Where are the gold bugs NOW?

Gold Prices Online ^ | 06/27/2002 | Lazamataz

[Lazamataz]

Well, 'the new spoosman' and many like him have told me for months that the 'fiat' currency is worthless, and gold is the only valuable currency out there. Disregarding for a second the fact that these gold bugs are so ready to part with their gold for those 'worthless fiat notes', I would like to point out that since the height of their caterwalling, Jun 01 2002, gold is down from 326$ an ounce to 314$ an ounce today. That is a 4 percent drop in less than a month.

The 'fiat currency' people are out to lunch. I don't expect gold to do any better than index with inflation in the long run, and today managed to show a savage loss of $5 an ounce.

[#3Fan]

Correct me if I'm wrong, but didn't the U.S. Government outlaw the private ownership of gold for about 40 years

"Uncle Joe's" buddy Roosevelt stole the gold from the American people, or those who weren't smart enough to stash it.

[First_Salute]

Bump.

[tubebender]

"Actually, there are gold and silver solutions that are sold to be injested (drank). They're very good for the immune system and the skin, I believe."
My wife has taken acapsule for her arthritis called RADURA for 25 years. She must get a monthly test for toxicity of her liver and kidneys.

[ArneFufkin]

Do you see any value in gold as a failsafe wealth instrument in a scenario that some here ponder? What event would trigger a collapse of our currency? It is better to invest in bottled water, canned foods, batteries, freeze dried veggies and meats, rice, soap and firewood. Nobody is going to trade gold coins in an American economy and government so ravaged and chaotic that paper currency is worthless. Sellers aren't going to exchange vital life stuffs for gold when there is no existing valuation standard or market maker. I don't get that use of gold ... I can see it as an investment vehicle, but as a doomsday lifeline? Escapes me completely.

Perhaps Herbert Kornfeld can lay some mad economic skills on me? Sam, that was one of the funniest things I've ever seen here, your Herbert commentary regarding the contentious FR software changes. Damn! I hope you saved that - you had the Onion patter dead on.

[Washington-Husky]

I'm still curious as to what happened in those decades from the start of the Depression (circa 1933) to about 1972, when I bought my first gold coin as a wild-eyed kid with a little extra paper route money to blow.

My parents told me that the government outlawed gold ownership, though I vividly remember during the 60's that you could buy "investment" grade gold coins even through mail order catalogues.

In any case, though I obviously love gold for its inherent charm and beauty (it's even more attractive than Martha Stewart!), I nevertheless fear the long arm of the government in matters relating to gold ownership. What difference does the price of an ounce of gold really matter, if you are outlawed (by government whim), from owning it in the first place?

[Torie]

You got it Laz. Gold is a cool diversifier in a portfolio because it has zero correlation with stock price movements. Too large a dose however is like drinking kool-aid at Jonestown. One needs to monitor the doseage carefully. Anything larger than 5% in a portfolio begins the slide towards toxicity.

[Washington-Husky]

That's been my belief for quite some time now, that if things get so bad that our currency is worthless, well, where do gold owners take their gold for redemption? And redeemed for what, exactly? More worthless dollars??

Yes, give me your bag of gold coins, and maybe, maybe, I'll trade you a can of beans and a bag of rice for it. But don't bet on it. Because I can still eat my beans and rice. Your gold.... I can't.

[ArneFufkin]

Do you invest in a managed gold fund or do you recreate Mr. T's necklace set at home?

[Torie]

I don't do gold. But if you want to, you want to invest in those that produce bananas, rather than hord the bananas themselves. Thus, you want to invest in mines, rather than the lucre itself. In short, you want to invest in the low expense ratio Vanguard precious metals fund. And you don't want the allocation to exceed more than about 5% of your total portfolio. Anything else is loser's game.

[Torie]

More about gold from a guy in whom I hold the highest esteem, and know very well.

[ArneFufkin]

I'm no economics whiz, but my common sense says ... if we are that bad off, a trunkfull of gold isn't going to save anyone's day. It would be like Thurston Howell III with all his bundles of cash on the island. Bananas were a more effective bartering vehicle than Howell's Ten grand bundles.

[ArneFufkin]

Torie, I understand the investment part of Gold. But gold funds don't serve the purpose that some here seem to embrace. That's why I asked ... I've looked at a gold fund but I'm pretty meat and potatoes right now. 3M, Phillip Morris, J&J, Target, BellSOuth, Ecolab. I have a couple of 401K funds that are stuck in neutral, but I guess that's a win right now. Growth stuff, but with firms like Medtronic and Merck, not Razorfish and Noprofit.com.

[Washington-Husky]

Well, you would have to bring in my favorite 60's TV show to make your point. But... point well taken. Thanks! lol ;))

[Torie]

You need to look more into index mutual funds. That's where my money is, to the extent it isn't in bonds or various kinds or sorts or real estate. The equity premia looked to me like close to zero awhile back, and it still strikes me as rather thin. JMO.

[ArneFufkin]

I've never bought a woman an expensive piece of gold jewelry. I buy gemstones for the lady. Rubies, Sapphires, Emeralds, Amisthets, Opals etc. Awesome. A birthstone trinket is a requisite. I like buying rings set with modest gemstones as a gift, because you can get several of them for a lady and she can mix and match them with her outfits or mood or occasion. They're really versatile and beautiful. Those are much better gifts for comparable prices IMO than gold. Women buy gold for themselves, and I'd rather not get her a necklace or pendant that she isn't comfortable wearing. Rings ... what's the look and feel today? I let women make choices about that stuff. I'm a smarty!!!

[ArneFufkin]

It was a mind blower when they'd have one of their emergencies in the middle of the night and all the men would be fully dressed and Maryanne came out wearing only a dress shirt and Ginger just wrapped a blanket around her naked body as a time saver. Talk about your sexual dysfunction and repressed desires, think about THAT little community!!!

Skipper: Goodnight little buddy!
Gilligan: Goodnight Skipper!
Skipper and Gilligan (thinking): The girls are naked. the girls are naked. The girls are naked. Oh God, oh God.

LOL!

[Washington-Husky]

Yes, I know, this is off topic, but I grew up with a crush on Maryanne! She was my idyllic "girl next door"... that's not to say, of course, that Ginger didn't, ahem, stimulate me in certain unmentionable ways....

[ArneFufkin]

$3140, I guess. You tell me.

Hey, you're the "golden" child. You are counting on this market for the stuff AFTER the US has immolated, I'm wondering how the market for selling your gold works NOW. I'm sure there are commodity traders who wheel and deal in these metals, but I don't think they feel any obligation to abide by any per/ounce bid containing a 3, a 1 or a 4 in it.

Gold's too esoteric for me. Chick Pea futures ... I'm there dude!

[ArneFufkin]

More about gold from a guy in whom I hold the highest esteem, and know very well

Don't men and women like him just amaze you? I will guarantee you he could give you a pretty comparable breakdown of the historical returns and risks for banking stocks, drug makers (remember when they were called THAT!), utilities, retail etc. These people operate on a different wavelength. Most of them can present the most intricate nuance of a particular market flawlessly, but do it with their fly open! :^) I don't know if your friend is that way, but as Don King would say "If you that brilliant on the upside .... somethin gotta give on the flipjack!"

[Southack]

"Our fiat currency currently has value, because our government and military says so. What happens if our government has some kind of extreme crisis? Bye, bye dollar, gone to the asheap with 99% of every other fiat currency ever issued."

Actually, our fiat currency has value for two huge reasons: we've got the world's largest economy and the world's mightiest military.

Gold has neither. Gold has been outlawed in the past. FDR banned Americans from owning gold during the Great Depression. Everyone had to turn their gold in or get jailed (or shot).

With the stroke of a pen governments can ban gold. It took until Nixon repealed FDR's gold ban in the 1970's before Americans could invest in gold again. That's a pretty unstable investment.

There is no army that is going to come defend gold. When it gets outlawed, then you're out of luck, and that very thing has happened here in America already.

On the other hand, the mightiest economy and the mightiest military backs the paper Dollar. Those are huge advantages that gold will never have.

Gold is for suckers. It is ugly and people laugh at you when you try to pay for your meal at a restraunt with it.

The fools who are stuck with that ugly yellow metal are forever trying to dump it off on the rest of us in exchange for our paper fiat Dollars.

The truth of the matter is that gold bugs want to exchange their gold for our Dollars because Dollars have real value. No one laughs at you when you pay with Dollars for your meal at a restraunt.

Everyday new gold is being mined and added into circulation, but the old gold never disappears. At least with investments such as land, you don't have to worry about the market suddenly becoming flooded with new property. They aren't making anymore new land, after all.