The Panic Starts ? Invest In Gold !

[LivinLOS]

There now must be EMERGENCY ACTION because the Chairman of the Fed has BOMBED OUT PUBLICLY and a PANIC is about to occur. Expect EMERGENCY ACTION in days, not weeks.

Yawn...the Thaivisa bears have been predicting the collapse of the Thai economy (and now the end of the world US) for years. It's boring guys, but cheer up statistically speaking one day you'll get it right. This particular panic has largely run its course in my view, so you'd be better off buying some quality stocks than gold.

BTW: It wasn't the fed that bombed out, it was hopelessly greedy US banks and investment houses that had their snout a bit too deep in the trough. Most of them have escaped with burnt fingers and a black eye or two, but otherwise largely intact and hopefully a bit wiser. Thanks in part to massive injections of foreign capital...

And where did the greedy banks get thier free money ??

And if you think this is over your not reading between the lines.. They are going to open the spigot on the digital printing presses and let inflation run rampant to protect against this credit contraction (when the banks would lose money) Paulson and the other inside men for the big banks will make sure of it.. The banks will be thrown a lifeline at the expense of the common man who will see saving evaporate under the hot sun of rampant inflation.

Look at inflation as simply a government mandated tax on savings. No increase in money supply and you can hold 0 inflation (currency risks taken out of the equation).. Yet the government prints itself free money, and devalues its future commitments and personal savings at the same time. Its a tax on savings by another name.

[LivinLOS]

There now must be EMERGENCY ACTION because the Chairman of the Fed has BOMBED OUT PUBLICLY and a PANIC is about to occur. Expect EMERGENCY ACTION in days, not weeks.

Yawn...the Thaivisa bears have been predicting the collapse of the Thai economy (and now the end of the world US) for years. It's boring guys, but cheer up statistically speaking one day you'll get it right. This particular panic has largely run its course in my view, so you'd be better off buying some quality stocks than gold.

Yeah and we have been right !!! Easy to call it boring but far more profitable to act on it in time.

I was not always bearish, only how I have been since 2002ish.. I was bullish and tech heavy all through late 90's.. I got out of most early enough (hung on to some tech unit trusts too long) but the low interest 'greenspan put' that was done to stave off a recession then when it was required to flush excess liquidity out of the system and generate an appreciation of risk again was quite obvious in creating other bubbles..

Someone needs to take the punchbowl away from the party.. and at some stage people have to live with the hangover.. Once thats happened then I can get back to bullishness.

[kdvsn]

There now must be EMERGENCY ACTION because the Chairman of the Fed has BOMBED OUT PUBLICLY and a PANIC is about to occur. Expect EMERGENCY ACTION in days, not weeks.

Yawn...the Thaivisa bears have been predicting the collapse of the Thai economy (and now the end of the world US) for years. It's boring guys, but cheer up statistically speaking one day you'll get it right. This particular panic has largely run its course in my view, so you'd be better off buying some quality stocks than gold.

Yeah and we have been right !!! Easy to call it boring but far more profitable to act on it in time.

I was not always bearish, only how I have been since 2002ish.. I was bullish and tech heavy all through late 90's.. I got out of most early enough (hung on to some tech unit trusts too long) but the low interest 'greenspan put' that was done to stave off a recession then when it was required to flush excess liquidity out of the system and generate an appreciation of risk again was quite obvious in creating other bubbles..

Someone needs to take the punchbowl away from the party.. and at some stage people have to live with the hangover.. Once thats happened then I can get back to bullishness.

It's well established that you are the ultimate genius when it comes to investing, but how does that help the rest of us?

[sonicdragon]

The Panic Starts when the insurers of all the misrated "dodgy debt" begin to fold. That's when you'll want to have cash.

That's already starting to happen

http://www.guardian.co.uk/money/2008/jan/2...llstreetjournal

[VegasVic]

I too think the chances of something really ugly happening are much higher.. Forget subprime, the whole debt is money paradigm could be about to change. Kondratieff waves predict this is the next great depression, the incredible debt bubbles made by the fed need popping, the entire US economy seems to be hanging on via an idea that you can borrow and spend and that makes wealth.

I too own gold (and silver) but having bet the farm on them back at mid 300's and mid 6's I am not unduly concerned.. I personally think Gold could correct quite a bit from its latest levels and will be much more volatile thanks in part to the ease with which buy and sell orders can be executed on the ETF's.. I am confident gold will be higher in nominal dollar terms (if that means anything.. Its spending power and wealth preservation I am more concerned with) so until I see a better asset class I will hold. The time will come (in the darkest hour before dawn) when commercial property / a performing UK country estate or farm / or other long term bet will appeal more than the metal of kings. But for now the fear hasnt really hit.

Those intending to retire based on portfolios with large equity portions will probably need a good long time horizon to realize gains this time round.

Ah yes, the old wives tale that Americans are all in debt way over their heads and that the dollar is about to become a worthless currency. I guess if stupidity like that gets posted here enough then those who can't think for themselves take it as the gospel truth. The reality however is that the total NET worth of U.S. households is very close to $60 trillion (yes thats trillion with a T), which by the way is more than the NET worth of the rest of the world combined! Hence the envy and animus towards everything American by many here! Another false tale propogated here on a routine basis is how that gold was $800/ounce back in 1980 and that would equate to $2500 or so today so gold has a lot further to go up. Wrong thinking again my gold buggy friends, gold was only elevated to those lofty levels back 28 years ago because the Hunt brothers were trying to corner the world silver market and dove silver to the $50/ounce level and gold came along for the ride during all the frenzy. Gold is in a similiar frenzy now and it will have a blow off top soon and fall back to levels that are more in line top its underlying value. Please by all means don't listen to me, feel free to go ahead and short the dollar and the DOW, and go long on gold, and a year from now we can revisit this discussion

[Abrak]

I too think the chances of something really ugly happening are much higher.. Forget subprime, the whole debt is money paradigm could be about to change. Kondratieff waves predict this is the next great depression, the incredible debt bubbles made by the fed need popping, the entire US economy seems to be hanging on via an idea that you can borrow and spend and that makes wealth.

I too own gold (and silver) but having bet the farm on them back at mid 300's and mid 6's I am not unduly concerned.. I personally think Gold could correct quite a bit from its latest levels and will be much more volatile thanks in part to the ease with which buy and sell orders can be executed on the ETF's.. I am confident gold will be higher in nominal dollar terms (if that means anything.. Its spending power and wealth preservation I am more concerned with) so until I see a better asset class I will hold. The time will come (in the darkest hour before dawn) when commercial property / a performing UK country estate or farm / or other long term bet will appeal more than the metal of kings. But for now the fear hasnt really hit.

Those intending to retire based on portfolios with large equity portions will probably need a good long time horizon to realize gains this time round.

Ah yes, the old wives tale that Americans are all in debt way over their heads and that the dollar is about to become a worthless currency. I guess if stupidity like that gets posted here enough then those who can't think for themselves take it as the gospel truth. The reality however is that the total NET worth of U.S. households is very close to $60 trillion (yes thats trillion with a T), which by the way is more than the NET worth of the rest of the world combined! Hence the envy and animus towards everything American by many here! Another false tale propogated here on a routine basis is how that gold was $800/ounce back in 1980 and that would equate to $2500 or so today so gold has a lot further to go up. Wrong thinking again my gold buggy friends, gold was only elevated to those lofty levels back 28 years ago because the Hunt brothers were trying to corner the world silver market and dove silver to the $50/ounce level and gold came along for the ride during all the frenzy. Gold is in a similiar frenzy now and it will have a blow off top soon and fall back to levels that are more in line top its underlying value. Please by all means don't listen to me, feel free to go ahead and short the dollar and the DOW, and go long on gold, and a year from now we can revisit this discussion

The OP's post at the beginning of this thread is the most stupid I have seen in a while, closely followed by this, the net worth of US households may well be worth US$60tr but their debt is US$48tr. As anyone who has lived in Thailand has witnessed these numbers unwind very quickly especially when the banking system is under pressure.

Wealth creation world over - in Thailand or the US is caused by credit expansion - when that unwinds and the banking system contracts - the wealth destruction is pretty scary. We have all seen it in Thailand and we are now witnessing it in the US. Whether we can preserve our capital in gold is a moot point - I guess we shall see.

(Incidentally when the net worth of US households is worth more than the remains of the world put together shouldnt that been sending warning signals that things are somewhat overvalued?)

Edited January 20, 2008 by Abrak

[VegasVic]

I too think the chances of something really ugly happening are much higher.. Forget subprime, the whole debt is money paradigm could be about to change. Kondratieff waves predict this is the next great depression, the incredible debt bubbles made by the fed need popping, the entire US economy seems to be hanging on via an idea that you can borrow and spend and that makes wealth.

I too own gold (and silver) but having bet the farm on them back at mid 300's and mid 6's I am not unduly concerned.. I personally think Gold could correct quite a bit from its latest levels and will be much more volatile thanks in part to the ease with which buy and sell orders can be executed on the ETF's.. I am confident gold will be higher in nominal dollar terms (if that means anything.. Its spending power and wealth preservation I am more concerned with) so until I see a better asset class I will hold. The time will come (in the darkest hour before dawn) when commercial property / a performing UK country estate or farm / or other long term bet will appeal more than the metal of kings. But for now the fear hasnt really hit.

Those intending to retire based on portfolios with large equity portions will probably need a good long time horizon to realize gains this time round.

Ah yes, the old wives tale that Americans are all in debt way over their heads and that the dollar is about to become a worthless currency. I guess if stupidity like that gets posted here enough then those who can't think for themselves take it as the gospel truth. The reality however is that the total NET worth of U.S. households is very close to $60 trillion (yes thats trillion with a T), which by the way is more than the NET worth of the rest of the world combined! Hence the envy and animus towards everything American by many here! Another false tale propogated here on a routine basis is how that gold was $800/ounce back in 1980 and that would equate to $2500 or so today so gold has a lot further to go up. Wrong thinking again my gold buggy friends, gold was only elevated to those lofty levels back 28 years ago because the Hunt brothers were trying to corner the world silver market and dove silver to the $50/ounce level and gold came along for the ride during all the frenzy. Gold is in a similiar frenzy now and it will have a blow off top soon and fall back to levels that are more in line top its underlying value. Please by all means don't listen to me, feel free to go ahead and short the dollar and the DOW, and go long on gold, and a year from now we can revisit this discussion

The OP's post at the beginning of this thread is the most stupid I have seen in a while, closely followed by this, the net worth of US households may well be worth US$60tr but their debt is US$48tr. As anyone who has lived in Thailand has witnessed these numbers unwind very quickly especially when the banking system is under pressure.

Wealth creation world over - in Thailand or the US is caused by credit expansion - when that unwinds and the banking system contracts - the wealth destruction is pretty scary. We have all seen it in Thailand and we are now witnessing it in the US. Whether we can preserve our capital in gold is a moot point - I guess we shall see.

You might want to take a few minutes to do some research on the NET worth of U.S. households (yes, that is the total assets minus all the debt) before you post next time. The NET worth of U.S. households is indeed in the upper 50 trillion dollar range. Don't feel too foolish when you actually take the time to find out the truth, you are just one of those who see this garbage posted time and time again that all Americans live beyond their means and actually have a negative NET worth. No need for apologies, but do take the time to get the facts next time around!

[Abrak]

I too think the chances of something really ugly happening are much higher.. Forget subprime, the whole debt is money paradigm could be about to change. Kondratieff waves predict this is the next great depression, the incredible debt bubbles made by the fed need popping, the entire US economy seems to be hanging on via an idea that you can borrow and spend and that makes wealth.

I too own gold (and silver) but having bet the farm on them back at mid 300's and mid 6's I am not unduly concerned.. I personally think Gold could correct quite a bit from its latest levels and will be much more volatile thanks in part to the ease with which buy and sell orders can be executed on the ETF's.. I am confident gold will be higher in nominal dollar terms (if that means anything.. Its spending power and wealth preservation I am more concerned with) so until I see a better asset class I will hold. The time will come (in the darkest hour before dawn) when commercial property / a performing UK country estate or farm / or other long term bet will appeal more than the metal of kings. But for now the fear hasnt really hit.

Those intending to retire based on portfolios with large equity portions will probably need a good long time horizon to realize gains this time round.

Ah yes, the old wives tale that Americans are all in debt way over their heads and that the dollar is about to become a worthless currency. I guess if stupidity like that gets posted here enough then those who can't think for themselves take it as the gospel truth. The reality however is that the total NET worth of U.S. households is very close to $60 trillion (yes thats trillion with a T), which by the way is more than the NET worth of the rest of the world combined! Hence the envy and animus towards everything American by many here! Another false tale propogated here on a routine basis is how that gold was $800/ounce back in 1980 and that would equate to $2500 or so today so gold has a lot further to go up. Wrong thinking again my gold buggy friends, gold was only elevated to those lofty levels back 28 years ago because the Hunt brothers were trying to corner the world silver market and dove silver to the $50/ounce level and gold came along for the ride during all the frenzy. Gold is in a similiar frenzy now and it will have a blow off top soon and fall back to levels that are more in line top its underlying value. Please by all means don't listen to me, feel free to go ahead and short the dollar and the DOW, and go long on gold, and a year from now we can revisit this discussion

The OP's post at the beginning of this thread is the most stupid I have seen in a while, closely followed by this, the net worth of US households may well be worth US$60tr but their debt is US$48tr. As anyone who has lived in Thailand has witnessed these numbers unwind very quickly especially when the banking system is under pressure.

Wealth creation world over - in Thailand or the US is caused by credit expansion - when that unwinds and the banking system contracts - the wealth destruction is pretty scary. We have all seen it in Thailand and we are now witnessing it in the US. Whether we can preserve our capital in gold is a moot point - I guess we shall see.

You might want to take a few minutes to do some research on the NET worth of U.S. households (yes, that is the total assets minus all the debt) before you post next time. The NET worth of U.S. households is indeed in the upper 50 trillion dollar range. Don't feel too foolish when you actually take the time to find out the truth, you are just one of those who see this garbage posted time and time again that all Americans live beyond their means and actually have a negative NET worth. No need for apologies, but do take the time to get the facts next time around!

Look I am not a simpleton - I said 'the net worth may well be US$60tr' implying the total worth before debt of over US$100tr. Just read the text. The majority of the US is fine but it is one of the most highly indebted public and private sector countries and this will cause problems.

When you say that the USA's net worth is greater than the remains of the world it should surely be sending warning signals that assets are overvalued? not so?

I remember when Tokyo properties were valued at more than the whole of the USA.

[Abrak]

I too think the chances of something really ugly happening are much higher.. Forget subprime, the whole debt is money paradigm could be about to change. Kondratieff waves predict this is the next great depression, the incredible debt bubbles made by the fed need popping, the entire US economy seems to be hanging on via an idea that you can borrow and spend and that makes wealth.

I too own gold (and silver) but having bet the farm on them back at mid 300's and mid 6's I am not unduly concerned.. I personally think Gold could correct quite a bit from its latest levels and will be much more volatile thanks in part to the ease with which buy and sell orders can be executed on the ETF's.. I am confident gold will be higher in nominal dollar terms (if that means anything.. Its spending power and wealth preservation I am more concerned with) so until I see a better asset class I will hold. The time will come (in the darkest hour before dawn) when commercial property / a performing UK country estate or farm / or other long term bet will appeal more than the metal of kings. But for now the fear hasnt really hit.

Those intending to retire based on portfolios with large equity portions will probably need a good long time horizon to realize gains this time round.

Ah yes, the old wives tale that Americans are all in debt way over their heads and that the dollar is about to become a worthless currency. I guess if stupidity like that gets posted here enough then those who can't think for themselves take it as the gospel truth. The reality however is that the total NET worth of U.S. households is very close to $60 trillion (yes thats trillion with a T), which by the way is more than the NET worth of the rest of the world combined! Hence the envy and animus towards everything American by many here! Another false tale propogated here on a routine basis is how that gold was $800/ounce back in 1980 and that would equate to $2500 or so today so gold has a lot further to go up. Wrong thinking again my gold buggy friends, gold was only elevated to those lofty levels back 28 years ago because the Hunt brothers were trying to corner the world silver market and dove silver to the $50/ounce level and gold came along for the ride during all the frenzy. Gold is in a similiar frenzy now and it will have a blow off top soon and fall back to levels that are more in line top its underlying value. Please by all means don't listen to me, feel free to go ahead and short the dollar and the DOW, and go long on gold, and a year from now we can revisit this discussion

The OP's post at the beginning of this thread is the most stupid I have seen in a while, closely followed by this, the net worth of US households may well be worth US$60tr but their debt is US$48tr. As anyone who has lived in Thailand has witnessed these numbers unwind very quickly especially when the banking system is under pressure.

Wealth creation world over - in Thailand or the US is caused by credit expansion - when that unwinds and the banking system contracts - the wealth destruction is pretty scary. We have all seen it in Thailand and we are now witnessing it in the US. Whether we can preserve our capital in gold is a moot point - I guess we shall see.

You might want to take a few minutes to do some research on the NET worth of U.S. households (yes, that is the total assets minus all the debt) before you post next time. The NET worth of U.S. households is indeed in the upper 50 trillion dollar range. Don't feel too foolish when you actually take the time to find out the truth, you are just one of those who see this garbage posted time and time again that all Americans live beyond their means and actually have a negative NET worth. No need for apologies, but do take the time to get the facts next time around!

Look I am not a simpleton - I said 'the net worth may well be US$60tr' implying the total worth before debt of over US$100tr. Just read the text. The majority of the US is fine but it is one of the most highly indebted public and private sector countries and this will cause problems.

When you say that the USA's net worth is greater than the remains of the world it should surely be sending warning signals that assets are overvalued? not so?

I remember when Tokyo properties were valued at more than the whole of the USA.

[Naam]

Another false tale propogated here on a routine basis is how that gold was $800/ounce back in 1980 and that would equate to $2500 or so today so gold has a lot further to go up. Wrong thinking again my gold buggy friends, gold was only elevated to those lofty levels back 28 years ago because the Hunt brothers were trying to corner the world silver market and dove silver to the $50/ounce level and gold came along for the ride during all the frenzy. Gold is in a similiar frenzy now and it will have a blow off top soon and fall back to levels that are more in line top its underlying value. Please by all means don't listen to me, feel free to go ahead and short the dollar and the DOW, and go long on gold, and a year from now we can revisit this discussion.

when VegasVic is right he is right! on january 21, 1980 the Hunt brothers were screwed by the Comex order to suspend silver trading and anybody who has some knowledge of finance history is aware what happened to the price of gold after that. but facts are no concern for goldbugs and their dreams. some of them wake up after nearly three decades of dreaming, NOT MAKING A SINGLE PENNY during this time, but shouting loudly "I TOLD YOU SO!"

anyway, i wish all goldbugs good luck with their investment. however i have strong doubts that in five years from now they can afford with their gold yields to buy the necessary good quality rubber sheets (to protect their mattresses from the result of their wet dreams).

disclaimer: present company naturally excluded

[Abrak]

when VegasVic is right he is right! on january 21, 1980 the Hunt brothers were screwed by the Comex order to suspend silver trading and anybody who has some knowledge of finance history is aware what happened to the price of gold after that. but facts are no concern for goldbugs and their dreams. some of them wake up after nearly three decades of dreaming, NOT MAKING A SINGLE PENNY during this time, but shouting loudly "I TOLD YOU SO!"

anyway, i wish all goldbugs good luck with their investment. however i have strong doubts that in five years from now they can afford with their gold yields to buy the necessary good quality rubber sheets (to protect their mattresses from the result of their wet dreams).

disclaimer: present company naturally excluded

I agree with you guys - the idea that gold is going to US$2000/ounce is pretty ludicrous. Still gold has out performed US equities pretty much for the last 5 years and it looks like it will do it again. I cant see why you are bearish on gold (apart from it has gone up so much) or bullish on US equities.

At some point it will be right to switch into equities again (I am really an equities guy) but I ran the numbers on Citicorp the other day after the recap and still reckoned they might halve from here (under a worse case scenario). I will not try to be clever - I plan to buy things on the way up.

[Naam]

gold has out performed US equities pretty much for the last 5 years and it looks like it will do it again. I cant see why you are bearish on gold (apart from it has gone up so much) or bullish on US equities.

do people really exist (living outside the U.S., paying for their expenses in a "foreign" currency) who invest in "U.S. equities"?

[sonicdragon]

Another false tale propogated here on a routine basis is how that gold was $800/ounce back in 1980 and that would equate to $2500 or so today so gold has a lot further to go up. Wrong thinking again my gold buggy friends, gold was only elevated to those lofty levels back 28 years ago because the Hunt brothers were trying to corner the world silver market and dove silver to the $50/ounce level and gold came along for the ride during all the frenzy. Gold is in a similiar frenzy now and it will have a blow off top soon and fall back to levels that are more in line top its underlying value. Please by all means don't listen to me, feel free to go ahead and short the dollar and the DOW, and go long on gold, and a year from now we can revisit this discussion.

when VegasVic is right he is right! on january 21, 1980 the Hunt brothers were screwed by the Comex order to suspend silver trading and anybody who has some knowledge of finance history is aware what happened to the price of gold after that. but facts are no concern for goldbugs and their dreams. some of them wake up after nearly three decades of dreaming, NOT MAKING A SINGLE PENNY during this time, but shouting loudly "I TOLD YOU SO!"

anyway, i wish all goldbugs good luck with their investment. however i have strong doubts that in five years from now they can afford with their gold yields to buy the necessary good quality rubber sheets (to protect their mattresses from the result of their wet dreams).

disclaimer: present company naturally excluded

I had just turned 12 years old at the time, so you will understand that I don't recall it personally. I have, however, studied economic history in depth so I know very well what you are talking about - in fact, this is exactly what I was referring to in my earlier post (#36 in this thread). It seems we just go round and round on this topic.

Edited January 20, 2008 by sonicdragon

[sonicdragon]

I too think the chances of something really ugly happening are much higher.. Forget subprime, the whole debt is money paradigm could be about to change. Kondratieff waves predict this is the next great depression, the incredible debt bubbles made by the fed need popping, the entire US economy seems to be hanging on via an idea that you can borrow and spend and that makes wealth.

I too own gold (and silver) but having bet the farm on them back at mid 300's and mid 6's I am not unduly concerned.. I personally think Gold could correct quite a bit from its latest levels and will be much more volatile thanks in part to the ease with which buy and sell orders can be executed on the ETF's.. I am confident gold will be higher in nominal dollar terms (if that means anything.. Its spending power and wealth preservation I am more concerned with) so until I see a better asset class I will hold. The time will come (in the darkest hour before dawn) when commercial property / a performing UK country estate or farm / or other long term bet will appeal more than the metal of kings. But for now the fear hasnt really hit.

Those intending to retire based on portfolios with large equity portions will probably need a good long time horizon to realize gains this time round.

Ah yes, the old wives tale that Americans are all in debt way over their heads and that the dollar is about to become a worthless currency. I guess if stupidity like that gets posted here enough then those who can't think for themselves take it as the gospel truth. The reality however is that the total NET worth of U.S. households is very close to $60 trillion (yes thats trillion with a T), which by the way is more than the NET worth of the rest of the world combined! Hence the envy and animus towards everything American by many here! Another false tale propogated here on a routine basis is how that gold was $800/ounce back in 1980 and that would equate to $2500 or so today so gold has a lot further to go up. Wrong thinking again my gold buggy friends, gold was only elevated to those lofty levels back 28 years ago because the Hunt brothers were trying to corner the world silver market and dove silver to the $50/ounce level and gold came along for the ride during all the frenzy. Gold is in a similiar frenzy now and it will have a blow off top soon and fall back to levels that are more in line top its underlying value. Please by all means don't listen to me, feel free to go ahead and short the dollar and the DOW, and go long on gold, and a year from now we can revisit this discussion

Vic, you seem to have missed the point. Either that, or you just prefer to look to other way. It's not about the actual amount of debt. It's about the distribution of the debt combined with a chronic shortage of national savings, a rapidly expanding money supply, and other well known factors.

Edited January 20, 2008 by sonicdragon

[Abrak]

Sadly long threads on TV are a sign of an end of a bull market rather than a beginning of one

[VegasVic]

I too think the chances of something really ugly happening are much higher.. Forget subprime, the whole debt is money paradigm could be about to change. Kondratieff waves predict this is the next great depression, the incredible debt bubbles made by the fed need popping, the entire US economy seems to be hanging on via an idea that you can borrow and spend and that makes wealth.

I too own gold (and silver) but having bet the farm on them back at mid 300's and mid 6's I am not unduly concerned.. I personally think Gold could correct quite a bit from its latest levels and will be much more volatile thanks in part to the ease with which buy and sell orders can be executed on the ETF's.. I am confident gold will be higher in nominal dollar terms (if that means anything.. Its spending power and wealth preservation I am more concerned with) so until I see a better asset class I will hold. The time will come (in the darkest hour before dawn) when commercial property / a performing UK country estate or farm / or other long term bet will appeal more than the metal of kings. But for now the fear hasnt really hit.

Those intending to retire based on portfolios with large equity portions will probably need a good long time horizon to realize gains this time round.

Ah yes, the old wives tale that Americans are all in debt way over their heads and that the dollar is about to become a worthless currency. I guess if stupidity like that gets posted here enough then those who can't think for themselves take it as the gospel truth. The reality however is that the total NET worth of U.S. households is very close to $60 trillion (yes thats trillion with a T), which by the way is more than the NET worth of the rest of the world combined! Hence the envy and animus towards everything American by many here! Another false tale propogated here on a routine basis is how that gold was $800/ounce back in 1980 and that would equate to $2500 or so today so gold has a lot further to go up. Wrong thinking again my gold buggy friends, gold was only elevated to those lofty levels back 28 years ago because the Hunt brothers were trying to corner the world silver market and dove silver to the $50/ounce level and gold came along for the ride during all the frenzy. Gold is in a similiar frenzy now and it will have a blow off top soon and fall back to levels that are more in line top its underlying value. Please by all means don't listen to me, feel free to go ahead and short the dollar and the DOW, and go long on gold, and a year from now we can revisit this discussion

Vic, you seem to have missed the point. Either that, or you just prefer to look to other way. It's not about the actual amount of debt. It's about the distribution of the debt combined with a chronic shortage of national savings, a rapidly expanding money supply, and other well known factors.

Sonic, it is not that there is a chronic shortage of national savings, but rather the way that savings is calculated in the U.S.. In the U.S. the savings calculation does not include equity in ones' home (or homes in many cases) or the equity in a retirement plan or investment in stocks. That is why you might see articles about the low savings rate in the U.S. and yet the actual net worth of Americans is at around $60 trillion. Now before you or someone else gets on a diatribe about -oh yea but U.S. home values are in a freefall and the equity is evaporating- realize that in many areas of the U.S. home prices are actually rising and in those areas that are falling they are falling by 5-20% and most of those areas saw a doubling of values between 2003 and 2006 so these homeowners are still way ahead of where they were back in 2003. Those hit by the real estate crisis in the U.S. are the ones that bought their home at the top of the bubble (in those bubble areas) and got creative ARM financing and bought way more home than they could afford normally, also investors (many of whom were foriegners) who bought multiple properties during that period. Then there were the ones who tapped the equity in their homes via home equity loans and went on a spending spree, but even with that said well over 90% of Americans have equity (most have very considerable equity) in their homes, and if a report I saw a few months back is accurate then over 30% own their home free and clear. The expanding money supply has indeed led to the worst inflation in 18 years (4.1% for all of 2007) in the U.S., but then again when you compare that 4.1% inflation in the U.S. to what is curently happening in China or the hyper inflation that many other countries have experienced or are currently experiencing, then that 4.1% figure seems pretty insignificant and makes those Americans complaining about the cost of living look like a bunch of spoiled children!

[LivinLOS]

If you actually believe real inflation is 4.1%... Well that puts the rest of your arguments in context.

[Naam]

The Panic Starts when the insurers of all the misrated "dodgy debt" begin to fold. That's when you'll want to have cash.

the latest news are scary!

[siamamerican]

I just don't get it - why is gold a good investment to preserve wealth. To me, it looks to be a good investment when investors are concerned with preserving their wealth which is not the same. If you time the market correctly, you make a lot of money, but gold over the long term has been much more volatile than equities. Hence not a good means to preserve wealth.

Going back to 1940, gold has lost over 25% using 2006 dollars ( much more in a couple of the decades ) in 5 of the 6 decades that followed. The 70s were the only decade the S&P decreased in value (2006 dollars) and it lost far less than 25% . Equities aren't the end all, but sure seem to be a better investment vehicle for preserving wealth.

LivLos and others have been successful timing the market, but I won't be "betting the farm" on gold.

[LivinLOS]

Name another currency that has lasted from Ancient Rome to now ?? Hows that for wealth preservation ??

And yes theres times to own other assets, I am not a perma bear or an under long termer.. But I do think the near to mid term outlook could be grim, and thats ideal time to be in it.

[sonicdragon]

I too think the chances of something really ugly happening are much higher.. Forget subprime, the whole debt is money paradigm could be about to change. Kondratieff waves predict this is the next great depression, the incredible debt bubbles made by the fed need popping, the entire US economy seems to be hanging on via an idea that you can borrow and spend and that makes wealth.

I too own gold (and silver) but having bet the farm on them back at mid 300's and mid 6's I am not unduly concerned.. I personally think Gold could correct quite a bit from its latest levels and will be much more volatile thanks in part to the ease with which buy and sell orders can be executed on the ETF's.. I am confident gold will be higher in nominal dollar terms (if that means anything.. Its spending power and wealth preservation I am more concerned with) so until I see a better asset class I will hold. The time will come (in the darkest hour before dawn) when commercial property / a performing UK country estate or farm / or other long term bet will appeal more than the metal of kings. But for now the fear hasnt really hit.

Those intending to retire based on portfolios with large equity portions will probably need a good long time horizon to realize gains this time round.

Ah yes, the old wives tale that Americans are all in debt way over their heads and that the dollar is about to become a worthless currency. I guess if stupidity like that gets posted here enough then those who can't think for themselves take it as the gospel truth. The reality however is that the total NET worth of U.S. households is very close to $60 trillion (yes thats trillion with a T), which by the way is more than the NET worth of the rest of the world combined! Hence the envy and animus towards everything American by many here! Another false tale propogated here on a routine basis is how that gold was $800/ounce back in 1980 and that would equate to $2500 or so today so gold has a lot further to go up. Wrong thinking again my gold buggy friends, gold was only elevated to those lofty levels back 28 years ago because the Hunt brothers were trying to corner the world silver market and dove silver to the $50/ounce level and gold came along for the ride during all the frenzy. Gold is in a similiar frenzy now and it will have a blow off top soon and fall back to levels that are more in line top its underlying value. Please by all means don't listen to me, feel free to go ahead and short the dollar and the DOW, and go long on gold, and a year from now we can revisit this discussion

Vic, you seem to have missed the point. Either that, or you just prefer to look to other way. It's not about the actual amount of debt. It's about the distribution of the debt combined with a chronic shortage of national savings, a rapidly expanding money supply, and other well known factors.

Sonic, it is not that there is a chronic shortage of national savings, but rather the way that savings is calculated in the U.S.. In the U.S. the savings calculation does not include equity in ones' home (or homes in many cases) or the equity in a retirement plan or investment in stocks. That is why you might see articles about the low savings rate in the U.S. and yet the actual net worth of Americans is at around $60 trillion. Now before you or someone else gets on a diatribe about -oh yea but U.S. home values are in a freefall and the equity is evaporating- realize that in many areas of the U.S. home prices are actually rising and in those areas that are falling they are falling by 5-20% and most of those areas saw a doubling of values between 2003 and 2006 so these homeowners are still way ahead of where they were back in 2003. Those hit by the real estate crisis in the U.S. are the ones that bought their home at the top of the bubble (in those bubble areas) and got creative ARM financing and bought way more home than they could afford normally, also investors (many of whom were foriegners) who bought multiple properties during that period. Then there were the ones who tapped the equity in their homes via home equity loans and went on a spending spree, but even with that said well over 90% of Americans have equity (most have very considerable equity) in their homes, and if a report I saw a few months back is accurate then over 30% own their home free and clear. The expanding money supply has indeed led to the worst inflation in 18 years (4.1% for all of 2007) in the U.S., but then again when you compare that 4.1% inflation in the U.S. to what is curently happening in China or the hyper inflation that many other countries have experienced or are currently experiencing, then that 4.1% figure seems pretty insignificant and makes those Americans complaining about the cost of living look like a bunch of spoiled children!

Vic, you are right that home price values do not enter the calculation of national savings. It is simply irrelevant to it. National savings is a concept that forms part of national income accounting. Increasing home prices will mask a shortage of national savings, this is part of the problem that the USA now has. Home prices are not increasing - certainly not in the aggregate - and I'm surprised to hear from you that they are many areas - what is your source for that ?

[Abrak]

I too think the chances of something really ugly happening are much higher.. Forget subprime, the whole debt is money paradigm could be about to change. Kondratieff waves predict this is the next great depression, the incredible debt bubbles made by the fed need popping, the entire US economy seems to be hanging on via an idea that you can borrow and spend and that makes wealth.

I too own gold (and silver) but having bet the farm on them back at mid 300's and mid 6's I am not unduly concerned.. I personally think Gold could correct quite a bit from its latest levels and will be much more volatile thanks in part to the ease with which buy and sell orders can be executed on the ETF's.. I am confident gold will be higher in nominal dollar terms (if that means anything.. Its spending power and wealth preservation I am more concerned with) so until I see a better asset class I will hold. The time will come (in the darkest hour before dawn) when commercial property / a performing UK country estate or farm / or other long term bet will appeal more than the metal of kings. But for now the fear hasnt really hit.

Those intending to retire based on portfolios with large equity portions will probably need a good long time horizon to realize gains this time round.

Ah yes, the old wives tale that Americans are all in debt way over their heads and that the dollar is about to become a worthless currency. I guess if stupidity like that gets posted here enough then those who can't think for themselves take it as the gospel truth. The reality however is that the total NET worth of U.S. households is very close to $60 trillion (yes thats trillion with a T), which by the way is more than the NET worth of the rest of the world combined! Hence the envy and animus towards everything American by many here! Another false tale propogated here on a routine basis is how that gold was $800/ounce back in 1980 and that would equate to $2500 or so today so gold has a lot further to go up. Wrong thinking again my gold buggy friends, gold was only elevated to those lofty levels back 28 years ago because the Hunt brothers were trying to corner the world silver market and dove silver to the $50/ounce level and gold came along for the ride during all the frenzy. Gold is in a similiar frenzy now and it will have a blow off top soon and fall back to levels that are more in line top its underlying value. Please by all means don't listen to me, feel free to go ahead and short the dollar and the DOW, and go long on gold, and a year from now we can revisit this discussion

Vic, you seem to have missed the point. Either that, or you just prefer to look to other way. It's not about the actual amount of debt. It's about the distribution of the debt combined with a chronic shortage of national savings, a rapidly expanding money supply, and other well known factors.

Sonic, it is not that there is a chronic shortage of national savings, but rather the way that savings is calculated in the U.S.. In the U.S. the savings calculation does not include equity in ones' home (or homes in many cases) or the equity in a retirement plan or investment in stocks. That is why you might see articles about the low savings rate in the U.S. and yet the actual net worth of Americans is at around $60 trillion. Now before you or someone else gets on a diatribe about -oh yea but U.S. home values are in a freefall and the equity is evaporating- realize that in many areas of the U.S. home prices are actually rising and in those areas that are falling they are falling by 5-20% and most of those areas saw a doubling of values between 2003 and 2006 so these homeowners are still way ahead of where they were back in 2003. Those hit by the real estate crisis in the U.S. are the ones that bought their home at the top of the bubble (in those bubble areas) and got creative ARM financing and bought way more home than they could afford normally, also investors (many of whom were foriegners) who bought multiple properties during that period. Then there were the ones who tapped the equity in their homes via home equity loans and went on a spending spree, but even with that said well over 90% of Americans have equity (most have very considerable equity) in their homes, and if a report I saw a few months back is accurate then over 30% own their home free and clear. The expanding money supply has indeed led to the worst inflation in 18 years (4.1% for all of 2007) in the U.S., but then again when you compare that 4.1% inflation in the U.S. to what is curently happening in China or the hyper inflation that many other countries have experienced or are currently experiencing, then that 4.1% figure seems pretty insignificant and makes those Americans complaining about the cost of living look like a bunch of spoiled children!

Vic,

Please take a look at the following graph tracing US home prices back to 1890

http://graphics8.nytimes.com/images/2006/0...raph2.large.gif

Then perhaps reconsider whether it is US homes that are overvalued and about to return to their true underlying value rather than gold, that the USA's net worth of US$60tr is indeed very vulnerable and that the current debt crisis is very real.

[SoCal]

But I do think the near to mid term outlook could be grim, and thats ideal time to be in it.

I think the ideal time to buy into gold is past. Now you are buying into a bubble. Not to say that bubble won't reach $1,000 or more, but still believe that anyone buying today is buying late into a bubble.

My savings account makes +10%. The last thing I would do right now is buy gold.

My next move is US equities, but not yet, not even close.

[siamamerican]

Name another currency that has lasted from Ancient Rome to now ?? Hows that for wealth preservation ??

And yes theres times to own other assets, I am not a perma bear or an under long termer.. But I do think the near to mid term outlook could be grim, and thats ideal time to be in it.

Now, that is a little extreme. Name another major stock index that has performed as poorly as gold since 1910.

Hey, I'm not critizising your decision to invest in gold. As you have stated, your investment in gold has done extremely well. I'm just suggesting that gold, historically (past 100 years) has been a risky investment. For those, like yourself, that have got in at the right times, more power to you. As for me, I don't think the sky is falling and don't want to bet the farm on gold. Gold has a much bigger downside, in my opinion, than the other investments I hold.

You've had a great run, getting out before the dot com bubble burst and getting into gold at $300. I think you're correct in that gold will increase in value, but it isn't for me.

[siamamerican]

But I do think the near to mid term outlook could be grim, and thats ideal time to be in it.

I think the ideal time to buy into gold is past. Now you are buying into a bubble. Not to say that bubble won't reach $1,000 or more, but still believe that anyone buying today is buying late into a bubble.

My savings account makes +10%. The last thing I would do right now is buy gold.

My next move is US equities, but not yet, not even close.

+10%, please tell me where. It sounds too good to be true.

[LivinLOS]

Now, that is a little extreme. Name another major stock index that has performed as poorly as gold since 1910.

But theres also a lot of trickery that the financial services industry wants you to forget..

Stock gains are taxed.. Take that out of the compounding and see where you stand..

The 'indexes' that people look at adjust hence dropping thier losers and holding only winners. To track the indexes you need to buy and sell with bid spreads.

Etc etc

It took until 1960 to get back to the highs of 29 without inflation in the US markets ??

Japan is down from 39000 to 13500 (and lost 3% this morning)..

Buy and hold needs an extremely long timeline, I happen to think we are entering one of those periods.

[parryhandy]

Is it really this serious now ?

http://www.tickerforum.org/cgi-ticker/akcs-www?post=24778

extract;

Monoline insurers write insurance contracts on everything from CDO's to Muni bonds.

I'm Citibank, I have 100 billion in CDO's on my SIV's I'm taking back onto my balance sheet, Ambac and MBIA has my back on those but ooops they BK, now I have only the value of those CDO's, which in the open market is 10 billion.

I just lost 90 billion but hey we always knew that they couldn't pay, but now I can't even pretend anymore, I'm out of compliance and technically should be shut down right the fuc_k now.

The ramifications more or less are that anyone claiming they're assets at full value BECAUSE it was insured now has to immediately mark to market, will probably lose it's triple A rating and as such a chain reaction starts.

I've got these insured CDO's in a Pension fund, insurer goes tits up, AAA rating goes poof, legally I must sell, without insurance I get 10 cents on the $.

I'm a mutual fund, insurer goes tits up, run starts on my mutual fund, I have to liquidate non insured CDO, 10 cents on the $, mutual fund blows up, on news, panic starts, runs everywhere, national panic.... chaos, cats sleeping with dogs and then the staypuff marshmallow man comes and it's game over

[Naam]

But I do think the near to mid term outlook could be grim, and thats ideal time to be in it.

I think the ideal time to buy into gold is past. Now you are buying into a bubble. Not to say that bubble won't reach $1,000 or more, but still believe that anyone buying today is buying late into a bubble.

My savings account makes +10%. The last thing I would do right now is buy gold.

My next move is US equities, but not yet, not even close.

i would like to know how i can make 10% with a "savings account" held in one or more major currencies. if you tell me the secret you will be my hero!

[BEENTHEREDONETHAT]

SoCal share with us where we can make that 10% on a savings account.

[lannarebirth]

One thing for the goldbugs to ponder. Due to the number of speculators in Gold right now, Gold takes a serious hit every time margin requirements are tightened. Do you think you're in an environment now where margin requirements are likely to tighten or loosen?