Gold: Past, Present, and Future

Patrick Moore3 said:Maybe Bennett wants to play Robin Hood, handing out dollars and wiping away debts like some kind of hero. But here’s the thing: if you give something to one person, you had to take it from someone else first. You can't just print money out of thin air. When they print it, they're actually snatching it from everyone who actually has something—including our retirement funds—just to hand it over to debtors. Honestly? I think they'd rather watch people starve than part with their capital.

No, Ben can't just hand out cartridges—you've got a point there... only Congress has that kind of power, and we might very well see them try it in the near future.

dustyheron5 said:No, Ben can't just hand out cartridges—you've got a point there... only Congress has that kind of power, and we might very well see them try it in the near future.

If the middle and working classes actually end up sitting in Congress, then yeah, it's looking likely... but let's be real, they don't even have the cash to run a campaign (and good luck finding a donor who'd willingly take a hit to their own net worth). I highly doubt they'll be the ones calling the shots.😉

Patrick Moore3 said:A 50-50 split is impossible. That would mean everyone has equal cash... which isn't reality. We all know a tiny fraction of people hold most of the wealth...

If we stop looking at hedge funds and the big institutional players and look at the middle class—the folks without debt who actually have savings—it hasn't been this easy for them to afford a house, a car, or any major investment in years... or even just blowing it on a vacation! So, from that angle, their cash still carries some weight. We live in a consumerist society where everything is designed to push spending on you...

As far as I know, it dropped from $1,900 down to $1,550 over the last year... there's always going to be people selling.😉

Goldman Sachs buddy, buddy...

For sure they exist, but they get drowned out by a massive pile of trolls...

Not everyone has the same amount of money; rather, the total volume of debt corresponds to the total level of claims... that is what I was referring to (I agree that physical cash is distributed very unevenly)

The middle class—specifically the less savvy portion of it—is in a very precarious position. I’m hearing that they are shifting away from hedonism toward pure survival and saving... if they can even manage that, given their lack of cash. Beyond that, they are trying to liquidate assets like homes and cars purchased during the market peak. I honestly believe they would drastically scale back the excess of previous years if they even had the option... but they don't. 😉

Regarding the gold price drop from 1900 to 1550, that is accurate, though it sits at 1770 now...
And even in a bull market, stock prices don't move in a straight line. The bottom line is that those who entered metals over the last decade are in the green, while those who went into equities are mostly in the red—at least in the American context; our view from here is a bit more nuanced.

Patrick Moore3 said:If the middle and working classes actually end up sitting in Congress, then yeah, it's looking likely... but let's be real, they don't even have the cash to run a campaign (and good luck finding a donor who'd willingly take a hit to their own net worth). I highly doubt they'll be the ones calling the shots.😉

I agree—I was simply pointing out that, both in theory and in practice, the Federal Reserve can't just hand out cash... that power belongs solely to Congress.

dustyheron5 said:I agree—I was simply pointing out that, both in theory and in practice, the Federal Reserve can't just hand out cash... that power belongs solely to Congress.

You also have to ask if Ben can even print money without that liquidity leaking into places it was never meant to go. Spoilers: he can't.

dustyheron5 said:Not everyone has the same amount of money; rather, the total volume of debt corresponds to the total level of claims... that is what I was referring to (I agree that physical cash is distributed very unevenly)

The middle class—specifically the less savvy portion of it—is in a very precarious position. I’m hearing that they are shifting away from hedonism toward pure survival and saving... if they can even manage that, given their lack of cash. Beyond that, they are trying to liquidate assets like homes and cars purchased during the market peak. I honestly believe they would drastically scale back the excess of previous years if they even had the option... but they don't. 😉

Regarding the gold price drop from 1900 to 1550, that is accurate, though it sits at 1770 now...
And even in a bull market, stock prices don't move in a straight line. The bottom line is that those who entered metals over the last decade are in the green, while those who went into equities are mostly in the red—at least in the American context; our view from here is a bit more nuanced.

That bigger chunk of the middle class has to pay down those overpriced homes first... and that’s gonna take forever. The smaller group that isn't buried in debt sees an opening now since things are cheaper, but the memory of people getting burned on Wall Street is still fresh... so I’m not so sure how much they actually want to invest! Who knows? Just thinking out loud, trying to see the big picture.

dustyheron5 said:Not everyone has the same amount of money; rather, the total volume of debt corresponds to the total level of claims... that is what I was referring to (I agree that physical cash is distributed very unevenly)

The middle class—specifically the less savvy portion of it—is in a very precarious position. I’m hearing that they are shifting away from hedonism toward pure survival and saving... if they can even manage that, given their lack of cash. Beyond that, they are trying to liquidate assets like homes and cars purchased during the market peak. I honestly believe they would drastically scale back the excess of previous years if they even had the option... but they don't. 😉

Regarding the gold price drop from 1900 to 1550, that is accurate, though it sits at 1770 now...
And even in a bull market, stock prices don't move in a straight line. The bottom line is that those who entered metals over the last decade are in the green, while those who went into equities are mostly in the red—at least in the American context; our view from here is a bit more nuanced.

You're spot on. Anyone who jumped into PM before last year is definitely up. But over the last twelve months, most are down while equity folks are up! It's not that I'm strictly against PM; back in 2007, I was looking at it and almost pulled the trigger on gold... If gold were a true hedge against inflation, I'd have 50% of my net worth in it, but with all the manipulation going on, I don't buy it anymore. My take now? Gold has nowhere to go but sideways or down for the reasons I mentioned. Am I right or wrong? Only time will tell.

dustyheron5 said:Not everyone has the same amount of money; rather, the total volume of debt corresponds to the total level of claims... that is what I was referring to (I agree that physical cash is distributed very unevenly)

The middle class—specifically the less savvy portion of it—is in a very precarious position. I’m hearing that they are shifting away from hedonism toward pure survival and saving... if they can even manage that, given their lack of cash. Beyond that, they are trying to liquidate assets like homes and cars purchased during the market peak. I honestly believe they would drastically scale back the excess of previous years if they even had the option... but they don't. 😉

Regarding the gold price drop from 1900 to 1550, that is accurate, though it sits at 1770 now...
And even in a bull market, stock prices don't move in a straight line. The bottom line is that those who entered metals over the last decade are in the green, while those who went into equities are mostly in the red—at least in the American context; our view from here is a bit more nuanced.

True, but... how many of them actually held onto metals over the last 10 years?
One in a hundred?
One in three hundred?

Lucky for those of us holding gold or silver, though I don't envy everyone else. Given how things are looking right now, the PM has plenty of reasons to let rates climb.
It’s a grim outlook; most people are going to end up broke after this mess plays out, and I'm certainly not celebrating that—unless, of course, everything truly hits the fan if the Middle East ignites and drags the rest of the world down with it.
The middle class? Honestly, I think it’s basically a myth at this point.

Anthony Evans78 said:Lucky for those of us holding gold or silver, though I don't envy everyone else. Given how things are looking right now, the PM has plenty of reasons to let rates climb.
It’s a grim outlook; most people are going to end up broke after this mess plays out, and I'm certainly not celebrating that—unless, of course, everything truly hits the fan if the Middle East ignites and drags the rest of the world down with it.
The middle class? Honestly, I think it’s basically a myth at this point.

In America, you basically call someone "middle class" if they pull in more than $3600 a year—if my math isn't totally off

Anthony Evans78 said:Lucky for those of us holding gold or silver, though I don't envy everyone else. Given how things are looking right now, the PM has plenty of reasons to let rates climb.
It’s a grim outlook; most people are going to end up broke after this mess plays out, and I'm certainly not celebrating that—unless, of course, everything truly hits the fan if the Middle East ignites and drags the rest of the world down with it.
The middle class? Honestly, I think it’s basically a myth at this point.

Setting aside the middle class and the Middle East for a second—do you actually think the PM will climb high enough to make up for your lost job?

I personally doubt we'll see those extreme, doomsday scenarios. Even if we ended up in a conflict with, say, Iran, that still isn't some massive existential threat to America, and I find it hard to imagine a sane scenario where a war spreads to the entire globe.

Since we're talking inflation, it seems to me that China has consistently kept their inflation higher than bank interest rates just to force people to dump their cash into companies. It feels like we might see a similar move on the "West" side—pushing through some single-digit inflation as the price for recovery. It’s a clever way to drain money from the hands of the middle class and funnel it straight into the pockets of politicians and those "can't-miss" stocks, like Facebook...

If that actually happens, then the winners will be the people jumping into PM today (or even earlier). By the time it becomes obvious that inflation is being forced upward, 90% of the population with a little bit of savings will be scrambling to get in, which will send the price of PM soaring way past the inflation rate. That’s your window to sell.

Melissa Sanchez17 said:In America, you basically call someone "middle class" if they pull in more than $3600 a year—if my math isn't totally off

Jerry, Todd is definitely middle class!
Where did that 10800 figure even come from?

lonehawk5 said:True, but... how many of them actually held onto metals over the last 10 years?
One in a hundred?
One in three hundred?

I agree they are few—but they exist... though that isn't really the point.

I am not an advocate for putting everything into a single asset class—which is why I criticize those folks over on the Berkshire Hathaway thread who focus solely on equities (stocks, stocks, and more stocks). 😂

I've touched on this before: the core philosophy of investing was laid out quite clearly by Leon Richardson in his book Investment I... essentially, gold, stocks, bonds, cash, and real estate (if you can manage it)—every asset has its own cycles of peaks and valleys. There is no sense in sitting on your hands in one asset while it's in a bear market if another asset is currently in a bull run.
I don't have much else to add to that...🤣

Right now, American stocks are in a secular bear market... and buying at this stage, when the S&P 500 is hovering near its 2000 or 2007 highs, doesn't strike me as particularly wise. Secular bear markets typically drag on for about 16 to 18 years—think 2000 through 2017.

dustyheron5 said:I agree they are few—but they exist... though that isn't really the point.

I am not an advocate for putting everything into a single asset class—which is why I criticize those folks over on the Berkshire Hathaway thread who focus solely on equities (stocks, stocks, and more stocks). 😂

I've touched on this before: the core philosophy of investing was laid out quite clearly by Leon Richardson in his book Investment I... essentially, gold, stocks, bonds, cash, and real estate (if you can manage it)—every asset has its own cycles of peaks and valleys. There is no sense in sitting on your hands in one asset while it's in a bear market if another asset is currently in a bull run.
I don't have much else to add to that...🤣

Right now, American stocks are in a secular bear market... and buying at this stage, when the S&P 500 is hovering near its 2000 or 2007 highs, doesn't strike me as particularly wise. Secular bear markets typically drag on for about 16 to 18 years—think 2000 through 2017.

Keep in mind gold is sitting in a secular bull market that also has an expiration date, maybe around 2018 or 2019. I know, I know—talking about gold is basically taboo on this board.😁

The name of the game is identifying the secular bull and riding it. You'll need to start sniffing out the next big move soon; it might manifest as a specific breakout sector within the stock market itself.

Paul Peterson4 said:Setting aside the middle class and the Middle East for a second—do you actually think the PM will climb high enough to make up for your lost job?

I personally doubt we'll see those extreme, doomsday scenarios. Even if we ended up in a conflict with, say, Iran, that still isn't some massive existential threat to America, and I find it hard to imagine a sane scenario where a war spreads to the entire globe.

Since we're talking inflation, it seems to me that China has consistently kept their inflation higher than bank interest rates just to force people to dump their cash into companies. It feels like we might see a similar move on the "West" side—pushing through some single-digit inflation as the price for recovery. It’s a clever way to drain money from the hands of the middle class and funnel it straight into the pockets of politicians and those "can't-miss" stocks, like Facebook...

If that actually happens, then the winners will be the people jumping into PM today (or even earlier). By the time it becomes obvious that inflation is being forced upward, 90% of the population with a little bit of savings will be scrambling to get in, which will send the price of PM soaring way past the inflation rate. That’s your window to sell.

If the absolute worst-case scenario hits, losing your job will be the least of your worries.🙂
But let's hope it doesn't. In the meantime, I'm working on getting as far outside the system as possible—solar power, well water, a small garden, picking up certain skills, things like that. I'd rather have people laughing at me now than be caught unprepared later.

quiettrucker12 said:Keep in mind gold is sitting in a secular bull market that also has an expiration date, maybe around 2018 or 2019. I know, I know—talking about gold is basically taboo on this board.😁

The name of the game is identifying the secular bull and riding it. You'll need to start sniffing out the next big move soon; it might manifest as a specific breakout sector within the stock market itself.

Not for me...🤣

quiettrucker12 said:Keep in mind gold is sitting in a secular bull market that also has an expiration date, maybe around 2018 or 2019. I know, I know—talking about gold is basically taboo on this board.😁

The name of the game is identifying the secular bull and riding it. You'll need to start sniffing out the next big move soon; it might manifest as a specific breakout sector within the stock market itself.

I don't see it that way. Is it just me, or are you blurring the lines between the 2015-2016 era and 2019? I mean, it seems pretty obvious to everyone that we eventually hit a ceiling at some point.
Maybe grabbing some farmland isn't a bad move for the long haul?

Melissa Sanchez17 said:I don't see it that way. Is it just me, or are you blurring the lines between the 2015-2016 era and 2019? I mean, it seems pretty obvious to everyone that we eventually hit a ceiling at some point.
Maybe grabbing some farmland isn't a bad move for the long haul?

Sure, we could see one more correction, but it would have to be a brutal one, dropping north of $3,000... that would be the real "deflationary period." Ben is probably just getting warmed up.

Patrick Moore3 said:That bigger chunk of the middle class has to pay down those overpriced homes first... and that’s gonna take forever. The smaller group that isn't buried in debt sees an opening now since things are cheaper, but the memory of people getting burned on Wall Street is still fresh... so I’m not so sure how much they actually want to invest! Who knows? Just thinking out loud, trying to see the big picture.

You're spot on. Anyone who jumped into PM before last year is definitely up. But over the last twelve months, most are down while equity folks are up! It's not that I'm strictly against PM; back in 2007, I was looking at it and almost pulled the trigger on gold... If gold were a true hedge against inflation, I'd have 50% of my net worth in it, but with all the manipulation going on, I don't buy it anymore. My take now? Gold has nowhere to go but sideways or down for the reasons I mentioned. Am I right or wrong? Only time will tell.

I was picking up gold at around $950 an ounce through the end of 2010. Now the spot price is sitting near $1,350. At the same time, I bought silver at $21 and could sell it now for $31, though it isn't quite as liquid or easy to move as gold. I guess you could say I beat inflation, wouldn't you?

Casey Price2 said:I was picking up gold at around $950 an ounce through the end of 2010. Now the spot price is sitting near $1,350. At the same time, I bought silver at $21 and could sell it now for $31, though it isn't quite as liquid or easy to move as gold. I guess you could say I beat inflation, wouldn't you?

And what about the folks who jumped in when gold hit $1,900? 😉 Though, if you look at the gold-to-dollar ratio, they didn't really lose out on the precious metal itself.
In my book, gold isn't some magic hedge against inflation—though you can certainly make money on it if the timing is right. If you want a real inflation hedge, go buy luxury watches or fine art (just ask any crooked politician)😂

Sure, gold might crawl back up to $1,900, but I wouldn't bet my life that something like ExxonMobil stock is ever going back to its old highs $127 (you should probably check with Bakić on that one) 😍

Look, gold is a thousand times more proven as a hedge against inflation than anything else, my friend 😉