What happened to the "Gold and the Dollar" thread?

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I think Warren Buffet summed it up best...

Today the world's gold stock is about 170,000 metric tons. If all of this gold were melded together, it would form a cube of about 68 feet per side. (Picture it fitting comfortably within a baseball infield.) At $1,750 per ounce -- gold's price as I write this -- its value would be about $9.6 trillion. Call this cube pile A.

Let's now create a pile B costing an equal amount. For that, we could buy all U.S. cropland (400 million acres with output of about $200 billion annually), plus 16 Exxon Mobils (the world's most profitable company, one earning more than $40 billion annually). After these purchases, we would have about $1 trillion left over for walking-around money (no sense feeling strapped after this buying binge). Can you imagine an investor with $9.6 trillion selecting pile A over pile B?

Beyond the staggering valuation given the existing stock of gold, current prices make today's annual production of gold command about $160 billion. Buyers -- whether jewelry and industrial users, frightened individuals, or speculators -- must continually absorb this additional supply to merely maintain an equilibrium at present prices.

A century from now the 400 million acres of farmland will have produced staggering amounts of corn, wheat, cotton, and other crops -- and will continue to produce that valuable bounty, whatever the currency may be. Exxon Mobil (XOM) will probably have delivered trillions of dollars in dividends to its owners and will also hold assets worth many more trillions (and, remember, you get 16 Exxons). The 170,000 tons of gold will be unchanged in size and still incapable of producing anything. You can fondle the cube, but it will not respond.

http://finance.fortune.cnn.com/2012/02/09/warren-buffett-berkshire-shareholder-letter/
 
Justifying the joy

There are many advantages to buying bullion, the biggest of which is the fact that they?re something tangible.

?The joys relate to the ?fondle factor? ? the ability to touch and see your wealth encapsulated in a compact, shiny form that has mesmerized humans since before Portugal sent its ships out to find more of it in the New World,? said Nadler.
http://articles.marketwatch.com/201..._1_bullion-coins-world-gold-council-gold-bugs

(Insert joke here)  :D
 
Gold can be a life-saver in certain desperate situations.  Just as investment gurus advocate a well diversified portfolio, your emergency portfolio should contain a well diversified cache of cash, gold, firearms, ammunition, food, water, medicine, and other necessities.  Sometimes the most basic necessities are neglected, consider how you'd go to the bathroom if the water utility service is interrupted.  If you had to choose between 1/10 oz gold Eagle vs. an emergency portable toilet with 100 plastic sanitation bags, shovel, and lots of toilet paper, well, the toilet paper will be easier on your rear-end than newspaper or plant/tree leaves.

For emergency water storage, FEMA recommends 1 gallon/day per person.  Remember that in addition to drinking water, you'd need water to re-hydrate emergency food and wiping yourself with a wet towel.  If you plan to store water in those blue 55 gallon drums, do not leave it sitting directly on the concrete.  There are chemicals in the concrete that will eventually seep through the plastic.  Also, keep in mind that if you need to bug out, it'd be difficult to haul a 55 gallon barrel with you.  So don't forget the smaller portable bottles with water filter.


[youtube]http://www.youtube.com/watch?v=7ubJp6rmUYM[/youtube]
 
The Motor Court Company said:
so we should buy  land? fertile farm lands or land near urban areas like why TIC did in the 60's/70's and now are making BIG profits
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Or toxic superfund land and play smoke and mirrors with it to develop residential neighborhoods?
 
The California Court Company said:
so we should buy  land? fertile farm lands or land near urban areas like why TIC did in the 60's/70's and now are making BIG profits
Click to expand...

Depends on what you are looking to do.  If for investment, farmland prices have gone up a lot already, so if you're not going to be farming it and going to rent it out for others to farm, returns are going to be low.  If you are going to use it as a bug out/retreat location, it would be better to buy land with water rights, or some kind of dependable water supply.
 
Just read some of these posts, and it looks one or two were in response to my "gold is wealth preservation, not an investment, speculation, or inflation hedge" theme.  Just want to clear something up; for me, wealth preservation and currency devaluation have little to do with apocalypse or societal collapse.
 
I'm not a goldbug by any means, but if we get a good 8.0 scale earthquake, trying to pull a few bucks out of an ATM for gas or water isn't going to happen. If you have a small denomination gold/silver coin you're going to get what you need. Anyone living in Southern California during the Rodney King riots know how quickly things can spin out of control. If you live by the credo "always have a plan B" which includes tangible assets, you'll sleep well at night.
 
Soylent Green Is People said:
I'm not a goldbug by any means, but if we get a good 8.0 scale earthquake, trying to pull a few bucks out of an ATM for gas or water isn't going to happen. If you have a small denomination gold/silver coin you're going to get what you need. Anyone living in Southern California during the Rodney King riots know how quickly things can spin out of control. If you live by the credo "always have a plan B" which includes tangible assets, you'll sleep well at night.
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Or you could just have some cash on hand.
 
Irvinecommuter said:
Soylent Green Is People said:
I'm not a goldbug by any means, but if we get a good 8.0 scale earthquake, trying to pull a few bucks out of an ATM for gas or water isn't going to happen. If you have a small denomination gold/silver coin you're going to get what you need. Anyone living in Southern California during the Rodney King riots know how quickly things can spin out of control. If you live by the credo "always have a plan B" which includes tangible assets, you'll sleep well at night.
Click to expand...

Or you could just have some cash on hand.
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Or ammo. :-)

Seriously, if it's a quake, you just need some cash and water.
 
We are now two years into the new cycle which started in 2011. The commodity cycle peaks every 30 years: 1920, 1950, 1980, and I thought 2010 was the peak. I needed to see gold break down major support levels early April to feel confident of the reversal.
http://www.businessinsider.com/chart-long-term-us-dollar-cycles-2013-3- this is the cycle I've learned to love for many years. This chart is what allows me to see the big picture in the FOREX market.

Gold topped to $1943 in April, 2011 while the dollar made the low to 72. Between 2000 and 2011, the winning trade was to go short the US and buy commodities and the emerging markets.

I believe that 2011 started the new cycle where the trade has now reversed and for the next few years, investors should buy American assets and go short commodities and the stock markets of the developing world. I am long the dollar and short the euro. I am also starting to like short term - high yield corporate bonds once the market pulls back for a correction. I like tickers: HYG. HYS, HYV to capture high yields in a 0 yield environment.

In my view, the secular bull market in precious metals is now over and this is not the time to have any exposure to gold, silver or the associated miners. 

2001 - Gold priced at $280  2011 - Gold priced at $1943
2001 - Dollar index at 120  2011 - Dollar index at 72...    In the next couple of years the US Dollar will not reach 2001 high of 120, but will break above March 2009 and June 2010 level. The dollar index to reach 100 is not out of the question.

 
Awgee, Only time will tell and let's see where we are at in 2015.

a0xpfm.jpg
 
Baby Irvine said:
Awgee, Only time will tell and let's see where we are at in 2015.

a0xpfm.jpg
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At least you have the comfort of knowing that Soros and your Mom are on the same side of the trade.  BTW, my mom just asked me a week or so ago if it was time to sell.
 
Don't ever say you weren't warned. :'(

http://www.ft.com/cms/s/0/9aac9378-de3f-11e2-9b47-00144feab7de.html#axzz2XNykemDa

Gold sinks to near 3-year low as investors rush for exit

Gold has tumbled to its lowest level in nearly three years, putting it on track for its biggest quarterly fall since the collapse in 1971 of the Bretton Woods system of exchange rates, which pegged the value of the dollar to the precious metal.


?The word at the moment is capitulation,? said Tom Kendall, precious metals analyst at Credit Suisse, adding the past week?s selling had been driven by long-term investors.

?Those are the guys who you would have expected to hold on through thick and thin and they?re not,? he said.

The price of gold on the spot market slid 4.2 per cent on Wednesday, compounding recent falls to hit a low of $1,223.54 a troy ounce. Since the start of April, the precious metal has fallen 23 per cent.

The slide has wrongfooted many investors who ploughed their money into gold in recent years as a hedge against the threat of inflation and a devaluation of currencies triggered by quantitative easing. Prices rose more than sevenfold to 2011?s record high of $1,920 an ounce.
 
The icing on this cake is a writer using the term "wrongfooted," and apparently has an editor who's OK with it.  I could not hope to do the same, and I work with Neanderthals.

If this really is "capitulation" then shouldn't we be buying?

 
Just too much technical damage for me....may be bottoming but what do I know? ???

http://www.cnbc.com/id/100851209

Gold Crashes Through Production Cost Levels

Gold fell to its lowest level since 2010 on Friday to under $1,200, which is what it costs many miners to produce an ounce of gold, and analysts tell CNBC that miners will be "severely" impacted if prices stay here.


Andrew Su, CEO at brokerage Compass Global Markets said the average cost of producing gold in Australia, home to some of the world's biggest gold miners, has jumped from $500 an ounce in 2007 to over $1,000 an ounce this year.


"What I believe is that the official costs, the costs in reality, are significantly higher than $1,000. So we've had quite a few gold mines close in Australia," Su said on Friday. "We've had some companies actually go bust and we've also got significant job cuts by big miners like Newcrest, Barrick, and Silver Lake Resources."

 
Was gonna buy at $1250, but it was crashing so fast that I didn't get my order in until $1227.  Buying again at $1160, but with all the negative sentiment, might not get the chance.
 
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