Start dumping your dollars for gold, IMHO.

[roamer65]

We have no choice but to devalue the dollar at this point. Countries like India are realizing it and getting out of the dollar.

http://www.businessday.co.za/articles/Content.aspx?id=85875

[BrklynLiberal]

1. I have been telling my son that for a couple of years...but he does not listen to his Mom...

[Why Syzygy]

2. I cannot wait for the

guillotines to go up.

[paulsby]

3. the time to really buy gold was 1998

fwiw, i started investing in a gold fund in 1998. it was like $250 an ounce.

my gold fund QUADRUPLED.

while gold certainly can go higher, just like every bubble, there are lemmings saying that NOW IS THE TIME ***after*** the huge move. seen in real estate in 2008 and tech stocks in 2000.

fwiw, i covered most of my dollar short play, as mentioned, and there are actually some nice swing longs in the dollar index and dollar pairs (paired with yen or euro)

but i just find it hilarious that when gold is at 1000 an ounce, NOW we have gold bugs.

when it was at $250, nobody would even mention it on the financial channels.

[roamer65]

6. IMO, there is much more upside on gold.

Time will tell.

[paulsby]

10. there very well may be

i'm not saying it can't go higher.

NOBODY knows what any market will do

i just make my trades (and investment) based on perceived risk/reward, etc.

it's just not compelling to ME.

but considering i DCA'd into a gold fund for years, don't get me wrong. i lurv gold

[doc03]

8. Remember the silver bubble back in the 70's people

lost billions in that one.

[paulsby]

9. oh yes

that was the hunt bro's.

that. and the scandal portrayed in the movie "rogue trader" (a good movie, btw) were two of the biggies from the go-go era.

in rogue trader, a SINGLE trader single handedly brought down one of the most prestigious banks in england, by overleveraging long bets on the nikkei.

i am NOT saying gold can't go higher.

i AM saying, as a contrarian, i buy when it's cheap (which it was) and sell when it's expensive.

it could go a lot higher, but the risk/reward ratio is mediocre at this point imo

[Art_from_Ark]

23. When gold was $250, it was a "barbarous relic"

Its time had passed. Stocks were the way to go.

[Hoopla Phil]

4. It is too late to get into gold. It is at record highs right now.

[TheWatcher]

13. It is too late for the average person. but if you think this is where it stops, you're wrong.

Watch and be Amazed.

There will be a correction, but this is not the end of the run.

[jakeXT]

33. As Rogers pointed out, inflation adjusted gold would have to be over 2000 to be at record highs

“The old high, back in 1980 adjusted for inflation, would be over $2,000 now, just to get back to the old high. So we’ll certainly get there some time in the next decade.”



Rogers: Roubini Wrong, No Gold Bubble

Monday, November 9, 2009 11:03 AM

By: Forrest Jones Article Font Size

Investor Jim Rogers successfully predicted a rally in commodities back in 1999.

New York University economist Nouriel Roubini predicted the collapse of the housing market and financial meltdown back in 2006.

Now the two gurus are predicting each other to be incorrect.

Rogers says Roubini's forecasts for bubbles to pop in the gold and emerging-market stock markets is just wrong.

“What bubble?” says Rogers, Bloomberg reported. “It’s clear Mr. Roubini hasn’t done his homework, yet again.”

http://moneynews.newsmax.com/streettalk/rogers_roubini_wrong/2009/11/09/283636.html#809189D2-7517-4af1-BAF0-1A36C3BB8640&numResults=0&command=%20m_objCurrentDocument.getElementById%28%27veohrecs_fr%27%29.style.height%20%3D%20%27107px%27%3B%20m_objCurrentDocument.getElementById%28%27Veoh_SpaceDiv%27%29.style.height%20%3D%20%2712px%27%3B%20m_objCurrentDocument.getElementById%28%27VeohCompass.LoadingDiv%27%29.style.height%20%3D%20%270px%27%3B%20m_objCurrentDocument.getElementById%28%27VeohCompass.LoadingDiv%27%29.style.display%20%3D%20%27none%27%3B

[ck4829]

5. If I had a gold coin every time someone told me to "buy gold right now"...

[TheWatcher]

14. If you had done that when it was $200-300 you wouldn't be pooh-poohing it so much probably.

[the other one]

7. Gold is cheap and heading MUCH higher.

I got in when it hit bottom at $279. I would buy more now if I had the spare cash.

Gold won't hit its peak until after CNBC starts running "Gold $5000.00!!!" special programs. And that could be months away...

[Xenotime]

11. Gold is the only thing that has value in a failed economy.

[eridani]

17. Why do people keep mistaking "the economy" for reality?

In reality, you need to be able to eat it, drink it, wear it, build shelter with it, or use it to keep warm or to get from point A to point B. All money is fiat currency, including gold, because it is not necessarily connected to reality.

[Xenotime]

19. Gold has never been worth zero. Because of that, you can get the stuff you need.

[eridani]

21. I'd like ten pounds of tomatoes. Can you change this gold bar for me?

A thousand in tens and 20s if you have it.

[happyslug]

22. Gold has been viewed as worthless, even movies comment in this

One of the side scenes in Casablanca had someone offering her jewels for passage, but was told Jewels had lost their value in Casablanca "for everyone is selling Jewels". In the WWII Nazi Ghettos Gold lost most of its value but what held value was food, for everyone needed food. In today's society the three things you need to survive are food, water and fuel. In any future crisis who has all three (or access to all three) will survive. You can use Gold to get all three but Gold by itself has to value, for it is NOT needed to survive. It is rare and valuable for being rare but you can live your whole life without evening owning any or even touch any (Through modern electronics is very dependent on Gold and Silver in addition to Copper, but gold and Silver while important in electronics, is used only when needed and then in only very small amounts).

No in times of crisis what you need to own is Food, access to water and fuel. People today need all three almost every day of their lives and as such will always have value.

[Art_from_Ark]

25. So how are you going to own food?

Especially if you live in a city?
How are you going to maintain access to water and fuel? The average person can't store these things. It's going to require money to keep that access.

By the way, 300,000 cellphones contain 10 kilograms of gold, enough gold that makes it profitable to extract ("urban mine") it once the cellphones become useless.

[Art_from_Ark]

26. Casablanca was a movie-- fiction-- not reality

A glamorized version of things on the other side of the world filmed in Burbank, California in the immediate aftermath of Roosevelt's gold confiscation order. "Everyone" might have been selling jewels in "Casablanca", but you can be darn sure that in real life most of them came out better than the ones who had nothing, or just paper from a no longer recognized authority.

[happyslug]

30. If you read further on I mentioned the Ghettos of WWII

I used Casablanca for most people know of that picture, most people do NOT know how the people in the Ghettos, but the problem mentioned in the movie was what was happening in Europe throughout WWII, gold was important for those who had access to food, but less important in the Ghettos (Where its ability to get food fell as food prices spired out of control) AND even less important in the camps (Where the gold could buy nothing, for most people were just killed and robbed). The movie was able to showed this for in the movie it was a throwaway line, NOT a statement of why someone died (and thus more easily seen and thus taken in by most people then if people have to watch what was happening in the Ghettos). Remember people avoid unpleasant things, like the Ghetto, but remember nice things like the movie and it is for that reason I brought it up, for the movie made the observation of the price of gold and jewels during time of crisis in a way most people can watch over and over again. The Ghettos, unless you have to actually study them, are a subject most people avoid for it was NOT a nice place to live and thus most people will avoid seeing comments on what happened in the Ghettos just like you did when you jumped on mu comments, you jumped on my mention of a movie but avoided my comment on the Ghettos, just like most people.

[Art_from_Ark]

32. There are some reasons why I did not mention ghettos in my first post

First of all, I wanted to comment on your movie comment in a separate post.

Second, the ghetto scenario is very anomalous in that the inhabitants were essentially in lockdown, that is, they were denied access to the outside. They were virtual prisoners, which means that money and trade took on a completely different dimension than would have otherwise been the case.

[davidwparker]

43. +1

[diamidue]

12. love gold, but

I found this article from a gold site, no less, suggesting that it might be wise to invest instead in food, natural gas, & other commodities while everyone else is now chasing gold. He suggests it may be better to concentrate on investing in things that are still selling at their bottom, not their peak.

http://www.321gold.com/editorials/thomson_s/thomson_s_110409.html

Still, I'd like to have a bucket full of gold & silver coins...;o)

[TheWatcher]

15. Indeed. That is actually pretty good advice.

Gold is way too high for the average person to chase it.

But there are many other opportunities opening up.

[upi402]

27. I distrust anything I can't posses and hold. Traded paper is for the toilet, imho.

If I am to invest in commodities like LPG or food, then I must invest in paper representatives of a partial position which is just a promise. I don't trust that.

As for food as a commodity, I've watched the film "Food Inc." and see that sector as controlled to the point of corrupt. So owning a physical farm is out, for many many reasons!

How would a cynic like me invest in anything BUT gold?

[Odin2005]

16. BS bubble hucksterism.

[TheWatcher]

36. Actually that's what your Hero Helo Ben and Geithner shove at The Public on a consitent basis.

The Artificial, unsustainable run-up in the Stock Market, the Bogus Recovery, that is the BS Bubble Hucksterism that people like you PROMOTE and DEFEND constantly on DU.

Just another one-line, meaningless attack with no substance.

Go watch CNBC.

There is nothing for you here.

[Statistical]

18. Gold has roared way past dollar devaluation.

Here is a comparison of Euro-Dollar and Gold.

http://www.google.com/finance?chdnp=1&chdd=1&chds=1&chdv=1&chvs=Linear&chdeh=0&chdet=1257435779834&chddm=262&cmpto=NYSE:GLD&cmptdms=1&q=CURRENCY:EURUSD&ntsp=0

Yup the Dollar has declined about 20% in last year. If you want a more broad based view look at dollar index which has declined about 12%.
However in the same time period gold has risen 50%.

The dollar could devalue another 20% and simply from a dollar value perspective gold would STILL be overpriced.
Generally when everyone and their brother "knows" xyz is heading to $5000 that is usually when it turns around.

Will dollar likely weaken further? Of course.
However there are non-gold plays for that.

Commodities like oil, nat gas, agriculture products, steel, coal all benefit from weaker dollar AND rising worldwide demand.

Another play is to hedge the dollar (and other low interest rate currencies like yen).
DBV is an ETF which looks at national interest rates and goes long on 3 there G10 countries with highest interest rates and goes short on the 3 G10 countries with lowest interest rates.
As the fed interest rate policy has a large influence on the value of dollar countries with higher interest rates tend to have stronger currencies.

Nice thing about an ETF like this is it is all done for you. As interest rates change the long/short currencies change also.

[girl gone mad]

20. Historically, India has always bought gold close to the top.

I wouldn't base my decisions on their actions.

[Art_from_Ark]

24. Any data to back those assumptions?

I would like to see India's historic data on gold purchasing

[upi402]

28. Anecdote: Asian people tend to buy gold for personal reasons

Rich investors in those countries buy for investment, but there is a much bigger retail gold market there for weddings and social reasons.

[SlowDownFast]

29. Silver's good, too.

If one can't afford gold.

Silver will actually outperform gold in the long run - percentage-wise.

I'm still a buyer in at these prices (sub-17's/oz).

'Member gold hit over $20 not that long ago.

It will go even higher -to stay - soon enough.

[A HERETIC I AM]

31. This is the best investment advice ever. Buy at an all time high.

One should always buy a commodity at the point when it is trading at a historical high point.

This is a sure fire, certain way to gain wealth.

Yup.


Always buy high.

Always sell low.

[jakeXT]

34. Reminds me of Gordon Brown

http://www.youtube.com/watch?v=EzVhzoAqMhU&feature=player_embedded

[Statistical]

35. Can't believe anyone would divest that much of any asset in single sale.

Utter stupidity. How about announce a plan to divest the gold over course of 2 years at rate of 4% per month.

I make multiple purchases or sales when getting into equities and that is couple thousand dollar position. Same logic makes even more sense with a couple billion dollar position.

[Art_from_Ark]

46. Don't buy at all-time highs

Now you tell me. I was still buying gold in 1973 when it reached the unheard-of level of $100/oz

[Art_from_Ark]

47. When you made your comment, gold was at $1100/ounce

Today, it's at $1160/ounce.

When I bought my first gold coin in 1968, gold was $35/ounce. It has since reached many all-time highs, including the January 1980 price of $850 (which no one was actually trading at). The price of gold was kept low in the intervening years due to mainly market manipulation by (mostly European) central banks, relatively high bank interest rates, and greater profit potential in the stock market, among other things. But now those circumstances have been reversed-- the stock market is just a big crap shoot where you can be swindled out of money legally, bank interest is next to nothing, and European central banks have announced limits on gold sales. Furthermore, the money supply is being inflated with trillions of new dollars, and big new players like China, India, and even Sri Lanka are getting into the gold-buying business. How long this will continue is anybody's guess, but the current trends point to more of the same, with occasional downward adjustments due to profit-taking.

[A HERETIC I AM]

48. Have at it there, Art.

I'm happy you feel comfortable buying gold at this level. Every properly diversified portfolio should have a position in precious metals.

As I said, This is the best investment advice ever. Like buying oil at $145.00/bbl Hey, it went to $147.00, didn't it?

How long this will continue is anybody's guess

Absolutely god damned right. (BTW, I'll call this "The Hedge Clause")

but the current trends point to more of the same, with occasional downward adjustments due to profit-taking.

For the sake of you and everyone else who follows the OP's advice, I certainly hope so. (And this "The Speculative Clause")

May all your trades be net gains.

[Art_from_Ark]

49. Personally, I don't feel comfortable buying gold at this level

Heck, I thought the market would top out at $600. But all these new developments have come into play-- the China card, the India card, even the Sri Lanka card (?!). Moreover, the European banks are getting out of the market manipulation game, South African reserves are drying up (and it's costing more and more to get what's left), the US is printing/fabricating dollars like there's no tomorrow, and personally, I don't think the rest of the world has too much confidence that Obama can do a whole lot to get us out of this mess. So the trend will likely continue, for a while at least. It could crash a bit, especially if India or Sri Lanka decide to cash in their hoards.

So, speaking just for myself, I stay away from strictly bullion at these levels and just look for collector coins that are selling for at or near the bullion price, especially coins that seem to be undergraded. But people who don't know anything about collector coins should stay away from them.

[cbdo2007]

37. I don't really understand the value in gold.

I admit I'm pretty stupid and highly dense. I've researched the Stock Market a lot lately and know quite a bit about it, but the "gold" thing is perplexing to me as an investment, especially as something people are falling back on if they're worred about the economy vanishing.

It seems like if the economy really did collapse, the value of gold would drop out as well because not all that many people own gold, so it's not going to become the new currency if 99% of the population has none. Then in order to disperse it, wouldn't the value greatly drop to pay for the small items needed restart the economy?

I don't know but it seems like the more the economy improves and as we move past the recession, it seems like the gold price is going to go way back down in another decade to bottom out around $600/oz.

[Art_from_Ark]

38. Gold, more than any other currency instrument,

best meets the requirements of a monetary medium. Viz, it
1) is available in relatively scarce amounts, but is not too rare like platinum
2) does not diminish (through chemical reaction, combustion, corrosion, etc.) over time
3) cannot be artificially produced (unlike paper/electronic money, which can be "produced" at any convenient time)
4) is viewed as a monetary medium around the world
5) has a longer history as money than any other monetary medium
6) represents a large value in a small amount and is thus relatively easy to transport

[cbdo2007]

39. Thank you for your response. I understand why gold is important

overall and the points you mention...but I guess strictly as a new "currency" if the dollar really became devalued to nothing. Who knows, maybe I'm never going to understand it...like maybe it's beyond my level of comprehension, but it seems like if something that major happened, the number of US citizens who have gold available to use is going to be beyond miniscule, probably .1%, so wouldn't the govt suspend trade temporarily and produce fewer dollars or create a new monetary system rather than gold actually becoming something that is used as money?

Like on a grander scale, I can't comprehend it because there are too many Americans who already have/produce goods, while very few people actually have gold. Does that make any sense?

[jakeXT]

41. Other risks are taxation or confiscation of gold

New currency is a possibility

http://www.youtube.com/watch?v=0-ZZFmKFk1s

[clixtox]

44. In SE Asia and China, regions that have a constant history of tumult...

gold jewelry has been used as an alternative to the "banking system" and to backstop fiat money when it loses fungibility due to hyper-inflation, "regime change" and other calamities for centuries.

These countries, Vietnam, Cambodia, Thailand, Laos, Malaysia, Singapore, China and Hong Kong, Burma, etc., especially the many residents of Chinese ethnicities out side of China, have used 23+ carat (or karat) gold jewelry, often linked necklaces and bracelets, and small 5 gram and 10 gram sized "bars" of "24" carat gold as "insurance" for potential disruptions.

The links of the gold jewelry can be easily removed and sold in "jewelry" shops, which are ubiquitous, or traded for commodities if the local currency loses viablity/fungibility. These gold "chains" are sold for a very small premium above the intrinsic/market gold value because of the low wage structure in these areas.

These traditional style "Chinese" gold jewelry shops are located in "Chinatowns" around the world, but the "workmanship" premium is, of course, higher in the "developed" countries.

[Warpy]

40. There are some real disadvantages to gold

and IMO it's best left to institutional investors. It's especially risky now when institutional investors are manipulating commodities markets.

While gold generally holds its value in absolute terms when a currency is either inflating or deflating, it earns nothing.

Gold is a thief magnet. Unless you bury it in the back yard under a koi pond or in some other equally inaccessible place, it draws people who think they have more right to it than you do.

Gold stocks and mining certificates have been oversold and many aren't worth the paper they're printed on.

If things become desperate, gold rarely manages to fetch its absolute value in goods or services. Stories were common during the Depression about people trading solid gold items for diner meals because there was no one with the money to buy them.

I do have gold kicking around, but it's all in jewelry that I like and actually wear from time to time. That's about the best way to "invest" in it for people of modest means, in small and easily traded pieces.

It's still a thief magnet, though.

[Art_from_Ark]

45. Thief magnets

Gold is much less of a "thief magnet" than a new car, a nice house or even nice clothes. Unless you go blabbing around that you've got it in your house, how will anyone know? Plus, gold is so small, there are plenty of places to hide it in your house if you use your imagination (and if that's where you want to keep it).

The trick is, don't go blabbing that you own gold, especially if you keep it in your house. If someone knows you own some, be discreet. If they ask you about it, or even of they don't, say you had to sell it to make the house payment, or pay for junior's tuition, or that you're just down to a couple of coins in the bank vault.

[EmeraldCityGrl]

42. If you sell your gold, sell in Euros...

Also, start collecting seeds...seriously.