Buying Gold to hedge against inflation

[AvHdB]

Andrew,

West coast is correct on many fronts.

So you know there are numerous international companies based in The Netherlands, but that is because of tax laws favour international corporations. For what it is worth that trend will accelerate due to changes of tax code in Cyprus and those small islands between England and France.

An example is IKEA in fact Dutch based for tax reasons - the scary reality is though that there "share" of the Dutch market is the greatest in Europe. Somewhere around 70% of households have IKEA in house in Holland. So this counters West Coasts point but except for a generic product such as gas Royal Shell you will find few companies that compete such as an Apple or IBM on the world market. For that matter what about Johnson Wax or Wrigley Chewing gum? They also maintain dominant positions and are American.

The market for almost everything is greater in North America than any where else in the world. (Often even combined guess the Aussies are not contributing enough!)

So you know the Americans have spent more on art and antiques over the last two years than all of Europe combined! But here my numbers are a bit skewed. If you give me a bit of time I will find the facts.

A friend has a his own company, selling bags for laptops. Fairly high end - in the States he sells 50% another 15% in Canada. The balance in Europe. He desperately wants greater sales in Europe but the market is growing in Canada and America and stagnate here. Odd fact it seems lap top sales are slowing down in America. Still it means 35% of his sales are gong to Europe and 65% to America.

Odd his bags are made in China, but he is not allowed to sell in China!

AvHdB

[JeanClaude]

kievstar

USA dollar is not backed 100% by gold.

That is zero percent. The USD is not backed by  gold at all, and since the fed doesn't allow external entities to audit them, nobody knows how much (if any) gold is being held in Fort Knox.

Westy

JC once again for an economist you show a surprising lack of knowledge of the world economy.  The US is still the world's top manufacturer and China is in 2nd place at about 70% of USA's capacity.  The US produces items such as production machinery and equipment, industrial supplies, consumer goods, motor vehicles and parts etc.

Once again you engage your keyboard before you engage your brain,

Westy lets make a deal, you stop telling lies about me and I stop telling the truth about you !

Since I don't drink the Kenesyan cool aid, or get a hardon from fractional reserve banking, like you or Turboguy do. I tend to deal with hard economic facts. Lets look at the hard data, instead of Kenesyan dogmatic mantra.


The US trade deficit is running at over 50 billion a year, and since exports (in a normal Austrian economic world) should pay for imports , the US has to borrows the difference from other central national banks (selling bonds). Hence more money is going out then there is coming in. So despite the capital goods your bragging about the "NET" transfer of wealth is NEGATIVE in a big way!

Now Turboguy (who is obviously Kenesyan like you are, although he at least admits to not knowing jack shit about how the economy works), uses this fallacy as an argument that the economy is still good. Yeah right, sure!!!

Westy

As for making money in a volatile stock market once again JC for an economist you show a lack of knowledge about the world economy.  Warren Buffet and George Soros aren't the only ones who know how to track equities or commodities and buy low and sell high and do it repeatedly.  

The world is not as simple as your leftist Kenesyan ideology paints it.

Kievstar (who was bragging about speculation on gold) held this as proof that gold was a "succers bet". Now If you like to equate short term speculation with long term weath storage (I have been holding gold since march 2008), I think you should give back that free  bachelor degree you got when buying that happy meal at McD's.


 

[WestCoast]

kievstar

USA dollar is not backed 100% by gold.

That is zero percent. The USD is not backed by  gold at all, and since the fed doesn't allow external entities to audit them, nobody knows how much (if any) gold is being held in Fort Knox.

Westy

JC once again for an economist you show a surprising lack of knowledge of the world economy.  The US is still the world's top manufacturer and China is in 2nd place at about 70% of USA's capacity.  The US produces items such as production machinery and equipment, industrial supplies, consumer goods, motor vehicles and parts etc.

Once again you engage your keyboard before you engage your brain,

Westy lets make a deal, you stop telling lies about me and I stop telling the truth about you !

Since I don't drink the Kenesyan cool aid, or get a hardon from fractional reserve banking, like you or Turboguy do. I tend to deal with hard economic facts. Lets look at the hard data, instead of Kenesyan dogmatic mantra.


The US trade deficit is running at over 50 billion a year, and since exports (in a normal Austrian economic world) should pay for imports , the US has to borrows the difference from other central national banks (selling bonds). Hence more money is going out then there is coming in. So despite the capital goods your bragging about the "NET" transfer of wealth is NEGATIVE in a big way!

Now Turboguy (who is obviously Kenesyan like you are, although he at least admits to not knowing jack shit about how the economy works), uses this fallacy as an argument that the economy is still good. Yeah right, sure!!!

Westy

As for making money in a volatile stock market once again JC for an economist you show a lack of knowledge about the world economy.  Warren Buffet and George Soros aren't the only ones who know how to track equities or commodities and buy low and sell high and do it repeatedly.  

The world is not as simple as your leftist Kenesyan ideology paints it.

Kievstar (who was bragging about speculation on gold) held this as proof that gold was a "succers bet". Now If you like to equate short term speculation with long term weath storage (I have been holding gold since march 2008), I think you should give back that free  bachelor degree you got when buying that happy meal at McD's.
 

After this latest display of ignorance I've concluded that you are not an economist, you may be a mathematician but you lack any academic training in economics.  The graph you display, without a title so we have no way of knowing what it means, isn't the US trade imbalance with the world.  It might be the US trade imbalance with Canada, http://www.census.gov/foreign-trade/balance/c1220.html#2008 .  

You state the "The US trade deficit is running at over 50 billion a year".  In 2003 the US trade deficit with Canada was running at over $50 billion US a year.  The current US trade deficit with the world is running at $42.8 billion/month http://online.wsj.com/article/SB10001424052748704644404575481411027521610.html?mod=googlenews_wsj .  If this is extrapolated to cover a full year that would put the US trade deficit with the world at about $513.6 billion a year.  

JC the days of buying and holding securities for years may be possible for multimillionaires and billionaires but for the average investor in equities it is the era of buy and hold equities for a short amount of time and then sell for a profit.  That's how you make money in a volatile stock market.  

[cufflinks]

GDXJ

Good Info as I did not realized there was a diversified ETF in "Junior Mining Stocks" also likely to be takeover targets and the economics of mining stocks versus actual Gold and Silver prices is well documented here and on the net (Since mining companies have fixed and variable costs like all businesses a spike in Gold and Silver prices can have a multiplier effect on mining stocks as their profits jump and thus the ETF will outperform physical Gold and Silver holdings.

Gold Hitting New Highs– Lever Your Gains with Small-Caps
Andrew Packer (September 22, 2010)
It’s no surprise that gold is rallying to new highs on the Fed’s latest announcement that they’re committed to throwing in everything– including the kitchen sink– to prop up asset prices.

If you’re a little more speculative or looking for a bigger leveraged move than just the changes in gold and silver, consider some smaller-cap gold mining companies.

With no new significant sources of gold discovered this decade and with production on the decline since 2003, gold remains the place to be and a sure hedge against inflation… but don’t forget to buy some physical gold as the ultimate insurance policy.

The Market Vectors Junior Miners ETF (GDXJ) tracks small and mid-sized mining companies, some of which will surely be bought out by larger producers to replace reserves. This fund, or more accurately its constituents, could offer the best upside exposure to gold.

[Maxx]

Gold just hit an all time record high of $1,307.10 and Silver $21.63 per ounce.

This is an increase of 13.5% from the start of this thread six months ago.

[kievstar]

13% is not that great in 6 months. 

The key is gold going to hit 2,000 or 1,000 first.  I like what gold is doing now going up and down and all the big financial firms are hyping gold and making money shorting it.  So many novice investors want gold to hold that you can make a short term fortune on options.  500% after tax returns are easy on gold right now per month. 

Up down up down and tons of activity.  Gold is being hyped like oil and housing market was a few years ago. 

[Maxx]

13% is not that great in 6 months. 

The key is gold going to hit 2,000 or 1,000 first.  I like what gold is doing now going up and down and all the big financial firms are hyping gold and making money shorting it.  So many novice investors want gold to hold that you can make a short term fortune on options.  500% after tax returns are easy on gold right now per month. 

Up down up down and tons of activity.  Gold is being hyped like oil and housing market was a few years ago. 

Over all there is very few percentage wise of people invested in gold, despite the hype. What happens when people wake up to the knowledge that our fiat currency is losing value as the government is revving up the printing press? Trillions of fiat dollars created out of thin are and dumped into our money supply. For every action there is another action.

13% increase in 6 months sure beats savings bonds or just about any other investment. What beats it? The dollar has decreased in value 40% over the last seven years while the price of gold increased 400%.

[Muzh_1]

After this latest display of ignorance I've concluded that you are not an economist, you may be a mathematician but you lack any academic training in economics.  The graph you display, without a title so we have no way of knowing what it means, isn't the US trade imbalance with the world.  It might be the US trade imbalance with Canada, http://www.census.gov/foreign-trade/balance/c1220.html#2008 .  

You state the "The US trade deficit is running at over 50 billion a year".  In 2003 the US trade deficit with Canada was running at over $50 billion US a year.  The current US trade deficit with the world is running at $42.8 billion/month http://online.wsj.com/article/SB10001424052748704644404575481411027521610.html?mod=googlenews_wsj .  If this is extrapolated to cover a full year that would put the US trade deficit with the world at about $513.6 billion a year.  

JC the days of buying and holding securities for years may be possible for multimillionaires and billionaires but for the average investor in equities it is the era of buy and hold equities for a short amount of time and then sell for a profit.  That's how you make money in a volatile stock market.  

Isn't it amazing that when you confront Monsieur Jack C with facts, he goes in hiding? Never seen a scientist run from facts.

[WestCoast]

After this latest display of ignorance I've concluded that you are not an economist, you may be a mathematician but you lack any academic training in economics.  The graph you display, without a title so we have no way of knowing what it means, isn't the US trade imbalance with the world.  It might be the US trade imbalance with Canada, http://www.census.gov/foreign-trade/balance/c1220.html#2008 .  

You state the "The US trade deficit is running at over 50 billion a year".  In 2003 the US trade deficit with Canada was running at over $50 billion US a year.  The current US trade deficit with the world is running at $42.8 billion/month http://online.wsj.com/article/SB10001424052748704644404575481411027521610.html?mod=googlenews_wsj .  If this is extrapolated to cover a full year that would put the US trade deficit with the world at about $513.6 billion a year.  

JC the days of buying and holding securities for years may be possible for multimillionaires and billionaires but for the average investor in equities it is the era of buy and hold equities for a short amount of time and then sell for a profit.  That's how you make money in a volatile stock market.  

Isn't it amazing that when you confront Monsieur Jack C with facts, he goes in hiding? Never seen a scientist run from facts.

I think it's safe to assume that all of JC's knowledge of economics and business comes from brief incomprehensible glimpses of the business pages while flipping through newspaper.

[Eduard]

meanwhile gold is at $1309.80... smart money says that as gold continues to go up, Dow Jones is going to decline until they meet at the point when one ounce of gold buys Dow Jones. Could be at around the 5K point... But off course no one knows for sure...

[Maxx]

Gold $1,319.79   Silver $22.10

[Eduard]

Gold $1,319.79   Silver $22.10

and unless Obama hands in his resignation very soon it's going to continue going up. American people have not faith or trust in this government. Glenn Beck and a few other real patriots have done an excellent job exposing who Obama really is, his background, his agenda and the people who are behind him. It will take decades to undo all the damage that has been done, real estate market is in for another huge wave of foreclosures, the dollar is being devalued....where to put your money? The stock market? Unless you are very good at shorting I wouldn't dare playing with stocks right now. Personally, to me, precious metals give a piece of mind right now. But off course now we find out that Obama stuck another surprise in his "healthcare bill". Every time you sell gold (over $600), you will now have to do a 1099!!! WTF??? I hope you all are voting this November!

[Maxx]

Gold $1,319.79   Silver $22.10

Personally, to me, precious metals give a piece of mind right now. But off course now we find out that Obama stuck another surprise in his "healthcare bill". Every time you sell gold (over $600), you will now have to do a 1099!!! WTF??? I hope you all are voting this November!

  You would be surprised how many people today are resorting to paying for things in precious metal or being asked to. As this thing gets worse expect more of that.

  Gold and silver will go up as politicians are unable to act fiscally responsible. Huge cuts in social services/entitlements and military spending are not on anyone's agenda except for Ron Paul. 

[Brasscasing]

13% increase in 6 months sure beats savings bonds or just about any other investment. What beats it? The dollar has decreased in value 40% over the last seven years while the price of gold increased 400%.

Well, I'm in. A Canadian fund mind you but has showed 19% over three quarters. Precious metals are considered high risk and my portfollio is based on medium risk investment so I've stepped out of my 'comfort zone' so to speak...we'll see what happens.  

Brass

[Maxx]

13% increase in 6 months sure beats savings bonds or just about any other investment. What beats it? The dollar has decreased in value 40% over the last seven years while the price of gold increased 400%.

 Precious metals are considered high risk
Brass

By those who get commissions from trading stock. It is stock in a crumbling economy that is high risk. The stock market crashes and will again along with the currency it is based on....

[Brasscasing]

By those who get commissions from trading stock. It is stock in a crumbling economy that is high risk. The stock market crashes and will again along with the currency it is based on....

Well, I've put my money where my keyboard is so I'll keep you updated. If it all goes to hell in a henbasket, it's not really going to matter what you're holding (stock) anyways, I suppose...

Brass

[Maxx]

By those who get commissions from trading stock. It is stock in a crumbling economy that is high risk. The stock market crashes and will again along with the currency it is based on....

Well, I've put my money where my keyboard is so I'll keep you updated. If it all goes to hell in a henbasket, it's not really going to matter what you're holding (stock) anyways, I suppose...

Brass

Guns and beans in that case. Maybe after the Apocalypse it will be something real like gold and silver that will back the dollar. I'm a strange sort I know. I am probably the only guy you know who gets paid in gold and silver. I work on a percentage of the metal I process and for outside contractors I deal with they work on the same. That is why I see a certain value in the stuff plus all the additional income I get by the rising prices.

[Brasscasing]

Guns and beans in that case. Maybe after the Apocalypse it will be something real like gold and silver that will back the dollar. I'm a strange sort I know. I am probably the only guy you know who gets paid in gold and silver. I work on a percentage of the metal I process and for outside contractors I deal with they work on the same. That is why I see a certain value in the stuff plus all the additional income I get by the rising prices.

  Good one, Maxx...

Well, if that's how you're getting paid, as you've stated, as far as the rising prices - you're going about it the right way...

Brass

[Maxx]

Guns and beans in that case. Maybe after the Apocalypse it will be something real like gold and silver that will back the dollar. I'm a strange sort I know. I am probably the only guy you know who gets paid in gold and silver. I work on a percentage of the metal I process and for outside contractors I deal with they work on the same. That is why I see a certain value in the stuff plus all the additional income I get by the rising prices.

  Good one, Maxx...

Well, if that's how you're getting paid, as you've stated, as far as the rising prices - you're going about it the right way...

Brass

Refining gold has been my living for the past thirty years. I was at a friendly competitor selling some gold shot a month ago. The owner, the president of the company as he was pouring some of my gold shot on his scale remarked to me that it's a shame everyone isn't able to do business this way. It's a surprise to us that there is such a resistance to this marvelous element by some.

As far as the risk. I do not worry about about a correction in the market. If it drops 2 or 3 hundred dollars so what. I am sure it will come roaring back. What concerns me is government interference in the gold market and an cashless checkless society sold to us as necessary. There are plenty of control freaks out there who want to monitor and control  everything we do and have. BTW recently I have been spending some time with a very kind and thoughtful RW. She's got it all, looks, humor and is very very sweet. It's her whole personality.    She is so refreshing to be around. It's been more than seven years since my train wreak and it finally feels like I am getting some oxygen if that makes any sense.



Maxx

[Brasscasing]

BTW recently I have been spending some time with a very kind and thoughtful RW. She's got it all, looks, humor and is very very sweet. It's her whole personality.    She is so refreshing to be around. It's been more than seven years since my train wreak and it finally feels like I am getting some oxygen if that makes any sense.

Good to read, Maxx! Some of us have been around the forums long enough to know you deserve it.

Brass

[Maxx]

BTW recently I have been spending some time with a very kind and thoughtful RW. She's got it all, looks, humor and is very very sweet. It's her whole personality.    She is so refreshing to be around. It's been more than seven years since my train wreak and it finally feels like I am getting some oxygen if that makes any sense.

Good to read, Maxx! Some of us have been around the forums long enough to know you deserve it.

Brass

Thank you Brass. I do not know where it is going. Tomorrow will be our last day. I have to leave. I'm going to give her all my contact information and see what happens. 

[Maxx]

Telling it like it is

By:  Peter Schiff
Friday, October 1, 2010

NY Fed President William Dudley's outrageous statements today closely conform to recent pronouncements from other Fed officials and confirm that a massive round of dollar devaluation is poised to begin.

Seemingly overnight, the Fed appears to have altered its mandate, ditching its former goal of "price stability" in favor of "moderate price inflation." While no one is under the illusion that the Fed has kept prices stable over the last century, it used to be that the governors would at least pretend to fight inflation. Low inflation used to be the aim, now it's the enemy. 

Although the inflation being created by the Fed may not be showing up immediately in rising rents or auto prices, it is nevertheless pushing up asset prices in other areas.  Many commentators are celebrating the "best September for the Dow and S&P in 71 years," rising 7.7% and 8.8% respectively. Well, it was also a pretty great September for soybeans (up 9.5%), rice (up 10%), oil (up 11%), corn (up 12.2%), orange juice (up 13%), cotton (up 17.5%), and sugar (up 19.3%). In fact, the whole CRB is up 8.7%. The Swiss franc is up 4.6%, the euro up 7%, the Aussie dollar up 9%. Gold is at all-time highs, silver at 30-year highs, and copper at 3-year highs.

In other words, the box of Uncle Ben's in my kitchen cabinet had a better month than the Dow Jones Industrials. The same could be said for the boxer shorts in my dresser. Could it be that the Dow isn't rising, but the dollar falling?

Dudley says it may take "several years" before inflation returns to levels consistent with the Fed's mandate. Exactly when did the Fed establish a floor for "acceptable inflation?" Where is that floor, 2%? (The core PCE index is currently up 1.4% for the year) If we are below the floor, where's the ceiling- 3%? 4%? In 1971, President Nixon imposed price controls when inflation averaged 4%. That rate was considered so high that emergency measures were needed. Is that still the case? How much higher do costs have to go for cash-strapped Americans before the Fed can be expected to take its foot off the gas?

Without better understanding of where these parameters lie for the Fed, the markets will be flying blind through an impenetrable fog.

If the Fed were serious about maintaining long-term price stability, which is its actual mandate, it would need to allow prices to fall after the speculative booms that it helped create. As we saw in the 1980s, unemployment resolves itself when the monetary system is sound, but no one will hire under the uncertainty of a rogue, inflationary Federal Reserve. As people on fixed incomes, increasingly impoverished by low yields and rising prices, desperately re-enter the work force, look for unemployment to head higher.

[Maxx]

Gold  $1325.40 Silver $22.10

[Maxx]

Gold $1344.40  Silver $22.83

[kievstar]

Big drop in gold today hope you guys are day trading with options like I mentioned more than a week ago.  10% daily returns not hard right now.