Economics Questions

Re: Question on gold/precious metal investment for college students

Anarcho-libertarian — Thu, 22 Dec 2011 03:31:09 GMT

Check out survivalblog.com which is the most read preparedness site. Here is a quick-start guide:

http://www.survivalblog.com/newbies.html

Re: Question on gold/precious metal investment for college students

John James — Thu, 22 Dec 2011 02:36:23 GMT

Happy to have you!

Be sure to check out:

New member? READ THIS!

Re: Question on gold/precious metal investment for college students

AndrewF72 — Thu, 22 Dec 2011 01:21:45 GMT

Woops- I tried to respond directly to certain people's posts but I dont think it worked. Anyways- thanks so much for the insightful advice from everybody- this seems like a really great community of very intelligent and knowledgeable people and I'm grateful that I came across it.

I am 23 y/o and will be applying to medical school next year and luckily I dont have to worry about paying for most of the tuition. I am just worried since most of my parents' and grandparents' investments and savings are in traditional stock portfolios, mutual funds, bonds and bank accounts. Thus, I felt it would be smart to invest whatever money I have in gold as a reliable savings mechanism in times of economic uncertainty and to possibly increase its value if hyperinflation ensues within the next decade or so. Its a small amount and probably wont mean much in the scheme of things- but I might as well take whatever risk is involved and in the process learn more about finances, savings and investment in the process.

Thanks for your replies!

Re: Question on gold/precious metal investment for college students

AndrewF72 — Thu, 22 Dec 2011 01:11:53 GMT

Exactly- this is a scary but also an exciting prospect. Nobody really knows. The Fed and all the other govt sanctioned global banks around the world can theoretically putt off a collapse of fiat currency for a long time to come.

Re: Question on gold/precious metal investment for college students

AndrewF72 — Thu, 22 Dec 2011 01:06:06 GMT

Thanks for the ideas. On a similar note, I have a good amount of bulk food stored away actually. A great idea is for a 55 gal drum of coconut oil which can be purchased on Mountain Rose Herbs and you can basically live off that stuff. I will look into that other stuff though.

Re: Question on gold/precious metal investment for college students

AndrewF72 — Thu, 22 Dec 2011 01:04:07 GMT

Thanks for your insightful reply and advice. I am a pre-medical student and will be apply to medical school in a year. Luckily, my grandparents left me money to pay for the degree. Even though I wont be making much money at all while in school- healthcare and medicine is my passion and I feel strong enough about sticking through with it so that I can live the lifestyle I want to and eventually open up my own practice.

I totally agree with your ideas about worthless degress. I dont think it makes ANY SENSE whatsoever to get a literature or history degree, unless you plan on doing an MBA or JD within a few years after.

I have been writing articles on textbroker and can churn out a few $100 a week- I just want to be prepared in case shit hits the fan, which is why gold and other metals came to mind. But maybe I have been reading too much Schiff and its possible that the supposed crash will be halted for years to come.

Re: Question on gold/precious metal investment for college students

DanielMuff — Thu, 22 Dec 2011 00:07:15 GMT

I know, but I wanted to skip ahead to a different point in time in the video, and I don't want to re-re-edit my post.

Re: Question on gold/precious metal investment for college students

Wheylous — Thu, 22 Dec 2011 00:02:12 GMT

You've gotta remove the last #t=... from video tags or the videos don't show.

Re: Question on gold/precious metal investment for college students

DanielMuff — Wed, 21 Dec 2011 23:57:21 GMT

Along the lines of what Clayton said:

[view:http://www.youtube.com/watch?v=lVS0vIkTrsw#t=1221s]

Re: Question on gold/precious metal investment for college students

onebornfree — Wed, 21 Dec 2011 23:21:39 GMT

Smiling Dave:
But how do you know for certain the opposite? What are your guarentees that the dollar will retain its value?

Smiling Dave, where have I ever, in these forums, claimed that I could guarantee that the $US will "retain its value"? . I think you might be confusing me with another poster.

My ongoing theme here, as always, has been that the economic future is entirely unknowable, which means that just like gold, silver, or anything else, the value of the $US will change relative to everything else, just as the value of anything and everything else, must also constantly change.

The $US might even become worthless at some point- I have absolutely no idea what the future holds for the $US, or gold, stocks , bonds , nor for anything else, and therefor my attempts at saving for the future involve a very wide diversification of savings across several broad investment classes , all of which are known [historically speaking] to perform well under certain economic conditions, in order to try to allow for and accommodate that always unpredictable future so that when the unknown and unpredicted arrives, and regardless of whatever " it" is, it is not too much of a shock to my savings.

The Only Certainty Is Constant Change

All I know for certain is that the relative market valuations of all of these things and more, just like the relative values of everything else relative to everything else, must always be in a constant state of flux [ change]. I hope that clarifies somewhat for you. Regards, onebornfree.

Re: Question on gold/precious metal investment for college students

Smiling Dave — Wed, 21 Dec 2011 22:16:31 GMT

how do you know for certain...how do you know for certain....how do you know for certain...absolutely no guarentees...

I don't. But how do you know for certain the opposite? What are your guarentees that the dollar will retain its value?

Since neither side has certainty or guarentee on its side, let us look at the fundamentals.

Intrinsic value? Gold yes. Green paper no.

Retained it's value over thousands of years? Gold yes, green paper no. In fact lost 99% over 99 years.

Has any paper money not gone to zero? Nope, they all went zero.

Has gold ever gone to zero? Never

Given the current madman money printing unprecedented in US history and world-wide history, what does that tell Austrain economics tell us, ceteris parebis? Gold up in price. Paper money down.

So I don't see why you are so content sitting on a time bomb because maybe it won't go off in your lifetime. Why sit on it at all?

Re: Question on gold/precious metal investment for college students

onebornfree — Wed, 21 Dec 2011 22:00:54 GMT

Smiling Dave:

onebornfree.

My understanding is that owning dollars is like being in a car headed toward a cliff. You are correctly pointing out the dangers of jumping out of the car, and how best to do it, but neglecting the danger of staying in the car.

If we had sound money and a gvt that isnt printing and borrowing like maniacs, you would be right. Stay safely at home instead of playing in traffic. But we live in a diffeent world, where doing nothing with dollars is dangerous.

Not the best analogy, but it will do in a pinch.

Assuming you are in the car, how do you know for certain that it will reach the cliff within your own lifetime? How do you know for certain that it won't just slow down to a crawl, maybe stop, or reverse, or even "do a "U-ie"" , or even just drive parallel to the cliff apon reaching it?

There any number of imaginary "car" scenarios that might reasonably occur in the future to prevent your car ever driving off that proverbial cliff, surely?

Although, as a former " gold bug", I understand and sympathise with your position and belief, unfortunately the reality is that there can be no absolute guarantee that that analogous car will ever get to where you think it must go within yours or my lifetimes - the economic future, as always, remains unknowable, in my own opinion. Regards, onebornfree.

Re: Question on gold/precious metal investment for college students

John James — Wed, 21 Dec 2011 19:04:31 GMT

First you need to understand that trading in your dollars for precious metals is usually not an investment. It is simply saving.

See here.

Next, check out these threads:

Looking for a good Finance textbook!

I'd like to use Austrian Economic analysis to become an evil speculator.

Begining an adult life - How do I protect my meager wealth??

Literature on Practical Applications of Austrian Economics?

Re: Question on gold/precious metal investment for college students

Smiling Dave — Wed, 21 Dec 2011 17:07:06 GMT

onebornfree.

My understanding is that owning dollars is like being in a car headed toward a cliff. You are correctly pointing out the dangers of jumping out of the car, and how best to do it, but neglecting the danger of staying in the car.

If we had sound money and a gvt that isnt printing and borrowing like maniacs, you would be right. Stay safely at home instead of playing in traffic. But we live in a diffeent world, where doing nothing with dollars is dangerous.

Re: Question on gold/precious metal investment for college students

onebornfree — Wed, 21 Dec 2011 16:28:47 GMT

AndrewF72:

I have $5000 that I made over a few years that I would like to invest in gold or other metals- as a long term, stable and steadily rising investment.

Any advice on where to start or if this is even a good idea in the first place? If anybody has any reommendations, books, articles etc- it would be greatly appreciated. I am new to this forum so sorry if this post is not allowed in this thread. Thanks in advance.

Step [1] : if possible divide your $5000 into 2 "piles" consisting of :

[1] money you cannot under any circumstances, afford to lose...........

and [2] money you _can_ afford to lose [you should be so lucky!].

If that is not possible because you have no money that you can afford to lose, then just be honest with yourself and admit this.

Your next step in the "honesty process" might be to then admit that no -one, can reliably, consistently predict future economic events.

You then might wish to consider the proposition that if a person puts all of their $5000 savings that they cannot afford to lose [or whatever part of that $5000 that they cannot afford to lose] into a single "investment category" such as precious metals, then consciously or unconsciously , they are doing exactly that [ i.e. attempting to predict future economic events], because precious metals historically have only performed well under certain economic conditions, and those conditions may, or may not , reoccur within the span of your own lifetime- there can be no guarantees.

On the other hand, if you can afford to lose some, or all of that $5000, then a speculation in precious metals might be justified, depending on your own wants /needs/understandings regarding rewards/risk ratios, support/resistance levels, automatic stop losses and the rest of the boring [yet necessary!] paraphernalia surrounding safe, successful speculation in markets of every type. Regards, onebornfree.