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Gold prices: Watch out below

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posted on Sep, 20 2009 @ 01:56 AM
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[double post]


[edit on 9/20/09 by silent thunder]




posted on Sep, 22 2009 @ 05:56 AM
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I'd agree with a previous comment on the thread here that if the worst comes to the worst, then at least gold can be traded for food. I know a few now very elderly people who used gold to buy rare items (like real coffee) on the black market here in Central Europe in WWII. Even though their paper money still had some value, gold was the most-accepted medium of exchange in the black market. The same went if someone wanted to get smuggled out of the country. It was gold -- or diamonds. The reasoning was simple: gold and diamonds could be traded anywhere, at any time; Reichmarks most certainly were another matter entirely.

The thing that bothers me as I follow the present upswing in the gold price is that it's still quoted in USD. So, as the USD is still falling, the apparent rise in the gold price is not really very significant -- if there is any real rise at all in terms of its purchasing power if converted back into dollars at some future date. A lot would depend on the gold investor's reasons for buying. If there is a major collapse of the USD in the near future -- with other currencies perhaps to follow, then gold's value may well outstrip its actual "price".

As to large amounts of gold being sold off, one has to wonder if the funds actually being paid for it are really in USD or in another, stronger currency. Right now, I certainly wouldn't want to take USD for my gold -- if I wanted to sell, I mean -- which I don't!

Edit to add: just by the way, I'm building up my stocks of coffee. As one old-timer told me, you can trade real coffee (or whiskey) for just about anything. We just buy extra every week or so and store them away. Sealed packs will keep for years, after all...

[edit on 22/9/09 by JustMike]



posted on Sep, 22 2009 @ 07:36 PM
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I would disagree that Gold is good for trading.

Gold is good if local currency becomes worthless, you can convert to more currency.

If you barter Gold for goods, you'll need an assayer like during the Gold rush. No one really knows how pure your alloy is. You'll end up getting 14k or 18k prices for your 22k or 24k gold. If you need food, that box of soup cans becomes more valuable than that gold coin.

Experiment: Right now, grab a unit of Gold (nuggets, coin, bar, ring, ingot) and head for the mall or supermarket. See if you get the same value of goods as what your Gold is worth. When SHTF, the value of your Gold goes down even further.



posted on Sep, 22 2009 @ 08:06 PM
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I am betting long on gold not because I think paper currency will disappear completely and we will be reduced to bartering physical gold. I think paper or electronic currency will continue to exist, but given the rate of inflation, it will be worth less. Which is another way of saying gold (and other real commodities) will be worth more.

There are many middle grounds between mad-max-style barter and bubble-boomtime finance, you know. I believe we are headed for territory somewhere in this middle ground, which makes gold a sound investment even if it never comes down to actual barter.



posted on Sep, 23 2009 @ 09:52 AM
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Originally posted by silent thunder
The IMF sale = 403.3 metric tons
Total global gold = between 120,000 and 140,000 metric tons

Source for latter stat here.

Thus, this represents a sale of from 0.02% - 0.03% of world gold.




[edit on 9/20/09 by silent thunder]


Nice one ST

I was going to work that one out for myself but you beat me to it. Thanks for that. When you look at it like that, it shouldnt affect the price too much, even less so if it goes directly to private institutions.

PEACE,
RK



posted on Sep, 23 2009 @ 11:23 AM
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Originally posted by silent thunder
There are many middle grounds between mad-max-style barter and bubble-boomtime finance, you know. I believe we are headed for territory somewhere in this middle ground, which makes gold a sound investment even if it never comes down to actual barter.


HA! Not on ATS there aren't!


You make a perfect point and that is why I hold a little bit of gold and silver. Will it help me in mad-max land? Not really. Are we going to mad-max land? I doubt it. If we do end up in mad-max land then I will have more things to worry about than some gold.

Besides, with gold we are talking about investments greater than $1,000USD. Stocking up on canned goods, coffee and booze are not on that scale. Everybody should have a good cache of non-perishables. My advice (during these times of financial uncertainty) is that you should have 1oz of gold for every $5,000 you have sitting in the savings account @ the bank. if you think you will ever have to barter with metals, get a roll or two of 20 1oz silver dollars just in case. Otherwise you will lose your rear.

Gold is only really good to hedge against unstable currency. If you are in the US and you think the USD is safe then you don't need gold. If you are in the US and you think the USD may go all Zimbabwe on us (or even partly Zimbabwe), then gold may not be a bad thing to have right now.



posted on Sep, 24 2009 @ 04:31 AM
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Originally posted by Dbriefed
I would disagree that Gold is good for trading.

Gold is good if local currency becomes worthless, you can convert to more currency.

If you barter Gold for goods, you'll need an assayer like during the Gold rush. No one really knows how pure your alloy is. You'll end up getting 14k or 18k prices for your 22k or 24k gold. If you need food, that box of soup cans becomes more valuable than that gold coin.

Experiment: Right now, grab a unit of Gold (nuggets, coin, bar, ring, ingot) and head for the mall or supermarket. See if you get the same value of goods as what your Gold is worth. When SHTF, the value of your Gold goes down even further.

Sorry to quote your whole post but I need to refer to all of it.

Gold is good for trading (for food and other essentials) under some circumstances. I started my post by referencing what actually took place here in central Europe in WWII. In other words I was saying that the circumstances have to be pretty extreme.

Most people traded/bartered gold rings and similar items. Their assay value is usually marked on them. When in doubt, the black marketeer would downgrade their value. In any case, if that trader is the only person around who can supply what the person with the gold needs, then the trader sets the "price". A gold ring for a jar of real coffee would have been a "fair" trade, for example -- and certainly occurred.

I closed my post by pointing out that I am upping my stocks of coffee, as in extreme circumstances it can be traded for just about anything. Believe me, people traded their jewelery for coffee or other rare items when they were planning a special occasion celebration like a wedding or a major birthday. In a hypothetical extreme situation I wouldn't trade my coffee for gold. I'd use it to obtain other consumables we might need.

Your experiment cited at the end of your post: I agree with you 100% that right now, there is no way that you'll get full value for your gold. You and I both know that we'd lose out, especially at a time when our money still has purchasing power. But like I said, in an extreme situation, you don't get the full, pre-crisis value for your gold either. People didn't in WWII and they won't in the next one. But they would get something, while those with only useless paper money (and no stocks of sought-after items) would likely get virtually nothing.

Summary: we're basically on the same page here. Having only gold for trading in dire circumstances is not the ideal. It's better than nothing, but for those with foresight it's far more astute to lay in supplies of items that people will need (and/or crave) and that will be hard to obtain. That's what I am doing and have done for some time. I chose coffee because all our coffee in Europe has to be imported. In a major crash of the world's economy, there will be virtually no imports, so those items will be especially sought after -- and I know from talking to people who went through the last massive crisis here that coffee was a significant item of trade. It stores well, which is a big plus.

I'm hanging on to the relatively small amount of gold I have as it is convenient for transport and can be traded (at extreme marked-down value) if necessary, but consumable items with a long shelf life are far preferable. I'm also hanging on to my gold as it could be useful in future if my teeth need more fixing. Not kidding. During WWII, my wife's grandmother had a dentist make and fit a gold tooth for her from a length of gold necklace she supplied. By agreement, the dentist kept some of the gold as his fee... This was not unusual, and in fact under the Communist regime here, it was typical that patients who wanted gold in dental work had to supply the gold themselves.

Yes, the experiences I mentioned in my prior post were not just plucked out of thin air. They were family and family friends.

Best regards,

Mike



[edit on 24/9/09 by JustMike]



posted on Sep, 24 2009 @ 09:33 AM
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gold is good for wealth preservation in times when confidence in paper currency is shaky.

this is the longest i have seen gold hover above 1000$ and i gotta say i like it......someone was wispering about a beijing "put" regarding gold prices .....we shall see

gold prices were readily manipulated by large banks but i don't know now wether foreign creditors said guess what fellas....we be buying gold AND your treasury's so don't F with gold....or we will not be buying your paper.

genrally the powerz don't like rising gold because it represents a alternative to their paper system ...gold has been rising in nearly all currency's over the past few years....let's see how high it can get



posted on Sep, 24 2009 @ 09:03 PM
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reply to post by JustMike
 


Good response Mike, I gave you a star.

Coffee beans. I wonder if the price of coffee will rise faster than the oil that gets it here.



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