Gold and Deflation

American Enterprrise Institute for Public Policy Research ^ | January 2003 | John H. Makin

[sourcery]

FYI

[Nick Danger]

If there is inflation, you should buy gold. If there is deflation, you should buy gold.

Now we are in one of those rare periods where we are balanced right on the cusp, between inflation and deflation. The conclusion is obvious: you should buy gold.

Somehow I don't think this guy has a different answer, no matter what happens.

[imawit]

Are investors a bunch of nincompoop ostriches.

If investors should conclude, and it would be premature to do so at this point, that the only option left to policymakers is to print money in quantities sufficient to create rising prices and perhaps dollar depreciation, the continued search for wealth preservation will lead to further purchases and a higher price of gold.

This is exactly what is happening by the Feds.

Stocks, bonds, any financial vehicle involving paper only are odds against value increase. Gold is odds for value increase.

Am I living in a dream world or is everyone else ? Looks like "buy & hold" as moved in to a phase of "keep holding & pray" and hedge with more buying, certainly don't hedge with gold.

[Kozak]

For those who were trying to preserve, not to mention enhance, wealth in an environment of persistently falling stock prices, shaky government finances, and governments vying for a weaker currency, to have bought gold in 1931, 1932, or early 1933 proved to be a brilliant move.

Yeah really brilliant. Especially when they were forced to turn over their gold to the Treasury.

[imawit]

Yeahbutt, I don't remember that they got $0 for doing that. The legislated value of gold was $35/oz.

[imawit]

ps: they were forced to turn over their gold to the Treasury.

This had to be done to enforce the price and make sure a hugh selling spree wouldn't occur to force the price back down. So the government became the only source to sell to but who cared if they were confiscating it at premium prices.

How do you think they were able to accomplish this, at gun point ?

[sourcery]

Based on the text Roosevelt's Executive order, those who owned gold at the time probably enjoyed a significant profit--at least in the manner the IRS would calculate it. The key words in the order are "for compensation at the official price":

"Executive order: By virtue of the authority vested in me by Section 5(B) of The Act of Oct. 6, 1917, as amended by section 2 of the Act of March 9, 1933, in which Congress declared that a serious emergency exists, I as President, do declare that the national emergency still exists; That the continued private hoarding of gold and silver by subjects of the United States poses a grave threat to the peace, equal justice, and well-being of the United States; and that appropriate measures must be taken immediately to protect the interests of our people.

Therefore, pursuant to the above authority, I herby proclaim that such gold and silver holdings are prohibited, and that all such coin, bullion or other possessions of gold and silver be tendered within fourteen days to agents of the Government of the United States for compensation at the official price, in the legal tender of the Government. All safe deposit boxes in banks or financial institutions have been sealed, pending action in the due course of the
law. All sales or purchases or movements of such gold and silver within the borders of the United States and its territories, and all foreign exchange transactions or movements of such metals across the border are herby prohibited.

Your possession of these proscribed metals and/or your maintenance of a safe-deposit box to store them is known to the Government from bank and insurance records. Therefore, be advised that your vault box must remain sealed, and may only be opened in the presence of an agent of The Internal Revenue Service.

By lawful Order given this day, the President of the United States."

[imawit]

Ya know what's really funny. The search for alternatives to equity assets together with a desire for wealth preservation, which has initially led to purchases of government securities and a movement into cash, will continue has not lead many to discover any alternatives other than homes and just a little to gold.

Maybe they are still getting bamboozled by the equity asset guys saying this is where you need to be.

My prediction is that the NAS will signal a change this week and drop almost every day.

[Steven W.]

you're not living in a dream world - you're just dreaming. Stocks, bonds, any financial vehicle involving paper only are odds against value increase. Gold is odds for value increase. you can't put stocks in that grouping as equities reflect corporate earnings which - for real companies - tend to always increase year after year. bonds & other fixed financial assets are inclined to see significant losses over the coming couple years while gold is merely another commodity but rather subject to the whims of the marketplace by the degree of fear and uncertainty that can leveled against investors.

[american spirit]

What's interesting is that "state of emergency" continues even today and that there is no provision in the Constitution for executive orders, thus giving a President almost dictatorial powers. Imagine Hillary using these if she were to become elected and recall Paul Begala's famous quote..."stroke of the pen, law of the land, kinda cool".

[imawit]

Thanks, I wasn't old enough no studied enough to come up with the actual law.

Just to mention a point or two in this same vein. The FED seems to be trying the same thing using the printing press and the threat if not the action of monetizing Treasury notes.

I don't think this gold buying trick by the government will be allowed to be used again.

[ExSoldier]

Even today if you purchase gold bullion, it must be registered with government. But this is not the case for numismatic gold coins...the area in which I choose to invest and which has seen dramatic rises in value since the 1940's.

I collect these for a variety of resons, not the least of which is my occupation as a teacher of American history...it is pleasing to me...a direct connection with certain periods of American history, but I do keep them for their investment value as well. And as we all know with the subject of guns, when the government doesn't know location by registration, it has no basis for future confiscation.

[imawit]

corporate earnings which - for real companies - tend to always increase year after year.

Do you mean gross earnings/income before expenses, debt service, taxes, retirement funding, write downs, goodwill, dividends, stock options, etc. or profits after or before book cooking.

Only with some of these factors eliminated would I agree.

[imawit]

Perhaps you can help. Where can I find quotes on coins ?

[Cool Guy]

http://www.tulving.com

[ExSoldier]

The two best resouces are Lear Financial (a WND supporter and advertiser) and Blanchard. I bought mine from Lear because they were $100 better on the price per coin than Blanchard and they invited me to shop! To me that shows integrity. Go to WorldNetDaily.com and click on the gold ads.

[arete]

That the continued private hoarding of gold and silver by subjects of the United States poses a grave threat to the peace, equal justice, and well-being of the United States; and that appropriate measures must be taken immediately to protect the interests of our people.

So the government can confiscate anything the president deems not in the interests of "our" people. Wonder if "our" people is the ruling class elite or the working serfs. I suppose that the government could just about subsititute anything they wanted in there couldn't they? Like guns, SUV's, private property or lava lamps.

How long will it be until there is another emergency declaration? It is troubling -- very troubling.

Richard W.

[arete]

All over the web. Do a google search for gold and silver dealers or go to ebay.

Buy gold and silver.

Richard W.

[arete]

Or you could try here. Prices seem reasonable. Some seller do not put the buyers name on invoices to protect against confiscation. Nice touch.

California Numismatic Investments

Richard W.