Ok, don't "invest" in copper nickels.

Don't be an idiot, 28%... unless you hold for less than 6 months, which the cap gains tax as a collectible is 35%. I hate correcting myself.

Hopefully the word has gotten out by now, though shunned by the most all major media, the gold and silver price manipulation has gained some overdue attention recently, exposing a 100:1 paper to physical gold scheme and ?:1 for silver. Gold and silver have rallied on the news and a large decoupling (phys./paper) is possible in the coming years where the true rarity is realized and the supply (for sale) is extremely low. Time will tell.

http://www.nypost.com/p/news/busines...MK7mb1uJeVHb0O

i was thinking of asking something similar. basically if the coins can act as both US currency as well as a commodity then it seems as though its a better alternative to keeping ur money in cash (assuming something was doing that). Would this work if someone were interested in holding some cash to stay liquid but also wanted to protect against hyper inflation? or during hyperinflation times the nickels wouldnt have the commodity value?

My latest blog entry on gold.

nestegg..... when you buy a gold future's contract or some sort of gold derivitive or ETF, then you run the risk that your gold isn't really there and that you don't really own any gold... you just own a promise to be paid gold by someone who probably will go busto if the price goes up too much. if the comex goes bust, you probably will not have your gold... if it turns out that GLD does not have all the gold they claim to have, then you lose money. if you buy something like a scotia bank gold certificate, you run the risk that the bank cannot come up with the gold when many people try to redeem their certificates all at the same time.

if you own allocated gold in a safe place, then you'll be in good shape. and if you keep some gold at your house, i don't see how you would get robbed if you didn't tell anyone about it... or if you hide it really well (in a fireproof safe) or bury it in your back yard... i think it'll be pretty safe.

we have heard reports that there are up to 100 oz of paper gold for every 1oz of real gold... so when people who think that they own gold figure out that they really don't, there will be a mad scramble for physical gold and the premiums for physical gold would likely soar above the prices you would pay for these synthetic derivative products.

so if you want to own gold, you should own the real thing. because for example, let's say you buy a comex futures contract. then the price of gold goes way up, a bunch of people start requesting delivery, and they can't deliver the physical gold. so the exchange defaults, and maybe you get paid back in US dollars for the price of paper gold when the contract is due (or maybe you get nothing, since there may not be any public will to bailout a bunch of goldbugs who will be labeled as evil speculators). when you get your US dollars, now you have to go into the physical market to buy real gold and you'll have to pay a lot more than what the comex gave you in order to get the same number of oz of gold since everyone will be trying to buy physical and no one will be selling.

and it is also a good idea to have sortable food, water filters, guns and ammo along with your physical gold and silver.

also, the costs to buying physical aren't very much more than buying the various paper gold products. and the costs of storing your gold is pretty small also... places like the perth mint don't charge for unallocated storage.

if the US government makes physical gold illegal to own, that's when you'll probably need it the most.

and if the world breaks down, someone is a lot more likely to sell me some bread for an ounce of physical gold as opposed to a piece of paper that says you own shares in the GLD ETF. Look what happened in Zimbabwae... their currency collapsed and they went back to trading in grams of gold... so if you want a possible example of what could potentially happen, look at Zimbabwae right now... people there pan for gold in order to survive. they need about 0.3 grams of gold per day buy the basic necessities.

but the great thing about physical gold, is that if things ever got really bad, you can put your gold in your pocket, and go to a country on earth were things weren't all messed up, and people there are very likely to exchange your gold for the local currency. you don't need any accountants or stock brokers or anything like that. almost everyone in the world knows that gold is valuable and there are coin and jewelery shops all around the world willing to pay near spot for gold coins or bars. if you go to some country with your comex futures contract, i don't think you'll find anyone who will accept it as if it were gold.

so you're giving up all of these advantages to save a few percent on your investment. but the reason you own physical gold is to hedge against all these things... it's like financial insurance. so you don't want to screw around trying to make an extra 1% or 2%. you own gold because it's real... you can gold it in your hand... that's why it functions so well as money... and the whole idea about owning gold is that you have your wealth stored in something real and tangible and that your wealth isn't all just paper and electronic digits in a computer somewhere.

"so if you want a possible example of what could potentially happen, look at Zimbabwae right now... people there pan for gold in order to survive. they need about 0.3 grams of gold per day buy the basic necessities."


They pan for gold because that's what the guys with guns want in exchange for food.


"but the great thing about physical gold, is that if things ever got really bad, you can put your gold in your pocket, and go to a country on earth were things weren't all messed up"


The thugs with guns would never allow you to leave the fatherland with your gold.


He who has the guns makes the rules. Get guns. Kill them all. Take gold. The f do.

Steelhouse is awesome.

Says it's 35% gets corrected and corrects the corrector to a different amount. Excellent.

Cause if the 2+2 politics forum has taught us anything it's that securing a border is EZ.

ya, i don't keep my gold in a bank... so you do have to be really careful about where you have your gold stored for you.... and that's why it's better to store your gold yourself in your house.

guns and ammo are good... but it's not going to store your wealth. gold is a store of wealth.... and i guess you may need guns to protect that. but guns and gold are the way to go.

it's pretty realistic to have 50oz of gold.... but i couldn't imagine having $50k worth of guns and ammo. so you can't really put all your savings into guns and ammo because that's just silly.... but gold will probably be a good investment, even if we don't get this worst case scenario (economic collapse).

Your thinking is too small in this collapse scenario hypothetical plowking. You don't just keep the 50k in guns and ammo to yourself. You give most of them away to locals that you can trust and become the county warlord. Then you try to expand into other counties. Then you build Thunderdome and make people fight to the death as you sodomize their women. Now that's power!

Just N of Sherwood, ND or S of Fort Hancock TX ?


IMO at the margin, wealthy institutions and individuals are RE-recognizing gold as the historic store of value and true money.

Perspective gradually will change to view gold as the constant and the various currencies as fluctuating relative to that constant, not vice versa. Ultimately, as Kudlow recently and many others formerly have conjectured, there may be a return to a national and/or global gold-backed monetary system.

You can acquire physical gold for around 1.5% over spot in larger quantities from a large broker and could certainly get physical gold at 20-30% below spot if you are purchasing from a motivated seller in the private arena.

You have claimed that physical gold probably gains negligible protection when compared to a derivative. It is clear that recently it has been exposed (though many have claimed for years) that paper gold traded 100:1 against physical bullion. That is not negligible.

To be clear, one of the beauties of gold to the investor... ZERO COUNTER-PARTY RISK! Gold instruments are very risky to hold in a physical short squeeze.


Store the gold in your residence, a large, secure safe bolted to the floor (a 500lb safe is optimal). Usually someone with a good amount of capital already has a safe.
Well that is wrong, you actually can. Who told you that?
http://www.firstnationalbullion.com/index.php/leverage
http://americanpreciousmetalsllc.com.../leverage.html






The gold confiscation was directly related to the US being on the gold standard at the time. Very few prosecutions were actually related to the order. Aside from that, this would serve the US only if it were to re-monetize gold. Why would you go door to door when there are trillions of electronic dollars to create or confiscate.


Big safe... get one.

Side note: always be prepared for a break in.

Gold is money and you could go to any country in the world and it will be accepted for goods, services, and/or local currencies.

Silver is for bread.

A gun, food and water... ok, now that we have spent .001% of our portfolio, we should allocate the extra capital to other areas in order to preserve it and most likely increase it exponentially.

hahahahahaahahaha.

bring on the collapse!

Gold will never be used by itself as a currency. Instead you will just exchange gold for whatever currency is popular. Nobody is going to be carrying around metal coins with them. Or people will accept a currency that is directly backed by metals. There isn't enough gold in the world for 6 billion people to directly use it.

Well it was "used by itself as a currency" for very long periods of time throughout history, so... not true.



http://goldmoney.com/index.html
Here's an easy way to do that now.


Most everyone I know does carry metal coins in their pocket in the course of a normal day.

P.S. Yeah, I know what you meant.

That would depend on the valuation. Of course what you have proposed is quite true if gold were in direct use, there would be some logistical problems there, to say the least.

http://www.tradersnarrative.com/the-...aven-1219.html

http://www.forbes.com/2009/12/16/app...llar-gold.html

You should also research various behavioral biases, such as the well observed bias of people consistently willing to call a downtrend on the S&P at every level regardless of the uptrending.

While gold may be a fantastic speculative investment for the near term, I think people hoarding physical gold are absurd. Even if the US government defaulted on everything, the first thing it would do is maintain order, and issue a new currency, enforcing laws that make you use that currency. The army and marines would be in the streets arresting and combating dissenters, without a doubt, and after a bit order would be returned. For a while, there may be riots, followed up by some sort of emergency currency distribution system. But overall, even if fiat currencies came crashing down it's pretty clear historically that the government stays around.

Now given that scenario, even in a fiat currency crash, stocks will retain value. Unless the legal and regulatory mechanisms in place throughout the world all come crashing down (read: mad max, highly unlikely), in the aftermath of such a catastrophic meltdown contracts would still be enforced. GM would still legally own factories, and perhaps it would renegotiate a lot of it's contracts with workers but ultimately owners of GM shares before the meltdown, would still have shares after the meltdown. It's in this manner, that equities aren't completely tied to fiat currencies.

Now beyond this, real estate shares the exact same principles of gold, except for the speculative bubble formed in times of high fiat volatility, and this speculative bubble is a self-fulfilling prophecy not some sign of inherent gold equity. The legal rights which protect gold, and anything else you plan on owning also protects any other physical asset. Therefore, it is nonsensical, other than speculation on a short term crash-oriented bubble, that gold would be a better asset to hold than any other rare form physical asset. There is no historical basis for countries to cease governance even in the face of fiat disaster.

Most importantly, because of the fact you are speculating, you become time sensitive. You have to time the gold bubble correctly for otherwise opportunity costs of holding will be suboptimal, as you might as well hold other assets and buy gold at a later date. This is the tricky part, because if you scream fiat collapse every day, you might be right one day but lapped in wealth by anyone who isn't a gold bug and bought gold at the last minute.

Now when you use fallacious arguments like "these top funds are buying gold," are they buying physical gold? What are they doing? Do you think they are you? Because I don't. I sincerely do not believe Soros nor any other famous hedge fund manager holding gold to this date believes that fiat currencies will come crashing down and you will be bartering gold for cans of coke. The fact that you hold this belief is hilarious. If you understand probability at all, even if you're right that fiat currencies are crashing imminently, I'm right in not acting on it. You are betting on an incredible fringe event, of which the odds and price are wholly against you. That is to say, the odds might be great for a speculative gold bet, but boy are they bad for a physical gold apocalypse bet. Anyone doing so should be well informed to realize they are subject to a wide variety of irrational behavioral biases, regardless the outcome.

http://eclipsenow.org/2010/04/13/200...-peter-schiff/

So you're saying there will be no sodomy and Thunderdome for Slater?

Yeah because what makes things valuable is their availability, like drawings of dead guys.

Gold has seen just shy of a 100% gain since this was written 3 years ago, and goes on to assume things that are ridiculous.


Ok, let's start with a quote from this genius...
Great link. (he spends most of the article talking about some of the negative consequences of the gold standard)


lol, it's called Mass Psychology by James Dines
So in your mind this is the motivation for the non-billionaire physical gold holder? You realize this is a tiny percentage of people, gold bugs or not, are expecting Mad Max levels of chaos.

What about the bondholders...lol

Gold has been less volatile than the S&P500, (1971-2010 data) and has been shown to be a better hedge against currency devaluation than other commodities. In a diversified portfolio gold reduces risk.

When run through an optimizer, in a medium risk portfolio an allocation to gold can enhance portfolio performance even if you calculate a 0% return (for gold).
http://www.marketknowledge.gold.org/...case_for_gold/

Doomsday is not worrying many precious metals investors right now imo.


Some speculate on currency collapse, most do not.


The smart ones are yes... and mining companies.


Were you trying to address anyone in particular or just speaking to the tiny percent of Mad Max doomsayers.

Uh, cool story bro.

I dunno, seems like most all of your contentious points were flawed. (no off.)

On to your last point the collapse...



How long do you think a lack of currency would last... 1 month... 6 months? No, you mean a true devastating, all services are crumbling, collapse scenario.


Yes. Gold=money, money=goods and services
This has worked out for over 5,000 years.


Bartering with power?? I can imagine...

Hello Mr. Farmer, I would like to make a trade, I want 50lbs. of wheat and two pigs, in return I will give you unbelievable power...


I think the global economy will break down at some point, however this does not lead to a Mad Max scenario imo.

Have you heard anyone saying that there will be a Mad Max collapse and they have gold, so they are safe based on that?

I don't think gold is a bad speculative bet, if you read carefully I never said it was, nor do I hold any opinions toward gold's future. I do however think gold is a bad speculative bet if you are giving up leverage, and you think it's some kind of mad max bartering hedge.

if you understand anything about the state of the US economy and how much debt you guys are printing, you'll start to think gold is a better and better investment cause your dollar is going to **** over time

having said that, GOLD will be a solid long term investment as will the chinese yuan

and if you believe global growth will continue on, then energy such as uranium are also good long term bets

If you map it out properly, it is actually a good investment and not exactly a speculative bet.

Yes, a Mad Max bartering hedge, it may not be.



I'll take the 100 bars of gold, you take the bread, and I'll come back with the army I hired with your gold bars to take it from you.

I understand what your saying (and still disagree), but who are you trying to convince? I have stated here, no expectation of the apocalypse.

BTW no hard feelings nestegg, dxu and synth. It seems that many people have a misconception about the motivation of gold players... including myself.

However I have heard this so many times before, if it really gets that bad, who is going to care about a shiny rock. Me. If it doesn't, we still have a major bull market in gold for 3-5 years from today.

Fair enough, I feel a 1.5% premium is quite negligible, but fair enough, point taken.