Gold Stupidity
- Thread starter Wicked Ice
- Start date
[ame=http://www.youtube.com/watch?v=A-WuyrHJiIc]State of the Gold Market - Sept. 26, 2011 - YouTube[/ame]
[ame="http://www.youtube.com/watch?v=A-WuyrHJiIc"]State of the Gold Market - Sept. 26, 2011 - YouTube[/ame]
[ame=http://www.youtube.com/watch?v=2rsph5jLd_I&feature=related]The Gold Standard in Theory and Myth | Joseph T. Salerno (Lecture 10 of 10) - YouTube[/ame]
Just a piece of advice, I hope none of you are investing solely in Gold and Silver. Even if it's a solid long play that many others are doing, it's incredibly risky.
When you hear all these people saying "Buy Gold! Buy Silver!", remember they have a diversified portfolio. Sure they are buying these precious metals, but I highly doubt they are putting more than 25% of their portfolio in precious metals. They probably aren't investing more than 10%.
The days of buying Gold at $400 and having your investment quadruple are over, at least in the short term. If you get in now, you need to be hedging and/or diversifying your portfolio.
When you hear all these people saying "Buy Gold! Buy Silver!", remember they have a diversified portfolio. Sure they are buying these precious metals, but I highly doubt they are putting more than 25% of their portfolio in precious metals. They probably aren't investing more than 10%.
The days of buying Gold at $400 and having your investment quadruple are over, at least in the short term. If you get in now, you need to be hedging and/or diversifying your portfolio.
Paper has uses in many service industries because of it's ability to start fires. Food don't get cooked with gold yo. Also, ever tried to wipe your ass with bouillon? It's problematic, uncomfortable and ineffective.
what else you got?
Guess you don't read much.
I never said gold standard was a bad idea. Its pretty much impractical to go back to it now. We don't even have nearly enough gold to make the switch back.
Not to mention if US made the switch to the gold standard every other major economy would have to make the switch.
There would have to be enough gold in reserve to insure the same thing that happened during the depression doesn't happen when ever fear starts kicking in.
Among a list of other things that makes it almost impossible to go back to gold standard now. It would take a huge economic collapse that would tear down our current system to build back up under the gold standard.
And besides, countries like being able to control how much their money is worth. The US is just going to devalue the dollar to a point where its no longer viable to have items made over seas and have them shipped here. This will help american companies compete with overseas companies. Soon more and more things will be made in america again because the costs will be a lot lower vs outsourcing everything to cheaper countries. The dollar would have to take a pretty big dip, But I'd say it would be good for companies and would bring a lot of jobs back home.
You do realize that those other countries will do the same thing, debase/devalue their own currency in response, so things won't get any cheaper.
Long story short:
Diversifying is crucial to long term investing, be it precious metals or anything else at that.
Anything else is utter stupidity.
Diversifying is crucial to long term investing, be it precious metals or anything else at that.
Anything else is utter stupidity.
not sure if serious?
Countries with the most gold will trade that gold for goods produced in other countries. The countries providing the most profitable goods as a result, will end up being the countries with the most gold.
Sounds pretty capitalist to me.
Watch the video Wicked Ice posted. It shoots down this argument.
Also, here is a thread at mises.org that deals with the same thing:
Is there enough gold in circulation for a Gold Standard? - The Mises Community
Of course, Almost every major economy in the world does this, But there comes a tipping point on how far it can go. It would be like who can take on the most water without sinking first. If other world economies wanted to play that game. And most of them can't. Thats why china flexes it's muscle when ever america tries to play that game.
Already watched part of the video before. Couldn't sit through it because to be honest the guy is hard to follow and sit through his lecture.
If i remember correctly he said that the US would have to start buying up gold. I doubt we are even in a position to do that or even would want to do that seeing how people are speculating that the US doesn't even have much gold anymore.
So not only would we need to resupply, we would need to buy enough gold to back the currency already in circulation, on top of that we would have to buy enough gold that there would be enough in reserve to allow for lending.
Not to mention there are big fluctuations in a gold standard. many countries like china could hoard large amounts of gold and could mess with our economics by releasing a shit ton of gold into the market at any time. Eventually it would correct itself over time, but the whole system is very volatile and most countries wouldn't want to go back to it unless there was no alternative.
And the final nail in the coffin is that for a gold standard to really work you would have to have one where the government couldn't mess with it. Or do stuff like add fractional currency on top of the gold standard. In the end its a good system if humans weren't such greedy corruptible beings. All it would take is some stupid people to make the perfect gold standard become corrupt or come crashing down.
The traditional version of diversification is utter stupidity. RichDadPoorDad defines what a true asset is.
“Wide diversification is only required when investors do not understand what they are doing.” - Warren Buffett
I'll have to disagree with you there. While Gold has been a form of currency for a very long time, there was a time when SALT had as much worth, if not more, as gold. Hence the expression 'Worth your weight in Salt'. It's also where we got the word Salary from.