Gold bubble?

When the poop hits the air oscillator, things always go to a barter system until a new currency arrives.  If it all comes down, gold will be the least of my worries. Water, food, shelter, energy, ammunition, knowledge... will be really important. You really can't stockpile enough to survive a major catastrophe of global scale.  
 

Gold is not an investment. It is a commodity. Gold is not an inflation hedge. It's value is based on fear and greed. People rush to it when the market dips out of fear at exactly the time they should hold the course or buy investments.  The people selling it play on that fear. They are greedy shiny happy people preying on mostly old, poor people. Nothing more, nothing less.
 

The easiest way to short gold is to buy actual investments and hold them for long periods. 
 

Last outrage of the week thread of the year, huh?

Steve_Jones said:

In reply to GameboyRMH :

Why do you hope for everything people do to fail? Gotta be a E36 M3 way to go through life. Maybe if you start trying to see success vs failure in everything, 2024 will be a better year for you. 

I don't hope for everything people do to fail, and shorting a stock isn't hoping it will fail, just expecting that it will. I only hope that people fail at doing harmful things, or to some extent, stupid things. Buying gold because it's being hyped up by people with a vested interest in the value of gold, or because you think it will hold or increase its value in a post-apocalyptic scenario, is a stupid thing.

SV reX said:

Total collapses make good movies, but won't happen in real life. Even the Great Depression wasn't devastating to the majority of people.  My grandparents barely knew it happened (and they were not wealthy). They continued going to work, and living their lives.

"Somebody told us Wall Street fell, but we was so poor that we couldn't tell."

The most obvious way to me to short gold would be to short something attached to it - e.g. gold mining stocks. I presume there's some sort of commodities exchange that would allow shorting gold more directly, but I'm not sure what it would take to get an account there or if you need to be something like an accredited investor.

The trouble with preparing for a real SHTF scenario is predicting what sort of dystopia will arise afterward. It doesn't help to stock up on 1970s Australian Ford Falcon parts if what you really need are bottle caps or a mailman's uniform and good bluffing skills.

You can buy gold etfs. Might be able to do it that way.

Or one could avoid playing silly buggers and just put your money in a dividend paying tech or real-estate etf and be happy.

Robbie (Forum Supporter) said:

And the narcicism to watch the votes on your own posts and then whine about them is a less depressing way to live?

 

I didn't watch the votes, I noticed it was hidden when I opened it to see replies. I thought it was more funny than anything. 

This is why I'm uncomfortable trying to logically predict the price of gold. Even if you assume the bullion sector works logically (big if in my mind), there's still half of the worldwide demand riding on the back of Ralph Lauren's summer collection or some other whim.

I'm just not the right person to predict when gold jewelry will be popular and when someone will decide to boycott because it's killing the monkees in Tanzania or something.

Another interesting thought. OP mentions starting to see more and more ads offering to sell him gold, and then also sees article in news feed about people buying gold. 

Could it be that OP somehow triggered a machine learning algorithm that "decided" he was a target for gold-related content and now he is experiencing a real uptick in gold related content, but his experience isn't necessarily consistent with that of everyone else?

Interesting how this kind of thing can have a world-view impact on anyone. 

In reply to Robbie (Forum Supporter) :

Maybe. 
 

I don't see ads for gold, nor articles in my newsfeed 

Y'all can stock up on gold in preparation for the collapse of civilization.

I will stock up on Whiskey. Much better preparation.

• More useful to more people
• If society truly collapses, I don't want to be sober for the end
• When society doesn't collapse, I still get to enjoy whiskey

This has been going on for some time. I remember hearing about it during Covid and, of course, they were blaming Covid madness for it.

I'm not really sure what you're accomplishing buying a small piece of gold in a retail store.

The fact that someone is asking on here how to short something on the market shows that they don't know enough to be trying it in the first place.

I know just enough to manage my own finances and I don't know anything about shorting a stock, nor do I have the slightest confidence that I could do it and come out ahead.

The guys who can do that have learned a lot of expensive lessons and are really good or really lucky.

You can play the entire market by buying 10-20 ETFs and REITs. The ETFs are managed buy people who know when to buy, when to sell and the fees are minimal compared to mutual funds through your bank. REITs invest in real-estate, things like warehouses, commercial properties, apartment complexes and malls. Everyone needs a place to live and everyone shops on Amazon so logistics facilities are in demand.

Personally, I never buy anything that doesn't pay a dividend. Why buy into a company or group of companies that doesn't pay you back for borrowing your money?

I only fiddle with things every quarter, maybe. Mostly it's once a year and that's usually to reinvest the dividends into whatever is cheap at that time but still paying well.

This is more than most financial advisors will bother to do for you and if you're not getting a return that's better than inflation, all they're doing is losing your money.

Don't mess around day trading unless you're comfortable taking some big losses until you learn what you're doing or give up.

Central banks buy gold and issue fiat currency and somehow the fiat currency is better?  So everyone trusts central banks?  CBDCs are going to be awesome!  We are already have currency that is over 90% digital, how is that working out?  100% digital, I'm sure that will be better.  
 

Good is properly like land, oil, wood or steel (cars too).  Fiat currency is just an easy way to trade property or labor for other things.  It's value is merely convenience.  

AnthonyGS (Forum Supporter) said:

 

Good is properly like land, oil, wood or steel (cars too).  Fiat currency is just an easy way to trade property or labor for other things.  It's value is merely convenience.  

 

The fact that we can't find gold or generate an agreed bitcoin fast enough to not constrain the build of an economy is a real problem.  As you point out, the whole point of a fiat currency is to exchange labor for stuff a whole lot easier.  Dollars are constantly being "printed" so that I can get paid for work, and then I can go out and buy something with it.

The "trust" in the dollar isn't about the government, it's about the economic system that it runs.  The government is there for insurance and constraint.  

alfadriver said:

AnthonyGS (Forum Supporter) said:

 

Good is properly like land, oil, wood or steel (cars too).  Fiat currency is just an easy way to trade property or labor for other things.  It's value is merely convenience.  

 

The fact that we can't find gold or generate an agreed bitcoin fast enough to not constrain the build of an economy is a real problem.  As you point out, the whole point of a fiat currency is to exchange labor for stuff a whole lot easier.  Dollars are constantly being "printed" so that I can get paid for work, and then I can go out and buy something with it.

The "trust" in the dollar isn't about the government, it's about the economic system that it runs.  The government is there for insurance and constraint.  

The insurance can't fill a pot hole or keep the streets clean in the big cities.  If the insurance isn't very good, what is tte product really worth?  Ideally my parents would've bought a lot of land and just stacked commodities on it.  That would've been the best investment.  There is a reason the richer people (banks) will give you all the fiat currency you want for real goods. 

In reply to AnthonyGS (Forum Supporter) :

What are you getting at?  I wasn't talking about taxing people so that they do things.  I'm talking that the basic ability to work the system to provide some balance in the economic system.  Sure, banks make money- just like they have been since banks were needed.  It sucks sometimes, but it is what our economic structure is all about.  Otherwise a consumption based economy would not be possible.

In reply to alfadriver :

In essence rich people and banks love gold.  The rest of the world makes fun of it. Who is really laughing last in that scenario?  If gold is so bad, I will gladly take all of it anyone wants to send to me. I know how to turn that silly stuff into anything I want.  

Robbie (Forum Supporter) said:

Another interesting thought. OP mentions starting to see more and more ads offering to sell him gold, and then also sees article in news feed about people buying gold. 

Could it be that OP somehow triggered a machine learning algorithm that "decided" he was a target for gold-related content and now he is experiencing a real uptick in gold related content, but his experience isn't necessarily consistent with that of everyone else?

Interesting how this kind of thing can have a world-view impact on anyone. 

I think that can be ruled out, not only because of the technology I'm using or not using, but because of how I saw those things. The ad for the documentary (which seems to be a series) came in through broadcast TV, and the article on gold selling out at Costco came in from an RSS feed containing all of CBC's articles via a self-hosted RSS reader that simply presents everything chronologically. Two systems with no capability to pick-and-choose what I see.

Robbie (Forum Supporter) said:

 

This is why I'm uncomfortable trying to logically predict the price of gold. Even if you assume the bullion sector works logically (big if in my mind), there's still half of the worldwide demand riding on the back of Ralph Lauren's summer collection or some other whim.

I'm just not the right person to predict when gold jewelry will be popular and when someone will decide to boycott because it's killing the monkees in Tanzania or something.

I had the same thoughts, with the vast majority of gold's demand driven by essentially irrational whim-driven uses, it's a risky thing to try to predict the value of one way or another, almost as risky as cryptocurrency (which I was also tempted to short at the peak but didn't for similar reasons...it was a big gamble even though I would've won it). The only things that make gold safer than cryptocurrency at all are a steadier supply, a vastly more mature and well-regulated market, and the industrial uses providing a rational "floor" value, but none of those would do anything to prevent a bubble. Tulips were an ordinary flower before and after tulipmania too. My previous employer's stocks would also be a great example of how amateur investor speculation can take the value of a fairly ordinary thing for a wild ride...

Gold is for the rich.

Silver is for the middle class.

Copper is for the poor.

Think about it historically.

This thread is attempting to reinforce the belief that gold and silver are too confusing and therefore worth less than dollars.  At least you can touch gold, silver and even a portion of the dollars.  They are tangible.  
 

You want to know what reality has done to and what the world thinks of the dollar?  
 

Look at bitcoin.  Bitcoin is intangible, 100% digital and ethereal.  It is entirely imaginary. In 2007 a bitcoin was a dollar ($1). Now one bitcoin gets you $40,000. 
 

If you think mostly digital dollars are great, you'll love all CBDCs.  Meanwhile rich people are using you're worthless dollars to buy up every real good they can obtain.  
 

Yes whiskey is more valuable than dollars will be.  At the current rate of inflation Parker brothers Monopoly money will be more valuable than digital dollars.

Did I mention I'm a trillionaire?  Thats right not millions, billions but trillions!  I've got a Zimbabwe $10 trillion dollar note as a reminder what central banks and fiat currency leads to.  I will give it to anyone for the low cost of one measly ounce of gold any day you like.  

Real wealth is retained when you hold lots of assets and not money.  With enough assets you can get access to all the cash you want.

Gold and silver aren't confusing. They just have a marginal utility above a stock certificate.  Gold and silver can be used for things but not much.   Stock certificates are pure hopes and dreams same with currency.  Money issues by central banks is mostly hopes and dreams. 
 

basically if anyone on mass starts believing in the value of an item it plummets in value.    It's how it is and how it always has been 

AnthonyGS (Forum Supporter) said:

 

Real wealth is retained when you hold lots of assets and not money.  With enough assets you can get access to all the cash you want.

 

 

What makes an "asset" have value?

anywyas you don't have to answer it. A quick search of zerohedge will provide whatever answer you were going to give.  
 

my point is value isn't absolute. 

ShawnG said:

 

Personally, I never buy anything that doesn't pay a dividend. Why buy into a company or group of companies that doesn't pay you back for borrowing your money?

Nothing wrong with dividend stocks, but there are really good reasons why really, really great companies retain earnings. 

If a company has a dollar of profit they can either pay it out in dividends, buy back it's own stock, or reinvest in operations to hopefully make more dollars, thereby increasing the value of the company. Paying out dividends is the most tax-ineffecient method of returning value to the shareholder. Assuming the CEO is good at asset allocation they will almost always chose to reinvest by buying back shares, reinvesting in operations or possibly just purchasing other businesses. 

Examples include Berkshire Hathaway, Teledyne, etc.

The difference between theory and practice - is that in Theory there is no difference, but in Practice there is.

In theory, fiat currency seems like an absurd idea that shouldn't work. It certainly shouldn't work better than commodity-backed currency.

In practice, fiat currency works. Fiat currency has allowed nations to weather larger financial upsets with less hardship than gold-backed.

As for crypto-currency - you can't use it to buy basic, functional goods. You can not use it to buy food or fuel.