rich people into shape shifting now

lester1/2jr · January 09, 2009, 11:48:21 AM

has anyone ever seen one of them do this?

QuoteMerrill Lynch says rich turning to gold bars for safety

they've got turtles beat by a mile

apparently they got Madoff right before he did this

CheezeFlixz · January 09, 2009, 08:44:56 PM

In the last 20 years, gold has had a net growth of 4% barely keeping place with inflation. Gold is very volatile, it might double one year and drop twice as much the next.

Just because some people are rich, doesn't mean they are wise.

AndyC · January 09, 2009, 10:09:05 PM

The thing that bothers me about people flocking to gold, or any precious metal, as an investment is that it drives the price up for the people who want to buy the stuff to enjoy it. I don't like to see, for example, a couple forking over extra dough for their wedding rings just because somebody else wants to stash gold away in his safe deposit box.

Not so much a financial opinion as one of values. As Burl Ives once said, "How do you measure its worth? Just by the pleasure it gives here on Earth."

lester1/2jr · January 10, 2009, 10:45:12 AM

demand is not really what is driving the gold price up. 2/3 of it is for jewelry. WHat is the main thingdriving the price up is that it's cost is denominated in american dollars and the american governmetn simply cannot stop spending and borrowing, thus the value oftheir currency drops and drops and drops.

Here's something to consider: in 2000, gold was $250 dollars an ounce and the DOW was at 10,000. that is a 40 to 1 ration. Today. Gold is at $850 dollars an ounce and the DOW is at 8,500. a ten to 1 ratio.

So our economy is a bit smaller and inflation is much much higher.

Doggett · January 10, 2009, 12:51:08 PM

Quote from: AndyC on January 09, 2009, 10:09:05 PM
Not so much a financial opinion as one of values. As Burl Ives once said, "How do you measure its worth? Just by the pleasure it gives here on Earth."

Wow...

That's deep, Andy.

Captain Tars Tarkas · January 10, 2009, 01:52:20 PM

http://ngm.nationalgeographic.com/2009/01/gold/larmer-text

QuoteLike many of his Inca ancestors, Juan Apaza is possessed by gold. Descending into an icy tunnel 17,000 feet up in the Peruvian Andes, the 44-year-old miner stuffs a wad of coca leaves into his mouth to brace himself for the inevitable hunger and fatigue. For 30 days each month Apaza toils, without pay, deep inside this mine dug down under a glacier above the world's highest town, La Rinconada. For 30 days he faces the dangers that have killed many of his fellow miners—explosives, toxic gases, tunnel collapses—to extract the gold that the world demands. Apaza does all this, without pay, so that he can make it to today, the 31st day, when he and his fellow miners are given a single shift, four hours or maybe a little more, to haul out and keep as much rock as their weary shoulders can bear. Under the ancient lottery system that still prevails in the high Andes, known as the cachorreo, this is what passes for a paycheck: a sack of rocks that may contain a small fortune in gold or, far more often, very little at all.

QuoteFor all of its allure, gold's human and environmental toll has never been so steep. Part of the challenge, as well as the fascination, is that there is so little of it. In all of history, only 161,000 tons of gold have been mined, barely enough to fill two Olympic-size swimming pools. More than half of that has been extracted in the past 50 years. Now the world's richest deposits are fast being depleted, and new discoveries are rare. Gone are the hundred-mile-long gold reefs in South Africa or cherry-size nuggets in California. Most of the gold left to mine exists as traces buried in remote and fragile corners of the globe. It's an invitation to destruction. But there is no shortage of miners, big and small, who are willing to accept.

Interesting article from National Geographic.

lester1/2jr · January 10, 2009, 03:13:24 PM

tars- I heard the authors of that article on NPR the other day.

one guy made the point that yes, it's a brutal life in the gold mines but if they weren't there they would be making pennies a day someplace else.

again, if the us governmetn could just stop spending and inflating it's currency gold would be at a more reasonable price and people would be less apt to do all this awful stuff to get it.

CheezeFlixz · January 10, 2009, 06:07:07 PM

Quote from: lester1/2jr on January 10, 2009, 03:13:24 PM
again, if the us governmetn could just stop spending and inflating it's currency gold would be at a more reasonable price and people would be less apt to do all this awful stuff to get it.

Wrong .. it's not JUST the US! An while I don't agree with all these bailouts, everywhere. People have alway had and will always have a desire for gold, it goes back 1000's of years. So blaming the current government on the demand for gold is not logical. There is a much bigger world out there beyond our boarders.

Captain Tars Tarkas · January 10, 2009, 10:27:14 PM

Gold was getting pretty high in price in 2007 when I was buying wedding rings, that's before everything went crashing down. It is just interesting to see where things come from. The jewelers were not willing to give a deal on the bands but were more than willing to give a deal on the diamonds. The best investment for gold is to start up your own cashforgold company and just pay people pennies on the dollar for their own gold because individuals aren't allowed to sell gold to reprocessing plants, thus those commercials all over tv.

lester1/2jr · January 11, 2009, 10:10:34 AM

cheeze- I'm sorry that is not correct. demand for gold was no higher in 2000 when gold was 250 an ounce than it is now.

the ticker on CNBC has the gold price at every moment of the day and it moves more or less inversely to the dollar. that's a fact.

but yes, other countries also inflate their currencies. but the cost of gold is not denominated in those currencies it is in american dollars as per the bretton woods agreement

through most of our countries history gold was 20 an ounce. there was essentially no inflation. the trouble started with the creation of the federal reserve system, who's tom foolery inflated the stock amrket bubble of the 20's giving us the great depression.

the final nail was when nixon went of the gold standard in 1973, since then gold has gone up and down bu mainly up and will ikely go higher till the govenment goes back on the gold standard which god willing it will one day

CheezeFlixz · January 11, 2009, 10:43:25 AM

I don't have time to reply in full right now ... but Nixon removed the FIXED PRICE ($35 oz) between 1968 and 1971, the Bretton Woods Agreement had more to do with values of currency relative to one another.
Gold like oil, silver, platinum is a openly traded commodity and subject to supply and demand more so than the intrinsic value of any give currency.

lester1/2jr · January 11, 2009, 10:53:09 AM

bretton woods made the dollar the currency used in trade, essentially. nixon removing the fixed price has caused or rather allowed the dollar to lose value. if he hadn't changed that the price of gold would be 35$ an ounce and the dollar would be worth 5 euros instead of like half a euro

ther is very little if any industrial demand for gold. cetainly not enough to justify going from 250 to 850 in a period of a couple years. I trade stocks for a living. I look at the charts everyday and believe me, the main factor in the gold price is the dollar and the main valuationary facotr in the dollar is how much the US spends and owes or is expected to owe or spend.

QuoteGold is a monetary metal whose price is determined by inflation, by fluctuations in the dollar and U.S. stocks, by currency-related crises, interest rate volatility and international tensions, and by increases or decreases in the prices of other commodities. The price of gold reacts to supply and demand changes and can be influenced by consumer spending and overall levels of affluence.

Gold is different from other precious metals such as platinum, palladium and silver because the demand for these precious metals arises principally from their industrial applications. Gold is produced primarily for accumulation; other commodities are produced primarily for consumption. Gold's value does not arise from its usefulness in industrial or consumable applications. It arises from its use and worldwide acceptance as a store of value. Gold is money.

AndyC · January 11, 2009, 02:59:34 PM

It's really against my better judgment to say any more, and utterly futile in the face of fervent dead horse beating, but I can't stop myself. On the one hand, Lester is telling us that inflation and the value of the US dollar are the primary factors in determining the price of gold. Yet, on the other hand, he's quoting a document (from?) that basically tells us that gold is influenced by many factors, including inflation and the US dollar. Doesn't seem to reinforce the argument all that much.

OK, feel free to tell me I'm wrong because black is white and up is down and a complex set of circumstances is not nearly as convenient a villain as government excess and the demon inflation, which are, as we know, the root of all men's ills. I think we all got the message at least a dozen identical threads ago. My next post will be a picture of a dog.

Aw hell, why wait?

CheezeFlixz · January 11, 2009, 08:46:58 PM

Cute dog, may I feed it to mine?

AndyC · January 11, 2009, 11:05:29 PM

Ohhh, he's just a big sweetie! A bit drooly, but cute. I like Rotties.