Gold Coins

[RainMaker]

So I'm putting together stuff I want in my safety deposit box. I came across a Kruggerand that was given to me as a kid. It got me wondering about gold and maybe picking up a few gold coins and putting them in the box for safe keeping.

Now is there any value to doing so? I'm primarily looking to just have some physical gold in my possesion that isn't going to cost me hundreds of thousands of dollars. Looking online it seems like everything is a collectible or some kind of scam. I'm just looking for physical gold like the Kruggerands are.

Does anyone know about this at all? And is this something that can be somewhat easily exchanged for close to the value of the gold if need be?

[chesapeake]

The price of gold is very, very high right now. Assuming we are not on the brink of a global depression, my feeling is that you are better off waiting to purchase more gold until prices drop.

Scams are always going to be a problem when you buy gold. Many national mints offer gold coins, including the US Mint. My sense is that you will pay more per ounce buying from a government source, but your purchase will have more collectible value, possibly more resale value if you keep documents that verify authenticity, and you will have more confidence that you are actually getting what you are paying for.

[Kodos]

I prefer to win my gold.

[Coffee Warlord]

Get your gold the old fashioned way: farm mobs.

[albionmoonlight]

Since the amounts you want to buy will be retail, you are going to have to pay high transactions costs and/or retail markup.

If you want to own some gold because it would be a cool thing to own, then go for it. If, however, you are looking at it as an investment, then you may want to consider options where you will not have to make up huge transaction costs before you manage to break even.

[Mustang]

I'd collect Platinum coins instead. They are worth 5x a Gold Piece.

[Kodos]

Gold!

[Mustang]

gold

http://www.basinpipes.com/blog/wp-content/uploads/2009/12/gmember.jpg

[QuikSand]

You may want to consider investing in Santo Gold.

http://stereogum.com/img/santo-gold2.jpg

[panerd]

I would just invest in GLD. It mirrors gold's exchange rate and is easier to get in and out of than gold. Of course if a major despression hits I am not sure that GLD would hold the same value as the actual metal, but there would be much bigger problems than that to deal with at that point.

[panerd]

The price of gold is very, very high right now. Assuming we are not on the brink of a global depression, my feeling is that you are better off waiting to purchase more gold until prices drop.

Scams are always going to be a problem when you buy gold. Many national mints offer gold coins, including the US Mint. My sense is that you will pay more per ounce buying from a government source, but your purchase will have more collectible value, possibly more resale value if you keep documents that verify authenticity, and you will have more confidence that you are actually getting what you are paying for.

Without turning this into a political debate if the government keeps spending money I think gold will always be a good investment strategy. (I haven't seen any evidence in my lifetime that they will stop spending money either) Not saying I would tie 100% of my portfolio there but it might be a better investment than a money market or bonds.

[DanGarion]

I'd collect Platinum coins instead. They are worth 5x a Gold Piece.

Thread over!

[Noop]

http://i274.photobucket.com/albums/jj273/brl131psu/midgetdancing2.gif

[MikeVic]

http://i274.photobucket.com/albums/jj273/brl131psu/midgetdancing2.gif

LOL.

[molson]

Of course if a major despression hits I am not sure that GLD would hold the same value as the actual metal, but there would be much bigger problems than that to deal with at that point.

Ya, I think that's always where talk of long-term investment in gold needs to end up. And if our currency is destroyed, you'd probably be better off if you invested in firearms anyway.

[sterlingice]

I'm pretty sure gold is useless in a post-apocalyptic time.

SI

[Apathetic Lurker]

I'm pretty sure gold is useless in a post-apocalyptic time.

SI


No its not..you can fling it at the cannibals and/or zombies..Pretty shiny things might distract them

[Rizon]

Get your gold the old fashioned way: farm mobs.

+1
Or flip in the AH.

[Swaggs]

I thought the only way to get gold coins was if you become a pirate.

[chesapeake]

Without turning this into a political debate if the government keeps spending money I think gold will always be a good investment strategy. (I haven't seen any evidence in my lifetime that they will stop spending money either) Not saying I would tie 100% of my portfolio there but it might be a better investment than a money market or bonds.

Purchasing gold is generally viewed as a hedge against inflation. The price has shot up in the last couple of years because of fears of inflation that haven't yet been realized -- assuming that we are comparing it to the US dollar. In my opinion, even if there is a somewhat significant increase in US inflation, much of that has already been factored into the current price. Opinions obviously will vary.

Everyone wants to buy low and sell high. My feeling is that unless there is a very big jump in domestic inflation, you are buying into the gold market too late. As an investment, you'd be better off putting your money into foreign and domestic stock indexes.

These are just my thoughts. Your own research may lead you to different conclusions.

[Sun Tzu]

Look for a rainbow, and watch out for this guy...

http://4.bp.blogspot.com/_exZ3bd2sNbk/Ss563RWy-oI/AAAAAAAAAH0/4YfcTeHxtL0/s400/leprechaun8.jpg

[JediKooter]

There's a Lethal Weapon 2 joke in there somewhere.

[Passacaglia]

You may want to consider investing in Santo Gold.

http://stereogum.com/img/santo-gold2.jpg

I believe it's called Santi Gold now.

[SportsDino]

Want to second chesapeke... I play gold crazier than anyone, and it is particularly nice when you know there is going to be inflation and it is at a low... but its sorts of a special commodity.

Without getting too mathematical, basically price gold not in dollars but in terms of other commodities (with dollars as a conversion factor, nothing more). If you get that curve, right now gold is not really underneath all the other commodities. My general strategy is to pick the commodity that is lowest relative to other commodities, because if there is a correction that is truly due to inflation I know that commodity is going to bump eventually.

Gold has a certain hysteria to that which I love to exploit, but right now I'd argue it is relatively flat. It was going full bubble speed at one point, I liquidated all but a long term small share and was happy when it dropped a good 11% within a month. I love to jump in and out of it (using ETFs, physical gold would be too slow), right now I don't think its going to plummet, but I don't think its going to grow either. If I were to guess, maybe a 2-5% increase if you hold it from now to end of year??? With a +- of say 4%.

Its at a historic high, usually not the best time to buy. Also there is a question whether we are seeing a spike similar to the early 1980's (which would be disastrous to hold gold). Some conditions in the economy are similar...

Another way to think about it, calculate what the price of inflation is relative to gold and think whether it seems reasonable. At the point I left out of the bubble it was short term inflation levels well into the double digits... which means its probably more hysteria than reality at that point.

My favorite gold play was late 2008, where you have banks about to get massive TARP, Fed printing a mint, and gold at a low point for the year. That was a formula for an easy predictable trend and I usually bounced on my jumps in and out of gold. Right now, I don't think it applies... there will be some boost perhaps if there is an inflation hit, but it can sometimes be negated by a commidity drop due to declining economy (see end of 2008!). Tricky business, I could go into it more, but I just do the simple thing, find the low dog on the commodity bundle and put my short term transactions through it.


Long term though, who knows, I'd say 20 years from now it will be up.

[QuikSand]

I believe it's called Santi Gold now.

Heretic!

[DanGarion]

I got some magic beans you can buy.

[DanGarion]

Wait no... Invest in Ameros!

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[B & B]

I prefer the gold coins with the chocolate inside.

Pure, high quality candy always comes in plastic netting.

[Logan]

SportsDino continues to be the smartest poster on this board.

[panerd]

He is definitely a bear but it is hard to argue with this guy. (Though many do)

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If you say, well he is a nut and just anti-government, watch this montage... My favorite is the guy from fox news at the end laughing at Schiff reccomending gold and then recommending Washington Mutual at $13 because it was undervalued. (This was after it had crashed from it's super highs!) LOL. What is that trading at now? 30 cents? Plus it's worth watching just to see how big of a d-bag Ben Stein really is.

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http://www.youtube.com/watch?v=2I0QN-FYkpw

[RainMaker]

The Peter Schiff vs Art Laffer clip is even better.

[panerd]

The Peter Schiff vs Art Laffer clip is even better.


I think its in that montage actually... but I agree its crazy and in hindsight Schiff makes Laffer look like a real stooge. You should watch the middle of the clip where a real estate expert and him are debating right before the crash if real estate prices are artificially high. He says something about the huge bubble like "I buy a house for 300K, put in a ceiling fan and sell it for 50K profit. Something is wrong here!" She maintains everything is fine and the housing market is a good investment. There is no doubt that he is ultra-conservative and a big time bear but he is very successful and has made a lot of money doing what he does.

[panerd]

I wonder how many people actually know about this guy? He is running for the Senate in Connecticut and actually has some realisitic ideas about what government does that causes some of these problems. Not Democrat or Republican talking points either but real understands of history and economics combined to show that this happens all the time throughout the history of the world and Americans act like this has only happened in 1929 and 2007.

[SportsDino]

Bah, now I'm curious whether my prediction will hold.

IAU (gold ETF) was at 108.6 (roughly) when I made my comments yesterday.

So my prediction is 2-5% +- 4%, so ranges would be:
-2% = 106.4
+9% = 118.4
+2% = 110.8
+5% = 114.0

So my prediction range is pretty much 110.8 -> 114.0

Note, the wider range happens to cover most of the prices since December.

[SportsDino]

Its well known I hate CNBC or other business news in general, but one thing that really gets my goat is that they act like total asses whenever Peter Schiff (or Ron Paul for politics) gets in the studio. You see a guy putting out his opinion and backing it with data, and on the other side you see people trying to talk over him and go 'cuckoooo, cuckooooo'.

Even ignoring the fact I see other shows where they let completely insane idiots (and sometimes future confirmed felons) say the most outrageous statements with off the wall fabricated data and sit there nodding their bobbleheads.

Whether you agree with him or not, you show some respect to your guests (who usually calmly present their position and try their best to avoid all the times they are baited... not just Schiff, I'm talking a number of true experts that break out hard numbers that disagree with the consensus opinion).

------

As for the first clip, the context of that was 2008 during the oil bubble. Basically he is doing what I mentioned above, comparing gold to other commodities (at that point ALL commodities were blowing off the charts, something that threw me for a loop)... it was at a low. Sure enough, if you bought when he said you should have bought gold, even if you missed selling gold at its peak this year and held on, you would have made a good amount (worst possible timing in 2008 = +10% today). If you timed it right (buy after steep declines, sell after huge spikes) you could have made a bundle. For instance you could have loaded from 750 to 900 and again at 750 to 1100 today for bumps of 20% and 47%. The second bump would be 60% if you exited at peak at 1200.

That said, I don't quite agree with 2000 an ounce. That prediction was made during a commodity bubble PLUS a lot of inflation pressure, so I could see how his model he probably is using would ring up such a number... but there was a deep commodity crash in the interim... so basically if there was no commodity bubble, we'd potentially hit 2000 (if the relative rates stayed the same), but with that decline taken into account the ceiling is probably 1300, with 1150 being the more likely amount (by my reckoning).

That said, if gold hit 1000 I'd probably be happy to use it again for the 10-15% short term trend. That is assuming my model is any good of course!