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re: Can someone explain the pros and cons of gold?
Posted on 4/17/24 at 7:12 am to TDTOM
Posted on 4/17/24 at 7:12 am to TDTOM
Gold is now bought and sold tax-free in 45 of 50 states, confirming that, in the eyes of .gov, gold is currency. From another site:
When Nixon announced that the USA was no longer redeeming gold for dollars on 15 August, 1971, the government had been exchanging gold for dollars at $35.00 an ounce and the LBMA price of gold was approximately $43.00. As of 15 April, 2024, the current market price of gold is approximately $2,390.00 an ounce.
Over this period using the LBMA price of gold, it has compounded annually at a rate of :
(2390÷43.00)^(1÷52.6666666667) = 1.0792736442 or compounded at approximately 7.93% per annum for approximately 52.67 years as of 15 April, 2024 or to state it another way, the dollar has lost (1-(43.00÷2390.00)) = .9820083682 or approximately 98.20% of its value against gold.
I suspect that the dollar will lose that remaining 1.80% in the next 5 years against gold.
A compounded annual rate of approximately 7.93% for approximately 52.67 years is not too bad for a pet rock or a barbarous relic and if the a BRICS currency is eventually backed by gold then I suspect the compounding rate could exceed 8.50% compounding.
When Nixon announced that the USA was no longer redeeming gold for dollars on 15 August, 1971, the government had been exchanging gold for dollars at $35.00 an ounce and the LBMA price of gold was approximately $43.00. As of 15 April, 2024, the current market price of gold is approximately $2,390.00 an ounce.
Over this period using the LBMA price of gold, it has compounded annually at a rate of :
(2390÷43.00)^(1÷52.6666666667) = 1.0792736442 or compounded at approximately 7.93% per annum for approximately 52.67 years as of 15 April, 2024 or to state it another way, the dollar has lost (1-(43.00÷2390.00)) = .9820083682 or approximately 98.20% of its value against gold.
I suspect that the dollar will lose that remaining 1.80% in the next 5 years against gold.
A compounded annual rate of approximately 7.93% for approximately 52.67 years is not too bad for a pet rock or a barbarous relic and if the a BRICS currency is eventually backed by gold then I suspect the compounding rate could exceed 8.50% compounding.
This post was edited on 4/17/24 at 7:14 am
0
Posted on 4/17/24 at 7:16 am to tgerb8
Eggs in many baskets.
Cash
Stocks
Precious metals
Ammo
Bonds
Crypto
Real Estate
Obviously, not in equal amounts, but having some in each affords some degree of stability and security that you'll still have something at the end of the day.
Cash
Stocks
Precious metals
Ammo
Bonds
Crypto
Real Estate
Obviously, not in equal amounts, but having some in each affords some degree of stability and security that you'll still have something at the end of the day.
Posted on 4/17/24 at 7:19 am to tgerb8
I suppose if it really hits the fan, you could say physical gold will have better recognizable value than a $100 bill.
But only people that really know how to tell what real gold is, will buy it from you or allow it as a barter.
Then you may have an issue with having a $2300 dollar price of gold paying for only $1000 worth of goods.
Is the seller going to reimburse you in the cash that you don’t want?
Or are you going to have to agree to buy $1300 more worth of stuff and then rent a UHaul to haul it off?
Then you start thinking that you shoulda got some 1/4 oz pieces. But they don’t look like AEagles.
Funny, I didn’t know all of this until I typed it. So it may be all comically false.
But only people that really know how to tell what real gold is, will buy it from you or allow it as a barter.
Then you may have an issue with having a $2300 dollar price of gold paying for only $1000 worth of goods.
Is the seller going to reimburse you in the cash that you don’t want?
Or are you going to have to agree to buy $1300 more worth of stuff and then rent a UHaul to haul it off?
Then you start thinking that you shoulda got some 1/4 oz pieces. But they don’t look like AEagles.
Funny, I didn’t know all of this until I typed it. So it may be all comically false.
Posted on 4/17/24 at 7:21 am to Bamadog75
quote:
Gold has been used for currency for thousands of years , the dollar only a few hundred years. In 1935 if you buried an ounce of gold and 35 bucks they were about the same. Come back 90 years later the ounce of gold is worth 2400 the 35 bucks is the same. Not very hard to understand.
That 35 dollars actually buys you less than it did back then. That makes your example even stronger for gold.
Posted on 4/17/24 at 7:24 am to blueboy
Just ask yourself this question:
Would I prefer a $100 bill or a nugget of gold worth $100. Your answer should make it clear to you.
Would I prefer a $100 bill or a nugget of gold worth $100. Your answer should make it clear to you.
Posted on 4/17/24 at 7:26 am to dstone12
quote:
Then you may have an issue with having a $2300 dollar price of gold paying for only $1000 worth of goods.
Is the seller going to reimburse you in the cash that you don’t want?
Or are you going to have to agree to buy $1300 more worth of stuff and then rent a UHaul to haul it off?
I'd love to see the Goldbacks actually become a thing. It's a bill made from a certain weight of gold foil. Right now it's a novelty thing and there is a large premium but if it actually became a currency it may work.
Posted on 4/17/24 at 7:34 am to DotBling
quote:
Most can buy in IRA.
Never let someone else keep your precious metals. When it hits the fan you'll never get yours.
Gubment also confiscated gold in 1933:
May 1, 1933 – President Roosevelt's Executive Order 6102 required U.S. citizens to deliver on or before May 1, 1933, all but a small amount of gold coin, gold bullion, and gold certificates owned by them to the Federal Reserve, in exchange for $20.67 per troy ounce. Under the Trading With the Enemy Act of October 6, 1917, as amended on March 9, 1933, violation of the order was punishable by fine up to $10,000 ($167,700 if adjusted for inflation as of 2010) or up to ten years in prison, or both. An exception to the order was listed in section 2 (b) “Gold coin and gold certificates in an amount not exceeding in the aggregate $100 belonging to any one person; and gold coins having a recognized special value to collectors of rare and unusual coins.”
Posted on 4/17/24 at 7:35 am to tgerb8
quote:
my financial advisor is against it. and I usually just take his advice because I don't know much about it.
I think I heard it is up 7% in last 5 years so not s good inflation hedge
This was from a crypto baw on MSNBC though
Posted on 4/17/24 at 7:36 am to rob0710
quote:
I'd love to see the Goldbacks actually become a thing. It's a bill made from a certain weight of gold foil. Right now it's a novelty thing and there is a large premium but if it actually became a currency it may work.
Not that you would, but you could, at the current rate, haul 1M$ in gold around in a small backpack, which would weigh about the same as a small backpack with 1M$ in 100 dollar bills.
And, not that you would, but you could sell a car valued at $24,000 by accepting ten gold American Eagles, which are noted to be worth $50 - clearly stated on the coin, minted by .Gov - and pay the local tax man their cut of sales tax: 7% of $500, or $35. If gold coins are US currency, then, why not.
This post was edited on 4/17/24 at 7:44 am
Posted on 4/17/24 at 7:37 am to tgerb8
The same volume of gold buys the same sized home in 1970 as it does in 2024. Gold is a store of value against inflation.
Posted on 4/17/24 at 7:43 am to rob0710
quote:
quote:Then you may have an issue with having a $2300 dollar price of gold paying for only $1000 worth of goods. Is the seller going to reimburse you in the cash that you don’t want? Or are you going to have to agree to buy $1300 more worth of stuff and then rent a UHaul to haul it off?
I'd love to see the Goldbacks actually become a thing. It's a bill made from a certain weight of gold foil. Right now it's a novelty thing and there is a large premium but if it actually became a currency it may work.
I saw a precious metals dealer on YouTube showing and talking about Goldbacks awhile back, he said they seemed to be more of a novelty item a few years ago but he claims he's selling a lot of them now, they look pretty cool.
Posted on 4/17/24 at 7:46 am to Bass Tiger
quote:
I saw a precious metals dealer on YouTube showing and talking about Goldbacks awhile back, he said they seemed to be more of a novelty item a few years ago but he claims he's selling a lot of them now, they look pretty
You know there’s a new interest in gold among the everyday citizen when you learn that Costco is selling around 2 billion in gold every year. That’s not Central Bank buying.
Posted on 4/17/24 at 7:52 am to tgerb8
We like gold, because other people like it, and there will always be a demand for it.
Just read up on the Jews and WWII.
Just read up on the Jews and WWII.
Posted on 4/17/24 at 8:01 am to Timeoday
quote:If society collapsed or otherwise radically simplified itself, both would be equally worthless.
Would I prefer a $100 bill or a nugget of gold worth $100. Your answer should make it clear to you.
Posted on 4/17/24 at 8:03 am to OccamsStubble
Gold is the only financial asset without counterparty risk, and one of the few assets to protect against the failure of government-issued Fiat currency. (every fiat currency fails …. 100% in fact)
Central banks are massively buying gold bullion (particularly China, Russia) in an effort to hedge against global financial instability.
Today, you can sell gold through dealers, coin shops, metal brokers, personal transactions, and refinery/ smelter dealers.
The US has announced the implementation of CBDC by January 2030, a mere 5 years away. At that time, you will only be able to liquidate gold in the US through government-registered gold dealers. You will still be able to sell it off shore in the same manner as today. (Which is the same way a crypto transaction will work offshore)
Central banks are massively buying gold bullion (particularly China, Russia) in an effort to hedge against global financial instability.
Today, you can sell gold through dealers, coin shops, metal brokers, personal transactions, and refinery/ smelter dealers.
The US has announced the implementation of CBDC by January 2030, a mere 5 years away. At that time, you will only be able to liquidate gold in the US through government-registered gold dealers. You will still be able to sell it off shore in the same manner as today. (Which is the same way a crypto transaction will work offshore)
This post was edited on 4/17/24 at 8:17 am
Posted on 4/17/24 at 8:10 am to tgerb8
This would be a great topic for the money board. Can't see the politics in your post.
Posted on 4/17/24 at 8:20 am to SixthAndBarone
Deficit spending, and the resulting inflation that is massively diluting the value of the Us Dollar ….. is entirely a political problem
Posted on 4/17/24 at 8:27 am to cadillacattack
quote:
Deficit spending, and the resulting inflation that is massively diluting the value of the Us Dollar ….. is entirely a political problem
Bingo. It's a policy position.
"we can't suggest higher taxes, they'll vote us out!"
"Wull, we have no choice - our spending far exceeds our revenue, we need more tax"
"OK, what if we kept taxes the same, revenue stays same, spending increases, and we pay the difference by printing the difference"
"That leads to inflation"
"So inflation is the tax that taxpayers cannot vote for or against?
"Yeah. Sweet deal, no?"
Posted on 4/17/24 at 8:29 am to tgerb8
Guns and Ammo
Posted on 4/17/24 at 8:45 am to tgerb8
Most financial advisors don't "like" it because if you buy physical gold, they're by and large cut out of the action. No other reason.
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