OT: Goldbugs... much ado about nothing

greenspun.com : LUSENET : TimeBomb 2000 (Y2000) : One Thread

In 1980, gold reached a high of $850 an ounce. Nearly twenty years later, the "gold bugs" are excited about reaching $300. Of course, gold was over $400 an ounce for most of the 1980s. If you listened to Gary North, you missed profits in every other investment under the sun (with the possible exception of swamp land in Florida.) Lest you doubt me, you can find the average price of gold at:


If you find this results disappointing, imagine how you'd feel if we factored in inflation. OK, let's say you bought gold at the "bargain" price of $317 an ounce in 1985. Just to keep pace with inflation, gold prices would have reached $485.49 last year. If you gold at its peak of $850 in 1980... you paid the equivalent of 1862.93 in 1998 dollars. Ouch!

In other words, folks, until gold reaches $500 an ounce or more, it hasn't even kept pace with inflation. Admittedly, gold may be underpriced and investors may feel they can make a profit. On the other hand, the same people have been touting gold for 20 years... saying the "big rally" was just around the corner. It seems the best way to make money on gold is in the sales commissions.

Caveat emptor.

-- Ken Decker (kcdecker@worldnet.att.net), September 28, 1999


Do I hear the sound of sour grapes in the distance?

The point is, we didn'tbuy at $850 or $500... we bought at under $300.

Latest: $305.28. Any regrets, Mr. Decker Sir?

-- Holy Shhhh (you're@too.late), September 28, 1999.

Ken, I believe most people here are interested in gold for wealth preservation rather than as a growth instrument.

-- lisa (lisa@work.now), September 28, 1999.

Let's see I bought my gold between 258 and 270 and you say its been 850 before,and it could go there again? and this is a bad investment on my part? I'm sorry but dude your not making any sense to me maybe its this state of euphoria I'm in.

-- todays Tom Sawyer (RUSH@2112.rockon!), September 28, 1999.

Maybe but I am laughing all the way to the bank so to speak. At $350 to $400 an oz with mines I will have turned $60,000 into about 3 million. That ain't hay. Laugh all you want.

-- goldbug (goldbug@mint.com), September 28, 1999.

He's right, but it doesn't matter. A Unique Event is on the horizon. I would not have bought gold coins otherwise, & neither would most of the people who've been purchasing them all summer. I would not have done a lot of things. This has been a unique year, a truly surreal one.

Were it not for y2k, I would be satisfied with owning gold only in the form of necklaces & earrings. Stick it in your ear; that's where gold really belongs!

-- it also goes (well@with.diamonds), September 28, 1999.

DROOY 2 11/32 10:00est.

-- todays Tom Sawyer (RUSH@2112.rockon!), September 28, 1999.

Hey Ken - sometime in late 2000, lets compare the value of your T-bills with the value of our gold.


-- a (a@a.a), September 28, 1999.

Goldbug -

Maybe I'm a stockmarket dunce, but what calculation leads you to derive $3,000,000 from $60,000?

Also, are you intending to be in the stockmarket at all for much longer? It just seems a bit of a contradiction to me: aren't goldbugs buying gold as a hedge against stock market collapse amongst other things?

-- I'm (just@curious.now), September 28, 1999.

I really have to laugh at this! For months I've been reading about how all the doomers think the traders on Wall Street are sheeple and at the same time chastising them for being in the stock market. The doomers have been waiting with baited breath for the market to crash.

Now those who bought gold are screaming from the mountain tops. Hypocricy at it's finest. It's all about money, no matter what side of the fence you are on. [snicker] Better be careful, gold could go down as fast as it went up.... just like the stock market.

-- (sickofthis@crap.com), September 28, 1999.

its the dollar stupid.

we will soon be using it to seal the cracks in our drafty walls or use it as fire starter for our wood stoves .

the world is so flooded with debt notes that they will all be reedamable for only more paper. In the mean time my stocks, G,G &G will be priceless.

-- Guns, Grub & Gold (home@the city.com), September 28, 1999.

If the only interesting information about gold was today's price, then you might be right that this is nothing to make an ado over. To me the really interesting "something" in all this is how gold's price has behaved over the last 30 weeks or so in contrast to how it has behaved this week. The contrast is nothing short of astonishing!

When the price of a commodity like gold drifts along quietly sinking for years and then in the space of a week it rockets up like it was shot out of a gun, then something fundamental has changed in the marketplace. That kind of behavior, Ken, is interesting. It is telling us something important, if we can only screen out the noise. It doesn't meet my definition of much ado about nothing.

-- Brian McLaughlin (brianm@ims.com), September 28, 1999.

It's a big deal--spooky and bizarre... it's happening, guys, just as it has been called--the fall of confidence in the market--and the price of gold reflects that even more than the sinking DOW.

-- Mara Wayne (MaraWayne@aol.com), September 28, 1999.

I'm slightly embarrassed at how well I've done in the market throughout the 90s. Equities have been very good to me... but I am wise enough to have taken my profits earlier this year.

As I said before, I am not sure how gold will do over the next few years. As a matter of record, it has been a terrible investment for the past 20 years.

People also forget a fundamental rule of investing. Price is determined by a seller AND a buyer. You may acquire direct holdings in gold... but the worth depends on an exchange. When you have your gold... who's going to buy it from you? Will you exchange gold for dollars? If not, what do you plan to exchange for your Eagles? And will the person who has what you want accept gold coin?

Oh, "a," if treasury bill become worthless we have problems a stash of gold coins won't fix.

Brian, I think inflation fears are real... and gold is probably a cheap hedge for a number of reasons. The thing to watch for is a speculative bubble as the players move in to ride a gold wave.

-- Ken Decker (kcdecker@worldnet.att.net), September 28, 1999.

I'm snarfing the latest Gold chart from www.kitco.com. As of now, it appears to be moving up rather steeply with about 1 hout till NY close:

-- Zach Anderson (z@figure.8m.com), September 28, 1999.

For all you with sour grapes, I bought gold at the first of the year and have waited patiently month after month for this to happen. It feels good to be both preparing for a 10 and having financial assets growing at the same time. If this bothers you, kiss -- ---.

-- psychotic (we're-doomed@y2k.com), September 28, 1999.

sickofthis@crap has brought up some good points that ought to be addressed. As someone who lives on a mountain top, has bought gold (and silver), and is in fact pleased to see the price-of-gold skyrocketing, I thought that I might do just that.

First of all, as one can see by lurking at the Gold Forum at www.gold-eagle.com, there are plenty of people who are totally clueless about Y2K, but have been "contrarian" investors, and have bought gold stocks (i.e., paper not physical), with the belief that Their Day will come (and maybe it has). Someone posting today expressed joy at the recent turn of events, and predicted retirement was at hand for him, and saw January 2000 as a life of leisurely golfing -- not exactly a Y2K "doomer". The point is that not all "goldbugs" necessarily know nor care about Y2K. They are, indeed, "in it for the money".

Precious metals are, indeed, an investment, and their price as expressed in fiat money can indeed go up or down. Of course, in my own case, Y2K was my motivation for small weight gold and silver coins, as I see it as an important hedge in the barter/meltdown scenario that Y2K may bring. As noted in another post above, the Y2Ker seeks to preserve and protect wealth through upcoming hard times, not "grow" it as one does with conventional stocks.

Finally, there are plenty of "doomers" who could not care less about precious metals, believing that one is better off "investing" in ammo, tools, etc., as barter items. The point is, you cannot really generalize that "doomer"="goldbug".

-- Jack (jsprat@eld.~net), September 28, 1999.


Ken, I have to give credit where credit is due -- even as the stock market crumbles and gold soars out of sight, you still maintain the status quo, even finding a way to sneak Gary North into it all. This is TOO funny!!!

Times, they are a changin', Ken. A lot of this is due to the "smart money" going to where it will be a lot safer.

The long dormant Bear has awakened, it is chasing the Bull down Wall Street, you don't want to get trampled....

-- King of Spain (madrid@aol.cum), September 28, 1999.

Remember, folks, it ain't a profit until you sell it. I'm out of the market, Spain. I'm just not in gold right now. Frankly, if it goes to $1000/oz, power to the gold bugs. It might soothe the pain of 20 years.

-- Ken Decker (kcdecker@worldnet.att.net), September 28, 1999.

Ok, Ken, my question is: are you going to buy gold? You've got money on the sidelines and a rise to 400 or more would yield nice profits.


-- BigDog (BigDog@duffer.com), September 28, 1999.

In "Dowspeak" analogy, here is what happened today: Gold opened at 10,000 - then gained 1,565 points - closing up 851 points.

-- Zach Anderson (z@figure.8m.com), September 28, 1999.


No.... it looks like I'm taking a beating on capital gains already. Besides... what do I know about gold? (laughter) I have a mix of assets including property and raw land that should serve as an inflation hedge. I think we could see a speculative bubble in gold as folks hedge from the equity and bond markets. It could be a heckuva ride, but I'm not sure I can time it well enough. I see no reason to change my game plan. T bills until the market looks "normal" and then select buy my way back in. Feel free to make a speculative play, though...

-- Ken Decker (kcdecker@worldnet.att.net), September 28, 1999.


What is remrkable about gold is not the price climb but the fact that it did it after the BOE bullion sale. Since the start of the year it has seemed to be manipulated at the highest levels. Now reality has set in and events of the past year can be looked at a little more objectively.

Unfortunately a storm has knocked out my cable service so I can't confirm this but England has mentioned they are converting to the Euro. If this is the case then gold has just shown its political colors. I hope someone can confirm this (hate to be wrong :o), and if it is so then we are wittnessing a shot over the bows of the good ship US Enterprise. If there WAS a serious manipulation of gold in the markets then someone is holding the bag. Debt will have to be paid as the leased gold will not be available any longer. Look at this as a matter of supply and demand. Or a big set up.

This will be the real story. We are living in interesting times.

-- Brian (imager@home.com), September 28, 1999.


I'm not sure, but we could see another speculative bubble... this time in gold. There's a great deal of liquidity sloshing in the tank, and a "gold bubble" would not surprise me in the least. Is there anyone left who remembers Ben Graham?

-- Ken Decker (kcdecker@worldnet.att.net), September 28, 1999.

Brian has it right.

Ken continues to prove what a know-nothing buffoon he is.

FWIW I've made money hand over fist with Prudent Bear as the markets slowly sink...

I've made money hand over fist on goldmine shares...

Profits have and are being taken - this is a game of musical chairs and the loser is the last one owning lots and lots of dollars...

And I've accumulated 300 ounces of yellow metal at firesale prices... by that I mean about $270 on average... again making money hand over fist... that's the best I can do at the moment...

While ddecker has been snickering and pontificating in his know- nothing way over the last year, I and my fellow INFORMED goldbugs and contrarian investors have been positioning ourselves for this denouement...

We are now collecting BIG TIME on the fiat funny money side...

BUT we have also provisoned ourselves with the real thing too...

Not only that we are ready and waiting NOW to move in the appropriate direction as all hell breaks loose as we approach y2k...

When the dollar collapses gold will become once again the de facto backing for the new world reserve currency, which will be the gold and oil-backed EURO,

And when the dust settles gold will be revalued at anywhere between $5-30,000 dollars an ounce - take your pick...

Decker you are so CLUELESS it's not even funny.

-- Andy (2000EOD@prodigy.net), September 30, 1999.

Decker: "Oh, "a," if treasury bill become worthless we have problems a stash of gold coins won't fix."

This is the conclusion one could come to only by having lived in a "world of paper" for too long. Time to re-examine your premises, sir.

And congratulations on "getting physical" (land) to the extent you have. Most Americans (90%?) basically have NONE, and they're used to it. I keep trying to remember Will Rogers' and Gerald O'Hara's (Scarlett's father) exact quotes about land, but for now, just having it will do fine.

-- jor-el (jor-el@krypton.uni), September 30, 1999.

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