Realcent.org

So here we are hoarding PM, thinking our US paper dollars will someday become worthless. So if/when paper dollars DO become worthless or near worthless- it'll take more of them to buy goods. So if all our gold/silver/copper/nickel is worth all these worthless paper dollars, what's the use of having PM? In the future cash them in for worthless paper? We'll all be screwed whether we have hoarded PM or paper dollars.

(in the future) Gold = alot of worthless paper

How do we know for sure we'll someday go back to a gold/silver standard? We might all be spinning our wheels hoarding now?

I'm about out of forum time this morning, but this is addressed in many intro articles on what is money. Gold is not money. Gold is wealth. Money is not wealth. (There is a referenced article on this that I'll have to dig up later.) Gold preserves wealth, and the value of gold is essentially unchanged over thousands of years. The value of 50 oz of gold is essentially the same now as it was 100 years ago, and a 1000 years ago. To lesser extent this applies to silver (and some say it will apply to silver even more so, soon). And silver has been the historial media of common daily transaction. Copper is also a tradable commodity, though more common.

The reason gold is going up in price is not that gold is becoming more valuable, but that the dollar is becoming worth less. When bread costs $1000 per loaf, gold will be valued at $400,000 per oz of those inflated dollars, and your wealth preserved.

Precious metals will be what one uses to purchase the tank full of gasoline, the loaf of bread, the gallon of milk and so on and so on. You will use those dollars to start the fire in the fireplace. Maybe insulation that wall in your house. OK, the dollars our governments are printing are becoming more and more of insufficient buying power that the only thing left is the metals. Man has been using one form of metal or another for transactions. Has been that way since man developed a way to stamp a coin out of metal planchets. Keep your chin up and keep hoarding, it will payoff. Just keep the faith!!

68Camaro I'd like to see the article you mention. Thanks.

If our economy goes really sour in the future like many say is going to happen and paper money becomes worthless or near worthless,
and if it's true that only 1% of the population owns PM,
only those with PM will be able to use their real money to pay for food/goods to survive.

What kind of world will we be living in? What are the remaining 99% going to do? Rampant crime to survive?

I assume your talking about PMs not PCs,and yes its worth hoarding metal will always have a value paper wont.If you cant see that then you need to pull the wool off your eyes.

I've made the correction. I appreciate it when posts are constructive. I just ignore the posts that are not.

50centsaver wrote:In response to your posts, if only 1% (isn't that the % of people who are investing in PC) of the population has PC, what kind of world will be living in?

Rampant crime to survive?

There will be a new 1% in the world when hyperinflation (or perhaps sooner, due to other supportive factors) occurs. Some of the current wealthiest individuals have already taken precautions to store some of their wealth in the form of precious metals, that super model that married the quarterback is one notable instance. There are many others who fritter away their fortunes now (athletes, actors) without even needing a massive depreciation for an assist. Anyone who continuously lives beyond their means will someday become dependent upon others. Statistics show that something like over 90% of lottery winners are broke again within a year. Let's play with some numbers and see who is holding the precious metals now. You can't assume it is spread evenly across society. If, as claimed, 50% (or more) of all wealth is owned by the top 1% (the disparity is likely much greater in less advanced cultures) than at least (if not more) than 50% of the precious metals purchasers are represented by that class, although PM lecturers like James Turk report anecdotally of only one hand in an auditorium being raised when surveyed as to how many owned gold, and this was a group of hedge fund managers and high-powered financial execs. So, for the sake of hypothesizing, let us just presume that only half of one percent of the current 99 percenters own ANY precious metals. What element of society would hold the rest? Who would those people be? You can likely eliminate the bottom fifty percent from anything more than nominal ownership as they are barely surviving... as the middle class disappears. There's little wonder as to why a class warfare (the haves vs the have nots) "us against them attitude" is beginning to prevail. And it will get worse as the subsistence giveaway programs for those who can't or choose not to work lose funding and are cut or eliminated. A lot of those people have an unfounded sense of entitlement... and herein lays the answer to your question of "what kind of world will we be living in?" Those people, who have little regard for the law now, will become even more lawless, and the victims will be those who have possessions, live in cities, and are unable to defend them. Muggings, looting and theft will become rampant, assaults and homicides increase markedly in inner cities. Joblessness will increase, and many people will resort to shoplifting to feed their families as food becomes unaffordable. I got sidetracked from my message I want to impart. As Michael Maloney likes to reiterate, we are about to see one of the greatest transfers of wealth the world has ever witnessed. Those who hold precious metals (most probably upper middle class, lower upper class) will become THE NEW 1%, and this will be accompanied by a massive social revision, as former millionaires who were ill-prepared and counted on the viability of paper money lose it all, to become part of the burgeoning sea of aimlessly drifting drowning droves... as they (WE) begin to thrive (carefully) upon the crest of a new wave of wealth. Your chances of survival in such a world (regardless of any feelings of "I wouldn't want to live in a world like that") will be greatly enhanced if you preserve your purchasing power with precious metals, as WE (forum members) are wont to do, rather than adding to the burden of your pre-existing problems by suddenly becoming penniless (haha) overnight. Sorry for rambling, lots of food for thought on this topic.

It's about currency vs. real money.

Paper dollars = currency. The value/purchasing power of a fiat currency fluctuates over durations of time. The longer the duration of time the more the value will change historically to the down side.

Savings/Checking accounts, 401k, ira, mutual funds, cd's, stocks, etc... = Claims to currency. These accounts do not mean you have paper dollars available to you. They are just accounts denominated in the paper currency of the day ($). You at some point in the future will take delivery of your paper dollars and hopefully they will be there and the accounts and investment vehicles chosen will have outpaced real inflation (not CPI).

Wealth/Money/Retirement = Metal/PM = Long term saving in a medium that does not fluctuate in purchasing power and thus stores wealth for a longer duration. You will either trade with this at some point in time or you will convert these holdings into whatever the go-to currency of the day is. It may be dollars it may be some new currency that comes about over the longer duration of time.

Saving in paper dollars under the mattress or keeping them in an account giving you claims to currency are ok and valid options on a short term, but for longer term savings it's advised to move into something more stable and that's where PM's come into play. It's not an investment where we're looking for huge swings in price to buy and sell day to day fluctuations. It's a long term storage of our wealth in a medium where bankers and governments can not steal the value of our metal but they most certainly change the value of the paper they print.

Even a gold standard is a bankers standard. When a government mints gold coins for circulation the face value of the gold coin is much higher than the actual physical price of the gold in the coin.

In order to see the world in this way you also have to change your paradigm of seeing gold as being $1750. That's priced in dollars. You have to disconnect the dollars from the gold as that's just the current marker we all use in our heads to give items their value. Money is a concept in your mind and it's the concept of value we place on the items we consume or acquire.

This is my view on metal, currency and money. I could be completely wrong so don't take my word for it.

Is it worth all this hoarding?

Yes.

It's also possible that PM will go way down and stay down during our lifetimes. It's a possibility. Personally, I doubt it and hope they don't. But for example Robert Prechter of Elliot Wave fame- projects DEflation, that gold will go eventually go way down to 680/oz and silver way back down to 8/oz (I hope I'm remembering those totals correctly but I KNOW his predictions are in those ballparks), before eventually rising again.

I'm personally hoarding metals hoping that the price of all PM will skyrocket during my retirement- in 10 or so years.
Re my posts I'm just playing devil's advocate trying to look at all scenarios. I am thinking of trying to center on "balance", as has been suggested by many realcent posters- having both PM and cash, the logic of not having all eggs in one basket.

You also have to realize, many of us who hoard PMs do not do so in fear of the impending apocalypse. Many of us use this as another vehicle - one of many! - to invest our hard earned dollars, for specific reasons that are covered in this and many other posts. Diversify, prepare for many possible outcomes. And don't forget to enjoy life.

OneBiteAtATime wrote:

Is it worth all this hoarding?

Yes.

+1

If you are going to succeed in holding PM's and basic metals long term, I would suggest a paradigm shift in your thinking. Don't think of them on the same level as currency. Think of them as a store of wealth. When the time comes you will be able to "buy", barter is a better term, the things you want and need for what you are holding. How well you will make out will depend a lot on your skill as a trader. Selling them to a coin dealer will involve paying him a discount, and he is just sitting there waiting for you.

You mentioned retiring in 10 yrs. I will assume you are in your late 50's. As a youngster, do you remember hearing stories of how people would "dicker" over the price of a sale? My old man grew up in the midst of the Great Depression. He told stories of how there was no money to be had. The Federal Reserve had hoarded up something like 20-25% of all silver coins. Folks had to trade and barter for what they wanted. Fools soon were poor, and skilled traders lived decent lives. In fact, some people lived better during the Great Depression than they did before it.

The biggest difference between then and now is the lack of morals in our society today (and a corrupt and oppressive government). Back then people would not stand for their neighbors being cheats and thieves. Back then people would take the law into their own hands if they had to and dispense some Midnight Justice. Today? Yeah, good luck on that happening.

This is one of the best threads I've read in a while on this board. I always find it extremely interesting when members speak of how they feel our society will be like when the SHTF. I recently moved from the Los Angeles area to a small town called Medford, Or. One of the primary reasons I moved was that I can only imagine how incredibly chaotic and violent the Los Angeles area will become when the SHTF and I don't want to be anywhere near it.

50centsaver wrote:It's also possible that PM will go way down and stay down during our lifetimes. It's a possibility. Personally, I doubt it and hope they don't. But for example Robert Prechter of Elliot Wave fame- projects DEflation, that gold will go eventually go way down to 680/oz and silver way back down to 8/oz (I hope I'm remembering those totals correctly but I KNOW his predictions are in those ballparks), before eventually rising again.

I'm personally hoarding metals hoping that the price of all PM will skyrocket during my retirement- in 10 or so years.
Re my posts I'm just playing devil's advocate trying to look at all scenarios. I am thinking of trying to center on "balance", as has been suggested by many realcent posters- having both PM and cash, the logic of not having all eggs in one basket.

What Prechter and the deflationists miss is the ability of central banks to create money out of thin air without limit. But fortunately their alchemy doesn't work on Gold, silver and copper.

If history is to repeat itself, we must have deflation before you can have hyperinflation. While we've had deflation in certain areas since 2008, it's better described as stagflation (some inflation, some deflation).

I'm not a big fan of Prechter, but it's interesting to note that the man Jim Sinclair credits with coming up with the $1764(?)/ oz of gold number of his goes by the name of Alf (somebody). Alf uses Elliot Wave theory to predict the future price of gold, based on it's past prices since becoming unhinged from the U.S. Gov't. He states that the theory doesn't work very well in any market outside of gold (historically), but that it works extremely well in gold. (I'm paraphrasing here quite a bit...) Alf doesn't say it will retract as far as Pretcher however. And as of right now, it apears Alf and Jim are all wet - gold surpassed that number earlier this year but hasn't gone parabolic. I'm not saying this won't happen, in fact, I suspect it probably will. Jim was a year or so "late" on $1600 gold, it might be a year or two before we hit the parabolic blow-off yet...

pennypicker wrote:This is one of the best threads I've read in a while on this board. I always find it extremely interesting when members speak of how they feel our society will be like when the SHTF. I recently moved from the Los Angeles area to a small town called Medford, Or. One of the primary reasons I moved was that I can only imagine how incredibly chaotic and violent the Los Angeles area will become when the SHTF and I don't want to be anywhere near it.

The Los Angeles area is chaotic and violent now. Oregon is a great place for Californians to move to.

I highly recommend it!

Back on topic.

It's like insurance. I really hope all this effort is futile and everything turns around.

Just like I hope my 20 year life insurance policy is a waste of money.

50centsaver wrote:68Camaro I'd like to see the article you mention. Thanks.

See the note in the following RC thread, and the link within that post.

viewtopic.php?f=17&t=9307&start=25#p95428

JJM wrote:If history is to repeat itself, we must have deflation before you can have hyperinflation. While we've had deflation in certain areas since 2008, it's better described as stagflation (some inflation, some deflation).

We are in a unique place in history so I'm not compelled to believe that we have to repeat anything in prior history. However, a brief period of deflation is quite possible, depending on what transpires in what order. (Quite frankly I think virtually anything is possible in the short term - but what is most important is what will be the medium-to-long term trend.) I think in the big picture that any such deflation will be a blip, and history will record this ultimately as a high-inflation to hyperinflationary event, ending in the redefinition or elimination of the US dollar. We are at a point where detailed predictions are (in my view) off the table. In hindsight, after it is all over, we will find that someone's specific predictions will be close to spot on, but that will be more luck than brillance.

JJM wrote:I'm not a big fan of Prechter, but it's interesting to note that the man Jim Sinclair credits with coming up with the $1764(?)/ oz of gold number of his goes by the name of Alf (somebody). Alf uses Elliot Wave theory to predict the future price of gold, based on it's past prices since becoming unhinged from the U.S. Gov't. He states that the theory doesn't work very well in any market outside of gold (historically), but that it works extremely well in gold. (I'm paraphrasing here quite a bit...) Alf doesn't say it will retract as far as Pretcher however. And as of right now, it apears Alf and Jim are all wet - gold surpassed that number earlier this year but hasn't gone parabolic. I'm not saying this won't happen, in fact, I suspect it probably will. Jim was a year or so "late" on $1600 gold, it might be a year or two before we hit the parabolic blow-off yet...

If you really keep up with Sinclair on a regular basis, he predicted that once it hit the EW number of 1764 that a further rise was inevitable, but he didn't describe specifics of timing. What he said was that there would be an extended re-baseline period while gold was re-valued, with frequent and violent spikes up and down of as much as $100 a day, before it started back climbing. That is exactly where we are at.

It's like insurance. I really hope all this effort is futile and everything turns around.

Just like I hope my 20 year life insurance policy is a waste of money.

Exactly! Prepare for the worst, but hope for the best.

pennypicker wrote:This is one of the best threads I've read in a while on this board. I always find it extremely interesting when members speak of how they feel our society will be like when the SHTF. I recently moved from the Los Angeles area to a small town called Medford, Or. One of the primary reasons I moved was that I can only imagine how incredibly chaotic and violent the Los Angeles area will become when the SHTF and I don't want to be anywhere near it.

Sorry but your still on the Drift line an those troubles can hit both of Us I'm trying to organized so I can get to Eastern Oregon I see the problem but just like Stacking I'm slow moving, and my DCA is high because of this.

Do our best an build our teams, we can't do this alone Pray for Guidance.

When you here the "greatest transfer of wealth the world has ever seen", most likely they are talking about the wealth transfer from the West to the East, as wealth is accumulated by producing more than you consume, whether you are an individual or a nation. Nations that actually produce and export will have increases in the standard of living while the US will continue to digress as we loss world currency status.

"while the US will continue to digress as we loss world currency status."

It sure aint happening today- the dollar looks to be strengthening. May just be in the short term, but sure is puzzling. We'll see what happens as this all plays out...

50centsaver wrote:"while the US will continue to digress as we loss world currency status."

It sure aint happening today- the dollar looks to be strengthening. May just be in the short term, but sure is puzzling. We'll see what happens as this all plays out...

Don't expect you to catch up overnight, but since you are not only new to the forum but apparently new to the topic, there is a lot of reading material on these subjects. Not only here at RC in summary, but especially at many other sites by reference. The dollar is strengthening because the Euro is in trouble, and while the view of gold as wealth is starting to gain some traction again, most of the market still views it as an option of last resort. So when the Euro weakens the dollar gets stonger, in the moment. This is a temporary thing - all fiat is part of the same house of cards.