but a bunch of doomer talk.

Better to invest in the stock market, or simply keep your money in US Federal Reserve Bank notes. Much better than either of those ancient relics. Right now would be an excellent time to invest in US oil and natural gas companies.

Look, I'm NO doomer (I'm a moderate who actually tries to invest over time based on actual data and trends, not preconceived locked-in-stone beliefs).

It's one thing to say you should invest in the stock market, especially for the long term. The historical returns over decades for the past nearly hundred years have been unmatched by any other major asset class, and there's no reason (doomer paranoia aside) to assume that won't be the case in coming decades -- taking the long term view. So on that point, we're in agreement. I also agree that now (while prices are depressed) is a good time to invest in oil and gas companies and have been a net buyer since oil prices tumbled, and will continue to be on dips.

However, when you say things like "There's no such thing as hyperinflation", you completely lack credibility. Do you deny the Germany hyperinflation which destroyed the Mark in the early 1920's happened? Do you deny the Zimbabwe hyperinflation that peaked LESS than a decade ago occurred? If so, widely accepted written history would strongly disagree with you.

https://en.wikipedia.org/wiki/Hyperinfl ... r_Republic

https://en.wikipedia.org/wiki/Hyperinfl ... n_Zimbabwe

Now, if you're saying you don't believe hyperinflation will occur in coming decades in the US or the first world generally -- fine, you're welcome to your opinion. However, with fiat currencies and corrupt, incompetent, self-serving politicians running things, how can ANYONE be sure? (I don't claim to know, but I sure as hell hedge against the risk as part of my investment plan).

Gold and Silver are just an attempt (which historically has worked well), to preserve purchasing power over time -- regardless of the gradual death of virtually ALL fiat currencies over time. Example: around 1600, you could buy a good suit of clothes for an ounce of gold. Today, you can buy 2 or 3 if you shop. Or 20+ if you just go for durability/practicality at a big box store, and eschew the status. Another example -- the value of the US dollar, long term. The following link does a nice job of defining terms and measuring dollar devaluation.

http://www.measuringworth.com/uscompare ... esult=2015

Also, the constant short term doomer prattle that we're completely doomed REAL SOON NOW has proven to be consistently wrong, and all evidence suggests it will continue to be wrong for decades (barring an unpredictable sudden global catastrophic event, like a giant meteor, etc). However, the concept that on a finite world with finite resources and BAU population and consumable demand growth, that at some point, net consumables per capita will peak -- is simple ARITHMETIC. Oil is just one of those resources, and it will be tough (though unlike the doomers, I don't think it will be impossible, given enough time and money) to replace.

So HOW is peak oil "debunked"? Because you have another opinion?

If you would deal in actual facts, data, and explain your terms and assumptions, IMO, such flat statements might be a lot more credible.
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Re: Is gold and silver worth investing in?

Unread postby GregT » Fri 12 Jun 2015, 18:53:08

Outcast_Searcher wrote:However, when you say things like "There's no such thing as hyperinflation", you completely lack credibility. Do you deny the Germany hyperinflation which destroyed the Mark in the early 1920's happened? Do you deny the Zimbabwe hyperinflation that peaked LESS than a decade ago occurred? If so, widely accepted written history would strongly disagree with you.


So HOW is peak oil "debunked"? Because you have another opinion?


Sorry guys, I guess my sarcasm was lost. I was responding to Desu in light of his recent post that he was no longer a doomer.

I have invested in gold and silver on and off since the 80s, and I have done well at it. I still hold both in physical form, and after all has been said and done, I haven't payed one red cent for it. What I do have today I would never sell, I consider it a form of insurance against a hyper inflationary scenario, and if that never plays out in my lifetime, I'll pass it on to my kids. Some of my gold coins have increased more in value as collectibles, than the 500% increase in gold prices during the same time period. I have always carried a 1 ounce silver coin in my pocket for as long as I can remember. It's pretty beat up now.

Outcast, I would like to believe that we have many decades left before some kind of doomer scenario, but all of the evidence that I have seen, makes me firmly believe otherwise.
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Re: Is gold and silver worth investing in?

Unread postby wildbourgman » Fri 12 Jun 2015, 20:15:42

For the people that say "You can't eat gold" well sure that may be true, but that quote assumes that you have a complete economic and societal breakdown for any one of many possible reasons. Diversifying ones portfolio to include a time tested store of value such as silver or gold is simply prudent preparation for a economic breakdown that's not accompanied by a complete and catastrophic breakdown in civilization.

So it's prudent planning that one should strive for at a minimum and If one's hobby is doomsday prepping I don't have a problem with that either.
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Re: Is gold and silver worth investing in?

Unread postby AgentR11 » Fri 12 Jun 2015, 23:14:12

GASMON wrote:No trading in Armageddon, just thieving and murder, just like quite a lot of the world today. !!!!!!!!!!!!


Your scenario is certainly possible, but is not guaranteed. If that is the turn of events, leaving the gold and silver in its forgotten hole in the ground is the most rational course of action.
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Re: Is gold and silver worth investing in?

Unread postby FarQ3 » Sat 13 Jun 2015, 11:37:55

When collapse does eventuate, even be it slowly, given the bash & take attitude of a lot of people now (especially organised crime) I'd tend to think that ammunition would be the currency of the day. Security will be the main concern whilst going about trying to get your family some food. Of course more common calibres would be more tradeable. A .243WM cartridge may be worth more than an ounce of silver.
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Re: Is gold and silver worth investing in?

Unread postby wildbourgman » Sat 13 Jun 2015, 12:03:07

I'm thinking we have been in collapse for many years and very few people have noticed. If you look at historic price charts of just about anything you would see the inflation, but it's happening too slow for ADD/ADHD populace to recognize. Our once civil society in the west is also declining slowly.

So gold and silver might just be the answer for a currency that's been in a crawling collapse at least since 1970. If the collapse of society and economics hastens then yes, the commodity of choice might be lead. I invest a bit in both.
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Re: Is gold and silver worth investing in?

Unread postby steam_cannon » Tue 16 Jun 2015, 15:41:40

Outcast_Searcher wrote:all evidence suggests it will continue to be wrong for decades (barring an unpredictable sudden global catastrophic event, like a giant meteor, etc). However...

Maybe we're all good now, but last I checked modern society runs a 12% per decade or higher risk of getting crushed. That's the risk calculated by NASA for a carrington event level electric grid burning solar flare to happen again. In my opinion, 12% chance every decade is a pretty high risk game we're playing. But let's say that was a 1% risk per ten years, putting money into preparing for that is still much better odds then putting your money into lottery tickets. And I think for some people even a 1% chance of society getting crushed in a big way would be worth considering in a portfolio.

These risks are real and significant and that's just one of the issues we face as a society. So I just think it's not right when I hear people quoting meteors as a disaster scenario when there are much more real high level risks we're living under.

A massive solar flare from the sun (12% per decade risk)
http://science.nasa.gov/science-news/sc ... uperstorm/

Ex-CIA Director: The EMP Threat
http://hardware.slashdot.org/story/15/0 ... emp-threat
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