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The difference is, a HOUSE gives you shelter from the elements.
Try that with your "100 ounces" of gold.
Ken
Your home can be taken for many "reasons". It also requires ongoing "investments" and expenditures. Gold does not.
Not sure what 25yrs you are referencing either? I don't think any investment strategy should have all its eggs in one basket.
My theory is that many believed what they were told by the Wall Street Journal editorial pages, namely, expansionary fiscal policy and loose money from the Fed was going to cause high interest rates, inflation and devaluation of the dollar. Those would have been ripe for gold to sour.
Since this didn't happen, gold investors are reversing their positions.
No doubt a lot of people did believe the Wall Street Journal editorial pages, and were proven incorrect and have reversed their positions given reality, but many people still believe in gold as some sort of salvation from a big societal collapse.
History is what shows the value of gold over time. True there are all kinds of bubbles being blown. Plenty of people have done fine with gold, as well as burned. Investments of any kind are no guarantee. Especially, in a heavily controlled market.
Exactly - gold goes UP and DOWN. There's nothing "magic" about it that makes it hold it's value better than any other commodity - whether it be another metal like copper or a food like grain. Whether or not you do good investing in gold is FULLY dependent upon your TIMING - just as with ANY commodity (or the stock market). Until 2 years ago gold was on a tear, now it's in collapse, 15 years ago is was just sitting there doing a lot of nothing. ANYONE who held gold for the quarter century it didn't gain in price ended up effectively LOSING money because inflation ate away at the value of the gold. The fact that gold shot up in another bubble doesn't mean there is anything special about gold - it was in a bubble just as ANY other commodity may be in a bubble.
The argument that gold somehow always maintains it's value is just some silly marketing BS made up by the gold hawkers. Even it WERE true that at this precise moment that it's true that "it takes the same amount of gold to buy a house today than it did in 1913" how does that rule hold if gold value drops by half? or gains by half? or doubles in value? or has it's value cut in half? Heck, home prices DOUBLED in California between 1980 and 1990 while gold prices didn't move at all - so CLEARLY it took a LOT more gold to buy an home in 1990 than it did in 1980 (TWICE as much) - so, so much for the "constant" relationship between the price of gold and the price of a house. The silly idea that there is something "special" about gold that keeps it's value constant over time is just dumb bunk.
Exactly - gold goes UP and DOWN. There's nothing "magic" about it that makes it hold it's value better than any other commodity - whether it be another metal like copper or a food like grain. Whether or not you do good investing in gold is FULLY dependent upon your TIMING - just as with ANY commodity (or the stock market). Until 2 years ago gold was on a tear, now it's in collapse, 15 years ago is was just sitting there doing a lot of nothing. ANYONE who held gold for the quarter century it didn't gain in price ended up effectively LOSING money because inflation ate away at the value of the gold. The fact that gold shot up in another bubble doesn't mean there is anything special about gold - it was in a bubble just as ANY other commodity may be in a bubble.
The argument that gold somehow always maintains it's value is just some silly marketing BS made up by the gold hawkers. Even it WERE true that at this precise moment that it's true that "it takes the same amount of gold to buy a house today than it did in 1913" how does that rule hold if gold value drops by half? or gains by half? or doubles in value? or has it's value cut in half? Heck, home prices DOUBLED in California between 1980 and 1990 while gold prices didn't move at all - so CLEARLY it took a LOT more gold to buy an home in 1990 than it did in 1980 (TWICE as much) - so, so much for the "constant" relationship between the price of gold and the price of a house. The silly idea that there is something "special" about gold that keeps it's value constant over time is just dumb bunk.
Ken
Well there is something special, history shows this. The banks keep gold. If gold wasn't special they wouldn't have such a history behind it and the govt wouldn't have confiscated it. I don't think "magic" is involved. Certainly precious metals alone have "real" value beyond other metals, as well.
All investments should be long-term and certainly diversity applies. As to comparisons of purchases that can only be generalized. All mediums of exchange are designed to represent, real value, which comes from people. Without people's energy our economy would not exist.
There IS no "global currency reset" - it's just a bunch internet rumor nonsense touched off by a single interview nearly a YEAR ago (who said it would happen sooner rather than later) - and yet it not only DIDN'T happen, the European Euro situation is better than it was a year ago.
However, I would wait and see if you are talking about currency changes. Certainly, there were some SDR adjustments and Basel III is making changes.
I was to understand that it was to happen and thought that it might have something to do with the drop in gold prices since this is suppose to happen very soon.
Your home can be taken for many "reasons". It also requires ongoing "investments" and expenditures. Gold does not.
Not sure what 25yrs you are referencing either? I don't think any investment strategy should have all its eggs in one basket.
It may require ongoing "investments" and expenditures, but those sure as heck don't equal 2 1/2 times it value over 25 years - AND it can be used to GENERATE income (in the form of RENT) - try that with gold. The fact is, for a quarter of century gold was a HORRIBLE investment - on par with putting your money under your mattress (even a simple bank savings account did better). The fact that gold shot up for 7 years or so, it simply reflective of the fact it was a bubble for those 7 years - and the fact that gold has LOST ground now for 2 years is reflective of the fact that that bubble has BURST.
Regarding "which 25 years - just look at the chart you posted) - Gold went from around 1981 to around 2005 (24 YEARS) without gain a dime. Gold price in 1981 was around $450 an ounce. By 2005 it had climbed to a "staggering" $450 an ounce - a gain of absolutely ZERO in nearly 25 years.
It may require ongoing "investments" and expenditures, but those sure as heck don't equal 2 1/2 times it value over 25 years - AND it can be used to GENERATE income (in the form of RENT) - try that with gold. The fact is, for a quarter of century gold was a HORRIBLE investment - on par with putting your money under your mattress (even a simple bank savings account did better). The fact that gold shot up for 7 years or so, it simply reflective of the fact it was a bubble for those 7 years - and the fact that gold has LOST ground now for 2 years is reflective of the fact that that bubble has BURST.
Regarding "which 25 years - just look at the chart you posted) - Gold went from around 1981 to around 2005 (24 YEARS) without gain a dime. Gold price in 1981 was around $450 an ounce. By 2005 it had climbed to a "staggering" $450 an ounce - a gain of absolutely ZERO in nearly 25 years.
Ken
Most investment strategies only recommend gold, as part of it. So I don't agree w/ it being a horrible investment. It has a purpose. All investments do. Our economy is pretty much nothing, but bubbles so just gotta time and diversify. In terms of value, gold did fluctuate over that 25yrs so you could also use it to make money much like currency exchanges, etc... Certainly, not like housing, but housing, as has been seen was a rather large bubble, that still has some changes to come.
Well there is something special, history shows this. The banks keep gold. If gold wasn't special they wouldn't have such a history behind it and the govt wouldn't have confiscated it. I don't think "magic" is involved. Certainly precious metals alone have "real" value beyond other metals, as well.
All investments should be long-term and certainly diversity applies. As to comparisons of purchases that can only be generalized. All mediums of exchange are designed to represent, real value, which comes from people. Without people's energy our economy would not exist.
The ONLY reason gold has a special place is because the ancient cultures of southern europe and the middle east began using it as a currency since it was relatively rare, easily malleable, and rather difficult to counterfit - so it made an idea currency. Other parts of the world used OTHER items as their currency - ancient China used shells, other cultures used bead and amber. Gold ended up wining out over these other forms of currency for 2 main reasons - #1) it was more practical than most of the others and #2) the Europeans ended up the dominant culture on the planet so their way of doing things were copied elsewhere. Gold today remains the "bank holding of choice" MAINLY because gold is the TRADITIONAL mark of wealth - it's little more than a cultural "force of habit".
The ONLY reason gold has a special place is because the ancient cultures of southern europe and the middle east began using it as a currency since it was relatively rare, easily malleable, and rather difficult to counterfit - so it made an idea currency. Other parts of the world used OTHER items as their currency - ancient China used shells, other cultures used bead and amber. Gold ended up wining out over these other forms of currency for 2 main reasons - #1) it was more practical than most of the others and #2) the Europeans ended up the dominant culture on the planet so their way of doing things were copied elsewhere. Gold today remains the "bank holding of choice" MAINLY because gold is the TRADITIONAL mark of wealth - it's little more than a cultural "force of habit".
Ken
Ultimately, as I stated, people are the value. Gold does have however, intrinsic value and yes historical backing. Not sure your point?
Gold is a substance with intrinsic value and history. Currency is a medium of exchange representing people's energy.
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