Flack wrote: Thu May 13, 2021 9:28 am
In the 1990s, gold was selling for $250-$300/ounce. The current price is just over $1,800.
From 1990 to 1999, the price fluctuated from $384 in 1990, to $279 in 1999. As with any investment, short term it can go up or go down. As I have said, Gold is a
long term investment intended to preserve wealth over time. But, if you buy it at the wrong time you can lose money. If you bought in 1978, gold was $147 an ounce. By 1980, the price had jumped to $680. Then it cratered; the price did not rise above $680 until 2006, or
twenty-six years later. This is exactly why I have repeatedly said that it should be about a 10% investment, in case the price plummets, you don't lose too much. But, the price has risen steadily since 1971 when gold ownership was re-legalized.
Flack wrote: Thu May 13, 2021 9:28 am
Gold gonna gold, baby. Same goes for property prices. Assuming banks and Wall Street and everything else is still operating, having a piece of paper saying you own some gold is as good as owning some gold.
Not necessarily. There was an incident in the Midwest a few years ago. A number of farmers had delivered their wheat to a silo, then the silo's owner went bankrupt. The farmers were secondary creditors to higher priority ones, who got paid first, from the sale of the wheat in storage. So the farmers got pennies on the dollar when the place holding their wheat went bust. Society was still intact, but they lost a lot of money.
These farmers had written proof that they owned a certain amount of wheat. They could have brought trucks down and retrieved it. That still didn't stop it from being sold to pay the silo owner's debts.
Recently, the FBI raided a business that offered non-bank safe deposit boxes. Despite the boxes being customer property, and the warrant was only against the owner of the business, the feds still seized the customers boxes, making them prove they're entitled to their property back.
They have written proof (or a key) that shows that they own a particular safe deposit box. Didn't stop it from being confiscated, and then they have to prove they have a right to it. Can be a big problem if you can't prove you made enough money to afford what was in your box.
You do not necessarily want to be holding a receipt for something valuable, you want to be holding the item.
Flack wrote: Thu May 13, 2021 9:28 am
If you want to talk about good investments if the system ever crashes, that's a whole different story. Find someone who hasn't eaten in a week and offer them a choice between a pound of bacon and a pound of gold and see which one they pick.
If they're stupid they take the pound of bacon. If they have any intelligence, they take the pound of gold and deliver it to a coin dealer, who would give them $21,000, enough to eat, at $30 a day, for a year and a half. Even if civilization has collapsed, then people will still trade gold for food. People have been using gold for commerce for as long as there has been civilization, over 6,000 years. I can't see that changing any time in my lifetime.
Flack wrote: Thu May 13, 2021 9:28 am
If you want to imagine what life will be at that point, go back a year and look at all the pictures of stores that ran out of toilet paper.
We've had TP shortages before. Johnny Carson stared one when he told a joke how the army was unable to find toilet paper because there was a shortage. Yes, there was. Of one-ply really cheap toilet paper they supply to troops. But, people thought it was a shortage of ordinary two-ply paper civilians buy. This then created a shortage as stupid people started panic buying. There was adequate supply of toilet paper for usual and customary demand. But not for panic hoarding.
Paper manufacturers make enough toilet paper for regular demand. If there are surges in demand you might ramp up a little, but you don't want to create so much that you've got stock sitting in warehouses that you can't sell because the excess demand evaporated. Stores don't want to buy excessive amounts because they don't want to be stuck with excess inventory. So in the case of sudden high demand, the supply chain can't keep up. This is why it's important to be able to either raise prices to discourage hoarding, or if not allowed, to ration purchases. Once all those panic buyers have more than they can use, the supply will return to pre-panic levels and the crisis will end.
Flack wrote: Thu May 13, 2021 9:28 am
People will lose their minds in about two days.
And some people won't. They are the ones who make out like a bandit when others panic.
Flack wrote: Thu May 13, 2021 9:28 am
You know all those guys driving their big 4x4 trucks in those Trump Trains a couple of years ago? Those will be the guys kicking in your front door and taking your food.
And when facing down the business end of a 30-06 or semi-automatic rifle, they will go elsewhere. Or if they search your place and can't find it. Or you leave your place looking like it's already been ransacked, so there's nothing to steal. The latter has usually been very effective.
There was a report about a guy who lived in a home in one of those prototypical South American banana republics where law-and-order break down with distressing regularity. He lived in a run-down house, overgrown with weeds and thorn bushes in his back yard. Looters ignored his place, seeing it was in terrible shape, he obviously had no money. His property was untouched while better looking places were ransacked.
Flack wrote: Thu May 13, 2021 9:28 am
If you are considering walling off a portion of your closet to hide $50,000 in gold coins or whatever, you are preparing for the worst
If you have that much on hand you certainly should have insurance and an alarm system. And then you probably have to fight with your insurer over losses. Unless you've taken steps to make losses less likely.
But, in fact, you are preparing for the worst. That right here, right now, in civil society, you're just preparing against your property in a middle class neighborhood from being robbed. Robbers have to act fast, fast, fast, most try to be in-and-out in less than twenty minutes, often as little as ten. They're going to look for obvious things, jewelry boxes in bedrooms, portable safes they can grab and open at their leisure, cash in drawers, gun racks, furs, and stuff they can get to on a cursory basis, like computers. Things they can spend or fence. What they can't see they can't steal. If it would take them too long to find valuables, they just assume they aren't there and look elsewhere.
Flack wrote: Thu May 13, 2021 9:28 am
-- and the reality of the worst is that people will be trying to kill you every single day to take your stuff, so you all better be prepared to switch from "I like to type on computers" to "I am willing to guard my house 24/7 and shoot anyone who tries to come in" mode.
Well, if civilization collapses that's what would happen. Then, depending on who you know and what they have, probably a group of like-minded people get together and one of them sits on a roof overlooking their homes in the neighborhood, shooting invaders. After a few hours another switches with them. At which point, looters seeing corpses outside the neighborhood will head for softer targets.
Back during the Rodney King riots, people wanting to steal things avoided certain stores, which remained untouched. Because the shopowners stood on their roof aiming a shotgun at anyone approaching their store.
Flack wrote: Thu May 13, 2021 9:28 am
Nobody will want your gold because you can't eat it and it won't help you survive. A can of Campbell's soup will be worth more than a gold coin.
Bullshit. Over all of civilization, gold first, then silver, and other precious metals (like platinum) once we found a use for them, became the go-to commodity for trading and commerce. Gold has so many intrinsic uses: it does not rust or corrode, will not decay, it is resistant to most acids, it can be used for plating, gold leaf, jewelry, tooth fillings, cosmetics, medals, coins...
The guy who has extra food might be willing to sell some for gold, because he can trade gold for ammunition, medicine, and other useful things.
If a civilization collapses, looting might occur for a short time, but eventually the existing food rots and becomes useless. Eventually people have to go back to pre-electricity technology, which means hand plows and farm animals. Or perhaps hunting, which means learning to use a bow and arrow, slingshot, or throwing a spear (firearms will be useless once ammo runs out and the capability to make gunpower and cartridges is gone,)
Now, "no man is an island." The farmer who has surplus grain might want to buy another oxen. The man who has killed three wild goats or cattle might want to butcher it and trade for someone who can make shoes. Maybe he can trade leather but the shoemaker wants something extra for his trouble and to pay for the nails he needsto make the shoes. Or maybe he can't use any more leather, he's got too much, but wants some blankets. But the blanket maker wants somethinge else. And so on, and so on.
Once civilization rises again, where people start trading, barter has very high "friction" as the other party might want something you don't have. When acquiring a pair of shoes requires ten different transactions and you end up with two blankets and 50 pounds of wheat seeds you can't use, then maybe you decide there needs to be a better answer. Maybe you open a trading post, where various merchants sell you their goods on consignment. But that isn't good for perishables like eggs and milk.
Also, is a pair of shoes worth a pound of wheat or a bushel of wheat? Eventually, everyone is going to need something to make it easy to trade. Something that can't be counterfeited, that will retain value (meaning it has to be hard to obtain), that won't rot like whear, won't rust like iron, that you can continue to use even if they don't restore electricity in your lifetime. And it has to be something that if you got stuck with more of it than you can trade that it's useful for something else.
Over eons, the oly thing that has met all the needs of a stable, predictable money, has been gold, then later, silver.
Flack wrote: Thu May 13, 2021 9:28 am
Tell an entire country that their money is worthless while turning off their food and water and watch how fast shit gets crazy. Go watch any of the Mad Max films and imagine how much better his life would have been if he had a bunch of gold hidden in a vacuum cleaner (hint: zero).
Uh, try again. In a complete, total collapse of society some people will start looting. In some cases they may have to, you would have to either abandon an urban area or be able to convert your apartment to grow food. But you'll need seed. Either you'd have to barter for it or steal it. Eventually civilization rises, and barter is too inefficient (has too much friction.) That's when people want something that they can use to effect trade, something valuable. Whatever it is - even if it was gasoline - people would want things they don't have (gee, it would be nice to have some shoes instead of being barefoot and maybe stepping on something.) "If only we had something better to trade with than gasoline, that's hard to come by and goes bad in six months."
"It would be nice if we had something valuable I could save to use for trading for things I need during the months when I'm waiting for my crop to ripen."
This is exactly why gold became a means of exchange. Because over millenia it was a reliable store of value.
