???Anybody abandoning Cash?

Discussion in 'Homesteading Questions' started by Oxankle, Jan 13, 2007.

  1. Oxankle

    Oxankle Well-Known Member

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    I have come to the conclusion that it is not a good idea any longer to hold cash.

    Anyone into mining stocks?

    Ox
     
  2. TnTnTn

    TnTnTn Well-Known Member

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    I think cash has abandoned me!!! Lol

    Gold and small pieces of real silver are nice to have around when paper is worthless except for cleaning up. TnTnTn
     

  3. Cabin Fever

    Cabin Fever Life NRA Member since 1976 Supporter

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    If you are abandoning cash and have any you want to get rid of, I'd be glad to take if off your hands.

    I assume you're referring to gold mining stocks....not a bad investment, IMHO.
     
  4. DAVID In Wisconsin

    DAVID In Wisconsin Well-Known Member

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    I've held a mining stock or two for years and years now. They (mine) pay a fairly decent dividend and the prices have skyrocketed over the years. Not a bad thing to invest in.
     
  5. mightybooboo

    mightybooboo Well-Known Member

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    Mining stocks did very very well during the depression.No,I dont have any.I know in the last 2 years or so as a group the increases have been huge.

    BooBoo :gromit:
     
  6. treefrog

    treefrog Well-Known Member

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    i make my living trading stocks. mostly commodities producers, with a bias toward precious metal miners and energy producers. i think silver will provide more percentage gains than gold in the near to mid term.

    hl, paas, ssri, cde, ipt, calvf, nxg, tre, shsh, lots of others, buy the dips, sell the rallies.

    abandon cash? no. stay as clear of the u.s. dollar as possible? yes.

    pax
    t.f.
     
  7. Beaners

    Beaners Incubator Addict

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    When I read the title the first thing that came to mind was that you meant you were only going to use plastic...blech.

    So do gold mining stocks work the same as other stocks?

    And when everyone recommends hiding pieces of gold and silver (like TnTnTn) who are these people that are going to be willing to sell you something for gold and silver? Most people I know wouldn't know what gold or silver looked like, how the heck would I A) convince them it's real and B) convince them it can be used as currency?

    Kayleigh
     
  8. patnewmex

    patnewmex Jane of all trades

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    I prefer a bit of actual silver and a wee bit of gold. When (not if) the stock market crashes again, anything on paper will be worthless. Gold and silver will not.
     
  9. palani

    palani Well-Known Member

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    My recommendation would be a stock that doubles or better every year.

    Hogs, cattle, sheep, poultry.

    I never could stand the taste of mining stock.
     
  10. mightybooboo

    mightybooboo Well-Known Member

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    If the dollar goes south,people will recognize real metal,real quick.
    Gun store owners as a group seem to understand metal right now.

    BooBoo :gromit:
     
  11. WisJim

    WisJim Well-Known Member Supporter

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    I have invested in photovoltaics (solar electricity) and wind power over the years--by buying and installing the equipment to power my home and shop. I can look out the window any day and see my investment working for me.
     
  12. Alice In TX/MO

    Alice In TX/MO More dharma, less drama. Supporter

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    From a previous post...

    If the dollar goes south,people will recognize real metal,real quick.

    My reply....

    This has been the mantra of the gloom and doomers at least since the mid 1970's, probably longer.

    It hasn't happened yet.
     
  13. Dutchie

    Dutchie Well-Known Member Supporter

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    Ox .... Oklahoma real estate is HOT right now. Provided you pick the right locations, you can't go wrong .....
     
  14. mightybooboo

    mightybooboo Well-Known Member

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    Most certainly has,what is that 1970 dollar worth today?

    BooBoo :gromit:
     
  15. KCM

    KCM Well-Known Member

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    Since 1970, the stock market has been a far better value than gold.
    To put that statement into perspective, 37 years have elapsed since the beginning of 1970. Based upon average price of gold for each year since 1970, if you had purchased one ounce of gold each year from 1970 through 2006 you would have 37 ounces of gold for which you would have paid a total of $11,700. Based upon today's market value, that same 37 ounces of gold would now be worth $22,700. A fair return? Yes it is! But since 1970 the average long-term rate of return into the stock market FAR outpaces that!

    If you took that same cash each year that you had spent on gold since 1970 and invested it into the stock market at the stock market's typical long-term return of 10.4%, your $11,700 would now be worth $31,470. That is $8,770 MORE than the gold is worth! This is NOT compounding anything, but basically a simple interest earning if you had invested in the stock market.

    It is true that gold has been on an upward trend for a little more than 3 years now and is currently worth about 5 times what it was in the mid 70's. It used to be the government set the value of gold. I don't remember exactly, but I think it was somewhere in the early 1970's when the value of gold ceased to be based upon governmental standards. At that time, the value of gold became based upon supply and demand, as it continues today.
    Because the price of gold does sometimes fluctuate wildly, if you had paid the average 1980 value of $612 for an ounce of gold in 1980 you would barely break even today ($618). In comparison, if you had invested the same money into the stock market and realized its average long-term rate of return of 10.4% your $612 would now be worth $2,333! That's a gain of $1,721 for your investment in the stock market vs. a gain of $6 for an investment into gold.
    If you think its an isolated occurrence to earn a higher rate of return into the stock market vs the rate of return into gold, you'd be interested in knowing that in 22 of the last 37 years an investment in the stock market would today outpace the same investment had it been made in gold. And most of those remaining 15 years included the first 4 years of the 1970's when the supply-and-demand model hadn't fully adjusted and the last 8 years during which the average long-term stock market rate of return hasn't had enough time to actualize.

    It is very risky to buy gold when the price increases rapidly, because nobody knows how long the upward trend will continue before it comes back down. For that reason alone it is a very risky venture to buy gold at today's market value. If you look at the value of gold based upon historical trends you may come to the conclusion that the value of gold may have peaked and set to go back down.
    If you're looking for investment profit then the mining stocks might be the better value than the gold itself. Historically, the stock market continues to be a better value.
     
  16. palani

    palani Well-Known Member

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    Since we venture further into the land of fiction kindly advise what the definition of one dollar in real world terms might be.

    To help you out, I could buy gas for $.15 per gallon in 1966 so one dollar then could be said to be 6.66 gallons in 1966. Gas now is $2.12 so one dollar could be said to be .47 gallons now.

    In 1963 an acre of local farmground was worth $400 so one dollar was worth 108.9 square feet. Now farmground is worth $5,000 per acre so one dollar is worth 8.7 square feet.

    In 1960 terms one ounce of gold weighed one ounce. In 2007 terms one ounce of gold still weighs one ounce. Who cares what the dollar value is as the dollar is undefinable.
     
  17. KCM

    KCM Well-Known Member

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    In essence, what you're saying is 6.66 gallons of gasoline in 1966 is only .47 gallons today, or 108.9 square feet of land in 1963 is only 8.7 square feet today. That doesn't make sense.

    The concept of Future Value of Money helps determine what an investment of $1 today should be worth at any given point in the future. This concept would have helped someone determine where to invest their $1 in 1966. Based upon factual historical comparisons, the value of gold since 1970 has not kept pace with the value of the stock market.
     
  18. palani

    palani Well-Known Member

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    No, it doesn't make sense. That is because there is no definition for the value of one dollar. You could define one dollar as being worth 6.66 gallons of gas in 1966 and being worth .47 gallons today. Is it the same dollar? If it is not how can you compare the relative value of one investment scheme over another.

    You might be interested in reading about the French experiment with fiat currency starting with the revolution in the late 1700's and ending around 100 years later

    Above quotes from an Ebook at Gutenberg
    FIAT MONEY INFLATION IN FRANCE
    How It Came, What It Brought, and How It Ended - Written around 1914
    ftp://ibiblio.org/pub/docs/books/gutenberg/etext04/fiatm10.txt
     
  19. mightybooboo

    mightybooboo Well-Known Member

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    And a lot of stocks failed,and a lot of people lost money.Then again,if you made any money you paid taxes on it.Quite a bit of taxes BTW.

    See,REAL money doesnt have to be speculated on to have and retain its value.Therefore holding metal isnt subject to the vagrancies of the market manipulators,or the policies of FEDERAL RESERVE,which ISNT FEDERAL BTW BUT A PRIVATELY HELD BANK.

    And a dollar sitting next to a gold coin,all things equal,the dollar HAS lost value through inflation every single year,that gold doesnt lose value,because its a real commodity with a world value,while the other is fancy toilet paper with a promise and nothing more.

    A PROMISE that isnt being kept through devaluation called inflation.And devaluation through the printing of more money,decreasing the value of every dollar out there.The dishonest dollar against the honest metal coin,that rises with inflation and cant be printed into oblivion.

    But if you think a paper dollar is more valuable than a metal coin,knock yourself out . And go gamble in the 'fixed' market,run by crooks.

    It isnt like the market cant collapse,eh? But metal,its never collapsed and never will.FIAT currency,on the other hand ,has a LONG history of collapse and failure.

    Take your choices.

    BooBoo :gromit:
     
  20. ma1bob

    ma1bob Victory Gardener

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    For anyone thinking about abandoning cash. Please send the worthless peices of paper to me. I know it is big of me, but I will take the burden off your shoulders.

    Cheers

    Bob