[RacerJace]

Since awakening to the PO post world realities and considering my family's future prosperity I have found that precious metals is the most commonly heralded option for preserving wealth. It seems the PO aware are very much the gold bugs.

I have read many many articles and essays on the history of currency and all the attraction of gold, its intrinsic value and it's popularity as a safe haven for those that wish to escape the effects of hyperinflation. I don't need convincing... the proof is written in the history books for all to see.

I have invested aproximately 1/3rd of my liquidated assets in gold and silver. Unfortunately for me I did it just before the prices took a dive from $710 to the current price of ~$650. So I'm a few thousand dollars in the hole. Interestingly I don't feel particularly stressed about it. In fact the virtual loss has reinforced my desire to stay invested in gold and silver for the long term.

I have a relatively pessimistic expectation of the global economies in the next few years and I am particularly concerned about the coming collapse of the US currency. Tonight I read an essay The Economy as Cartoon by the 'crazy, foaming at the mouth, standing on the roof screaming at the world in a tutu firing AK47 rounds in the air', Mogambo Guru. He cracks me up, but under his feverish ranting is a clear 'bang your head against the wall' message about how to preserve your wealth. And damn it, it makes me feel like putting the whole lot on the shinny yellow metal.

I know there are many of you out there that would say "you can't eat your gold... what are you going to do, carve off some gold swarf to buy a litre of milk and some eggs for an omlette?" No, but eventually I do hope to pay for a nice couple of acres of fertile land near a freash water supply and some free ranging beasties to farm or hunt. And in the meantime I intend to acumulate all manner of useful things that will help facilitate a self sustainable lifestyle with whatever profits and savings I can gain.

Amidst this dreamy rant I have a feeling of uncertainty... And that is would I be better off just spending my money on those useful things now, or should I be a good conservative present day investor and do the diversified portfolio thing? My tempation is to keep it simple and go all or nothing on the shiny stuff. But my family would probably have me burned at the stake.

'8O'

[warmh2o]

Its a tough call. Precious metals provide a bedrock of wealth and financial security, but it makes it much tougher to watch the prices go up and down with such volatility. Ultimately I think you have to take both the long term and short term into account. For the long term metals are a very solid way to store wealth. For the short term it doesn't make sense to sell gold to buy a loaf of bread. Its far easier to use paper in the short term. If there is a paper currency crash the instability will money less and less effective. Other than currency and metals you could purchase items or equipment that will allow you to produce something to sell. If you're on a salary rising inflation will eat up your money. If you are producing something and selling it then you will be able to keep up with inflation. Make sure its something people will need to buy though, like bread or lumber or coffee - I wouldn't buy a monocle factory

[newhunter-gatherer]

I say buy physical silver to insure yourself against recession or depression. There are a number of factors to consider why it would be wise to invest in this metal. The price of silver could go nuclear at any time.


*Large quantities of silver are consumed in industry, unlike gold which is mostly recirculated after it has been mined
*Silver inventories are at an all time low
*There is much more gold above ground than there is silver
*Silver is tremendously under valued and practically free at the moment.
*People will want to move their investments into something more trustworthy, reliable and payment in full when the value of the dollar enters a freefall.And if everyone else has the same idea, this will only put further upward pressure on silver prices
*The extraction of silver is an energy intensive process. The price of silver has been highly correlated with the price of oil in the past.
Imagine what would happen to the price of silver when fuel shortages begin to reduce mining output
*Silver ETF may cause further shortages of silver in the market place

[JohnnyReb]

$this->bbcode_second_pass_quote('RacerJace', 'I') am particularly concerned about the coming collapse of the US currency.

[DantesPeak]

The price of many basic goods are up 10 times in price over the last 40 years, and the price of oil, gold and homes up 20 times.

I'd call that a crash in the value of a dollar.

[kam30en]

$this->bbcode_second_pass_quote('', 'I') have invested aproximately 1/3rd of my liquidated assets in gold and silver. Unfortunately for me I did it just before the prices took a dive from $710 to the current price of ~$650. So I'm a few thousand dollars in the hole. Interestingly I don't feel particularly stressed about it. In fact the virtual loss has reinforced my desire to stay invested in gold and silver for the long term.

[RacerJace]

$this->bbcode_second_pass_quote('JohnnyReb', '')$this->bbcode_second_pass_quote('RacerJace', 'I') am particularly concerned about the coming collapse of the US currency.

[pogoliamo]

Are you seriously concerned about your wealth? What is your wealth? Seriously, how much is your wealth is an important question and it matters a lot, think about it. Do you estimate what you have as a fortune? Or is it just some money you have put aside for tough times?

Another concern? What characteristics of your wealth you want to preserve? Value? Liquidity? Inheritability? Return?

In my view the best way to preserve wealth in general is to diversify. Buy an apartment, a piece of land, gold or silver, books and tools, bicycle, make sports, help you friends when they need, some few shares in a business you rather know, invest in your health, or learn a new language, it is also an investment
etc, etc

And how about traveling? Buy few airplane tickets, Latin America, East Europe, Africa. If you are rich I guess there you will discover the *real* value for your wealth.

Ah, sorry, my suggestions may sound more like ways to spend your money
Good luck, anyway!

[MrBill]

$this->bbcode_second_pass_quote('', 'S')cientists were way off the mark in their forecasts of last year's hurricane season, which caused more than $100 billion in damage in the United States. The official season runs from June 1 to November 30.

The 2005 season spawned an unprecedented 28 tropical storms, of which 15 became hurricanes. NOAA had predicted 12 to 15 tropical storms, of which it said seven to nine would be hurricanes. Seven of last year's hurricanes were considered "major," while NOAA had predicted only three to five would reach that level.

[RacerJace]

$this->bbcode_second_pass_quote('MrBill', '')$this->bbcode_second_pass_quote('', '[')snip]

You say the economy is growing slowly, but acutally it is growing quite quickly. It depends on your frame of reference and what you consider normal (also sustainable)? ... [snip]"

[RacerJace]

$this->bbcode_second_pass_quote('pogoliamo', 'A')re you seriously concerned about your wealth? What is your wealth? Seriously, how much is your wealth is an important question and it matters a lot, think about it. Do you estimate what you have as a fortune? Or is it just some money you have put aside for tough times?

Another concern? What characteristics of your wealth you want to preserve? Value? Liquidity? Inheritability? Return?

In my view the best way to preserve wealth in general is to diversify. Buy an apartment, a piece of land, gold or silver, books and tools, bicycle, make sports, help you friends when they need, some few shares in a business you rather know, invest in your health, or learn a new language, it is also an investment
etc, etc

And how about traveling? Buy few airplane tickets, Latin America, East Europe, Africa. If you are rich I guess there you will discover the *real* value for your wealth.

Ah, sorry, my suggestions may sound more like ways to spend your money
Good luck, anyway!

[MrBill]

$this->bbcode_second_pass_quote('', 'M')y gutt feel is the better option is more gold and silver but I'm hounded by the investment mantra "diversify.. diversify... diversify".

[JBinKC]

RacerJace be honest when did you come to this enlightenment on gold or did you feel you missed the boat by chasing a hot market? I can say you won't do a good job of preserving wealth by following the herd because experience tells me most of the time the herd will get burned.

I agree with you thinking on gold for the long term so gpood luck but I probably would have chosen another commodity that is currently out of favor like a long term natural gas contract because the price is trading at about half of the energy equivalent of oil at this time.

[abelardlindsay]

$this->bbcode_second_pass_quote('RacerJace', '')$this->bbcode_second_pass_quote('JohnnyReb', '')$this->bbcode_second_pass_quote('RacerJace', 'I') am particularly concerned about the coming collapse of the US currency.

[RacerJace]

$this->bbcode_second_pass_quote('JBinKC', 'R')acerJace be honest when did you come to this enlightenment on gold or did you feel you missed the boat by chasing a hot market? I can say you won't do a good job of preserving wealth by following the herd because experience tells me most of the time the herd will get burned.

I agree with you thinking on gold for the long term so gpood luck but I probably would have chosen another commodity that is currently out of favor like a long term natural gas contract because the price is trading at about half of the energy equivalent of oil at this time.

[Dukat_Reloaded]

$this->bbcode_second_pass_quote('', 'I') know there are many of you out there that would say "you can't eat your gold... what are you going to do, carve off some gold swarf to buy a litre of milk and some eggs for an omlette?"

[warnio]

I'm still not 100% convinced about gold.
You say it's guaranteed to preserve wealth over the long term.
But what about those guys that bought gold at 800$/ounce in 1980?
After 26 years they still made a loss.

I'll stick with my euros for now. Because the institution that produces them has the specific task to protect it's purchasing power (although at a loss of 2% per year). But since I also gain some interest on my bank account (I think about 1-1.5% per year) that's only a loss of 0.5-1% per year. I will thus only lose half my purchasing power in 70 to 140 years.

So if I trust the European Central Bank to keep inflation low, it does look pretty safe to just hold euros.

And I have a question. Personally I do not think there will be some sort of economic/fiat currency collapse or hyperinflation. Is it then still interesting to buy gold? I still have the impression that just holding fiat money is the most risk-averse thing to do. Although I think few people here will agree with me

[warnio]

I just got an idea for Americans, who of course don't have any euros to hold to begin with.

What about... "Treasury Inflation-Protected Securities"

This removes the one thing you all fear so much: inflation.
The only risk is that the US government will collapse and thus not pay you back. The only way I see that happening is if the entire world would collapse and then you're screwed anyway.

[Jellric]

$this->bbcode_second_pass_quote('', 'N')o, but eventually I do hope to pay for a nice couple of acres of fertile land near a freash water supply and some free ranging beasties to farm or hunt.

[RacerJace]

$this->bbcode_second_pass_quote('Jellric', '')$this->bbcode_second_pass_quote('', 'N')o, but eventually I do hope to pay for a nice couple of acres of fertile land near a freash water supply and some free ranging beasties to farm or hunt.