[Homestead] More on Gold
bobford79 at yahoo.com
Wed Dec 31 06:15:20 EST 2008
--- On Wed, 12/31/08, Leslie <cayadopi at yahoo.com> wrote:
> <<<<".....phenomenon of a bubble, you must sell somewhere around the zenith. Or at least on the risings side of things higher than you paid
for it. If the gold investor's stragegy is to exploit the bubble,there's really not a lot of leeway in the timing to besuccessful." >>>>
I disagree,,,, there is time, but not in terms of years or making a decision - decision making time tends to need to be made within a few short weeks/months once the top is in.
******* You are essentially correct, Leslie. With any 'investment', a person needs an "exit strategy", but timing is not equal among investments. One thing about gold, currencies, tresuries; they are liquid. Real estate , on the other hand is il-liquid.
Practically everyone saw the bubble in real-estate , and some of us knew the end time was near. Sometimes , just general things in life -- health, personal, etc --things come up when you can't move quickly. Being able to react quickly is imporantant. I didn't react quickly enough and real-estate was too il-liquid for me to divest myself of all of my excess at the proper time.
But, I have been buying and selling real-estate off-and -on for decades; sometimes your timing is off, especially in a once-in-lifetime blow-off. I still have the real-estate. It has already improved in value since Spetember. Maybe , as the economy changes this year -- as the country is flooded with trillions of dollars--I can sell, at not as much a loss as I would now. If not, then I guess somewhere down the road it will be worth something to my brother's kids. Now that I have worked out my deal with the gov't, I can see just how poor I am becoming, but that doesn't mean everythjing tangible dissappears.
Exit strategy is very important for any investment, but as you say, sometimes gold is not looked at as an investment, but rather as a store of wealth. In times like these, if a man were to be ultra-consevative, you might say he would keep his money in his mattress. But, really, the most conservative way to keep your excess would be half cash -- half gold. They move in inverse. If the dollar continues to gain, gold will drop. If the dollar drops (and goodness knows, it should ) gold will rise. That is a fact proven by history.
Never listen to the people who yell "this time is different". Really, every time is 'different' and every time it isn't different. There are too many ways to compare. But, whether looking at technical analysis or fundamentals, gold , as a commodity, should be much cheaper; therefore gold is acting as a currency. yet, gold, as a currency, should be much higher?
In the end, a man has to make his own decisions for what he think will work best for him. Property taxes have taken away many homes, farms, etc, in the past -- we have become better at taxing; property taxes could take away that which no-one now is even considering. Things might be different this time, why does one man need more than five acres (or 3 acres or whatever), maximum? Maybe a federal property tax on 'excess' acreage is what people will think we need to pay off our debts. Since the vast majority of people live on less than an acre , the vast majority of people would not have a problem voting for people who would enact such a tax.
Just like people don't mind taxing people who make or have more money than them. Now, that would be horrid for people like you and me; but; anything is possible; and everything is a gamble; some scenarios are just more un-likely than others.
I have been posting since early September about a man from another forum whp lives in Iceland. he would be considered comforatbly upper middle class. A little over a year ago, he sold all of his investments, cashed in his private pension, took 'all' of his excess, and bought physical gold. Today, compared to the avrage Icelander that was like him a year ago, he is rich. He can take that gold go anywhere in the world and be very comforatble. His friends and relatives who were much wealthier than him -- just one year ago--are broke.
But, he could have accomplished the same by buying 'physical' U.S. dollars. He didn't trust dollars -- he thought the same thing that happended to the Icelndic Krona should happen with dollars, and maybe it will, but it hasn't so far. But, he trusted the intrinsic value of gold as a currency, just as all of our central banks do.
Now, personally, I would not have done as he did. I can say that with certainty, becuase everything that was going wrong with his Krona is going wrong 'worse' with the USD, and I haven't even considered doing what he did. The only difference I see between the dollar and the Krona is that one is backed by the world's largest arsenal of weapons and the other isn't. I still have money in all sorts of varied investments. With me, Gold is included, but not exclusive. So , regardless of what happens , I'll at least have enough to eat and move about.
I don't know what will happen. I have my guesses, just like everyone. A lot of the people who are predicting the worst , have predicting that same 'worst' for years. Maybe they will be right this time -- even a stopped clock is right, twice a day. The main thing is for a man/ woman to know that it is his life, his future, and to do what he thinks is best for himself and his. I think what is best for me is to be rural, whether times become as awful as some are predicting, or whether this is just another bad recession , as others are predicitng. I think I still have time left to make my exit from the city more efficient, and my time afterward, more enjoyable. So I will take that time.
You are smart on this issue and ,as impotant, you are very good at putting your thought to paper. I am terrible at writing what I am thinking. Prepare the best you can prepare, but don't forget to continue to have fun. Sometimes people get so caught up in the survival aspect , they forget the fun. That might be surviving, but it isn't living......
> We agree that not all forms of storing excess wealth are
> equal. Each person must choose form himself which is
> best to tide one over during good times and bad, and whether
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