Anyone here buys precious metal bullion?

[ilbob]

It was hardly the discovery of America that caused the drop.  It was the boatloads of gold and silver that came over from South America (causing a big inflation in Europe btw).
I would say that gold prices will decline during a crisis (like WW1) because so many people who have gold are trying to sell it.  But they have it.  And they can get money for it.  And it remains a reliable, portable, concealable store of wealth that retains desirability across cultures (for the most part) and generations.  And I dint know any other commodity that has those characteristics.

people used to say similar things about diamonds, until it became apparent to virtually everyone that the only thing keeping the price of diamonds up was the artificial restriction of supply by a cartel.

the bottom line is that the reason gold has had such a long run as a store of value is that some where someone wnated it. If people lose that interest, gold will not be much of a store of value. as a useful; metal, gold has very limited, although very important uses. but you cannot eat it, nor can you even burn it. most above ground gold is tucked away somewhere in a safe or vault, much of the rest of it is jewelry. If people lose interest in jewelry, what do you think will happen to the price of gold? There is only so much demand for buying yellow metal to lock away.

[The Rabbi]

"If people lose interest in jewelry" is right up there with people losing interest in eating.  I can only go by what I have heard about and the best bottom line insurance for people fleeing one place for another is gold.

[Matthew Carberry]

Don't those historical models presuppose they are fleeing one place to another place with a functional economy?

[The Rabbi]

Don't those historical models presuppose they are fleeing one place to another place with a functional economy?

Usually, yes.  But since no one can provide models of anything else it seems the most reasonable scenario to me.

[Matthew Carberry]

Don't those historical models presuppose they are fleeing one place to another place with a functional economy?

Usually, yes.  But since no one can provide models of anything else it seems the most reasonable scenario to me.

Not willing to try to prove the negative, eh?  A-HA! 

(I have no idea "a-ha" what of course)

[Waitone]

I've really enjoyed the debate.  Here is a question for further clarification.  If precious metal is an outdated form of investmentstorageofwealth, how come it is central banks all have stores of metals like gold? 

[Moondoggie]

For the average individual who wants to keep a precious metal on hand for whatever reason, silver is a better choice.  Smaller value per ounce...much more practical for the non-millionaires among us.

If we hit a drastic economic downturn or some other widespread catostrophe, those with all of their disposable wealth stored as "electronic digits" will find themselves SOL.

Cash, silver coins, food, water, fuel, weapons, ammunition, first aid/medical supplies, and last but not least TOILET PAPER will all become precious commodities if the trappings of our first world society should disappear or otherwise become unavailable.

[Guest]

...and last but not least TOILET PAPER will all become precious commodities if the trappings of our first world society should disappear or otherwise become unavailable.

 Maybe the fiat-lovers can use/sell it for that. 

[tokugawa]

If you want SHTF insurance, have a lot of booze and cigarettes. And food.
 any "money" is simply a "value" storage device. When things really get tough, folks want a usable commodity, not the storage unit.

[280plus]

Cash, silver coins, food, water, fuel, weapons, ammunition, first aid/medical supplies, and last but not least TOILET PAPER will all become precious commodities

Until someone floods the market with leaves... 

My favorite is the 1963 (IIRC) Kennedy half dollar. 40% silver makes them a lot closer to face value than a 99% silver half. That way if the market ever DOES drop out they will STILL be worth at least $0.50 each, as long as the US remains in existence. Only problem is a $1000 bag weighs about 74 lbs. They're a bit feisty to store.

[wingnutx]

Anytime I get a large quantity of change, I sift through it looking for silver. Occasionally I score, generally dimes.

[ilbob]

I've really enjoyed the debate.  Here is a question for further clarification.  If precious metal is an outdated form of investmentstorageofwealth, how come it is central banks all have stores of metals like gold? 

They don't store all that much. A lot of central banks were selling a few years ago because they wanted out of the gold business. It was one of the reasons gold went under $300. Increase supply and basic economics takes over.

To the gold bugs, of course, this was not just a normal transaction. there was obviously some kind of sinister undertone to it. No one ever came up with any rational reason why central banks would sell gold into a declining market if they didn't decide to just get out of holding so much gold, but all kinds of wacky theories have been put out.

[Wasz]

"Office Spa....?"

Damn!

Random Task!  Back to the lair, there's more planning to be done!

Ever watch South Park?  SIMPSONS DID IT! SIMPSONS DID IT!

[Matthew Carberry]

"Office Spa....?"

Damn!

Random Task!  Back to the lair, there's more planning to be done!

Ever watch South Park?  SIMPSONS DID IT! SIMPSONS DID IT!

Which episode? It ain't ringing a bell.

[Wasz]

Butters is professor destructo or whatever and some little kid is his sidekick.  Everytime Butters comes up with an evil plan (cutting the head off a statue, blocking out the sunlight etc...) the sidekick yells SIMPSONS DID IT!  Until Butters goes crazy because he cant come up with a plan that wasnt on the Simpsons

[Guest]

...if the market ever DOES drop out they will STILL be worth at least $0.50 each, as long as the US remains in existence. ...

 Why be pessimistic? 

[Guest]

I've really enjoyed the debate.  Here is a question for further clarification.  If precious metal is an outdated form of investmentstorageofwealth, how come it is central banks all have stores of metals like gold? 

They don't store all that much. A lot of central banks were selling a few years ago because they wanted out of the gold business. It was one of the reasons gold went under $300. Increase supply and basic economics takes over.

To the gold bugs, of course, this was not just a normal transaction. there was obviously some kind of sinister undertone to it. No one ever came up with any rational reason why central banks would sell gold into a declining market if they didn't decide to just get out of holding so much gold, but all kinds of wacky theories have been put out.

 You are right about one thing; no rational person (interested in profit) would wait to sell anything at a market bottom - announcing their intentions ahead of time. That's why the reason has to be something else.

 States (governments of nations) hate gold because it makes inflation (hidden tax) difficult. An increasing price of gold (POG) signals inflation to the populace. Therefore, (some) states came up with the plan to sell gold into the market to cloak inflation. They are still doing it but are starting to run out. That is why they aren't being successful in keeping the POG down.

The central banks won't publicize how much gold they have left. IMHO, they have less than 1/2 what they had in 1945 - 16,000 tons now as opposed to 32,000 t. +-. Central/bullion banks also short gold futures to undermine the price. Goldman Sachs, alone, is short about 30,000 futures contracts (3,000,000 oz.).

 BTW, I don't consider it theirs to sell. Do you?

[ilbob]

 BTW, I don't consider it theirs to sell. Do you?

if they own it, they can sell it. they can sell it if they are acting as the agent of the owner as well.

 it is no different than any other piece of property.

[280plus]

...if the market ever DOES drop out they will STILL be worth at least $0.50 each, as long as the US remains in existence. ...

 Why be pessimistic? 

Well, this wouldn't be the first empire to ever crumble... 

[Matthew Carberry]

Butters is professor destructo or whatever and some little kid is his sidekick.  Everytime Butters comes up with an evil plan (cutting the head off a statue, blocking out the sunlight etc...) the sidekick yells SIMPSONS DID IT!  Until Butters goes crazy because he cant come up with a plan that wasnt on the Simpsons

Wow, I love that episode and I completely spaced the reference.

[Gewehr98]

I thought Krugerrands were still illegal for U.S. citizens to purchase and own?

I've got a stash of 1920s-vintage Liberty Walking half-dollars, that came from my grandparents' estate.  I also have a bunch of silver certificate notes I found while bartending in my college days, the bar had 6 cash registers and you wouldn't believe what some folks buy drinks with, to include rolls of Franklin quarters.

But were the S to H the F, I'd wager the 20K + rounds of ammo I have in the lockers would keep me in chickens and kerosene or diesel for at least a little while.  .223, .308, and .30-06 should be pretty popular, as well as .38 Special, .357 Magnum, and .45 ACP. 

[280plus]

Butters is professor destructo or whatever and some little kid is his sidekick.  Everytime Butters comes up with an evil plan (cutting the head off a statue, blocking out the sunlight etc...) the sidekick yells SIMPSONS DID IT!  Until Butters goes crazy because he cant come up with a plan that wasnt on the Simpsons

Wow, I love that episode and I completely spaced the reference.

Don't forget, at the end of the episode Butters FINALLY comes up with some far out plan that the Simpson's didn't do only to hear it announced that the Simpsons WILL do it in the next episode. LOL...

.223, .308, and .30-06 should be pretty popular, as well as .38 Special, .357 Magnum, and .45 ACP. 

Yes, I'd like to place my order now and beat the rush. Lessee, I'll take some .223, some .308 and a double helping of that .45 please. 

[Guest]

 BTW, I don't consider it theirs to sell. Do you?

if they own it, they can sell it. they can sell it if they are acting as the agent of the owner as well.

 it is no different than any other piece of property.

 My point was that (much of) it was confiscated/stolen from the populace by FDR in 1933. Soon after, citizens were forbidden to own gold for decades.

[Art Eatman]

Krugerands are legal to own.  They sell at the least premium over the spot price.  Or did, anyway, back when it was proper to hate South Africa.

[Guest]

I thought Krugerrands were still illegal for U.S. citizens to purchase and own?

 "South African Krugerrands banned
However, in 1985, because the South African government was white-ruled, Congress banned the importation of Krugerrands. By then, an estimated 22 million Krugerrands gold coins had already been imported, and the ban did not affect the status of gold bullion Krugerrands coins already in the United States. Today an active market continues for Krugerrands and thousands trade daily.

In 1994, Congress lifted the importation ban, and gold bullion Krugerrands were again offered for sale in the U.S. By then, however, Gold Eagles had captured the U.S. gold bullion coin market, and the South African effort to promote Krugerrands in the U.S. ended. Today, Krugerrands sell at prices below Gold Eagle prices and remain favorite gold coins for gold buyers seeking to buy bargain bullion gold."

 Thanks for "helping Africa", Ronnie.