I didn't think anyone thought about that one.
Posted on 12/09/2005 6:01:51 AM PST by DebtAndDelusion
Look for the "smart guys" to get out shortly leaving the novices, who actually believe this or any other market only goes up, holding the bag. The huge spike up in the past several weeks is imo, the last surge before the bottom falls out.
If you take an average of the high and low for each of the years and adjust them for inflation adjust those figures for inflation you will see just how bad an investment gold really is relative to equities.
Father and Gramps used to have some terrible arguments about gold. Gramps was an old Bryan supporter and made the cross of gold argument all the time with Father.
Insanity does run in some families. It's a miracle Grandma didn't take the side by side to the both of 'em.
Unfortunately Father bought stocks on margin in 1929.
I guess he can't claim to be an economist either.
Darn Islamics and Asians buying all the gold
I guess only aryans should have the bling.
The working man in this country is getting it from every end.
Gee, that's new, different, and original.
Still got the farm, still got the gold and still have most of my teeth.
How could Maslow miss these in his hierarchy of needs?
Sheesh....
(Tax free) :^)
If you were half as bright as a bar of gold, you'd be ok.
have most recoved what they lost from the markets post 911?
what if you bought at $250.00 during the mid 90's?
I didn't think anyone thought about that one.
Only becuase I couldn't fit him in to and of the stages of Piaget’s Theory of Development. Although, Louis Terman would have to dig a new basement for this guy.
What the hell and I typing?
Right, but I was comparing them to equities and was looking at the long term. You will find many stocks that will have done far, far better then gold over the same period of time. Gold is a haven for safety and not growth.
Subtract the inflation and you have your net gain. Considering a 100% gain minus inflation adjustments you still come out ahead.
Year |
High |
Low |
Year |
High |
Low |
|
|
1972 |
70.00 |
44.00 |
1990 |
423.75 |
345.85 |
|
|
1973 |
126.00 |
64.00 |
1991 |
403.00 |
344.30 |
|
|
1974 |
195.00 |
117.00 |
1992 |
359.60 |
330.20 | |
|
1975 |
185.00 |
135.00 |
1993 |
406.70 |
326.10 | |
|
1976 |
142.00 |
102.00 |
1994 |
397.50 |
369.65 | |
|
1977 |
168.00 |
127.00 |
1995 |
396.95 |
372.40 | |
|
1978 |
243.65 |
165.70 |
1996 |
416.25 |
367.40 | |
|
1979 |
524.00 |
216.55 |
1997 |
367.80 |
283.00 | |
|
1980 |
850.00 |
474.00 |
1998 |
314.60 |
273.40 | |
|
1981 |
599.25 |
391.25 |
1999 |
323.50 |
252.80 |
|
|
1982 |
488.50 |
296.75 |
2000 |
325.50 |
264.10 |
|
|
1983 |
511.50 |
374.25 |
2001 |
291.45 |
256.65 |
|
|
1984 |
406.85 |
303.25 |
2002 | 342.75 | 277.75 | |
|
1985 |
340.90 |
284.25 |
2003 | 417.25 | 319.90 | |
|
1986 |
442.75 |
326.00 |
2004 |
454.20 | 375.00 | |
|
1987 |
502.75 |
390.00 |
||||
|
1988 |
485.30 |
389.05 |
||||
|
1989 |
417.15 |
358.50 |
||||
|
|
||||||
That sort of thing is usually a sign that bankers have found ways around the controlled variables. There is an endless game central banks and the rest of the banking system play. Central banks control money creation by targeting variable X. Banks come up with ways to leave X essentially unchanged yet create additional effective money Y. Central banks target Y. Banks invent Z. Etc.
Incidentally, CPI measured inflation in the last year was 4.3%, significantly above the 3.2% average since 1982. The Fed has been tightening for a reason.
Do you know what the gold vs. silver argument was all about?
How do you figure your gold profit would be tax free?
Did I say Tax Free? oops..
Buying and selling precious metals, like sex, is all about timing.
Back in the '70s I read a great book by Harry Browne with the numbing title "How you can profit from the coming devaluation". I was on vacation and stayed up until 3 a.m. reading it. The guy was spot on. Before I got back from vacation, there was a devaluation. (Devaluation is the government euphenism for bankrupcy - as in a 50% devaluation in effect says the country is bankrupt and will pay off debtors at the rate of half what is owed them.)
Remember the "dual rate" of LBJ? The govt said gold was worth $44 an ounce, but wouldn't redeem any dollars in that (foreign govts could still demand conversion - LBJ talked them into taking silver instead at 95c an ounce, all the while exhorting people not to hoard silver - Gresham's Law* proved once again.). The free market immediately went to $48, when I bought in.
I bailed at $105 an ounce, kissing my hands at what a smart speculator I was - it CAN'T POSSIBLY go any higher. Got back in at $125 and stayed until $525 when I figured that was absolutely the tops. Jesu, what a ride!
Out of all that, what sticks in my mind was walking into a coin shop with $52 face value silver coins and walking out with $1004. Talk about being stunned!
A long time ago, a wise man said that gold was the thermometer of the world's condition, so maybe these Asians know something we don't.
*Bad money drives out the good. If you have two coins, one intrinsically worth more than the other but of equal buying power, which would you keep?
very good post!
And when you sell your house you can legally exclude $250,000 ($500,000 for a married couple) of profits from capital gains taxes.
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