Gold.

[garybeck]

Since 1/1/2000:

DJIA has gone from 11,502 to 10,3xx... more or less flat.

In that same time, gold has more than quadrupled, from roughly $300/oz to over $1,200/oz.

Those late night talk show commercials just might know what they're talking about.

[Arctic Dave]

1. If you are saying I should buy now, I'll pass.

[rfranklin]

2. It's just so heavy to carry around...

And then there's always the worry of the neighbors raiding your stash.

[Warpy]

5. Right, it's a thief magnet

I've suggested burying it in the back yard and building a koi pond over it, but that makes it problematic to retrieve when the time comes.

I only have a couple of pieces of jewelry, hidden in insane places and not worth the time and trouble for a thief to try to retrieve.

The only reason I can see buying it is if you like the piece of jewelry and will wear it and enjoy it.

[Art_from_Ark]

11. How would the neighbors know you had a stash?

And at $1200 per ounce (31.1 grams), even $10,000 worth, at a little more than 8 ounces, is not particularly heavy to carry around,

[slackmaster]

3. FWIW, that's nowhere near the peak it hit in 1980

Adjusting for inflation.

I look at it this way: Any part of the value over and above what it costs to mine and refine the stuff is speculation. I sold some of my precious metals in March 2008 for a nice profit, and dumped the rest earlier this year.

I won't consider buying again until silver is below $7, or gold about $600.

[Art_from_Ark]

10. Nobody was actually buying gold for $850 in 1980

That "peak" was just a blip on the screen.

The costs of refining and mining vary greatly from one country to another, and even from one company to another. And mining prices have to include all the money that was spent up to the time an actual mine was put into operation, as well as all the money it will take to clean up the mess once the mine is closed. Incidental expenses not directly related to actual mining activities could include preliminary feasibility studies, feasibility studies, reconnaissance surveys, on-site surveys, satellite image analyses, drilling and analyzing core samples, calculating grade and reserves, and, if it gets that far (and most of the time it doesn't),finding investors for the project (who are expecting to make a profit), getting the infrastructure set up (including roads, tailings dams, shafts and adits (if it is an underground mine)), cleaning up tailings ponds, sealing off the mine. All that requires money.

You might see silver below $7 again (though I kind of doubt it). But with all of the trillions in fiat money floating around and the high cost of mining and refining gold (when all aspects of production are factored in), the days of $600 gold are over.

[slackmaster]

17. I remember that time well - The Hunt Brothers had just announced that they were selling their silver

Prices made an abrupt turnaround. The handful of people who actually paid $850 for gold were fools.

[Chulanowa]

4. Yes, those commercials do know what they're talking about

Of course, their goal is to sucker you out of money, not to help you through tough times.

Gold always goes up during economic hardship. Once jobs come back and inflation drops, gold crashes - so when you trade all your money in for gold, what's happening is that you're buying high, and will inevitably end up selling low - often to the same people who sold you the gold in the first place.

yeah, the value of a dollar is dropping. But find me a grocery store that'll take five grams of gold shavings instead.

[garybeck]

6. wrong.

i listened to those late night commercials 12 years ago. but i didn't fall for their sales pitch and buy from them and pay extra. I went to my local coin shop and bought some coins at the spot price.

today if I wanted to go to the grocery store and buy some food with the gold I have, I could stop on the way at a coin shop and sell it for 4 times what I paid for it 12 years ago. then i could buy all the groceries I want.

however I'm holding on to my gold coins for now.

I only wish I would have bought more back then.

[Art_from_Ark]

12. You've summed it up pretty nicely

The people who are truly knowledgeable about gold have no illusions about "taking five grams of shavings to the grocery store". That sort of thing never happened, except perhaps in a few places in the Old West that were far from a Mint or an assayer's office. What you have described is precisely the way it's done-- sell your coins to a dealer who will give you a decent price for them, rather than trying to negotiate their value with someone who wouldn't know a Gold Eagle from a Philadelphia Eagle.

[phasma ex machina]

22. Boomtown bartenders profited from being greasers.

After pouring a drink they'd run their figures through their oil slick hat, take a pinch of the customer's gold, drop it in the till, run their fingers back through the oil slick, and end up taking a very profitable shampoo after hours.

[FlyingTiger]

15. Once inflation... drops?

You might wanna Google something called the Consumer Price Index. The value of the dollar versus other currencies is not the same as inflation.

[FBaggins]

20. Put more accurately...

"once the anticipation of future inflation drops"

Gold can (and likely will) decline (or even collapse) while inflation is rising. It isn't inflation that causes Gold to climb... it's the anticipation that inflation will be a problem that sets it off on a tear.

Just look at the early 80s as the price of gold collapsed even as inflation ran out of control.

[C_Lawyer09]

7. Look at silver as well

Mainly because how much it is used in common industry, and the fact that it can't be recycled or reused. The US mint doesn't have enough in reserve to mint the 09' eagle proofs.

[AtheistCrusader]

9. It's used a lot less in industry now

with photography and even medical imaging going digital. Optical and xray film developer was where a lot of it was going. Not so much today.

[garybeck]

14. can't be recycled?

?
more info please

[SlowDownFast]

18. Silver

In the end, silver will outperform gold's rise, percentage-wise.

As of right now - 12/04, 3:10pm, gold/silver is taking a bit of beating - a natural correction/consolidation as it was overbought - which may continue for a while longer - in which case I would be willing to purchase more for the long term. I bought much of my physical gold stash at $800/oz, and silver at $12-14/oz - in anticipation of the sub-prime debacle and continuing devaluation of the US dollar. I see gold going even higher than $1200/oz. I see $1600+ in the not-so-distant future.

However, for those who can't afford gold - silver is an excellent alternative, and I hold a decent amount of physical Silver American Eagles, as well as some generic rounds and pre-1964 90% coins. At this time, precious metals are correcting/consolidating and are/will be presenting buying opportunities.

Silver will go to $30-50/oz in the not-so-distant future. As I said above, silver will OUTPERFORM gold, percentage-wise.

Mark my words.

[orwell]

8. But they always tell you to buy gold...

...so when are they right and when are they wrong?

You only know after the fact.

Have you ever heard any of those folks tell you to sell gold?

[FlyingTiger]

16. Ever heard of Cash4Gold.com?

If you've seen the "buy gold" ads, then you've probably seen the Cash4Gold ads, too. They're paying you CASH for GOLD... sure sounds like they want you to sell.

[roamer65]

13. Gold is directly responding to the monetary inflation by the Federal Reserve.

M1 money supply has just about quadrupled since 2000 and so has gold.

Gold is the ANTI-DOLLAR and I trust it more.

[SlowDownFast]

19. Exactly.

I will hold my precious metals until I start hearing serious rumors of The Fed raising rates AND see ACTUAL "green shoots" - re:jobs, return of manufacturing, etc, and not just gov't/Goldman/CNBC pumpmonkey shenanigans and "green shoot" lip-service.

I expect to wait a few more years, AT THE VERY LEAST.

More like 5-10.

I just saw/read a study (can't remember where right now - might have been The Economist, but don't quote me) that said we might not see any REAL recovery until 2027.

Now THAT'S something to think about.

[roamer65]

21. The massive amount of "hot money" dumped into the system is starting to gain traction.

You are right. Gold will be a good long-term investment. This will be a mirror of the 1971-1981 time period where Nixon's pumping up of the money supply took 10 years to work through the system and took 21% interest rates to finally kill off the effects of it.

[notesdev]

23. In this case

gold appears to be being hoarded in order to establish solid alternative currencies to the dollar in the future. India just made a play to buy ALL of the IMF's available gold.

The dollar cord is snapping and countries are scrambling for monetary independence.

Bottom line: Bretton Woods has run its course, fiat money is collapsing everywhere as a result of a total lack of trust in the governments involved.