Let me simplify: Stacker buys gold, and gold drops in price. Stacker doesn't sell, and delusionally tells him/herself no fiat has been lost. Gold is not fiat. Gold is purchasing power. Thus, stacker really has lost purchasing power, and taken a financial loss.
You wouldn't think we've already considered all those scenarios as well? @cave-guard, I have completely missed what you are trying to say. Hindsight is wonderful, what are you doing with your cash? Buying gold or investing in term deposits?
Mind explaining why? I used the most basic scenario of the differences one would expect with $1387.78 of cash on hand, if he/she used it in term deposit compared to buying gold. How is that nonsense? Because it doesn't match your views? So does shares and bonds, hold 1 year and get 50% CGT discount after selling. If you're worried about that, buy bonds then? Real estate even offers negative gearing, try that instead if you want to factor tax. So you're going to have to wait 10 years to hope that it went up enough that you made a good choice? What if prices doesn't go to the moon after 10 years and stays below $2000/oz? The monetary/macro environment has been unstable since the GFC in 2007/2008 and since the start of the money printing in the US, people were harping about how it would collapse "next year", now it's 6 years later, has it collapsed yet? Has gold skyrocketed to da moon since 2008? If you say I am "cherry picking" my time frame, well I can say you are also "cherry picking" your timeframe too. Try gold prices between 1995-2005? That's if we actually head back towards a gold-related monetary system. Who's to say we're not headed towards a crypto-currency backed system?
You are cherry picking your time frame. Try the value of the Australian $ since it was introduced. Source: bordsilver
Dollar has only been around since 1966 Purchasing power less than 5% since its introduction based on a small basket of comparable comsumer items I can think of at the moment
It is quite clear that the author of the article ( aka cave_guard ) simply considers there is no reason to own any PMs and had obviously been cut that his view had been wrong over the last 10 years, so has taken the opportunity to write a "see I was right" article. There are many reasons people hold PMs and Barry hasn't even considered some of them in the article or in this discussion, but I would guess his views would not be changed one iota anyway.
To elaborate on paper losses, A 'paper loss' remains a paper loss until such time as the item is sold at a loss, thus turning paper into actual. If I bought my stuff at $23 an ounce, and it went to $15 an ounce, I hold until it is $300 an ounce and the 'loss' disappears. JMO OC
This would be {nearly} true if you value of your stack in fiat (ignoring the real factor of opportunity loss). However, to value your stack in fiat is contradictory to the stacker philosophy that gold is money, which should instead be valued in purchasing power, and serves to preserve wealth. It seems that the majority of stackers are happy to sprout-off about purchasing power and preservation of wealth through gold, until price falls..... then they revert to valuing in fiat in order to convince themselves a loss has not been realised. It is this hypocrisy that irritates me. You can't have your cake, and eat it too.
I have said quite a few times here that to me personally, the possession of G & S is an INSURANCE policy, NOT an investment! I believe that in due course I can get all the 'premiums' back in 3 or 5 or 10 years. Probably 10 or 30 times over! again, JMO OC
Oh boy, went to work and came back to see all the goldbugs with their claws out, didn't think it would take long! Here goes: You obviously missed my point. Bullion Baron was claiming I was "cherry picking" my timeframe of the past 2 years and thus suggested I look at a timeframe of the last 10 years, which saw a considerable increase in gold prices. I simply wanted to show that the length of time (ie. 2 years vs 10 years) didn't matter, since between 1995-2005 (also 10 year timeframe) didn't see gold outperforming term deposits. During those years there were even times where interest rates went over 10%. We can go around and accuse each other of "cherry picking" all our timeframes but it would be quite pointless, so let's leave it at that. LOL this is what I love about some goldbugs - they think people who are gold bears are people who missed out on the increase in gold prices over the last 10 years and are "cut" or "butthurt" over it. This is like some form of gloating over non-stackers, quite amusing and rather pathetic really. I never said anything along the lines of "see I was right" - I simply did some maths and showed what you can expect in the future if you managed your money either way. I also highlighted some other possibilities about the future - eg. gold not going to the moon, crypto currencies becoming mainstream, etc. and also pointed out that the economy isn't as simple as "GFC = gold to da moon". Who da hell is Barry? I've been a lurker for a while and only just started posting because I saw an article written by a level-headed person, that's all. I'm not an ultrabear, if that's what you're implying. If gold is performing well today I'm not afraid to pour a big chunk of my money into it. The money making machines in the near-term are not in gold unfortunately, so I won't put my money there. Simple as that.
