Is gold the best investment?greenspun.com : LUSENET : TimeBomb 2000 (Y2000) : One Thread
Last week my wife went to a store and was told that they could not accept her Visa credit card because it expired in 2-2000. Has any one else had a experiance such as this? Also I understand that banks have about 4 trillion dollars in deposits from people like you and me. The banks say that the government insures them for 100k per account. But in this government fund there is less than 1 billion dollars!!. This has me worried. Should I be? I already have a years worth of freeze dried food. Should I cash in my CD's and buy gold or silver or food or what.
-- Greg Wiatt (firstname.lastname@example.org), January 05, 1998
i do like gold, but the ability to reduce it down to make small purchases is problematic. i prefer pre-1964 u.s. silver coins and ammunition especially .22 lr ammo. the coins for the ability of the public at-large to rcognize it as a tangible asset, unlike paper money and because of the very high silver content in them. i like .22 lr ammo because MANY people will re-discover their old guns in the attic and because the ammo is so cheap right now. i recently bought a box of 550 remington rounds for 8$. now imagine when it all goes bust, you need a couple a gallons of gasoline and all youve goy is folding money. the seller will sneer at you and walk away....but you show him a handful of shiny bullets, he will see the value of that. it seems that everyone has a .22 rifle sitting around and a little rifle is better than NO rifle. good luck.
-- michael miller (email@example.com), January 05, 1998.
HI apparently this is starting to happen with credit cards with year 2000 expiration dates,it was on some local news stations.They said it was a "minor software problem".I wish i knew what to believe is it a major problem or is it just a minor problem like the news said how will we know???Ed yourdon what do you think of this news report???
-- Marc Cloutier (firstname.lastname@example.org), January 05, 1998.
Buying gold and silver are very good alternatives. Just be sure to pay cash for these purchases and spread it over many vendors so it doesn't have to be reported to the IRS. I'm not sure what the cash purchase limit is that has to be reported. (One of the government's ways to punish the innocent while trying to get drug dealers.)
As Michael pointed out with his buying of ammunition, I would also buy things that could be bartered, such as extra food, toiletries, etc.
I would want my "money" in tangibles, not the bank.
Last year an Iowa bank had to re-issue all of it's v\VISA cards because the retailers and ATMs couldn't accept them.
-- Rebecca Kutcher (email@example.com), January 05, 1998.
Keep in mind that the federal government confiscated all privately owned gold in the 30's due to the depression.. If you're going to invest a lot of money into gold, be sure to research this problem beforehand.
-- Rich (firstname.lastname@example.org), January 06, 1998.
I have not fully researched this question, but one flier I have claims that the Government makes a distinction between bullion gold and collector gold. The claim is that bullion gold such as Gold Eagles, Mapleleafs, etc. can be confiscated and that some form of registration must be completed on purchase (I have not done this - yet - so I don't know, this is just from the flier). On the other hand, he claims that gold coins which are old enough, they count as collectors items and neither have to be registered nor are they subject to confiscation.
Once again, I have not personally verified this information, but the source seems authoritative on the subject.
-- David Lee Anderson (email@example.com), January 07, 1998.
You do not have to register your purchase of gold coins if you buy them from a dealer. I have never had to register andy coins I have purchased. Perhaps if you buy them direct from the mint??? I would check with a local coin dealer.
-- Rebecca Kutcher (firstname.lastname@example.org), January 08, 1998.
Someone asked about the credit-card "00" expiration problem in the midst of this thread, and I thought I would respond -- I was interviewed about this on TV last week, and it seems to have gotten a lot of attention.
In a nutshell: none of the major credit cards companies anticipated this problem (duh!), and it first hit them in 1996 when their member banks began issuing 4-year renewal cards. Visa apparently had to withdraw 12 million cards at that point, and all three of the big organizations (Visa, MC, and Amex) began working on a solution.
At this point, they're okay; and as far as I know, the thousands of member banks who actually issue the cards are okay. The big problem, all along, has been the credit-authorization machines (card swipers) owned or leased by some 14 million merchants, together with whatever sophisticated "in-store" POS systems those merchants might have.
Visa claims that 99% of the merchants have now upgraded, and they've begun issuing "00" cards at the beginning of this years, as has MC. Amex has not yet done so, because they're not convinced that a sufficient number of their merchants are ready.
But in any case, all of this is actually GOOD news: if all of the organizations around the world were at the stage where they had finished their code-fixing and their testing, and were ready to unleash new systems upon the world in order to "flush out" the 1% problem situations, we would have nothing to worry about.
In this case, they were dealing with an utterly trivial aspect of the Y2000 problem: the credit-authorization systems were simply rejecting the cards, because they assumed that the expiration date was 1900. None of this involves the complex date-arithmetic logic you're going to find in a lot of financial systems...
-- Ed Yourdon (email@example.com), January 11, 1998.
You don't have to register when you buy gold unless you purchase more than 10,000.00 dollars at a pop. There are a lot more restrictions when you sell it, but that shouldn't apply to most of us. Be careful not to appear to be structuring your purchase when you buy (ie, purchasing 9,000 dollars worth on 3 consecutive days to avoid the reporting requirements). The IRS pays rewards to clerks and dealers to report anomalies like this. Withdrawing cash from your bank account falls under the same rules. If you withdraw more than 10K from your account at one time, you have to fill out an IRS form 8803 (or something like that, I don't have the reference with me, so be on the safe side and look it up.) Again, it's a pain in the behind, and you might get audited because of it, but that's better than having your account frozen and your assetts siezed because someone accuses you of being a drug dealer. The better solution: keep your withdrawls small and spread them out.
-- Rob Minor (firstname.lastname@example.org), February 11, 1998.
Regarding the Visa issue, I have "00" new Visa card and use it in many places with no problem. When I got it I assumed it meant Visa had figured out the problem and fixed it. It is used in many different types of estalishments on business travel etc. and is always accepted.
O gold and silver, remember that 1/10 oz gold coins at current gold prices is only about $30 so they certainly could be used for small purchases.
Regarding barter, I once heard someone suggest cigarettes as a good item to store for trade even if you are not a smoker but I don't know the shelf life.
-- Richard Taylor (email@example.com), February 22, 1998.
When using cash to purchase gold, then the $10,000 restriction applies, but if you wire transfer money, there is no limit. Have the money wired from a money market or bank to the dealer and pick up your coins when it is completed. Often the dealer will lock in the price prior to the money being available-sometimes up to two weeks in advance. In all things know your party with whom you are doing business. What happens when you take deliver is that the dealer here just asks if I want it in my name or cash. I state cash. Good luck and God bless.
-- Gene Peterson (firstname.lastname@example.org), March 26, 1998.
Hi All: I plan to buy gold and silver in Mexico using American dollars. If I do it soon enough I hope to get better value. I also intend to leave the gold in Mexico and if and when the "Bottom falls out" I will pick up my gold and head for some white sandy beach with a lot of beer and tacos. Seriously, rural Mexico is better prepared than we are for this debacle. They know how to live with kerosine lamps and wood burning stoves, bad sewege and bad water. The food supply isn't "Just in time" delivery. If the "bottom does not fall out" I will get my gold, sell it and only be out a few bucks. I would really appreciate some feed back on my plan, especially from critics and those who know more about buying and selling precious metals.
-- Bill Solorzano (email@example.com), April 01, 1998.