Gold As An Investment?

[strategy 4]

Gold is stable. The dollar is falling. Gold is not an investment. It is a refuge.

let me just save this for 90 days from now.

[Balloon guy 158]

let me just save this for 90 days from now.

Let me save this for 90 days from now

[mtdesmoines 3]

let me just save this for 90 days from now.

I don't think y ...Wait; I KNOW you don't get my point. I'm not saying gold is a bad place to have your money stored. In fact, it may be wise.

[strategy 4]

I don't think y ...Wait; I KNOW you don't get my point. I'm not saying gold is a bad place to have your money stored. In fact, it may be wise.

gold is not stable. it has been a fantastic place to put your money for a few years now, but it is nothing resembling stable. look at historical charts; it's really volatile in times of turmoil.

[aucu 3]

gold is not stable. it has been a fantastic place to put your money for a few years now, but it is nothing resembling stable. look at historical charts; it's really volatile in times of turmoil.

That's because it's really not that big of a market, it reacts and over reacts quickly to changes in the wind and is vulnerable to manipulation.Long term and in this case I'm talking about mining companies that are looking at investing billions in capex to develop new mines that will be producing for 10-20 years starting 2-3 years from now, they are currently using in their models a POG in the range of US$850/oz as a base case.

[strategy 4]

That's because it's really not that big of a market, it reacts and over reacts quickly to changes in the wind and is vulnerable to manipulation.

so, in other words, it's not stable?

[aucu 3]

so, in other words, it's not stable?

Depends on how you define stable in this market, but anyone who has been around gold knows that it is erratic, high risk and not for the faint hearted to put a large % of their worth into.The same thing can be said about a lot of investments but gold and gold stocks have a special sort of high risk that can get even a jaded poker players blood pumping.On the other hand if the US$ is coming up to it's "black swan" moment gold would be among the best investments you could make.

[Skeleton Jelly 2]

Depends on how you define stable in this market, but anyone who has been around gold knows that it is erratic, high risk and not for the faint hearted to put a large % of their worth into.

I'd like to hear this definition of stable that includes erratic and high risk.

[ahosang 0]

Depends on how you define stable in this market, but anyone who has been around gold knows that it is erratic, high risk and not for the faint hearted to put a large % of their worth into.The same thing can be said about a lot of investments but gold and gold stocks have a special sort of high risk that can get even a jaded poker players blood pumping.On the other hand if the US$ is coming up to it's "black swan" moment gold would be among the best investments you could make.

Difficult to think of a better one.

[ahosang 0]

I'd like to hear this definition of stable that includes erratic and high risk.

http://www.goldprice.org/gold-price-histor..._day_gold_priceDifferent timespan graphs in that link.

[Skeleton Jelly 2]

http://www.goldprice.org/gold-price-histor..._day_gold_priceDifferent timespan graphs in that link.

I'm not sure what you're trying to do there. Won't all graphs look smoother when you look at longer time periods? Or are you just saying that it's solid long-term? But then wouldn't that run contrary to the "high risk" notion?

[strategy 4]

crappy chart from that website:or, you could just use the BLS' inflation calculator with this chart instead:$800 in 1980 = $2125 in 2010. gold's $1388/oz today. as I said, gold isn't always stable, dependable, reliable, etc. just ask the people who got their faces ripped off 30 years ago.whether it's a GOOD investment right now is another discussion entirely.

[ahosang 0]

I'm not sure what you're trying to do there. Won't all graphs look smoother when you look at longer time periods? Or are you just saying that it's solid long-term? But then wouldn't that run contrary to the "high risk" notion?

I'm not trying to do anything except help you answer your question. I googled that and glanced. Find a site that does more inflation graph stuff if you need to. I mean yeh, there's an increase of 181% over last 5 years which pretty much covers inflation, huh??But if you bought in 1980 peak , you would be slitting your wrists over the next 5 years right??So there's some serious movements, yes??But as a store of wealth, it's been solid long-term. I mean there have been better famous stocks etc, but this is a store of wealth which could never go to 0 ever(unlike stocks or your poker bankroll). Human civilisation would have to hit Armageddon, or change very radically for that to happen(you'd need tins of food and tanks of water etc).

[strategy 4]

I'm not trying to do anything except help you answer your question. I googled that and glanced. Find a site that does more inflation graph stuff if you need to. I mean yeh, there's an increase of 181% over last 5 years which pretty much covers inflation, huh??But if you bought in 1980 peak , you would be slitting your wrists over the next 5 years right??So there's some serious movements, yes??But as a store of wealth, it's been solid long-term. I mean there have been better famous stocks etc, but this is a store of wealth which could never go to 0 ever(unlike stocks or your poker bankroll). Human civilisation would have to hit Armageddon, or change very radically for that to happen(you'd need tins of food and tanks of water etc).

look back at the history of the conversation. I'm not disputing that we have culturally assigned a value to gold that won't ever go away. I'm questioning the idea that "gold is stable."

[hblask 1]

It seems to me that gold is stable in real terms, but not if you don't adjust for inflation.Back in the 80s I saw a graph from sometime in the 1800s til 1980-something, and, adjusted for inflation, gold was exactly the same as it had been. And most of that history was flat, just a few spikes during really bad inflation or when they messed with gold standards and gold ownership rules.

[Theraflu 1,035]

It seems to me that gold is stable in real terms, but not if you don't adjust for inflation.Back in the 80s I saw a graph from sometime in the 1800s til 1980-something, and, adjusted for inflation, gold was exactly the same as it had been. And most of that history was flat, just a few spikes during really bad inflation or when they messed with gold standards and gold ownership rules.

Man, how can anyone dispute that kind of argument?

[Don Giovanni 0]

look back at the history of the conversation. I'm not disputing that we have culturally assigned a value to gold that won't ever go away. I'm questioning the idea that "gold is stable."

we haven't 'culturally assigned' a value to gold. as if its just some random decision and we could have picked anything else. go read about the history of gold and other precious metals and drop the fashionable post-modernist interpretations. gold is a physical object that was specially suited for coining in the beginning and its value continues to be based on its objective physical properties and scarcity. other similar substances like silver are also similarly valuable. this is not a coincidence.this is also the reason that gold is stable and safe, and measuring it in terms of dollars at any given moment is missing the point.

[ahosang 0]

look back at the history of the conversation. I'm not disputing that we have culturally assigned a value to gold that won't ever go away. I'm questioning the idea that "gold is stable."

Most stable store of wealth in human history. Through revolutions, wars and invasions, survivors have took this thing and ended up with some wealth even when run out of countries and chased off land. And been passed down for intergenerational wealth.If you're talking specifically in recent times, say last 50 years, then still stable as hblask says(and the inflation adjusted graph you posted showed). Don_G scratches surface of more nuanced points. The idea that aucu said was mining firms looking at 20-30 years. That's the sort of long-term stability(actually mining stock can go to nothing ldo).The idea is its a permanent store of value with fluctuations along the way dependent on political/economic happenings. If, as aucu suggested, the dollar and euro falls, then confidence in gold will skyrocket i believe(and so do most people more expert than me in the business of gold).I guess you're arguing over the definition of the term 'stable'. If you mean like little variance, then no...

[aucu 3]

I'm questioning the idea that "gold is stable."

Compared to what? Paper money issued by bankrupt governments or the bonds representing debt of those governments? or perhaps stock in companies that depend on stability and that the sovereign debt issues to just going away without a lot of kicking and screaming?

[aucu 3]

$800 in 1980 = $2125 in 2010. gold's $1388/oz today. as I said, gold isn't always stable, dependable, reliable, etc. just ask the people who got their faces ripped off 30 years ago.whether it's a GOOD investment right now is another discussion entirely.

Using a spike price of $800 from 30 years ago as a base is as bad or worst than saying that if you got suckered and bought tech stocks in 2000 when the NAS broke 5000 so now it's at 2600 and thats not even taking into consideration inflation shows that tech is "unstable" and should be avoided is just as unsound thinking as the anti gold argument.

[Skeleton Jelly 2]

I'm not trying to do anything except help you answer your question. I googled that and glanced. Find a site that does more inflation graph stuff if you need to.

I don't care about gold. I just found it curious that someone could say that gold is stable while also saying it's erratic and high risk.

[aucu 3]

I don't care about gold. I just found it curious that someone could say that gold is stable while also saying it's erratic and high risk.

It depends on your time frame and the way you invest in the metal. I invest on the discovery to production end which by it's nature is boom or bust but what I know best.Holding the actual metal as an alternative currency is not my thing but it is reasonable but going to the far end of the ideological spectrum the end of the world, bomb-shelter type arguments are a bit batty.

[Quacktastic 106]

It depends on your time frame and the way you invest in the metal. I invest on the discovery to production end which by it's nature is boom or bust but what I know best.Holding the actual metal as an alternative currency is not my thing but it is reasonable but going to the far end of the ideological spectrum the end of the world, bomb-shelter type arguments are a bit batty.

I think a bomb-shelter type arguement can be rational, although crazy.

[strategy 4]

Most stable store of wealth in human history. Through revolutions, wars and invasions, survivors have took this thing and ended up with some wealth even when run out of countries and chased off land. And been passed down for intergenerational wealth.If you're talking specifically in recent times, say last 50 years, then still stable as hblask says(and the inflation adjusted graph you posted showed). Don_G scratches surface of more nuanced points. The idea that aucu said was mining firms looking at 20-30 years. That's the sort of long-term stability(actually mining stock can go to nothing ldo).The idea is its a permanent store of value with fluctuations along the way dependent on political/economic happenings. If, as aucu suggested, the dollar and euro falls, then confidence in gold will skyrocket i believe(and so do most people more expert than me in the business of gold).I guess you're arguing over the definition of the term 'stable'. If you mean like little variance, then no...

I'm fine with this argument, but I don't at all think it's appropriate reasoning for holding gold right now. that spike in the 80s? nuclear war was a realistic possibility. the commies were still a threat. it was totally rational to want to hold gold during that period. today, I just don't see any problems in the world rising to that level.I don't agree with everything this guy says, but he does mention that gold mining companies have a storied history of hedging and getting screwed.http://www.npr.org/blogs/money/2010/09/07/...ders-guns-money

Compared to what? Paper money issued by bankrupt governments or the bonds representing debt of those governments? or perhaps stock in companies that depend on stability and that the sovereign debt issues to just going away without a lot of kicking and screaming?

compared to any of the billion other ways to hedge the dollar?

Using a spike price of $800 from 30 years ago as a base is as bad or worst than saying that if you got suckered and bought tech stocks in 2000 when the NAS broke 5000 so now it's at 2600 and thats not even taking into consideration inflation shows that tech is "unstable" and should be avoided is just as unsound thinking as the anti gold argument.

I was referencing a period of price instability. it's completely fair re: mdm's "stable" comment. if he wants to expand on what he meant, I'm ready and willing to concede that it is special+stable in some contexts.

[mtdesmoines 3]

so, in other words, it's not stable?

I dunno. I guess the whole idea of the "gold standard" was to tie our currency to it because it was stable.

$800 in 1980 = $2125 in 2010. gold's $1388/oz today. as I said, gold isn't always stable, dependable, reliable, etc. just ask the people who got their faces ripped off 30 years ago.whether it's a GOOD investment right now is another discussion entirely.

Well, compared to other places to store money, people didn't get their faces ripped off. I mean, we were talking 19% mortgages, tripling of gas prices and gas lines, wage and price controls, etc. The 70's-80 were not a sweet time in the US or world economy. Gold price movements were then, as now, more a reflection of faithlessness in currencies and the US dollar than variance in the value of gold.