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Gold is a good investment when government put interest rates too low compared to inflation (interest rates - inflation), and the new production of gold is low. It is a way to protect yourself against a government who prints up a lot of money and put interest rates down to 0 at the same time. (Hence, many countries have banned gold trading.)
That sounds like now. Interest rates has been around 0-2%, there has been massive dollar printing and gold production has dropped since the peak in 2000. From 1980 to 2001 gold lost 80% of its value. Since 2001 after the massive drop in interest rates the gold price has risen by 400%. If you kept your money in the bank you would only have gotten about 15%.
Gold is a good investment when government put interest rates too low compared to inflation (interest rates - inflation), and the new production of gold is low.
That sounds like now. Interest rates has been around 0-2%, the dollar would have gone the other way if no money were printed and gold production has dropped since the peak in 2000. From 1960 to 2001 gold lost 80% of its value. Since 2001 after the massive drop in interest rates the gold price has risen by 400%. If you kept your money in the bank you would only have gotten about 15%.
Good point. What has been strange was Gold in the past followed inflation on it's way up. I got out of PMs 6 mos before the price went to the moon.
Good point. What has been strange was Gold in the past followed inflation on it's way up. I got out of PMs 6 mos before the price went to the moon.
True, but I don't think it strange at all. Inflation tends to rise before interest rates, hence gold become a good investment object. I did a mistake in my previous post I meant that prices has dropped from 1980 to 2000, not 1960 to 2000. And we can see 3 factors that affect gold prices, inflation, interest rates and gold production. Gold prices are adjusted for inflation.
So pretty much when you see interest rates go up, inflation go down and gold production up, sell your gold.
However in these times that is unlikely to happen. What is more likely is that we see stagnant gold production, higher inflation when US needs to deal with its debt problems, but no noticeable gain in interest rates. And in that case gold will be a good investment object. But US may ban gold trading like other countries, because if too many people own gold it reduces the effectiveness of money printing.
Gold bullion is real, honest money...and, many say, the best form of money the world has ever known. It is a store of value and a safe haven in times of crisis. Gold is rare, durable and does not wear out in the manner of lesser metals (or paper!) when passed from hand to hand. A small amount, easily carried, can purchase a significant amount of goods and services. It is universally accepted, and can be easily bought and sold around the world.
Today, the beauty of a gold bar lies in its ability to diversify investments, protect wealth and preserve one's purchasing power.
Closed @ $1769 today.
Will open tomorrow much higher.
Using inflation to buy the debt they created, only hurts the poor and middle classes.
They have been doing it for decades. Just this time, there is no productivity to fall back on. It has all left and gone to China & Indonesia.
Actually, it has no intrinsic value and is prone to speculative bubbles, like many other assets.
So it may go up, particularly in bad times, but it will not "never stop." And you can lose your shirt with that sort of a mentality. What comes up also comes back down.
Actually, it has no intrinsic value and is prone to speculative bubbles, like many other assets.
So it may go up, particularly in bad times, but it will not "never stop." And you can lose your shirt with that sort of a mentality. What comes up also comes back down.
All I have to say is wow Go back a couple of pages as I already explained in depth why gold has lots of intrinsic value.
I must agree with Lost Leaf. WE are or have been there, what you hear from all of us that lived gold ownership is where you should get your advice. PM ownership can mean different things to us all, but ether way we all know the basics . Actually its not rocket science , and, can be a fun hobby along with an investment you can get your hands on, feel it, ITS REAL ! How refreshing.
Gold is a good investment when government put interest rates too low compared to inflation (interest rates - inflation), and the new production of gold is low. It is a way to protect yourself against a government who prints up a lot of money and put interest rates down to 0 at the same time. (Hence, many countries have banned gold trading.)
That sounds like now. Interest rates has been around 0-2%, there has been massive dollar printing and gold production has dropped since the peak in 2000. From 1980 to 2001 gold lost 80% of its value. Since 2001 after the massive drop in interest rates the gold price has risen by 400%. If you kept your money in the bank you would only have gotten about 15%.
Gold mining and production has been ramping up in fits and spurts since ca. 2000. One big reason is the global wealth moving into Indian subcontinent, where women't gold jewelry is a very strong and stable market. This will act as a buffer, so the price won't bottom out as low, most probably, as it did in the past. Even so, there is so much bullion around now that the bust is inevitable.
Much reclaiming is done now using new technology and methods; old crushed ore dumps are very often rich in micro-flakes of gold, which can now be reclaimed, but could not using the old methods of the 20th century and earlier. Mines are also profiting from new technology, and known deposits that were simply too hard to process in the past are no longer beyond the profit margins needed.
There is plenty of the stuff around. The old methods didn't deplete most deposits; the mines just didn't have the means to make the difficult ore profitable in the past, so they shut down. They will probably shut down in part again, for at least until the market levels out after the bust, but the current prices are so high that the companies can ride out the bust this time.
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Go back a couple of pages as I already explained in depth why gold has lots of intrinsic value.