http://www.bowlvisions.com/gldslv.htm -- Are You Nuts?

Sure, precious metals have intrinsic value, BUT...

Today's market prices do not strongly reflect those intrinsic values. Gold, in particular is overpriced, with a viewpoint that includes:

current processed supply real cost of acquisition productive demand

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Metals used to have very stiff value because they were currencies. This is no longer true, almost universally. Even the secondary currency relationship of reserves has been mostly discontinued. And, since the various economies of the world are now interrelated, that minority is further diluted.

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The banking community should start offering goodies. They need a little room to do this. They have it.

You may be about to see Millenium Bridge Awards. Soon, your bank could offer premiums to invest your savings in CD-like vehicles which mature in 2001. These offers might become very attractive, so try to assess the best ones.

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The millenium will be a collector's dream too. Financial institutions can offer Bridge depositors limited edition coins and ingots - fine precious metals artfully cast into commemoratives. Incentives like these are cheap for the banks right now and have real value for the recipients as well.

You will certainly have opportunities to profit and to own at least a piece of history. Even if that is "only" your profit!

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The bottom line - whoever is ready can really come into the new milleneum successfully. Twenties in your mattress will just be eroded by inflation, which is unavoidable.

-- Cherri (sams@brigadoon.com), June 18, 1999

Answers

Cherri

I would consider Gold as a hedge agianst possible problems. Having little "real time value" is certianly true and no doubt plenty have got stung in the investment of Gold.

Of course the mystery with gold right at this moment is why the Bank of England would anounce sellling half their gold stock when even an idiot would realize that the price would drop. And drop it did so the Bank has now lost hundreds of millions of dollars. Good Scottish upbringing finds the actions of the BOE totally strange.

Of course the US keeps 8000 tons of the stuff, must have some kind of value.

-- Brian (imager@home.com), June 18, 1999.

Gold is only over priced if you fascetiously peg it to silver at the old ratio's back in the 1880's which is about from 16:1 to 20:1.

Read this link:

Gold - The Last Four Bottoms - And A Fifth??

Then click on start and read the entire series:

Gold Past and Present

Of course the stuff is "expensive" that's why most put off buying in at ANY price. And it seems so silly. I have one thing to say.

BUY LOW! Sell High.

Gold is REALLY low now. Stocks are still too high. Bonds have y2k risk (if the currencies all implode).

At a 16:1 gold:silver rate, 5 dollar silver should mean 80 dollar gold. However, that is being silly. If on the other hand you keep today's prices, then $250 gold should mean $15 silver. Silver has much greater upside potential. So buy "some" of that too.

A final point, Gold is not overpriced. About 50 percent of south african mines and US mines were no longer profitable back when the price was $320. It is now under $260. These guys have been staying in business by selling gold they will mine IN THE FUTURE. (read the links).

Ignoring inflation, gold is as cheap as it was in 1979. Twenty years of inflation apparently dont exist. That's funny, the world is awash in oil, but there is no comparable surplus of gold.

Figuring inflation it is as cheap as it was in 1978. It is only about 30percent more expensive now (adjusted for inflation) than it was at it's mid 70's low of $102.

Gold is so FUCKING CHEAP it boggles the mind. It may still go lower. It may even go to $80 like I said. It may stick around it's present levels for the next decade (discounting y2k). But the upside potential is at least 6:1 (ie six hundred percent) The maximum upside is unknown. After all, the dollar, which is just an Uncle Sam I.O.U. could go to Zero Value.

(in which any finite amount of gold will make you infinitely rich in dollars... hi hi.)

-- Otay Buckwheat (spanky@lilrsacles.com), June 18, 1999.

Personally, I don't have money to invest in silver or gold. I have other preparations that are more meaningful/valuable to me. I would, however, keep stockpiling lead. Useful for making fishing sinkers, dive weights, fishing jigs, toy soldiers, and bullets.

-- Mad Monk (madmonk@hawaiian.net), June 18, 1999.

Note to self.

If Cherri says that gold is a bad investment, buy as much as possible now!!!

-- Andy (2000EOD@prodigy.net), June 18, 1999.

I'm surprised that Andy has not already put in his usual 50,000 word contributions as to the Wonders Of Gold, from sources such as www.gold-eagle.com. (And in addition to the gold-eagle site, you can get a great education on gold and silver from: www.the-moneychanger.com, www.the-privateer.com, and www.certifiedmint.com.)

I am hardly an expert. Within the past week, I have received (from www.ajpm.com) a significant amount of gold (American Eagles: a few 1 oz, the rest 1/10 oz) and silver (pre-1965 quarters, commonly referred to as "90% junk silver"). But, before I bought, I did a lot of thinking on this.

I think it all comes down to whether you think Y2K is going to be significant or not. Cherri, the link that you posted does not even address it, talking about investment vehicles that will be best going to 2001 etc. If there were no Y2K problem whatsoever, this site would probably make a lot of sense. But for those of us who think that Y2K is going to throw a big monkey wrench into our world, it is a completely different concept -- namely, how do I safeguard my money from ending up wiped out in a stock market crash or into the bank's bit bucket? The idea of trying to figure out an "investment strategy for the new milleneum is laughable!

Personally, I think that Y2K is going to be a very significant problem, and though it is an open question what role precious metals will have in a barter/breakdown scenario, I am trying to hedge my bets. My "Y2K Diversified Portfolio" consists of cash (in denominations of $10 and below, including coins), gold coins and silver coins. My belief is that cash would be fully accepted initially by John Q. Public, but then there would perhaps come a time when confidence would be eroded, and it would probably be back to bartering. At that point, introduction of gold and silver might find acceptability. (But who knows?)

-- Jack (jsprat@eld.net), June 18, 1999.

Andy says:

"If Cherri says that gold is a bad investment, buy as much as possible now!!! "

I am not saying anything one way or the other, as a matter of fact I have no opinion and am not interested in the price of gold. I posted the info I had fould for the benifit of those who are interested so they could read it.

-- Cherri (sams@brigadoon.com), June 18, 1999.

I resemble that remark Jack :)

Cherri, please say you think gold is a bad play, please, I'm begging you...

-- Andy (2000EOD@prodigy.net), June 18, 1999.

All the gold you have won't buy a can of beans from me if things get really tough. Cherri's kinda right but for the wrong reason.

-- Beans? (nosale@myhouse.org), June 19, 1999.

I agree with andy on the gold issue. In Russia last year when their economy tanked and the value of the ruble dropped like a rock,those that had Gold and silver did not lose 80% of their money over night. It is simple risk management. Our paper can become worthless overnight if enough banks tank,The fdic's promise to pay will go into the toilet. With less than 1 dollar physical cash available for every $100 on deposit it doesnt take a rocket scientist to figure out that if bank runs occur our dollar will devalue very quickly. Im very bullish on gold and silver as an asset protection vehicle. Also if things tank real bad your gold coin just might get you safe passage thru a national guard or fed secured area. Gold and silver are the milita's currency of choice and they may be in charge of certain area's after a y2k disaster. Even if you dont believe y2k will tank things keep some Gold and silver aside anyway because your analysis of y2k may be wrong and your family's lives may depend on it. We dont plan for disasters they just happen, and then we react. We buy insurance for fires floods etc. Gold,silver,cash,coins, and survival preps are the only viable y2k insurance given the warnings by experts and evidence of failed compience efforts that leak out daily like 4 million gallons of sewage in just 2 hours yesterday. Your family and close friends are worth the effort. Faith without deeds is dead.

-- y2k aware mike (y2k aware mike @ conservation . com), June 19, 1999.

Cherri,

I see you have time to post but no time to reply to Cory. So could it be that your "story" was just another one of your lies.

-- AberFoyle (AberFoyle@water.com), June 19, 1999.

Gold is no good if you can't eat, or drink, or stay warm. It boils down to simple economics, any purchasing power over and above what you use to provide the things you need and want is held in the form of money. Now it is FRN's, but since those are probably about to go in the toilet, metals are a better bet in the long term. But that is IF you have bought all the things you need to be self-sufficient. There is not guarantee that there will be any kind of buying and selling when the sh** hits the fan, or that it will even be safe to travel off your property to do it. Buy everything that you think you will need, and then if any money is left over, put that in metals. Once things settle down to a dull roar, and people start buying and selling things again, it will come in handy. Otherwise, don't worry about it.

-- Ag (theprofits@hotmail.com), June 20, 1999.

Ag makes a point often missed here. Every item worth having has an intrinsic value (what it can be used for in and of itself), and an exchange value (what it can be traded for). One of the qualities of any good medium of exchange is that the intrinsic value approaches zero. If this weren't so, people would use up that medium for its intrinsic value, and it would no longer be available to trade. Intrinsic and exchange values are mutually exclusive -- if you trade it, you no longer have it to use. If you use it up, you no longer have it to trade.

Gold has almost no intrinsic value (except in jewelry and some industrial applications). Nobody here is talking about buying gold for jewelry, but rather because it historically has retained exchange value better than anything else.

-- Flint (flintc@mindspring.com), June 20, 1999.

Yes Cherri gold has no value. That must be why the worlds richest people have been stockpiling it for the last several thousand years.

-- a (a@a.a), June 20, 1999.

Gotta love it.

I write that gold has almost no intrinsic value, and a huge amount of exchange value, which it has historically retained.

So 'a' extracts the part about the intrinsic value, ignores the rest, and claims I said gold has no value. Makes me wonder if 'a' is such a doomer because he *really thinks* this way. Ignore what you don't like, misrepresent (totally!) what you do like, and pretend you're smart? What a maroon.

-- Flint (flintc@mindspring.com), June 20, 1999.