Posted on 12/07/2005 10:10:37 AM PST by DebtAndDelusion
The price of gold passed $500 an ounce last week, its highest level since the late 1980s. This is either an ominous development—or it isn't...
If you'd lived a century ago, gold would have been the basis of your money. Great Britain dominated the global gold standard; its currency, the pound, was freely convertible into gold...
On April 5, 1933, President Franklin D. Roosevelt ordered Americans to surrender their gold coin; the country effectively went on a paper-money standard...
Higher demand collides with constricted supplies; wham, prices rise...
Gold is an unending mystery, because its value lies less in what it does for us (it is not like sugar, copper or oil) and more in what it symbolizes. It is almost as unfathomable as the human drama itself.
(Excerpt) Read more at msnbc.msn.com ...
Years running from 1801 to 2001. Each tick is 10 years.
Thanks ... now that I know, I can read it. The blips in the stock market appear more or less where one would expect them to.
twenty five years ago, 100 ounces of gold would buy you a nice 4 bedroom house.
today, 100 ounces of gold would buy you about one-fourth of that house.
Now if you had gotten an ounce of Rhodium in 1801, not only would you be wealthier (~$3k/oz.), but you could have named it after yourself, as it wasn't discovered until 1803.
Rhodium is essential to the manufacture of Beebers, hence it's ability to retain value.
And the really disturbing part is that you could have brought that ounce back in 1981 for $891.
And the really disturbing part is that you could have brought that ounce back in 1981 for $891.
That probably explains why gold is worth half as much as it was worth 25 years ago.
Many other posters have already refuted your foolish nonsense. Ditto to all of them.
If one had the foresight to time the gold market perfectly and buy at the lowest point in 1999, then they would have earned a 100% return on their investment or approximately 16.5% return, minus the high super high transaction fees and commissions. BFD. Most people can't time the market with perfection and therefore their returns are generally a lot less than the best case scenerio that the gold hucksters project. Very few gold hucksters will tell you, for example, that if you had brought gold on December 21, 1980 and sold today you would have lost nearly 45% of your investment, plus the high commissions and transaction fees.
Meanwhile, the S & P 500 and the DJIA has returned an average of something like 10.3% since the inception of those indexes back in the 1920's. Yep, gold is a really great investment and hedge against inflation.
A well diversified portfolio of quality stocks, bonds, and treasuries, purchased over time (dollar cost averaging) through discount brokers or better yet, no-commission, low cost mutual funds. Although no one can predict with certainty whether these time tested investments will do as well over the next 100 years as they did over the last 100 years, no one can predict either whether gold will perform any better than it has over the last 100 years. I'll take my chances with proven winners, and gold is not one of them.
They have?
You are conflating insurance against fiat collapse (and preservation of purchasing power) with 'investment vehicles.'
This really isn't a thread so much about INVESTING in gold as it is about the virtue of gold as a store of wealth. Now, I'm not jumping into this argument, but I don't like it when people escape simple points being made in a thread.
It's NOT ABOUT INVESTING (generally) with gold, it's about protecting oneself from the vagaries of fiat monetary systems.
Read what happened to Confederate bills during the war?
I'll go real slow so even you can understand.
In 1900 Gold was $20/oz. Hold Specie or Paper your choice.
If you hold Gold that ounce is now worth $510.
If you hold paper that $20 is now worth $1 due to debasement.
Everything else is idle chatter.
And we see how it preserved purchasing power since 1980.
It's NOT ABOUT INVESTING (generally) with gold, it's about protecting oneself from the vagaries of fiat monetary systems.
Great, let me know when our fiat money collapses.
Silly strawman. No one in his right mind would hold cash under his matress for a hundred years. When you account for the effects of inflation, that $510 return has still lost you money, because that $510, after fees, is less than the inflation-adjusted purchasing power of the original $20.
Any other investment --- stocks, bonds, real estate --- would have gained you money.
I have no problem with trading gold if you know what you're doing, although it's a bit reckless for my tastes. But holding gold is crazy -- the longer you do it, the more money you lose.
No. Gold has been a profitable trade for the last 5 years. If you bought within the last 5 years, good for you.
Gold has several shortfalls. It pays no interest and no dividend. Its trading costs may be higher than those of stocks, bonds and mutual funds, especially for small amounts.
I just have to laugh at people who think gold is the best investment in the world. I prefer investments that pay a dividend. Past performance is no guarantee of future results. Your results may vary. Void where prohibited by law :^)
Gold prices (and the CRB) are telling me that bond prices are about to collapse. IOW, sell bonds until you puke or puke until you sell bonds.
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