economy is imploding.

[The Bad Ass Canadian]

Makes you wonder just how leveraged the whole system is,

Last number I heard was well over 700 Trillion in leveraged debts and derivatives. Truly frightening.

Some people are going to lose a lot.

I'm buying as much silver as I can get my hands on.

 

[synergy1]

If I was to get into precious metals ( which I plan to as part of my portfolio), what is the best way to buy directly? I don't want a contract that says I own it- I want the real thing. That said, I have zero experience with buying anything other than equities etc. Suggestions?

There was a good article on zero hedge ( or chris martensen's web page) regarding ones capital. I agree that the name of the game for the individual should be preservation of capitol and diversification. For example, if you opt to buy or sell public shares, do so on multiple brokers ( especially if they are the larger ones) so as to minimize your downside should there be a banking holiday. Keep as much money in accounts as you can part with in a worse case scenario.

If I had to guess, the long term positive trends will be in ore and energy products. Thats why I like Julius S's recommendation on buying bargained shares of junior mining exploration companies. Energy index funds will probably trend okay , especially ones concerned in natural gas which the US is currently experiencing a surplus of.

 

[azanon]

As a common stock investor, THESE are the kind of posts I like to see. Doom and Gloom conversations mean $$$$ in stocks. Now when "you're crazy not to own stocks" (what I heard around 1997-1999), then you know it's time to sell.

Now "you're crazy not to own Gold". That tells me all I need to know about Gold. When the REAL idiots start to buy an investment, they're the last ones. I think we're almost at that point. Anyone old enough remembers seeing this same thing way back in 1980. Long-term Bonds are also the really hot item for the amateur. In probably the not too distance future, LT bond holders will get to find out what happens when interest rates and inflation rise.

The best portfolios are real stinkers if you were to talk about it in a group of people. I have 2/3rds international to domestic stock, including REITSs and a small amount of short term treasuries. I REALLY like Japan for stocks atm. No Gold or silver. No long-term bonds. No Junk. I recently dumped my TIPS for a nice profit. Now the common man is onto TIPS too.

Lean to pay attention to the noise. Listen to what's loudest and hot, and then do exactly the opposite. Doom means prosperity. Posperity means doom. Up is down in the investing world.

 

[The Bad Ass Canadian]

As a common stock investor, THESE are the kind of posts I like to see. Doom and Gloom conversations mean $$$$ in stocks. Now when "you're crazy not to own stocks" (what I heard around 1997-1999), then you know it's time to sell.

Now "you're crazy not to own Gold". That tells me all I need to know about Gold. When the REAL idiots start to buy an investment, they're the last ones. I think we're almost at that point. Long-term Bonds are also the really hot item for the amateur.

The best portfolios are real stinkers if you were to talk about it in a group of people. I have 2/3rds international to domestic stock, including REITSs and a small amount of short term treasuries. No Gold or silver. No long-term bonds. No Junk. I recently dumped my TIPS for a nice profit. Now the common man is on to TIPS too.

agreed, but there are very real macro economic reasons why gold and silver are worth holding. If the price drops, I'm buying more. Paper assets worth nothing, until you sell them and get your cash in hand. A lot can happen to prevent you from ever withdrawing your "investments". Bank holidays, liquidity freezes, plus if they keep devaluing the currencies, the money ain't worth anything, anyways.

Silver and gold are great hedges against inflation and great things to have on hand in case some "dooms day" event ever does happen.

 

[azanon]

Silver and gold are great hedges against inflation and great things to have on hand in case some "dooms day" event ever does happen.

Hope like hel* that doomsday actually comes. Because you can either learn from experience or study history to learn just what happens to precious metals when (not if) they go out of favor.

The inflation-adjusted, long-term return of gold is approximately 0. My preference is more in the neighborhood of 7% real (aka stocks).

When the next 1981-82 comes though, I'll probably get a bit of gold. I'm holding out for $200 an ounce. When it gets there, I'll bump the thread so I can do a victory dance.

 

[azanon]

Stick all your money in a shoe box and hide it under the bed.

That won't do any good. Inflation will still find it, and erode the s*** out of it.

 

[Mr.Positive]

Argh. Azanon, who do you know who actually buys gold and silver? My guess, nobody. 99.99% of the population is still clueless on precious metals.

Think about this for a moment...if just in the U.S., just in the United States, each person bought only 1 oz of silver coin, the price would probably shoot up to $100 an oz. That's just my best guess. Add the 2 billion folks in China..the sky is the limit.

Still, a very small few folks are actually investing into physical (not paper) precious metals. Those few? The elite, mostly. Big money is moving that way.

Forget what the media says (sell your gold), follow where the big money is going...

It's hard assets. Buy land, cans of beans, ammo, anything. It's all going to go up in price, thus value.

On the other hand, silver, if the economy does get better, is like a rocket ready to launch.

I agree with you regarding gold and silver gaining nothing, merely a hedge against inflation, but you will not LOSE your wealth in the long run. That's the whole point. Not losing everything when the markets go kaput.

A stock can go from $100 a share, to zero, a complete loss. Gold and silver will always be worth something.

Diversify, that's all you need to do.

 

[Julius_Seizeher]

The economy is not imploding, the world is not ending, but it makes a great excuse to throw up your hands and say, "Poor little me!" while not doing anything to rectify it.

When you are in an inflationary environment like we are in today, commodities are the best place to be. The 1970's were far worse than what we are going through today, and there were plenty who said the world was over and you should just give up. That's what losers do, they always look for an excuse to give up and wallow in their nihilistic, impotent view of existence.

The problems today are 1. government spending and debt 2. fiat currency destruction (inflation) and 3. overregulation of the productive sector.

The last time we went through this crap, the guys who made fortunes were the ones who bought gold and gold miners. Sooner or later the US dollar will be back on some kind of gold standard (it is the only way to save it), but before that happens we might have to see some 70's-style hyperinflation. In hyperinflation, the only safe place to have your money is in commodities. And relative to the currency debasement that drives inflation, gold and gold miners are the very best place to be in a hyperinflationary environment. And don't pay any attention to all these phony government statistics that claim inflation is a non-issue; they do not calculate food and oil (the two commodities most affected by inflation) when they calculate inflation. Use your own mind to judge inflation when you go to the grocery store and do a double-take when you see food prices.

Sooner or later people will remember what makes this country great and what lifts people out of poverty and allows them to advance (hint: it's not government). Free trade and capitalism will once again be the law of the land, free from this muck of bureaucratic socialism that even the US finds themselves bogged down in. A bureaucrat cannot mandate prosperity, which means: you cannot put a gun to someone's head and order him to prosper. It is only in freedom, with free men, free minds and free trade as the law of the land, that humans can better their lot in life and live as happy, functional, self-directed sovereign beings.

So it's not the death of the economy that we are seeing, it is the death of Keynesian economics that we are watching in real-time, in both the US and Europe.

 

[metoo]

we'll never again see that kind of freedom in the US.

At least, not until there's been a 90% die off, and the ones who survive won't be either politicians or welfare types. You stick your neck out on the stock market if you want. For the other guy, I'll take all that "zero net gain" gold that you want to send me, idiot.

 

[Poonani Maker]

Idk, now as I sit here, I feel a lot safer with my dollas converted into gold, guns, ammo, freeze-dried food and 55 gallons of water (soon to be more). My bank doesn't like that I converted 2/3s of all my dollas to these things, but I do. The cash I have left is for merely paying bills and/or cushion. I don't want to get caught by a surprise "holiday" devaluation. I mean, LOOK at the news stories of the past couple of months - sham, rigged, EU bullsh!t, "hope," Corzine, Goldman Sacs gang, the drying up of liquidity in the market i.e. investor confidence dwindled because of the casino-like attributes of the stock market. It's now a news story run show to squeeze every last dime out of the little guy. Then they take us to war.

I'd rather have my money in gold (and silver), guns, and food/water. It's preparing for the worst, because the crooks and criminals are running our country on all levels. Morality has flown out the window now. We no longer have a productive capacity.

 

[Mr.Positive]

Sooner or later the US dollar will be back on some kind of gold standard (it is the only way to save it), but before that happens we might have to see some 70's-style hyperinflation. In hyperinflation, the only safe place to have your money is in commodities.

Julius, your post is a homerun, honestly. The only thing you need to understand....is the dollar doesn't exist anymore. It's already destroyed. The numbers we see printed on paper, or digits, in our bank account mean nothing anymore.

You can't save what doesn't exist. It's all an illusion at this point. Everyone's watching the same fantasy movie.

Currencies, are nothing. They are air. Debt. That's it. The only thing that gives currencies their value? Our faith in them. There's no difference between a $1 bill and a $100 bill. Just a couple of zeros added to the paper.

As long as people trust the dollar, it will have value. The only question you have to ask, for yourself...is do you trust others with your wealth? If yes, hey trust the dollar.

That's fine. Don't ***** one second though if it goes down in value, or become worthless like the paper it's printed on. Because YOU know, that's the gamble you are taking.

There's no atheists in foxholes.

 

[Kerpal]

If I was a guy who got directly screwed by such people, I'd take it up with them personally,and THEY would never be doing such things again (or much of anything else, from their wheelchair! Nobody having balls enough to do anything about it is WHY such punks DARE do such things in the first place! Not one guy who got screwed over by enron beat/shot thosepunks! why not? nobody to point the finger, since it could have been any one of 1000's of people.

I've wondered the same thing. Remember when Madoff was walking around NYC with all the reporters following him around? I was half expecting some guy to jump out of the crowd and pull a Jack Ruby. These guys have screwed tons of people and I'm really surprised nobody has taken justice into their own hands, especially with how easy it would be to get away with it.

 

[azanon]

Stocks do not return 7% inflation adjusted on average. The last time that was true was around the top of the tech bubble and the last ten years have obliterated that. What many people tend to forget is that the DOW 30 has changed quite a bit over the course of history with new Companies being added and older one's dropping off. It is not a timeless measurement.

Nor do you need doomsday for gold to keep holding it's value, and unless we have a true deflationary armageddon, I think $200 is out of the picture. Hell we didn't even hit under $250 an ounce when the world was ending for gold at the tech peak.

In short, from a big picture standpoint you are right.....however your numbers and your timing are a bit off.

They absolutely do return 7% real. Before the tech bubble burst, it was about 9% real. Granted, I'm measuring on a very long term scale (1802-). This is a total market measurement, not Dow 30. http://en.wikipedia.org/wiki/Stocks_for_the_Long_Run Now if you want to say Jeremy Siegels (Ph.D from MIT) numbers are off, you have larger nads than I do.

"Dow 30" is for grandpaws. If i wanted to judge the US Market as a whole, I'd use Wilshire 5000. Or if I wanted to separate large caps from, mid and small, I'd use S&P 500 vs. Wilshire 4500. When the boomers finally die off, you won't see this quoted anymore.

I just guessed at gold $200. What I actually think it will "mean-revert" to is whatever the inflation-adjusted 0% return price would be. That might be $400, I actually don't know. It certainly isn't anywhere close to today's prices! I mainly don't know because my interest in highly volatile, zero-sum investments is just not that high.

 

[azanon]

Idk, now as I sit here, I feel a lot safer with my dollas converted into gold, guns, ammo, freeze-dried food and 55 gallons of water (soon to be more). My bank doesn't like that I converted 2/3s of all my dollas to these things, but I do. The cash I have left is for merely paying bills and/or cushion.

I'd almost bet my life savings you are from the deep south. I'd guess Arkansas or Mississippi. Just don't bury your money under the confederate flag, because that's the first place I'd look for it!

 

[metoo]

SO EFFING what? 7% minus taxes and ss is 5%, and we've averaged 5% per year inflation since I began watching it in 1970. Prices have doubled every 15 years. Cars, housing, food, guns, you name it, it costs 6-8 times as much today as it did in 1970.

 

[Quiksilver]

In the Balkans during the seiges in the 1990s, food in the city was so scarce that women were offering sex in exchange for a can of pork 'n beans.

And yes, the world financial markets are going to sh1t in a big way. I'd call b.s. on anybody who claims they know the date it will happen though.

What we do know, however, is due to the nature of the banking system, it will be an accelerating event and a 'straw that broke the camels back' event.

Economic declines tend to have very shallow and long trendslopes.

Financial declines tend to be more like cliffs, and be much shorter in duration.

Decent and entertaining article on the matter, for you semi-financially literate readers:

http://www.zerohedge.com/news/why-uk-trail-mf-global-collapse-may-have-apocalyptic-consequences-eurozone-canadian-banks-jeffe

Maybe a bit of scare-mongering, however it did touch on the current scary trends in interbank liquidity and of course fractional reserve lending.