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however, to actually lay your hands on an oz of gold costs $2050. I am hesitant to risk losing $400 or more. per oz. However, I have no idea what else to do with my surplus money. Obviously, inflation is at 15% and going to 20% this year and worse next year. So what investment will clear 20%, after taking out 40% taxes and "self-employed" ss? That will just be breaking even! you'll have to make 40%, 40k profit on 10k, minus 40% leaves 24k, then minus 20k for inflation. You make a real 4% on a 40% return! Screw that! All you can do is try to limit your losses to inflation by holding gold. Taxes just help your enemies, so why pay them?
 

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...Taxes just help your enemies, so why pay them?
Because if I didn’t, unemployed senior citizens with knee and back problems would be living under a bridge somewhere, instead of in a warm house posting on the Internet about the future of gold prices. And I’m nicer than that.

Do you honestly not see the glaring hypocrisy in your statements? On this very forum, you’ve bragged about your “increase in income”. And every penny of your personal income that you’ve brought up comes from people’s taxes.
 

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Oh great Melvin the Tax Protester.
Yep, that's smart talk about tax evasion on an open forum.🙄
JMD, please cut that back for your own sake.
I know of people that went that route and didn't fair to well.
Those types don't end up breaking rocks, stamping out license plates or blowing glass.
They end up room temp with the moles delivering their mail. Steer clear of them types. There used to be some out yonder your way.
I'd name one place but I don't want my post flagged by some govt algorithm.
Although in some way you'd probably not get along with them.
 

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I know I've done this before, but comparing gold to plain old equity investments (stocks). The power of equities is that it's the ownership of entities that involve people actually DOING things. It's ownership in things that people are making, selling, etc.

Put another way, say you own 10 ounces of gold, or 10 shares of Apple, Home Depot (or whatever stock). A decade from now, that ounce of gold is unchanged, other than typically (mostly) keeping up with inflation. But say that a decade later, Apple has a wider product line, a bigger customer base, etc. Or Home Depot has opened more stores, or moved into another country, etc. That ten shares now represents ownership of MORE, simply because the company is bigger. Gold simply doesn't grow. Ownership of gold is possessing something that does nothing, produces nothing, and whose value is completely based on how people feel on a given day. If people are scared, they start buying gold, which drives up the price. Stock prices are partially influenced by emotions, fads, and fears; but gold prices are COMPLETELY driven by those things.


This chart shows gold (orange) and the DJIA for the past 107 years; the longest history I could find. They did track very closely until the US was taken off the gold standard by Nixon in 1971. Simply put, for 103 of the last 107 years, equities (stocks) have outperformed gold.
Rectangle Slope Plot Font Line


If you were going to bet on a team, would you bet on the team that has won 104 of their last 107 games, or the team that has won 3 of their last 107 games? Because betting on gold is literally betting on the team with a 3-out-of-107 track record. More power to anyone who wants to, but I can't see any way that that makes sense; historically or mathematically either one.
 

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Melvin, this is just me, please describe how in a WROL scenario that you talk about, how do you eat gold? How do you defend yourself with gold? How many bullets does an ounce of gold produce, how does gold make your car run ?
 
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Wonder how welfare pays for all this so called gold he is buying? Maybe it is all the money he makes being a slumload. Or from all the other scams he thought of over the last forty years. Or the illeagal dope-- can money.
 

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I also see he doesn’t understand that capital gains are taxed differently from ordinary income.
Sadly, that's about the least-incorrect thing in the 'math' of the opening post.

Posted in whole, to keep things in context:
however, to actually lay your hands on an oz of gold costs $2050. I am hesitant to risk losing $400 or more. per oz. However, I have no idea what else to do with my surplus money. Obviously, inflation is at 15% and going to 20% this year and worse next year. So what investment will clear 20%, after taking out 40% taxes and "self-employed" ss? That will just be breaking even! you'll have to make 40%, 40k profit on 10k, minus 40% leaves 24k, then minus 20k for inflation. You make a real 4% on a 40% return! Screw that! All you can do is try to limit your losses to inflation by holding gold. Taxes just help your enemies, so why pay them?

And then piece by piece, to try and make sense using smaller bites:
..Obviously, inflation is at 15% and going to 20% this year and worse next year.
…you'll have to make 40%, 40k profit on 10k…
$40k made on $10k is not 40%; it’s 400%. Fourth-grade math tells us that 40% on $10k is $4k.

The difference between $40k and $4k only represents an error of 1000%, so darn close I guess.


…minus 40% leaves 24k, then minus 20k for inflation..
When the stated assumption is 20% inflation, I don't follow the '$40k profit' minus '$20k for inflation' thing. That's not 20%; it's 50%.

And if we use actual, non-imaginary numbers (the $4k that actually IS what 40% of $10k works out to), that 20% for inflation is just $800. But I guess $800 is pretty close to $20,000 if you’re on good enough drugs.

Bear in mind, the "actual, non-imaginary numbers" I'm talking about are themselves based on the (crazy) listed assumption of a 40% return. Where you can reliably & predictably make 40% in a single year on a $10k investment is a mystery that has yet to be solved by the human race, but that's another conversation.

So let's take the assumptions as given, but without the crazy-wrong calculations.

  • A $10k investment, making a 40% return = $4000 growth.
  • Leave it for a year and a day, to get the capital-gains benefit Dorobuta mentioned, and the taxes become 15% on the $4k growth; or $600. $4000 - $600 = $3400 growth after taxes.
  • That leaves us with a net gain of $3400, and a net total value of $13,400.
  • If we have 20% inflation, then the 20% bite that inflation takes out of our $13,400 is $2680. So we now have $10,720 ($13,280 - $2680)

Where in god's green earth are you getting all these $40k, etc, numbers...?
 

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Melvin, this is just me, please describe how in a WROL scenario that you talk about, how do you eat gold? How do you defend yourself with gold? How many bullets does an ounce of gold produce, how does gold make your car run ?
In an ultimate SHTF scenario would you choose to barter for an ounce of gold or a 50 round box of .22LR?
 
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Maybe Silver would be better?
I mean the way things have been going we'll probably need it for the Vampires and Werewolves next.😛
Isn’t that the truth? I was talking to one of our employees the other day about the nonstop craziness of the last couple years, and I told him that at this point if I saw a herd of dinosaurs running down the road I honestly don’t think I’d be shocked. And I really don’t think I would.
 

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I don't own gold or stocks either one (other than stock in our own business), so no personal bias on "stocks vs. gold"; I just like to look at the past as the being the best predictor of the future. One good site that has interactive graphs is macrotrends.net; they have pretty good and easy-to-view stuff there on various investment items - gold, silver, stocks, oil, soybeans, platinum, etc. You can look at investment X vs. investment Y, over the course of different time frames, which is real handy imo.

For example, gold vs stocks (S&P 500, nothing fancy or exotic); over the last 5 years, gold has returned 46% and S&P has returned 58%. Stocks are the winner, but no big disparity in such a short-term view. Basically, stocks win by 26%.

Over the last ten years, disparity is much greater. Gold has returned 20% and S&P has returned 167%. Stocks win by 735%.
Last 20 years, gold is 234%, S&P is 495%. Stocks win by 111%.
Last 30 years, gold is 455%, S&P is 875%. Stocks win by 92%.
Max period listed is back to 1915, so 107 years. Gold looks very impressive, at 9,831%. Sounds good, but pales in comparison to the stock market's return, at 58,225%. In the longest run that we have data for, stocks win by 492%.

If I were going to be putting money in either one, those numbers make the logical choice seem readily apparent to me. I get that there's a 'hands-on' aspect of gold ownership and an emotional/psychological gratification and peace of mind that it would likely bring, but to me that alone wouldn't be enough reason to pick the constant mathematical loser.
 

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His ideas on gold come from a work of fantasy/fiction, which wasn't too bad for the time frame it was written in.
But what concerns me is the thinking behind it.
In Atlas Shrugged yeah many of the main good guys went to a covert gold standard and based the economy on self worth/what they could actually produce.
They also had a rather low opinion of looters and moochers. Govt bureaucracy or otherwise.

IF There were a complete SHTF situation. I can't see it being entirely worthless but it may be a long time before it's value is recognized and is worth even a smidgen of it's value to anyone beyond those with a "Oh look shiney!" mentality. And I don't expect those types to last very long if it gets that extreme.
i can see more use for silver. Because if the proper kind it's got some value as a antibiotic.
 

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His ideas on gold come from a work of fantasy/fiction, which wasn't too bad for the time frame it was written in.
But what concerns me is the thinking behind it.
In Atlas Shrugged yeah many of the main good guys went to a covert gold standard and based the economy on self worth/what they could actually produce.
They also had a rather low opinion of looters and moochers. Govt bureaucracy or otherwise.

IF There were a complete SHTF situation. I can't see it being entirely worthless but it may be a long time before it's value is recognized and is worth even a smidgen of it's value to anyone beyond those with a "Oh look shiney!" mentality. And I don't expect those types to last very long if it gets that extreme.
i can see more use for silver. Because if the proper kind it's got some value as a antibiotic.
Well written, only the delusional will think that gold and silver will still retain value during the first few years of a WROL scenario. Marauders' will probably be the only people interested in precious metals at the beginning. How you would use it while living in your spider hole, is beyond me. Caches of freeze dried, dehydrated food, ammunition and small amounts of gasoline would seem to be more important during the first 12 months.
 
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