Where are the gold bugs now?

[dojo]

We had some rough years here in my country. We come from almost half a century of Comunism which is THE WORST thing to happen to us. The situation is as follows:

1. a lot of old people: they worked their behinds off, so I consider they're ENTITLED to their pension. which is pretty small actually ...

2. people my age (33 my case) don't rush into making babies, since they do cost a lot. And you need to prepare for school, offer them a decent future etc. So we're not giving birth too soon, except for the gypsies and all kinds of poor and uneducated people who do the deed and suffer the consequences. The State is pretty 'nice' to them, oferring a 2 year maternal 'leave' and child support. Which you guys in the US have no idea about, from what our friend in NYC told us.

Even so, people like me and others don't rush to it, since a child's life is more important than a small wage (~300 bucks, which is pretty normal in my country) and 2 years off work.

This means the population is getting older each year, so pensions will be hard to support in 30 years time.

3. IDIOTIC measures from our Government. I assume we're good to enter the Book of World Records. 3 years ago they got the 'smart' idea to put a 500 euro tax every 3 montsh on ALL small businesses, even if they are just good for the family to live and pay the taxes. OF course, big corporations (Nokia, Renault etc.) and exempt from various taxes, to make them stay in the country. Nice thing is that once their contract expires, they're ready to move onto another country ...

In 2009 I paid 80% of my income as a small business to the romanian state. Not to put my accountan's salary. I am forced to have an accountant, even if I make few 'deals' each month. With all this I came close to 90%. Now I have an offshore, they can kiss my money goodbye.

INstead of supporting the small investors and business men, they are still under that wretched COmunist idea that business owners are bad and all that jazz. So they decapitated hundreds of thousands of business these years and still don't get it.

We're not relying on the Euro too much, you guys hear about it already. The USD is as bad as this. So buying SOLID gold as coins is a good way to save my money from the wrong things that are to come

[disneysteve]

im 50% metal and 50% cash flowing real estate, all extra cashflow goes to metal every month, hows that for diversified...think im nuts? im a retired 2 years ago at 39 nut.

Since gold provides no income, interest or dividends, I assume you are living on the income generated by the real estate.

[97guns]

assumption correct

[Kooshiball]

I have great portion of portofolio in both gold and silver (Physical not paper). I do think very high-inflation if not hyperinflation is coming very soon as currency wars starts to intensify (US against everybody elses). US will keep devaluing its currency to increase domestic employment so they will print and other countries will react this by printing their currency to offset. This process already started and it will get worse and worse.

During high-inflation or hyperinflation, investments that making sense is to gold and silver (Physical) and buying asset like real estate with taking debt (debt will be effectively destoryed by it). Worst investment you can make during hyperinflation or high inflation is fixed income like pension, bond, saving. Those will be totally destoryed by inflation. For example, collecting $1000 a month in pension but it won't be any good if gallon of milk costs $100 / gallon. This is how many people lost their money during hyperinflation. Many people said "it is not going to happen here but please think that it happened many times in the history including, Germany, Hungary, Japan, China, Chili, Zimbabwe etc and hyperinflation happened in US soil twice (During civil war and the other is during revolutionary war). So, it is not totally out of scope to ask if hyperinflation will happen in US. As far as I see what government and central banks are doing right now, hyperinflation will happen in near future.

That's my take...

[greenskeeper]

good points, also the global paper money experiment has only been around for about 150 years

[97guns]

paper currency is backed by nothing now, it is fiat money. gold and silver backing of us currency ceased to exist over 50 years ago. if you look at the gold chart starting in 2008 when leahman brothers went down, derivitives uncoiling came into play, and the fed started pumping the economy with the printing press the gold chart has gone nuts.

[Kooshiball]

I read somewhere that life of fiat currency is usually last 30 - 40 years or so Nixon took the US dollar off the gold standard on 1971 so we've been in dollar standard for just over 40 years (Fiat currency) and have already seen simptom of collapsing... It is just matter of time in my view...

Better stacking the gold and silver in my opinion...

[97guns]

i also feel fiat currency is on its very last leg, look whats happening in europe, once the euro falls we have very little time untill the dollar collapses. everything is tied together, stocks, bonds and everything paper will fail. it is not a matter of if but when, the world has dug way too deep a hole to get out of, the only way out is to print to infinity, austerity cuts will not work, much too late or cuts.

[Kooshiball]

i also feel fiat currency is on its very last leg, look whats happening in europe, once the euro falls we have very little time untill the dollar collapses. everything is tied together, stocks, bonds and everything paper will fail. it is not a matter of if but when, the world has dug way too deep a hole to get out of, the only way out is to print to infinity, austerity cuts will not work, much too late or cuts.

I agree... In spite of austerity measure (All of PIIGS nations have austerity governments), 10 year bond of most PIIGS nations have increased since september 2011... That means that there is no bullets for technocrats to stop this.

Once Eurozone implode, then this will surely hit hard to US shore since US banking system has major exposure to the credit default swap (For European sovereign debt). This will be the another Lehman moment. It is very interesting to see what Fed and other central banks reaction once it happens (Even everyone knows that only weapon they know is to print the paper into oblivion...)

[97guns]

we can just hope the other members here read this and open their eyes, things will fall like domino's. in fact since the lehman debacle the domino's have been in motion, we could be near the end of the domino's.

[Kooshiball]

we can just hope the other members here read this and open their eyes, things will fall like domino's. in fact since the lehman debacle the domino's have been in motion, we could be near the end of the domino's.

I totally hear you...

[NetSkyBlue]

This will be the another Lehman moment.

Could someone explain what this means? Sorry to be such a noob

[97guns]

i dont know how to cut and paste with this new mac but do a wiki search for lehman brothers.

[Kooshiball]

Could someone explain what this means? Sorry to be such a noob

Hi. Do you know what happened in Lehman brothers right? Lehman (and other investment banks and other big commercial banks) had credit default swap insure against default of insitution like AIG. Credit default swap is the financial derivative. It works like a insurance. In this case, AIG is paying the premium to the Lehman brothers and in turn, Lehman have obligation to pay the AIG in case of AIG default. In 2008, major insurance institutions like AIG went down so all the banks including Lehman brothers and Bear sterns and others needs to pay the massive amount to AIG. Since derivative market (Derivatives including credit default swap) was 30 - 40 times bigger than the US national debt, all the US financial system plunged dramatically...

New Lehman type crisis is coming on this horizon except this time is european sovereign debt. Size of this is much bigger than the 2008 (With stroid. times at least 5 times bigger).

[NetSkyBlue]

i dont know how to cut and paste with this new mac but do a wiki search for lehman brothers.

I see it was an investment bank that went bankrupt, but I don't understand what that has to do with mutual funds.

Is the advice to avoid all major investment firms? I'm a bit lost, I'm sorry.