lawyerliz - 19 July 2008 12:04 PM

Would anyone here just supinely hand over confiscated gold?

Hmmmm?

Anybody?

I don’t think they would have to confiscate it. It is currently illegal to accept gold as a form of payment or to use it to settle contracts. The relevant section of the U.S.C. can be found here. If stores and retailers can’t take gold as payment, can’t offer gold as compensation, and ordinary people can’t use it as money then it’s only remaining value is as an investment commodity. The government wouldn’t have to confiscate it as simple enforcement of existing law would be enough to discourage it’s use as “money”. The reason to own physical gold is two-fold: as a hedge against inflation and as an insurance policy against a very dark day when the laws become unenforcable due to war, revolution, or societal collapse.

Sorry Panda, I don’t know how to respond to a private message.
I went and bought coins from a dealer

Since I did this on the off chance that we would be in a survivalist
situation, I didn’t want anything electronic.  I didn’t buy them to make
money, tho I have made a bit.  We didn’t buy much.

I like buying individual shares only.  I like to pick the companies
myself.

Awgee, do you ever just buy from local dealers?

I have found a couple of south county dealers who sell American Eagles at spot + $40, which is basically the same price as tulving, but without the 5 oz minimum purchase requirement, and no shipping or insurance expenses (which I know is free from Tulving if you purchase at least 20 oz, but….).

Honestly, I find Tulving’s website nearly impossible to navigate, but from what I can tell the minimum order for gold is 5 oz, but 20 oz if you want free shipping and insurance.

BLUE FIRE - 28 July 2008 09:47 AM

Honestly, I find Tulving’s website nearly impossible to navigate, but from what I can tell the minimum order for gold is 5 oz, but 20 oz if you want free shipping and insurance.

If you’re not buying 20+ oz, why bother?

No really.  Even at a $1000/oz, if you can’t afford a 20 oz purchase, it’s fairly pointless for you to try and play this game.  Your transaction costs will kill you.

“Gold has fallen every session this month, with the most- active contract losing $94.40 since July 31. The metal entered a bear market today, declining 20 percent from a record $1,033.90 an ounce reached on March 17.”

Wow…awgee, you buying any on this drop?

Bloomberg on gold

Am I way off base or would any perceived “strength” in the dollar have the gov-mint salivating for another round of stimulus?  Obviously the powers that be are comfortable with an even lower dollar relative to world currencies and the anticipated global slow down must’ve given the gov-mint more room to run, no?

PANDA - 11 August 2008 07:02 PM

Took Awgees advice and had cash on the side line and loaded up on gold last Friday and today. Gold down to 829 an ounce today, Panda says “OUCH” but I am in it for the long haul. Let the inflation kick in and let the dollar weaken! Go Precious Metals!
Panda

I would still leave some cash around - no point on catching the falling knife unless it stabilizes. I disposed of most of my gold out of sheer luck the day before the last Fed meeting as I didn’t thrust the market’s reaction to whatever the fed was up to.

We now have gold at -20% and silver at an incredible -30%. Can you believe precious metals are depreciating faster than houses built with shady loans?

This market is vicious - be careful out there.

I do agree for the futures and short term day traders, gold and silver is a very dangerous investment, but for the long term investor, I am very bullish with commodities as I will continue to buy as the prices fall. I am also planning to buy more equities in foreign countries, especially in Japan, Korea, Hong Kong, and China as prices are starting to look very and very attractive again. I sold out of all my Chinese/Hong Kong equities about a year ago (as valuations of Chinese companies were starting to get way over priced) and the next 6 month, I am looking to aggressively to buy up the asian equities at bargain prices again.

As Silver dropped 9% in one day on Friday, I see it as a huge discount (buying opportunity) to get in at 40% discount from the peak. Gold prices under $800 is an incredible bargain. I think Gold prices will probably correct more down to $750 tops in the near future to completely wipe out the short term speculaters.

Gold is headed toward at least $2,200 an ounce currently at $786.00 up from $280 so far, and Silver at $100 (currently $12.70, up from $4)

IS PANDA CRAZY???????

In 1981, the histortic seventies gold bull market finally topped out at $850. After adjusting for inflation, to merely equal what it did in 1981, gold would have to go (only) to $2171. Silver topped out at $50 in 1980. After adjusting for inflation since then, to merely equal what it did in 1981, silver would have to go up to $125.

Why is Panda so bullish that metals could even go much higher than that? The biggest single factor that drives gold and silver is monetary inflation, and that’s already several times greater now than during the great gold and silver bull market of the seventies. And also silver supply will be almost become obsolete in the next 10 - 15 years.

Graph, You may be laughing at Panda now for continuing to buy gold and silver at these bargain prices and loading up on cheap quality asian equities, but i will be laughing at you in a couple of years.

Panda

PANDA - 16 August 2008 07:48 AM

I do agree for the futures and short term day traders, gold and silver is a very dangerous investment, but for the long term investor, I am very bullish with commodities as I will continue to buy as the prices fall. I am also planning to buy more equities in foreign countries, especially in Japan, Korea, Hong Kong, and China as prices are starting to look very and very attractive again. I sold out of all my Chinese/Hong Kong equities about a year ago and looking to aggressively to buy up the bargains.

As Silver dropped 9% in one day on Friday, I see it as a huge discount to get in at 40% discount from the peak. Gold prices under $800 is an incredible bargain. I think Gold prices will probably correct down to $750 top in the near future to completely wipe out the short term speculaters.

Gold is headed toward at least $2,200 an ounce currently at $786.00 up from $280 so far, and Silver at $100 (currently $12.70, up from $4)

IS PANDA CRAZY???????

In 1981, the histortic seventies gold bull market finally topped out at $850. After adjusting for inflation, to merely equal what it did in 1981, gold would have to go (only) to $2171. Silver topped out at $50 in 1980. After adjusting for inflation since then, to merely equal what it did in 1981, silver would have to go up to $125.

Why is Panda so bullish that metals could even go much higher than that? The biggest single factor that drives gold and silver is monetary inflation, and that’s already several times greater now than during the great gold and silver bull market of the seventies. And also silver supply will be almost disappear in the next 10 - 15 years.

Graph, You may be laughing at Panda now for continuing to buy gold and silver at these bargain prices and loading up on cheap quality asian equities, but i will be laughing at you in a couple of years.

Panda

We dumped all our gold awhile ago, so I really don’t care if it goes up or down. Panda, for your sake, I hope you are right and that it continues to climb. $2,200 an ounce? Wow!  That would make you some sweet cash.  I’m too nervous to invest in commodities right now. Like Astute Observer, I went through the 80’s and witnessed gold crash.  When gold crashes - it crashes hard.

PANDA - 16 August 2008 07:48 AM

Why is Panda so bullish that metals could even go much higher than that? The biggest single factor that drives gold and silver is monetary inflation, and that’s already several times greater now than during the great gold and silver bull market of the seventies. And also silver supply will be almost become obsolete in the next 10 - 15 years.

Graph, You may be laughing at Panda now for continuing to buy gold and silver at these bargain prices and loading up on cheap quality asian equities, but i will be laughing at you in a couple of years.

Panda

This market has taught to not be overly confident into what I thought was “bullet-proof” logic. The problem I have is that, because gold by itself does not generate income or dividends and industrial demand for it is actually a fairly small part of overall demand, the premise behind gold going up is simply more people buying into the same logic you’re using.

I’m not necessarily saying I’m against buying gold; I still have a 5% stake - but I had a 10% 2x leveraged stake before, and had I not being lucky I would have been looking at a 40% loss. I guess all I’m saying is I wouldn’t be so supremely confident that gold is going straight up; it’s more of an insurance policy than anything else.

I also keep my ear to the ground and the thesis that we may be headed in a DEFLATIONARY environment has some legs. I’m neutral on wheter we’re in for an inflationary or deflationary cycle, but there is some logic that the fact if nobody can get a loan, then that means fewer dollars available not more. There’s good arguments going for both sides.

These days I’m slightly leaning towards the thesis that a worldwide recession means lower prices for all asset classes, gold included. I’ll still buy gold on a rebound, but not in a huge 10-20% proportion I was willing to do before.

Heck, my super-risky bank puts look safer than my gold right now. At least the bank puts I understand the catalyst for them dropping in value (banks giving out bogus earnings numbers), whereas gold is dropping 20% for no good reason.

I wish the market went up and went down they way it’s “supposed” to. Heck, I’d be rich if that were the case.  Sometimes it starts to go down and then people panic and then it becomes a domino affect.
 
The dominoes go down very, very quickly.

Here is a interesting observation from my research on gold prices and any one can correct me if my facts are off.

Free to float, gold in the last bull market rose from $42 an ounce to its all-time high of around $850 - $877 in 1980, a 20-fold increase. The current bull market in gold has not even seen a tripling yet at gold prices at $786.20 an ounce. A similiar move this time wold give gold a price of $5,100.

Here is the interesting part, at the peak of the bull market of the 1920s the DOW was around 36 and, with gold officially $35 an ounce, the DOW-to-Gold ratio was back to nearly 1 to 1.
By 1966 the Dow was again worth more than 20 ounces of gold, and by 1980, with Dow at about 850 and gold at about $850, it was again back to 1 to 1 for the second time. So they had two occasions in the prior century when the Dow exceeded the value of gold by a ratio of 20 to 1 and then, within a short period of time after hitting 21, went back to 1 to 1.

The Dow’s all-time record high relative to gold occurred in 2002, when it reached something like 44 to 1, an absurd level, more than double the previous peaks of 1966 and 1929. As i write this post today, we are at about 15 to 1. Were we to repeat history of the last century and go back to a 1 to 1 ratio, you’d be looking at a gold price of $11,000 an ounce, assuming the Dow stays where it is at and does not decline any further. If DOW goes to down to September 30, 2002 price at $7528 that would put one ounce of gold at $7528. I will not be suprised to see our DOW go from 11,000 to 7500 within the next 5 years. Again, i am trying to be realistic, gold price at $2200 a ounce is a very realistic figure in the near future.

Panda’s .02 cents.

... gold in the last bull market rose from $42 an ounce to its all-time high of around $850 - $877 in 1980...

Price of Gold August 2008 (28 years later) 785
 

 
For the people who are buying gold, I hope they know when to sell.

CalGal - 16 August 2008 05:11 PM

... gold in the last bull market rose from $42 an ounce to its all-time high of around $850 - $877 in 1980...

Price of Gold August 2008 (28 years later) 785
 

 
For the people who are buying gold, I hope they know when to sell.

That’s my point CalGal,

If the Irvine Company came to you and said that they will sell you all their Irvine SFRs they built in Turtle Rock for less than 1980 prices wouldn’t you buy it?? Panda would buy ten of them at a heartbeat.

Panda

PANDA - 16 August 2008 02:45 PM

Were we to repeat history of the last century and go back to a 1 to 1 ratio, you’d be looking at a gold price of $11,000 an ounce, assuming the Dow stays where it is at and does not decline any further. If DOW goes to down to September 30, 2002 price at $7528 that would put one ounce of gold at $7528. I will not be suprised to see our DOW go from 11,000 to 7500 within the next 5 years. Again, i am trying to be realistic, gold price at $2200 a ounce is a very realistic figure in the near future.

I just don’t see why history should repeat itself exactly the same way. The last gold spike was an era with 20% inflation wasn’t it? If that were to happen, wouldn’t that pretty much imply house prices would have to stabilize or even go up again as the value of the dollar went down the drain vs. hard assets? The scenario you’re implying seems to imply a very quick return to the house bubble era.

Saying gold would go up to 2200$ tells us more about the dollar than gold. Gold is a fixed store of value, the dollar is the thing that fluctuates along with it.

PANDA - 16 August 2008 06:47 PM

That’s my point CalGal,

If the Irvine Company came to you and said that they will sell you all their Irvine SFRs they built in Turtle Rock for less than 1980 prices wouldn’t you buy it?? Panda would buy ten of them at a heartbeat.

Panda

What if you asked them what price they planned to sell them for next year and they said they’d sell it for the 1960s prices, would you still buy it? That’s exactly what’s happening right now, people don’t care what price the houses are at if they still believe they will be worth less in the future. As an investor, I couldn’t care less if they sold the houses for half price if I didn’t believe the houses would offer a good ROI in a reasonable amount of time.

I just think you’re over-simplifying. Buy low, sell high, but you could pick “low” or “high” depending on any number of timeframes or reference points that you choose.

Just to be clear, I still plan to buy more gold myself at some point, I’m just trying to be devil’s advocate - over-confidence can be investor’s worst enemy.

People spend years educating themselves and specializing in the commodities market. It’s not for the weak at heart. As long as you can handle the lows as well as the highs - then go for it. Just remember, trading stocks and commodities is a gamble. Please only trade what you are willing to lose.  I’ve seen too many people lose their hard-earned life savings in a blink of an eye.

Ooo, I just saw that I’m at McMansion status.

I’m not sure if anyone would know the answer to this question. My data for gold prices only goes back to 1968 and was wondering if anyone knows what the gold prices were between 1960 - 1970. I’m think that the price of gold probably moved in a flat line hovering around $35 an ounce and started to make upward movement in the 70s. Can anyone validate if my information is correct?

I think the DOW also moved in flat line between 1970 - 1980, however did the DOW have an upward movement between 1960 - 1970?

Panda

Here’s tabular data for gold price for every year neginning from 1800. No chart though, you’ll need to make a chart yourself in Excel.

Gold prices

Even without a chart, the history of the price of gold is pretty simple.

From 1800 to 1932, gold was at about 20$ almost the whole time, for more than a hundred years.

Then in 1932, it became illegal to own gold after the great depression, gold prices got stuck at 35$ from 1932-1971 as the currency got devalued.

Nixon then ended Bretton Woods in 1971 and gold actually started fluctuating, peaking out at 850$ in 1980, a 24-fold increase. I guess people were so gaga about gold not having a fixed price that there was no reference point to value it properly.

Gold zig-zagged its way back down to it’s recent low of 300$ in 2001 and rose back to its now current price of 800ish$ in 2008.

Basically you can pretty much ignore any gold prices before 1970 because gold was set to a fixed price by the government back then and, well, you couldn’t trade it anyway.

Congrats to all the gold nuggets out there.
Gold up 25 today.
Great day to be a nugget holder. 

It’s interesting that a few crazy days of drops in commodities and everyone is ready to run. I really don’t think that any of the fundamentals have changed and this week in stocks sort of proves that. There is no way that the possibility of a bubble in commodities comes anywhere near what has happened in housing and how it has affected the entire market. Sit tight with your gold, you’re ok.

muzie - 20 August 2008 05:48 PM

The last gold spike happened with 20% wage inflation. That’s just not happening, for now - on the contrary we have massive wealth destruction and wages have been flat for a while.

To be honest, I haven’t seen any massive wealth destruction.  The US markets are down, but nothing compared to the rest of the world. If anything, I’ve seen the US government try to prop up housing and the banks in order to keep the credit flowing to the consumer.

Then again, I live in Irvine, so I’m shielded from the real world.  When everyone in Irvine starts driving scooters and riding bicycles, then I know its bad.

awgee - 25 August 2008 01:34 PM

Is the dollar going to strenghten?

Will the price of gold and oil collapse?

Peter Schiff’s view

and click on “Investors Chase Phantoms”

Hmmm, well I’ve got some issues with that Peter Schiff guy after having read his “marketing” material a while ago. (He’s selling an e-book, and his marketing letter was basically “How you can make a million from 10$ in 5 minutes a day” or something along those lines).

Here’s Mish Shedlock debating Schiff’s vew, arguing for a deflationary view:
Peter Schiff Replies to Deflation Rebuttal

I don’t think gold’s going to crash, but it’s NOT the slamdunk that some people here and elsewhere make it out to be.