Better invest in tractors.....

http://www.monex.com/prods/gold_chart.html

A friend told me last winter that the was thinking of buying gold. I'm no finance person but I know enough to know that gold goes opposite of the market in general. I have invested in both Deere and Fiat and they have both been doing well.

I think the current slide in the gold prices is just temp. Stock markets and fairly anything else is inflated a lot, and the crash is going to come and gold will still be a better investment. Just my opinion

As long as the Fed keeps printing US Dollars with absolutely nothing to back them up Gold will win out long term.Anyway Gold and Silver are a form currency not an 'investment' as such.Gold will be valuable when the US Dollar is long gone.ALL paper currencies failed eventually and no reason to think the US Dollar will be any different,the temptation to print too many is too strong when the Gov't gets in a financial bind.

I'd sooner have the cash,you can do something with that.Who are you going to sell gold to?
There not going to give you market value for your gold.Ever try to sell gold jewelery,you would be luckey to get 60% of it's value.

(quoted from post at 12:32:20 04/16/13) I'd sooner have the cash,you can do something with that.Who are you going to sell gold to?
There not going to give you market value for your gold.Ever try to sell gold jewelery,you would be luckey to get 60% of it's value.

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That's the problem with gold....you have to find a way to change it to something useful without getting raped. Brokers make $$$ on both ends...why else are they pushing it so hard??

I don't know how it is in other areas, but in Indiana there's a place that's been in business a long time called "Silvertown" and they are reputable exchanging.

Yep. I get my financial investment advice at Tractor Supply and my medical advice at McDonalds. Always lots of free suggestions.

(quoted from post at 14:50:44 04/16/13) Yep. I get my financial investment advice at Tractor Supply and my medical advice at McDonalds. Always lots of free suggestions.

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Well, go back to either one and you won't be missed here.

I've spent my life putting money back into investments ,, land & farming business. Not fun anymore. Now old tractors, that's fun .At my age fun is more important than return on investment.

Gold coins sell on ebay all the time for about 10 to 20 percent more than I can buy them if I buy $15,000 worth at a time.And don't worry Gold coins will be in demand when no one will take paper currency

Back in 1913 when the Federal Reserve stated printing Federal Reserve Notes which are mistakenly called Greenbacks or Dollars these days, a person could take 20 of the Notes into a bank and you could get 1 ounce of Gold for the 20 notes.Today it takes 1300+ of the Federal Reserve Notes to buy a 1 ounce Golden Eagle or comparable
coin.That means the Federal Reserve Notes in 100 years have lost 98% of their value against Gold.So which has been the better to own over the long haul?Even in 1971 the offical price of Gold was only $35 so the so called US Dollar has declined in value at a very fast rate.In 07 Gold was around $700 an ounce and the Stock market was about where it is today while Gold has about doubled in value even with the latest drop.Hope you got a wood stove at least paper currency can used to start a fire but it makes lousy toilet paper.Or worse yet digital Dollars like is in the bank where they can be just wiped out like in Cyprus.

I think equipment and tractors are getting ready to tank. $7+
corn gives a lot of people some extra cash, and the price of
used equipment shows it. $4.80 corn is going to slow this
down.
Josh

Who was in office when we went off the gold standard?? Maybe we should have used TARP money to buy banks like some of them did!!

You know not all the gold commodity traded on the market now is backed by real gold anymore! Ask how germany made out trying to withdraw its gold a couple of years ago!

When I talk about Gold I'm talking the Physical Gold in hand."Paper Gold" is just paper as you say.

Gold and silver are commodities, not unlike corn, soybeans, barley and crude oil, all traded... and bought and paid for with US Dollars and priced in said denomination. Nothing more.
The run up in the price of gold has simply been a reflection on people's perception and demand for gold, not it's value. As such... it's now perceived to be worth less... and people are dumping their holdings... and the price is taking a dump.

Rod

(quoted from post at 20:14:36 04/16/13) Gold and silver are commodities, not unlike corn, soybeans, barley and crude oil, all traded... and bought and paid for with US Dollars and priced in said denomination. Nothing more.
The run up in the price of gold has simply been a reflection on people's perception and demand for gold, not it's value. As such... it's now perceived to be worth less... and people are dumping their holdings... and the price is taking a dump.

Rod

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Exactly....as those who bought at $1800 are now finding out. It is easy to like gold if you bought it at $300 or less LOL! Silver is the same way, I had a buddy that was chasing the silver dream back in the 80's and bought on leverage. He turned old fast.....

Nope you're wrong Gold is a Currency just like
the US Dollar or Euro matter of fact its been the most enduring currency that all other currencies have been measured against since the beginning of recorded history.As of late as the 1890s in the US over 75% of all transactions were in Gold.The Federal Reserve Act of 1913 gave us here in the US
our present form of paper money.Paper money has no value other than the economic health of the enity thats produces it.With 17 Trillion in direct
outstanding debt and up to 100 trillion in liabiliites like Social Security,Medicare,and the like facing the US Gov't in the future with no hope of ever being able to pay except for one thing being able to print (digitize) more Dollars which the Fed is feeding into the system at the rate of 86 Billion every month the value of the Dollar is dropping and overall compared to Gold has droppped in value.If you held Gold and paper money with equal value back in 07 you now today would be able to buy about 20% less with your paper money when buying things like fuel,groceries,tractor parts etc but if you held Gold those things would be cheaper now than in 07 because Gold is worth 2X as many US Dollars as it was in 07.If you think the US Gov't is on solid financial footing and has everthing under control then stay in US Dollars but if you think Gov't spending is out of control with no hope of meeting its financial obligations over the long term then you want to get out of US Dollars and Gold is the long term thing of enduring value thats has outlasted all Gov'ts and all paper currencies and will continue to do so in the future.

Look at it this way when you take US Dollars you are really holding promisary notes issued by The Fed for the US Gov't and even our paper money has had any guarantee of redemtion done away with since 1971.Would you hold a promisary note from someone hopeless in debt and totally irresponsible
that could never repay their debts and you have no guarantee of any kind to be able to recoupe anything of value?Thats what you're doing with Federal Reserve Notes.

Sorry, I understand it fairly well... The value of gold today has virtually no effect on the value of the dollar, US or otherwise.

Stop and think about this for a minute. Ask yourself 'What is currency?'
In a nutshell, currency is a tool that we use to facilitate trade... nothing more, really. You have a ton of barley to sell. You name a price. I pay you in dollars... cash, paper or electronic. Then you go buy what you need with that currency. It makes a lot more sense than trying to weigh off an exact amount of gold...

Go to 1913... the Fed was created to manage currency and the economy at the top level. The dollar was to be used as a floating currency where the value of the dollar could be expanded or contracted depending on the economic conditions of the time. While you may consider this to be a devaluation of the dollar against gold, another way of looking at it is that as the dollar has been devalued it's allowed for wealth of the country to be spread among the many, bringing general prosperity to many.

The present economic situation of the world was laid down during the second world war. In the early stages of the war the UK 'shot the wad' as Churchill called it... and emptied the nation's treasury to pay for the war by buying material and food from the US, Canada, etc. When that was gone, then came Lend-Lease in which the US transfered a large number of capital ships in exchange for strategic bases, etc... After that, trade was done purely on credit. Not having money to give... credit was what was available. The US then had to finance the acquisition of this material for the UK... thus the dollar was devalued. Since this created one of the largest economic booms in recorded history, pretty well everyone did well by the deal.
At the end of the war the US was now the most economically and militarially powerfull nation on the planet. Since they also had most of the gold it probably didn't make much sense to try and use gold for trade...
Thus the US dollar by default was the most powerfull currency at the time by virture of the strength of the US economy. Following Bretton Woods and other such meetings that followed the war and the creation of the IMF, the US dollar became the 'reserve currency' of many countries... basically the reserve currency of the world. The US pledged to peg the dollar to gold at 35 dollars or whatever the number was. As time wore on the real commodity value of gold exceeded the peg value against the dollar... with the result that gold was being redeemed from the US treasury at the pegged value and being sold on the commodity market at a profit. The pegged price was moved upwards several times until 1973 or whatever date when the US abandoned the gold standard because it was not feasable to maintain with the run on gold that was taking place.
Thus you have a fully floating dollar that is tied solely to the value of the nation's economy.... and GOLD is a traded COMMODITY.

You can argue that the value of the dollar has declined against the value of gold... which I suppose it has. You can point to the 'devaluation' since 2007 for whatever myriad of reasons you wish to attribute it to... but then I'd have to ask you this.... Why has the value of gold fallen by 15-20% in the past week? Is that because it's a commodity or has the US economy strengthened that much against gold in the last 10 days?
Again... I say gold is a commodity and the leaches of the commodity world are now dumping what they correctly realize is overvalued.


Rod

All curriencies change value against each other constantly just like stocks will go up and down short term but its the long haul that determines true value and like I said the US Federal Reserve note has lost 98% of its value against Gold since its invention 100 years ago.Thats a fact.Not a real good track record for anything.No currency can escape being compared to Gold these days.But we'll see in the next couple years which it is that comes out on top.Since Gold can't be conjured up on a computer screen like paper currency can I'll keep betting on Gold and Silver too.Heck on face value Confederate Money is worth more than Federal Reserve Notes. You can buy a whole lot more with a Confederate 100 Dollar Bill than you can with a US 100 Dollar Bill.(LOL)

The precise purpose of reserve type banking systems is that the value of the 'notes' can be changed. You view that as a failure but that is their basic purpose.
I don't know how the present stagflation predicament will be fixed, if it can be fixed... but I'm quite sure it won't be with gold.

The price of oil is what's driving most things these days... or preventing things from moving forward... depending on where you are. The Canadian dollar has basically turned into a petro dollar in the last 10 years because of the amount of trade generated through what flows from McMurray... The downside is that the cost of oil is killing the rest of the country that doesn't share in that oil boom.

You should read about the Federal Reserve system and other relevant banking information... from a source other than the right wing/bible thumping/conspiracy theorists who are still living in the Victorian era. The Fed's own website has a fair amount of information on the purpose and function of the Fed...

Rod

Asking the Fed about their system is like asking criminals in jail if they are innocent or guilty pretty predictable what the answer will be.You're right about one thing the value of their currency does change but I don't see it as good when it constantly looses its ability to buy things when people save for years thinking they'll have something.So you tell me how is the US Gov't going to pay off all its debts and meet all its obligations any other way than to keep flushing Dollars into the system at 0 per cent interest?
Do you really think other countries around the World will keep accepting these Dollars?
Would you buy stock in a company thats owes Trillions and just keep issuing more stock
to raise operating money?
Gold has out lasted paper money in countries all over the World the US is no different just bigger.

Every other country in the world that has a government of more than a tin pot dictator is following pretty much the same economic policy. They have no realistic alternative to using the US Dollar as their Reserve Currency. Well they do... The Euro... which is in worse shape.

You need to draw a distinction between the government printing money and a private entity borrowing money. The governemnt will never pay off it's debt. The purpose or intent was never there to pay it off. That's not to say it doesn't need to be managed... and I'm not saying it isn't well out of hand today compared to where it should be... but at that level paying it off is not really the point.
If the money supply was limited to the amount of gold in the world you would have no realistic way to manage the money supply... and not managing the money supply is a big part of what has caused past panics and the unwinding of previous currencies. Would you really want to rely on a currency today where most known unmined reserves exist in Africa and South America? We've taken most of our gold from the ground already...
I'm not sure why you see the Fed as being run by criminals. That kind of stuff is the spin that is place don facts by people with an agenda to sell that generally has nothing to do with the fed. Or they see some grand conspiracy in the normal workings of an organization simply because they don't understand exactly what it is the organization does.

We're sitting here argueing about macro economic theory... a subject that's hardly agreed upon by leading economists of the past century let alone anyone else... but this much I do know... none of them advocated a return to the gold standard.

Rod

I have to side with Traditional Farmer. If gold is just a commodity, why do central banks the world over hold tonnes of it in vaults as "reserves"?
Thousands of years and countless transactions have determined that gold and silver (silver has been used as money more than gold) were the best items to hold and preserve ones wealth until they decided to use it to obtain something.
All paper currencies ever used in history have eventually collapsed, and the dollar will too. Paper has never been determined to be a store of value. In every instance, it was used as a receipt for gold or silver stored in a warehouse(bank), and eventually had the gold backing removed from it. At that point, the currency is eventually going to fail.
Our dollar was backed at least partially by gold until 1971. We've been running on empty since then, and it's starting to show.
If you don't think gold is money, answer these questions:

What did the egyptians bury their kings with?
What did the three wise men bring as gifts to the child Jesus?
What did Spain, England and other European countries haul back from the new world in armadas of ships?
What caused the huge population rush westward in 1849, and also to Alaska?
It wasn't paper, or the promise of a government. It was gold.

The big sell off the other day was in paper gold (ETFs). As we speak there are beginning to appear holes in the physical supply. Those that know are buying pyhsical gold and holding on to it, because they know how bad the entire western world is at financially.

Paper currencies, bonds, stocks, whatever, are investments in debt. If you're okay with that then go for it. I changed my mind several years back, and now I try to keep the wealth I have in physical metals.

If you think paper currencies are great, think about this:
In 1998 gas was $1.47 and silver was around $4.50 an ounce. That means you could buy 2 1/2 gallons of gas with an ounce of silver. Today the exact same ounce of silver will buy you (gas at $3.43 here right now), even with the recent drop, about 6.7 gallons, while your paper dollar will buy less than 1/3 of a gallon.

Call me a gold bug if you want, but I'm in the hard metal camp.

Rod, your statement:

"If the money supply was limited to the amount of gold in the world you would have no realistic way to manage the money supply"

tells me that you don't understand the concept of a gold backed currency. There is always a clearing price for gold. If gold were 1 billion dollars an ounce, would there be enough gold in the world to back the currency? You bet. If it really were a billion dollars an ounce, that would only show the sad state our dollar was in though.

Of the questions you pose... the only relevant answer is that gold was valued in that time...

The reason gold is held in vaults is that it has value... as a metal. I didn't say it has no value. I said it has no bering on the value of currency. Governments keep strategic reserves of crude oil as well. Because there is economic value in having it as well as strategic value.
As far as how much gasoline you can buy with an ounce of silver... I'll say it again... it has to do with the appreciation or stability in the commodity price of silver. None of these commodities have pegged monetary values. Their price is set daily on futures markets... and the price is based solely on what traders perceive to be the supply and demand of those items. Again, not the actual demand... the perceived demand.

People often sit here and complain about the price of gas rising while the price of crude has been steadily falling... and nobody seems to be able to explain why. The answer is really quite simple. There's more perception of demand for gasoline at that particular time because that's the game someone is playing today. I sit here and watch the market somewhat, at a distance... and I don't play... because I have no desire to lose money at it. It's nothing more than organized, legalized gambling in my mind. For every winner there is a loser somewhere else.... and the odds are stacked in favor of the ones who have enough weight to shift the market.... or who at least quickly realize the trend and get out before it tanks. Reality in this game is that the market has to cycle up and down for the players to make money... and if you're not one of them you're probably not the one making the money.

You can go on buying gold or silver or whatever you like... but reality is this. If/when the crap hits the fan, the government of the day will find a way to get your gold the same way the government of Greece has raided bank accounts in that country so they can write down some bad debt... so don't think you'll be immune.

I tend to think that if there is a widespread collapse your gold won't really be worth a whole lot. If someone is starving they'll have more need for food than gold... or oil... or tools to grow food. Gold wouldn't be high on my priority list.

Rod

I understand it fine...

You can either obtain more gold or you can inflate the value of gold
Either you revalue a piece of paper or you revalue the gold... either way you're revaluing something, which goes counter to the original assertion that gold has some godly intrinsic value.

Rod

(quoted from post at 21:26:40 04/17/13) You can go on buying gold or silver or whatever you like... but reality is this. If/when the crap hits the fan, the government of the day will find a way to get your gold the same way the government of Greece has raided bank accounts in that country so they can write down some bad debt... so don't think you'll be immune.

I tend to think that if there is a widespread collapse your gold won't really be worth a whole lot. If someone is starving they'll have more need for food than gold... or oil... or tools to grow food. Gold wouldn't be high on my priority list.

Rod

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Which brings us back to the topic......buy tractors!

I've already got a strategic pile of iron
The old man still wants to give it away at the bottom of the market tho

Actually, it has been appreciating a bit of late but nowhere near 2008 highs.

Rod

Well, TF, I guess we now know why you're in such a foul mood. You'd better sell your gold now, before it drops down to $900/ounce.

Rod has it right, but I can understand why you don't want to accept his common sense if you're holding a few dozen gold coins that are worth 20 percent less than what you paid for them. Like Rod says, gold is a commodity, just like a bushel of wheat or a ton of pork bellies. Gold has an inherent value, for the simple reason that it has industrial uses for which there is no acceptable substitute. But gold's inherent value is nowhere near its current price, and the more expensive it is the more industry will figure out how to use less of it.

As for going back to a gold standard, I'm afraid that can never happen. Even at $2000/ounce, there's not enough gold floating around to replace all the dollars in circulation. Let's not forget that scarceness of currency was a major inhibitor to the economic growth of the US during the 19th century. If you want to kill a nation's economy, switching to a gold standard is great way to do it.

It is a fact that gold prices rise and fall along with uncertainty in the economy. Like it or not, the economy continues to improve. As long as the economy continues, those gold coins under your mattress will continue to depreciate.

I'll tell you what: Gold closed yesterday just shy of $1400. If gold hits $1600/ounce in the next three months, I'll come back and say I was wrong. But if it drops $200 to trade at $1200/ounce, then you have to admit I was right.

See you July 18th.

Rod, you bring up a lot of good points on why the system we have works. But I find it odd that you support the Fed and it's manipulations while decrying the markets and their "legalized gambling". The two are about the same thing in the end- the big movers and shakers control the markets and the Fed controls the currency and the debt. The scary part is the two are intertwined in a zillion different ways. That's an unholy alliance if ever there was one.

I see a purpose for commodity futures markets as a means of sending production signals... I also see a purpose for stock markets in their purest form as a means of generating investment capital.... but the business of trading stock at values above it's initial capitalization is pure speculation. I guess I don't see the point of that other than someone obviously hopes to profit by it... but that's still a gamble.
If you look at the large pools of money that some of these 'funds' have been playing with over the last number of years... they're basically buying into a commodity. The size of their ask alone creates a demand that drives the price which creates a buying frenzy... but the only one that knows when the dump will happen is the original fund manager when he decides he can take enough profit to get out... then the sell off creates a price slide... but since the first guy is on the leading edge of the curve he gets to profit the most or at least hurt the least.

The other side of the coin, as you probably know.... is shares like Berkshire H that have very little trade volume and remain at a stable price. Those have far more value inherent that their face value....

Rod

Gold doesn't have some "godly" intrinsic value. But it does have intrinsic value, and more than a piece of paper. Gold is useful in numerous industrial applications, as well as jewelry. I guess you can use paper to light your fire with or have your puppy pee on it. Personally, I would rather have an ounce of gold than 1500 pieces of paper representing someone elses debt if push came to shove. There will always be someone wanting to give me their paper for my gold, but not necessarily the other way around.

Your arguement here doesn't make sense. True, gold is a commodity, but it's value simply as a metal, strategic or not, has a miniscule global industrial footprint in comparison to it's massive monetary footprint. If it's simply strategic or industrial, why do central banks worldwide store it? And why does the USA have the largest stockpile in the world at 8000 tons? They don't keep nearly that much oil by comarison, which would be a much more important commodity compared to gold's industrial uses. It's largest stragetic value is as a reserve of money. Commodity? Yes, but the commodity of choice for storage of wealth for 5000 years of market transactions.
You should read about the history of paper currencies sometime. And I don't mean just the dollar. Read about the continentals or the French assignats, or a number of others.

Obviously we could go on about this stuff forever, but I will get down off my soapbox now. The government won't confisticate my gold until they come to my house and figure out where I buried it, lol.
I wish I had a solid gold tractor. I could be happy the rest of my days with one of those.

Yes, the US has a large pile of gold. I don't think it's much more than about half what you state, but undeniable, it is large. The value is also quite large if calculated at today's market prices.
The same source of information will tell you that the Bank of Canada keeps about 3-1/2 ton or so of gold in reserve. Arguably, our currency has far outperformed the US dollar in relative terms over the past 10 years or so... as it was rising against other major world currencies while the US Dollar was falling.
It obviously didn't do that on the basis of the amount of gold residing in the basement. That was the result of several years of austerity measures at the federal government level to bring spending under control... and much more to do with the amount of oil coming out of the ground in Alberta.

As far as keeping gold as a reserve against paper... there isn't really much compelling reason to get rid of it any more than there is reason to acquire it. I don't see too many central banks on gold buying sprees... The fact that Greece has floated the idea of selling theirs off to pay for some of their misdeeds is one of the reasons the price has taken a slide over the past week... so it could be argued that selling gold off into the commodity market would have a major negative on gold mining... and a resultant reduction in economic activity... quite contrary to the purposes of most central banks.
So it sits, an assett to the treasure of some value... Perhaps to be needed some day to bail out a mess should there be a market for it.... but reality is that if that day comes, the only one who could afford to take gold would be someone who doesn't need it.
It's just one of those things that goes with a mentality that's attracted to all things shiny. It still doesn't serve much real purpose other than for someone to say they have it and hold over someone who doesn't. Well... that and it's a great conductor in circuit boards.

While much time has been spent in this thread on condemning paper currency... mabey a better question would be... Why do you think gold has ~any~ real value? Given it's industrial uses are relatively small... why is it worth anything? Paper currencies have proven time and again that they support commerce on a daily basis. Why value gold?

My simple answer to that is this... you value gold because you ~think~ it's worth something. The same concept supports paper. Either will fail as a currency when sufficient numbers of people no longer believe in their value.

While I haven't gone and read the history of other failed currencies... I would tend to believe that their failure was more the result of political stability of the day (or the lack therof).

Rod