Who are you voting for in 2012?

[Anthony DeAngelis]

http://en.wikipedia.org/wiki/The_Rip_Van_Winkle_Caper

 

[mfegrad]

I love people holding gold as if one day it will be used. Let me fill you in. The day you are chipping pieces of gold off to buy bread is the day guns and ammo are far more valuable. When the world goes to crap it will be force and intimidation that will rule the day, not some guy with a sack full of gold coins.

this.

i'd add water and food to the list of things that have an actual value aside from "ohh shiny."

 

[Abdel]

I love people holding gold as if one day it will be used. Let me fill you in. The day you are chipping pieces of gold off to buy bread is the day guns and ammo are far more valuable. When the world goes to crap it will be force and intimidation that will rule the day, not some guy with a sack full of gold coins.

I also didn't see any "ownage". Ron Paul is a smart guy and has his well defined position and Bernanke is a smart guy with his well defined position. Always warms my heart to see a politician making an abstract point instead of trying to get something done.

In the meantime, my purchasing power is intact.

How about your paper money? :D

 

[Anthony DeAngelis]

What purchasing power? You are not getting interest. If you have physical gold you have to pay storage costs (or insuring it if you are smart). My USD does just fine.

 

[alain]

In the meantime, my purchasing power is intact.

How?

 

[bigbadwolf]

In the meantime, my purchasing power is intact.

How about your paper money? :D

Anthony is making a legitimate point: those stockpiling gold are not doing so in the expectation of a transition from paper money to gold in an economy that otherwise remains the same; rather, they're betting on an utter collapse of the economy. When that occurs, a rifle, ammunition, water-purifying tablets, some food, and some control of arable land will be infinitely more useful than some shiny gold bullion. There'll be nothing to purchase with your gold: no-one will give up land and ammunition when the only exchanges taking place will be barter exchanges of tangibly useful commodities. Even gold requires some exchange economy where it functions as money.

 

[Abdel]

How?

Gold is money and money retain it's value.

Gold price are not going up. It's the paper money that is losing value.

So I'm not going to sit there and let my purchasing power gets taken to the cleaner by Bernanke's inflation.

 

[Abdel]

Anthony is making a legitimate point: those stockpiling gold are not doing so in the expectation of a transition from paper money to gold in an economy that otherwise remains the same; rather, they're betting on an utter collapse of the economy. When that occurs, a rifle, ammunition, water-purifying tablets, some food, and some control of arable land will be infinitely more useful than some shiny gold bullion. There'll be nothing to purchase with your gold: no-one will give up land and ammunition when the only exchanges taking place will be barter exchanges of tangibly useful commodities. Even gold requires some exchange economy where it functions as money.

But the point he is missing is, before we get to that unlikely scenario, the US dollar will and is getting hammered. You don't want to be Bernanke's target, so you need to get out of dodge.

You can hold other somewhat ''solid/stable''currencies (such as the swiss franc wich the swiss politicians are trying to link to gold again).

You can also hold a minimum amount of US dollars for your daily needs.

But my point is, if you have some wealth (+500k), you got to protect it in these current economic times.

And remember, even if the US politicians make a 180 degree change and start having sound economic policies again, gold is not going back down to low levels. With all the money they printed, there is no way that could happen.

 

[Abdel]

My USD does just fine.

Yea, it is just down at historical levels against almost anything on earth, from currencies to commodities, lol

 

[Anthony DeAngelis]

Once again, unless I am buying foreign goods not pegged to the USD, how is this effecting me? With the way the economy is I am buying things at prices I never thought I could get. Brooks Brothers and Banana Republic are always have sales and my rent is rather cheap IMO. My food costs are actually pretty decent also. Unless I am going to Europe for a vacation or buying a brick of gold, I really am not feeling this decline in value.

 

[Abdel]

Then you need to tell us where you do your grocery Anthony, lol

 

[Abdel]

Plus, the US import alot (huge monthly trade deficits), this means the good you buy will cost more.

 

[Anthony DeAngelis]

Gold prices are a mix of things, including fear, jewelry demand, investments, etc. I would imagine with the advent of ETF's the price of gold has increased also considering the new level of access that investors now have. Also, diversifying into commodities is a relatively new concept which has added a nice demand for gold.

Gold is fine to hold, but it is a pure appreciation play. No dividends, not income. Taking control of the physical is a huge pain and you eventually have to convert it into a currency.

Why not invest in a tech stock. Basically the same thing, just different drivers.

Also, yes, the USD is taking some heat thanks to QE whatever number we are on now, but the rest of the world has just as serious issues. Europe is sitting on a powder keg, the Middle East is tumultuous and China keeps raising rates trying to cool off its own inflation. Also add commodity price increases and supply issues to that. If the US can agree on a long term debt reduction plan I think you will see a much stronger nation going forward.

I am more of a silver or palladium person anyway. Both are precious metals, but at least silver and palladium have real, industrial uses.

 

[Anthony DeAngelis]

Trader Joes my friend. I typically avoid hippy places, but the food is both delicious, nutricious and cheap. Now I am just one urban dweller, so I cannot speak for a person with a family to feed, but I consider myself a head of the curve.

I personally believe that suburbia is one of the greatest natural resource destroyers ever. I walk to work, live in an apartment that can either expand or contract depending on my life needs and have access to everything necessary. If I lived 30 miles away I would be hit with limited selection, gas prices, opportunity cost with traveling, etc.

Buy REIT's that deal with rental units in urban centers. More and more people will see the folly of living in the middle of nowhere and paying for ever increasing gas prices.

Oil, now that is a commodity to buy.

 

[Anthony DeAngelis]

Yes, we import a ton. But where? China and they peg their currency.

Inflation is pretty modest when you remove food and energy from the equations. Energy use is a factor of proximity to work and living. Food prices are another animal, but I think they can be managed.

 

[Abdel]

Also, yes, the USD is taking some heat thanks to QE whatever number we are on now, but the rest of the world has just as serious issues. Europe is sitting on a powder keg, the Middle East is tumultuous and China keeps raising rates trying to cool off its own inflation.

Sure, the attention is on Europe now.

But the US problems are much much worse. We're going up the food chain: greece, portugal, spain, italy, then will come france, the UK and finally the US. That is my prediction.

Remember, few months back (more like a year or so), no one was talking about greece eventhough they had those problems.
And all of the sudden, it was all over the news. So, the fact that the attention is now turned to Europe, does not mean that the US problems will fly under the radar.

And for the long term debt reduction plan, just remember that on top of the official debt ($14 Trillion) you have to add, medicair,medicaid, social security etc. with those included (governement have to pay for them), the US debt is $60 Trillion.

 

[Abdel]

Yes, we import a ton. But where? China and they peg their currency.

Inflation is pretty modest when you remove food and energy from the equations. Energy use is a factor of proximity to work and living. Food prices are another animal, but I think they can be managed.

Only problem is, I don't know alot of people who can go without food and energy, lol

And when it comes to the CPI, even if you take food&energy prices out of the equation, it's still phony.

They have substitutions, ponderations and hedonics. Everything is made to try to hide the inflation.
And they're talking about changing the way they measure it, yet again.

If you use the free market method that was used by the US governement before, the current inflation is around 9%.

 

[Anthony DeAngelis]

The US economy is much larger and more dynamic than Europe is. We also have more we can cut. Social Security can be tweaked easily as can the other programs. At the end of the day all those programs are end-able. People might complain, people might cry, but you will see the nanny state become a cold mother before you see a default. There is a difference between being broke and spending too much. Broke is broke, the other is just a matter of self control.

I mean Obama is serious about cutting the budget. Even Obama lovers will admit that he wasn't elected to reduce entitlement programs and now look at him, talking about cutting third rail programs.

We could scale back the DoD to being only equal to every country in the world combined and poof, their goes our financial issues.

http://en.wikipedia.org/wiki/List_of_countries_by_military_expenditures

No other nation in the world has as much fat that can be cut as we do.

 

[Anthony DeAngelis]

If you live close to work you can reduce your energy costs. If you buy different food or use coupons, etc you can mitigate a lot of costs. I am not saying that prices haven't risen or that people don't feel it, but inflation is not across the board and you can work around it in certain circumstances.

Inflation is hitting everyone around the world though, not just here. We have a globally growing middle class that wants to drive and eat protein. China is growing up and people are getting richer. Wages have increased in China also. I think in the next 10-20 years you will see manufacturing, to an extent, relocate or move back to the US.

The ever changing global economy.

 

[Abdel]

Ok,

1st: when you say that the US economy is larger, just remember that the US GDP is 70% consumption based on borrowed money to buy foreign products. So, he can shrink dramaticly in a heartbeat. I'm not saying that Europe is a perfect but it is sounder economicly.

2nd: You cannot cut these entitlement programs simply because you have people who's lifes depend on it. You can cut it for the young people, but for people who putted in for +20 years, not going to happen.

3rd: Obama is serious about cutting the budget? lol....let me remind you that his plan is not to actually reduce real spending. What he is saying goes something like this: ''Instead of having $28 Trillion of debt in 10 years, we'll have $24 Trillion instead, this means that I'm cutting $4 Trillion over 10 years''.

So, he's not cutting anything, he's bringing the debt up.