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The Best Time to Buy Gold in the Past 50 Years?

phattonez

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St. Louis adjusted monetary base divided by Gold Fixing Price. Presented with no other comment.
 

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Looks like it's the best time to SELL gold right now (buy low, sell high) if that chart is to be believed. The time to buy was in 2008.
 

finebead

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Looks like it's the best time to SELL gold right now (buy low, sell high) if that chart is to be believed. The time to buy was in 2008.
The chart is not the price of gold, it is a ratio of the money supply divided by the price of gold, and it indicates that now is a good time to buy gold. Gold price spiked in 1978 to $885 per ounce and the chart has a bottom in 1978, indicating a good time to sell gold at the peak to that date. The chart peaks in 2001, when gold was at a 23 year low off the 1978 peak, which truly was a good time to buy gold.

I'm not buying gold at this point. The monetary supply is so artificially manipulated that I don't know what it means at this point. We have not been in a relatively steady state economy for 13 years, so I don't know it traditional ratios mean the same thing they did 20 years ago. I bought some gold in 2003, just off the 23 year low and with the deficit growing due to the wars being fought on the credit card and Medicare part D being enacted in 2005 with $70 billion a year of spend and no plan to pay for that. I sold out in 2010, before the peak, but I had no idea where the peak would be. Now, the deficit has been coming down and hopefully will come down some more (it needs to). Some expect a hyper inflation down the road and that is part of the case for gold. On this one, I just don't know, but we are at a 2 year low, not a 23 year low, so for me, that is not a extreme of low valuation. I'm not a gold expert, so I only want to buy in at an extreme low of valuation, so its not an option for me right now.

I'll just wait another 10 or 20 years and look for a another opportunity when the rest of the economy is not so whacked up.
 
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clownboy

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Thanks for explaining that.
 

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If the ratio of the money supply divided by the price of gold is an indicator of a good time to buy gold, why isn't the ratio of the money supply divided by the price of a bag of Cheetoes a good time to buy Cheetoes?

I just graphed it out, yup, I'm gonna go to the grocery store this afternoon and stock up. After all, Cheetoes are gold...en. At least if the price of Cheetoes doesn't increase by the expiration date, I can eat them, they are my favorite snack food.
 

phattonez

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If the ratio of the money supply divided by the price of gold is an indicator of a good time to buy gold, why isn't the ratio of the money supply divided by the price of a bag of Cheetoes a good time to buy Cheetoes?

I just graphed it out, yup, I'm gonna go to the grocery store this afternoon and stock up. After all, Cheetoes are gold...en. At least if the price of Cheetoes doesn't increase by the expiration date, I can eat them, they are my favorite snack food.
The price of Cheetos is probably about to rise. This doesn't disprove anything.
 

specklebang

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If the ratio of the money supply divided by the price of gold is an indicator of a good time to buy gold, why isn't the ratio of the money supply divided by the price of a bag of Cheetoes a good time to buy Cheetoes?

I just graphed it out, yup, I'm gonna go to the grocery store this afternoon and stock up. After all, Cheetoes are gold...en. At least if the price of Cheetoes doesn't increase by the expiration date, I can eat them, they are my favorite snack food.
Gold will shine forever. Cheetos will get stale.
147247_4_Tisk_44_Hollar.jpg
 

APACHERAT

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I bought my first Krugerrand in 1976, have no idea why I purchased it. But during the early 80's I bought gold Krugerrands when I could afford to depart with my money not as an investment but as an insurance policy incase something were to go wrong like the collapse of the economy, we lost a war, a nuclear war, collapse of society under socialism, etc. Today I own 20 Krugerrands, Bought them when gold was between $300 to $400 per ounce during the early 80's at the height of the Cold War.

In a worse case scenario, .22 LR ammunition will be worth it's weight in gold. Being able to use it to barter for what you need.

It's a myth that "Gold is easy to buy and easy to sell."
Gold is easy to buy but it's hard to sell it for what gold is worth.
 

specklebang

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Ah, things are looking up for us PM collectors. My phone has been ringing all day with hysterical telemarketers. I laugh at them because I already have a mountain of gold and silver now following housing into the stratosphere.
 

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Gold is not an investment; it's not even a hedge- it's a trade and the only people who make money are the salesmen pitching it...

Think about it, if they (salespeople) truly believe that gold is a great buy and going to go up in price, why sell it to you??? If they're so sure, then why not sell everything they own and buy the gold themselves instead of selling it to you?

Bottom line is that they make around 6% on the way in (buy) and out (sell) so really they could care less where the price goes, either way they collect their commissions. It's a fear trade at the end of the day..
 

specklebang

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Gold is not an investment; it's not even a hedge- it's a trade and the only people who make money are the salesmen pitching it...

Think about it, if they (salespeople) truly believe that gold is a great buy and going to go up in price, why sell it to you??? If they're so sure, then why not sell everything they own and buy the gold themselves instead of selling it to you?

Bottom line is that they make around 6% on the way in (buy) and out (sell) so really they could care less where the price goes, either way they collect their commissions. It's a fear trade at the end of the day..
Look at people buying a home. One day you're rich, one day you're underwater in your loan. So, when they tell you to buy a house, they're just doing it for the money. If it was going to go up in value, why sell it to you? And stocks - how silly is that. You can own 100% of your company, rake in every shekel in profit you can and you don't have anyone on a board of directors trying to poison you so they can become the new VP of marketing? Instead, you break up your company into millions of little pieces and people flip it back and forth with the rhythm of a casino game. And bonds - another joke. I'll pay you back if I can promises.

Gold. Beautiful. Shiny. Elegant. Awesome. It's no sillier than anything else.
 

Captain Adverse

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I don't need gold. I need money that has intrinsic value to reduce inflation and eliminate all this fiat money which causes it. Let the government keep the gold and use it to back a limited amount of currency. Then I'll be happy.
 

austrianecon

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Buy gold because it's nice and shiny. People who make money, however, trade in something useful.

Gold is very useful just as bearer bonds, travelers checks, and diamonds are.
 

Grand Mal

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Gold is very useful just as bearer bonds, travelers checks, and diamonds are.
Exactly. Each of those things has a price but no usefulness, so their 'value' is artificial. They are each loans that you hope will be redeemable.
Buy plywood, cocaine, ammunition, diesel fuel, something with real value.
 

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Ive heard gold bugs saying this for 50 years now and I am only 33 years old. Time to shut up already.
 

austrianecon

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Exactly. Each of those things has a price but no usefulness, so their 'value' is artificial. They are each loans that you hope will be redeemable.
Buy plywood, cocaine, ammunition, diesel fuel, something with real value.
Actually each of those things do have "value" depending where you are in the world. Gold and Diamonds are better then the all mighty dollar in some places. Bearer bonds and travelers checks are easier to transport then the all "mighty" dollar. These items are highly redeemable and in high demand.

Gold itself has real value.. How important is gold in the world. You can't drive a car without gold, type on this forum or surf porn on the internet without gold.

Btw, it cost at most $.078 to make a $100 bill. The cost to produce money

That means the value of your $100 bill is over valued by 1282 times. So in reality the value of the dollar is more artificial then gold. ;)
 

austrianecon

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Ive heard gold bugs saying this for 50 years now and I am only 33 years old. Time to shut up already.
Nah, I wouldn't tell anyone to buy gold now. If you didn't buy in JP Morgan's sell off to manipulate profits for their short trades in April, you missed the boat for another year or more.
 

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Look at people buying a home. One day you're rich, one day you're underwater in your loan. So, when they tell you to buy a house, they're just doing it for the money. If it was going to go up in value, why sell it to you? And stocks - how silly is that. You can own 100% of your company, rake in every shekel in profit you can and you don't have anyone on a board of directors trying to poison you so they can become the new VP of marketing? Instead, you break up your company into millions of little pieces and people flip it back and forth with the rhythm of a casino game. And bonds - another joke. I'll pay you back if I can promises.

Gold. Beautiful. Shiny. Elegant. Awesome. It's no sillier than anything else.
Houses do not have finite supplies; you can live in them and they have a practical use. It too however isn't an investment, it's shelter.

And yes, one of the contributors to the housing bubble was and will again be the sales compensation of real estate agents; when their compensation is directly correlated to the value of the home they sell then you don't truly have price discovery.

In regards to stocks, the reason why companies are sold into pieces (stocks) is because they capitalize the company through the initial public offering. Surely people trade them and gamble with them, but true investors buy companies because of their earnings growth etc

Apart from the IPO, the company has very little to do with its stock trading back and forth; they have to report earnings, most keep investors informed etc. that's different than gold, where people speculate on price direction based on fear.

The ironic thing is that people buy gold for safety, yet the standard deviation of gold's price rivals if not exceeds that of the S&P 500.

In the end gold is just a fear trade..not much more.
 

specklebang

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Houses do not have finite supplies; you can live in them and they have a practical use. It too however isn't an investment, it's shelter.

And yes, one of the contributors to the housing bubble was and will again be the sales compensation of real estate agents; when their compensation is directly correlated to the value of the home they sell then you don't truly have price discovery.

In regards to stocks, the reason why companies are sold into pieces (stocks) is because they capitalize the company through the initial public offering. Surely people trade them and gamble with them, but true investors buy companies because of their earnings growth etc

Apart from the IPO, the company has very little to do with its stock trading back and forth; they have to report earnings, most keep investors informed etc. that's different than gold, where people speculate on price direction based on fear.

The ironic thing is that people buy gold for safety, yet the standard deviation of gold's price rivals if not exceeds that of the S&P 500.

In the end gold is just a fear trade..not much more.
I don't agree about stocks and I'll tell you why. A good example is UPS which was privately owned from inception. After decades of success, the company went public. Why? You think they needed money? No, they simply created stock and got more money than the company was worth all at once. So everybody with a piece of UPS bought a company for 10 or 20 times what it was worth so they could trade the papers back and forth. UPS trucks just kept on delivering as they had the day before. So, capitalization is total bull**** unless stock is sold from the beginning to raise capital. Otherwise, it's just owners getting a bunch of money from suckers.

Sure, if you bought Microsoft stock while Gates was still in his garage, you became a zillionaire. If you buy it today, you're just a gambler. You think stock makes you an "owner". Dream on. All you own is a piece of paper and Windows will still suck.

Nobody should put more than 5%-10% of their money in PMs. Even I, an advocate, primarily buy modern rarities rather than bullion. Much easier to sell and some (not all) go up in value regardless of the intrinsic metal itself.

I will fear no evil.
 

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I don't agree about stocks and I'll tell you why. A good example is UPS which was privately owned from inception. After decades of success, the company went public. Why? You think they needed money? No, they simply created stock and got more money than the company was worth all at once. So everybody with a piece of UPS bought a company for 10 or 20 times what it was worth so they could trade the papers back and forth. UPS trucks just kept on delivering as they had the day before. So, capitalization is total bull**** unless stock is sold from the beginning to raise capital. Otherwise, it's just owners getting a bunch of money from suckers.

Sure, if you bought Microsoft stock while Gates was still in his garage, you became a zillionaire. If you buy it today, you're just a gambler. You think stock makes you an "owner". Dream on. All you own is a piece of paper and Windows will still suck.

Nobody should put more than 5%-10% of their money in PMs. Even I, an advocate, primarily buy modern rarities rather than bullion. Much easier to sell and some (not all) go up in value regardless of the intrinsic metal itself.

I will fear no evil.
UPS and MSFT are two stocks, and while we can agree to disagree on how they've performed you can't use it as a basis to not like stocks.

Also you fail to acknowledge that price appreciation is but one part of stocks' benefits; dividends are important and have over time made about 40% of the S&P's total return. Gold has a zero dividend, it doesn't even hold its inflation value due to speculation; maybe you sleep better at night, but apart from the speculative trade, it fails to be a good deal overall- well except for the salesmen pitching it..

You might as well trade pork belly futures- everyone loves bacon :)
 

specklebang

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UPS and MSFT are two stocks, and while we can agree to disagree on how they've performed you can't use it as a basis to not like stocks.

Also you fail to acknowledge that price appreciation is but one part of stocks' benefits; dividends are important and have over time made about 40% of the S&P's total return. Gold has a zero dividend, it doesn't even hold its inflation value due to speculation; maybe you sleep better at night, but apart from the speculative trade, it fails to be a good deal overall- well except for the salesmen pitching it..

You might as well trade pork belly futures- everyone loves bacon :)
I think that those 2 stocks pretty much say it well enough. As for dividends, yeah, when they pay them. As for the stocks, yeah, they go up unless something goes wrong.

Pork bellies - what do they do with the rest of the pig? Taking delivery is also a problem. OTOH I can put a million dollars of gold in one small suitcase.

Keep in mind that I suggest 5% to 10% in PMs, not the whole enchilada. I also like cash which really depreciates. Still, 5% to 10% in cash.

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or
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or
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Which one? Which one?:)
 

greyhat

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I think that those 2 stocks pretty much say it well enough. As for dividends, yeah, when they pay them. As for the stocks, yeah, they go up unless something goes wrong.

Pork bellies - what do they do with the rest of the pig? Taking delivery is also a problem. OTOH I can put a million dollars of gold in one small suitcase.

Keep in mind that I suggest 5% to 10% in PMs, not the whole enchilada. I also like cash which really depreciates. Still, 5% to 10% in cash.

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Which one? Which one?:)
This one :)

 
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