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Discussion Starter · #1 ·
people are finally waking up to how horrible an economy we have and how many people are never again going to have a job. Their bizes are never going to reopen, etc. Govt can shut down BC whenever they want. and there's quantum computers hard at work at cracking BC encryption. For all anyone knows, govt set it up in the first place and is looking to steal every dime put into it.
 

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The fact that a product is more expensive, is NOT a reason to buy more of it. If increased demand and panic-buying led to shortages (as it did with toilet paper last year), that would be one thing. But Gold never gets scarce the way toilet paper did last year. Any time a person wants to buy gold, it's ALWAYS available. There is never a shortage.

To stick with the toilet paper analogy - if the price of toilet paper was hugely higher than it was six months ago, but the shelves in every store were constantly stocked completely full, every day, and never ran low, would you see the greatly-increased price as a reason to start soaking every available dime into buying toilet paper? Of course not. Then why do it with gold, which NEVER disappears from the market?
 

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Given the current market, if I'm going to invest, it will be in additional food supplies. JMHO
 
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Fwiw, this chart visually shows something better than I can verbally explain it. Gold generally paces inflation pretty well; not always and not perfectly, but pretty close. But compared to other uses of your money, about the only thing it beats is sticking your money in a cookie jar. Bonds are extremely safe and stable, but the returns are stupid low, basically you're paying for the reduced volatility by agreeing to reduced returns. But even bonds - which are seen pretty much universally as crappy-return vehicles - hugely outperform gold as far as how they exceed inflation.
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Even WITH the dotcom collapse of 1999-2000, AND with the 'great reset' of 2008-2009, every other investment vehicle shown has still outperformed gold. Of those graphs on the chart, which line would you rather find yourself on? I'd personally still rather have S&P market funds rather than real estate or real-estate funds (REIT's), but even the crappy return of bonds hugely outperforms gold. If you'd still rather have your money tied up in gold, more power to you, but do it with a full knowledge of historical reality; not just following the herd of doomsaying prepper nutjobs (and I'm a prepper nutjob myself) and not because of some innate negativity and pessimism toward the world in general.

Wish I could find a chart with longer-term data, but this is the longest I found with all five on it.
 

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If gold were the answer, then the companies selling it for dollars would not be doing so. They are getting rich off people panicking . They'd be hoarding it, setting themselves up to be the only rich and powerful people around after the "collapse"

The fact that the entire world is in the same or worse shape than the US, is what will stop a total collapse. There will be some corrections, inflation, etc. But the economy isn't going to collapse any time soon. Covid had the best shot of collapsing it, but couldn't. There are more jobs than people looking for work right now.
 

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If gold were the answer, then the companies selling it for dollars would not be doing so. They are getting rich off people panicking . They'd be hoarding it, setting themselves up to be the only rich and powerful people around after the "collapse"
Exactly. I honestly don't understand why so few people see that huge, and obvious, logic disconnect.

Their whole sales pitch is "your dollars will soon be worth a lot less than they are now; you need gold as a store of value instead". But their livelihood is based on the exact opposite - they trade you their gold in exchange for the very dollars they say will soon be worth less, or even worthless. How does that make sense to anyone who stops to think about it for ten seconds?
 

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I know after buying in too much into the "Sky Is Falling" stuff all or nearly all of my preps are stuff I can use if it's all sunshine and roses from here on out.
The worst that I can see is a conflict ending in balkanization of different states.
And that's a stretch and I'll admit that. I'm more concerned about short term Pantifa-Bolshevik Lives Matter shit shows popping up in select spots unannounced than anything else.
Minor as they may be I've no desire to be caught up in one unless it's in an overwatch position. Just saying.
However if something that long lasting happens in my area. Then those libtards are summer than I give them credit for.
If I invested in anything it'd probably be silver.
Otherwise copper, lead and brass plus gunmetal are my investments.😁
 

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Discussion Starter · #8 ·
hey, dummy, it's not that gold will be in a shortage situation, it's that $ wont buy it anymore. The entire world knows that we're counterfieiting $ and that we'll have to keep paying unemploymet, giving Bizs PPP loans and giving stimulus money to everyone else. They are unable to hold down the price of gold. It's going up over 2k per oz again by fall, without a doubt and it wont pull back much from that, either.
 

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hey, dummy, it's not that gold will be in a shortage situation, it's that $ wont buy it anymore. The entire world knows that we're counterfieiting $ and that we'll have to keep paying unemploymet, giving Bizs PPP loans and giving stimulus money to everyone else. They are unable to hold down the price of gold. It's going up over 2k per oz again by fall, without a doubt and it wont pull back much from that, either.
First off, my economic and investment knowledge is sophomore level at best, but if you truly believe the above statement, yours is clearly Pre-K level. The US has done a LOT of stupid crap to the dollar in the last year. The biggest thing to remember is that most of the rest of the world has done pretty much the same thing to their currencies in the last year as well, so the playing field is still fairly level across the board; at least in the grand scheme of things. Now, could it lead to inflation? Possibly. It could also lead to DEflation and a boom; there are actually valid indicators in both directions right now. Will it lead to higher taxes? Almost certainly.

But to address your core claim that a time is coming that "dollars won't buy gold", a simple question, When - as in "what year or month" - have dollars NOT been able to buy gold? You can't name one instance. Look at the chart above, that shows gold vs. dollars vs. stocks vs. bonds vs. REITs (Real Estate Investment Trusts, which are basically mutual funds of real estate; a bundling of real estate instead of a bundling of stocks). Gold and the CPI (ie, inflation) have basically been bed-buddies since we functionally left the gold standard 50 years ago. And EVERYTHING else - including crappy, boring bonds - has surpassed gold for true value held long term.


This chart going all the way back to 1925 may help illustrate the difference between "dollar", "inflation", and the price of gold. And notice that the chart is logarithmic, not linear. Eg, going up two lines isn't twice as much growth as going up one line; it's a HUNDRED times the growth.
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The gold line mostly hovers right at the starting point - the "$1" line, all the way to the early 70's. This makes complete sense, since in 1971 we left the gold standard. (Technically we left it in 1933, but the govt held the price steady at $35 per oz until 1971, at which point the 'volatility' started. Thing is, even with the "volatility" of the gold price over the intervening 50years, it's still stayed darn close to $1 origin line, at least relative to the dollar and relative to other investments. Simply put, it's stayed closer to the value of inflation-adjusted dollars than stocks have, than bonds have, and than a non-inflation-adjusted dollar has. The only thing that has stayed closer to the "zero-sum" origin line has been Treasury Bills. (Simplistically put, T-Bills are best thought of as shorter-term govt bonds; often used as inflation-protected places to temporarily park money. There are other differences, but that's the primary one.)

You can see from this 96-year chart, that gold has indeed done slightly better than inflation. But it hasn't done even as well as bonds (which are very safe and low returners). In 96 years, gold has grown by approximately six fold (again, compared to inflation-adjusted dollars), which sounds good, but only on the surface and only if we're completely ignorant of other long-term things. Even the extremely safe, very poor-performing bond market has nearly doubled that. And the market as a whole (which can be analoged via index funds) has returned around seven HUNDRED fold in the same time frame. And bear in mind that when they say 'large stocks', they're talking about large-cap stocks, which are about the most boring and lower-end-yield of the market. The line for the market as a whole would be an even higher performer than the 'large stock' line; which is still the best-performing item of anything shown.

So if you had bought $2500 worth of gold in 1925, you'd have roughly $15,000 today. That same $2500 in the stock market (spread around as evenly as possible) would now be more $1.75 MILLION dollars. With what logic, with a century-long track record like this, would a person choose the $15k performer over the $1,750K performer..?

And also notice that even in the "horrible" crash times like the "Great Depression" of the 30's, gold still only beat the stock market for twenty-some months; never longer than that.


Again, to go to your core claim, please name one time - ONE TIME - when dollars couldn't by gold?
 

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14039

A negative 9 percent return over the past year. Keep in mind, that means you lost 9 percent PLUS the inflation rate. You'd have been better off to keep dollar bills hidden in the back yard.



For a longer-term view, this is the ten-year chart:
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Again, congratulations are NOT in order. This shows a return of 0.0% over the past ten years. That means you matched the inflation rate (usually between 2-3 percent lately) every year. Meaning you made out exactly the same as someone who hid dollar bills in their back yard. Just sayin'...


Again, I don't mean to be mean about it, and I'm absolutely no expert. But right now, prices are high and emotions are high. Individually, either one of those is a reason to NOT buy something; but together, they're HUGE reasons not to be buying something.
 

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This year so far (Jan 1, 2021 through December 13, 2021), which is pretty much the entire year:

Rectangle Slope Line Font Plot


Gone from $1943 to $1807. That's a negative 7% return; not great.


Comparing it to any no-brainer, no-research-necessary S&P Index Fund:
Atmosphere Sky Nature Azure Natural environment


Gone from $3694 to $4568. That's a positive 23.6% return. That's not good either - it's great.

Look at it from actual dollar amounts involved. If on January 1, 2021 you invested $10,000...
...in gold, it would be worth $9,300.05 today.
...in a no-brainer S&P fund, it would be worth $12,365.99 today.

That's a net difference of more than 30%; or put another way, a difference of $255 per month on a one-time $10k investment. Lost simply because of basing decisions on short-term emotion instead of long-term historical data.

And I am absolutely NOT any kind of financial genius. My knowledge level is sophomore at best. But I know that the difference between losing $700 and making $2365 is worth slowing down & taking a breath before making major decisions.
 

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...They are unable to hold down the price of gold. It's going up over 2k per oz again by fall, without a doubt and it wont pull back much from that, either.
The day you made this statement (May 19, 2021), gold was $1871; so your prediction that it would go up "over 2k per oz" means hitting more than $3900 per oz, "by fall" of 2021. That's an increase of 107%.

First day of fall (Sept 22), it was $1776.
Last day of fall (Dec 20), it was $1792.

So your prediction on gold was a return of more than a hundred percent gain, but the actual return was a LOSS. To put it visually, if you put $10,000 into gold, you would have $9,578 at the end of this time frame.
On the S&P for the same May-to-December time frame, the actual return was a gain of right at 11%. So if you'd put that same $10,000 into a simple, no-brainer S&P index fund, you'd have had $11,090.

When I went to school, making $1,090 was better than losing $422.

But go ahead and continue to tell us how gold is such a phenomenal investment; even though every long-term - and even most short-term - historical records show the exact opposite.
 

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$1774 today; August 5, 2022:
Rectangle Slope Plot Font Line


That's up $37 from the $1737 it was at when you started this thread; a 2% return.

In the same time frame, even with the "sky is falling" news about the stock market, the S&P 500 went from $4128 to $4145 (April 2021 to today). That's a crap return, but it's not far off what gold did, is it? And that's while the stock market elicited constant "HOLY HELL, THE STOCK MARKET IS CRASHING" headlines throughout that time frame. Care to hazard a guess why pundits didn't put out "sky is falling" reports about gold at the time? Because that's what people are USED to gold doing - giving crap returns.

Another good visual example from macrotrends.com; a ten-year chart of gold's price after adjusting for inflation. This is August of 2012 to August 2022:
Rectangle Azure Slope Plot Font


That puts it very well visually - after adjusting for inflation, gold is actually worth less than it was a decade ago. Even if not adjusted for inflation, it's still a sucky return. Same ten-year span, but not adjusted for inflation, it's right at what it was in mid-2012:
Rectangle Slope Plot Font Parallel


Absolutely no good reason to put money into something with that kind of return.

For comparison, the returns of even no-brainer, do-no-research S&P index funds over the same time frame:
Azure Rectangle Slope Font Plot


Easy decision if a person is willing (and has the time) to think long-term.
 

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Another good chart that I just stumbled across in an e-book in this weekend. When looking at this, keep in mind that it’s logarithmic; the distance from $1 to $10 is the same as the distance from $100,000 to $1,000,000.

If it was an undistorted chart that showed the true linear tracks, the disparity would be hugely greater, so much so that it wouldn’t fit on the page.

Rectangle Plot Slope Font Parallel
 

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Fwiw, an example of the problems with trying to predict the future; especially when people's emotions are involved in the pricing of things -

January 2021: $1898 per oz
April 2021: $1737 (when this thread was started)
August 2021: $1780 (one year ago this week)
November 2021: $1867 (high point for 2021; never came close to the "over $2k by fall" prediction)
February 2022: $1808 (six months ago this week)
August 2022: $1763 (down from a year ago, and down from six months ago)

I really wish we could get some input from the person who started the conversation and made the predictions, but alas, no.
 
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