What do you make of investing in gold and silver?

[PM Martin]

I know the prices are prime to sell at this time. But what do you make of investing in metals (long term)?
I know the right wingers in the US have and obsession with gold and silver.

[Robb]

1. A hat, or a brooch...

[DainBramaged]

17. +1000

[Warpy]

2. The only reason to invest in gold is to hedge against inflation

At this point, gold has outstripped the inflation rate, making it a sucker's investment.

Gold really doesn't generate returns. It just holds absolute value. Fiat currency loses value during inflationary periods, as do equities.

[HereSince1628]

3. I'd rather have land paid in full.

Land is as much a fixed commodity as gold. And you can't get much food value from what grows on gold.

[alittlelark]

5. That's my investment choice as well.

[bubbayugga]

18. land is good except you have to pay taxes on it every year.

and there is a lot of pressure to raise those taxes in many parts of the country. Then, when you sell it, you are taxed again on any profits. An asset that costs you money like thatr isn't really an asset, it's a liability. That's what makes gold and silver nice. It just sits there in your safe, unbeknownst to anybody, slowly appreciating until the day you trade it in for some paper dollars. It's hard to run with a briefcase full of all your land too and sometimes you just gotta run for greener pastures.

[HereSince1628]

24. All true. And you can't eat a briefcase either.

[bubbayugga]

30. no, but you can buy a lot of beans with a little bit of gold

even when the rains flood your fields or the sun scorches them or when the japanese beetles devour them.

[Dark n Stormy Knight]

26. "And you can't get much food value from what grows on gold."

Excellent point.

[pipoman]

4. One ounce of gold will buy approxamately

the same amount of goods as an ounce 100 years ago. It will usually maintain at the rate of inflation...occasional peaks and valleys...not historically (in the last 100 years or more) a great investment. In dire times it may be nice to have if you subscribe to that type of thing..

Silver has far out performed gold over the last several years..

[bubbayugga]

19. I bought into gold when it was $950 an ounce.

bought into silver at the same time. It was like $15/ounce I think. I probably should have bought more of both but I listened to the nay sayers. In retrospect, I think they were a better investment than pretty much any stock you could have recommended at that time- 2008ish. Property seems like the obvious investment to make these days but it comes with way too many issues for common folks looking to invest. I don't think there is a safe investment to made right now honestly. the right education maybe. debt deleveraging makes a lot of sense in this climate IMO especially any high interest debt you might hold. I think a lot of folks are still doing that in fact.

[PM Martin]

6. kick

[TrogL]

7. Please, please, please do not get the gold bugs started.

It does not matter what the financial and economic situation is, they'll be screaming "buy gold".

[PM Martin]

8. Why is there such an obsession among the American right with gold?

[Recursion]

15. More to the point, do the goldbugs not know that a gold standard is just explicit price-fixing?

I was arguing with a goldbug "friend" on Facebook the other day who said, in the same comment, both

"I want a return to the gold standard", and

"I want the free market to determine the price of gold".

I tried for a few more comments to show him that the two are diametric opposites of each other, but no good.

[Dawson Leery]

9. If you bought silver 6-8 years ago, it was certainly a great investment.

[earthside]

28. A great investment.

I bought a lot of silver when it was around $5 an ounce.

It is now about $32 an ounce.

I think silver will still go up.

As to gold ... I own Central Fund of Canada and Tocqueville.
I don't care about the gold standard; I don't care about survivalists ... both stocks have been very good for me over the past ten years.

You know, owning stocks of any kind is a gamble, so whether it is GM or IBM or gold/silver --- all that matters is when you get in and when you get out.

[Dawson Leery]

29. Silver is projected to top 50 dollars later this year.

Last edited Sun Jan 20, 2013, 09:52 PM - Edit history (1)

Whether or not this will actually happen is something we will have to wait to see.
The Precious Metals Markets are highly volatile.

[PM Martin]

10. kick

[1-Old-Man]

11. And ingot of gold produces nothing, employs no one, enriches no one's life

it is just a metal that frightened people think will allows them to somehow weather all storms.

[bubbayugga]

31. does it have too?

It's a small, tangible, easily liquifiable asset that hedges a person against inflation and taxes. What's not to like about that? Give me a choice between $10,000 cash and $10,000 worth of gold with the caveat that I have to sit on one or the other for 5 years, I guarantee you, I'm taking the gold. If it was only one year, I might take the cash if I had need of it at the moment. Gold is highly useful that way.

[Dawson Leery]

35. As a hedge, it has value.

Using it as an alternative currency? No.

[slackmaster]

12. A few things - The most important to me is that they never pay dividends or interest

They can't.

They're a hassle to store. They're good as a hedge against inflation.

There is some downside risk to buying them, because their value sometimes goes down.

I sold all of my precious metals about two years ago and have never regretted the decision. They had appreciated considerably (I had silver that I had bought at $6) and I needed cash to pay what I owed in taxes.

[Lurks Often]

13. Never understood that,

Last edited Sun Jan 20, 2013, 06:43 PM - Edit history (1)

I fully expect that at some point that the values of gold and silver will depreciate again.*

If it is in some belief that society will collapse then they haven't thought things through.

You can't eat the silver or gold and if I have food and water, I'm not going to trade for silver or gold.

And if society does collapse and it really is the End Of The World As We Know It (exceedingly unlikely) then mean, grumpy people like myself who own guns are going to band together with other like minded people and take the damn gold & silver anyway if we want it that bad.**


*Taking financial advice from me would be unwise

** Read Lucifer's Hammer by Larry Niven & Jerry Pournelle for a well reasoned glimpse of what might happen if society collapsed and the people who enforced the laws weren't around. It isn't a happy book though.

[Fumesucker]

22. Lucifer, not Thor n/t

[Lurks Often]

27. Oops, you're right n/t

[Recursion]

14. "Investing" implies there are fundamentals; gold has no fundamentals

It's a metallic baseball card.

[upi402]

16. Mine has gone up 225% since the crash, late 2008

A rightwing former buddy gave me a ton of crap for buying it.

I have doubts about our economic future;
I still see banksters still in charge. The M3 is still hidden after W started that bullshit.

I feel Matt Taibi is right. Obama's econ team is corrupt, similar to W's gang.

You can store it in a safe deposit box for very little per year.
You can sell it in a public space with cameras - thank the cloud beings for internet sales!

ymmv

EDIT to add: I stopped buying real estate during the lunacy of the RE bubble and will not buy it now. I had multiple rentals, 2 commercial. I now own my personal residence only- and only due to its location. Just my .02

[Science Geek]

20. Gold is way overvalued.

I've heard several people I trust say that gold is about to drop like a rock. Other metals will most likely follow.
This may be the best time ever to sell gold and the worst time ever to buy.

[Nye Bevan]

21. I would say you were buying at the top.

But I was also saying that back when gold was $1000 per ounce. So what do I know.

[bemildred]

23. I think it's gambling. nt

[OldDem2012]

25. If the world economy goes over the cliff, do you really think any amount of....

...any metal will really be worth anything at all? You can't drink or eat gold or silver, and that stuff certainly won't protect you from the elements. You could probably throw it at people trying to attack you, but you'll run out fairly quickly.

[Egalitarian Thug]

32. Lose - lose right now. The margins are too wide and the prices are so high that you are guaranteed to

lose on any you buy now. If the economy does so badly that today's prices seem a bargain, nobody is going to be looking for metals, they're going to be looking for food, tools, seeds, clothing, and shelter. Metals are no longer attached to any currency, so any relationship is coincidence not causation.

[MrSlayer]

33. Would have been a great idea ten years ago.

My buddy called this back then and has been putting everything into silver for years now. I, of course, never had any money to invest so I missed out. Have to have money to make money.

[datasuspect]

34. water and food