Abraxas
Global Moderator
Hero Member
Karma: +212/-207
Posts: 4,097
"You do not speak for the rest"
|
 |
« on: October 31, 2007, 12:51:16 PM » |
|
If so, lucky you. Gold Tops $800 for 1st Time Since 1980NEW YORK (AP) - Gold barreled above $800 an ounce Wednesday for the first time since 1980 as investors cheered the Federal Reserve's decision to lower its benchmark interest rate by a quarter point. The Fed dropped its federal funds rate to 4.50 percent, as the markets widely anticipated. Lower interest rates tend to undermine the dollar and raise the allure of precious metals as an investment alternative. The dollar stumbled to another low against the euro following the Fed's decision on Wednesday, helping drive gold higher. LINK Never thought those commercials asking for spare gold actually made any money. Is this preformance common? would it be smart to invest in gold in the future? In 2 years or so I'll be graduating and I want to know where to put my money. Just curious. |
|
|
|
|
Logged
|
Either you repeat the same conventional doctrines everybody is saying, or else you say something true, and it will sound like its from Neptune.
- Noam Chomsky
... you can almost see the high water mark - that place where the wave finally broke and rolled back.
- Hunter S. Thompson
|
|
|
2.DOH
Full Member
Karma: +83/-18
Posts: 171
|
|
« Reply #1 on: October 31, 2007, 01:19:58 PM » |
|
Gold is a good insurance investment in case the dollar goes crap. Balanced investing is always best (I know, yadda yadda blah blah, boring), but it's smart to take advantage of times like this. Look into a precious metals fund of some sort, to start. I have this: Vanguard Precious Metals & MiningI was fortunate enough to get in around mid 2000. It's mostly done nothing but go up since then. It's closed to new investors, but other companies offer similar funds. Oppenheimer has one IIRC. Good company. In 2yrs it would still be a smart investment, but I doubt we'll see gains like we've had over the past 5-8 yrs. BTW, I'm not a broker, nor do I play one on the intraweb. |
|
|
|
|
Logged
|
|
|
|
|
Gojira
|
|
« Reply #2 on: October 31, 2007, 01:45:50 PM » |
|
Gold is always a great place to put cash in times of inflation worries. Other currencies are a great way too. Remember though that there is no expected return on currency or futures (commodities like gold) so you have to either bet on money demand in the currency case or industry market demand in the commodities case. What it does though is it diversifies your risk of just one type of cash and spreads it amongst other currencies or commodities as well so you don't have to rely on the dollar anymore.
Here's the kicker: As long as there is a fiat money system, gold will continue to go up. So it's a win-win. Purchasing power isn't deflated by increased money supplies if the price goes nowhere and if the demand for gold consistently goes up, you make a higher real return.
However, if you aren't comfortable with derivatives, especially futures, it would be better to stay out of it and put your money in said or like funds above.
|
|
|
|
|
Logged
|
Our democracy has created an environment of indecision at times of impending crisis.
If life is easy for you, then you aint livin.
|
|
|
|
Dormouse
|
|
« Reply #3 on: November 07, 2007, 09:58:25 AM » |
|
Gold is a product that is relatively 'high' in supply and has relatively 'low' market demand (consumer jewellery is about it).
The only reason gold has a value as high as it does is due to the artifice of Central Banks holding/hoarding it (a policy that most have either abandoned or are in the process of abandoning).
Btw, the USA has publically stated they are divesting the gold at Fort Knox. Do you know how many years of consumer gold consumption that Fort Knox stockpile represents?
Bottom line is that gold has very little to recommend it from a rational market perspective. Gold however remains superstitiously popular with all kinds of non-establishment people though.
Indeed, if you had spare cash for speculative investments, I'd be loading up on oil equities.
|
|
|
|
|
Logged
|
|
|
|
|
Dormouse
|
|
« Reply #4 on: November 07, 2007, 10:01:49 AM » |
|
Gold is always a great place to put cash in times of inflation worries. Your statement is very dated. This idea, often repeated in the 1970's, proved to be a failure during the 1980's and 1990's. Btw, since the early 1980's, gold has failed to even keep pace with inflation. It has risen and fallen with the regular mining/commodity cycle. |
|
|
|
|
Logged
|
|
|
|
|
Gojira
|
|
« Reply #5 on: November 07, 2007, 10:23:16 AM » |
|
Gold is always a great place to put cash in times of inflation worries. Your statement is very dated. This idea, often repeated in the 1970's, proved to be a failure during the 1980's and 1990's. Btw, since the early 1980's, gold has failed to even keep pace with inflation. It has risen and fallen with the regular mining/commodity cycle. Based on what currency? Let me guess...the dollar. |
|
|
|
|
Logged
|
Our democracy has created an environment of indecision at times of impending crisis.
If life is easy for you, then you aint livin.
|
|
|
|
Dormouse
|
|
« Reply #6 on: November 07, 2007, 10:29:48 AM » |
|
Gold is always a great place to put cash in times of inflation worries. Your statement is very dated. This idea, often repeated in the 1970's, proved to be a failure during the 1980's and 1990's. Btw, since the early 1980's, gold has failed to even keep pace with inflation. It has risen and fallen with the regular mining/commodity cycle. Based on what currency? Let me guess...the dollar. Pick any currency you like. Gold has actually dropped in relative value since the late 70's (worth less now than 25-30 years ago in absolute terms). And gold has not actually performed this alleged 'inflation hedge' role in many decades. But I won't argue with goldbugs. I know better than that. Go buy gold if you like. I'm just trying to put out the rational facts here. |
|
|
|
« Last Edit: November 07, 2007, 10:32:04 AM by Dormouse »
|
Logged
|
|
|
|
|
Gojira
|
|
« Reply #7 on: November 07, 2007, 11:10:01 AM » |
|
Gold is always a great place to put cash in times of inflation worries. Your statement is very dated. This idea, often repeated in the 1970's, proved to be a failure during the 1980's and 1990's. Btw, since the early 1980's, gold has failed to even keep pace with inflation. It has risen and fallen with the regular mining/commodity cycle. Based on what currency? Let me guess...the dollar. Pick any currency you like. Gold has actually dropped in relative value since the late 70's (worth less now than 25-30 years ago in absolute terms). And gold has not actually performed this alleged 'inflation hedge' role in many decades. But I won't argue with goldbugs. I know better than that. Go buy gold if you like. I'm just trying to put out the rational facts here. Show me proof and I will reconsider. |
|
|
|
|
Logged
|
Our democracy has created an environment of indecision at times of impending crisis.
If life is easy for you, then you aint livin.
|
|
|
2.DOH
Full Member
Karma: +83/-18
Posts: 171
|
|
« Reply #8 on: November 07, 2007, 11:28:51 AM » |
|
I was never under the impression that an investments worth was determined by how close it was to record high. ~ $850/oz in 1980 was a record IIRC, & that didn't last long at all. Adjusted for inflation, price would have to be ~ $2,000 per ounce currently. I doubt that happens, but $1000/oz seems quite possible.. Gold closed just shy of $490/oz in 82 Adjusted for inflation, that's ~ $1000. Very realistic. One would have to be pretty dense to ignore what it's done since 2000:  |
|
|
|
|
Logged
|
|
|
|
Biker Dude
A TRUE Liberal!
Forum Administrator
Hero Member
Karma: +156/-117
Posts: 2,101
Live to Ride, Ride to Live
|
|
« Reply #9 on: November 07, 2007, 07:08:14 PM » |
|
One would have to be pretty dense to ignore what it's done since 2000:
Good one! Anybody that claims consumer jewelry is the only use of gold has very little knowledge. Any posts by such a person would of course be dubious. |
|
|
|
|
Logged
|
 Who will watch the watchers?Now that it is over, what are we going to talk about? |
|
|
Fredledingue
Global Moderator
Hero Member
Karma: +30/-31
Posts: 868
|
|
« Reply #10 on: November 10, 2007, 04:55:10 PM » |
|
The only way to earn money with gold is to enter a time machine, go back to 2002 and sell it today.
Just like with any other investment.
Gold could rise another 25%, yes. But that's not safer than funds or bonds.
Gold has tripled since 2001, 40% a year, but ntohing indicates that it will grow by 40% in 2008.
You can see a crash in gold as much as in mortgage funds.
|
|
|
|
|
Logged
|
 Dr. Zoidberg is jewish (and an important AIPAC donator!)  |
|
|
|
