Buying Gold to hedge against inflation

[Turboguy]

So tell me something guys.  I am not that up on some parts of investing in gold but do most of you posses your own gold or does the service you buy it from store it for you?

It sounds like Maxx does a lot of his gold purchases by buying used gold and melting it so I am assuming he does, but how about the rest of you.   Do you have it in your possession, what form?  Krugerlands or other coins or

[WestCoast]

So tell me something guys.  I am not that up on some parts of investing in gold but do most of you posses your own gold or does the service you buy it from store it for you?

It sounds like Maxx does a lot of his gold purchases by buying used gold and melting it so I am assuming he does, but how about the rest of you.   Do you have it in your possession, what form?  Krugerlands or other coins or

I have physical gold.  I was given some Krugerrand gold coins by my grandparents when I was a child.  Over the last 40+ years I've bought a few others.  Mostly Canadian Maple Leafs but also have some American Eagles and some more Krugerrands.  I keep them in a bank safety deposit box, personally I wouldn't trust some some service like a gold buying/selling operation to safeguard my property. 

[Turboguy]

Thaks WestCoast.  That was what I was wondering about.  There is a saying, desperate times make people desperate and if things really did go to pot I wouldn't have much faith in someone else holding my gold and I do think some people are buying where the selling is storing the gold. 

[AvHdB]

I have sold most of my gold Krugerands. I have the Dutch and American numinastic coins.

I still have too much silver.

All of it is at "hand".

AvHdB

[Eduard]

Ray, I too own physical gold and keep it in a safety deposit box at a bank. I own Canadian Maples, American Eagles and American Buffalo 1 ounce coins. I also have some silver bars. I'm thinking that PM will pull back pretty soon, so I will be buying more at that time.

[khelkhov]

As for gold, I own Canadian Maple Leaf coin and few gold bars.  As for silver, I have American Eagle and Canadian Maple Leaf silver coins and American silver rounds and silver bars produced by private mints.  I store them in my own fireproof safe in the basement of my house.  I do not feel comfortable with banks storing metals for me in their safety deposit boxes.  

I also have some of my gold/silver bullions being stored in various vaults outside of the USA.  It is a way to diversify my assets in various places.  Having some gold/silver stored overseas would allow me to have some peace of mind just in case when the US Dollar becomes worthless, where I can sell it for a different currency where I can spend my money when I am overseas... We may never know what would happen to our US Government..  They could get so desperate and hungry for cash by stealing/looting on US citizens' money or precious metals through "law" and law enforcement officials so they would have the stolen money to pay their debts...          

[BCKev]

So tell me something guys.  I am not that up on some parts of investing in gold but do most of you posses your own gold or does the service you buy it from store it for you?

I don't like holding gold. I see it as stale asset.

I have exposure to gold through ownership of a mining exploration company that has gold resources in the ground. 

[cufflinks]

China reportedly ends exports of silver and rare earth (high tech) metals - and is stockpiling gold purchased with collapsing dollars:

http://inflation.us/videos.html

[Maxx]

I am proud of you guys for your ownership of gold. I had been questioning whether it was a wise use of my time hanging out with you guys.



Good video Cuffy.

[WestCoast]

China reportedly ends exports of silver and rare earth (high tech) metals - and is stockpiling gold purchased with collapsing dollars:

http://inflation.us/videos.html

Cuffy it's hardly a secret that China is reducing its export of rare earth metals.  It has been well documented in many business articles in print, on TV and on the web.  Now of course is the time to buy the stocks of companies that are restarting their rare earth metals mines or exploring for new ones. 

[Turboguy]

So tell me something guys.  I am not that up on some parts of investing in gold but do most of you posses your own gold or does the service you buy it from store it for you?

I don't like holding gold. I see it as stale asset.

I have exposure to gold through ownership of a mining exploration company that has gold resources in the ground. 

I hope your gold mining stock has done better for you than the 1000 shares of the gold mining company I own has done for me.

[WestCoast]

So tell me something guys.  I am not that up on some parts of investing in gold but do most of you posses your own gold or does the service you buy it from store it for you?

I don't like holding gold. I see it as stale asset.

I have exposure to gold through ownership of a mining exploration company that has gold resources in the ground. 

I hope your gold mining stock has done better for you than the 1000 shares of the gold mining company I own has done for me.

TG there are dozens of gold mining stocks that have crashed during this run up in the price of gold.    Kind of hard to believe.  Most of these companies had little or no chance of actually finding or mining any significant amount of gold. 

[Turboguy]

TG there are dozens of gold mining stocks that have crashed during this run up in the price of gold.    Kind of hard to believe.  Most of these companies had little or no chance of actually finding or mining any significant amount of gold. 

When I bought this stock they were complaing that the price of gold (about $ 325.00) was below their cost to produce it (about $ 400.00).   I had hopes that with the gold price going through the roof they would start minting money but the stock price is a fraction of what it was when gold was cheap.  Oh, well, It is still doing better than the GM stock I bought before all the mess.

[WestCoast]

TG there are dozens of gold mining stocks that have crashed during this run up in the price of gold.    Kind of hard to believe.  Most of these companies had little or no chance of actually finding or mining any significant amount of gold. 

When I bought this stock they were complaing that the price of gold (about $ 325.00) was below their cost to produce it (about $ 400.00).   I had hopes that with the gold price going through the roof they would start minting money but the stock price is a fraction of what it was when gold was cheap.  Oh, well, It is still doing better than the GM stock I bought before all the mess.

I've got my broker looking into companies that mine rare earth metals.  China produces about 97% of the world's supply of rare earth metals and they are currently reducing or restricting exports so that they can use the metals in their own products.  Who knows I could find a winner in this group of stocks.    And Cameron Diaz could declare her undying love me, which is probably far more likely.   

[BCKev]

So tell me something guys.  I am not that up on some parts of investing in gold but do most of you posses your own gold or does the service you buy it from store it for you?

I don't like holding gold. I see it as stale asset.

I have exposure to gold through ownership of a mining exploration company that has gold resources in the ground. 

I hope your gold mining stock has done better for you than the 1000 shares of the gold mining company I own has done for me.

It has been okay. Up 200% over the past year.

[JeanClaude]

BCKev,

companies can be nationalized, so there is some risk there, I own gold bullion, 70% of my assets is in gold,

Now I don't advise keeping it at home unless you own over 5 million in gold, that would justify the cost of buying a safe.

There are 3 storage facilities where you can store your bullion (or ounces). New York, London, and Switzerland,

The USA and UK tend to have thieving socialist governments from time to time, so again , some risk there, also the Swiss vault has registered ownership , so your certificates are not fungable assets, so they cannot abuse it by printing more certificates then they have gold in the vault (oh wait....those certificates we used to  call "money", untill it was made legal to print MORE "certificates/money" then there was actual gold, LOOOL)

Funny, if this would concern any other asset (selling more oil certificates then there is oil in your oil storage facility) the OIL company CEO would go to jail.


But when it concerns money or other securities, it is called "the fractional reserve system" and banks get bailed out with taxpayer labor paying the difference!

[JeanClaude]

Its official,

NEGATIVE INTEREST RATES 

http://finance.yahoo.com/banking-budgeting/article/111124/TIPS-at-negative-yield-what-it-means?sec=topStories&pos=1&asset=&ccode=

First-Ever TIPS Auction at Negative Yield: What It Means
by Daniel Gross, Yahoo! Finance
Tuesday, October 26, 2010
ShareretweetEmailPrintIt's perhaps the most fundamental law of lending: People extend credit to a borrower today with the expectation that they'll be paid back, with interest, in the future.

But a U.S. government bond offering on Monday appeared to defy this fundamental law. The offering of $10 billion in Treasury Inflation Protected Securities (known as TIPS) was priced to yield an interest rate of -.55 percent. That's negative .55 percent. The deal: You give the government $105.50 today. Over the next five years you get annual interest payments of 50 cents and $100 in cash. The interest payments are adjusted for inflation -- if prices rise, the interest payments rise a bit. At the end of five years, investors receive their $100 back. But that sum is also adjusted for inflation. If the CPI rises by five percent in the five-year period, an investor would receive $105. If inflation is flat over that period, the investor would only get $100.

Crap, every time I think they cant be that stupid, I have to lower the bar again.

Hold on folks, its going to be a rough ride!
I

[tfcrew]

I've been a member here for a long time..[Just never have posted that I recall]
Probably, most of us don't have quite the caviar income [sadly]
Silver rises and falls in the precious metals market along w/gold and platinum.
It is also more affordable and not as risky to keep at home.
However, I do recommend [highly] keeping all guns and valuables locked up tightly.
Earlier in the thread, there was mention of 'intrinsic' value in gold currency..
Probably, the esthetic value is better phrased.

Nat Geo had a special on the discovery of the SS Republic that sank with a sizable gold bullion aboard in 1865.
The treasure was found some 2000' deep along the Atlantic floor.
Est was $5 million in recovered gold.
This is based on esthetic [or collectible] value as an 1853 prestine $20 gold piece was appraised at some $20,000.00
Gold is still only worth it's market value when the rubber meets the road on value.

Some readers might not be aware of this...The United States Gov't has never been authorized to print money. Period
The Federal Reserve [which does print money] is not a government agency.

[JeanClaude]

What happens if you own a trillion in cash and the zimbabwen central bank federal reserve start printing dollars like crazy?

You would get severly pissed, right?


China is hopping mad:

http://www.breitbart.com/article.php?id=CNG.18a92e9878f71f90e7b491d0afd4b1a3.501&show_article=1

Rampant issuance of dollars by the United States is saddling China with "imported inflation", Chinese commerce minister Chen Deming was quoted as saying by state media on Wednesday.
"Given the current situation, companies have thought ahead and prepared for exchange rate fluctuations as well as an increase in labour costs," Chen said, according to the state-run China Business News.

"But because the issuance of dollars is out of control, and international commodities prices are continuing to rise, China is confronted with imported inflation, which has created major uncertainties for businesses," he said.

[WestCoast]

What happens if you own a trillion in cash and the zimbabwen central bank federal reserve start printing dollars like crazy?

You would get severly pissed, right?


China is hopping mad:

http://www.breitbart.com/article.php?id=CNG.18a92e9878f71f90e7b491d0afd4b1a3.501&show_article=1

Rampant issuance of dollars by the United States is saddling China with "imported inflation", Chinese commerce minister Chen Deming was quoted as saying by state media on Wednesday.
"Given the current situation, companies have thought ahead and prepared for exchange rate fluctuations as well as an increase in labour costs," Chen said, according to the state-run China Business News.

"But because the issuance of dollars is out of control, and international commodities prices are continuing to rise, China is confronted with imported inflation, which has created major uncertainties for businesses," he said.

This is what a lot of people don't understand of China's situation as manufacturer and producer of goods to the world.  They are dependent on US dollars because of the trade imbalance with the US, their reserve of US securities and their peg to the US dollar.   If China is going to peg their currency to the US dollar then they are going to have to live with any problems that creates.

[kievstar]

If Walmart stops producing in China, China has a crisis. 

Globalization has made China, India, Mexico, Canada, and Brazil best friends with USA whether they like it or not. 

[JeanClaude]

 

If China is going to peg their currency to the US dollar then they are going to have to live with any problems that creates.

Dont worry, the Japanese, chinese, Saudi's are not going to be that stupid again sinking all their eggs into one reserve currency. Not even the Euro (wich is the only currency that has the lequidity to replace to USD) is going to be trusted.

Globalization has made China, India, Mexico, Canada, and Brazil best friends with USA

Yeah, the USA is making a lot of friends destroying the US dollar holdings of foreign nations, money they could have spend on infrastructure, pensions, medical care and education.

They are going to love you for it!

[WestCoast]

If China is going to peg their currency to the US dollar then they are going to have to live with any problems that creates.

Dont worry, the Japanese, chinese, Saudi's are not going to be that stupid again sinking all their eggs into one reserve currency. Not even the Euro (wich is the only currency that has the lequidity to replace to USD) is going to be trusted.

Since the US is by far the EU's largest partner there is not a chance the EU would want to replace the USD as the world's reserve currency. 

[JeanClaude]

If China is going to peg their currency to the US dollar then they are going to have to live with any problems that creates.

Dont worry, the Japanese, chinese, Saudi's are not going to be that stupid again sinking all their eggs into one reserve currency. Not even the Euro (wich is the only currency that has the lequidity to replace to USD) is going to be trusted.

Since the US is by far the EU's largest partner there is not a chance the EU would want to replace the USD as the world's reserve currency. 

Whats the use of having a customer if he is a deadbeat?

[cufflinks]

China:

Check out http://www.pbs.org/independentlens/chinablue/

China systematically drives the price of global labor into the toilet with slave labor sweatshops and has built a $2 trillion global trade surplus because of it... which they are now pouring into infrastructure projects around the world to secure future commodities supplies (Africa) and control infrastructure that will benefit their export economy ($6B for a widened Panama Canal that can handle Chinese Super Cargo Container ships etc...) as well as their own domestic infrastructure lest they see 1 month long traffic jams versus the regular 1 week jam up gridlock situations that occur now on an ongoing basis.

The idea that China and Japan can dictate to the USA is laughable - yes USA must get Social Security, Medicare and Medicaid under control (Can you say UK, France and Greece style austerity measures???  French are rioting in the streets over increasing the retirement age to 62 - USA will most likely be raised to 72...  And what did Russia do with its hyperinflating currency - 30000 rubles to the dollar in 1998 went to 30.6 rubles to the dollar today - and Russia is stable and prosperous once again...

Listening to China cry about the devaluation of the dollar which in fact increases the attractiveness of US exports as well as Chinese as long as they remain coupled to the dollar - is like listening to parents of a 200 lb 8 year old complain that fast food made the child fat.  It was the parents laziness that made the child fat.

Chinese are "poised" and maneuvering to become the world's reserve currency.  Lets see how that will work out - shipping companies do not like to deliver commodities to Chinese ports due to unexpected "environmental and safety" port inspections that tie up the ships so long the demurrage fees wipe out profits - so who in their right mind is going to trust the Chinese Red Freaking Army and hold their reserves in red-yuans?  The moment China decouples from the US Dollar is the moment that their workers go from $70 month wages to $700 a month wages and they lose their crushing labor advantage over the rest of Asia, India, Pakistan and Latin America.

Oh - and the Japanese know that China is still plotting their revenge for the rape and murder of Nanking - which is why you will see an acceleration of automated Japanese factories of all type (Autos, TVs, Appliances, Mobile electronics etc) in the USA as their industrial park of choice to mitigate the risk of China's revenge.

So the common wisdom that the USA is doomed if China stops buying up US treasuries might actually be a good thing and force the USA to finally deal with runaway entitlements before every baby boomer retires...  The Japanese robotics industry is accelerating along with our own and the Chinese cheap labor advantage becomes less so day by day.