Friday, Oct 24, 2008
Gold Standard
Moneyweek: Why the gold standard could make a comeback
To invest in gold, I recommend you buy physical gold and keep it hidden on your property. Pick up the yellow pages and look for gold brokers or coin dealers. Ask them what price they charge on gold bullion coins. Buy from the broker with the lowest price and the longest history of doing business in your town.
One more thing, don't buy it right now. Physical gold is in short supply and prices are at rip-off levels
Posted by sold out @ 01:20 PM (845 views) Add Comment
16 Comments
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1. planning4acrash said...
Podcast today on lewrockwell.com with long time gold dealer. They simply can't get the stuff. Worth a listen. Peeps in the industry are miffed. How long can they keep it down? Or, will the inflation train come off the tracks? Nerve biting stuff.
2. sold 2 rent 1 said...
Firstly. Buy in the gold/silver pool accounts at Kitco then convert to coins when supply comes back.
Secondly. There will be no return to a gold standard as gold will have to go to $36,000 and joe public hasn't got the readies.
It local community currencies for day to day living
3. planning4acrash said...
Personally? I see hyperinflation if central banks succeed in off loading the funny money, total currency collapse if they don't. Gold is good for either. I don't see a medium. Unfortunately the robber barons own most of the gold.I hope the have 2 sell it!
4. drewster said...
Here's a brilliant YouTube video about the gold market (contains subtitles so you can watch with the sound off if you're at work)
Youtube: Hitler gets a margin call
5. matt_the_hat said...
2. sold 2 rent 1
The goverment will confiscate all gold holdings if a return to the gold standard is upon us - reminiscent of 1930's US
6. Andyh said...
Could the shortage of physical gold be down to ETFs having sold more gold on paper than they own. All very well when the gold price is dropping (keep the cash, wait a while, buy some for less later, pocket the difference) but at a certain point they have to buy the stuff and perhaps there isn't enough to go around.
If this is the case and paper gold has been traded like credit then gold stocks could follow credit trading in to a collapse. There would be the potential for massive fraud (or just over the top bonuses) with money/gold disappearing in to the sunset with the fund managers.
Or it could just be that no one wants to touch a depreciating asset when it costs you 10% if you can't sell it for a week.
7. drewster said...
The problem we're currently seeing across the world is deleveraging of debt positions. Everybody who has lent money is asking for it back. The reversal of fractional reserve lending causes the money supply to shrink, which causes deflation (ceteris paribus, e.g. no dollar printing). If there are fewer dollars circulating then there are fewer around to buy gold, so the price of gold should fall along with all other assets and commodities. Logical?
8. letthemfall said...
"...buy physical gold and keep it hidden on your property"
That would feel a bit uncomfortable under the mattress in more ways than one.
9. Suzyandjoe said...
under the mattress...
Hmm I don't fancy fighting off the new breed of house burglar
10. jonb said...
There is one major flaw in his argument. It assumes everyone is going to keep their money stashed away under the mattress. Even if people move away from mortgages to some sort of residential real estate investment trust, you still get the credit multiplier effect. Ultimately, the money supply doesn't just represent gold bars, it represents all the houses, factories, power stations, machinery and so on in the country. These are what represent the "value" in a fractional reserve banking system. The problem at the moment is that people placed too high a value on houses, and they placed a value on unsecured loans to people who can't afford to pay them back. But houses, even although they are not worth what most people are asking for them at the moment, they are still worth something, and can still form the basis for the value behind some sort of banking/investment system.
11. malct said...
from 321GOLD
It is Time
Sam Mathid
Oct 15, 2008
What is beyond the collapse?
The construction of the collapse was loosely as thus:
Governments inflated their currencies.
Malinvestment resulted
To cope with the problems of malinvestment, governments inflated their currencies more.
Huge malinvestments resulted.
To cope with the problems of huge malinvestments governments inflated their currencies hugely.
Currencies utterly collapsed (still playing out).
The feeble construction known as the world economy has been held together with the glue of lies and pathetic conceits such as:
Pieces of paper printed by governments, and not backed by anything of value, could successfully be used instead of real money.
Wealth creation could be separated from production.
The more control government took of the economy, the stronger the economy would be.
The disintegration of the moral, spiritual and intellectual fabric of the western world had nothing to do with governments control of the economies.
I have had readers make the point that if the whole edifice was built only on an illusion of wealth creation, then how come there was so much prosperity for the last few decades?
The answer to that is horribly simple.
We expropriated and wasted not only such real wealth (production) as there has been in the present times, but we wasted the accumulated wealth of all the preceding generations,
and finally (and most disgusting of all) we then went into vast debt and consumed the wealth of future generations.
12. planning4acrash said...
Malct. That's half true. If governments stepped back and allowed adjustment. Prosperity would return.
13. malct said...
10. planning4acrash said...
Malct. -------------------- That's half true.
Friday, October 24, 2008 02:38PM
,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,
to be fair I've quoted less than - half - the article. Sam Mathid covers various issues.
He goes on to say :-
"Our education system is run by people whose job is to ensure that children attain adulthood without gaining any dangerous ideas about personal integrity or individual responsibility.
Our media no longer even pretends to publish the news, they are merely organs of propaganda for the government, and for those vast corporations allied to government. It is time to be done with all our institutions.
No part of what we have is worth saving. The corruption has penetrated and permeated from the very top to the very bottom. Society has been rotted down to the last point of resistance... the core level of the family and individual. The institutions have become a part of the problem, not the solution.
The solutions can now only be at the level of the family and the individual."
14. Nkvd said...
hmmmmm that doesnt sound like the ranting of a right wing fanatic at all.....
Frankly thats the kind of inflammatory nonsense that would have gone down a storm in berlin in 1933
15. planning4acrash said...
Yes, and that solution is liberty and true capitalism.
16. str 2007 said...
Drewster
Great video - very funny.
Jonb
I think you have point and a four bed detatched house costs roughly £150-200k to get built (less if you do alot of it yourself). The build cost may go down a bit when people are struggling for work as labour maybe a bit cheaper (but that wil probably be replaced with having 25% of your materials nicked.
Anyway my point is that that is the houses worth. The land with services and permission is £50kish fair priceIMO some may say 100kish and that IMO gets you to the value of a good detatached house on a good plot. About 250-300k. I reckon about 30% less for a typical 80's estate type house as economies of scale come into play. So about 150-200k.
These figures are about 40-50% less than where they are now.
The big question will be (for me) what they do with interest rates and mortgage availability.
If things were left as they were I can definately see prices falling as above.
I just don't know if mortgages were 1/2 the cost they are today and available with say a 25% deposit if that would help stem actual falls.
What would have happened to GBP in that time though..... given what's appened today just by a couple of people mentioning the R word. It'll probably be about £10 to the dollar by the time they've lopped 3% off base rates.
And my children will never get to go to DisneyLand Florida boo hoo !