Gold = $$

Let me help you out here..

When Gold is doing good the US Dollar is doing bad. But the prices of Gold are majorly influenced by the USD. Remember that the dollar is not backed by gold so it has to be traded for gold in the foreign exchange. Every other country has money backed by a precious resource that is why they do not influence it as much because they would lose money in the long run. Now why buy gold? Because its simple economics and you can trade gold and make money thats why. But the huge underlying factor is that billions are being moved around. And when people fall back too hard on gold the dollar comes down and other now want to buy gold just incase the dollar crashes. It would most likely come back to a normal number like 1.25 USD/EUR because people would now sell the gold back to finish their trade and they will make a huge amount of cash, this market, the forex, is the most profitable one I believe even more than the stock exchange.

Well I hope that helped, just ask if you have any questions.

The dollar has been off the gold standard for over 30 years. If you wish to make an argument for a standard, oil would fit since 1971. All countries had to trade oil in US dollars until recently. Saddam threatened to change to euros and see what happened? Now, as I hear through the proverbial grapevine, only 2 countries still trade oil in US dollars, Saudi Arabia and I can't think of the other, maybe the UAE (of the OPEC nations). The constant movement of petro dollars is what has kept the US economy afloat. Now the dollar is out of favour---Remember what happened when the ruble fell out of favour? Expect the same, but bloodier.

I have a question. How does one buy gold? Do you have to buy thru a broker? And, then where is it kept unitl you decide to then sell it. Are there taxes on buying/selling gold? Do the broker fees outweigh the chance at making some profit on your purchase?

Thanks in advance for anyone that replys!

Prax

reply to post by Praxilla

Buying numismatics ( coins ) was considered safest, and the buy/ sell rate changes daily. I should have bought @ $250 per ounce, but hesitate over $700 per. But as I was wrong before??????? Who knows for sure. When people are starving, and no banks exist, what is gold but a lump of un tasty metal anyway?

As both a (former) equity and currency trader. The simplest explanation about the value of the almight dollar is the oldest rule of economics. SUPPLY AND DEMAND. When the supply is low and the demand is high, the value of the dollar is high. This in turn slows our economy as it makes good in the United States more expensive. It does however make imports cheaper. The high dollar over time has allowed countries like Japan and China not just the ability to compete in the US with their goods, but the ability to kick our ass!!!! Take for instance, the Asian contagion, the time period leading leading upto the collapse of Long Term Capital (the hedge fund). It all started with the rubble, then spread to the asian currencies. The demand for the US$ became so high that the US government was selling dollars trying to keep the value of it lower than demanded was pushing it to.

Even right now, everyone is complaining about the value of the US dollar being tooo low. It is far from dangerous levels and trust me, the US government has about 15 steps at anyone time they can take to sure up the value of the $. There is no need yet to do this. The American economy is benefitting from it. Shhhhh its a nasty little secret, but America companies are making lots of money selling goods internationally. This is a boon to the bottom line of multi-nationals. It is also allowing them to keep prices artificially low here in the US, allowing them to better compete against countries such as Japan and China.

It is one thing to allow countries to compete against our own here on our soil, but definitely another to let them beat us at our own game. Why do you think other COuntries are so worried about the US$? They never have been before. Mostly beacause they see whats going on. Its becoming harder to compete for the American consumer. American Companies are making better productgs again, after taking about 30 years off. They see whats going on. The Bush administration (and here is where I will get beat up) is doing a good thing trying to support the economy from all sides. Low taxes and a low dollar during tough times is a good way keep the economy from going into recession. It is a dangerous game though. Between the infusions of money by the FED at recent Repo events and the lowering of the diso# rate by 1% point and the Fed Funds rate by .5% there is a big fear of inflation.

I really am disappointed that so many of you ere on ATS are believers that our America $ is still backed by Gold. It was said earlier. The backing of the US$ is the full faith and credit of the US treasury. Despite what people think, the treasury will never go broke. They can print money as fast as they want. What happens when the printe excess money is they de-value the dollar.

Funny note about banks when times are tough:
When things are tough- banks stop worrying about the return on their dollar, its the return of thier dollar they worry about.

Not the exact quote, but something similar. Said by Wil Rogers quite some time ago. Now all you younger ATSers out there might want to go look him up on wikipedia or something.

Well, back to work.

[edit on 4-10-2007 by traderonwallst]

I see an appalling display of ignorance here, but folks it's not your fault that we learn nothing about money in public school. Johnmike is right. To the OP, you seem like a lazy person who wants someone to explain economics to him, so watch America Freedom to Fascism, or watch part three of Zeitgeist.
If any of you still have the ability to read books, I DEMAND that you read "What Ever Happened to Penny Candy?" by Richard Maybury. This book is what took me out of economic ignorance. It is a beginners book that explains everything about inflations, recessions, depressions, and basically how your money works. It will explain to you things like the value of gold, when the USA was taken off the gold standard and had most of it's gold sold to central banks during the 1980's recession, and how our "dollar" was the next generation of "THALERS" until we were given Federal Reserve notes.
IF YOU'VE EVER WANTED TO FILL THAT BLACK HOLE IN YOUR HEAD WHERE ECONOMICS GOES, I URGE YOU TO START HERE

This book changed my life in so many ways.

Okay what I wanted to mention to the above poster, is that since the American Dollar was taken off of the gold standard, the only thing that makes it valuable is other countries holdings in it. Every time the Fed prints more money, they borrow it from foreign banks WITH MONEY BACKED BY REAL VALUE (GOLD,SILVER,OIL, ETC) and those foreign banks take more holdings in US Dollars.
However, when those countries decide that the downfalls of holding a fiat currency outweigh the advantages of doing business with the biggest consumer nation (USA), they drop those US dollar holdings by spending them or exchanging.
As of late, the USA's debt to these banks is growing at a furious rate and seems like it's about to pop. Saudi Arabia dropped the US dollar last week causing it to drop and become par with the Canadian dollar. Venezuela is preparing to drop it's holdings as well. China has threatened repeatedly to drop its trillion plus dollar holdings and throw us into an economic collapse, not to mention Russia's growing anti-American dollar sentiment.

To give an example of how INSANE inflation can be, let's look at pre-WWI Germany. An egg cost slightly less than one mark. Fast forward nine years later, and it cost EIGHTY BILLION MARKS to buy one egg.
Yes folks, inflation can really kick you in the balls if you don't understand economics. You could have a gazillion US dollars in the bank and it still won't make you financially secure.
BUY SOME GOLD

What some of you don't seem to grasp here is that the value of gold is steady. I remember reading once that back in the 1800s, an ounce of gold would buy one a nice suit, a nice dinner, and a night out. In 1850 that amounted to about $21. Today, that's $731. That same ounce of gold bought the same thing then that it buys now. The difference here is that the dollar has inflated so much in that 150+ year time period that $731 now is equal to $21 then. The value of gold is not going up, the value of our currency is going DOWN.

The value of our currency is directly linked to the value of gold. Sure, you can't go to the Fed and demand $20 in gold for your $20 bill. But, you can sure go out and buy gold on the open market with that same $20. The amount of gold you buy can then be changed into any currency you like based on their currency's current gold price. So, as you can see, despite the fact that our currency is not backed by gold, it's value is directly related to it.

I would just like to quickly point out, while its nice to own your own gold, and store it your self, if you buy gold, make sure it comes from an overseas source.

I know many that own gold, and they often talk of the Banking Relief Act, in which gives the Secretary of the Treasury the right to confiscate the gold of private citizens.

More on the Emergency Banking Act

Where might one buy overseas gold? and if I did would it be best to keep it in an overseas account? like a Swiss account? All this talk of the dollar faltering is making me very nervous and I would like to protect my daughters future.

I will try to get that info for you. Do not google "gold bars for sale"

You are looking for reputable jewelers that sell gold bars, and make it easy to import. US Mint gold bars have serial numbers on it, if i remember correctly.

reply to post by Cyprex


Thanks....it is much appreciated. I could not find anything on the internet or maybe I just am not searching correctly.I don't use google since they seem to be in the administrations back pocket now. I search on alta vista now.

I happen to work for a publisher of financial newsletter that focus on natural resources, especially gold.

If you want to buy gold, do it through a reputable dealer, like www.amergold.com or www.kitco.com -- there's a lot of scumbag dealers out there that will just rip you off. As to the question whether it's worth it to buy gold -- with dealers' fees and so forth -- I bought some gold when it was at $450 an ounce and paid approx. $50 in dealers' fees (don't remember exactly). Now it's at $725 an ounce... does that answer your question?

The chairman and founder of our biz is a well-known "investment guru" in natural resources, and he is convinced that the dollar will fall even more and that gold still has a long way to rise, probably to $2,000 an ounce or more. So it's still not too late to buy some. If you buy only a small amount, you can hide it somewhere at home. I'm wary of safety deposit boxes since under new rules, Homeland Security and such can block and seize the contents of an SDB. If you want to buy a lot, you can choose to buy it from companies such as www.goldmoney.com, which will store it in a secure vault -- for a fee -- in an allocated or unallocated account.

You can also buy gold ETFs such as streetTRACKS or gold mutual funds. With the dollar's value going down the drain, it's definitely recommendable to have some of the yellow metal.

Haha, I had spelled Bullion as Billion. Mod corrected me.

Originally posted by Cyprex
I would just like to quickly point out, while its nice to own your own gold, and store it your self, if you buy gold, make sure it comes from an overseas source.

I know many that own gold, and they often talk of the Banking Relief Act, in which gives the Secretary of the Treasury the right to confiscate the gold of private citizens.

More on the Emergency Banking Act

Thats why you buy coins, and why governments mint them. Easy to identify as to purity and content, and exempt from the BRA in most cases.

The federal reserves, cfr, irs are all nazis..

The only product in the end they have is debt.

[edit on 4-10-2007 by topsecretombomb]

reply to post by CaptGizmo


you should avoid gold bars. they are easy to counterfeit. go with minted coins the are worth slightly more than the spot gold price,and carry a lot more confidence. go to kitco .com and you will see the varying prices of the coins. krugerrands are the most accepted,but not the most valuable.

Kitco.com is a great place to buy gold and silver and other metals. I bought a pool account where they hold the amound of gold for you, you can then sell it at any time you want and they will send you a check.
I also bought some physical silver bars from apmex.com.

Originally posted by Techsnow

Originally posted by hinky

The value of the American dollar is not pegged to any other currency or metal. A person believes that a dollar is worth a dollar. Other countries have a value to their currency, regardless of how it occurs. The dollar just floats in value.

The value of the American dollar is in fact pegged to a metal... its called gold.
If you fail to realise that the American dollar is based on the gold standard then you fail to understand economics.

And yes other countries have a value to their currency as well. The EU is also on the gold standard.

The dollar does not just "float" in value. It is controlled under the manipulation of gold by the world bankers.

I see gold locally, at many places is worth very little. I'm asuming this has to do with the drop in dollar worth, as it goes both ways?