Does anyone know anything about buying gold?

[GCP]

I'm one of the luckier DUers with a portfolio (boomer who's saved all my life). I'm getting really worried about the slide in the dollar and think we're headed for a big crash. As one of the ones who lost a lot in the last big slide, and retirement (may or may not be looming - depending on how bad it gets), has anyone any experience of buying gold as a hedge against further losses?

[radwriter0555]

1. Real estate or cash is better. Best place to hide piles of cash is in

casino safe deposit boxes.

Can't spend gold.

[DoYouEverWonder]

2. Plus when you buy gold

you usually are just buying a certificate. A piece of paper that claims you have some gold, somewhere.

Gold jewelry is okay, but of course that is usually marked up so high that you are spending 2 - 3 times more for the piece, than the gold that is in it. However, I wouldn't get rid of any gold jewelry either. If gold goes sky high again you can actually make some good money off of old pieces you didn't really like to begin with.

[Dr Strangelove]

7. I buy gold coins

at a local shop. They charge me cost+10%. Last week I paid $470 for a one oz Canadian coin. I get the Canadian coins because the look more like gold than the US versions. I know they are both supposed to be .999 pure gold, but side by side they look different.

I would disagree that cash is better than gold. If there is a serious devaluation that cash may be good only as toilet paper.

[2Design]

19. what kind of local shop? What would I do to find one where I live?

[DoYouEverWonder]

20. Yes, gold coins are good

I was referring to investing in gold on the market.

[GCP]

4. You can always sell it, though

I have a house, but the real estate market is going to crumble soon when the Fed has to raise interest rates to get foreign investors buying our Treasury Bonds, mortgaqe rates will rise and people won't be able to either keep their megamansions on cheap credit, or afford a mortgage in the first place. There will be negative equity on a lot of houses, it happened in the UK in the 80s.
Foreign investors are beginning to stay away from the treasury bond auctions. They could also start to dump huge amounts of dollars.
Quite frankly, I'm scared of what's going to be going down.

[KingChicken]

6. Even if you have cash in physical form the value still decreases

Gold is the backbone of free currency, everyone should own some, there is always the risk that all your U.S. money can become worthless in a short time.

[mrbill]

12. you could trade gold for cat food, tuna or ammo

correct, you can't "spend" gold.

the walmart clerk wouldn't have a clue how to make change.

on edit: spell check

[ArkDem]

25. That cash sitting a a safe deposit box will just be losing money.

[KingChicken]

3. www.goldmoney.com

They are safe, i've been doing business with them for a while. You can buy and have it stored there, or shipped to you via insured registered mail for $30 form kitco.com, or you can buy direct from kitco.com.

[GCP]

5. Yeah, I saw that on the web

I wasn't sure if it was on the up and up. You're happy with them?

[KingChicken]

8. Check your private message box, i sent some info.

[Irishladdie]

9. Gold & Euros

gold krugerrand ounce coins, thats what I buy. There are many websites to order them from. They are really awesome and feel great having them. I bought many prior to Sept. 11th and have been buying them since. I also am in deep with the EURO, ever since its inception. I knew over time it would take us over. I recomend the EURO or the gold krugerrand ounce coins.

Hope That helps.

[theHandpuppet]

10. If you have the extra money...

.. wouldn't this be the time for concerned folks to pay off a mortgage? If the economy tanks and the dollar goes the way of jobs, best to at least have the security of a roof over your head.

[GCP]

30. I have no mortgage or debt of any kind

As I said, I've always saved and we paid the mortgage off early because we hate paying interest.

[kcwayne]

11. There was a gold fever back in 1980

Harry Browne, a Libertarian who ran for President a number of times wrote a book about the coming total collapse of the US currency, and recommended buying canned food and gold after liquidating all of your assets. He was dead wrong.

I bought some gold, and some gold mine stocks after listening to people who convinced me that our way of life was coming to an end. I lost 90% of my investment. Gold had soared to $1300 an ounce, and collapsed back to $200 where it has hovered for the last 20 years.

Gold is a stupid and purely emotional investment. It has no real value relative to its price. It may soar in price for a short time, but the game is to find some other sucker to buy it from you at an even higher price. Its just like the Nasdaq at 5000, with the talking heads cheering it on to 10,000.

Your best hedge is to look overseas. The devaluation of the dollar against all world currencies makes a simple savings certificate in a currency that looks to be a winner in the economic landscape a good hedge. Since all of the world is pouring their capital into China, Asia would be an obvious place to investigate.

The Bush policies would not appear to do anything to change the course of the devaluation of the US currency. We are becoming a third world country that can only export raw materials to China to reimport back as finished goods. Our debt coupled with the insane spending on an ever expansive military makes us look like a very poor credit risk on top of the trade deficit. If this trend continues, your dollars converted to Chinese currency earning 5% interest will gain by 10-40% depending on the rate of currency devaluation. The problem is that the trend may not continue, and you are gambling.

The state of the economic future looked equally grim in 1980 with interest rates at 18%, but the collapse the gold bugs were betting on never came, and the virtual Ponzi scheme of buying Kruggerands collapsed. No one can forecast the future, and these decisions always have huge risk.

Having said all this, I am not currently investing overseas. I am trying to hoard cash to invest in a car wash. If I were not doing that, I would be reducing my debt and raising cash, and putting some percentage into Euros and a percentage into Asian currency.

[JNelson6563]

21. Gold is for fools but Dollar good?

Um, ok.

[kcwayne]

22. I didn't say the dollar was good did I?

[JNelson6563]

26. I thought "cash" meant "dollar"

I am trying to hoard cash...

I guess you were talking Euros or Yen or something. My bad.

Julie

[jmowreader]

13. I know there are four basic gold plays

You have the gold-on-paper play, the futures play, the bullion play, and the coin play.

Gold-on-paper means you get a certificate entitling you to a certain amount of gold locked in a safe at a company somewhere. The thing that worries me about this play is that nothing is stopping them from buying 200 ounces of gold then selling a million certificates against those 200 ounces--when enough people demand their gold, the holders of it throw it in a suitcase and head for some country that doesn't have an extradition treaty. Most gold-on-paper firms are scrupulously honest, but I've been trained to always think of worst-case scenaria.

Commodities futures trading is gambling. You buy a certificate that says you will receive x amount of a commodity on a date future and you pay y amount of dollars for it. You are betting that the commodity is going to be worth more on that date than it was when you bought the certificate. You can get rich in the futures market; you can also lose your ass. However, with gold there is an upside: if the price really is lower on the day you take delivery than it was when you bought the contract, you can hold the tangible gold in your safe-deposit box until it goes up. A pound of gold, if you bought that much, isn't all that big. (OTOH, if you're playing the wheat futures market, that's harder to do.)

Bullion plays are pretty obvious--you pony up whatever the spot price of gold is on that day, plus a handling fee, and you receive a little hunk of solid gold. Take it to the bank and throw it in your safe-deposit box until you're ready to get out of it.

Coin plays are different because you're working in two markets. Most gold coins are available in troy-ounce sizes, so we'll use that one. You have a Krugerrand from 2003. When you go to check the price of your Krugerrand, you need to look at the price of gold and the price of 2003 Krugerrands because the value of the coin as a coin can be and sometimes is higher than the value of the coin as an ounce of gold. Following me? Good. Now, the Krugerrand's price has a rather liquid floor--the spot price of the metal in it. The value of a coin can never be less than the price of the metal, because if it was everyone trying to get out of coins would just sell them as pieces of gold and not as coins.

Fun historical fact about gold: sailors of old pierced their ears so they could wear their bank accounts. When the sailor got to port and wanted to buy something, the shopkeeper would shave off the correct amount of gold from the sailor's earring then return the remaining piece.

On edit...Four plays, not three. I feel like the Spanish Inquisition.

[MadHound]

14. A couple of things about gold

First off, if you are buying gold for emergency, the country has collapsed purposes, I suggest that you buy gold coins. The price is a bit high right now, since many people are doing what you, and I, are doing. If you can afford it, gold is always a good emergency cash fund. It holds its value better than equities if everything goes balls up. The US and Canada make fine, .999% pure gold coins, and there is usually only a minor mark up on price.

If you are buying gold as an investment, now is not the time. While the prices probably haven't peaked yet, I think that they're getting close, and gold can be a very volatile market, not for beginners. You could buy up forty oz. today at the current rate of $430.00, and tommorrow somebody could release their gold reserves and you'll be screwed. Better than buying the actual metal for investment purposes, buy into the gold trading firms. There are a few mutual funds out there that invest in precious metals trading firms, and with the markets in these materials being quite active, you stand to make a pretty penny. Plus, you don't have to be getting in on the top like you would be doing with the metal. Since metal trading firms make their money whenever the metals market is active, either going up or down, you not only can ride this coaster all the way up to make money, but you can ride it back down to make even more money. I got into the metals firms mutual fund four years ago, knowing that Bush would fuck up the economy and get us into war. Such societal stresses always send the metals market to heavy trading, and it hasn't stopped yet. If Kerry had won, I would have sold, since Kerry would have had a moderating influence on rest of the world, soothing peoples' fears, and making them think that the end times aren't quite so near. As it is, I'm still invested in these mutuals, since Bush makes everybody scared and nervous, and keeps them preparing for the worse. The fund is still making me good money, and will continue to do so for the next four years.

Hope that helps.

[r_u_stuck2]

15. Here is some help

Do your own due diligence. Check out these two web links and see if they help any.

http://www.kitco.com/

http://goldeconomy.com/

[GCP]

16. Thank you all for your insight

There's a lot of thinking to do.

[ispeculate]

18. Alot of good information by people here

I never traded gold before, mostly stocks. I'm a chart reader and look for small companies with big potential.

What about currencies? Is there any way besides options contracts to play the short side of the dollar on a long term basis without the huge premiums??

[Jose Diablo]

17. Precious metals

http://www.kitco.com/

Kitco - Gold Precious Metals - Buy Gold Sell Gold, Silver, Platinum - Charts, Graphs, Prices, Quotes, Gold Stocks, Mining Stocks, bullion dealers.

This gives prices. What I do is actually hold the metal. I don't care for paper certificates myself. The best way I have found to buy the gold or silver is get out your Yellow Pages and look-up "Numismatic". These are Gold/Silver coin/bullion dealers. You do NOT give your name except a first name, it is strictly cash deal (keep it under $10K per transaction) and remember it is really a currency transaction thus no sales tax or none of that rubbish.

I like the bullion myself because you are only buying the metal content itself. There is a premium for coin.

Not to give advice or anything, but throughout history, when Kings have taken the coin of the realm and remelted the coin and mixed the metal with lead then restamped the money, people always have chosen the good money over bad. Say what they will, saying paper is good as gold just doesn't make it so.

As for silver, if you go with silver, it is bulkier. However, if paper becomes worthless, an ounce of silver will always buy 2-3 days of basic food and it is convienent for barter where an ounce of gold is a huge amount of value, not convienent for daily barter. Yet gold will store a lot of value with not much weight.

IMO, silver is a better value right now, but again, it is my OPINION. Keep that in mind.

For preserving value, gold/silver outlasts any that would say whatever is fasionable economically. Saying gold/silver is old fasioned doesn't make it so, as we shall soon see. When there are economic uncertainties, metal goes up as confidence goes down. This is the real indicator what people believe to be true as far as currency goes.

[OxQQme]

23. Wondering why

gold (in particular) is the most valued of the earth's resources and not some other base mineral.

[junker]

24. it is 1979, November - Right Freaking Now, and in 2 months gold will go

ballistic... Remember, gold doubled in price over the course of Jan in 1980...conditions were similar to today, only no where near as extreme


BUY LOCAL cause you gonna have to sell local....

AND NEVER BUY PAPER GOLD PROMISES (like hey man, don't let no one 'hold' your gold for you.)

AND don't trust bank safety boxes (these were the first looted in Argentina during their recent money crisis)

go hang out with the survivalists for a while on some of the more extreme wingnut jobs, where the real paranoids chat. You can get some real good ideas about having and stashing your gold.


Up here in mossback country, ALL the real liberals are getting out of cash and dollar denominated paper 'assets' as fast as it can be done. Less than 3 months before bushies hyperinflation hits...

USofA will be bankrupt and NOT drawing in any foreign moneys by May of 05..

[ispeculate]

29. Of course if the recount(s) go to Kerry...

all bets are off!

[BeHereNow]

27. DO NOT buy gold in US Currency

Bush INC did a sneaky thing the day they "captured"
Saddam. He passed part of the Patriot Act 2 that
requires metal vendors to report purchases. Now why
would they do that? Because if puch comes to shove
and there is a mass exodus of monetary value from the country
they will prevent you from moving your assets out of the economy.
In the case of gold, you want to buy it in non-currency form.
I bought mine in what they call Philharmonic Viennas. No
currency stamp, therefore not subject to recall.
Since the gub'mint will know of your purchases, as the vendors
are now required to report it, you want to make sure it is
not subject to currency recall. Also, DON'T keep it in a bank.
Keep it at home.
The banks have to report all metal in their vaults too.
BHN

[rman]

28. gold is only good for

making certain specialized practical products such as micro-chips, and for making luxery goods such as jewlery.

Imagine a post-apocalictic world; what good would gold be?

You can't eat it.

I think it has no real value as a reference/standard for the value of currency, since there's a finite and fixed amount of it on the planet. I think it would be a miraculous coicidence if the value of the total amount of gold is equal to the value of the wealth created by human labor (and there's isn't really any other kind of wealth), if only because the amount of wealth and thus its value are forever changing (typically increasing over the long run).

[MadHound]

31. Yes, in the most practical sense you're correct

But gold has been for thousands of years the currency of either last, or first resort. It has no practical value, other than electronics and jewelry, but it's intrinsic value is huge. When a currency is going south, people will resort to gold. When times are troubled, people will resort to gold. There is nothing practical about it, but it is simply the way things are and have been for thousands of years, worldwide.