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I see echoes of the late 70s boom followed by early 80s bust in gold prices.
History is repeating itself. Scaremongers who say gold will be the only currency left standing and the world's fiat money system is collapsing are only partially right.
My evidence is the 1920s and 30s.
HUGE property speculation. HUGE debt loads. MASSIVE de-leveraging. Risk aversion leads to seeking "safe havens." Gold bugs immediately seek that, then are totally unprepared for when the economy does recover.
Personally, I think the world will continue to see huge shocks to the system. The Euro will either be totally dismantled and rebuilt from the ground up, or abandoned. If I were a German or French taxpayer, I'd be rebelling in the streets right about now, seeking the heads of my "leaders."
China has seen a humongous and unprecedented scale of property bubble speculation. Their external debt load is only about 20% of GDP. But their internal debt load is a staggering 95% of GDP, mostly built from the prior 10 years. And due to how their economy works, tighter controls will only drive down market investment if one part of the economy starts showing signs of capital outflows. There's a reason why over 80% of rich Chinese want out of the country (on a sidenote, for $1 million investment and starting a company hiring Americans jobs, I'd be willing to give that person a green card).
All this will subside by 2015 or so. Until then we're likely to see deflation in capital markets with inflation in commodities, then eventually once all the bad debt is gone, a recovery in the US markets. Ironically, we may see a resurgence in unions and more manufacturing jobs, though I clearly think that an education in a technology oriented field is the key to future success in our now global world.
Gold will crash. That is a fact. Get out now while you still can. Read up and see the parallels of us vs. late 70s America. Even Bloomberg business magazine agrees with me, and when a stalwart cornerstone of the very edifice which started the whole "innovation" in mortgage "investments" says that, you know its serious.
Read a lot of your posts and assume you are being facetious. Stores will always be there due to the profit motive, irregardless of what you tender for payment.
the reality is there most likely will be no financial calamity that will devestate us as we know it. gold is a currancy,its a competitor to the dollar.
im not a gold bug but gold has always been a part of my portfolio for 25 years . while cash value has plummeted over that time frame my equities and gold are worth far more than even i expected.
just having a plan that forced me to rebalance my gold when it was falling like a rock had it eventually beating an s&p 500 investment over that time frame today..
anyone who rules out any of the 4 economic scenerios that can play out is just plain foolish.
they are
prosperity
deflation
inflation
recession.
we already saw three out of 4 play out depending who you listen to this last decade .
good planning is not ruling out uncertainty ,its allowing for it.
none of us know when something is over valued. in the 1990's i remember when oil went from 10 to 30 a barrell and i cried bubble. well who knew it would be a straight rise to 120 a barrel before falling back a little.
try to rule out any of the 4 basic scenerios and the asset classes that respond to them because you think they wont play out is turning you into a speculator instead of an investor.
an investor doesnt bet on events happening or not happening, a true investor in my opinion accepts the returns the markets give them and everyone else like them ,good or bad that year without attempting to beat the markets returns at their own game.
the folks who got burned this last decade only speculated on prosperity happening. since that didnt play out and they got caught up holding assets that responded well only in that scenerio now they are blaming the markets and scams and ponzi schemes because they bet only on investments that responded to one outcome: prosperity.
Last edited by mathjak107; 11-20-2011 at 09:21 AM..
I bought some gold coins at the end of the 1990s. Sold them earlier this year when gold hit around $1450/ounce. Made a very nice profit. I will buy gold again but not while prices are over $1000/ounce. I don't believe in buying at the top of the market.
I see echoes of the late 70s boom followed by early 80s bust in gold prices.
History is repeating itself. Scaremongers who say gold will be the only currency left standing and the world's fiat money system is collapsing are only partially right.
My evidence is the 1920s and 30s.
HUGE property speculation. HUGE debt loads. MASSIVE de-leveraging. Risk aversion leads to seeking "safe havens." Gold bugs immediately seek that, then are totally unprepared for when the economy does recover.
Personally, I think the world will continue to see huge shocks to the system. The Euro will either be totally dismantled and rebuilt from the ground up, or abandoned. If I were a German or French taxpayer, I'd be rebelling in the streets right about now, seeking the heads of my "leaders."
China has seen a humongous and unprecedented scale of property bubble speculation. Their external debt load is only about 20% of GDP. But their internal debt load is a staggering 95% of GDP, mostly built from the prior 10 years. And due to how their economy works, tighter controls will only drive down market investment if one part of the economy starts showing signs of capital outflows. There's a reason why over 80% of rich Chinese want out of the country (on a sidenote, for $1 million investment and starting a company hiring Americans jobs, I'd be willing to give that person a green card).
All this will subside by 2015 or so. Until then we're likely to see deflation in capital markets with inflation in commodities, then eventually once all the bad debt is gone, a recovery in the US markets. Ironically, we may see a resurgence in unions and more manufacturing jobs, though I clearly think that an education in a technology oriented field is the key to future success in our now global world.
Gold will crash. That is a fact. Get out now while you still can. Read up and see the parallels of us vs. late 70s America. Even Bloomberg business magazine agrees with me, and when a stalwart cornerstone of the very edifice which started the whole "innovation" in mortgage "investments" says that, you know its serious.
I laughed so hard reading this I almost fell out of my chair.
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