OT: Which Would You Hold--Mortgage or Gold?greenspun.com : LUSENET : TimeBomb 2000 (Y2000) : One Thread
Here's a nice (real life, for me) question for you.
I converted some assets to gold (metal and stocks) some time ago. If I liquidated now I'd just about be at parity with my purchase price, so I'd have to see a rise in price from here to actually make any money.
If gold went to greater than $375/oz. I could liquidate these assets, pay off my mortgage, and even have a bit left over to pay the IRS if it survives. Then I'd be debt free and the only absolute obligation I would have is the rent (er, property taxes).
OTOH, the goldbugs here indicate that I'll be a bazillionaire if I hold the gold.
Personally I'm inclining toward debt reduction, if the price runs that high. What would you do and why?
-- Take Ur (firstname.lastname@example.org), October 01, 1999
If a total bank collapse is the scenario, then wouldn't it make the most sense to borrow to the max, re-finance your house, etc?. You'd never have to pay it back.
-- Lars (email@example.com), October 01, 1999.
Becoming a bazillionaire from gold would require you to live outside of the United States and to be paid your wages in a stronger and stable currency like the EURO.
Holding gold here in the US will simply keep you from going under. It is going to be a wealth retention tool, not a commodity from which you can play the odds on.
-- OR (firstname.lastname@example.org), October 01, 1999.
Hmmph. I should have left out the crack about being a bazillionaire. I did not buy the metal to get rich; I bought it to preserve wealth at a time when I did not have a property worth paying off.
But now I have a nice property which I would prefer not to have confiscated because I cannot pay the mortgage or the rent (damn, I mean property taxes!).
Taking out additional debt in the wild hopes that one would not have to pay it back is both immoral and foolish. So scratch that idea.
Is there any good reason to go into 2000 with debt, if one can avoid it?
-- Take Ur (email@example.com), October 01, 1999.
Well, If on Friday of last week you took $10,000.00 and invested it in 180 December gold calls @ a strike price at 320 your net gain for that 1 transaction would be $138,600.00 at todays closing. Monday it would have been worth $199,100.00.
All paper will burn within 4 months. Anyone that can't see that the entire financial system is on the brink of total collapse and is not buying gold and silver, deserves to loose everything they own. And, MARK MY WORD, YOU WILL LOOSE EVERYTHING YOU OWN UNLESS YOU BUY AND TAKE POSSESSION OF SILVER AND GOLD WITHIN THE NEXT FOUR WEEKS. By November the first 1999 THE CHANCE TO PRESERVE YOUR WEALTH IS GONE FOREVER. YOU AND YOUR FAMILY WILL LIVE IN POVERTY FOR THE REMAINDER OF YOUR DAYS ON PLANET EARTH............ guaranteed ........Remember, you were warned.
-- nospam (firstname.lastname@example.org), October 01, 1999.
I've never bought (or played) in the stock market. Do you think that gold calls would still be a good risk at this late date? If so, what "strike price"?
-- Lon Frank (email@example.com), October 01, 1999.
In re: "Personally I'm inclining toward debt reduction, if the price runs that high. What would you do and why?"
Inflation benefits the debtor, deflation benefits liquidity.
Take your pick and position accordingly.
I believe price deflation in stock market and paper assets, inflation in commodities basis today's prices.
-- Tom Beckner (firstname.lastname@example.org), October 01, 1999.
HOLD the gold.
in the post-crash scenario you will be rich and can pick up assets for pennies on the dollar. Use your brain :)
-- Andy (2000EOD@prodigy.net), October 02, 1999.
Personally, I like to hedge my bets. Pay ahead on the mortgage and keep some gold, too. That's what I'd do and why.
-- T the C (email@example.com), October 02, 1999.
T the C, that's exactly what I'm going to do. Great minds think alike.
-- Take Ur (firstname.lastname@example.org), October 04, 1999.