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- - A case AGAINST gold and silver? (http://goldismoney.info/forums/showthread.php?t=333814)

hoser | 12-23-2008 11:24 AM
A case AGAINST gold and silver? OK, sorry if this is a newbie question, but seems like the case is strong FOR buying gold and silver. But I'd love to hear a "devil's advocate" case against gold. And also one against silver. I just think when everything is pointing me to buy more, I'd love to hear a knowledgeable opinion to make slow down and look at the possible downside. :36_3_12:

Mujahideen | 12-23-2008 11:53 AM
Re: A case AGAINST gold and silver? The only case against buying PMs is that the price will fall... But the same thing could be said with frns... the value of frns can and will fall.

AuNuggets | 12-23-2008 12:25 PM
Re: A case AGAINST gold and silver? Quote:
Originally Posted by Mujahideen (Post 1479112) The only case against buying PMs is that the price will fall... But the same thing could be said with frns... the value of frns can and will fall.
The question is..... "compared to what ?" As long as the dollar is the universal (?) value reference, it will not "fall" in comparison to itself, only as a matter of perspective compared to other goods, services, or currencies of other countries. The ideal scenario is to figure out which of those goods, services, or currencies will either appreciate the most....... or depreciate the least. One could play devil's advocate against the PMs vs. any number of other things that might perform better, offer a better "use value", or hold their purchasing power better in the current financial environment. Be careful not to fall into the trap of worshiping your investments.

SilverNGoldHaveINone | 12-23-2008 01:44 PM
Re: A case AGAINST gold and silver? Gold and silver are like any other investment - they could go up, or they could go down. Around here, you have two types of people. Those who invest in silver and gold the way you'd invest in real estate, stocks, bonds, etc. The second group of people are the survialists/whackos, who think the world is going to end. In these "end times," people will be trading gold and silver for food. Yes, that's a ridiculous view. But keep in mind that many around here share that. Thus, much of the advice you'll receive will come from such folks. Discount that advice accordingly.

hoser | 12-23-2008 01:59 PM
Re: A case AGAINST gold and silver? Based on the current financial situation worldwide, seems like PM's are a sound investment. I'm looking for reasons why it may NOT be a sound investment -- like if everyone's dollars and Euros are so beat up, no one could afford to buy gold and silver anyway, regardless of price. Any investment is only worth what people will pay for it, correct? I know this is probably a real "newbie" question, so appreciate your patience and input!

Saul Mine | 12-23-2008 02:07 PM
Re: A case AGAINST gold and silver? Have you considered the "case against food"? How about the "case against housing"? There is no case against a commodity, only a preference for one rather than another. You can't eat gold, you can't shoot beans, you can't drive bullets, and a car is a lousy store of value.

foolsgold | 12-23-2008 02:12 PM
Re: A case AGAINST gold and silver? Quote:
Originally Posted by SilverNGoldHaveINone (Post 1479280) Gold and silver are like any other investment - they could go up, or they could go down. Around here, you have two types of people. Those who invest in silver and gold the way you'd invest in real estate, stocks, bonds, etc. The second group of people are the survialists/whackos, who think the world is going to end. In these "end times," people will be trading gold and silver for food. Yes, that's a ridiculous view. But keep in mind that many around here share that. Thus, much of the advice you'll receive will come from such folks. Discount that advice accordingly.
Notice the poster's name. I don't consider myself a survivalist by any stretch. My PM's are to primarily "protect" my savings which are normally eroded by inflation. Gold and silver are not "normal" investments. They have no counter party risk, meaning I don't have to rely upon someone else's ability to pay or the full faith and trust of the US government. If gold coins could be transported back in time to someone 1000 years ago they would have value and I think the same would be true if they could be transported into the future, though that cannot be proven.

born_cross_eyed | 12-23-2008 02:18 PM
Re: A case AGAINST gold and silver? Quote:
Originally Posted by SilverNGoldHaveINone (Post 1479280) Gold and silver are like any other investment - they could go up, or they could go down. Around here, you have two types of people. Those who invest in silver and gold the way you'd invest in real estate, stocks, bonds, etc. The second group of people are the survialists/whackos, who think the world is going to end. In these "end times," people will be trading gold and silver for food. Yes, that's a ridiculous view. But keep in mind that many around here share that. Thus, much of the advice you'll receive will come from such folks. Discount that advice accordingly.
Why are you here "SilverNGoldHaveINone"? Obviously you're a troll looking to get a rise out of people. If there's a case against gold and silver, it's that it's not an investment but rather a store of wealth. PMS are a vehicle in which to mantain purchasing power; a hedge against the inflationary policies of the central bankers. If you're looking for high-return performance (and the associated risks), look elsewhere.

madfranks | 12-23-2008 02:45 PM
Re: A case AGAINST gold and silver? Quote:
Originally Posted by SilverNGoldHaveINone (Post 1479280) The second group of people are the survialists/whackos, who think the world is going to end. In these "end times," people will be trading gold and silver for food. Yes, that's a ridiculous view. But keep in mind that many around here share that. Thus, much of the advice you'll receive will come from such folks. Discount that advice accordingly.
People have been trading gold and silver coins for food WAYYYY longer than they've been trading any sort of gov't paper (including the USD) for food. In a true free market, gold and silver coins would still be used to buy food, because one would have to offer a coin(s) of equal value to the goods/services he wants in return. Only in the world of government management and legal tender laws are people forced to trade a paper ticket backed by nothing in exchange for a carload of food. Fundamentally, which one makes more sense? Which one is the ridiculous view?

studiopaul | 12-23-2008 02:50 PM
Re: A case AGAINST gold and silver? Gooverment intervention with its private holders manipulating its value... but as said value to what as it stays always a gold coin for example. Frns may not last and turn to unusable paper... gold.. doesnt turn into much it stays gold!!! Just watch for exchangers manipulation.

unalga | 12-23-2008 02:54 PM
Re: A case AGAINST gold and silver? Wait til the very first store asks to only pay in PM's. Now that will be news.

smullen | 12-23-2008 03:21 PM
Re: A case AGAINST gold and silver? I think it depends on what your reasons for holding Gold and Silver are??? a. Speculation/Profit??? b. Protection against the value of the failing US FRN?? C. Use for trade in a situation where the US dollar and current system money system as we know it fails apart... Anything I could come up with as a negative could be said about any other investment as well... With exception of maybe storage issues (you gotta have room to hide and protect it) and maybe trouble unloading it for whatever you need (Cash, food, ammo)...

EE_ | 12-23-2008 03:31 PM
Re: A case AGAINST gold and silver? The biggest concern I hear is, that PM's are the least controlled of all assets. They operate for the most part outside the system. Some believe this will not go on forever, and I think it's a valid concern. The system wants your cash in stocks, banks and treasuries, where they can keep a close eye on it, or tax it every time it moves left or right. And for cash hoarders, I think one day the government will call them in for a new currency. Frankly, I'm surprised they haven't already, to flush out all the off-shore, and hidden black money. They can't do the same with PM's, they will have to do it by other means

LukeNM | 12-23-2008 03:31 PM
Re: A case AGAINST gold and silver? Quote:
Originally Posted by SilverNGoldHaveINone (Post 1479280) Gold and silver are like any other investment - they could go up, or they could go down. Around here, you have two types of people.
Will I am the third type -- let me know when you figure it out newbie!

bfnelson | 12-23-2008 03:53 PM
Re: A case AGAINST gold and silver? Quote:
Originally Posted by SilverNGoldHaveINone (Post 1479280) Gold and silver are like any other investment - they could go up, or they could go down. Around here, you have two types of people. Those who invest in silver and gold the way you'd invest in real estate, stocks, bonds, etc. The second group of people are the survialists/whackos, who think the world is going to end. In these "end times," people will be trading gold and silver for food. Yes, that's a ridiculous view. But keep in mind that many around here share that. Thus, much of the advice you'll receive will come from such folks. Discount that advice accordingly.
Well bear in mind, alot of people are wiped out because of the way they invested in those markets. The problem is they invested more than they could afford to lose. Some of those people gave Madoff their life savings. If you are worried about food shortages doesn't it make more sense to simply stock the food rather than buy something you think will go up and allow you to buy food that is in short supply in the future? I agree, these complicated schemes never work, keep it simple.

bfnelson | 12-23-2008 04:00 PM
Re: A case AGAINST gold and silver? Quote:
Originally Posted by Saul Mine (Post 1479301) Have you considered the "case against food"? How about the "case against housing"? There is no case against a commodity, only a preference for one rather than another. You can't eat gold, you can't shoot beans, you can't drive bullets, and a car is a lousy store of value.
See that's the problem - you need all of those things. It's naive to think that just spending all your money on a relatively small stack of silver is going to solve your problems. Even with inflation as high as it goes if you have debt you should pay it off. Bear in mind that anything bought on credit will probably be dirt cheap so people with a pile of cash and necessities will probably be ok to some extent. Who knows what silver will actually do or how easy it will be to get all that cash for it? If you don't have enough cash to ride out the storm you may end up having to sell the things you spent all that money on for a song to stay afloat (weak hands). If you think you will need food then buy it now. Keep your car and home in good repair and have some reliable guns that you can afford. I am mostly focused on getting my debt paid off by the end of next year but I have a decent amount of silver hoping for some leverage. If it doesn't work out I'll be fine because I bought what I can afford.

Waypoint-Trading | 12-23-2008 04:07 PM
Re: A case AGAINST gold and silver? Quote:
Originally Posted by hoser (Post 1479066) OK, sorry if this is a newbie question, but seems like the case is strong FOR buying gold and silver. But I'd love to hear a "devil's advocate" case against gold. And also one against silver. I just think when everything is pointing me to buy more, I'd love to hear a knowledgeable opinion to make slow down and look at the possible downside. :36_3_12:
Hey Hoser........How is it in the great white north ey? Conventional wisdom: Gold is a barbarous relic that does not pay any return (ie interest, dividend, etc.), cannot be replaced if stolen, and costs something to store it (either safe in your home, safe deposit, etc.) Silver has the same drawbacks, but it also takes up much more space than gold for the value held. That is why I don't have any, as it went over the side of my dinghy in a storm in the Gulf of Mexico last year. So, because I lost it all, it cannot be replaced by the nice people who should have held on to it for me so that it could be replaced when I lost it, like nice stocks, bonds, or FRN's in a bank that they will also pay me at nice 1% return on instead of a virtual guarantee to keep up with inflation by investing in PM's. Balance that against total implosion of the debt/FRN system and I think I will buy more PM's.

SilverNGoldHaveINone | 12-23-2008 04:34 PM
Re: A case AGAINST gold and silver? Quote:
Originally Posted by born_cross_eyed (Post 1479320) Why are you here "SilverNGoldHaveINone"? Obviously you're a troll looking to get a rise out of people.
It's a Biblical reference, actually: http://bible.cc/acts/3-6.htm You really should read more broadly before falsely accusing someone of being a troll.

SilverNGoldHaveINone | 12-23-2008 04:38 PM
Re: A case AGAINST gold and silver? Quote:
Originally Posted by bfnelson (Post 1479418) If you are worried about food shortages doesn't it make more sense to simply stock the food rather than buy something you think will go up and allow you to buy food that is in short supply in the future?
Exactly. You also have guys here who are storing silver but have health problems because they are overweight or obese. If, as people like to say, TSHTF, which would be more helpful: Being healthy, strong, mobile, able to move, work, and fight. Or having silver and gold? Ideally, you should have food, guns, gas masks, and silver and gold. But you should also have your health. Yet how many SHTF guys are taking regular hikes, lifting weights, and getting themselves in super shape? Keep it simple, Sally.

ppius13 | 12-23-2008 04:51 PM
Re: A case AGAINST gold and silver? In the past, the opportunity costs of holding gold relative to income producing investments was high. In other words, gold pays no interest or dividend, like stocks or money market funds; that is a lost opportunity. However today, interest rates are so low and the risk of holding dividend paying stocks is so high, that gold is very attractive to those who would ordinarily not invest in it.

born_cross_eyed | 12-23-2008 04:55 PM
Re: A case AGAINST gold and silver? Quote:
Originally Posted by SilverNGoldHaveINone (Post 1479478) It's a Biblical reference, actually: http://bible.cc/acts/3-6.htm You really should read more broadly before falsely accusing someone of being a troll.
Actually my accusation has much more to do with your condescending attitude towards those who take preparation seriously than your user name.

pbr streetgang | 12-23-2008 04:58 PM
Re: A case AGAINST gold and silver? I think it is time to sell! I am noticing more and more TV ads and local newspaper ads for GOLD! Both for buying and selling. I have never seen this ever before. This makes me very suspicious of what is going on in the world of PM. Also today while I was eating lunch at a local sub shop there were three fat housewives sitting next to me and one of them piped up and said, "Have you seen all the gold ads on TV lately?" I was thinking the same exact thing as we all watched an ad on Fox news. One of the other heifers bellowed, "yah me and frank are considering buying some since we pulled our money out of the market." AHH Houston, we have a problem! Secondly, when APMEX sells 200,000 SAE in 24 hrs this should be very alarming to many long term invertors here. Why, because all that supply will eventually come back out into the open market. Just as the tide floods in it will surely ebb out. Simple economics. I mean just look at the outrageous premiums people are paying for PM's. It's mayhem. I believe one day soon there will be heavy selling pressure as many NOOBS realize PM's are not stocks and once they realize that the SHTF scenario does not play out they will panic and start selling. I would look to sell into the rallies and wait till we test the lows to pick up any PM's. Everything that goes up must come down. Lastly, Newtons second law also applies to economics. check it out.

GreenSpirit | 12-23-2008 05:34 PM
Re: A case AGAINST gold and silver? Let me know what you have to sell.

SilverNGoldHaveINone | 12-23-2008 06:14 PM
Re: A case AGAINST gold and silver? Quote:
Originally Posted by ppius13 (Post 1479502) In the past, the opportunity costs of holding gold relative to income producing investments was high. In other words, gold pays no interest or dividend, like stocks or money market funds; that is a lost opportunity. However today, interest rates are so low and the risk of holding dividend paying stocks is so high, that gold is very attractive to those who would ordinarily not invest in it.
Right. Gold should remain part of a well-diversified investment portfolio.

Highwayman | 12-30-2008 01:29 AM
Re: A case AGAINST gold and silver? Quote:
Originally Posted by SilverNGoldHaveINone (Post 1479280) Around here, you have two types of people. Those who invest in silver and gold the way you'd invest in real estate, stocks, bonds, etc. The second group of people are the survialists/whackos, who think the world is going to end. In these "end times," people will be trading gold and silver for food. Yes, that's a ridiculous view.
You'd do well to resist the former, and step more in line with the latter. Most of the people here see the storm coming, their discernment makes them not "survivalists, wackos, and end-timers".. but people who understand and study monetary history, fiat currency, economics, the Federal Reserve, and fractional reserve banking. How much do you know about these subjects? Read more GIM threads about those subjects, then post again. (Sorry all.. newb initiation)

Highwayman | 12-30-2008 01:42 AM
Re: A case AGAINST gold and silver? Quote:
Originally Posted by unalga (Post 1479361) Wait til the very first store asks to only pay in PM's.
First they'll refuse personal checks Then refuse check cards Then refuse credit cards Then refuse cash Then refuse gold because the tyrants passed a "no sale without the chip" law. Of course, they call it the "Economic Freedom Act". And soon after.. the choice of slavery or liberty (which is already on the ropes). Liberty requires courage, sacrifice, and a nasty independant streak. All rare things in todays immasculated and entitled American males. That's my timeline figurin' anyway...

AuNuggets | 12-30-2008 09:13 AM
Re: A case AGAINST gold and silver? 1 Attachment(s) Quote:
Originally Posted by Saul Mine (Post 1479301) Have you considered the "case against food"? How about the "case against housing"? There is no case against a commodity, only a preference for one rather than another. You can't eat gold, you can't shoot beans, you can't drive bullets, and a car is a lousy store of value.
Whadda ya mean, you can't shoot beans !?! :5_1_120: .

Twisted Avatar | 12-30-2008 09:40 AM
Re: A case AGAINST gold and silver? The case against PM's Hmmmmmmmmmm You will "take a pinch" on the spot price depending on how bad you want to unload it. Depending on where you sell they might attempt to 1099 you. It is very heavy to lug around. Thats it. T

GoldandCountry | 12-30-2008 09:46 AM
Re: A case AGAINST gold and silver? Case against? Silver is bulky and it is easier to have your PM stolen than the money in your savings account so long as your balance is covered by FDIC.

flash91 | 12-30-2008 11:01 AM
Re: A case AGAINST gold and silver? I think we can all agree that the goal is purchasing life's necessities (and paying taxes so that the gov doesn't take away our lives) There are a lot of perma bulls on this board. That's not entirely irrational, because gold and silver have a long history in trade. If you are in doubt about the future, its hard to go wrong accumulating. I don't subscribe to the perma bull thought because I can't live forever (if this changes, PLEASE SEND INSTRUCTIONS!) Figuring that when the dow went from 13K to 8K the economy lost about $7 trillion, plus a credit slowdown, the dollar should strengthen for at least another quarter. A strong dollar buys more "stuff" which should be bearish for gold and silver into 2009. So I'm in the short term bear camp.

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Sparky | 12-30-2008 11:09 AM
Re: A case AGAINST gold and silver? I think the main case against it would be that in a true, utter systemic financial breakdown, the government could make it a federal crime to own, trade, or sell. True, there would still be a black market and it would have value. But I could say that about heroine right now, and yet I don't want to be in the heroine black market either. That being said, even in that environment, I'd still want to hold some as an emergency trading resource. Right now, the positives far outweigh the negatives. We've just had a year of incredible de-leveraging, where most assets have dropped 30-50%. The only thing that has held up for twelve months has been gold (up a few percent) and treasury bills (up a lot; interestingly, silver is down 25%).

Twisted Avatar | 12-30-2008 11:18 AM
Re: A case AGAINST gold and silver? Quote:
Originally Posted by Sparky (Post 1487691) I think the main case against it would be that in a true, utter systemic financial breakdown, the government could make it a federal crime to own, trade, or sell. True, there would still be a black market and it would have value. But I could say that about heroine right now, and yet I don't want to be in the heroine black market either. That being said, even in that environment, I'd still want to hold some as an emergency trading resource. Right now, the positives far outweigh the negatives. We've just had a year of incredible de-leveraging, where most assets have dropped 30-50%. The only thing that has held up for twelve months has been gold (up a few percent) and treasury bills (up a lot; interestingly, silver is down 25%).
Because the manipulation is most violent in the history of commodities......... no other commodity class even approaches one tenth the level of manipulation that is going on in silver

Avalon | 12-30-2008 11:19 AM
Re: A case AGAINST gold and silver? Government intervention is the biggest risk to owning pm's. If gold goes to 5,000 dollars an oz the way many here think it will the Government would tax it , confiscate it or outlaw it very quickly.

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