Should we believe in gold in 2016?

Discussion in 'Gold' started by TreasureHunter, Sep 11, 2015.

  1. REDBACK

    REDBACK Well-Known Member Silver Stacker

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    Below Article Source Fernando "FerFAL" Aguirre
    Surviving in Argentina

    (This subject has come a couple of times and I was wondered how this was handled in Argentina.
    You go to the grocery store to buy some things. When the cashier talleys the amount you hand her s couple of ounces of silver? Did/do stores keep track as to what the conversion is for precious metals - maybe a silver Maple Leaf or Golden American Eagle? Or maybe there are laws in place that force the stores to reject the precious metals or coinage?
    Gary)
    ..
    Hello Gary,
    Thanks for your email and sorry for taking so long to reply.
    Gold became an instant hit right after the economic collapse of 2001, the business of buying gold went up 500% the years after the collapse. All of a sudden every jewelry store and every kiosk, every new shop that opened was all about buying gold. With terrible rates of unemployment and inflation people became desperate, and the first thing they did after running out of money was turn to belongings they could sell. Of course, selling jewelry meant you could go to any of these stores and walk out with some cash to put food on the table.
    Here its important to notice that in spite of its popularity, the real business was for the person buying the gold and melting it, rather than the desperate person selling at a big loss, often for a spot price that was well below market value. For those that had gold coins, the loss when selling was generally not as bad if they went to a reputable precious metal dealer or bank.
    Answering your first question, no, you wouldn't pay in a grocery store with any kind of precious metal. You could although go to one of the many dealers looking to buy precious metals, which could be found all over town, sell your precious metals for whatever the price was that moment, and then with the cash now go to the grocery store. People that had gold and silver coins would sell a little bit at a time so as to preserve it from inflation. Answering your second question, yes, knowing the ongoing price of precious metals and especially currencies was very important. For years and still today, for any Argentine catching the price of the US dollar that day before leaving to work is as much of a ritual as checking the weather forescast.

    Gold=Store of Value>Hedge>Transportable>Convertible due to easy liquidity
    Little biased there buck wheat?
    You run down to the market with your iPads,iPods & clucking Chicken in hand.i'll run down with a couple of grams of gold
    Maybe a gold dealer will want your Chicken?

    REDBACK
     
  2. REDBACK

    REDBACK Well-Known Member Silver Stacker

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    Firstly where did i say invest in gold?

    Secondly the confidence thing ..You'll have to explain that to INDIA..1.2Billion people missed that one.

    A prudent reserve of Gold in the eighties might have been an effective hedge when real-estate,businesses and the economy went south in a hurry.
    Everyone we knew was hit hard
    You had to live thru that period to truly understand how tough it got for a lot of people.

    Lets move on
    I'll make a grandiose statement so you can have some time to think.

    Here's your statement to play with in the kiddy box for the next few hours~

    "GOLD IS A WORLD CURRENCY"

    And another~

    "GOLD HAS THE CONFIDENCE OF THE WORLD"

    And another~

    "CENTRAL BANKS BUY GOLD"

    I'm getting the hang of this~

    Here you try~


    REDBACK
     
  3. sterling-nz

    sterling-nz Well-Known Member

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    So your guy wrote a book?
    Is he an author trying to sell things?
    Try talking to ACTUAL SURVIVORS like i have and you may have a different view on how NORMAL CITIZENS managed to survive.
    I STAND BY MY ORIGINAL POST>
     
  4. Peter

    Peter Well-Known Member

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    There might be a crisis in one country, but gold buyers from other countries can just fly in
    and buy, and they will if gold is cheaper there.
    And they buy off the local dealers.
    Greed will always find a way.
     
  5. REDBACK

    REDBACK Well-Known Member Silver Stacker

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    Kiwi
    Your grossly missing the point
    Again not my guy just an easy reference source to check for all.
    You seem to blindly ignore all the benefits associated with gold during a crisis or exodus.
    Love to have you around for dinner with my Vietnamese friends.
    They have no bias against gold as a store of wealth.
    Easy to hide.
    Easy to recognise.
    Easy to liquidate.
    Your point is mute and without substance sorry to say.

    REDBACK
     
  6. dccpa

    dccpa Active Member

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    I visited Argentina in 2002, spent about ten days in Buenos Aires and traveled to most of the main cities. I didn't see a single sign wanting to either buy gold or offering gold for sale. The only time I saw gold was on a Sunday in Buenos Aires where a weekly outdoor market is held. There were gold watches and jewelry for sale. No sales were made while I was there and the trays had no empty slots where it appeared that something had been sold. Gold was under $300 and I cannot speak to whether the government had any controls on gold.

    If the economic collapse is caused by a currency collapse, then gold should provide some protection. In Argentina's case, the Peso dropped was devalued about 70%. Gold and most anything else provided some protection. But if gold and silver pawn shop dealers in Argentina were anything like those in the US, the protection would have been minimal. Desperate people aren't very good bargainers and the pawn shop dealers are very good at paying very little for value.
     
  7. Skyrocket

    Skyrocket Well-Known Member Silver Stacker

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    Just noticed this post! I agree Mr House! :)
     
  8. TreasureHunter

    TreasureHunter Well-Known Member

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    I've traveled to various parts of Mediterranean Europe after 2008 and I saw dozens and dozens of gold and silver buyer-seller shops. Or, the currency exchange shops turned to this activity too.

    Large signs could be seen in big cities. They were in abundance.

    They are still there, but investor sentiment has decayed.

    I think it was rather the "panic of '08" that ignited the prices so high. There is no panic now, so the rational reasons like the events undergoing and the economic indicators are not that important.

    I think what moves gold's price is mainly PANIC.

    EMOTIONS.

    :|
     
  9. Audeamus

    Audeamus Member

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    I think it's fair to say someone believes in gold. Be interesting to know who's taking delivery?

    Quote in "The Age" 3rd September...2015

    " The main reason for the narrowing of Australia's trade deficit
    in July to $ 2.5 billion, from $3.2 billion in June is the rebound
    in exports of bulk commodities and in particular Gold, Barclays
    notes..

    "The monthly data are volatile, but point to a strong rebound
    in Q3 to date. , Barclays economist Kieran Davies notes, Offering
    the following break-down:

    1. gold exports are up 70% over the Q2 average when volumes fell
    almost 30 per cent.

    2. iron ore exports are up 1per cent after a1% fall in Q2
     
  10. Caput Lupinum

    Caput Lupinum Well-Known Member Silver Stacker

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    What really moves gold is negative real interest rates which creates the demand as it costs more to hold cash. A zero yielding asset like gold is still better than a negative yield on cash.
     
  11. DSK

    DSK Active Member Silver Stacker

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    .........

    how could the argies afford to buy gold with a worthless currency when they could hardly afford to eat..your comparing first world conditions, ,ie the ability to afford to buy gold/silver while also able to eat.
    the exchange falling so badly that prices of goods like clothing and food were changing several times a day...they ended up
    not even putting price tags on.....that was told by my auntie in buenos aires.....
    whats big there is copper....my mum said that during ww2 there was one guy in her neighbourhood that went around buying everyones copper pots, ect.....he ended up being the richest person after the war with his copper stack

    ...
     
  12. TreasureHunter

    TreasureHunter Well-Known Member

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    At this moment, gold is good as a means to save on the longer term e.g. for pension savings, but also for some hedge against possible drammatical currency devaluation.

    But it's very hard to imagine it will climb to 2,000 again anytime soon. Not in 2016, but probably not in 2017 either. Unless a big crisis kicks in.
     
  13. RichardAL

    RichardAL Active Member Silver Stacker

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    Cogent stuff.
     
  14. Cinvalo

    Cinvalo Member

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    Hang on to real money my friend. You are in the right direction to hold gold. Another Crisis is certainly on the edge. And it will be SOON. Eventually they will have to launch QE4.
    Hold your precious metal tight before then because there might be a bumpy ride in-between.
     
  15. JulieW

    JulieW Well-Known Member Silver Stacker

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    I followed this fairly closely at the time and this pretty much sums it up. Better be a year early than a day late.

    p.s. Gold sales were banned in Argentina in 2012 unless you were purchasing to travel to a country where gold was legal tender (!)
     
  16. dccpa

    dccpa Active Member

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    Julie, did you mean 2002 in your p.s.? Gold was openly offered for sale at the market I attended. Nobody was buying but there were trays of gold and silver watches, jewely, etc.

    I see these types of articles all the time and they always seem to be written by pro pm people. My reply is so what? The devaluation was only in the overvalued Argentina peso. Food, toilet paper, liquor, USDs, Euros, and pretty much everything else would have protected value. In the year following the January, 2002 peso devaluation, the Brazilian real/USD ratio went from 2.42 to 3.59. That 48% gain is more than double the 23% increase in gold during that time. Real > gold > toilet paper > Peso.

    I expect the USD to get increasingly overvalued and at the peak, the sentiment will be far more extreme than last March. Selling the USD is the easy decision, the real question is what do you buy?
     
  17. JulieW

    JulieW Well-Known Member Silver Stacker

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    No that was in 2012 dccpa.

    Probably just anecdotal, but when the dollar-peso link was broken, as you can imagine prices in pesos went through the roof and shortages arrived. This was when the gold came out for trade for goods. Popular was a gold chain and swapping x links for your groceries/petrol or whatever. This was probably in the early days since gold stacks weren't a popular family trait in Argentina until then.

    I assume that gold became popular after such a salutary lesson, and the Kirchner government jumped on gold 'hoarding' with its 2012 proclamation. Presumably, giving a large hit to the Argentine gold reserves.
     
  18. fishtaco

    fishtaco Active Member Silver Stacker

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    Wrong market my friend! you needed to visit the "black market" to see what pm,s were being traded for and between whom for what.
     
  19. dccpa

    dccpa Active Member

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    "A black market or underground economy is a market in which goods or services are traded illegally."

    In 2002, gold was legal and there was a floating currency. No reason for a black market to exist. Right now, there are currency controls and that type of situation fosters a black market.
     
  20. REDBACK

    REDBACK Well-Known Member Silver Stacker

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    Black markets for goods and services exist in any economy.Full stop
    Its like fighting the tide brother.
    When economic conditions become worse the tide becomes stronger.
     

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