You are going to lose some watts on conversion (lost as heat etc.). It's a big waste to convert your low voltage DC power from the solar panels to line voltage AC, and then back to low voltage DC in the car to charge the battery. There should be a better way.

Help me solve an investment question.

I was asked by a family member if it was dumb to take out a loan to buy gold.

Brief background:
- He is someone who invests ~600-1000/month in physical metals, mostly gold lately.
- He will continue to spend his 600-1000/month for the foreseeable future if he doesn't take out a loan to purchase a bulk of gold right now.
- He likes to invest in some numismatic gold coins as well. Some of these which he believes will increase in value beyond the spot price.

He said he was thinking about a loan of $30,000 over 3 years at 6%. ($913/month x 36 months = $32,868) It would cost him $80/month to service the debt for a total of $2,868 over the life of the loan.

If he spent all $30k on gold today at $1617/oz he would hold ~18.5 ounces of gold. At then end of 36 months gold would have to be $1776/oz just for him to break even on the debt service. (these numbers are fudged in his favor bc bullion sells for a premium over spot, but there are ways to minimize this premium)

Here is the kicker, he will be able to buy some scrap gold from another family member who owns a pawn shop at 75% of spot. Although he won't be able to buy $30,000 all at once, he could buy ~10k every 3 to 4 months due to supply from the pawn shop.

If he did a one time buy of scrap for $10,000 at 75% of spot he would have $13,333 worth of scrap gold with $20k remaining to buy bullion with.

Questions
Is this a good idea?
How much do smelters charge?
For a 15% return on his money, gold would have to be ~$2040/oz. Any opinions on this?

Any other comments are appreciated as well.

This "scrap" gold that you mention, does it typically sell for 75% of spot, or is your family member getting a steal here? I've got no idea what smelters charge but common sense would tell me the profitability of this hinges on whether or not he's getting a good deal on the scrap.

For small amounts of gold, it can't be that hard to do yourself. Just need a few tools, and you are good.

The pawn shop owner sells it to his gold buyer for 75% of spot. What the gold buyer does with the scrap is not known.

We started talking about dollar cost averaging when comparing the two options (30k loan vs ~30k over 3 years)

Any opinions on which option will have the lower dollar cost average?

I just skimmed though a book called gold bubble. I decided to make a chart of some assets that have not appreciated as much as gold in the last 20 years.

metal 1990 2000 5/2012
cu ($/metric ton) 2365 1843 7896 3.3 4.3
al ($/metric ton) 1528 1679 2002 1.3 1.2
au ($/troy ounce) 410 284 1591 3.9 5.6
ag ($/troy ounce) 5.24 5.23 28.88 5.5 5.5
steel (m.t. Cold) 530 370 900 1.7 2.4
nickel (metric ton) 7056 8315 16968 2.4 2.0
uranium (lb) 9 9.55 51.89 5.8 5.4
zinc (metric ton) 1294 1178 1928 1.5 1.6
pb (metric ton) 707 471 1999 2.8 4.2
total debt (trillions) 10825 18225 38644 3.6 2.1
plywood ($/sheet) 3.17 4.56 6.11 1.9 1.3
cotton (cents/lb) 75.2 47.43 88.53 1.2 1.9
gasoline ($/gallon) 0.64 0.71 2.88 4.5 4.1
beef ($/lb) 1.26 0.88 1.87 1.5 2.1
shrimp ($/lb) 8.9 17 8.23 0.9 0.5
banana ($/MT) 589 483 955 1.6 2.0
oranges ($/MT) 456 348 756 1.7 2.2

The 2nd to last column is retunr since 1990 and last column is retunr since 2000. Thus gold has 3.91X since 1990, and 5.6X since 2000. If you consider things that are real that have not risen as much you could look at aluminum, nickel, zinc, wood, cotton, or shrimp that have not risen nearly as much. Some wood stocks yield in excess of 3%. total debt is based off z.1 fed tables.

lock box (#3) was hungry, so even though the markets were getting punched in the face i took a trip to the coin shop today...

he had a lot of gold, but everything was either ounces or numi, both out of my price range. i did buy a 1 pennyweight 21k coin from somewhere in south america (forget).

when he told me 17x face for 90%, i went that route. 25 dimes, 30 quarters, 20 halves, no wear at all and almost unc. yes pls.

i really wanted maybe 10 silver eagles, and i know he has them but i felt bad pushing. he did have probably 20 ms69 eagles he wanted $40/each for. and i do have an ngc box i'm 5 away from filling, but meh. 90% was the deal of the day.

$20 face of 90% and 1.55g of 21k gold for ~$400. good day. lock box satisfied for now.

oh and 4 boxes of pennies from the bank because, i'm still doing the copper-sorting thing.

wife's not gonna be happy when she gets home that we're not getting take-out and have to grill chicken instead, but she'll get over it.

hopefully.

Lol gold!

He should buy the scrap gold. If he doesn't want to then I'll gladly pay 85% of spot for it.

Getting your gold melted is cheap.

Has fofoa written anything about this old Martin Armstrong article?
http://armstrongeconomics.com/693-2/...should-buy-it/

So barring the GATA argument....Armstrong doesn't agree with fofoas physical plane theory?

Thoughts?

By the way, in case it wasn't obvious, there's still time to buy gold, imo. Benny B. is basically guaranteeing 20%+/year roi with QE3.

never stopped.

coin shop has had a ton of dos pesos lately, so i've been snapping them up.

Anyone here follow or particularly knowledgeable about gold stocks?

So far I've only bought physical bullion, but a friend of mine is buying shares in New Gold (NGD on Nasdaq) and suggested I do as well.

I don't follow gold stocks / miners & have no way of making an informed decision, but I would like to diversify some.

Anyone have any informed opinions?

stay away unless you know what you're doing. stocks add a whole other element to the mix. The gold price just becomes one of many variables to consider.

If you're up for that task and are apt to make a prediction on all those variables relating to the particularly stock you plan on undertaking, then go ahead. Definitely dont dip into the market on whims or tips IMO.

I have like 10k eur to invest but I already have almost all of my wealth in gold.

Im willing to take more risk with it. Levered silver perhaps (AGQ?)

@above; gold stocks correlation with bullion gets destroyed during crises and crashes. I.e. it's not a great hedge. Apart from this most gold stocks can be specified as a 2 factor model w.r.t. the domestic index and the gold price, where the mean of both coefficients is very positive. So you're getting positive risk exposure from 2 sources with gold stocks instead of just 1 source from gold. Standard factor model assumptions state that the E[r] should be equivalently higher due to the higher systematic risk.

For "when" to buy gold, the best timings based on empirical data are revealed in this working paper: http://papers.ssrn.com/sol3/papers.c...act_id=1989593

Don't listen to anyone without empirical data. The human brain is very well known for seeing patters where absolutely 0 patterns exist (e.g. time series data such as financial market data which is mostly just brownian motion type noise).

You should just have gold as part of a diversified portfolio as determined by something like resampling or black litterman. It doesn't make sense to have an undiversified portfolio of gold.

I got a 1 kilo silver Libertad in the mail today from APMEX and I have a question.

I'd like to open the case (it's not proof-quality or anything) but can't for the life of me figure out how to open it. The top and bottom of the coin have a sort of lip around the faces, but it doesn't seem openable. There's also a seam around the side, near the bottom face, but it's extremely tight. I can't even get the edge of a knife down into it to try to pry it. I can fit a fingernail but nothing more.

Any tips? I'm tempted to just break it open and buy a new coin holder.

I am having a hard time finding a bank that will give me a loan on my gold. Looking to get anywhere from 75%+ on it. Why is this? The banks I contacted have never done it and don't know what to do. Any suggestions?

where is my $3k yo

you should consider billing him for the time it took to find that post as well

i know some people who are interested in financing against gold. PM if you're interested. You'll need to agree on a way to satisfy both parties security in the collateral in the intermediary is all.

a bunch of people linked it for me in celebration threads

Hi
How come no one asked Obama (in his latest press conference) about the FED increasing the monetary mass?
They asked questions about the diplomat that got killed in Libya, they asked about the climat changes, Iran and Syria. That s all