Owning Gold

[Nutria]

But throughout had history, gold and land probably were the only 2 hard assets that had maintained real value.

You're ignoring the other precious coinage metal: silver. I'd mention the other precious metals (platinum and palladium), but they're too new to Europeans.

Only one thing is called real estate, and it's not gold (which only has value because it's rare and we think it's shiny pretty).

If the apocalypse happens, no one will be around to care about gold or anything else.

Don't tell that to the Preppers...

[~bs]

You're ignoring the other precious coinage metal: silver. I'd mention the other precious metals (platinum and palladium), but they're too new to Europeans.

Only one thing is called real estate, and it's not gold (which only has value because it's rare and we think it's shiny pretty).



Don't tell that to the Preppers...

That is true. I tend to mentally think of gold/silver as somewhat similar. And both have held good value over time.

I think historically, it's been around 15-20:1 as the ratio between silver ounces to gold. In roman times, it was around 12:1. Right now, it's at 1240/15 = 82 ounces of silver to 1 ounce of gold. That's actually a bit on the higher side, and might indicate silver is relatively cheap to gold.

[Nutria]

That is true. I tend to mentally think of gold/silver as somewhat similar. And both have held good value over time.

http://www.macrotrends.net/1470/historical-silver-prices-100-year-chart

Make sure that "Log Scale" is un-checked, and "Inflation-Adjusted" is checked.

I think historically, it's been around 15-20:1 as the ratio between silver ounces to gold. In roman times, it was around 12:1. Right now, it's at 1240/15 = 82 ounces of silver to 1 ounce of gold. That's actually a bit on the higher side, and might indicate silver is relatively cheap to gold.

Of what relevance is the price of gold to silver?

And while I've read about the 12:1 ratio before, it's only been on "Silver Bug" sites that want you to buy PMs from them. And even if it is true, what does what the Romans did with the amount of gold and silver that they had have to do with the prices of gold and silver now?

[rennigade]

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[~bs]

http://www.macrotrends.net/1470/hist...100-year-chart

Make sure that "Log Scale" is un-checked, and "Inflation-Adjusted" is checked.



Of what relevance is the price of gold to silver?

And while I've read about the 12:1 ratio before, it's only been on "Silver Bug" sites that want you to buy PMs from them. And even if it is true, what does what the Romans did with the amount of gold and silver that they had have to do with the prices of gold and silver now?

Ok, what is the point of that chart?



it's to evaluate cheapness as one related to another. Is there better value spending $1k on one or the other as of a certain point in time, that sort of deal.

Trust me, it's been on far more sites

Google says "About 855,000 results (0.35 seconds) "

[JBinKC]

My rule: I would hold enough physical as protection for an event to allow you to escape a trending impending implosion event. Example if you held physical gold as a citizen in Venezuela you would have a chance to escape before there is total carnage and anarchy. At this juncture the hyperinflation has eroded unprotected citizens wealth by an amount enough to make them unable to leave financially. They are now stuck.

[sv2007]

My rule: I would hold enough physical as protection for an event to allow you to escape a trending impending implosion event. Example if you held physical gold as a citizen in Venezuela you would have a chance to escape before there is total carnage and anarchy. At this juncture the hyperinflation has eroded unprotected citizens wealth by an amount enough to make them unable to leave financially. They are now stuck.

I agree with you. Also, a few things that popped into my mind while thinking about Venezuela's situation.

Gold is an investment class that costs money to hold and has generally localized market (e.g. most people must sell it where ever they can carry it; and carrying it far may either be illegal or see its amount decreased by bribes). It can be a diversification but probably not good as the bulk of the investment.

As for our Venezuela friends, I wonder if holding foreign investments and with enough money and connections (perhaps must paid for by gold) to get out is better. Maybe that's why a lot of 3rd world holds USD privately (even if illegal) as insurance like gold. Paper is a lot lighter and easier to hide on the person.

[JBinKC]

US dollars are king in Venezuela. The black market rate for conversion is about 3-4 times higher than the official rate.

But for major currencies with a much lower probability of implosion I think my rule is appropriate with regard to physical. As for efficiency in conversion it will always favor the dealer in any circumstance even under normal conditions.

[sv2007]

do you really get robbed/assaulted that often?

I think all it takes is once in these types of situations; so let's ask this question, "How often does your house burn down?" Ok, so why the homeowner's insurance : )

Being prepared is generally a good thing. Now, I'm not sure about being prepared with a gun that you don't really know how to use or don't have a tactical plan to it; but if you do know, then I'd say that can be a good option for protection.

In fact, my dad has been asked me about getting a gun for HD due to LV crime; I know his neighborhood is pretty safe (it is gated within a gated community) and I think I know why he wants a gun. Some people think guns are cool and fun; but that's the wrong way to look at it. They are tools; like a calculator, that's designed to do a task. I know because I used to think like that in 1994 when I bought my first Glock 17.

I may take my dad to the shooting ranges and give him some training, and give him a couple of guns. Actually, I already know what I want to give him: a Beretta 96 pistol and a Storm carbine; shares magazines and 40sw perfect for HD; and incredibly easy to hit your target.

I think I'll see if he wants some range time; I'll keep you guys updated.

[james.hendrickson]

Gussas - Silver is easier to acquire because its cheaper.

I looked at the numbers a while back and I couldn't find any evidence that gold was negatively correlated with other asset classes - just some opinion pieces of the web - no hard evidence. So, its not at all clear to me that gold will provide the diversification that some people say it will.

[greenskeeper]

Thats interesting, I thought gold was more valuable? I do have a gold ring, it's nothing much, but it is gold however....

Gold is more valuable but the silver ratio is out of whack and has been for some time.