How does investing in gold work?

I agree. If you want to see how much the average Republican knows about interest rates and asset prices look no further than my signature.

 

LOL

 

uhm.......gold did extrememly well until interest rates went up......once interest rates go above the "TRUE" inflation rate usually the bubble bursts at that time.....this is why I keep saying gold will keep rising....look how low interedt rates are........in 1980 they peaked at 20% so only a clueless fool would be in gold at that time.

 

incorrect as you stated the DOW went from 1,000 to 12,000.....remeber that the DOW at 1,000 in 1965 is in 1965 dollars.....so you are only adjusting the gold price.......I guess its the only way it can give the illusion that you are accurate

 

Omg. I give up.

 

Except that you're wrong.

1) The raising of interest rates by the Fed ended the inflation by starting a recession. Prior to this and DURING the period of inflation Gold exploded - because as I said, it is THE asset to hedge against it.

2) Do you understand what the interest rate on Treasuries means and represents? It's an insurance policy against default. a 14% rate on a 30 yr loan is VERY high. People who bought treasuries took on a significant measure of risk and were rewarded when it worked out. According to your logic those people who bought Greek bonds when they were 15% about a year ago were financial geniuses....except now its 60+% and those 14% bonds are worthless.

3) Out of the thousands of people I know, and hundreds I know well, only 5 are invested in physical gold and/or silver. I don't know any "gold bugs".

4) How can you assume that people who did own gold in 1980-81 bought ALL of their gold at the height of the boom? That's a retarded argument.

5) My holdings have gone up 300%+ in the past two years, while the Dow and S&P can barely show 5% for the past DECADE.

I think I'm winning. And stop nitpicking statistics - the more informed argument would focus on trends.

 

Gold, Interest rates on US Treasuries, and Inflation all peaked withing months of each other. At the peak of MASSIVE inflation was the time to be selling gold and buying US treasuries. Please stop posting nonsense.

 

You ignored my first point. Why?

 

Are you high? We had a AAA rating in 1980 and our national debt wasn't even a trillion dollars. We just got our credit rating downgraded by S&P and our national debt is now almost $15 Trillion. Let me ask you a question. Were we a bigger default risk in 1980 or are we a bigger default risk in 2011? Let me ask you another question. Was the interest rate on the 30 year bond higher in 1980 or in 2011? Think about both questions before you answer. The last person that got these questions wrong got destroyed.

 

I didn't ignore your first point. I answered it. READ my post and study the graphs. When inflation was at its peak that was the WORST time to buy gold and the BEST time to buy US treasuries. Got it?

 

well now Doug , that was a fine post you made , and I for one sure learned a lot , and thanks ...

Let me ask you a question , , , in looking through old jewlry , is there a rule of thumb something or other chemical test that is used to test gold ?

Otherwise , how does the consumer know if they're being cheated , ya know ? ? ?

 

and while you're at it.....go get some gold

 

the time to buy treasuries is when interest rates peak as they did in 1980.....since they hit 20% of course there was money to be made as interest rates were sure to fall......but now they are already at zero.....what winfall can possibly await you if interest rates are already as low as they can go?

 

clueless people always ignore what they dont understand

 

I answered SmokemoNSC question. He said this...

I said this...

You agreed...

Once I have you are agreeing with me that's the best I can do. What more do you want?

 

I'm hearing crickets on this thread. Where is SmokemoNSC?

Looks like someone who lives in a glass house has been throwing stones.

 

An acid test is used. A bit of gold is scraped on to a stone and acid is applied. The results show what carat the gold is. Generally the weight of gold in jewelry isn't the determining factor in its value as cosmetic jewelry is worth more than its gold content.

That's why these 'cash for gold' operations are such a rip off. They pay you less than the weight of the gold is worth and far less than the value of the jewelry.

 

I believe they pay around 30% of the true gold value.....no wonder why they advertise so much....if they can buy 1800 gold and only pay 600 dollars for it, then of course they make alot of money! Its too bad people are so clueess about the true value of gold that they are willing to sell so cheap!

 

Gold jewelry is not a certified gold bar in an audited vault. The value of gold jewelry is less than that of a gold bar because it is even more illiquid. One thing you have ignored is the liquidity of gold. There are transaction and storage fees associated with hoarding that archaic metal.

Running out of space! Can you say BUBBLE!

 

lets see if you still call gold archaic when the currency crisis hits in a few years!

 

Yeah, it's so hard to understand your fetish for gold, despite all the facts that show it is delusional.

 

WE HAVE LIFTOFF!

Another gold bug predicting hyperinflation just around the corner. The corner we never turn.

 

perhaps you can explain to us your fetish for paper assets

 

ya think? when was the last time the US had a debt to GDP of 100%

when was the last time its credit rating was lowered?

when was the last time the US had to resort to buying its own debt?

and when was the last time gold hit 1800?

gold is going up for a reason....if you want to believe its just a bunch of speculators then you are in for a rude awakening

 

"when was the last time the US had to resort to buying its own debt?" Bacardi

That Ben Bernanke is not the Greatest American Hero?

[ame="http://www.youtube.com/watch?v=e9Q3orQhEcA"]Greatest American Hero Intro - YouTube[/ame]