# The value of Gold



## Tweto

I have heard numerous story's about how Governments have been buying up large quanities of Gold and how off coast banks are buying up Gold.

On the reverse of this I have heard the when Europe colapses that they will be selling off their Gold reserves (some of this has already started).

The small amounts of Gold that individuals buy is not enough to cause the value of Gold to go up or down.

The issue is will the value of Gold drop and how far when Europe collapses.


----------



## BillS

Central banks around the world are buying gold. I believe they're preparing for a return to the gold standard. It only makes sense. The Federal Reserve is creating trillions of bogus dollars every year. The European Central Bank is doing the same thing with the Euro.


----------



## SuspectZero

If the gold standard was to return many of us would become overnight millionaires then poverty stricken with hyperinflation. There is not enough gold in the reserve ( if any remains) to dent our debt. An article i read a few months ago put gold at close to 25k/oz just to get the worlds gold reserve close to the global debt. Congress said it would be impossbile to return to it because of its ratio of debt to its holdings. Also silver would have to be at its legal ratio of 1:16 as defined by congress. Now if europe does flood the market with its gold holdings who knows maybe the dollar would come up and gold devalue enough to create a gold standard as it should be. But i dont see that happening either as many countries in europe would become overnight 3rd worlds. Ever notice how gold has skyrocketed yet the value of gold in our reserve has stayed the same...


----------



## The_Exorcist

Zero, you are _partially _right.
With the price of gold the way it is, we still could not go to a Gold & silver standard... unless all the paper bills printed by Obama were thrown in an incinerator.
Thats right, if the money supply went back to 2008 levels, we would have enough for the fractional reserve threshold.

Ah, but without all the drama and uncertainty bred by 2008, would Gold be where it is today?
Perhaps not... but there is always the EU.
If Obama can't wreck the Global Economy, look to Europe...


----------



## BillS

The gold standard will come back after the dollar and the euro are destroyed by hyperinflation. Then it won't matter what the gold price to debt ratio is. I believe there will be a complete debt reset. I believe the federal government will default on federal pension obligations, medicare, medicaid, food stamps, and social security. I believe that eventually social security payments will be limited to whatever money comes in. It's going to get a lot worse before it gets better and I lied about the "getting better" part.


----------



## k0xxx

Tweto said:


> [snip]
> The issue is will the value of Gold drop and how far when Europe collapses.


I believe that the price of gold, in US dollars, will drop significantly if the Euro dies (that's assuming that the Euro dies before the Dollar). When the Euro dies, the big money will rush into dollars, making the dollar index soar, and dollar stronger. We've seen that to a small extent in recent weeks. IMHO that will be the time to buy precious metals. Then as the Dollar starts it's inevitable crash, and the index plummets, the metals will once again start heading for the stratosphere.

Even though those with decent amounts of metals put back will then be millionaires, the purchasing power of what the metals buy would more than likely remain the same. If 20 ounces of gold buys you a car valued at $40k in today's market, when that same car is valued $400k, it could still be purchased with 20 ounces of gold.

There will be some exceptions, though. Somethings would be worth more, compared to gold and some things less. Food would probably be worth more, real estate less. During the hyperinflation period of the Weimar Republic, you could purchase a full city block in downtown Berlin for only 25oz of gold.


----------



## Tweto

k0xxx said:


> I believe that the price of gold, in US dollars, will drop significantly if the Euro dies (that's assuming that the Euro dies before the Dollar). When the Euro dies, the big money will rush into dollars, making the dollar index soar, and dollar stronger. We've seen that to a small extent in recent weeks. IMHO that will be the time to buy precious metals. Then as the Dollar starts it's inevitable crash, and the index plummets, the metals will once again start heading for the stratosphere.
> 
> Even though those with decent amounts of metals put back will then be millionaires, the purchasing power of what the metals buy would more than likely remain the same. If 20 ounces of gold buys you a car valued at $40k in today's market, when that same car is valued $400k, it could still be purchased with 20 ounces of gold.
> 
> There will be some exceptions, though. Somethings would be worth more, compared to gold and some things less. Food would probably be worth more, real estate less. During the hyperinflation period of the Weimar Republic, you could purchase a full city block in downtown Berlin for only 25oz of gold.


Sounds like very good logic, thanks


----------



## The_Exorcist

k0xxx said:


> I believe that the price of gold, in US dollars, will drop significantly if the Euro dies (that's assuming that the Euro dies before the Dollar). When the Euro dies, the big money will rush into dollars, making the dollar index soar, and dollar stronger.


Ah, betting on a brief period of deflation, eh?

Lots of people are thinking that way, but you might be disapointed. In fact, I'm pretty sure of it.

Europe and it's power-that-be won't take that lightly, and if they join in with the Russia/China/India/Brazil alliance demanding a new world currency, then that could become fact very quickly.
Watch for the signs, one of which would be China finally un-coupoling the Yuan from the Dollar.
:shtf:


----------



## k0xxx

The_Exorcist said:


> Ah, betting on a brief period of deflation, eh?
> 
> Lots of people are thinking that way, but you might be disapointed. In fact, I'm pretty sure of it.
> 
> Europe and it's power-that-be won't take that lightly, and if they join in with the Russia/China/India/Brazil alliance demanding a new world currency, then that could become fact very quickly.
> Watch for the signs, one of which would be China finally un-coupoling the Yuan from the Dollar.
> :shtf:


You could be right, of course. If I were an expert, I would be a lot better off than I am. 

Either way, I'm not selling my metals yet. I'm still buying and if I am right, then I will certainly buy more on the dip. What ever happens in the long run, I'm pretty sure that it won't be our politicians getting any sense and doing anything meaningful about our debt. If the dollar is toast, then I'll need something to convert to whatever currency is being used, so that I can pay the taxes on the farm.


----------



## Tommyj

Check out Max Keiser's opinion that nations will return to a gold standard after all the debts blow up.

He stakes gold at $7,000 per ounce in a few years.


----------



## Londoner

The trouble with gold is it only works as a hedge, its not worth diddly in a true collapse. In a true collapse a fishing rod is worth more than gold.


----------



## BillS

Londoner said:


> The trouble with gold is it only works as a hedge, its not worth diddly in a true collapse. In a true collapse a fishing rod is worth more than gold.


No, it'll still be considered a currency by a lot of people. The more people you have in a group that trades among themselves the more important it is to have gold or silver as currency. If all you have contact with is one other family then barter makes the most sense. Even then they could choose to only accept silver.

Besides, a collapse won't last forever. The government will regain control over what's left of the country. That's true whether it's a pandemic, an economic collapse, an EMP, a solar flare, or whatever it is. You'll be able to turn your gold and silver into whatever the new currency is.


----------



## Jimmy24

BillS said:


> No, it'll still be considered a currency by a lot of people. The more people you have in a group that trades among themselves the more important it is to have gold or silver as currency. If all you have contact with is one other family then barter makes the most sense. Even then they could choose to only accept silver.
> 
> Besides, a collapse won't last forever. The government will regain control over what's left of the country. That's true whether it's a pandemic, an economic collapse, an EMP, a solar flare, or whatever it is. You'll be able to turn your gold and silver into whatever the new currency is.


I would beg to differ with you. Having PMs during a crisis does nothing for you. PMs are for the time after things have settled down. PMs are nothing more than a hedge against the future, if/when things go in the toilet.

I pound of rice and a pound of beans when people are hungrey, is worth a lot more than a gold/silver coin.

PMs are gonna be stranded with people who have real commodidies, and trade them for small amounts of PMs. Inflation will be out the roof.

Jimmy


----------



## TheAnt

This argument has been played over so many times. You are both correct in your own vision for the economic meltdown. The reason you disagree is because you are both envisioning a different meltdown and/or values at different stages during said meltdown.

As BillS would agree gold and silver will continue to have value long after the dollar is dead. He would also agree that if you and he were stranded on a desert island in the pacific for a year he would prefer to have beans and water to gold and silver.

Gold and silvers core value does not really fluctuate over the long term but the value and use of one fiat currency or another certainly does. 300 years ago the British pound might have been the dominant currency in the world and acceptable almost anywhere and an ounce of silver would get you dinner and a shave. Today the dollar is the dominant currency in the world and acceptable almost anywhere and an ounce of silver will still get you dinner and a shave. In 30 years (maybe more maybe less) the dollar wont be acceptable anywhere but the outhouse but an ounce of silver will still get you dinner and a shave if those things are available to be had.

In the short term gold and silver may go up AND down against the dollar but the wise purchase gold and silver for the long term not the short term and the wise money would make sure he has food for the next winter before thinking about having gold and silver for the next winter.

In short, you are comparing the value of a long term investment (gold/silver) against that of a short term investment (rice/beans). If you are starving in the short term you're going to want rice/beans... if you are fed but broke in the long term you're going to want gold/silver. Me, I would like to be able to make use of both.


----------



## Immolatus

Londoner said:


> The trouble with gold is it only works as a hedge, its not worth diddly in a true collapse. In a true collapse a fishing rod is worth more than gold.


Refer below to Ant post. You are correct only if you are starving and alone. As long as their is 'society' in some form, there will be trade, and a reason for some form of money. The default form of money in modern society will always be precious metals.



TheAnt said:


> This argument has been played over so many times. You are both correct in your own vision for the economic meltdown. The reason you disagree is because you are both envisioning a different meltdown and/or values at different stages during said meltdown.
> 
> As BillS would agree gold and silver will continue to have value long after the dollar is dead. He would also agree that if you and he were stranded on a desert island in the pacific for a year he would prefer to have beans and water to gold and silver.
> 
> Gold and silvers core value does not really fluctuate over the long term but the value and use of one fiat currency or another certainly does. 300 years ago the British pound might have been the dominant currency in the world and acceptable almost anywhere and an ounce of silver would get you dinner and a shave. Today the dollar is the dominant currency in the world and acceptable almost anywhere and an ounce of silver will still get you dinner and a shave. In 30 years (maybe more maybe less) the dollar wont be acceptable anywhere but the outhouse but an ounce of silver will still get you dinner and a shave if those things are available to be had.
> 
> In the short term gold and silver may go up AND down against the dollar but the wise purchase gold and silver for the long term not the short term and the wise money would make sure he has food for the next winter before thinking about having gold and silver for the next winter.
> 
> In short, you are comparing the value of a long term investment (gold/silver) against that of a short term investment (rice/beans). If you are starving in the short term you're going to want rice/beans... if you are fed but broke in the long term you're going to want gold/silver. Me, I would like to be able to make use of both.


Bingo! I would only dispute one of your points. I have to assume that 300 years ago an ounce of silver wouldve gotten you *much* more than a shave and a meal.


----------



## Jimmy24

TheAnt said:


> This argument has been played over so many times. You are both correct in your own vision for the economic meltdown. The reason you disagree is because you are both envisioning a different meltdown and/or values at different stages during said meltdown.
> 
> As BillS would agree gold and silver will continue to have value long after the dollar is dead. He would also agree that if you and he were stranded on a desert island in the pacific for a year he would prefer to have beans and water to gold and silver.
> 
> Gold and silvers core value does not really fluctuate over the long term but the value and use of one fiat currency or another certainly does. 300 years ago the British pound might have been the dominant currency in the world and acceptable almost anywhere and an ounce of silver would get you dinner and a shave. Today the dollar is the dominant currency in the world and acceptable almost anywhere and an ounce of silver will still get you dinner and a shave. In 30 years (maybe more maybe less) the dollar wont be acceptable anywhere but the outhouse but an ounce of silver will still get you dinner and a shave if those things are available to be had.
> 
> In the short term gold and silver may go up AND down against the dollar but the wise purchase gold and silver for the long term not the short term and the wise money would make sure he has food for the next winter before thinking about having gold and silver for the next winter.
> 
> In short, you are comparing the value of a long term investment (gold/silver) against that of a short term investment (rice/beans). If you are starving in the short term you're going to want rice/beans... if you are fed but broke in the long term you're going to want gold/silver. Me, I would like to be able to make use of both.


I think I pretty much said that. BillS and I actually agree on parts also.

Not sure what your saying is so different than what I stated. I replied to what BillS replied to another post. That other post by Londoner, was about a complete collapse. Short term crisis. He and I just disagree on how long things will stay down.

JMWAG anyway, as is everyone else's. No one really knows what is going to really happen.

Thanks for the reply.

Jimmy


----------



## LincTex

Jimmy24 said:


> PMs are gonna be stranded with people who have real commodities, and trade them for small amounts of PMs. Inflation will be out the roof.


This is why pre-'64 dimes and quarters, being only 90% silver, are selling at near spot price in many areas. 
It is the CONVENIENCE... smaller denominations are easier to handle and negotiate with. Who wants to pay for their beans and rice with a 10oz silver bar?


----------



## invision

LincTex said:


> This is why pre-'64 dimes and quarters, being only 90% silver, are selling at near spot price in many areas.
> It is the CONVENIENCE... smaller denominations are easier to handle and negotiate with. Who wants to pay for their beans and rice with a 10oz silver bar?


I was just on eBay looking at pre-65 coins, and people are bidding crazy... 40 quarters spot price should be $230 according to current spot right now... I saw bids as high as $285, just crazy... Just got 10 oz of coins for under spot so I am happy for the month...

Anyone noticing PMs are on a downward trend though for spot? If silver hits $24-28/oz, I am buy buy buy...


----------



## Immolatus

invision said:


> Anyone noticing PMs are on a downward trend though for spot? If silver hits $24-28/oz, I am buy buy buy...


Ill have to agree with that, Im not chartist, but from what Ive seen 21-24 would be the bottom.
Interesting to watch stuff on ebay, our local store has some rarer pieces about sometimes, 25 and 40oz bars, things like that, that sell for hundreds above spot and the price that I could get them for.


----------



## neworchard18

I can't say what countries are doing but I can say what gold miners are doing. Half the gold mined this year is not being sold. The second year in a row.


----------



## LincTex

neworchard18 said:


> I can't say what countries are doing but I can say what gold miners are doing. Half the gold mined this year is not being sold. The second year in a row.


To force the price of existing gold higher? Any evidence of this?


----------



## neworchard18

No evidence that this is what is behind it but this is what is happening. The gamble (and it is with multimillion dollar mines and with single claim holders) is that it will go a lot higher. And a lot of miners and their families are also as concerned as the rest of us with a financial collapse and just keeping a valuable commodity on hand. With the price of gold they can afford to just sell half to pay for their years work and take out a very nice income and keep the rest for later.


----------



## invision

Yes, but here is the biggie for us to consider ... In the 1930s FDR put in executive order 6102. Most everyone was forced to surrender their gold for $20.65 per Troy ounce, then the Treasury raised the price after collection to $35 per Troy ounce... What would keep the governments from re-enacting exec order 6102??? And what would you do? Other countries have similar suspended rules - such as Australia....


----------



## k0xxx

That's certainly a possibility, but not as likely IMHO. Back then gold coins were common and a large majority of the population had them. Today a much smaller percentage of the population holds gold. That of course could change as things get worse for the dollar, but I suspect that it won't as most people will still refuse to believe that the Dollar will or even can die, and even fewer will actually try to do anything to protect themselves.

It does make a good case for owning at least some gold in the form of jewelry, which wasn't confiscated.


----------



## Immolatus

invision said:


> Yes, but here is the biggie for us to consider ... In the 1930s FDR put in executive order 6102. Most everyone was forced to surrender their gold for $20.65 per Troy ounce, then the Treasury raised the price after collection to $35 per Troy ounce... What would keep the governments from re-enacting exec order 6102??? And what would you do? Other countries have similar suspended rules - such as Australia....


From what I've read this was somewhat of a myth. I dont think they ever went house to house actually looking for anything, so I dont think anyone was actually forced to do anything. If you were storing it at some facility then they would have easy access to it along with the paper trail, but if you had yourn at the bottom of the lake so to speak, nones the wiser. Right?


----------



## Caribou

There were exemptions for jewelry, art, and some coins. Now, if you have a chunk of bullion that you need help with to pick up, you probably don't want to make that into a necklace. A bezel around a coin or one ounce bar of gold or silver and you have jewelry. You can buy gold chain, rings, etc. Melt your gold and make wedding rings. There will be legal ways around any such law should you choose to figure them out.


----------



## invision

Well, I was at a poker game Friday night and the dealer owns a stake in a we buy gold store... Started talking to him... The company he sends off to melt charges 4% on silver, gold, and platinum... What do you all think of my offering to melt for 3%, I can do 2kilos at a time with my furnace, and I have access to a furnace that can do the platinum for a 1% stake?..


----------



## LincTex

invision said:


> What do you all think of my offering to melt with my furnace, and I have access to a furnace


It's just time and money. Do you have both? Is it worth the time/trouble to you?

See if you can make a business deal with the guy. Go around and pass out flyers/brochures/business cards to other places as well.


----------



## invision

LincTex said:


> It's just time and money. Do you have both? Is it worth the time/trouble to you?
> 
> See if you can make a business deal with the guy. Go around and pass out flyers/brochures/business cards to other places as well.


That is what I am thinking, want to see what is involved - time and effort versus $... There are a ton of these places around my area.... I mean a ton...

If they all are doing $500,000 a year, and I got 10 (for simple math) That would be decent money... Paid in gold... I am using the $500,000 cause the guy said that's what they were going to net this year with only a 20% margin. Of course the take would be much larger cause it would be 3.5% on all PMs melted...


----------



## LincTex

invision said:


> I am using the $500,000 cause the guy said that's what they were going to net this year with only a 20% margin. Of course the take would be much larger cause it would be 3.5% on all PMs melted...


 You want to "adopt" me to run it for you?


----------



## k0xxx

Immolatus said:


> From what I've read this was somewhat of a myth. I dont think they ever went house to house actually looking for anything, so I dont think anyone was actually forced to do anything. If you were storing it at some facility then they would have easy access to it along with the paper trail, but if you had yourn at the bottom of the lake so to speak, nones the wiser. Right?


Order 6102 specifically exempted "customary use in industry, profession or art"-a provision that covered artists, jewellers, dentists, and sign makers among others. The order further permitted any person to own up to $100 in gold coins (a face value equivalent to 5 troy ounces (160 g) of Gold). The same paragraph also exempted "gold coins having recognized special value to collectors of rare and unusual coins."

Contrary to popular myth, there was nothing in the act that required safety deposit boxes to be searched or to be opened only in the presence of an IRS agent.


----------



## preponomics

Immolatus said:


> From what I've read this was somewhat of a myth. I dont think they ever went house to house actually looking for anything, so I dont think anyone was actually forced to do anything. If you were storing it at some facility then they would have easy access to it along with the paper trail, but if you had yourn at the bottom of the lake so to speak, nones the wiser. Right?


When Roosevelt signed Executive Order 6102, which ordered people to turn in their gold at $20.67 per ounce, there were exceptions. Jewelers, artists and dentists were some that were exempt and also everyone was allowed to keep up to a hundred bucks. The largest goal was to include in the "New Deal" that payments could no longer be exchanged in gold. It was more about forcing exchange to a central bank currency.

I don't think there is an account of them storming an individuals door to confiscate. If so I cant find it


----------



## preponomics

k0xxx said:


> Order 6102 specifically exempted "customary use in industry, profession or art"-a provision that covered artists, jewellers, dentists, and sign makers among others. The order further permitted any person to own up to $100 in gold coins (a face value equivalent to 5 troy ounces (160 g) of Gold). The same paragraph also exempted "gold coins having recognized special value to collectors of rare and unusual coins."
> 
> Contrary to popular myth, there was nothing in the act that required safety deposit boxes to be searched or to be opened only in the presence of an IRS agent.


ok your quicker than me


----------



## preponomics

Tweto said:


> I have heard numerous story's about how Governments have been buying up large quanities of Gold and how off coast banks are buying up Gold.
> 
> On the reverse of this I have heard the when Europe colapses that they will be selling off their Gold reserves (some of this has already started).
> 
> The small amounts of Gold that individuals buy is not enough to cause the value of Gold to go up or down.
> 
> The issue is will the value of Gold drop and how far when Europe collapses.


Here are my reasons why I believe Gold/Silver will skyrocket by 2016. In the last decade gold went from 300 to 1800 an ounce, I believe due to the following reasons


Loose monitory policy with the Fed and other central banks internationally
Artificially held interest rates too low
Unlimited backing Freddie/Fannie
Out of control consumer spending due to a perverted supply (cheap easy credit distorted the market with sub-prime loans and general credit)
Mortgage backed securities full of these sub-prime loans were sold everywhere
Investors were too leveraged with junk loans
The Fed with QE2 Injected over two trillion dollars in the the economy (printed - monetary inflation) to buy them - bail outs

All of these things in combination will cause things that have "intrinsic" value to rise including gold and silver - Price Inflation

We are now due to greed repeating the process


Loose monitory policy with the Fed and other central banks STILL EXIST
Holding interest rates practically at ZERO for mid level banking - LOWER THAN LAST TIME
Virtually unlimited backing for Freddie and Fannie AGAIN
Consumer debt levels are ramping back up do to easy credit - AGAIN
Liquidity is better but not that much better - give it time
QE3 is now officially in full swing AGAIN - one to two trillion in 2013!

Some investors and economist predict 5 trillion of easing strategies by 2015

for me I am buying buying buying

I think gold and silver are radically undervalued but that is just my own conclusion for me 

I will not be shocked to see 3000 gold/ 70 dollar silver 

I will recant my prediction for gold of course if these symptoms go away - fat chance though, as the lion never leaves a fresh carcass full of meat

disclaimer - I am fool for predicting anything


----------



## Tweto

Heard today that the reason gold is dropping is that China is selling gold because of their poor economy and India has implemented a much higher tax on imported gold for individual use.

One of the local radio experts says that he expects gold to go to $2000 in the first quarter of 2013.


----------



## Immolatus

I think we all have to keep in mind, and please correct me if Im wrong, that the price of gold in dollars has very little to do with actual "fundamentals", given the presence of all the paper gold.
Not saying dont buy it, but being the cynic I am, I always try to see the other side even if I "know" I'm right.


----------



## preponomics

Immolatus said:


> I think we all have to keep in mind, and please correct me if Im wrong, that the price of gold in dollars has very little to do with actual "fundamentals", given the presence of all the paper gold.
> Not saying dont buy it, but being the cynic I am, I always try to see the other side even if I "know" I'm right.


I will be last to correct you because your right - I think gold paper is in trouble - silver definitely looks like it is


----------



## alwaysready

Immolatus said:


> I think we all have to keep in mind, and please correct me if Im wrong, that the price of gold in dollars has very little to do with actual "fundamentals", given the presence of all the paper gold.
> Not saying dont buy it, but being the cynic I am, I always try to see the other side even if I "know" I'm right.


I agree a smart man will keep his wealth and not leave it to be watched by another. After all paper is just paper.


----------



## musketjim

I have whatever little bit of gold that I pan on my float trips. I tried eating it and it was a little crunchy and tasted like crap. . So I tried reloading some .44's with it and it patterned like crap. So I got some assayed and bought beer and food.:cheers:


----------



## Immolatus

musketjim said:


> I have whatever little bit of gold that I pan on my float trips. I tried eating it and it was a little crunchy and tasted like crap. . So I tried reloading some .44's with it and it patterned like crap. So I got some assayed and bought beer and food.:cheers:


Case closed!


----------

