Value of the dollar

[nando]

I don't recall any economists that said that, nor did I ever say that, or say I was following what any economists said about gold.

if you want nonsense read the drivel written by Jeff Nielson for thestreet.com. Oh wait, it's the same crap you guys are spouting here. ;)

[nando]

you are always the glass is half full kind of guy aren't ya? :)


but what if he is right? You ready for that?



On another note, Credit Rating Agency Moodys just announced that several states and local governments are facing credit rating downgrades.

http://www.politico.com/news/stories/0811/61039.html

Not exactly. I just know an opportunity when I see it. I'm as uneasy as any of you. I'm just making an attempt to not follow what my emotions say because they are often the exact opposite of what you should do.

what if there's a god and I'm going to hell? basically the same argument to me.

the downgrade of states isn't news, it was expected weeks ago, even by the states themselves. Hell, our state defaulted on billions of loans for a nuclear reactor in the late 70's. They know what a downgrade means.

[rwh11385]

nope. 2008 was a total lockup of credit, half a million people being laid off a month, multiple large institutions failing. this current route is about fear of a recession and the failure of governments to lead.

It's a loss of confidence, not a crash - but the credit markets are still functioning and liquidity is high. people have been saving cash, rather than piling on debt. Big difference.

nando is on the ball, in a sea of tinfoil hat wearers and people who are buying up gold because everyone else is. (that's called speculation pricing y'all - nothing different then buying a stock because it is "so hot", or oil. Eventually it runs out of steam, people get out, and price crashes)

Someone from school works now for an I-bank and has said similar things. Corporations have been tighter on their credit and corporations are highly profitable.

[Fusion]

There's nothing tinfoil about not willing to leave your hard earned pieces of paper to the sake of institutions, that'll simply close their doors the next time they screw up and don't get a bailout. All you'll be able to do is stand there and yell at an empty building.

[rwh11385]

There's nothing tinfoil about not willing to leave your hard earned pieces of paper to the sake of institutions, that'll simply close their doors the next time they screw up and don't get a bailout. All you'll be able to do is stand there and yell at an empty building.

You know that's the concept behind stock and bonds, right? That you have a risk of them failing? And you play the entire field in order to diversify your investments so a building being boarded up won't impact you as much.

You can buy speculation-heavy commodities when everyone else is, and I'll buy into VTI (all of US market) and VEU (all of the world market, minus US) while their prices are dropping and see where we are in a year. I didn't have a brokerage account until Oct '08 and made a big ROI when I bought when everyone was selling.

But hey, do the opposite of what Warren Buffet says if you want... you clearly know better than him and a more savy investor.

[Fusion]

"Warren Buffett's problem is that he only understands balance sheets and earnings. The value of a Picasso or a gem diamond or a bar of gold is outside Buffett's understanding. Which is sad, because Buffett's lack of understanding has kept many an American on the sidelines while gold surged higher in terms of Buffett's beloved paper currencies."

Richard Russell, the dean of investment newsletter writers

[rwh11385]

Wow. Investment newsletters, is that what morons read to be "educated" about the economics and what to buy?

And how is his track record vs. Buffett's?

[nando]

buffet understands value. what you're talking about is price.

[Fusion]

Is that what you say about movie critics? "How many movies has that guy made to justify his opinion?"

And I'm not suggesting investing in gold, rather converting (part of) your savings in monopoly money, that has tremendously been losing value, into something that has rising value and has been highly valued for thousands of years.

[Vedubin01]

buffet understands value. what you're talking about is price.

Buffet is also able to buy value with his purchasing power. Something you and I can not do.

[rwh11385]

Is that what you say about movie critics? "How many movies has that guy made to justify his opinion?"

And I'm not suggesting investing in gold, rather converting (part of) your savings in monopoly money, that has tremendously been losing value, into something that has rising value and has been highly valued for thousands of years.

No, I understand... you have no clue. You read an article and think that person is more aware than one of the world's greatest investors because you like the story... that the USD is going to tank and fiat money doesn't work and gold is the savior. Wanting to believe in something doesn't mean it is right.

This guy is apparently the godfather of telling idiots what to buy and what was going to happen, so they could feel educated and feel aware of the market. It doesn't necessary mean they are right or know what they are talking about. But understanding markets and diversifying is boring and people who write about basic and passive investing can't make as much money as people like Cramer telling you the hot stocks and encouraging action. But we all know Cramer is hardly ever right, and just looking up about the guy you posted, his track record for judging the market was been poor.

But, he knows idiots and understands that people like you who don't know economics will buy into the "buy gold" idea and raise the price of gold in doing so, and make a self-fulfilling prophecy. (Until of course, there is a massive correction and people who bought in near the top lose a good deal of money). That's what you don't understand, it doesn't matter how high the price goes as much as where you bought in at. If you buy at 1750 and it drops to 1700, it might be more than expected by analysts but you still lost $$.

In the world today, ignorance is rampid, as is stating opinion as fact. And ignorant opinion is rarely accurate. You say that the USD is monopoly money, but forget the fact that it has been the THIRD BEST performing currency in the last 100 years and remains the world's preferred transaction denomination. And how many people said that the Euro was going to take over and forever rise against the dollar??!? That the one-time price shift when it was introduced would be ever-continuing...?!? But wait, the Euro has regressed, and as I stated long ago (2007-ish), only the US has an ideal currency union... the EU is potentially exposed to asymmetric shocks and have the issue of providing relief to another member nation since why would one country want to bail out the other? Since all states are members of the US, there is much less controversy or issues about borders. And this is nothing new, the same concept of the ECB is why the UK still has the GBP because of when they were facing unemployment and Germany was hit with inflation - one policy could not help out both.

You advocate gold (speculated commodity) and Chinese and Russian currencies. China is an untrustworthy nation with ghost cities to boost GDP and very fundamental issues of 'policy' vs market realities. Not to mention labor or the poor restlessness and unhappiness. If the currency was accurately valued, their competitive cost edge would decay and hence, demand for Chinese goods would shrink and their GDP would fall greatly as that is their strategy - sell on price. Russia is a whole other bag of issues.

Who told you those were a good idea? Did you read it somewhere and assume it to be the correct read on the future? Is that what you want to do with your money? Hedge it on someone's (typically wrong) analysis of the market and commodities? Or maybe, just maybe, you ought to invest in a book about economics and actually get some sense on the topic. I promise the ROI will be great, at least better than wasting your time on "investment newsletters".

[rwh11385]

Oh, and commodities don't get more efficient, they don't innovate, nor get new leadership that makes new products or better serves customers. They are just things that can either change in supply or demand or popularity, but otherwise don't become more than people's opinions about what their price ought to be.

If you buy into a commodity, your money is going to raise the price for its users and make some stock brokers rich. If you buy into a company, you can help finance their creation or growth and make something great possible that could help the world.

And you don't get dividends from a bar of gold.

[Vedubin01]

being devils advocate a minute...


Not all stocks pay dividend and gold has never been worth $0.

[rwh11385]

Fair enough. No, not all but many do. And show me someone who only buys one company's stock and I'll point out an idiot.

Sure, gold always has some value but compared to a company, it has very limited information and mostly opinion. Looking at another commodity which people sunk money into to hedge against inflation... you could track oil drilling production and world demand but do YOU personally spend 80 hours a week studying it? Do the 'investment newsletter' writers? Or are you playing a game that someone spends much more time and energy analyzing, and much more likely to win when you lose. And remind me, what happened to oil price? Did it always keep growing? Were people betting on it always being higher?

Like I mentioned, buying stock or bonds can allow a company to grow, create jobs, make innovations that help the world, and also reward you with returns (even without making another transaction). Trading commodities or forex is roughly a gamble that one person will lose and another will win. Will the winning be uneducated people who believe hype and buy into some person's online ramblings... or will they be the people who study it daily? (Or maybe someone who just makes money on commissions instead of really worrying about trading themselves - they make $ if you win or make $ if you lose).

Sure, the market took a hit (a major correction) and people freaked out and the value of their portfolios went down... but does that mean gambling on something else, with less information and more volatility is better? Is it really smarter on betting against history (USD) instead of putting money on good companies that share their success with you? Some bad eggs break and some may fall, but is putting all your eggs in a speculated basket make any sense?

[Fusion]

No, I understand... you have no clue.

Look, I have no reason to argue with you. The quote is from here http://www.24hgold.com/english/news-...ael+J.+Kosares (among other good ones) and I've never read anything else from that guy.I don't read economic articles, because I have no idea who to believe. I believe only in myself and my decision to buy gold bars a few years ago (and every once in a while since then) backs up my positive words about gold. I haven't even calculated the profit I'd make if I sold them today, because I don't plan on doing so. I just like the thought of having them instead of virtual money in an unprofitable account.So anything you write, phrases about clueless idiots and morons, all of it is about as informative to me as a Rage Comic. You could've spent that time and thought in a more produtive manner.