Gold and Its Supposed "Store of Value"

[suitcase_sally]

I saw today where the value of gold has gone down 29% in the last 2 years, so I went to the "Vault" and noticed no one has posted about buying up gold and its "Store of Value" in about the same time frame.

Can someone explain to me how the SOV works?

[TnAndy]

I bought mine between 400 and 900. Working fine for me.

I suspect even those that bought at 1900 will be fine in time....probably WAY more than fine.

The only absolute 100% safe thing I know of is life insurance if held long enough.

[Johnny Dolittle]

Alan Greenspan is predicting a significant "correction" this year and recommends buying gold.

http://www.zerohedge.com/news/2015-0...-big-going-hap

We asked him where he thought the gold price will be in five years and he said “measurably higher.”

Specially he said that the era of quantitative easing and zero-interest rate policies by the Fed… we really cannot exit this without some significant market event… By that I interpret it being either a stock market crash or a prolonged recession, which would then engender another round of monetary reflation by the Fed.

He thinks something big is going to happen that we can’t get out of this era of money printing without some repercussions – and pretty severe ones – that gold will benefit from.

[Ozarks Tom]

It seems buying Precious Metals is a matter of attitude. If you're looking for a quick profit they're more of a gamble than several other investments you could make. If you're thinking the economy is headed for the dumper, they're a good investment for hedging against hyperinflation.

Personally, I'd rather have junk silver as a prepping tool than gold. Seems it would be easier to barter/buy in smaller increments.

[Roadking]

Silver, as a store of value, is my preference. A bit of gold is okay, but around here, you'd be hard pressed to find someone able to make change for a gold Eagle at 1200 an ounce, i.e. monetary collapse.

Precious medals, are good to store AFTER you have your essentials in order...like food, ways to get food, heat source, seeds, etc. as I feel all of the above, and other items, will have much more value in the future than the paper bills in our wallets today.

I will now remove the tin foil...LOL!

Matt

[Oldhat]

Means that you could typical buy the same commodity (and other things) at nearly any time in history with the same amount of gold.

For example, let's say 100 ounces of gold (about $130K) gets you a nice lower end middle class home today. You should (on average) be able to get that same home for 100 ounces of gold 50 years in the future.

Please bare in mind that you need to look at the "average" over a time, it will spike and it will dip, but on average it should buy the same "any time".

Oh and in closing:

If you are gonna stack metal it is not best to compare it to "dollars" - which is just paper with no backing besides for our government. No matter what the dollar does, an ounce of gold is still an ounce of gold.

[DaleK]

To me gold is more of an intermediary store of value rather than long term. Gold will hold its value in the face of currency deflation.. So will any number of other physical assets. Gold is attractive to some because you can hold a lot of value in the palm of your hand, but there could easily be a time when gold is of no value relative to land, bullets, beans, tools/parts, medicines, etc.

[DavidUnderwood]

If you are gonna stack metal it is not best to compare it to "dollars" - which is just paper with no backing besides for our government. No matter what the dollar does, an ounce of gold is still an ounce of gold.
In other words, its just a piece of metal. You will never be able to eat it, and if everyone else is hungry, you won't sell it either. And since none of use will live beyond the usage of a dollar, at least buy coins.

[pancho]

I bought up quite a bit of gold back when it was $32 an ounce, long time ago.
Got rid of most of it when it went up as high as I could stand it.
If you are going to buy do so when it is low. Most people wait until it is high then get in just in time for a drop. That is the reason many people don't make money on gold or anything else. Buy when it is so low there isn't much interest in it. Set back and wait.

[GeneMO]

I know this guy that bought gold at $560, then sold it when it reached about $1200. Since he didn't report the gain on his taxes, I wont mention his name.

I bought a hundred or so ounces of silver when it was any where from $5.50 to $17 an ounce. Held on to it through the $32 time, and still have it.

I like silver better cause it is more affordable, and in quantities that are easier to trade.

Kinda hard to walk up to a guy with one full ounce of pure gold an try to buy a half a hog or something.

Gene

[TnAndy]

Originally Posted by GeneMO

Kinda hard to walk up to a guy with one full ounce of pure gold an try to buy a half a hog or something.

Gene

You could say the same thing about silver. Hard to buy a candy bar, or even a gallon of milk, with a one ounce coin.

Which is why there are dimes.

And why there are 1/10 ounce gold coins....you'd probably need 2 or 3 of them currently to buy that hog.

But your point is taken. Often times, metals are coined in high value coins.

So here is something that 'may' come down the road. A 1/10 or 1/20 gram 'note', similar to our paper money, but with an actual amount of recoverable (if the note wears out over time for example) gold in it. Silver could be done the same way.

http://www.silverbearcafe.com/privat.../holdgold.html

[Sawmill Jim]

Originally Posted by DavidUnderwood

If you are gonna stack metal it is not best to compare it to "dollars" - which is just paper with no backing besides for our government. No matter what the dollar does, an ounce of gold is still an ounce of gold.
In other words, its just a piece of metal. You will never be able to eat it, and if everyone else is hungry, you won't sell it either. And since none of use will live beyond the usage of a dollar, at least buy coins.

Thing is plan now not to be the hungry one ,and yes I would sell one of my three axes for a oz of gold

Ah but some got right rich in that great depression while others went hungry . I was talking to a guy little while back ,told him he needed to buy more silver . His response was if he needed to leave in a hurry a pickup load of silver was going to be a problem .Check it out those with silver and gold did much better in Zimbabwe also in Argentina

[Nevada]

Originally Posted by GeneMO

Kinda hard to walk up to a guy with one full ounce of pure gold an try to buy a half a hog or something.

Gold bar denominations in grams have become commonplace. Denominations of 1, 2.5, & 5 grams are common. There are 31 grams to a troy ounce. Silver is roughly equivalent to a 0.5 gram bar of gold, which is also easy to find on the market.

http://www.ebay.com/itm/0-5-G-GRAM-9...item43d3959e88

I have a little gold, but mostly I buy silver bar. Silver is gold on steroids, since there are industrial consumption and supply issues with silver.

[Wanda]

Does anyone remember ''the intentional peasant'' that posted on the old board and maybe here for a while. His theory was to put your extra capital in things that had a value to use. Nails ,screws. wood, buttons,wire,glass ect.His thinking was precious metals were no different than playing the stock market. He was simple guy with some different ideas that made a lot of sense.

[BlackFeather]

As to the price of Gold, there are several banks being investigated right now for gold manipulation, the Comex, (gold futures market) hasn't settled its contracts in gold for the last year and a half. The price you see listed is the price of paper gold, the buyers of real gold, the ones who buy a million dollars or more, are paying a premium of 20 to 40 percent above the listed price, depending on the quantity they want. So the price you see is manipulated. As a side note, these banks will not be convicted of manipulation because they do it for their clients which are the U.S. and other governments. The laws make it legal for the government to manipulate the markets. There was a case of silver manipulation just a couple of years ago, and no charges were brought because JP Morgan was doing it for the U.S. government. Eventually the government will no longer be able to manipulate the price when their gold reserves are gone. Experts say we are getting close to that time. China, Russia, and the other BRICS nations are buying gold as fast as they can afford. The banks in the west are selling to keep the price of their fiat dollars afloat. Gold is psychological, if it goes up it means the currency is going down and the Government and the Federal Reserve bank want to make everything look A-OK, so they manipulate the prices of gold and silver, let alone every other market. At some point manipulations will come to an end, then precious metals will start to shoot up. Precious metals are not for investment but to hold on to what you have during crisis. The best time to buy is before a crisis not during.

Just found this while reading the news this morning... http://www.zerohedge.com/news/2015-0...-mistaken-gold

[dfr1973]

Originally Posted by Wanda

Does anyone remember ''the intentional peasant'' that posted on the old board and maybe here for a while. His theory was to put your extra capital in things that had a value to use. Nails ,screws. wood, buttons,wire,glass ect.His thinking was precious metals were no different than playing the stock market. He was simple guy with some different ideas that made a lot of sense.

Makes sense to me. I would include/add to that list: land owned free-and-clear, no consumer debt, garden tools and/or infrastructure for at least hens, things you can make useful things of like: fabric and yarn, in my case, and the tools to use them. Lots of canning jars with rings and lids, and both water bath and pressure canners. A nice collection of cast iron cookware. I am sure there are plenty more. When I buy silver, I prefer it in the form of dishes or silverware, although I do have a small dice bag of "junk silver" dimes.

[Nevada]

Originally Posted by dfr1973

When I buy silver, I prefer it in the form of dishes or silverware, although I do have a small dice bag of "junk silver" dimes.

I always insist on LBMA approved silver that's 99.9+% and in bar form. I get the lowest premium from bars. I almost always buy 1 ounce Johnson Matthey bars.

[Ponderosa]

Buying gold for long term investment hasn't panned out for most, pun intended. Gold and DOW were around 800 in 1980, today gold is 1200 and Dow is over 18000. Gold and S&P crossed paths in the 600's in 2009, now S&P is over 2100 and gold is 1200. Silver has a ridiculous high premium, spot is 16 and its tough to find it under 20 at most any coin place.

[Shrek]

If you want to maximize the SOV of gold, silver or whatever precious metal keep in mind with a monetary collapse the precious metals may be used as currency in the post collapse inflated economy as gold dust and nuggets were used by assayed value of weight during gold mining rushes.

With that in mind, precious metal in the form of jewelry provides both assay weight scrap value that can be clipped off the chain a few links at a time, often has stones of some value and if not in an economic collapse, a "pirate chest" of jewelry in the jewel box has often 300 to 1000 percent inflated aesthetic value above per ounce metal value as jewelry greatly increasing the SOV factor.

On occasion I have bought jewelry at estate sales and popped the gemstones out before selling the gold as scrap for more than I bought the ring or bracelet for and other times I have sold wedding band sets for up to 4 times weight value and above what I paid for them at the estate sales because the local jewelery store had similar sets priced at 10 times higher what I needed to show an adequate profit.

[Oldhat]

Originally Posted by Ponderosa

Buying gold for long term investment hasn't panned out for most, pun intended. Gold and DOW were around 800 in 1980, today gold is 1200 and Dow is over 18000.

You know I kind of hate to see "The DOW" compared to gold and silver. You do realize that a ton of companies that were in the DOW in the late 80's went bankrupt and are not only not in the DOW but out of business... or they were kicked from the DOW and a new "better" company replaced them.

So the argument that if you would have bought $800 worth of the DOW stocks at the time (say in a mutual fund) is disingenuous to act as if the $800 would now somehow be worth $18K.

You talk about premiums (you mentioned silver)....just think of the premiums that are on the "dollar" - at least when you buy precious metals you only get hit with the premium. if you simply keep your "dollars" then you are losing at least 2% per year in value - and that is in good years.

Here is the argument for you: If you would have stuck a dollar in your mattress in 1962 it would still be worth "a dollar" today. In 1962 Silver was $1 per ounce. Today it takes $17 of your dollars to by my 1 ounce of silver.
3 years ago you would have had to give me $50 to get one of my ounces.

Shelter, Food, land, little to no debt, 6 months cash reserve on hand, then one should maybe choose 50-50 split between standard investments and the other 50 to precious metals - that is how I think. If they could get the price of SOLAR down another 10-15% then I'd sell some of my investments and an equal amount of PM's to come up with the $60K to go off grid - that would be a good investment to me.

Most of us "Homestead" or are "Countryside Families" because it is an "idea" or way of life....a way to move out of "the system". It's just simply not raising a chicken and a pig. I think storing value in precious metals is no different than storing value in land, shelter, food, water, and a good tractor.

The World used gold as money or backed a currency with it for 5000 years until we (The United States) came along and done away with that in the early 70's. The dollar will disappear one day, just look at how much value it has lost since 1913:

In 1913 you could buy as much with a dollar as you can with $23.63 in 2014.
Silver was $0.58 an ounce back then - it sure has out performed the dollar. I mean if one would have used that $1 to buy nearly 2 ounces of silver in 1913 you'd get $33 dollars in exchange today.

The old adage with land - "They ain't making any more of it" is the same with precious metals - not dollars, heck they can just turn on the printing press. I mean just look how many dollars are out there just in government debt - $18 trillion (soon) - in order for "a dollar" to come into existence you have to create "a dollar" worth of debt.