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Gold

Discussion in 'Sports and News' started by The Big Ragu, Sep 9, 2009.

  1. BTExpress

    BTExpress Well-Known Member

    My ridiculously conservative retirement fund is up $50,000 since I rolled it over into a new employer in September 2011.

    Had I taken that retirement fund and converted it into gold (which was trading at $1,630 that day), it would have lost $73,000.
     
  2. Bubbler

    Bubbler Well-Known Member

    The thing about it, Ragu, is there has never been, and never will be, any political will for your collapse theory to play itself out. That's never taken into account when these doom and gloom scenarios are posited by you and others. Economists like to jerk themselves off with these theories, but they would never play out as cleanly as you and others suggest.

    Politicians will never let a total collapse happen because they know if they do there will be blood in the streets. There already has been with the austerity measures undertaken in parts of Europe. No government is going down with the economic ship if they can avoid it. For historical evidence, see what happened to Hoover and the Republicans in 1932 when his administration wasn't deemed by the voters to have done enough about the Depression. And that was a somewhat clean transition compared to economic turmoil in other nations.

    Governments/central banks will bail out like its their job to avoid a total collapse. There would be debt forgiveness before a total collapse. The entire world economic system depends on governments that operate on a limited free market, not an unfettered one. More than ever, it's in the interest of China, et al, to not let one of their best markets implode in the way you suggest, because they'd go down right with it.

    An unfettered free market, and the alternative at the other end of the spectrum, communism, are alternately politically untenable or undesirable.

    None of this is to say there won't be crises such as the one in 2008, but measures would be taken, even if it meant -- gasp! -- that creditors got hosed, to ease the damage.

    Politics come before economics. Every single time.
     
  3. kleeda

    kleeda Active Member

    I got rid of my entire stake at $1,600. It wasn't an enormous amount, but not small. But since most had been procured at $900 or less, I thought it was time to take "an offensive" profit as an investor friemd of mine likes to put it. I'll be back when it's down around $500 again.
     
  4. 2underpar

    2underpar Active Member

    Just checking -- anybody got any new thoughts on gold? Buy? Sell? Bury it in my back yard?
     
  5. cranberry

    cranberry Well-Known Member

    Ragu's boy Peter Schiff says it's time to buy because there's absolutely no way the fed can continue tapering.

    http://www.cnbc.com/id/101390063

     
  6. The Big Ragu

    The Big Ragu Moderator Staff Member

    Oh, the Fed is going to be back in with either a reversal of its tapering of asset purchases, or more likely a new scheme -- because the asset purchases haven't worked and have ballooned its balance sheet. I am guessing by late spring / summer.

    Here is one of my other "boys," predicting, similarly, that by summer the Fed will be back in with the hoses turned all the way up: http://www.abc.net.au/news/2014-02-11/extended-interview-with-jim-rickards/5253454

    Our economy is on life support and has only been propped up by the interest rate suppression and money printing.

    All of the economic news since the beginning of the year has been miserable and it points to a recession -- except with the mess the Fed made, we still never even got a recovery before the new recession. We're likely in a depression. And the Federal Reserve has backed itself into a corner with two bad choices -- deal with the balance sheet mess it has created (why it tapered) or step back in to screw things up more in a futile attempt to try to put off dealing with reality.

    Here is one of my other boys talking about the Fed's manipulation: http://www.cnbc.com/id/101373807

    If you are worried about what the "badly: entails, you should ditch some of the dollars you own and trade them in for some gold and/or silver. Think of it as insurance -- for a lot of people it is 10 percent of their savings. If the Federal Reserve destroys the dollar, that bullion you own will help protect your savings.

    If you think a currency crisis is inevitable because of the monetary mess they have already created, then move more of your dollars than that into gold. But don't think of it as "Should I buy, should I sell, etc." As long as they keep on the same destructive path, just wait.
     
  7. Vombatus

    Vombatus Well-Known Member

  8. TheSportsPredictor

    TheSportsPredictor Well-Known Member

    If you are buying gold, you aren't actually owning gold, you are owning a piece of paper that days you own gold stored in Fort Knox or somewhere, right? No one is getting gold shipped to them and mailing it out when they sell it, right?

    So if you buy the gold in anticipation of the coming collapse, and the collapse comes, just how do you intend to get your gold? Since the economy and society will have collapsed, won't the gold then belong to whoever has the most guns? Cause you're not taking your piece of paper somewhere to pick up your gold.
     
  9. Boom_70

    Boom_70 Well-Known Member

    I am predicting that the price of gold will rise one day.
     
  10. Baron Scicluna

    Baron Scicluna Well-Known Member

    My prediction: Pain
     
  11. WCIBN

    WCIBN Active Member

    Back on September 9, 2009 when this thread started, Gold closed at $995.30 an ounce. Friday Feb. 27, 2015, Gold closed at $1,212.60 an ounce. That's a 21.83% increase in almost 5 1/2 years. Roughly just under a 4% increase a year. Better than a money market return but not a good investment.

    So for the heck of it, I decided to compare some returns on thirteen stocks over the same time frame. (I wrote down the name of the 13 stocks BEFORE I checked their price history)

    Let's start with a few 'conservative' stocks:

    AT&T closed on 09/09/2009 at $25.94 a share. Friday's close was $34.56 a share. Also in that 5 1/2 span AT&T paid out a total of $10.50 a share to the stockholders. So the $25.94 'investment' returned $45.06 ($34.56 + $10.50) a share to the stockholders. A 73.71% increase in value over the 5 1/2 years.

    Kellogg's stock increased from $48.03 to $64.48. Shareholders also received $9.05 in dividends over the term. $64.48 + $9.05 = $73.53 which is an increase of 53.09% over the 5 1/2 year term.

    Coca-Cola stock went from $49.19 to close on Friday at $104.39. Add in the $5.50 in dividends shareholders received over the last 22 quarters, the $49.19 'investment' returned $109.89. That's a 123.4% ROI over the term.

    Ford closed on 09/09/2009 at $7.39 a share. Friday it closed at $16.34 a share. Dividends paid to the shareholders over the time frame totaled $1.30 a share. So the $7.39 'investment' returned $17.64 ($16.34 + $1.30) a share. That's a 138.7% increase in value in the 5 1/2 years.

    On 09/09/2009 U. S. Steel stock closed at $44.30 a share. Two days ago the closing price was $23.95. Over the 5 1/2 year term, stockholders received $1.20 a share in dividends. The $44.30 returned $25.15 ($23.95 + $1.20), a bad investment as the stockholders lost 44.23% over the term.

    General Electric stock closed at $14.87 a share on 09/09/2009. Friday it closed at $25.99 and when you add in the $3.75 a share in dividends shareholders received that's a return of $29.74 ($25.99 + $3.75) in the 5 1/2 years. A 100% increase in value.

    The stock of Halliburton (Dick Cheney's old company) went from $24.94 to $42.94. In the 5 1/2 year term, Halliburton also paid out $2.33 per share in dividends. $42.94 + $2.33 = $45.27 which is a 81.22% increase in value over the term.

    Walmart stock on 09/09/2009 closed at $51.11. Friday's close of $83.93 coupled with dividends of $8.03 a share ($83.93 + $8.03 = $91.96) makes it a 79.93% increase over the 5 1/2 year term.

    In the 5 1/2 year span, Daimler AG's stock went from $48.24 to $96.28. When you add in the $12.86 a share in dividends over the term ($96.28 + $12.86 = $109.14), the investment increased by 126%.

    Microsoft stock went from $24.78 to $43.85 and when you add the $4.88 in dividends ($43.85 + $4.88 = $48.73), the investment returned a 96.65% profit.

    Nike stock price increased from $27.86 to $97.12 and there were $3.85 a share in dividends paid out in the term. $97.12 + $3.85 = $100.97 which is an investment increase of 264.87 %.

    Apple stock (adjusted for a 7 to 1 split) rose from $24.45 to $128.46. Add in the $4.76 per share dividend ($128.46 + $4.76 = $133.22), an investment in Apple has returned a 445% profit to shareholders over the last 5 1/2 years.

    Netflix has more than doubled Apple's return. Netfix stock on 09/09/2009 closed at $43.23. They pay no dividends to shareholders but the stock closed Friday at $474.91. That's a 998.57% increase in value of an investment in Netflix over the term.

    What does this prove? Nothing other than gold was a poor investment compared to most stocks over the term of this thread and U.S. Steel shareholders should have dumped their stock a long time ago.
     
    Boom_70 likes this.
  12. Boom_70

    Boom_70 Well-Known Member

    Good stuff WC. Supports the point that I made back in 2009 at start of the thread.
     
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