The end of commerce

Re: The end of commerce

PostBy: rberq On: Fri Jun 06, 2014 5:59 pm

lsayre wrote:If you had ignored any form of investment risk and merely bought and held gold you would have done 62% better than the stock market.

Your conclusion is heavily dependent on the start and end dates you chose. If you sold when gold was at almost $1,900 your result would be even better, much better. But for a lot of years 1971 through 2014, you would have done worse than the stock market. See chart. Gold is more about speculation than about investment. And by speculation I mean, speculating what the hype will induce other people to pay, and being clever enough to sell at the hyped highs. In other words, buying gold is more about hype and mob psychology than about solid financial judgment.

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Re: The end of commerce

PostBy: jpete On: Fri Jun 06, 2014 6:51 pm

rberq wrote:
lsayre wrote:If you had ignored any form of investment risk and merely bought and held gold you would have done 62% better than the stock market.

Your conclusion is heavily dependent on the start and end dates you chose. If you sold when gold was at almost $1,900 your result would be even better, much better. But for a lot of years 1971 through 2014, you would have done worse than the stock market. See chart. Gold is more about speculation than about investment. And by speculation I mean, speculating what the hype will induce other people to pay, and being clever enough to sell at the hyped highs. In other words, buying gold is more about hype and mob psychology than about solid financial judgment.


And the Dow is what? A stone tablet from the Lord Almighty? :no1:

Gold, like everything else, is priced in fiat Federal Reserve Notes and is subject to all the manipulations inherent in that system.
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Re: The end of commerce

PostBy: lsayre On: Fri Jun 06, 2014 9:19 pm

As best as I can figure it roughly 160 companies have been part of the makeup of the DOW Jones Industrials Average over the years. Investing in any group of 30 of them without wavering for any given span of 30 years and without playing the game that the DOW itself routinely plays with them (continually kicking out losers and adding in winners to mask failure and bankruptcies) would probably leave you totally bankrupt, or at least leave you in much worse shape overall than the Index alone would lead you to believe. How does this tell anyone what the markets have actually done over time?

Can you truly say that investment in gold (and silver) is more purely speculative than investing in stocks?
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Re: The end of commerce

PostBy: rberq On: Fri Jun 06, 2014 9:46 pm

lsayre wrote:Can you truly say that investment in gold (and silver) is more purely speculative than investing in stocks?

Re-read the posting. I did not say that, I simply said buying gold is speculative. Nor did I characterize buying gold as an investment, I said it is speculation and NOT investment.
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Re: The end of commerce

PostBy: lsayre On: Fri Jun 06, 2014 9:55 pm

rberq wrote:
lsayre wrote:Can you truly say that investment in gold (and silver) is more purely speculative than investing in stocks?

Re-read the posting. I did not say that, I simply said buying gold is speculative. Nor did I characterize buying gold as an investment, I said it is speculation and NOT investment.


Are you convinced that the price is in no way linked to the effort and labor put into mining and refining it?

I still chuckle over the time when revisionist Ben Bernanke told Congressman Ron Paul (after wavering a bit over it) that gold is not money. I believe Ron Paul's response was something about 3,000 years of history proving otherwise.
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Re: The end of commerce

PostBy: jpete On: Fri Jun 06, 2014 11:44 pm

rberq wrote:
lsayre wrote:Can you truly say that investment in gold (and silver) is more purely speculative than investing in stocks?

Re-read the posting. I did not say that, I simply said buying gold is speculative. Nor did I characterize buying gold as an investment, I said it is speculation and NOT investment.


It's speculative because the market is rigged.

What's more speculative than investing in a company that you have no knowledge of the inner workings?

Enron looked like a great investment for a while.
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Re: The end of commerce

PostBy: lsayre On: Sat Jun 07, 2014 5:33 am

What has the least chance of going to zero purchasing value over time?

gold (never happened yet)
silver (never happened yet)
fiat paper notes (many examples of this happening with nations currencies, and with independent bank notes)
stocks (many examples of it happening)
bonds (many examples of it happening)

It seems to me that this plays some part in determining the level of speculation required to play in any of these ballparks.

Roughly 42 years ago I bought a 35mm camera with a then well recognized brand of 'Money Order' that I bought at the local drugstore, only to find that it had bounced (the money order company went into bankruptcy after it was made out and before it was received), and I had to pay for the camera a second time.

And then there is the fact that the US Dollar (FRN) has lost between 97% and 98% of its buying power since it was first issued in 1913, with a certified 83% of this decline coming just since 1971. And since the values of stocks and bonds, etc... are "measured" by this wasting asset, have they really performed as well over time (on average) as the Wall Street Boyz would have you believe?
Last edited by lsayre on Sat Jun 07, 2014 11:11 am, edited 1 time in total.
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Re: The end of commerce

PostBy: jpete On: Sat Jun 07, 2014 9:10 am

And that is the trouble with discussions like this. Everything is priced in Federal Reserve Notes.

Exchange that currency for Continental dollars, Wiemar marks, or Zimbabwe dollars and I wonder if the argument is the same?

Or does gold still look like "speculative investment"?
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Re: The end of commerce

PostBy: franco b On: Sat Jun 07, 2014 10:02 am

jpete wrote:And that is the trouble with discussions like this. Everything is priced in Federal Reserve Notes.

Exchange that currency for Continental dollars, Wiemar marks, or Zimbabwe dollars and I wonder if the argument is the same?

Or does gold still look like "speculative investment"?

Confederate dollars seem to be worth more than a modern dollar.
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Re: The end of commerce

PostBy: jpete On: Sat Jun 07, 2014 11:02 am

There are few of them in circulation. Scarcity drives the price up. :)
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Re: The end of commerce

PostBy: samhill On: Sat Jun 07, 2014 2:01 pm

All they have to do is make it illegal to hold gold once again, it's been done before & now they have almost all the transactions that have taken place for decades. Even if you have it you can't spend it legally, like I have said in the past why do you think all those people that sell gold at inflated prices are so happy to take your hard earned worthless fed reserve script it return? I sometimes wonder just why the prices go so high & who is behind it.
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Re: The end of commerce

PostBy: jpete On: Sat Jun 07, 2014 2:10 pm

samhill wrote:All they have to do is make it illegal to hold gold once again, it's been done before & now they have almost all the transactions that have taken place for decades. Even if you have it you can't spend it legally, like I have said in the past why do you think all those people that sell gold at inflated prices are so happy to take your hard earned worthless fed reserve script it return? I sometimes wonder just why the prices go so high & who is behind it.


That's the thing Sam. Gold isn't inflated right now. It's actually quite cheap. Likely because all these "cash for gold" places have everyone turning in their grandfathers pocket watch. Larry already illustrated that the mining costs are roughly equal to the current per once cost so it's almost not even worth doing.

The government can take everything you have. That doesn't make it a bad idea to acquire things. Especially things that are easily hidden.

To answer the implied question of this thread, commerce never ends. It just changes form. Today it's Federal Reserve Notes, tomorrow it might be something else.

Everyone needs something and they are always willing to take some form of payment for what they have to get what they want.
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Re: The end of commerce

PostBy: wsherrick On: Sat Jun 07, 2014 3:07 pm

People will always trade. As has already been said. Everyone always will need goods, shelter and sustenance. If a Government makes Human Nature and the need to survive illegal. Then we will just be all criminals.
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Re: The end of commerce

PostBy: Flyer5 On: Sat Jun 07, 2014 5:16 pm

jpete wrote:
samhill wrote:All they have to do is make it illegal to hold gold once again, it's been done before & now they have almost all the transactions that have taken place for decades. Even if you have it you can't spend it legally, like I have said in the past why do you think all those people that sell gold at inflated prices are so happy to take your hard earned worthless fed reserve script it return? I sometimes wonder just why the prices go so high & who is behind it.


That's the thing Sam. Gold isn't inflated right now. It's actually quite cheap. Likely because all these "cash for gold" places have everyone turning in their grandfathers pocket watch. Larry already illustrated that the mining costs are roughly equal to the current per once cost so it's almost not even worth doing.

The government can take everything you have. That doesn't make it a bad idea to acquire things. Especially things that are easily hidden.

To answer the implied question of this thread, commerce never ends. It just changes form. Today it's Federal Reserve Notes, tomorrow it might be something else.

Everyone needs something and they are always willing to take some form of payment for what they have to get what they want.


Brass and lead have been good investments over the years. :)
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Re: The end of commerce

PostBy: KLook On: Sun Jun 08, 2014 8:43 am

Brass and lead have been good investments over the years. :)


Probably the best thing for a gov. that can take everything you have. ;)
I recall Sam making a snide remark when I indicated that my ancestors kept some Gold back when it became illegal. Showing his true mentality in that he desires a strong Socialist gov. that can "correct" perceived injustices. Remember, those forms of gov. do not believe in inheritance so all the wealth and possessions go back into the "pot" for society to fight over and achieve. I think the value of the gold my family squirreled away is far far higher then an equal amount of FRN's that someone put in a box at the same time.

Kevin
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