So I may be receiving a lump sum of cash...

[DeBon]

Well to start off I apologize if this is the wrong forum, but I thought it would be best suited here.

Rite now I am 16 years old. Due to certain events that happened in my early childhood, which I won't be going in to, I will be receiving a lump sum of cash when I am 18. Some where in the ball park of $250,000 (it was more but after taxes and such...). For a long time I've had that sitting on my mind. I've always fantasized about what I would do with the money when I'm older. I want to help people. I want to get things done. I know in some cases it isn't much, but a little can go a long way. I've thought about buying some land and farming a bit and inviting fellow Marxists who've wanted to live in a commune. I'm just not sure and I was wondering if I could get some suggestions?

[RGacky3]

If you want to make a real difference donate to groups like the IWW.

[piet11111]

Buying a small farm and making available some of that land for public vegetable gardens would be a nice way to go.

[ComradeMan]

I've thought about buying some land and farming a bit and inviting fellow Marxists who've wanted to live in a commune.

You've answered your own question perhaps?

[DeBon]

You've answered your own question perhaps?

It's just an idea really, I have no idea really but the more I think about it the commune idea sounds better but I wouldn't know how to go about doing such a thing. :/

[RGacky3]

Maybe find a buisiness idea and start a cooperative, theres a lot of info about that you can find.

[Nox]

Maybe find a buisiness idea and start a cooperative, theres a lot of info about that you can find.

Perfect idea.

Invest the money in solar panels, set up a solar energy co-op. The reason I say solar energy is obviously because it's good for the environment, but mostly because the cash flow is guaranteed seeing as you're feeding the electricity into the national grid. Also, there are places in the US such as Arizona that are perfect for this sort of thing.

[Bud Struggle]

When you turn 18 I'm guessing you won't know how to farm or do much of anything else at that point in your life. Until you learn HOW to do something useful with your money find a good broker invest it wisely. Maybe something long term with a high return.

If you start buying farms (you won't get much with 250) or starting co-ops will just piss it all away before you know it.

[ComradeMan]

When you turn 18 I'm guessing you won't know how to farm or do much of anything else at that point in your life. Until you learn HOW to do something useful with your money find a good broker invest it wisely. Maybe something long term with a high return.

If you start buying farms (you won't get much with 250) or starting co-ops will just piss it all away before you know it.

I have to disagree- in the current financial turmoil and insecurity the wisest option in my opinion would be to invest the money in land or buy gold. That's from a hard and cynical financial perspective.

With around 250k you could be a small pacific island!!!

Of course, and this is meant humorously, if he does buy land and open a commune he would technically become a bourgeois landowner and could see the day in which his communards rise up against him and seize what's rightfully theirs. :crying:

Anyway, I'm not giving anyone financial advice- he must look at the options and decide.

[Bud Struggle]

Disagreeing with you CM. You have to know how to buy land. LOTS of people bought real estate in the last bubble and lost their shirt. Same thing with gold--it's had it's ups and downs. American investments--the NYSE is still going up.

[PhoenixAsh]

Few thoughts:

1). Lucky you...unless the events you won't go into were very traumatic or emotionally scarring/draining.

2). I agree partially with Bud....in so far as that you should really really know wat you are doing before you spend your cash....lest you throw it all away and waste it on some half assed plan.

3). How is your college and univesity outlook? Perhaps you can use some of the money for your own education in which you can acquire knowledge on how to help people?

4). Keep some of the money at least for yourself. Life is hard unless you are very very wealthy. Put something aside for a rainy day...

5). Before you donate do a thorough research of the organisation you are donating too. Find one where your money directly benefits people.

6). Lucky you. :)

[piet11111]

Or buy a few homes and let recently foreclosed people live there.
Charge them "rent" but actually use that as payment for that house so that after they paid off the cost of that house you give them that house unless they are so much in debt that the house would be seized right away if that is the case charge them 1$ for 3 months of rent or something until they paid of enough of their debt and are not at risk of losing their house.

Also be sure to keep enough money for yourself having a healthy bank-account is nothing to be ashamed of as you need to secure your financial health.

[ComradeMan]

Disagreeing with you CM. You have to know how to buy land. LOTS of people bought real estate in the last bubble and lost their shirt. Same thing with gold--it's had it's ups and downs. American investments--the NYSE is still going up.


Real estate or land as is? Sure, you wouldn't want to buy 1000 hectares of land that had been a toxic waste dump and then find out you couldn't build on it. But I maintain that land, as an investment, is a commodity that will always accrue value. Think about it- the amount of available land is decreasing and the demand for the land is increasing- this is what gives you real estate guys a profit in a sense- therefore land, in my opinion, will become a "commodity" of increasing value.

The people who bought real estate and lost their shirts were borrowing money to buy houses that dropped in value so they were worth less than the money borrowed to buy them. I don't think that's the same as someone having an amount of capital to invest. Even if he bought some good land and land prices fluctuated- failure to gain is not a loss unless the sole intention is to resell the land at a profit.

As for gold- when stocks are low gold is high and vice-versa. When the gold price goes up it usually means that the shit is about to fly are is already flying! Okay, there are problems with gold but if you look at the predictions of the hurdles on the gold price and do the maths involved I think it's a safe long term investment- if you have the nerves.

If I were in his position I'd do two things- I'd invest (carefully) in good land and take a course/degree in ecology and agriculture ;).

My own land criteria would roughly be as follows, I'd personally need all (5) before I would consider investing a large amount in a given plot of land.
1) possibility to build on the land
2) soil quality and climatic factors
3) autonomous fresh water supply
4) renewable energy potential (photovoltaic/photothermic)
5) access

[Bud Struggle]

Real estate or land as is? Sure, you wouldn't want to buy 1000 hectares of land that had been a toxic waste dump and then find out you couldn't build on it. But I maintain that land, as an investment, is a commodity that will always accrue value. Think about it- the amount of available land is decreasing and the demand for the land is increasing- this is what gives you real estate guys a profit in a sense- therefore land, in my opinion, will become a "commodity" of increasing value.

The people who bought real estate and lost their shirts were borrowing money to buy houses that dropped in value so they were worth less than the money borrowed to buy them. I don't think that's the same as someone having an amount of capital to invest. Even if he bought some good land and land prices fluctuated- failure to gain is not a loss unless the sole intention is to resell the land at a profit. All true, but you have to know how to buy land. What a good mutual fund could do would be is a place to put his money where could earn interest until he was exactly sure what he wanted to do with the money. I am actually of in the land business--and unless you know REALLY know what you are doing you could be stuck with a piece of property that you can't liquidate when you needed it. You have to understand land use rights and zoning and water right and a hundred other things to make a really GOOD investment.


As for gold- when stocks are low gold is high and vice-versa. When the gold price goes up it usually means that the shit is about to fly are is already flying! Okay, there are problems with gold but if you look at the predictions of the hurdles on the gold price and do the maths involved I think it's a safe long term investment- if you have the nerves.

Here's the problem with gold:

http://upload.wikimedia.org/wikipedia/commons/thumb/e/e3/Gold_price_in_USD.png/800px-Gold_price_in_USD.png

It's just up too high for now. It's peaked, or something close to it.


If I were in his position I'd do two things- I'd invest (carefully) in good land and take a course/degree in ecology and agriculture ;).

My own land criteria would roughly be as follows, I'd personally need all (5) before I would consider investing a large amount in a given plot of land.
1) possibility to build on the land
2) soil quality and climatic factors
3) autonomous fresh water supply
4) renewable energy potential (photovoltaic/photothermic)
5) access

I quite agree. I just don't think most 16 or 18 yo kids are up to making those sorts of assessments. That's not about the age--my 17 yo daughter could read the price of piece of land from a mile away--but she was brought up in the business. It's about playing it safe untle you know what you are doing.

[RGacky3]

I hate to say it but Bud is right about Gold, especially since recently Gold has not been acting as a counter to lowering stocks prices, its become a speculative animal in its own right, it may be a good investment for someone who knows what he's doing and riding a bubble, but its not a safe one.

I agree taht you should probably put it away and have someone who knows what they are doing help you.

[thefinalmarch]

Keep it for yourself. Use it to achieve a comfortable standard of living. A lot of working class people in your country don't even have that any more. Think mortgages, college funds, etc. I'm sure no-one here will object to that.

[Bud Struggle]

As far as things like gold go--here's a rule of thumb: when Glenn Beck is selling it, don't buy it.

(To be fair to CM--he is not privy to Mr Beck's pearls of wisdom of American AM radio.)

[ComradeMan]

I hate to say it but Bud is right about Gold, especially since recently Gold has not been acting as a counter to lowering stocks prices, its become a speculative animal in its own right, it may be a good investment for someone who knows what he's doing and riding a bubble, but its not a safe one.

I agree taht you should probably put it away and have someone who knows what they are doing help you.


It's recurring trend in economics, stocks high gold low, gold high stocks low - it's called refuge value.

The fact that the major economies of the world are in serious debt crisis and that the dollar is not worth what is used to be worth nor seen to be such a safe bet, along with the euro crisis means that investors are buying gold. The losing of AAA status is another blow to confidence too.

Here's an interesting 2009 article
http://www.timesonline.co.uk/tol/comment/columnists/william_rees_mogg/article5740620.ece

[Terminator X]

Valid, noble idea - but unless you really know what you're doing, you're going to end up with a "farm" of a couple hippies living in a tent amongst a few meager rows of pot plants.

Go to college with some of that money, maybe major in agriculture management or natural resources or something along those lines and figure out what you're doing and how to manage such an undertaking. Sock the money away in some sort of account that pays interest and you could have more by the time you're out of school to invest in your plan.

[ComradeMan]

It's amazing how discernably un-leftist some of the leftists' suggestions become with the scent of quarter of a million greenbacks in hand.

Come on, this guy wanted to do something moderately "leftist" with the money....:rolleyes:

[RGacky3]

I'm talked about Gold quite a lot, what makes it dangerous is that people are saying that gold is fool proof, safe, and will always keep its value, this is where Marxian economics holds up, use-value, Gold has very little use-value, very litlte of the value derives from people wanting jewlery or whatever, most of it comes from speculation, the idea of intrinsic value, all it takes for that prices to collapse is that idea to shift, or another popular security, its the same thing that happened with the housing market when the price went way beyond the use value, an got effected by things that had nohting to do with the use value and nothing to do iwth the thing itself, right now you have tons of ETFs, Futures and other securities attached to gold.

Its libertarians that are pushing gold, Peter Schiff and other crack pot austrian economists, considering the rest of their analysis I would'nt listen to them at all (generally they also want to go back to the gold standard too).

[ComradeMan]

I'm talked about Gold quite a lot, what makes it dangerous is that people are saying that gold is fool proof, safe, and will always keep its value, this is where Marxian economics holds up, use-value, Gold has very little use-value, very litlte of the value derives from people wanting jewlery or whatever, most of it comes from speculation, the idea of intrinsic value, all it takes for that prices to collapse is that idea to shift, or another popular security, its the same thing that happened with the housing market when the price went way beyond the use value, an got effected by things that had nohting to do with the use value and nothing to do iwth the thing itself, right now you have tons of ETFs, Futures and other securities attached to gold.

Its libertarians that are pushing gold, Peter Schiff and other crack pot austrian economists, considering the rest of their analysis I would'nt listen to them at all (generally they also want to go back to the gold standard too).

I'm not going off anyone's analysis- just looking at the stats and the trends.

Gold does not have very little use-value either, look inside your cellphone. About 10% of gold produced is used in industry. About 40% of gold production if for jewellery and the remaining 50% is investment.

[RGacky3]

It's recurring trend in economics, stocks high gold low, gold high stocks low - it's called refuge value.


Traditionally your right, but over the last year or 2 it has not been acting like that, and its mainly due to the securitization of gold.


The fact that the major economies of the world are in serious debt crisis and that the dollar is not worth what is used to be worth nor seen to be such a safe bet, along with the euro crisis means that investors are buying gold. The losing of AAA status is another blow to confidence too.


I totally agree that the euro and the dollar is in trouble, (I'm actually more confident in the euro than the dollar), but gold right now is in a bubble, its impossible to argue that, the speculation in gold has been insane, it does'nt take much for gold to loose its value.

Yes investors are buying gold, but if you invest in gold your playing the greater fools game.



It's amazing how discernably un-leftist some of the leftists' suggestions become with the scent of quarter of a million greenbacks in hand.

Come on, this guy wanted to do something moderately "leftist" with the money....:rolleyes:


There is no such thing as doing something leftist with your money ... Unless your the government.

[RGacky3]

Gold does not have very little use-value either, look inside your cellphone. About 10% of gold produced is used in industry. About 40% of gold production if for jewellery and the remaining 50% is investment.

Compared to its price yes it does, 50% speculative value + the billions and billions of dollars on ETFs, futures contracts and other securities points to the obvious fact that Gold can easily bubble, and many many very intelligent investors and economists have said that it is.

[NoOneIsIllegal]

Sit on it for a while. You have 2 years to think about it, but honestly, at 18, you still might do some dumb shit. I would take out $10,000 to have as fun/whatever money, and just take a while to solidify your plans with the rest. What's the rush?
Of course I would suggest donating here and there to various things, but your own politics will dictate who and what you give to, etc.

[ComradeMan]

Compared to its price yes it does, 50% speculative value + the billions and billions of dollars on ETFs, futures contracts and other securities points to the obvious fact that Gold can easily bubble, and many many very intelligent investors and economists have said that it is.

But anything can "bubble" or burst- look what happened to aluminium. No one in their right mind would believe that there is such a thing as 100% watertight safe investment- but it also depends what you want to do with the money too. What we are talking about is during this period of increasing financial insecurity and turmoil- currencies are not worth what they used to be worth and there isn't the confidence in them, that's why people invest in gold.

[Olentzero]

I feel I need to +1 DJAnimosity's post. You should really consider that line of approach, DuBon.

[RGacky3]

What we are talking about is during this period of increasing financial insecurity and turmoil- currencies are not worth what they used to be worth and there isn't the confidence in them, that's why people invest in gold.

yes, and gold is deep in a bubble, so its not safe there either.

The more a securities price relies on percieved or speculative value rather than use value the more prone it is to large bubbles.

Gold would have been smart to invest in 2 or 3 years ago, even a year ago, now its a risky investment because its deep in a bubble which could burst soon.

[Bud Struggle]

It's amazing how discernably un-leftist some of the leftists' suggestions become with the scent of quarter of a million greenbacks in hand.

Come on, this guy wanted to do something moderately "leftist" with the money....:rolleyes:

We have to start a RevLeft Stock/Bond Investment Club.

[Revolution starts with U]

I would invest something like 100k into safe and long-term investments; as Bud said, a good broker can go a long way. And the trick, I have been told, is that the person who meets with his broker once a week makes the most money. This way you have a nest egg of 100k that you can reinvest the dividends into and be secure. You'.re not helping the rest of us by blowing it all and going into debt.
Now you have 150k to do with what you want. If you want to throw 50k at a co-op startup, it's okay. You have that secure nest-egg. If you want to donate some, that is fine too.
Either way, gratz on the payoff. Sorry for whatever caused it. And here's wishing you the best of fortunes :D

[Column No.4]

I've thought about buying some land and farming a bit and inviting fellow Marxists who've wanted to live in a commune.

Im there, i have loads of experience in building, gardening, basically anything involving the outdoors.

[ComradeMan]

yes, and gold is deep in a bubble, so its not safe there either.

The more a securities price relies on percieved or speculative value rather than use value the more prone it is to large bubbles.

Gold would have been smart to invest in 2 or 3 years ago, even a year ago, now its a risky investment because its deep in a bubble which could burst soon.

Sure, but we are not talking about 2 or 3 years ago but if you want to take that point in time then predictions were made (with the US debt then $10 trillion) that it would be at least 10-12 years before any recovery could seriously be detected.

The bubble will only burst if the global economy begins to grow seriously and not by pathetic stats such as 0.000001% etc :lol:.

This is the big one.....

Getting back to the OP- why not help him with positive suggestions for his idea/dream instead of everyone telling him why it won't work?

[Aurora]

Buy an apartment or house, that way you'll always have a place to live. That gives you a huge head start in life, it's what i'd do anyways.
Don't buy gold, you can't live in it or eat it and frankly it's a shiny piece of useless shit.

[RGacky3]

The bubble will only burst if the global economy begins to grow seriously and not by pathetic stats such as 0.000001% etc http://www.revleft.com/vb/so-may-receiving-t160626/revleft/smilies2/laugh.gif.


I don't think so at all, you don't need a recovery for the bubble to burst, all you need is an end to buying frenzies, there is a reason Soros got out when he did.

[RichardAWilson]

Purchase conservative large cap dividend yielding stocks (I.e. Like Microsoft and Exxon), go to college and earn a degree in a useful field (I.e. Agricultural Science, Business) and work towards your objective (I.e. Starting a co-operative, investing in clean energy, launching a farming commune). You'll need the knowledge and background to succeed in business and farming.

[Astarte]

You could ... equally distribute it among the members of Revleft - silly me! Just a thought.

[NGNM85]

I could seriously use a donation.

[A Revolutionary Tool]

Donate your money to me, I would put it to good use.

[Nox]

Whatever you do, don't donate any to Revleft.

[Broletariat]

A few things.

The revolution can not be brought about by volunteristic efforts like you are looking for, no offense. Your money would probably be best spent helping to agitate and educate workers about their plight.

Revolution happens because Capitalism is a shithole, not because it's good, which is what your commune type co-operative thing is basically going to be. Making Capitalism more livable makes revolution more distant.

[NoOneIsIllegal]

I'm in the red. Get me out of debt, and whatever house you buy with your money, I'll mow it for the rest of your life.
;)

[Bud Struggle]

When Comrade Man and RGacky are arguing over precious metals investment strategy on RevLeft--you know I'm earning my pay from the CIA. :D :D :D

[ComradeMan]

When Comrade Man and RGacky are arguing over precious metals investment strategy on RevLeft--you know I'm earning my pay from the CIA. :D :D :D

Fuck you! In a friendly sort of way!!!! :D

I still maintain the best thing the guy do would be to buy land (sensibly) as I previously stated.

[RichardAWilson]

I'm bullish on gold and silver. Helicopter Ben is going to continue printing.

(Which also makes me bullish on energy, materials and finance).

[ComradeMan]

I'm bullish on gold and silver. Helicopter Ben is going to continue printing.

(Which also makes me bullish on energy, materials and finance).

Exactly---- we won't be seeing the bears on those tickets for a while. Afterall we haven't really seen the dead cat bounce and at the end of the day gentleman prefer bonds.

[Ele'ill]

Wow this conversation is creepy. I feel like I'm in some secret society's cigar lounge. I would put the money away for a while until a plan is worked out. Once the plan is worked out- sit with it for a year or longer to see if you change your mind.

[Thug Lessons]

OP, give it to me.

[Bud Struggle]

OP, give it to me.You Commies are sounding more and more Red Chinese with every post. :D

[Demogorgon]

My best advice to you would be to wait for a while. At eighteen you are unlikely to know what to do with it and it is so easy to waste it. It is admirable that you want to use the money to do good, but that doesn't mean you need to rush. Take time to plan what you are going to do with it and make sure you get the advice of those you trust. Moreover don't spend it all on one project, spread it out and of course keep some of it for yourself. If you can get yourself a good education and a good start then you can potentially do a lot more good down the line.

Oh, as for how to save it, I have to agree with not investing in gold, that is a bubble waiting to burst. There is a real tragedy in the US right now with people being hustled out of their money by right wing pundits who tell people how gold is the only solid basis for wealth and how they should rush out and buy up gold. Right on cue when the adverts come on there are lots of adverts offering to sell gold. That isn't the only reason so many are investing in it right now of course. There is the same rush you get with every "next big thing". ComradeMan is right about gold being used as a safe refuge when other options seem risky but there is more than that going on just now. There is irrational excitement around gold. Investors will loose confidence in it sooner or later.

[Aspiring Humanist]

You'd need a lot more than 250k to start a fully functioning self sustaining commune
But its worth a shot, I'd certainly join a commune if I could find one

[#FF0000]

If you want to make a real difference donate to groups like the IWW.

How does giving money to a historical society make a difference?

Just save that shit up. Hold onto it, save it up, plan it out. Give it some thought.

[Ele'ill]

How does giving money to a historical society..

Ouch.

[Bud Struggle]

How does giving money to a historical society make a difference?


Bada bing. :D

[kitsune]

I've been talking with some friends about starting an intentional community. I'm also interested in growing food, with an emphasis on permaculture, as well as sustainable housing and alternative energy. Making a cooperative business part of the model is an excellent idea, and one that several thriving communities use. The community should be very self sufficient, with cooperative and social ties to other communities.

The Fellowship for Intentional Community (http://www.ic.org/) has a lot of good resources.

You definitely want to learn about what you're getting into before you jump in. Get to know some people, ask questions, go visit a few places, see how they're run.

[Kingpin]

Infiltrate the upper class and spark conflict within.

[La Comédie Noire]

I had something similar happen to me, although with a much less significant amount. Personally, I don't touch it unless I absolutely need it and use it mainly to finance my nursing education.

I agree with people in this thread, don't spend a cent until you are sure what you are going to do with it!

[Leftsolidarity]

I've thought about buying some land and farming a bit and inviting fellow Marxists who've wanted to live in a commune.

I'm only 17 but that has been my dream for a few years now

[ComradeMan]

Oh, as for how to save it, I have to agree with not investing in gold, that is a bubble waiting to burst. There is a real tragedy in the US right now with people being hustled out of their money by right wing pundits who tell people how gold is the only solid basis for wealth and how they should rush out and buy up gold. Right on cue when the adverts come on there are lots of adverts offering to sell gold. That isn't the only reason so many are investing in it right now of course. There is the same rush you get with every "next big thing". ComradeMan is right about gold being used as a safe refuge when other options seem risky but there is more than that going on just now. There is irrational excitement around gold. Investors will loose confidence in it sooner or later.

It's not just the US. In 2009 the Indian Central Bank bought 200 tonnes and it appears that other economies have also been holding on to their gold reserves. Gold production reached a peak in 2001 but has fallen since that time and as investors are nervous about currencies this has also contributed to the bull market for precious metals.There has also been a massive increase in gold demand in China as the Chinese grow nervous about rising inflation. The Central Bank of Mexico also bought about 100 tonnes of gold earlier in 2011.

2010 saw central banks becoming the biggest net customers for gold, reversing the trend of the last 20 years as being sellers.

In short, the gold bubble has been going to burst for at least 2-3 years according to some, but it still hasn't burst and until budgets are balanced and currencies are stable I don't believe it will. If the central banks are buying gold reserves again after two decades.... well... you figure it out.

Here an interesting article from 2008
http://www.telegraph.co.uk/finance/comment/jeffrandall/2782892/When-governments-print-money-buy-gold.html

and another more recent article 27th August 2011
http://www.telegraph.co.uk/finance/personalfinance/investing/gold/8725818/Time-to-quit-the-gold-party.html

[RGacky3]

Revolution happens because Capitalism is a shithole, not because it's good, which is what your commune type co-operative thing is basically going to be. Making Capitalism more livable makes revolution more distant.

I'd work in a cooperative under capitalism anyday, I'd rather get out of wage slavery under capitalism, than be in wage slavery but somehow having revolution more in my interest.

living in a shithole to the point where you need revolution is'nt pleasant.

Btw, starting a cooperative buisiness is totally senstibe (trying to start some sort of commune is kind of silly and you'll need way more than 250,000 to make it workable), but if you have a good idea, and some buddies that want to help, and you know there is a market for it, start a coop, a bunch of silicone valley was basically that, some dudes with a good idea setting up cooperatives, not for ideological reasons, for but practical reasons.

But your 17, for now be sensible with it.


You Commies are sounding more and more Red Chinese with every post. :D

Actually comrademan is, China's Gold reserve is HUGE, infact if either China or the US dumped a portion of their reserve, for any reason, the price would plummet.


How does giving money to a historical society make a difference?


It makes a difference for the workers they organize and fight for, I'm just saying if your gonna give it to a charity ... It does'nt need to be the IWW, but radical labor unions fare making a difference.


It's not just the US. In 2009 the Indian Central Bank bought 200 tonnes and it appears that other economies have also been holding on to their gold reserves. Gold production reached a peak in 2001 but has fallen since that time and as investors are nervous about currencies this has also contributed to the bull market for precious metals.There has also been a massive increase in gold demand in China as the Chinese grow nervous about rising inflation. The Central Bank of Mexico also bought about 100 tonnes of gold earlier in 2011.


Central Banks buying up Gold reserve does'nt make it a good investment for an individual, central banks don't work the same way individuals work, nor even how regular banks work, following what central banks do for investment purposes is really really silly, their purpose is to keep the capitalist system going, not make a return.


In short, the gold bubble has been going to burst for at least 2-3 years according to some, but it still hasn't burst and until budgets are balanced and currencies are stable I don't believe it will. If the central banks are buying gold reserves again after two decades.... well... you figure it out.


Your right, 100%, but its almost undeniable that its a bubble, now whether or not it will burst soon is another story, and central banks buying up would have an effect on price, but what I'm saying is that the gold price now is not based on supply and demand, the futures market for gold has sky rocketed, the same with ETFs, I'm saying the price is increasingly speculative, and the raise in price has far far outpaced the raise due to supply and demand, so even if the central banks buy it up the bubble could still burst.

I don't think its coorolated to currencies and budgets at all, and niether is the stock market, the stock market has gone up and down even when economies were in disaster on mainstreet, the economy is not a zero sum game, its also not a zero minus game, for something to drop you don't need something else to go up.

For the short term Gold could be a good bet, but its not the safe stronghold it once was, Gold is where property was in the mid 2000s, a percieved safe haven even though it was bubbled, if your gonna bet on it, make sure you really really know what your doing, but don't invest in it, i.e. don't put your kids college fund in gold.

There is no longer a strong corrolation between stock markets, currencies, economies (employment and so on) and commodities, economies can drop while stocks raise, currencies can plummet while stocks raise, stocks can plummet while commodities do the same and so on.

5 years ago I'd say your analysis was spot on, but its a different game now.

[brigadista]

travel -find out how people live outside your own backyard- then you will have some more food for thought - dont do any thing hasty

[ComradeMan]

Central Banks buying up Gold reserve does'nt make it a good investment for an individual, central banks don't work the same way individuals work, nor even how regular banks work, following what central banks do for investment purposes is really really silly, their purpose is to keep the capitalist system going, not make a return.

Gacky- "paper money" needs something to "back it up", that's why a lunch in somewhere like Zimbabwe will cost you Zim$3 billion! ;) Gold is used as a way of protecting currency against the fortunes of the US dollar which is used at the flat currency for held liquid assets as opposed to commodity money. Central banks are responsible for monetary policy and the issuing of money- but they must have a reserve to back it up. If foreign currencies such as the US dollar are no longer stable- coupled with increasing financial insecurity they go back to the commodity money that is gold. There is nothing silly about watching what the central bank does.


Your right, 100%, but its almost undeniable that its a bubble, now whether or not it will burst soon is another story, and central banks buying up would have an effect on price, but what I'm saying is that the gold price now is not based on supply and demand, the futures market for gold has sky rocketed, the same with ETFs, I'm saying the price is increasingly speculative, and the raise in price has far far outpaced the raise due to supply and demand, so even if the central banks buy it up the bubble could still burst.

But all "prices" are based on supply and demand- the gold supply seems to be decreasing, and remember we are dealing with a relatively rare and finite commodity here, and the demand seems to be increasing with no end in sight. I'm not sure what you mean with the last sentence, but all speculation, is speculative- investment is by nature speculative because we are working with predictions- crudely but it's almost like betting.


I don't think its coorolated to currencies and budgets at all, and niether is the stock market, the stock market has gone up and down even when economies were in disaster on mainstreet, the economy is not a zero sum game, its also not a zero minus game, for something to drop you don't need something else to go up.


For the short term Gold could be a good bet, but its not the safe stronghold it once was, Gold is where property was in the mid 2000s, a percieved safe haven even though it was bubbled, if your gonna bet on it, make sure you really really know what your doing, but don't invest in it, i.e. don't put your kids college fund in gold.

Gold and real estate are false equivalencies. I think Bud, as a realtor, would agree that you can't see real estate in terms of a commodity- even though recent theories suggest that gold behaves more like a currency.

So put it in the bank with low interest, falling currencies and rising inflation... :lol:

The bubble was set to burst in May this year- it's September and it's still rising.


There is no longer a strong corrolation between stock markets, currencies, economies (employment and so on) and commodities, economies can drop while stocks raise, currencies can plummet while stocks raise, stocks can plummet while commodities do the same and so on.

Your mixing the domains here a little. If you look at a chart from the 1920s you'll see the trend is nearly always the same- as stated before.


5 years ago I'd say your analysis was spot on, but its a different game now.

Five years ago people were raising the same sorts of objections that people are raising now. ;)

You have to differentiate too between the reasons people invest in gold- these are not the same reasons as they invest in stocks- stocks offer big returns, gold does not... but.....

Modern politicians dislike the idea of gold in general- why? Because they are not entirely in control, the yellow shiny metal is neutral, it has no policies and for one reason or another is accepted "universally" around the world- unlike currencies.;)

Anyway- getting back to the OP- it's up to him what he does but if I were in his postion I'd go for land. Perhaps land in Alaska or somewhere---- where there's gold! :cool: :lol:

George B. Shaw "You have to choose (as a voter) between trusting to the natural stability of gold and the natural stability and intelligence of the members of the government. And with due respect to these gentlemen, I advise you, as long as the capitalist system lasts, to vote for gold."

[RGacky3]

Gacky- "paper money" needs something to "back it up", that's why a lunch in somewhere like Zimbabwe will cost you Zim$3 billion! ;) Gold is used as a way of protecting currency against the fortunes of the US dollar which is used at the flat currency for held liquid assets as opposed to commodity money. Central banks are responsible for monetary policy and the issuing of money- but they must have a reserve to back it up. If foreign currencies such as the US dollar are no longer stable- coupled with increasing financial insecurity they go back to the commodity money that is gold. There is nothing silly about watching what the central bank does.


First of all, they dont' buy gold to back up their currencies, not at all, there is no corrolation.

Second, I'm not saying that its silly what they do, I'm saying its silly for an individual investor to copy them.


But all "prices" are based on supply and demand- the gold supply seems to be decreasing, and remember we are dealing with a relatively rare and finite commodity here, and the demand seems to be increasing with no end in sight. I'm not sure what you mean with the last sentence, but all speculation, is speculative- investment is by nature speculative because we are working with predictions- crudely but it's almost like betting.


No they are not, there are many factors going into price, one of which is supply and demand.

The Gold supply is not decreasing, the market maybe is, but not the supply.

Ivestment is'nt always speculative, what I mean by speculation, is price speculation, in other words its not like your putting money in an ice cream stand thinking that people will buy ice cream and you'll get that money, its buying something thinking that someone else will buy it later for more.

Futures and ETFs are securities that are based on something else, so you can buy an ETF which affects the price of gold without ever buying gold, this creates a price change not based on supply or demand or even labor, you put that on top of speculative changes and you have a very unstable price.


Gold and real estate are false equivalencies. I think Bud, as a realtor, would agree that you can't see real estate in terms of a commodity- even though recent theories suggest that gold behaves more like a currency.

So put it in the bank with low interest, falling currencies and rising inflation... :lol:

The bubble was set to burst in May this year- it's September and it's still rising

THe difference is real estate has use value, gold does not. GOld does'nt behave like a currency at all, because it has no innate purchaising power, only tradeing power, nor is it backed up by a government.

Gold recently has been behaving like a Stock, I'm not saying necessarily put it in a bank, I'm just saying Gold is not the safe haven it used to be and is in a bubble.

No one can really predict when a bubble bursts.


Your mixing the domains here a little. If you look at a chart from the 1920s you'll see the trend is nearly always the same- as stated before.


Absolutely, but post 2009 you'll see the trend is decidedly changed.


Five years ago people were raising the same sorts of objections that people are raising now. ;)


No they were'nt, at least not the economists I know.


You have to differentiate too between the reasons people invest in gold- these are not the same reasons as they invest in stocks- stocks offer big returns, gold does not... but.....


Gold has been giving big returns, and now people are investing in Gold as if they were stocks.


Modern politicians dislike the idea of gold in general- why? Because they are not entirely in control, the yellow shiny metal is neutral, it has no policies and for one reason or another is accepted "universally" around the world- unlike currencies.;)

No, thats not why, first of all, they don't dislike the idea of gold, unless your talking about gold as a currency, and most people don't like that because its insane.

As a security .... well ... its just like any other security.

[ComradeMan]

First of all, they dont' buy gold to back up their currencies, not at all, there is no corrolation.

"A gold reserve is the gold (http://en.wikipedia.org/wiki/Gold) held by a central bank (http://en.wikipedia.org/wiki/Central_bank) or nation intended as a store of value (http://en.wikipedia.org/wiki/Store_of_value) and as a guarantee to redeem promises to pay depositors, note holders (e.g., paper money), or trading peers, or to secure a currency."
http://en.wikipedia.org/wiki/Gold_reserve


Second, I'm not saying that its silly what they do, I'm saying its silly for an individual investor to copy them.

... and I'm saying it's foolish for the individual investor not to follow what the big fish are doing....


No they are not, there are many factors going into price, one of which is supply and demand.



The Gold supply is not decreasing, the market maybe is, but not the supply.

Err... the supply is decreasing. The market is increasing, i.e. demand, hence the rise in price.

http://seekingalpha.com/article/175987-gold-soars-on-falling-supply-and-rising-demand
http://www.resourceinvestor.com/News/2011/3/Pages/Conflict-Mineral-Supply-Bottleneck-Foreseen-for-Gold.aspx


Ivestment is'nt always speculative, what I mean by speculation, is price speculation, in other words its not like your putting money in an ice cream stand thinking that people will buy ice cream and you'll get that money, its buying something thinking that someone else will buy it later for more.

Gacky... strictly speaking speculation is when there is no thorough analysis, but there are no guarantees as such with investment. In either of your ice-cream examples the primary motive is the same, a profit or return on the initial investment. It depends what kind of investment, if you buy shares in an ice-cream company it's because you want a shareholder return on the profits made by the ice-cream company- as well as the fact that if the company does well their share price will rise and you'll be able to make a profit by selling your shares.


Futures and ETFs are securities that are based on something else, so you can buy an ETF which affects the price of gold without ever buying gold, this creates a price change not based on supply or demand or even labor, you put that on top of speculative changes and you have a very unstable price.

Futures and ETFs are even more speculative than investing in gold as a stock- which is what we were talking about.


THe difference is real estate has use value, gold does not. GOld does'nt behave like a currency at all, because it has no innate purchaising power, only tradeing power, nor is it backed up by a government.

Real estate only has a financial value in that it is worth what someone will pay for it.

Here's an article on gold as a "currency" or at least not a commodity.
http://online.wsj.com/article/SB10001424052748703908704575433670771742884.html

Purchasing power of gold
http://www.wiltontech.com/purchasing-power-of-gold---100-year-chart

[RGacky3]

Futures and ETFs are even more speculative than investing in gold as a stock- which is what we were talking about.


Futures and ETFs ON GOLD!!!


"A gold reserve is the gold (http://www.anonym.to/?http://en.wikipedia.org/wiki/Gold) held by a central bank (http://en.wikipedia.org/wiki/Central_bank) or nation intended as a store of value (http://en.wikipedia.org/wiki/Store_of_value) and as a guarantee to redeem promises to pay depositors, note holders (e.g., paper money), or trading peers, or to secure a currency."
http://en.wikipedia.org/wiki/Gold_reserve (http://www.anonym.to/?http://en.wikipedia.org/wiki/Gold_reserve)


NOBODY judges a currencies value by the gold reserve, that never happens.


... and I'm saying it's foolish for the individual investor not to follow what the big fish are doing....


Central banks are not investors, seriously comrademan, the big fish are institutional investment banks.


Err... the supply is decreasing. The market is increasing, i.e. demand, hence the rise in price.

No the Market supply, i.e. whats on the market, thats what I meant.


Gacky... strictly speaking speculation is when there is no thorough analysis, but there are no guarantees as such with investment. In either of your ice-cream examples the primary motive is the same, a profit or return on the initial investment. It depends what kind of investment, if you buy shares in an ice-cream company it's because you want a shareholder return on the profits made by the ice-cream company- as well as the fact that if the company does well their share price will rise and you'll be able to make a profit by selling your shares.


No when you by stock in a company, your profit comes from percieved value, which sometimes comes from profits, but you NEVER GET those profits, you just get an increase in vlaue of your stock (maybe).

Speculation always entails analysis, but its the greater fool concept, nothing more.

The motive is to make money, the investment type is totally different.


Real estate only has a financial value in that it is worth what someone will pay for it.

The same with Gold.


Here's an article on gold as a "currency" or at least not a commodity.


Btw, you better pray that gold never becomes a currency, becuase if it does its value as a speculative instrument would plummet.

But look, if you want to invest in gold long term be my guest, its in a bubble, you don't deny that, so go ahead and invest in a bubble.

[ComradeMan]

Futures and ETFs ON GOLD!!!

Which are not speculative????


NOBODY judges a currencies value by the gold reserve, that never happens.

But NOBODY was saying that- central bank reserves, be they in the form of gold, foreign currency or whatever else are to hedge against things like currency devaluation etc.


Central banks are not investors, seriously comrademan, the big fish are institutional investment banks.
Functions of a central bank may include:


implementing monetary policy
determining Interest rates
controlling the nation's entire money supply
the Government's banker and the bankers' bank ("lender of last resort")
managing the country's foreign exchange (http://en.wikipedia.org/wiki/Foreign_exchange_market) and gold reserves (http://en.wikipedia.org/wiki/Gold_reserves) and the Government's stock register
regulating and supervising the banking industry
setting the official interest rate (i.e., price fixing (http://en.wikipedia.org/wiki/Price_fixing)) – used to manage both inflation (http://en.wikipedia.org/wiki/Inflation) and the country's exchange rate (http://en.wikipedia.org/wiki/Exchange_rate) – and ensuring that this rate takes effect via a variety of policy mechanisms

http://en.wikipedia.org/wiki/Central_bank#Activities_and_responsibilities


No the Market supply, i.e. whats on the market, thats what I meant.


No when you by stock in a company, your profit comes from percieved value, which sometimes comes from profits, but you NEVER GET those profits, you just get an increase in vlaue of your stock (maybe).

What is that perceived value based on?

Now it depends on what kind of company, but basically have you never heard of a shareholder "dividend"- i.e. When a corporation makes a profit or surplus it has basically two options 1) reinvest in the company 2) pay out a dividend to shareholders. Sometimes a both 1) and 2) occur in order to keep shareholders happy and keep the corporation strong. Receiving a dividend does entail giving up ownership of stocks/shares.


Speculation always entails analysis, but its the greater fool concept, nothing more.

No it doesn't, in fact it intrinsically implies the opposite in financial terms- that's the main difference between "investment" and "speculation", the former being seen as far lower risk than the latter.


The same with Gold.

No, it's not the same. Ignoring price fluctuations you are dealing with two things that are substantially different. A house which is immovable and static and will eventuall fall down, need maintanence and insurance etc etc etc and a 100z gold bar that will sit in one vault or be easily transferred to another vault until the end of time and that is of a substance that is universally recognised and accepted.


Btw, you better pray that gold never becomes a currency, becuase if it does its value as a speculative instrument would plummet.

Sure, we all know that the US$ price of gold had remained fairly stable until Nixon took the US off the gold standard in the early 1970s- but what has that got to do with this argument? But someone could easily argue that you well, if you like government debt inflation, inflation, currency speculation, chronic deficit spending, and no long term price stability then you had better pray that the gold standard never comes back. You might also see in this why so many politicians are hostile to the idea. ;)


But look, if you want to invest in gold long term be my guest, its in a bubble, you don't deny that, so go ahead and invest in a bubble.

The counter argument again would be, well if you want a suitcase full of useless and worthless bits of paper, currency or share certificates then be my guest- put your trust in a failing system.:lol:

[ComradeMan]

Just as a side note, post-revolutionary Russia actually turned to the gold standard in order to combat rampant inflation and maintained this until 1939 as part of the Soviet economic "miracle".

[RGacky3]

Which are not speculative????


They are ... thats my point.


But NOBODY was saying that- central bank reserves, be they in the form of gold, foreign currency or whatever else are to hedge against things like currency devaluation etc.


Its more the full faith and confidence in the government that backs the currency.


Functions of a central bank may include:


Yes, not maximising returns on its investments no matter what.


What is that perceived value based on?

Now it depends on what kind of company, but basically have you never heard of a shareholder "dividend"- i.e. When a corporation makes a profit or surplus it has basically two options 1) reinvest in the company 2) pay out a dividend to shareholders. Sometimes a both 1) and 2) occur in order to keep shareholders happy and keep the corporation strong. Receiving a dividend does entail giving up ownership of stocks/shares.


Its based mostly on the idea that someone else will buy it for higher or the same price, thats most of where the percieved value comes from, dividends are just icing on the cake.


No, it's not the same. Ignoring price fluctuations you are dealing with two things that are substantially different. A house which is immovable and static and will eventuall fall down, need maintanence and insurance etc etc etc and a 100z gold bar that will sit in one vault or be easily transferred to another vault until the end of time and that is of a substance that is universally recognised and accepted.


Yes, and the house as use value, so they both have good and bad sides, but both the house and the gold bars value beyond their use value is based on speculation and percieved value, i.e. extremely prone to bubble once it goes beyond that, Gold acts like a stock.


But someone could easily argue that you well, if you like government debt inflation, inflation, currency speculation, chronic deficit spending, and no long term price stability then you had better pray that the gold standard never comes back. You might also see in this why so many politicians are hostile to the idea. http://www.revleft.com/vb/so-may-receiving-t160626/revleft/smilies/wink.gif


I have nothing against inflation if it comes with growth, infact its necessary if it comes with growth, on the gold standard your growth is extremely limited, its not politicians that are hostile, its all rational economists.


The counter argument again would be, well if you want a suitcase full of useless and worthless bits of paper, currency or share certificates then be my guest- put your trust in a failing system.http://www.revleft.com/vb/so-may-receiving-t160626/revleft/smilies2/laugh.gif

And gold is part of that failing system.



Just as a side note, post-revolutionary Russia actually turned to the gold standard in order to combat rampant inflation and maintained this until 1939 as part of the Soviet economic "miracle".


No I'm pretty sure it was rapid industrialization.

[RichardAWilson]

None of the aforementioned matters much. As long as the printing presses keep running, gold will become more popular and expensive. (It has always been the case and will always be the case.) I don't care if Central Banks are purchasing or selling gold.

All that matters is that the M1 and M2 Aggregates are rising.

http://www.federalreserve.gov/releases/h6/current/

Quantitative Easing #3 will soon be launched and energy and materials (including gold and silver) will move higher.

[Drosophila]

Wait until you have some knowledge of economics and how the world works, then decide what you will do with it. While donating to various organizations is a good idea, it seems sort of silly to use that much money on it. I've never heard of a successful commune, but if you want to be the first to try then go ahead.

[RichardAWilson]

You could donate $50,000 to progressive socialist organizations and allocate the remainder into high dividend yielding stocks (Which would provide you with a guaranteed income for using toward college.)

British Petroleum is yielding 4.4% ($8,800 in annual dividend income on $200,000 in common stock).

[RGacky3]

None of the aforementioned matters much. As long as the printing presses keep running, gold will become more popular and expensive. (It has always been the case and will always be the case.) I don't care if Central Banks are purchasing or selling gold.

All that matters is that the M1 and M2 Aggregates are rising.

http://www.federalreserve.gov/releases/h6/current/ (http://www.anonym.to/?http://www.federalreserve.gov/releases/h6/current/)

Quantitative Easing #3 will soon be launched and energy and materials (including gold and silver) will move higher.


You don't think speculative instruments or speculation on gold itself can inflate the price? Just because the Fed is shooting out money does'nt mean that gold is neccessarily tied to that.

[DeBon]

Thanks comrades, I really appreciate all the advice and insight.
I live in Oklahoma (Bible Belt >_>) the land is real fertile here, and I could probably get a good stake in about 5-10 acres by the Arkansas River for $30,000-$50,000. The rest I would (theoretically) invest in the land itself and probably some resources to build. I've been reading a lot of articles online about collective farms and such and from what I understand it takes about half an acre to produce enough food to feed one person in a year, assuming that half-acre has all the different varieties and such. I've also been looking into vertical gardening and hydroponics, aquaponics, and skyscraper farms. Basically the same concept as building a 5/6 story apartment rather than a 1 story house. It's pretty interesting stuff. I plan to do my research and plan this out rite.

And sorry for not being active past few days, busy busy bla bla blah.

Thanks Comrades. :)

[DeBon]

Perfect idea.

Invest the money in solar panels, set up a solar energy co-op. The reason I say solar energy is obviously because it's good for the environment, but mostly because the cash flow is guaranteed seeing as you're feeding the electricity into the national grid. Also, there are places in the US such as Arizona that are perfect for this sort of thing.

I like the idea, especially the energy independence solar provides. If I were to invest in solar panels it would be in keeping the land off-grid and then some, but not just for pumping into the grid. Solar panels are extremely expensive, who knows though, solar panels are subject to Moore's Law and they could become practical in a few years.

[ComradeMan]

They are ... thats my point..

You don't actually make the distinction between investment and speculation. :rolleyes:


Its more the full faith and confidence in the government that backs the currency..

That's a lot of pseudo-Keynesian rhetoric there. Central banks decide on monetary policy are usually autonomous (unlike how it was in Italy years ago that saw massive inflation and devaluation of the lira). If central banks control the issuance of money, interest rates and general monetary policy the government is secondary in importance and has to work out its policies accordingly. It's the monetary policy that then dictates the level of investment in an economy and it's subsequent growth.


Yes, not maximising returns on its investments no matter what..

You don't seem to understand how central banks function in our current economic models, do you? :rolleyes:


Its based mostly on the idea that someone else will buy it for higher or the same price, thats most of where the percieved value comes from, dividends are just icing on the cake.

So are you saying that a corporation does not primarily exist in order to make profits for its shareholders? It's not mostly based on the idea that someone else will buy it etc.... That's such a gross over-simplification of things. If dividends were only "icing on the cake" why would so many shareholders be so happy to hold on to shares and earn a nice little income of half-year and subsequent full-year dividends.

Ironically it is, in my opinion, just this kind of "flipping" mentality that has been, at least in part, responsible for the current financial crisis- the US housing bubble. It's well seen from history that flipping bubbles usually spell financial disaster.


Yes, and the house as use value, so they both have good and bad sides, but both the house and the gold bars value beyond their use value is based on speculation and percieved value, i.e. extremely prone to bubble once it goes beyond that, Gold acts like a stock.

Well you keep arguing that even though it's not actually backed up by anything. Real estate is well-known as a risky investment and I am not sure you can compare real estate with metal commodities. You're also completely neglecting the difference between gold as investment to store value and other investments which are to return value.


I have nothing against inflation if it comes with growth, infact its necessary if it comes with growth, on the gold standard your growth is extremely limited, its not politicians that are hostile, its all rational economists.

Inflation actually encourages people to buy commodities. High levels of inflation are generally viewed as negative by all economists- even the Keynesians who you seem to be following that take a more positive outlook on inflation as a whole.

If you actually bothered to look at the statistics of growth under gold standard systems you'd see that growth was far more stable- what it does limit is monetary growth.


And gold is part of that failing system.

Yeah and if/when that system fails what would you rather have, bullion or worthless paper bills? Your take on economics would be well suited to the Weimar Republic.


No I'm pretty sure it was rapid industrialization.

Well Lenin was financed by about $20 million in gold through connections with Jacob Schiff and a Warburg bank. Funny how they chose gold eh? Contrary to what you make think there was a lot of Western investment in post-Revolutionary Russia through the 1920s.

Post-revolutionary roubles were worth nothing and there was massive inflation so by July 1922 they decided to use chervonetz "gold roubles" backed by gold and linked to pre-war purchasing power in order to stabilise the currency- fully convertible and backed by a gold standard. These were traded on the international markets and paved the way for the New Economic Policy.

[RGacky3]

You don't actually make the distinction between investment and speculation.

Speculation IS investment, but not all investment is speculation, you get what I'm saying? Buying gold IS speculation.


That's a lot of pseudo-Keynesian rhetoric there. Central banks decide on monetary policy are usually autonomous (unlike how it was in Italy years ago that saw massive inflation and devaluation of the lira). If central banks control the issuance of money, interest rates and general monetary policy the government is secondary in importance and has to work out its policies accordingly. It's the monetary policy that then dictates the level of investment in an economy and it's subsequent growth.


Federally insured ...


You don't seem to understand how central banks function in our current economic models, do you? http://www.revleft.com/vb/so-may-receiving-t160626/revleft/smilies/001_rolleyes.gif


So you REALLY think that following what central banks do is good advice for individual investors .... Such as .... purposefully buying toxic bonds, you obviously don't get what Central banks do, they are not out to maximise their own revenue. Otherwise they woudl'nt give out almost no interest rate loans would they?

And enough with the bullshit smugness, your arguing something rediculous, that central banks and private investors have the same interests.


So are you saying that a corporation does not primarily exist in order to make profits for its shareholders? It's not mostly based on the idea that someone else will buy it etc.... That's such a gross over-simplification of things. If dividends were only "icing on the cake" why would so many shareholders be so happy to hold on to shares and earn a nice little income of half-year and subsequent full-year dividends.

Ironically it is, in my opinion, just this kind of "flipping" mentality that has been, at least in part, responsible for the current financial crisis- the US housing bubble. It's well seen from history that flipping bubbles usually spell financial disaster.


Do you know what the average holding time of a stock is? around 30 seconds, the stock market your living in is the one in the 1800s not the 21st century.

I'm saying that stocks are not tied to earnings, that technicals in trading are much more relevant than fundementals, the corporations purpose is to make profit, but what drives stock price is percieved value, i.e. thinking someone else will buy it for higher for whatever reason.

You can say flipping is good or bad, that does'nt matter, its reality, and its the reality with gold as well.


Well you keep arguing that even though it's not actually backed up by anything. Real estate is well-known as a risky investment and I am not sure you can compare real estate with metal commodities. You're also completely neglecting the difference between gold as investment to store value and other investments which are to return value.


Real estate is a well-known risky investment AFTER 2007 and mainly IN the united states, before 2007 it was as solid as gold, infact it was more solid than gold, infact in many places its still considered solid. The only reason its riskey in some places now is because the buble bursts, which is exactly what will happen to gold, and it did'nt take a jump in currencies or stocks to burst the real estate market.

Gold can be used to store value, but its mostly used to return value, which is why its not safe as a method of storing value.

Because the people using it to return value are building a bubble that will burst and screw all the people trying to use it to store value.


Inflation actually encourages people to buy commodities. High levels of inflation are generally viewed as negative by all economists- even the Keynesians who you seem to be following that take a more positive outlook on inflation as a whole.

If you actually bothered to look at the statistics of growth under gold standard systems you'd see that growth was far more stable- what it does limit is monetary growth.


Your talking about investing in commodities? Inflation means higher prices, you know that right?

I am neutral on inflation, its good when it accompanies growht, and negative when it dose not.

What it limits is economic growth, you know how many financial catastrophes there were under the gold standard? As well as deflation AND inflation, as well as the cost of money going up and up screwing working people.


Yeah and if/when that system fails what would you rather have, bullion or worthless paper bills? Your take on economics would be well suited to the Weimar Republic.


when did I ever say invest in currencies? oh, and not all currencies are made equal.

Bricks of gold are useless if no one is there to buy it. Right now your using glenn beck logic.

making intelligent investments in things that are NOT bubbles will leave you up.

Investing in bubbles because of some myth that gold always holds value will leave you with probably half your value gone.


Well Lenin was financed by about $20 million in gold through connections with Jacob Schiff and a Warburg bank. Funny how they chose gold eh? Contrary to what you make think there was a lot of Western investment in post-Revolutionary Russia through the 1920s.


It could be based on the fact that most of the world did'nt recognize them, and investing in currencies would be dangerous, or the fact that their currency was basically moot post revolution, there are many reasons, none of which make it a good idea today.

BTW, investing in gold and using god as a currency are 2 TOTALLY different subjects, and I don't know why your talking aobut it, and as i said, if your investing in gold, supporting it as a currency is idiotic as it would destroy its value.


Post-revolutionary roubles were worth nothing and there was massive inflation so by July 1922 they decided to use chervonetz "gold roubles" backed by gold and linked to pre-war purchasing power in order to stabilise the currency- fully convertible and backed by a gold standard. These were traded on the international markets and paved the way for the New Economic Policy.

OK, as I said, there were many reasons for that, that does'nt mean its a good idea today, nor does it mean that as an investment (WHICH IS A TOTALLY DIFFERENT ISSUE) gold is smart.

[ComradeMan]

Speculation IS investment, but not all investment is speculation, you get what I'm saying? Buying gold IS speculation.

You don't understand the difference between a store value investment and a return investment and you are completely ignoring the current financial situation.


Federally insured ...
:laugh::laugh::laugh::laugh:

How does that federal insurance work in a Weimar like situation when currency has no value?


So you REALLY think that following what central banks do is good advice for individual investors .... Such as .... purposefully buying toxic bonds, you obviously don't get what Central banks do, they are not out to maximise their own revenue. Otherwise they woudl'nt give out almost no interest rate loans would they?

If central banks are buying up gold it means they are hedging against currency devaluation. Are you now going to argue that currency devaluation coupled with rising inflation is not in the least bit worrying? But no one said that central banks were out to maxmimise their own revenue? Strawman. Obviously you know something that all the people who are buying gold like there is no tomorrow, the Chinese, the central banks and the ordinary private buyers do not. :rolleyes:


And enough with the bullshit smugness, your arguing something rediculous, that central banks and private investors have the same interests.

Another strawman. I said that investors, in view of the current financial climate, would be wise to take notice of what the central banks are doing- as well as of course the private investor. You are the one who seems to be arguing the ridiculous because you keep contradicting yourself and show a basic lack of knowledge of how the system works. There is an argument that had nations adhered to the gold standard the sovereign debt crisis would have been impossible.


Do you know what the average holding time of a stock is? around 30 seconds, the stock market your living in is the one in the 1800s not the 21st century.

If you're taling about "flipping" then you'll see it's one of the reasons proposed for why we are having the current financial crisis. Great economic strategy. :thumbup1:


DI'm saying that stocks are not tied to earnings, that technicals in trading are much more relevant than fundementals, the corporations purpose is to make profit, but what drives stock price is percieved value, i.e. thinking someone else will buy it for higher for whatever reason.

You really don't have a clue how it works do you? If a company announces huge profits then its stocks rise- if it announces huge losses or goes bankrupt then its stocks crash. The perceived value is not a perception as you are putting it but is based on the actual performance and thus projected performance of the said corporation.


You can say flipping is good or bad, that does'nt matter, its reality, and its the reality with gold as well.

More nonsense... flipping is generally perceived as being bad.



Real estate is a well-known risky investment AFTER 2007 and mainly IN the united states, before 2007 it was as solid as gold, infact it was more solid than gold, infact in many places its still considered solid. The only reason its riskey in some places now is because the buble bursts, which is exactly what will happen to gold, and it did'nt take a jump in currencies or stocks to burst the real estate market.

Err... so how do you explain the Florida real estate bubble which burst in 1925? Or the Japanese asset bubble of the 1990s? It's not only a US phenomenon either.


Gold can be used to store value, but its mostly used to return value, which is why its not safe as a method of storing value.

In short- no it isn't.


I am neutral on inflation, its good when it accompanies growht, and negative when it dose not.

So now you are neutral before you sounded pretty pro-inflation.


What it limits is economic growth, you know how many financial catastrophes there were under the gold standard? As well as deflation AND inflation, as well as the cost of money going up and up screwing working people.

Was that to do with the gold standard though? The origins of the modern gold standard came about after the silver and paper money crises of the 18th-19th centuries.

The gold standard actually does not limit growth at all, that's another myth. The adoption of the gold standards, or more specifically gold standards seeing as there are different versions, actually encouraged trade throughout the 19th century up until WWI- by which time most industrialised nations had adopted a version of the system. Trade promotes growth.


when did I ever say invest in currencies? oh, and not all currencies are made equal.

"Investing in currencies"- ? Again, more strawman arguments. The point is this, and this is why in times of crisis gold becomes popular- even if you have $1 million dollars in the bank, if the currency crashes it's worthless- it's just paper and nothing else. Withdraw your worthless miliion dollars if you can- that's when you get a situation like the Weimar Republic of Zimbabwe. If a country has a serious debt crisis and basically can't pay its debts its currency becomes worthless as that currency is no longer a guarantor of anything.


Bricks of gold are useless if no one is there to buy it. Right now your using glenn beck logic.

I don't even know what Glenn Beck has to say on the matter to be honest. But you aren't using any logic or knowledge whatsoever and just pulling opinions out of your hat. If currency collapses then your pieces of paper are worthless, your cheques and your drafts count for shit- but, gold, amongst other commodities, will always be accepted as payment.


making intelligent investments in things that are NOT bubbles will leave you up. Investing in bubbles because of some myth that gold always holds value will leave you with probably half your value gone.

Well the last time I looked the debt crisis was getting worse, currencies were falling, confidence was low, inflation was rising and there was no end in sight to the massive levels of unemployment. Again, you are building up strawmen here. Well done, I wonder if the British are thinking that now after their New Labour government sold off main gold reserves when it was at a low price in 1999/2000.... at a loss to between $2-3 billion to the British taxpayer.


It could be based on the fact that most of the world did'nt recognize them, and investing in currencies would be dangerous, or the fact that their currency was basically moot post revolution, there are many reasons, none of which make it a good idea today.

A breakthrough- so in times of monetary instability and lack of confidence in currencies, even Lenin- the communist, knew that gold as a "currency" is something he could fall back on. :thumbup1:


BTW, investing in gold and using god as a currency are 2 TOTALLY different subjects, and I don't know why your talking aobut it, and as i said, if your investing in gold, supporting it as a currency is idiotic as it would destroy its value.

Well there are different sub-threads in the discussion, you are the one who turned this into (also) a discussion about the gold standard.

Over the last 5 years the US$ gold price has risen 191.55% and we are at (last price) 1882.3, that's up 56.33. :)

You're of course ignoring the fact that China has been buying gold in massive amounts and encouraging the Chinese to do so too. If the Chinese keep building up their gold reserves and dumping the US$ it could be the death of the dollar. The rumour, and it's just a rumour, is that if China manages to back up the yuan with gold then the yuan will become the world's reserve currency (impossible at the moment because it is not convertible) and not the dollar as has been the case up until now. A full gold standard, i.e. specie, is impossible under current IMF regulations however a central bank can peg its currency to its gold holdings. It also seems like the Russians are pretty keen on the idea too.

[RGacky3]

How does that federal insurance work in a Weimar like situation when currency has no value?


Irrelivant, either way, its not gold that backs up currency.


You don't understand the difference between a store value investment and a return investment and you are completely ignoring the current financial situation.


I understand the difference, I'm saying gold is being used as a speculative instrument for a return investment, which is making it unstable.


If central banks are buying up gold it means they are hedging against currency devaluation. Are you now going to argue that currency devaluation coupled with rising inflation is not in the least bit worrying? But no one said that central banks were out to maxmimise their own revenue? Strawman. Obviously you know something that all the people who are buying gold like there is no tomorrow, the Chinese, the central banks and the ordinary private buyers do not. :rolleyes:


It is worrying, but its more complicated than that, central banks buy and sell many different things for different reason.

You said that what central banks do is smart for investors to do, which is rediculous unless they want to maximise their own revenue.

What I'm saying is that gold is in a bubble that will burst no matter what currencies do or stock markets.


If you're taling about "flipping" then you'll see it's one of the reasons proposed for why we are having the current financial crisis. Great economic strategy. :thumbup1:


We are not talking about economic strategy, we are talking personal investment. I don't care whether its good or bad for the economy, its the reality of the economy.


You really don't have a clue how it works do you? If a company announces huge profits then its stocks rise- if it announces huge losses or goes bankrupt then its stocks crash. The perceived value is not a perception as you are putting it but is based on the actual performance and thus projected performance of the said corporation.


Not always the case, infact stocks have been extremely sticky, and many times they raise and fall irrespective of what happens in earnings.

It is a perception because there is no concrete connection, other than dividends, which is juts a small piece of the pie.


More nonsense... flipping is generally perceived as being bad.


Does'nt matter thats what people do, when your investing you don't judge what SHOULD be you judge what is.


Err... so how do you explain the Florida real estate bubble which burst in 1925? Or the Japanese asset bubble of the 1990s? It's not only a US phenomenon either.

Yes, many other bubbles happened, does'nt negate anything I said, I said before 2007 real estate was considered solid as gold, just as gold is considered now, even though every one knows its in a bubble, and even though everyone knows its being securitized and speculated on.


In short- no it isn't.


Well, your not watching the gold market then, ETFs and futures are HUGE on gold.


So now you are neutral before you sounded pretty pro-inflation.


Read more carefully.


Was that to do with the gold standard though? The origins of the modern gold standard came about after the silver and paper money crises of the 18th-19th centuries.

The gold standard actually does not limit growth at all, that's another myth. The adoption of the gold standards, or more specifically gold standards seeing as there are different versions, actually encouraged trade throughout the 19th century up until WWI- by which time most industrialised nations had adopted a version of the system. Trade promotes growth.


This is for another discussion, and it has NOTHING to do with gold as an investment.

In short, growing economies on a fixed currency = deflation.


"Investing in currencies"- ? Again, more strawman arguments. The point is this, and this is why in times of crisis gold becomes popular- even if you have $1 million dollars in the bank, if the currency crashes it's worthless- it's just paper and nothing else. Withdraw your worthless miliion dollars if you can- that's when you get a situation like the Weimar Republic of Zimbabwe. If a country has a serious debt crisis and basically can't pay its debts its currency becomes worthless as that currency is no longer a guarantor of anything.


Ok, but that does'nt mean the same thing cannot happen to godl for different reasons, it does'nt matter what currencies are doing, gold is in a bubble.


I don't even know what Glenn Beck has to say on the matter to be honest. But you aren't using any logic or knowledge whatsoever and just pulling opinions out of your hat. If currency collapses then your pieces of paper are worthless, your cheques and your drafts count for shit- but, gold, amongst other commodities, will always be accepted as payment.


Actually no they won't, legally, you have to sell them for money first.


Well the last time I looked the debt crisis was getting worse, currencies were falling, confidence was low, inflation was rising and there was no end in sight to the massive levels of unemployment. Again, you are building up strawmen here. Well done, I wonder if the British are thinking that now after their New Labour government sold off main gold reserves when it was at a low price in 1999/2000.... at a loss to between $2-3 billion to the British taxpayer.


Yes, I agree, BUT GOLD IS ALSO IN A MASSIAVE BUBBLE!!!


Well there are different sub-threads in the discussion, you are the one who turned this into (also) a discussion about the gold standard.


I did not, and don't make me embarrass you by going back.


Over the last 5 years the US$ gold price has risen 191.55% and we are at (last price) 1882.3, that's up 56.33. :)


No shit, and now it is in a bubble, and way over valued.


You're of course ignoring the fact that China has been buying gold in massive amounts and encouraging the Chinese to do so too. If the Chinese keep building up their gold reserves and dumping the US$ it could be the death of the dollar. The rumour, and it's just a rumour, is that if China manages to back up the yuan with gold then the yuan will become the world's reserve currency (impossible at the moment because it is not convertible) and not the dollar as has been the case up until now. A full gold standard, i.e. specie, is impossible under current IMF regulations however a central bank can peg its currency to its gold holdings. It also seems like the Russians are pretty keen on the idea too.

China won't back the Yuan with gold and China has major problems itself, one of which is that it needs to United States as a consumer, and that it itself will suffer terribly if the dollar collapses becausea it owns so much in it. China is buying Gold because the US might not pay back, or might deflate their currency.

BTW, China also is keeping their currency low on purpose.

And again, if China pegs its currency to gold, kiss your gold holdings value good bye.

China's buying of Gold does not mean its not in a major bubble, ETFs and futures are a HUGE part of the gold market, and they affect gold holdings almost more than gold changing hands itself.

Neither you nor I know why China is buying GOld, and if its because they want to ack their currency, I would get the hell out of it before they do.

buy Gold, if you want, you'll have a brick of gold who's price is in a bubble and is effected much more by people buying products connected to gold while never holding gold itself than the actual gold brick, in other words, its a wall street security, nothing more, nothing less, just like real estate was from 2000-2007.

[RGacky3]

BTW, you can shit on Keynsian economics all you want, but they are the ones with the Nobel peace prizes and they are the ones that have it right, the ones all about the gold prices are the austrian economists, and good luck with that.

[ComradeMan]

Irrelivant, either way, its not gold that backs up currency.

Yep... and now we are in the middle of currency crisis.


I understand the difference, I'm saying gold is being used as a speculative instrument for a return investment, which is making it unstable.

Except it isn't, because that's not how gold generally works. It's a refuge and a way of hedging against falling currencies in times of financial instability.



It is worrying, but its more complicated than that, central banks buy and sell many different things for different reason.
You said that what central banks do is smart for investors to do, which is rediculous unless they want to maximise their own revenue.

Err...not really, they only have three main sources of revenue as such. Apart from that it's completely inane to suggest that someone who was considering a serious amount of capital would not take into account the global monetary policies and actions of central banks. The whole system is inter-connected. Think about it in simple terms, the more gold the central banks buy the less there is and the more it's worth. ;)


What I'm saying is that gold is in a bubble that will burst no matter what currencies do or stock markets.

Yeah, you keep saying that but you have yet to provide any economic of financial evidence that the bubble is going to burst. Bubbles only burst when there is a pop. Now, would you like to tell us what that pop is going to be? :rolleyes: I've been hearing about the bubble going to burst for 2-3 years now.



We are not talking about economic strategy, we are talking personal investment. I don't care whether its good or bad for the economy, its the reality of the economy.

See above.


Not always the case, infact stocks have been extremely sticky, and many times they raise and fall irrespective of what happens in earnings.

Yeah but the main reason is usually the profits of the corporation. ;) Other projections are indeed made, like if a new oil field were discovered or force majeure etc.


It is a perception because there is no concrete connection, other than dividends, which is juts a small piece of the pie.

So the profits and good fortunes of a corporation (that of course affect its share value) are not concrete? Could you explain exactly how dividends are just a small piece of the pie? :rolleyes:


Does'nt matter thats what people do, when your investing you don't judge what SHOULD be you judge what is.

Which is exactly what you aren't doing. :rolleyes:


Yes, many other bubbles happened, does'nt negate anything I said, I said before 2007 real estate was considered solid as gold, just as gold is considered now, even though every one knows its in a bubble, and even though everyone knows its being securitized and speculated on.

Apart from the fact that anyone who talks about "solid" 100% guarantees in the world of finance and investment is questionable to say the least- you were basically and completely wrong in what you said about pre-2007. You're just thrashing around grasping at things that can save your argument that is not backed up by facts or stats. Can you provide a source for your assertion? By the way if you look at records going back to 2002 you'll see that gold has been in the green every year. There was a dip when the crisis began with Lehman brothers etc but that was largely due to people selling gold to pay debts.


Well, your not watching the gold market then, ETFs and futures are HUGE on gold.

And... your point?


Actually no they won't, legally, you have to sell them for money first.
:laugh:
Well if it came to that day, it wouldn't really be easy because the money would be worthless wouldn't it? But it could also be used to buy foreign currency too.

Gacky- your only argument is every that you are right because you are right. You keep repeating ad nauseam that gold is in a bubble but you actually haven't brought one piece of economic evidence or facts or statistics or even accurate economic history to back up your arguments,


China won't back the Yuan with gold and China has major problems itself, one of which is that it needs to United States as a consumer, and that it itself will suffer terribly if the dollar collapses becausea it owns so much in it.

How do know that? You really are becoming irritating with this thread- all you are doing is throwing your opinion in as if it were a fact without backing anything up. China is dumping the dollar and buying gold. In 2010 the Industrial and Commercial Bank of China's gold savings accounts reached over a million- one year on into the scheme. China is not the only player, there's India too and Russia. You never thought they might be buying gold too to hedge against the fact that the dollar may become worthless and the US won't be able to repay its debts? :rolleyes:


And again, if China pegs its currency to gold, kiss your gold holdings value good bye.

Actually the predictions, should that happen, would be that the gold price would rocket and you could end up with prices as much as $3-5000. It would actually be good according to investors.

It would be nice if you could actually base your arguments on facts and not factoids and opinions.

As for the inane comment about Keynesian economics, yeah, they are the ones that some might say have contributed to the financial crisis, sovereign debt crisis, credit crisis and so on. However another Nobel laureate, namely Milton Friedman was a major critic of Keynesian economics so your argument to the Nobel prize becomes even more pitiful- oh and then there's Robert Lucas Jr. and Friedrich Hayek- oh, they won Nobel prizes too. :rolleyes:

[DinodudeEpic]

Make a cooperative..... AFTER going to college using some of said money.

[RichardAWilson]

Comrade, you're wrong in one regard. Friedman's Monetarism is based on the Keynesian (Monetary) Approach.

Heard of Helicopter Dropping?

Nonetheless, as long as the Fed is printing money, gold will move higher. A weaker dollar will translate into higher priced Gold.

Historical correlation is indisputable.

Gold will become a bubble if and when interest rates rise, the dollar strengthens and our macroeconomic fundamentals rebound.

[RGacky3]

Yep... and now we are in the middle of currency crisis.


We are in the middle of an everything crisis.


Historical correlation is indisputable.

Gold will become a bubble if and when interest rates rise, the dollar strengthens and our macroeconomic fundamentals rebound.

Historicaly correlation is disputable, because if you look at gold over the last 5 or so years Gold has SKYROCKETED, way way beyond any historical corrolation, even as the stock market stabalized and the dollar stabalized Gold went way way up.

GOld is not acting as it usually does, and this it in large part do to gold being used as a return investment AND Gold securities not directly backed by gold, but rather just influence the price.


Except it isn't, because that's not how gold generally works. It's a refuge and a way of hedging against falling currencies in times of financial instability.


Yes, but thats not what its being used for now, now its being used by many as a return security and is in a bubble, people are looking at the price go up and they want a piece of the action.


The whole system is inter-connected. Think about it in simple terms, the more gold the central banks buy the less there is and the more it's worth. ;)


Of coarse, but that does'nt mean "copy the central bank" is a good policy.


Yeah, you keep saying that but you have yet to provide any economic of financial evidence that the bubble is going to burst. Bubbles only burst when there is a pop. Now, would you like to tell us what that pop is going to be? :rolleyes: I've been hearing about the bubble going to burst for 2-3 years now.


I don't know what the pop is going to be, it could be someone not delivering on futures, it could be a freeze in the market, it could be something as simple as a slow down in the rate of growth that freaks out the return investors, It could be a dump, Gold ETFs might freeze which would plummet the gold price, devivatives on GOld might go bad, there are tons of things that could make the bubble pop.

BUt just the fact that you admit there IS a bubble prooves that this is not a good long term investment.


Yeah but the main reason is usually the profits of the corporation. ;) Other projections are indeed made, like if a new oil field were discovered or force majeure etc.


Which is still percieved value, unless there are derivatives in the mix, and thats juts a small piece of the pie. Share holders never actually GET the profit wihtout a dividend, all they get is someone else willing to buy for a higher prices, because they htink someone else will later, or maybe they think they'll get a dividend.


So the profits and good fortunes of a corporation (that of course affect its share value) are not concrete? Could you explain exactly how dividends are just a small piece of the pie? :rolleyes:


The tie between profits and stock price are not concrete.

DO you really think dividends make more money than capital gains??? or even close to the same amount of money?

Btw, saying dividends are anything close to capital gains and then rolling your eyes is being smug about ignorance.


Which is exactly what you aren't doing. :rolleyes:


Errr no, I'm actually listening to people saying gold is in a bubble and actually looking at the data and what is affecting it.

Your just saying "that is how it has been from my forfathers to their forfathers" Just like people said about property from 2000-2007.


Apart from the fact that anyone who talks about "solid" 100% guarantees in the world of finance and investment is questionable to say the least- you were basically and completely wrong in what you said about pre-2007. You're just thrashing around grasping at things that can save your argument that is not backed up by facts or stats. Can you provide a source for your assertion? By the way if you look at records going back to 2002 you'll see that gold has been in the green every year. There was a dip when the crisis began with Lehman brothers etc but that was largely due to people selling gold to pay debts.


A source that people thought real estate was considered solid? Do you really need one.

Ok, GOld was in the green, and what? Now it is in a bubble.


And... your point?


That Gold is becomming a speculative instrument, and these products are inflating the price.


Well if it came to that day, it wouldn't really be easy because the money would be worthless wouldn't it? But it could also be used to buy foreign currency too.

Gacky- your only argument is every that you are right because you are right. You keep repeating ad nauseam that gold is in a bubble but you actually haven't brought one piece of economic evidence or facts or statistics or even accurate economic history to back up your arguments,


Do you deny GOld is in a bubble? Because if you do I'll get you some evidence, so far you hav'nt denied it.


How do know that? You really are becoming irritating with this thread- all you are doing is throwing your opinion in as if it were a fact without backing anything up. China is dumping the dollar and buying gold. In 2010 the Industrial and Commercial Bank of China's gold savings accounts reached over a million- one year on into the scheme. China is not the only player, there's India too and Russia. You never thought they might be buying gold too to hedge against the fact that the dollar may become worthless and the US won't be able to repay its debts? :rolleyes:


I know it because Chinas main export partner is the US, meaning they get paid in dollars, meaning that they nee dto keep THEIR currency down.

How much money does the US owe to India? Or Russia, most of the money the US owes is to US players, and btw, NO ONE thinks the US will default, I wish they would, but its just not gonna happen.

There is a reason Soros (who knows a thing or 2 about currency devaluation) called Gold the "Ultimate asset bubble."


Actually the predictions, should that happen, would be that the gold price would rocket and you could end up with prices as much as $3-5000. It would actually be good according to investors.


Really? Where are those predictions, BTW, if that happened? Kiss your Chinese economy good bye, It would be so expensive to buy chineese if their currency was valued so high.


yeah, they are the ones that some might say have contributed to the financial crisis, sovereign debt crisis, credit crisis and so on. However another Nobel laureate, namely Milton Friedman was a major critic of Keynesian economics so your argument to the Nobel prize becomes even more pitiful- oh and then there's Robert Lucas Jr. and Friedrich Hayek- oh, they won Nobel prizes too. :rolleyes:

From the 1970s to now its been the Monitarists and the Neoclassicals who have been the policy makers.

BTW, Ask a Chilaen about Friedman, or an Icelandic person, or anyone from a country that followed his model.

[ComradeMan]

Comrade, you're wrong in one regard. Friedman's Monetarism is based on the Keynesian (Monetary) Approach.

He was originally a Keynesian however I thought his staunch laissez-faire approach and anti-state intervention ideas were considered to be anti-Keynesian.
http://www.dallasfed.org/research/ei/ei0202.html

He's generally cited as being anti-Keynesian but do you have other information perhaps? I don't know so much about the Chicago School.


Heard of Helicopter Dropping?

:scared:- I wasn't saying I was a Milton Friedmanist, it was more in response to Gacky's citing Nobel Prizes...


Nonetheless, as long as the Fed is printing money, gold will move higher. A weaker dollar will translate into higher priced Gold.

Well from sunny Italy, the idea of printing money and high inflation... lol.... ;)


Historical correlation is indisputable.

Agreed


Gold will become a bubble if and when interest rates rise, the dollar strengthens and our macroeconomic fundamentals rebound.

I agree, and I don't see that in sight. I hope I am wrong.

With such huge debts an interest rate rise would not be good. I don't see how the dollar will recover after losing AAA status and with the $14 trillion deficit and counting. It's not good for anyone at the moment. Italy was on 116% public debt that last I looked and the solution? Rise VAT (IVA) - value added tax! :rolleyes: The only other options are raiding pensions but that's political dynamite for a government. The UK are in a bad way too.

There was a Roman Emperor, I believe although I can't remember who, one of the Flavians, who had the nerve to cancel all debts. It worked, but then he was a Caesar. ;)

[RichardAWilson]

Friedman opposed Keynesian Fiscal Policy. However, if you read Keynes's General Theory and the Treatise on Money, you'll learn Keynesian-ism has two branches (Fiscal and Monetary).

The Monetary Crowd, I.e. Free Keynesian and New Keynesian, focuses more on interest rates and the use of monetary policy.

Strict-Monetarism subscribes to maintaining a stable money supply, whereas real-world monetarism (the kind endorsed by the likes of our Federal Reserve's Chairman) has been much more aligned with Keynesian Monetary Policy.

[ComradeMan]

We are in the middle of an everything crisis.

You should work on Wall Street with your in depth analyses.

47% of public debt is foreign owned.... , 32% of total debt- major owners are China, Japan, UK and Brazil. It's a big enough chunk to be a problem.... especially when we are talking in trillions and the US...ooops doesn't even have enough gold to pay it off. :(

Hoping for the economic ruin of the US in the current system is the talk of a madman.


We Really? Where are those predictions, BTW, if that happened? Kiss your Chinese economy good bye, It would be so expensive to buy chineese if their currency was valued so high.

http://www.fa-mag.com/fa-news/7972-gold-may-reach-5000-by-2020-standard-chartered-says.html

http://cnbusinessnews.com/standard-chartered-predicts-5000-gold-price/

http://www.prlog.org/11548384-gold-prices-will-explode-as-china-is-planning-for-huge-dollar-collapse-by-buying-gold.html

http://buying-gold.goldprice.org/2011/02/yuan-new-gold-standard.html

http://seekingalpha.com/article/259016-2-500-gold-prices-double-market-returns-as-china-s-gold-fever-breaks-records

http://www.thestreet.com/story/11009124/1/a-chinese-gold-standard.html


BTW, Ask a Chilaen about Friedman, or an Icelandic person, or anyone from a country that followed his model.

Gacky.... so what? Ask the Greeks, the Irish etc about how great our current economic models and policies have been.... :rolleyes:

[RichardAWilson]

P.S. I don't see inflation being a major problem in the short to medium term. The M1 and M2 have exploded.

The M3 (Which the Fed stopped publishing during the financial crisis - though it's still estimated by Wall St.) remains flat-lined.

Furthermore, the jobless rate remains ultra-high and inflation-adjusted incomes continue to fall.

Gold investors are investing more on the belief in a breakdown in the system. (I.e. Loss of Confidence in America)

Inflation Expectations are, after all, Expectations.


Core Inflation is still running below an annualized 2% rate.

http://4.bp.blogspot.com/-HoYvCLfJJto/TboAe7hWojI/AAAAAAAAPQk/mpSqYzPESqY/s600/core.jpg

[RGacky3]

You should work on Wall Street with your in depth analyses.

47% of public debt is foreign owned.... , 32% of total debt- major owners are China, Japan, UK and Brazil. It's a big enough chunk to be a problem.... especially when we are talking in trillions and the US...ooops doesn't even have enough gold to pay it off. :(

Hoping for the economic ruin of the US in the current system is the talk of a madman.


Yes, there is a debt crisis, there is an unemployment crisis, their is a credit crisis, there are many crisis' we are in an economic crisis.

I'm not hoping for any economic ruin.


http://www.fa-mag.com/fa-news/7972-g...ered-says.html (http://www.fa-mag.com/fa-news/7972-gold-may-reach-5000-by-2020-standard-chartered-says.html)

http://cnbusinessnews.com/standard-c...00-gold-price/ (http://cnbusinessnews.com/standard-chartered-predicts-5000-gold-price/)

http://www.prlog.org/11548384-gold-p...ying-gold.html (http://www.prlog.org/11548384-gold-prices-will-explode-as-china-is-planning-for-huge-dollar-collapse-by-buying-gold.html)

http://buying-gold.goldprice.org/201...-standard.html (http://buying-gold.goldprice.org/2011/02/yuan-new-gold-standard.html)

http://seekingalpha.com/article/2590...breaks-records (http://seekingalpha.com/article/259016-2-500-gold-prices-double-market-returns-as-china-s-gold-fever-breaks-records)

http://www.thestreet.com/story/11009...-standard.html (http://www.thestreet.com/story/11009124/1/a-chinese-gold-standard.html)



Not one of those articles say that it would go up if China pegged their currency to it, except for buying-gold.com, and common now, and the last arcticle which said.

"China holds $2.85 trillion in foreign reserves, which means the country would need to buy roughly 66,000 tons of gold to fully back its currency. Even if the country upped the ante to just 3%, the country would need to buy 1,000 tons. "

The rest of hte arcticle is saying gold will go up, which makes sense.

Look up Gold prices vrs the dollar and the dow jones over 5 years, Gold is up almost 200%, while the dollar is down about 10%, and the Dow jones is almost where it was 5 years ago, The dollar depreciating 10% while Gold appreciates 200%?

ITS NOT JUST THE CURRENCY, ITS A BUBBLE, and I'm not the only one that thinks so

http://www.forbes.com/sites/feeonlyplanner/2011/08/28/gold-bubble-or-not/
http://money.cnn.com/2011/01/10/pf/investing/investing_in_gold.moneymag/index.htm
http://www.reuters.com/article/2011/08/20/us-india-gold-prices-idUSTRE77J0FO20110820
http://www.investorplace.com/2011/06/gold-prices-bubble-investing-gld-etf/
http://moneywatch.bnet.com/investing/blog/investment-insights/gold-bubble-alert-wells-fargo-warns-clients/2313/

The fact is your ignoing the Huge amount of ETFs and other securities attached to gold, your ignoring the GIANT and rapid raise in price of gold as opposed to everything else, and your ignoring history, gold does'nt go up this high without a collapse, Currency is not collapsing, this is not the wiemar republic, even if it was gold is still way over valued, Gold is no longer being used as store value is a speclative instrument, It does'nt matter that China is buying gold, Because there are much bigger things affecting it.

"Unless you want to flash some bling, buying gold today is just a bet that someone else will want to pay you more for it tomorrow. "

"Unlike a bond, gold doesn't promise to pay you back with interest; unlike a stock, it doesn't have any hope of generating earnings over time. If gold were a house, it would be one you couldn't live in or collect rent from. "

"In 2005 only 16% of the demand for gold came from investors most went to industrial users and jewelers. Now investors reflect almost 40% of the demand. "

"The size of the gold ETF screams bubble because it indicates that everybody and their dog have bet all on gold."

" The sheer size of the gold ETF virtually guarantees that sellers will not be able to find buyers at current prices."


Gacky.... so what? Ask the Greeks, the Irish etc about how great our current economic models and policies have been.... :rolleyes:

The Greeks, the Irish, and so on all followed neo-liberal models, the current models ARE the neo-liberal ones.


Gold investors are investing more on the belief in a breakdown in the system. (I.e. Loss of Confidence in America)


Many of them are just speculating and wanting to get some on the way up.

If Gold was just a repsonce to the currency crisis, it would reflect that, it does not.

[ComradeMan]

Gacky- when it comes to the subject of finance and investment there is no "golden formula" if there were and either you, I or anyone else knew it we would be a) very rich b) have a suitcase full of Nobel prizes c) be advised perhaps to keep very quiet... ;):lol:

When it comes to the subject of gold the camps are very divided. However the "enemies" of gold over the last 5-10 years or so seem to have been consistently wrong in their predictions and in their analyses there always seems to be one factor they miss, i.e. (and as Richard pointed out above) people invest in gold because they don't have faith in paper currency. The objectors raise all kinds of issues like the "real/correct/fair" price of gold- despite telling anyone how exactly they arrive at such a figure and also despite the fact that it is generally viewed as a non-earning asset. From there they argue the whole bubble theory by saying that the asset is overpriced. However an asset being overpriced does not per se constitute a bubble which is also defined by the financial fall out if the bubble bursts which, at the moment at least, would not be much for gold, i.e. a crash.

You are buying into the "greater fool theory" with your view on the "gold bubble".

I also think that you are forgetting that we are talking about a global phenomenon and not just a US one.


If Gold was just a repsonce to the currency crisis, it would reflect that, it does not.

See:-


Gold investors are investing more on the belief in a breakdown in the system. (I.e. Loss of Confidence in America)

And:-

2004 article linking gold investment to currency crisis
http://www.safehaven.com/article/2169/currency-crisis-ignites-gold

2011 article linking gold investment to currency crisis
http://buygoldsilver.org/2010/11/global-currency-crisis-gold-whats-really-going-to-happen-2011-2012/

http://www.gotgoldreport.com/2011/08/haynes-this-is-a-genuine-currency-crisis.html

http://www.munknee.com/2011/09/a-full-blown-international-bond-currency-crisis-is-approaching-fast-heres-why/

US Dollar Crisis- article
http://wallstreetpit.com/67394-u-s-dollar-crisis-only-way-to-protect-yourself

Euro currency crisis- article
http://eurotradingtrend.com/euro-currency-crisis-2011.php

[RGacky3]

Buygoldsilver, gotgoldreport, and safehaven I would'nt really call those neutral on the isseu.

BTW, you can find many arcticles saying Gold is safe, I'm telling you why its not, and guess what you YOU AGREE, you agree its in a bubble, you just don't think its gonna pop .... I don't get that logic.

ETFs, futures, speculatoin, the very nature of gold as a security, everything points to it being a bubble, when its gonna pop? who knows, but your suggesting a good long term investment idea is buying gold at the peak of a giant bubble.

[ComradeMan]

Buygoldsilver, gotgoldreport, and safehaven I would'nt really call those neutral on the isseu.

Well, I have posted other sources and the articles that were mentioned referenced facts/claims and statements by people regarding the topic.

Here's another article from msn.money
http://money.msn.com/currency/why-gold-is-not-a-bubble-fleckenstein.aspx


BTW, you can find many arcticles saying Gold is safe, I'm telling you why its not, and guess what you YOU AGREE, you agree its in a bubble, you just don't think its gonna pop .... I don't get that logic.

There is consensus or agreement on "bubbles" to start with and I am not saying it's in a bubble. Prices go up and they can go down- that's the market. You, on the other handm, keep repeating "it's a bubble" "it's a bubble" with very little historical, economic or statistical analysis to back it up. Ironically, bubbles in finance only become bubbles after they pop. ;)


ETFs, futures, speculatoin, the very nature of gold as a security, everything points to it being a bubble, when its gonna pop? who knows, but your suggesting a good long term investment idea is buying gold at the peak of a giant bubble.

Err.... everything points to a lack of confidence in banks and currencies. ETFs and futures are just one of several different ways to invest in gold.

Here's a little article too
http://gold.bullionvault.com/How/GoldCoinsShortage

Think about it, if people are buying gold up then there's less gold available and there's also more "money" tied up in gold, i.e. not in currency. Why do you think that is? You just don't seem to accept the idea of gold as a refuge and/or hedge against faultering currencies etc.

[Jimmie Higgins]

That's a lot of money to suddenly have dropped in your lap, but really in the long-term it isn't much. Consider yourself lucky and use the money how you want to. If you've always wanted to live on a commune, then try and start that up, but starting a commune because you want to do something leftist, isn't a good reason because frankly, it won't help the working class struggle IMO.

If you want to go to college, use some of the money for that, use it to travel and do things you may not be able to do otherwise and use it to try and make your personal life more secure by buying a home after you have a steady job or something like that. It's rough out there.

[RGacky3]

Well, I have posted other sources and the articles that were mentioned referenced facts/claims and statements by people regarding the topic.

Here's another article from msn.money
http://money.msn.com/currency/why-go...ckenstein.aspx


There are some things wrong with his article, first of all there is this straw man that if you think gold is bubbled you MUST think currency is safe, that is not the case, second, the idea that there needs to be many players to have a bubble, the housing bubble only involved a few major players (seliing CFOs and Credit default swaps).

BTW, people who argue for gold as an investment tool are almost always the same ones that argue for it as a currency backer, which is wierd and comes off as fetishists (since as a currency it would suck as an investment tool).

Also you don't have to BUY GOLD to be a player, infact many many players are exposed to the price without eveyr buying gold, which means I don't care how much gold china is buying, because people buying different ETFs and derivatives from gold are affecting it hugely.


There is consensus or agreement on "bubbles" to start with and I am not saying it's in a bubble. Prices go up and they can go down- that's the market. You, on the other handm, keep repeating "it's a bubble" "it's a bubble" with very little historical, economic or statistical analysis to back it up. Ironically, bubbles in finance only become bubbles after they pop. http://www.revleft.com/vb/so-may-receiving-t160626/revleft/smilies/wink.gif


Bubbles in finance become bubbles when their price is over inflated, in other words it is speculated above what the price would normally be. People were calling the housinb bubble before it popped, and people are calling the gold bubble.

The historical evidence is that it has gone up MUCH FARTHER than the so-called reasons for it going up allow, currency devaluation is small, and stocks are still doing ok, whereas Gold is sky rocketing, you also have the evidence of the giant volume of Gold ETFs and other derivatives in which people are exposed to Gold without buying it, which is logically prone to bubbles, anytime you can bet on something without buying something your moving beyond supply and demand and affecting prices.

Thats one reason the food prices went so high in 2007.

I've given tons of argument, you just ignored them and set up straw men about currencies.


Err.... everything points to a lack of confidence in banks and currencies. ETFs and futures are just one of several different ways to invest in gold.


No ETFS and futures are ways to affect the price of gold, or be exposed to it, without buying physical gold, which means you hae people that impact the price of gold wihtout buying or selling it.

Its much different then buying a block of gold.


Think about it, if people are buying gold up then there's less gold available and there's also more "money" tied up in gold, i.e. not in currency. Why do you think that is? You just don't seem to accept the idea of gold as a refuge and/or hedge against faultering currencies etc.

There is not more money tied up in gold, people buy and sell gold with currencies.

There is not less gold availabe, people are still selling gold and gold products,

I accept that gold can and many times DOES act as a hedge and refuge against currencies and other things, what I am saying however, is that NOW, all the signs point to it being hugely inflated and bubbled. Just becuase it used to be something does'nt mean it always is. speculation can change the way a product works, and it has with gold.

[black magick hustla]

bruh life is short, don't piss your money on political groups or charities or whatevs. 250k is a good chunk of money, but at the end, it is not really "that" much. at most you can start a small buisness or buy a mid priced range house. don't listen to any jokers that tell you to invest in the IWW if you want a real change. most of the leftist groups today will probably have very little to do with a future revolution, if there is any. find a good broker and invest it, or invest in real estate, or do something longterm. 250k is really easy to piss away if you are not careful.

[ComradeMan]

I've given tons of argument, you just ignored them and set up straw men about currencies.

In the context of this discussion it's mostly because your arguments are incoherent, opinionated, unsourced rubbish. You constantly back-track and contradict yourself and show a lack of understanding of how some of the concepts work. When confronted with fairly reasonable objections, based on sources etc, you provide few counter-sources and employ the circular logic of "it's right because I say it's right". So you are basically saying that despite the fact it is a well-known fact that gold is a refuge/store-value investment in the main, especially in times of financial uncertainty, and despite the fact that we are indeed in such a crisis and despite the fact that gold is conforming to these well-known and historically recorded trends.... despite that, it's not actually how it is.


There is not more money tied up in gold, people buy and sell gold with currencies.

So it that why the US and EU are looking into measures to stop over investment in one commodity because it might be hurting others? Gacky- if I invest $x in gold it means I haven't invested $x in something else... get it?


There is not less gold availabe, people are still selling gold and gold products,

Despite the fact that overall gold mining has declined, most sources say the supply is lower than before, and in addition to the fact the costs of production, i.e. the mining, are rising. :crying: We could also add of course the fact that those who supply gold are saying they can't keep up with demand. As usual we have to ignore all the actual facts on the matter to agree with Gacky's opinion.


I accept that gold can and many times DOES act as a hedge and refuge against currencies and other things, what I am saying however, is that NOW, all the signs point to it being hugely inflated and bubbled.

I wasn't aware of a "bubble measure"- even if we are in a "bubble" the bubble needs to pop and it will only pop if what Richard points out happens and there isn't really much sign of that? Let's wait to see what the Germans have to say about EU bail-outs and whether or not Italy might default... etc...

We are in a currency crisis- all the evidence reflects that and the hard facts, i.e. the lines, graphs and stats (devoid of analysis) don't lie.


Just becuase it used to be something does'nt mean it always is. speculation can change the way a product works, and it has with gold.

:laugh::laugh::laugh:

PS- I see platinum is doing well.

[RGacky3]

So you are basically saying that despite the fact it is a well-known fact that gold is a refuge/store-value investment in the main, especially in times of financial uncertainty, and despite the fact that we are indeed in such a crisis and despite the fact that gold is conforming to these well-known and historically recorded trends.... despite that, it's not actually how it is.


Yes, based on the rapid jump in price which was not in line with dropping currencies, and the raise of ETFs and derivataives .... and people using gold as speculation.

Its not conforming to those historically recorded trends, otherwise it would have raised much slower seeing as currency is being devalued much sloewr and the stock market has basically recovered.


So it that why the US and EU are looking into measures to stop over investment in one commodity because it might be hurting others? Gacky- if I invest $x in gold it means I haven't invested $x in something else... get it?


Yes, if oyu invest $x in gold that means that someone else has your $x to invest in something else, get it? Your buying gold from someone I presume.

yes there is more of YOUR money tied in in gold, that means that YOU and other people who invest in gold have money tied up and thus have an interest in keeping the price high.

But your right there is more money in gold, only because the price of it has gone up rediculous amounts.


Despite the fact that overall gold mining has declined, most sources say the supply is lower than before, and in addition to the fact the costs of production, i.e. the mining, are rising. :crying: We could also add of course the fact that those who supply gold are saying they can't keep up with demand. As usual we have to ignore all the actual facts on the matter to agree with Gacky's opinion.


Has the supply dropped 200% Has the cost of production gone up 200%

And again a lot of the people investing in gold products ARE NOT BUYING GOLD, meaning they are affecting the price BEYOND the actual supply and demand of gold.

Gold ETF volume has exploded, meaning that as supply of gold slows down, GOLD derivatives go up, meaning the price is affected more and more by gold ETF speculation.

if people want to agree with your opinion they have to live in the 1800s.


I wasn't aware of a "bubble measure"- even if we are in a "bubble" the bubble needs to pop and it will only pop if what Richard points out happens and there isn't really much sign of that? Let's wait to see what the Germans have to say about EU bail-outs and whether or not Italy might default... etc...


I'm saying that Gold prices have a ton more to do with speculation and a ton less to do with hedging against currencies than both you and richard claim.

Neither you nor Richard nor me know when the bubble will pop. I'm saying the raise in price is above and beyond any currency devaluation.


We are in a currency crisis- all the evidence reflects that and the hard facts, i.e. the lines, graphs and stats (devoid of analysis) don't lie.


No your right, they do not lie.

Over the last 5 years Gold has Appreciated over 200%, The Euro is at around 2.25% and the Dollar is below 2%.

Sorry but that growth is not all from hedging agianst currencies, you'd be insane to think that.


:laugh::laugh::laugh:


We are post 2007 and you still think that we live in an economy where everything always acts the way it always has acted, like like housing right?

Gold, like housing from 2000-2007 has been HEAVILY turned into and linked with speculative products, and your still living as if we were in a world only ruled by supply and demand. Not only that but your rolling your eyes .... basically at both warren buffet and George soros.

[ComradeMan]

....

:laugh::laugh::laugh::laugh: I suggest you read around the financial papers. I don't even think you know what you're talking about anymore.

Here's another article
http://emasterpilih.blogspot.com/2011/07/debt-fears-hurt-stocks-euro-gold-at.html

[Game Girl]

If I had that kind of money, I'd be able to set up my own photography buisness. Which si something I've wanted for the longest time.

Sadly, theres no chance of me winning the lottery. So, I'll have to try and get a job...Keyword is try. (There ARE no jobs around here! D:.)

[RGacky3]

http://www.revleft.com/vb/so-may-receiving-t160626/revleft/smilies2/lol.gifhttp://www.revleft.com/vb/so-may-receiving-t160626/revleft/smilies2/lol.gifhttp://www.revleft.com/vb/so-may-receiving-t160626/revleft/smilies2/lol.gifhttp://www.revleft.com/vb/so-may-receiving-t160626/revleft/smilies2/lol.gif I suggest you read around the financial papers. I don't even think you know what you're talking about anymore.


Same to you, is some one tickling you?

Anyway, you still hav'nt responded to most of my points.