Price of Gold in USD moving right along

[suzannegoh]

4 hours ago, gamb00ler said:

The US Federal Reserve was created Dec. 23, 1913.  The price of gold averaged about $19 in 1913.

$100 in 1913 is equivalent in purchasing power to about $2,424.31 in 2016 so about $2,500 now.

Adjusting the price of gold by the same ratio yields an inflation adjusted price of $475.

Current gold price is roughly $1,400.

 

Which works out to an annual real rate of return of 0.94%.  How much money would you have today if you had put $19 in a savings account in 1913?

[owl sees all]

7 minutes ago, suzannegoh said:

Which works out to an annual real rate of return of 0.94%.  How much money would you have today if you had put $19 in a savings account in 1913?

If you had picked the wrong bank in 1913, you would have lost the lot in September 1929.

[suzannegoh]

3 minutes ago, owl sees all said:

If you had picked the wrong bank in 1913, you would have lost the lot in September 1929.

Likewise, FDR might have confiscated your gold.

[suzannegoh]

27 minutes ago, Brunolem said:

Actually, if one is buying gold as an insurance, it is very good to see its price manipulated downwards... it allows to buy more for less... 

 

I wish they were also manipulating down the prices of health and car insurances... 

 

It's not always being manipulated in the same direction, when it went up to $1900 it was being manipulated upwards.  And it sucked in a lot of people who were greedy on the way up or thought that gold was "on sale" when it went down from $1900 to $1700. 

[Brunolem]

6 minutes ago, suzannegoh said:

It's not always being manipulated in the same direction, when it went up to $1900 it was being manipulated upwards.  And it sucked in a lot of people who were greedy on the way up or thought that gold was "on sale" when it went down from $1900 to $1700. 

The market forces pushed the price to 1,900...not manipulation... 

 

Find me one example of fraud/manipulation where the fraudsters were caught pushing the price of gold up. 

 

There are many many cases, the latest being quoted above, but they tend to all work in the same direction... and this is not up... go figure... 

 

[mania]

7 minutes ago, suzannegoh said:

It's not always being manipulated in the same direction, when it went up to $1900 it was being manipulated upwards.  And it sucked in a lot of people who were greedy on the way up or thought that gold was "on sale" when it went down from $1900 to $1700. 

Not so sure about that.... When it went that high could also be attributed to their inability to stop a flood of buyers of physical gold such as that at that point in time.

This scenario will happen again & more IMO

 

Also in regards to manipulation Many still do not understand & think to buy a paper version of metals is the same...whether that be silver/gold/platinum/rhodium/palladium etc etc.

Those versions are manipulated & physical price is then based off that. But if you tried to actually buy a decent amount of "physical" gold at the time you would have seen it was not easy as supply was not there & I am speaking of 99% bullion not other forms

 

[mania]

Some folks remember from 2008 or so onwards thru 2012 it was more than obvious JP Morgan was manipulating Silver by shorting amounts that not only they did not control but did not even exist

 

Just googled & see a not too old news report on it...Even this report I think does not tell all..

https://www.cnbc.com/2018/11/12/ex-jp-morgan-silver-traders-guilty-plea-could-boost-manipulation-suit.html

[suzannegoh]

The market forces pushed the price to 1,900...not manipulation... 

 

Find me one example of fraud/manipulation where the fraudsters were caught pushing the price of gold up. 

 

There are many many cases, the latest being quoted above, but they tend to all work in the same direction... and this is not up... go figure... 

 

Maybe I'm wrong about that, maybe upward manipulation has only happened in the silver market. Remember the Hunt Brothers? Still it seems a bit dillusional the way goldbugs assume that whenever gold goes down it's because of manipulation and that when it goes up it can only be because of natural market forces. At a minimum there must be people on Wall Street unethical enough to do a pump & dump.

 

[Brunolem]

14 minutes ago, suzannegoh said:

Maybe I'm wrong about that, maybe upward manipulation has only happened in the silver market. Remember the Hunt Brothers? Still it seems a bit dillusional the way goldbugs assume that whenever gold goes down it's because of manipulation and that when it goes up it can only be because of natural market forces. At a minimum there must be people on Wall Street unethical enough to do a pump & dump.

 

Gold manipulation is generally not about making money... in fact most of the times the manipulators lose money... but they don't care, what they want is to keep the populace from buying gold, in order to preserve as long as possible the dying fiat money system, which has been under respiratory assistance since 2008 and is not going any better (see the latest decisions from the major central banks). 

 

The last thing the governments and bankers need would be a gold mania like in the 70s and 80s.

 

Meanwhile, there is a good reason why central banks, especially from China and Russia, are piling gold by the hundreds of tons... these people may be evil, but they are not dumb, they can see the writing on the wall... 

[RocketDog]

On 6/25/2019 at 9:13 PM, emptypockets said:

Value of gold? You cant eat or drink it.  There is no intrinsic value in shiny metal apart from what other fans of shiny metal are prepared to pay for it. No different to sea shells in other cultures. Probably will make more money in drinking water in the not too distant future, as that is what wars will be fought over.

If gold works for you - go for it.

Gold is simply congealed currency. It is no more an investment than currency itself is.

One day everybody will be a fan of shiny metal  because they will realize that colored paper can be created out of thin air and geologically limited shiny metals are emminently suitable representations of wealth.

 

While the 'real goods' you mention, like water will also the valuable the logistics of storing and protecting them are simply not rational for representing large amounts of cash.

 

I can store hundreds of thousands of dollars worth of shiny metal is a shoebox and conceal it easily. It will never rot or deteriorate like sea shells, and frankly I don't want people warring over my assets.

 

Where will you store the equivalent amount of water? A reservoir? Good luck protecting or hoarding that. Evaporation will bankrupt you but rain will make you wealthy? A bit too capricious for my taste.

 

All asset classes have pros and cons.

 

What is clear however is that governments all over the world have been telling people for decades that gold is worthless while simultaneously serriptitiously (or not) avidly hoarding huge amounts of it. Apparently they too have fallen for the shiny metal deception. Apparently a massive strategic error on the part of the same powers that have successfully controlled global commerce and entire kingdoms for centuries. Boy, will they be surprised to find how worthless it is! They'll be forced to convert it colored paper at a massive loss. ????

 

It is simply inevitable that fiat currencies will lose favor when their intrinsic worthlessness becomes evident.

 

After all, as somebody recently  pointed out:

"There is no intrinsic value in colored paper apart from what other fans of colored paper are prepared to pay for it. "

 

Jewelry made from colored paper is simply ugly and simply impossible to do with ones and zeros in the cloud.

 

To each his own, and good luck to all of us.

 

[RocketDog]

2 hours ago, suzannegoh said:

Likewise, FDR might have confiscated your gold.

The gov won't do that again, at least in America; too few Americans own enough gold to make it worth the home-to-home searches and violence necessary to retrieve it.

Watch out for simple bans on precious metals trading or outright windfall profits taxes that nullify the original point of owning metals: hedges against colored paper.

 

Bottom line: own some metals and spread them across the globe in stable jurisdictions. Sorry, I meant 'more' stable jurisdictions than a big country run by a moronic sociopath with a king complex.

[Naam]

3 hours ago, Brunolem said:

You are comparing the performances of an asset, gold, which is constantly manipuled downwards (gold paper market, outright fraud...) with an asset, stocks, which is constantly manipulated upwards (QE, ZIRP, outright fraud...). 

these old and naïve conspiracy theories always make me smile. yes... i agree that QE is indeed a major factor influencing the appreciation of stocks. but this appreciation is a normal reaction (interest lower = stocks higher and vice versa) and neither a manipulation nor fraud.

[Brunolem]

22 minutes ago, Naam said:

these old and naïve conspiracy theories always make me smile. yes... i agree that QE is indeed a major factor influencing the appreciation of stocks. but this appreciation is a normal reaction (interest lower = stocks higher and vice versa) and neither a manipulation nor fraud.

... and ZIRP, or even NIRP is an even bigger factor ... just look at how stock markets react on the hope of lower interest rates... 

 

Now, on the other side, what exactly is the purpose of a paper gold market (that is a market that trades gold that doesn't physically exist, yet influence the price of physical gold)? 

 

The very existence of this paper market is a manipulation in itself! 

 

Why isn't there a paper cotton, or a paper copper, market? 

 

What's so special with gold (and other precious metals) that it needs to be treated differently than other commodities? 

[suzannegoh]

22 minutes ago, Naam said:

these old and naïve conspiracy theories always make me smile. yes... i agree that QE is indeed a major factor influencing the appreciation of stocks. but this appreciation is a normal reaction (interest lower = stocks higher and vice versa) and neither a manipulation nor fraud.

And it takes a lot to make a Klingon smile.

People here are talking as if they buy gold and hold it forever.  Good for them if they do.  But unfortunately these discussions encourage people who don;t know that they are doing to go out and buy gold a speculative investment.  Alex Jones and all the awake people scare them into thinking that the dollar is going to zero so they buy gold as it's price is rising, and then they panic and dump the gold when the market goes south.  I know a couple of retirees in Chaing Mai that did that - went all in on gold and gold miners shares in 2010 or 2011 and wound up taking a bath.

 

[suzannegoh]

6 minutes ago, Brunolem said:

... and ZIRP, or even NIRP is an even bigger factor ... just look at how stock markets react on the hope of lower interest rates... 

 

Now, on the other side, what exactly is the purpose of a paper gold market (that is a market that trades gold that doesn't physically exist, yet influence the price of physical gold)? 

 

The very existence of this paper market is a manipulation in itself! 

 

Why isn't there a paper cotton, or a paper copper, market? 

 

What's so special with gold (and other precious metals) that it needs to be treated differently than other commodities? 

It might be ripe for manipulation but it serves another purpose too.  The existence of exchange traded funds like GLD makes it easy for anyone with a 401k or IRA to invest in gold.

[suzannegoh]

1 hour ago, RocketDog said:

The gov won't do that again, at least in America; too few Americans own enough gold to make it worth the home-to-home searches and violence necessary to retrieve it.

Watch out for simple bans on precious metals trading or outright windfall profits taxes that nullify the original point of owning metals: hedges against colored paper.

 

Bottom line: own some metals and spread them across the globe in stable jurisdictions. Sorry, I meant 'more' stable jurisdictions than a big country run by a moronic sociopath with a king complex.

OK, but the reason that this came up was that it was demonstrated that if someone put money in gold in 1913 that they would have beat inflation by about 1% per year for the last 106 years.  And I asked how that would compare to keeping the money in a savings account.  The bank could have gone bust, and there was a 40 year period in there were it was illegal to hold gold in the US, so it's sort of a hypothetical question.  So let me rephrase is - does gold having an annualized real rate of return of 1% over that period of time make it a good investment compared to the alternatives?

[Brunolem]

29 minutes ago, suzannegoh said:

And it takes a lot to make a Klingon smile.

People here are talking as if they buy gold and hold it forever.  Good for them if they do.  But unfortunately these discussions encourage people who don;t know that they are doing to go out and buy gold a speculative investment.  Alex Jones and all the awake people scare them into thinking that the dollar is going to zero so they buy gold as it's price is rising, and then they panic and dump the gold when the market goes south.  I know a couple of retirees in Chaing Mai that did that - went all in on gold and gold miners shares in 2010 or 2011 and wound up taking a bath.

 

And the same can be said for stock markets, where laypeople are lured when they reach the top, only to lose everything when comes the crash... as happened in 2000, then 2008, and is going to happen again... 

 

There are many people who have made their fortunes with the stock market, yet keep on buying gold because they understand that trees don't grow to the sky, and that after the party comes the hangover... 

 

[mania]

From 12:30 some commentary on Gold silver ratio

 

[suzannegoh]

44 minutes ago, Brunolem said:

And the same can be said for stock markets, where laypeople are lured when they reach the top, only to lose everything when comes the crash... as happened in 2000, then 2008, and is going to happen again... 

 

There are many people who have made their fortunes with the stock market, yet keep on buying gold because they understand that trees don't grow to the sky, and that after the party comes the hangover... 

 

I think that you used the analogy gold being an insurance policy.  That being the case, what percent of your portfolio would you put in that insurance policy?

[Brunolem]

2 minutes ago, suzannegoh said:

I think that you used the analogy gold being an insurance policy.  That being the case, what percent of your portfolio would you put in that insurance policy?

I won't pretend to be a specialist... the latter generally recommend around 10%...

 

I would say that it also depends on how one's money is invested/parked... whether one is in low risk assets or high risk assets influences how much insurance one requires... 

 

 

[suzannegoh]

6 minutes ago, Brunolem said:

I won't pretend to be a specialist... the latter generally recommend around 10%...

 

I would say that it also depends on how one's money is invested/parked... whether one is in low risk assets or high risk assets influences how much insurance one requires... 

 

 

That lays ground for a much more even-keeled discussion.  Even famous gold guys like Peter Schiff give similar advice.  When you hear him talk he usually presents a very bullish story on gold and one might get the impression that he's saying to jump into gold with both feet, but he's not generally telling his clients to go all-in.

[RocketDog]

OK, but the reason that this came up was that it was demonstrated that if someone put money in gold in 1913 that they would have beat inflation by about 1% per year for the last 106 years.  And I asked how that would compare to keeping the money in a savings account.  The bank could have gone bust, and there was a 40 year period in there were it was illegal to hold gold in the US, so it's sort of a hypothetical question.  So let me rephrase is - does gold having an annualized real rate of return of 1% over that period of time make it a good investment compared to the alternatives?

As I and others have stated: metals should never be considered an investment. It is primarily a hedge against fiat currency and is considered a tangible asset, along with some other asset classes. It's all about preservation and growth is just a happy coincidence if it happens.

It is simply another asset class like collectibles, real estate, stocks, bonds, etc.

I believe in asset class as well as geographic asset diversification.

In my personal case I'm content with what I have and care less about growing it and more about preserving it.

Everybody's case is different to some degree or another. There is never only one way to grow or preserve wealth.

DISCLAIMER:
I'm not a broker, financial planner, tycoon, rocket surgeon, or even a particularly good investor.

All I did was work hard, accumulate assets, retire at 67, and now try to enjoy life.

Sent from my SM-G930V using Thailand Forum - Thaivisa mobile app

[suzannegoh]

3 minutes ago, RocketDog said:

As I and others have stated: metals should never be considered an investment. It is primarily a hedge against fiat currency and is considered a tangible asset, along with some other asset classes. It's all about preservation and growth is just a happy coincidence if it happens.

It is simply another asset class like collectibles, real estate, stocks, bonds, etc.

I believe in asset class as well as geographic asset diversification.

In my personal case I'm content with what I have and care less about growing it and more about preserving it.

Everybody's case is different to some degree or another. There is never only one way to grow or preserve wealth.

DISCLAIMER:
I'm not a broker, financial planner, tycoon, rocket surgeon, or even a particularly good investor.

All I did was work hard, accumulate assets, retire at 67, and now try to enjoy life.

Sent from my SM-G930V using Thailand Forum - Thaivisa mobile app
 

I have no disagreement with that.  Where I find myself in disagreement is that often in this forum buying gold seems to be part of a Radical Libertarian philosophy rather than part of a portfolio management plan.

[Brunolem]

25 minutes ago, suzannegoh said:

That lays ground for a much more even-keeled discussion.  Even famous gold guys like Peter Schiff give similar advice.  When you hear him talk he usually presents a very bullish story on gold and one might get the impression that he's saying to jump into gold with both feet, but he's not generally telling his clients to go all-in.

Peter Schiff is a bit too "nervous" for my taste... he has been proven right, but is often too early, because too much in a hurry to be proven right. 

I prefer less passionate guys who have proved their worth over decades, and look at the global situation in a more detached manner... guys such as Doug Casey and his fellows, Bill Bonner, John Mauldin... they are all into gold, but not for making a killing, only to protect themselves against what they know is coming, because in the end it's all about numbers and maths, and one can defy these only for so long... as one says, sooner or later, gravity reasserts itself... and the longer it is suspended (extend and pretend), the harder and longer the hangover... 

[RocketDog]

I have no disagreement with that.  Where I find myself in disagreement is that often in this forum buying gold seems to be part of a Radical Libertarian philosophy rather than part of a portfolio management plan.

Ah, I see.
I'm apolitical where financial survival is concerned.

I woke up in 2008 to find that while my longterm investments in mutual funds had only lost about 15% in the crash, they had done nothing but track inflation after nearly 30 years. Until then I had taken the prevailing advice and let the 'experts', and time, provide for my retirement. That was obviously a mistake. I spent the next few years studying the monetary system, the history of banking, investment vehicles, global and sovereign finance, etc.

I was horrified at what I learned and determined to "work out my own salvation with diligence" as Alan Watts advised long ago regarding spiritual survival.

It's clear to me that most citizens are merely rubes to be duped by folks who spend their time dreaming up new ways to get rich without actually ever creating any wealth themselves; merely 'grist for the mill'. Governments are chest-deep in this game worldwide.

So over the last ten years I have invested in real estate and precious metals as well as planting banking flags in three foreign counties with metals vaulted in three more. I keep cash in three different currencies to and have a small and carefully selected equities portfolio of homely companies that actually turn modest profits.

As I mentioned earlier my primary game now is security and preservation, not growth. I do deviate a bit with certain equities because some of them will surely survive the RESET. Somebody mentioned water being the new gold, so look at the slow but steady growth of American Water Works (AWK) as a sample of my stocks. The FANG stocks? Surely you jest!

I am sober enough to know that as financial systems begin to unravel some of my assets will surely lose value or be seized, but not all of them.

And unravel the System surely will, as current events and future trend lines make abundantly clear to wary watchers.

The world has for much too long disregarded the financial Golden Rule for stability and growth:
Create more wealth than you consume.

Borrowing (or printing) money creates debt, not prosperity. It's just common sense, as any sixth grader should be able to (but likely can't) tell you.

Nearly all major sovereign governments now owe more than 100% of their GDP, with no plan or intention to repay those debts. Japan is leading this race to the bottom with 200% debt/GDP ratio. It is not credible that entire populations will work for an entire year or more with no personal income, to repay their nation's debt.

There is no effective way to repay these debts except by devaluation of currency, which is naked theft from the citizenry by their governments followed by outright repudiation of external debts and nationalization of foreign assets. All of these horrors are well underway and will not end well for the vast majority of the world's peoples.

All hail the savior called Financial Technology. Not. There is no magic anodyne to years of borrowing shamelessly from future generations.

So I have chosen a selfishly pragmatic approach to funding a modest life in my later years. My goal is to 'shelter in place' and watch this train wreck in slow motion unfold.

If I'm right in these self-inflicted predictions at least I won't huddle in the dark eating dogfood as I age. Win, lose, or draw I tried to take back control of my own destiny.

If I'm wrong I will be amazed that humanity was smart enough to find a solution that saves the world from total financial destruction wrought principally by the seemingly benign parasite known as the fractional banking system.

One could argue that my doomsday scenario is too negative but if they rationally evaluate our collective state of affairs it is impossible to conclude that prosperity is abundant and printing money truly is the ultimate panacea to the mess we've created.

The only financial advice I am arrogant enough to offer is that each person should strive to understand what is truly happening and make their own plans accordingly.

Feel free to ridicule and discard my stance; my die is cast.

With requisite apology I now end the sermon and will henceforth attempt to hold my peace.




Sent from my SM-G930V using Thailand Forum - Thaivisa mobile app

[Naam]

6 hours ago, Brunolem said:

... and ZIRP, or even NIRP is an even bigger factor ... just look at how stock markets react on the hope of lower interest rates... 

 

Now, on the other side, what exactly is the purpose of a paper gold market (that is a market that trades gold that doesn't physically exist, yet influence the price of physical gold)? 

 

The very existence of this paper market is a manipulation in itself! 

 

Why isn't there a paper cotton, or a paper copper, market? 

 

What's so special with gold (and other precious metals) that it needs to be treated differently than other commodities?  

whether we like it or not ZIRP and NIRP are things that happen based on economic necessities. Japan the most indebted country (>200% of GDP) wouldn't have survived without implementing them.

 

let me tell you a secret Bruno. what you call paper market exists for any commodity. the papers are called derivatives. and if you can think of rare commodities for which derivatives are not yet available, e.g. shrink heads from Papua New Guinea, pubic hair from virgin nuns or rocks from Mars and are able to commit 50 or 100 million dollars your bankers will find a counterpart (as crazy as you) and establish a relevant derivative contract.

 

 

[Naam]

8 hours ago, suzannegoh said:

Maybe I'm wrong about that, maybe upward manipulation has only happened in the silver market. Remember the Hunt Brothers? Still it seems a bit dillusional the way goldbugs assume that whenever gold goes down it's because of manipulation and that when it goes up it can only be because of natural market forces. At a minimum there must be people on Wall Street unethical enough to do a pump & dump.

please don't overlook that the Hunt Brothers' silver hoarding indirectly pushed up the price of gold which later collapsed together with silver.

[Naam]

10 hours ago, mania said:

Some folks remember from 2008 or so onwards thru 2012 it was more than obvious JP Morgan was manipulating Silver by shorting amounts that not only they did not control but did not even exist

"naked shorts" as in JPM's case are not illegal in many jurisdictions until this very day. the SEC banned it in 2008.

[Naam]

10 hours ago, mania said:

Also in regards to manipulation Many still do not understand & think to buy a paper version of metals is the same...whether that be silver/gold/platinum/rhodium/palladium etc etc.

Those versions are manipulated & physical price is then based off that. But if you tried to actually buy a decent amount of "physical" gold at the time you would have seen it was not easy as supply was not there & I am speaking of 99% bullion not other forms

a fairy tale even though mentioned often by many goldbugs. there was never a shortage of supply.

[Brunolem]

4 hours ago, Naam said:

whether we like it or not ZIRP and NIRP are things that happen based on economic necessities. Japan the most indebted country (>200% of GDP) wouldn't have survived without implementing them.

 

let me tell you a secret Bruno. what you call paper market exists for any commodity. the papers are called derivatives. and if you can think of rare commodities for which derivatives are not yet available, e.g. shrink heads from Papua New Guinea, pubic hair from virgin nuns or rocks from Mars and are able to commit 50 or 100 million dollars your bankers will find a counterpart (as crazy as you) and establish a relevant derivative contract.

 

 

Survive is the word indeed for Japan. 

 

It is like saying that patient X wouldn't survive without respiratory assistance... yet where does that lead? 

 

Nowhere actually... Japan preserved its economy, only to lose its population, like Europe is now doing. 

 

You can't go against the tide... you block it there and it pushes over there... one way or another the Western socio-economic system (adopted by Japan) is on its last legs and will probably not survive the next decade... 

 

As far as derivatives are concerned, they don't influence the price of the concerned commodities like the gold paper market does. 

 

And by the way, you don't explain why this gold paper market is needed???