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Safer Trading Gold!!!

blazan (blazan)
Oct 17 2012 at 13:03
5 posts
Very interesting info - much appreciated for the detailed explanation.
Doesn't it also matter who controls the largest share of the market in question? For example (this is just hypothetical, I really have no idea), if most of the gold is exported from the US and its economy deteriorates, wouldn't gold lose value also? (although probably in a lesser rate).


Well, in the U.S., precious metals in general are not mined in abundance relative to other countries with more precious metals resources available. In particular, Silver is actually in more demand than Gold because it's consumed. It has hundreds of uses in most of the technology we now use that is in high demand, such as cell phones, computers, etc. If you consider that, Silver is the better of the two as a long term investment - for that reason. To answer your question in more detail, Gold NEVER loses value. It has and will continue to always have intrinsic value. The price of Gold or Silver is a reflection of the value of the currency you are pegging it to. The U.S. does still have roughly 287 million ounces of Gold still in reserve. The problem with that is it's not backing up the US Dollar, thanks to President Nixon in 1971. The Dollar, along with every other paper currency is not backed up by anything. It is just printed by Central Banks and dependent on the creation of new debt to fund current interest payments on existing debt. The way this is set up provides an incredible opportunity for those of us who understand our monetary system. At some point, the currency will not be able to hold its value at all because there is way too much of it in circulation. The more of something that there is, the less valuable it becomes, and vice versa. So, eventually paper currency will lose the bulk of its value relative to Gold and other commodities. It's not that the price of things are actually going up. On the contrary, the value of the currency is going down. Buy Silver while you can still afford to! Gold is out of reach now for most of us. Hope this helps.

James_Bond
Oct 18 2012 at 12:42
556 posts
Yes, that actually helps a lot. Looks like you're very knowledgeable of fundamental analysis - I've never tried to understand it as it just looks so complicated - your posts proves my point 😄

Kidding aside, what other metals do you think are valuable? And when you're saying it will always go up in price - what timeframe are you talking about here? As it can definitely go down in a 6 months timeframe for example.

blazan (blazan)
Oct 18 2012 at 14:08
5 posts
Kidding aside, what other metals do you think are valuable? And when you're saying it will always go up in price - what timeframe are you talking about here? As it can definitely go down in a 6 months timeframe for example.


How does the U.S. government pay for the existing debt it has? Most would say through taxes. This is far from the truth. Even if we paid 100% tax, it would not be enough to meet the interest payments on the existing debt we have in the U.S. So, where does the money come from? They PRINT it. Through the FED, the U.S. prints the money it needs to pay for the interest on existing debt, in addition to many of the entitlement programs we have - Medicare, Welfare, Military, etc. So, what happens when there's more currency in circulation? The value of the currency goes DOWN. This causes the PRICE of everything to go UP.

Most people have no idea what government is doing to cause price fluctuations in the market. They only see the consequence of it. Food costs more, gas costs more, etc. But they don't understand why. Currency devaluation is the cause. It's not a question of IF we will see a currency crisis. Rather a question of WHEN. Look at what's happening in Europe. This is a clue as to what will happen in the U.S. - only worse. It's a mathematical certainty. How long can you pay for your existing debts with new debt? Each time they buy Treasuries or bailout a Bank or Automaker, they are adding another interest payment to the existing interest that they can't afford to pay. So not only is debt increasing, so is the interest on the debt. This can't go on forever. And, the U.S. has infected other governments with the same Central Banking money printing. So, you will continue to see countries and currencies going broke one after the other. For example, first Greece, now Spain in Europe. You'll hear about another soon enough. It won't get better, it will get worse. They are all doing the same thing. Everyone is paying for debt with new debt.

Precious Metals in particular benefit the most from currency losing value because as people realize their cash is losing its purchasing power, they rush to put their money where it can maintian its value at the time. They are also physical assets. Gold & Silver have always been valuable, and they always will be. Silver is the better opportunity of the two because it is in high consumer demand. It is used all over the world in the technology we are starting to use more and more. Solar Panels, LCD screens, computers, cell phones, etc. My suggestion is to buy a little at a time, even if only 1 ounce each month. Over time you will accumulate a large amount of it and you'll benefit in the end as currencies go through crisis all over the globe.

Geereg
Oct 18 2012 at 22:34
18 posts
Blazan, I agree with you 100%. People don't realize that central governments (especially the USA) have created the biggest ponzi scheme of all! Madoff who? Think about it. The government guarantees its debt by paying interest on T-Bills and T-Bonds. When it is time to pay the interest, they reissue debt to cover the old debt. Hmmm!!! OK. This sounds like Madoff! The government is the biggest hypocrite of them all.

But we have a huge problem. There has been so much damage, the only thing we can do is delay the inevitable. If we change now, the whole system will collapse overnight. Also, by using a gold standard, it will be hard for an economy to grow because we won't be able to produce enough gold to keep up. So you can't issue debt and expect someone to pay you interest, because where is the extra money going to come from? Also, the inevitable crash is exacerbated by the fact, that the US Federal Reserve has lied about the amount of gold it has stored. It is rumored that they have about 25% of the reported value. When this comes crashing, 2008 will be laughable compared to epic collapse of the fiat currency system.

Using commodities to stabilize the economy has its pros and cons. It will be harder for the little guy to become prosperous. Wealth will be harder to create out of thin air, because we wouldn't be able to use fancy accounting to justify it. But, maybe that is exactly what we need.

A man should look for what is, and not for what he thinks should be.
blazan (blazan)
Oct 18 2012 at 22:54
5 posts
Geereg posted:
But we have a huge problem. There has been so much damage, the only thing we can do is delay the inevitable. If we change now, the whole system will collapse overnight. Also, by using a gold standard, it will be hard for an economy to grow because we won't be able to produce enough gold to keep up.

Using commodities to stabilize the economy has its pros and cons. It will be harder for the little guy to become prosperous. Wealth will be harder to create out of thin air, because we wouldn't be able to use fancy accounting to justify it. But, maybe that is exactly what we need.


EXCELLENT point! What we should accept is the fact that collapse and crisis WILL happen. No one knows exactly how or what the full effects will be because it has never happened to this degree. People that have studied the economic history of the U.S. and other countries agree on one thing: Fiat currency is UNSUSTAINABLE. As you said, it IS a Ponzi Scheme. Media plays an important part in distracting all of us from the obvious. But, those of us familiar with the history of money can do something to position ourselves to benefit from the next transfer of wealth that will take place as the consequence of this Fiat monetary system. Land, Precious Metals, Food, etc. are all logical things we should accumulate while they are within reach, and the opportunity is still here. And, make no mistake about what will end up happening as far as the Gold standard. The next go round they will back up currency with Gold. China has already begun doing it with the Yuan. And they are still buying Gold bullion through a third party. They are not as stupid as the U.S. would like to think. They are on to the U.S. dependency on goods produced in China and other countries. When they are well positioned with Gold reserves don't be surprised if they stop buying U.S. Treasuries. The U.S. Dollar is losing its reserve currency status slowly but surely. Iran is on to this too. And they are not afraid of the 'Big Bad Wolf.' We'll see how it turns out and how much longer things can go on this way.

Meantime, we are on the right track by accumulating as much Silver, Land, etc. as we possibly can. Even if this wasn't going to happen, these assets increase or maintain their value in ANY condition across the globe.

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