Investing in Gold? How much imaginary Gold has been Sold?

[MorelCabin]

If you are buying gold...do you actually have it in your posession or is it just a banknote? Risky business... For every ounce of gold out there right now there are 4 or more owners:

http://www.lifeaftertheoilcrash.net/Archives2009/AdrianDouglasGold.html

 

[okiegirl1]

I was actually thinking about this last night.

We (our family) live pretty cash free. We're self employed, so when I do payroll, I just bank transfere $ from the company account into our personal account. Then I use my debit card most of the time because I can track spending online thru the bank. I've even got to where I pay my lots of bills thru my bank online e-payments. I started thinkin last night if suddenly the banks collapse (or govt' collapse, the the FDIC wouldn't be able to back the banks, right?) then I really have nothing but paper.

long story longer....

I was thinking about gold. when you buy gold, do you actually get gold coins or pieces? in an economic collapse, is gold the old stand by for exchange?

 

[k0xxx]

I was thinking about gold. when you buy gold, do you actually get gold coins or pieces? in an economic collapse, is gold the old stand by for exchange?

I apologize for the length of my reply, but I feel that there is a lot to consider before putting hard earned money into a sometimes volatile commodity.

If you are considering buying gold or silver as a hedge against economic trouble, I would suggest buying physical metal in the form of coins, bars or rounds.

As the story in the first post mentioned (and in a lot of other news stories before), there is a lot of gold that is merely paper promises. The amount of silver "paper" sold is actually worse. In an economic upheaval, where people would want to cash in their paper for the real thing, there wouldn't be enough metal to go around.

I own mostly silver, and a smaller amount of gold. I put a small amount of my monthly income into them. I buy mostly Silver Eagles and 1 ounce silver rounds or bars, some half ounce and quarter ounce silver, and even some smaller (1, 5 or 10 gram) pieces. I do have a few larger silver bars too. Also silver (pre-1965) dimes quarters and halves dollars are included.

Gold is usually purchased in the form of 1/10 ounce American Gold Eagles due to the cost, but I do own some quarter, half, and 1 ounces coins also. I also have some 1 gram private mint gold bars and rounds.

When purchasing the smaller amounts of metals, especially gold, you generally have to pay more of a premium to cover the cost of minting. However, if the dollar were to collapse to the point where silver and gold were to be used for bartering, smaller amounts would be a lot more useful for purchasing everyday items.

I do not purchase metals to make money on. I purchase them as a way to store a percentage of my meager "wealth". Consider that in 1964 (the last year that a quarter was made from silver), that quarter would purchase a gallon of gas. Today, a silver quarter is worth about $3.00 and will purchase about a gallon of gas.

The price for these metals can be quite volatile, but over the course of the years, they hold there value and their purchasing power. So, the way I figure it, is even if the dollar doesn't collapse and inflation doesn't become rampant and I never actually need to use metals for bartering, I have something of real value to leave my children.

YMMV

 

[Ldychef2k]

My family (not me, that's for sure) buys gold Kruggerands, and old silver dimes, quarters and half dollars. I don't know anyone who has purchased precious metals and not received them in hard form, not paper. Because of the condition of the economy and concerns about the future, my parents converted all of their stock portfolio to silver and gold. They are otherwise diversified, but the stock market was too volatile for them, in their 80's.

 

[Wifezilla]

I can't tell 10k for 18k from 24k gold. I can't eat it...so what's the point?

I buy seeds, food, animals that I can use for food or trade, tools, and other items that I will always find handy regardless of the situation.

If TSHTF and someone offered me gold, I would tell them to go find someone to trade them for coffee, meat, seeds or fresh dairy and then get back to me.

 

[MorelCabin]

I can't tell 10k for 18k from 24k gold. I can't eat it...so what's the point?

I buy seeds, food, animals that I can use for food or trade, tools, and other items that I will always find handy regardless of the situation.

If TSHTF and someone offered me gold, I would tell them to go find someone to trade them for coffee, meat, seeds or fresh dairy and then get back to me.

I fully agree...I have no gold either...the only gold I wear is to show that I'm married

 

[SKR8PN]

My "gold" is food, seeds, animals, and lead.

With lead, I can get as much "gold" as I want.

 

[Wifezilla]

Good point!

 

[MorelCabin]

My "gold" is food, seeds, animals, and lead.

With lead, I can get as much "gold" as I want.

 

[k0xxx]

Unless things get to the point of a Mad Max scenario, then lead will be all that you need. Otherwise, there will always be things that you will need "money" for.