Topic: Gold - is it really safe investment? (Read 2328 times)

That depends if you take up piracy for example and the ships you loot only carry basic minerals you are fucked. The most profitable venture, trading slaves also cannot be exploited by blasting the ships.
Trading illegal goods is prone to exponential profit and bounty hunting or working for fractions is not... So you'll end up using all that room for cargo instead of weapons if you want ROI.
Transporting certain passengers can be worthwhile with a small cruiser though.

Those are awesome investments !  I have several, mostly because I have a tendency to crash into hostile planets....

You cannot take your land and flee if you have to. In the event that you must leave the area you are in then you will have to leave your wealth, and it will not be a good time to sell.

Also, around here I would have to pay a yearly tax the the government to have my land and I would not own the mineral rights and if they wanted to build a highway through it I could not stop them. In Canada you don't own land, you pay for it then you rent it from the government.

What about a space battleship?

And then your property gets nationalized, or taxed to death....
I don't think there is a single investment that is completely foolproof.

I honestly believe that the only truly safe investment is in land, because then at least if the worst happens you can always just live off the food you grow there, everything else is relative to the time you're in.

Energy costs are only increasing. Obviously as oil becomes more expensive, oil companies are willing to consider more expensive means to acquire oil, case in point: canadian tar sand bitumen extraction, BUT, in general, I think energy costs are going to only increase. Gold of course is mined out of rock and that takes an incredible amount of energy. "Safe investment" is also relative. I think if you are seeking to save your equity, cash is probably the worst. Land or hard metals are better. But if you get your cash to WORK, ie through business, then you can probably get a better return. Fiat money is paper backed by a promise supported by an industry defended by an army. Warren Buffet billionaire wunderkind has always debauched gold and rightly so, it sits there; for him he needs something can can be hooked to a plow and cash is more liquid. It depends on you. China, the largest holder of US T-Bills in the world has recently imported around 500 tons of gold for 2012. The entire gold holdings of the EU amounts to that amount. Obviously China is not bullish USD.

Its more likely 1000 tonnes of gold and 7000 tonnes of tungsten.

I'm not an expert, but that seems wrong because the 8133 tons of gold are only a portion of the assets held by the Federal Reserve. If the Federal Reserve sold off all their assets except gold, then the currency and deposits left over would be 100% backed by gold. Any idea what this number would be? I'm guessing a lot less than $10176/oz.

Based on the numbers found on these websites, I am calculating 10176$ / troy ounce of gold reserves.  I am somewhat surprised though, I seem to remember it being higher, so either my memory is wrong, or I am using the wrong resources.  They would be fools not to buy up some gold prior to going to gold standard though, so this would give a number between the current price and 10176$.

http://research.stlouisfed.org/fred2/series/BASE/
http://en.wikipedia.org/wiki/Gold_reserve#Officially_reported_gold_holdings

I read somewhere that for gold to be as a reserve, like a gold standard, each fiat $ backed by gold, an once of gold sould be priced arround 33 000 $  instead less than 2000 like those years.
Knowing that fiat printing press are running at turbo mode, diluting fiat, an appreciation in gold price is strong probability.
But I bet BTC will show to be a much better investment.. BTC today VS gold Today, for sure I invest in BTC first, and a lot more !

In case of a major crash ?? 
My call is : Fire arm, dry food and run to hide in the forest
As I like to say in french : Bouffe sèche, arme à feu et planque dans l'bois

I think you are right that several people that have gold might have to sell their gold for basic needs in economically hard times.  However, there is a larger force in the opposite direction.  During economical difficult times (like now in western world) central banks will often print a large amount of money to give government sufficient purchasing power (as these governments have often accumulated a large amount of debt, and have fiscal deficits going on).  This has the capacity to severely undermine the purchasing power of your fiat money (although this depends on the amount of printing versus balance sheet reduction and reduced money velocity).  As people grow aware of this, they try to protect their savings by trading their fiat currency for hard assets (gold, silver, land, real estate etc.).  This causes a larger amount of wealth to be transferred to gold compared to fiat currencies.  If this wealth transfer is larger than the reduced availability of goods and services in bad times, your gold will buy you more stuff.  The thing to remember is, while there are middle class families struggling to survive, selling their grandmothers jewels, there are also a lot of rich people with a lot of wealth who do not want to see their savings printed into oblivion.

Sorry, but this is such an urban legend.  Don't get me wrong, I like gold and silver, but they do not automatically maintain purchasing power.  Somebody who bought gold in 2000 made a hell of an investment, an can now buy a boatload more other stuff then he could then.  It is true that if you look at gold historically, then it maintains its purchasing power a lot better than fiat currencies, but in the short term (short being decades here), this is simply not true.  This is why I also don't see gold as a "safe" investment, next to the volatility being quite large.  There might be times when it is the safest asset to buy, but definitely not allways.

Well to put it very simply precious metals are always a good store of value. they are never good investments. now i will explain.

gold and silvers value doesnt really ever change. A few decades ago you could buy a gallon of gas for one silver dime. Today you can still buy a gallon of gas for one silver dime. The only thing that has value that changes is fiat currency. Another example gold used to have its value controlled in respect to the dollar. 1 ounce of gold was worth 20 dollars. at that time you could buy a brand new car for about 300 bucks or 15 ounces of gold. Today an ounce of gold is worth exactly the same. 15 ounces of gold at the current fiat exchange rate will still get you one brand new car.

So if you were to buy a bunch of physical gold you would have the value of it stored. regardless of what the exchange rate does your value would remain the same. if fiat currencies decline further then you would think to yourself well now my gold is 5k an ounce and what a wonderful investment it was. The truth would be that your 5k would have the same buying power as your 1700 does right now. The same would hold true if fiat currencies gained value so your 1 ounce of gold is only worth 500 an ounce. That 500 dollars would have the same buying power as your 1700 does now.

your words my friend. let's do this!

The real meaning of the word apocalypse is simply change.

I take this to mean "change to the status quo" and in my case, I see world economic slavery ending all around us.

It's a good thing. :-)

-p

Genetically modified bacteria that consume gold ions also threaten gold, since the immutability of gold is it's key selling point.
This is practical for mining (from sea water), but also undermines the immutability of gold.

Yes, we all have a very large penis to fall back on...

The only three technologies that I believe threaten gold are deep core mining, deep space mining and transmutation of elements. I don't think any of those three are near being practical.

The vast majority of gold's use is already economic. Governments horde it and use it to settle debts with each other. Industrial and jewellery use is a very small part of it.

Silver on the other hand does have a good chance of losing much of its value due to advancements in materials technology. But if material technology makes copper less important then silver prices will jump up because most silver is produced as a byproduct of copper mining.

I haven't in mind total apocalypse scenario, just a severe crisis, that would force relatively large amount of people to enable their stored assets. The problem when exchangeing gold directly is lack of mobility, it is really uncomfortable to use gold as cash, and when comes to electronic transfers, you must rely on some kind of IOU anyway.

I personally do no live my life on the expectation of apocalypse - I live it on the basis of exponential technological progress. That's why bitcoin is the future.
If apocalypse happens I will have to rely on my very large penis.