Why buy gold coins?

So, I notice that a lot of people are selling gold coins. I just want to know if anyone is buying them -- and if so, why?

Personally I think it's a dumb investment, a dumb survival strategy, and a dumb way of "preserving" wealth -- unless you wait 100 years -- and even then, there are way better investments than gold. So why are people buying cold coins?

It's also worth noting that anytime you buy a gold coin, you pay a premium for it which is at least 5% of the current value of gold, and you have to pay for shipping/handling, and you need a safe place to store it.

reply to post by Kaytagg


I agree, if the SHTF then what good will gold be to anyone? I mean, you can't eat it. I guess you could build a golden idol out of it...but otherwise, it doesn't do much good to have or to want.

Just my 2-cents

I know...it's silly.Always hear people saying to invest in gold or silver for a SHTF scenario where the global economy plummets.I don't know about anyone else but i wouldn't trade a can of beans for a big gold bar in such a situation.

Originally posted by Solomons
I know...it's silly.Always hear people saying to invest in gold or silver for a SHTF scenario where the global economy plummets.I don't know about anyone else but i wouldn't trade a can of beans for a big gold bar in such a situation.

ABSOLUTELY!!! what does an ounce of gold cost as of today? Approx $950? I would rather have $950 in beans, rice, etc. And you know who's horde would be worth more to all those poor hungry souls (rhetorical question)?

A lot of people are selling precious metals currently because the price is high.

www.kitco.com...

but hardly anyone is buying scrap sterling, 14k metal.

Futures trading is brisk.

reply to post by Kaytagg


I buy them. I visit pawn shops and they have alot!

Good investment. Since I lost 7K last year.

In my humble opinion. . .

When local currencies crumble, precious metals historically have proven to be used to obtain goods and services. If anyone thinks of this as something that only happened in the past, just look to Argentina's economic collapse and the countless stories of families buying their way out of the country with gold.

It is an excellent way to protect and retain wealth in localized SHTF situations. If the whole world goes up in smoke, sure, depending on your supplies of dry goods and ammo will be the way to go; but if the US dollar decides to go away for good, or an extended "bank holiday" takes effect, you'll want some easily traded and universally accepted currency to get what you need, where you need to go, and mitigate some of your losses in savings and investment you might have had in imaginary paper like local currency, stocks, bonds, etc.

[edit on 8/27/09 by larphillips]

Excellent question. In my opinion, I would not be rushing to buy gold right now because it is priced rather high at $950/oz. It's value as an investment is dubious. If you believe that a full economic collapse is eminent, then maybe buying some gold may not be a bad idea but by all means don't put all of your eggs in one basket!

To me, the purpose of gold is to retain wealth during currency transition. If you think the US economy and the dollar will be devalued, or if there will be major hyperinflation, or a full collapse then gold can help you. Yes, when people are starving and you need a can of beans it may not be helpful, but if you are talking mid-term strategy, it is very handy.

For instance, say you buy an ounce today at $950. Say in October, something bad happens and the USD goes into crisis. They declare a bank holiday and devalue the dollar. Major inflation kicks in and now a loaf of bread costs $20. Well, gold will go up in price in proportion to the inflation as it is an international commodity. Now that ounce may be worth $5,000 when $5,000 has the purchasing power of $950 before the crisis.

Which would you rather have when $950 USD or 1oz AU? The gold will preserve your purchasing power.

Sure, if TSHTF then it will not protect you and it will not feed you. If you need to get on a plane and get outta Dodge, then it may help you there. It is portable, and people will generally acknowledge it's value. It is like a safety net.

Personally, I would advise 20% of your savings should be in physical gold and silver. I have a cache of small gold coins (mostly 1/4oz) and silver bullion dollars in my 'just in case' kit. Might come in handy when paper dollars are only worth burning for heat.

reply to post by Kaytagg


The intention of converting wealth to gold is on the assumption that the economy will recover in the future, and that, therefore, gold can then be sold at either standard or inflated price.

These are not survivalists doing this, they're people who still hold a lot of faith in money and profit.

A survivalist invests their money in methods and materials in order to survive through the potentially disastrous crash.

Personally, I am not wealthy enough to even consider gold. And I don't have a materialistic attitude either.
My spare money is going to develop a plot to grow my own food, water purification, solar/wind power and so on...

reply to post by nydsdan


This is more of a question than a comment on your post.

I foresee hyper-inflation in our future and have roughly 20% of my life's savings in Canadian Maple leaf's.

In your opinion, where would you put your other 80% to protect it from destruction of the dollar by our government.

Gold is not going to get you through a SHTF situation.

It is a hedge against inflation. If we go through a period of hyper inflation it will be a good thing to have because as your lose their purchasing power, gold will be worth more.

People buy gold and silver not to drag with them as they bug out but as a medium of exchange should paper dollars lose their value.

Originally posted by Wildbob77
Gold is not going to get you through a SHTF situation.

It is a hedge against inflation. If we go through a period of hyper inflation it will be a good thing to have because as your lose their purchasing power, gold will be worth more.

I'm not prepared to forecast it...but...wouldn't hyperinflation qualify as a SHTF/TEOTWAKI scenario ???

The relationship between Gold ownership , and , the ability to weather severe inflationary episodes , is acutely underscored in the book titled ; When Money Dies: The Nightmare of the Weimar Collapse . Imo , this work by William Kimber is the quintessential read on Germany' hyperinflation experience.

Originally posted by Wildbob77
People buy gold and silver not to drag with them as they bug out but as a medium of exchange should paper dollars lose their value.

Both Wildbob....

Without their Gold Taels (thin sheets of 24kt Gold) , thousands of Vietnamese refugees , and their children , would have lacked the resources to expatriate to safety , and begin new lives in the mid/late 70's.


$950 Gold overpriced ???

Gold Myth No. 1: Gold is (too) expensive

For the past eight years , at every major break-out , I've read the pundits declare that Gold is overvalued. Since the inception of the current secular bull , even the "esteemed" wave theorist R. Prechter has been , and remains , consistently wrong on Gold....

BEAR MARKET UPDATE
October 10, 2003

In his recent October 3 issue of the Elliott Wave Theorist, Robert Prechter has given his latest status summary for the precious metals and stock markets. Based on the very recent events in both of these markets, his conclusions are that both are in the process of ending bear market rallies and resuming their downtrends. In the case of gold, it means resuming a downtrend that started at the 1980 price peak of about $800. Prechter expects this new down leg will end with the gold price below $200....

Full Text

Wont happen overnight , but Gold is a double from here [minimum]...without hyperinflation.


Very , very sad , but related: Gold for bread in Zimbabwe


*Personal opinions* Not to be construed as sound investment advice.

are you kidding....??? LOL... one word... WOW

Gold and Silver are two of the BEST, I repeat BEST, investments you can buy. Unlike the dollar or any other currency it is not subject to inflation, i.e. they will hold their value...

and if you look at historical graphs regarding the value of gold and silver, they have only been increasing with time...

Now I STRONGLY recommend silver over gold... Why? Because silver is a precious resource that has almost been completely mined up across the globe. And guess what...!?!?!? Silver is a primary super-conductor and component of many technological devices we use on a daily bases... one, being the computer.

now you are definately entitled to your own opinion... but to say gold is a dumb investment... is in fact DUMB itself.. perhaps you should research personal finances and books describing wealth... One great one for starters would be Increase your Financial IQ by Robert Kiyosaki, self made MULTI-MULTI millionaire!

And guess what he recommends??? buying as much silver as you can!!!


[edit on 27-8-2009 by tmayhew01]

First I put together a mountain of food and survival gear, water purifiers, fuel pumps, guns and ammo. Solar power, batteries, inverters, fuel, generators. Firewood, candles, keroscene stoves and lanterns. Medicines and health supplies. Study.

Last was fractional silver and yes gold.

Imagine trying to get somewhere in crisis.

A can of beans won't get you transportation.

George Green: "I keep five ounces of gold on me"
Easy to take on a plane

Silver would be good for trade.

Ammo in popular caliber also.

You can only carry so much.

Of course the military used to give you a knife, gold and condoms, lol.

You may not consider gold valuable but I can guarantee that you will watch the common mans eyes glitter when they see it. Greed is a tool.

0CD

reply to post by tmayhew01


I fully agree with this. Plus I find it rather disconcerting and, frankly, unbelievable there are intelligent people who don't know that the only real money there is is gold and silver.

As for the ridiculous argument that 'you can't eat gold' - well, I guess that's true. But I guess these people think a big plate of FRNs or crispy dollars, garnished with a few copper coins, makes for a hearty meal, right?

Gold is a lifeline. Inflation, maybe even hyperinflation, is guaranteed given the stimulus spending continuing. There will be a period, as has happened countless times in history, where certain paper money will not be accepted. Sure, bartering/trading goods may be also useful, but your surviability - not to mention thrivability - will be amplified countless times if you have gold.

Finally, every single paper currency throughout history has ended up failing, without exception. It's an inevitable, natural cycle that applies to ALL currencies, except gold. There is a reason why central banks, governments, and the world's wealthiest are currently hoarding gold - and that reason isn't because gold is a bad investment.

Originally posted by Kaytagg
So, I notice that a lot of people are selling gold coins. I just want to know if anyone is buying them -- and if so, why?

Personally I think it's a dumb investment, a dumb survival strategy, and a dumb way of "preserving" wealth -- unless you wait 100 years -- and even then, there are way better investments than gold. So why are people buying cold coins?

It's also worth noting that anytime you buy a gold coin, you pay a premium for it which is at least 5% of the current value of gold, and you have to pay for shipping/handling, and you need a safe place to store it.

I just bought some USA 20 dollar gold coins circa 1901 a copl of weeks ago from a pawnbrokers. They weigh 33 grams each and are 90% pure gold. I paid the equivalent of USD 935 each for them. So where in that deal is the 5% premium you are talking about?? Put simply, you are talking sh!te.

If you think gold is a dumb investment and a dumb survival strategy then that is fine, but realise this... People who can afford to and are smart enough yo be buying gold have probably already got their food, ammo & survival gear stocks already built up and are thinking about future currency.

They are not thinking "oh.. I better swap all my dollars for gold now so that I can buy food later" If you honestly think that is why people are buying gold at this point in time, you need to take off the blinkers, look around you and see what is happening.

PEACE,
RK