Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Old 11-24-2009, 04:29 PM   #61
Recycles dryer sheets
 
Join Date: Mar 2009
Posts: 430
Quote:
Originally Posted by ultimo View Post
I was a child in the 60's, and looking for a job in the 70's, right when unemployment reached this terrible high and interest rates were in the mid-teens. I don't know how much of a child you were at this time, but I was 22 and my future was at stake, and we haven't come near anything like that since... until now.
I agree

I was a child in the 40's and 50's. I also was self-employed in the late 70's, 80's and half of the 90's. None of those times compare to whats happening now. I believe we are already in the early stages of a depression. My dad would be 94 if he were alive. He told me many stories about how hard times were in the last depression. It was really sad about how some of his friends lost everything. oldtrig
__________________

__________________
oldtrig is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 11-24-2009, 06:59 PM   #62
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Gone4Good's Avatar
 
Join Date: Sep 2005
Posts: 5,381
Quote:
Originally Posted by jdw_fire View Post
o really, do u know actually know alot of people buying gold? i dont. so i dont think it is to the point of "the latest, greatest,..."
Yup.

Quote:
Originally Posted by ultimo View Post
What gold is telling us is that there's no faith in dollar
Quote:
Originally Posted by ultimo View Post
. . . To not buy gold you'd have to make a case that the dollar's going higher
Maybe, except Gold is completely unhinged from dollar moves. Since 2000 the dollar index is down 25%, Gold is up 360%. Since October 2008, the dollar is down 10%, gold is up 140%. And in January and February of this year when the dollar rose nearly 10%, gold rose by slightly less. Clearly something else is going on here.

But at the same time, it looks like we're still in the early days of a gold bubble. These things typically last years. So I wouldn't be surprised to see $2,000 or higher before its all done. It doesn't hurt to have a major "news" network forecasting the end of western civilization every night. But none of that makes me want to buy it.
__________________

__________________
Gone4Good is offline   Reply With Quote
Old 11-24-2009, 09:27 PM   #63
Recycles dryer sheets
timwalsh300's Avatar
 
Join Date: Nov 2009
Posts: 131
Quote:
Originally Posted by ultimo View Post
I'm skeptical of the various asset allocation models I've seen (e.g., X% stocks, Y% bonds). What happens if both go bad?
This is a strange statement/question, given that you are talking about holding 100% gold, cash, or bonds. What happens if your one asset goes bad?

I agree that things are very uncertain right now for investors. Stocks are still somewhat expensive according to historical P/E10 data and dividend yields. But bond yields are also near historic lows and interest rates have nowhere to go but up. Commodities like gold, copper, and oil are at or near historic highs despite huge inventories, from what I understand. And real estate prices, while down from their peak, are still above their historical trend line too.

So nothing appears obviously undervalued right now, except maybe the Dollar - and that may in fact be the case if the loose fiscal and monetary policy (which has people in such a panic about inflation) ultimately fails to stop the deflationary forces at work. Indeed, we can't even agree on whether the US is headed for a Japanese-like "lost decade" or Zimbabwe-like hyperinflation.

I guess it's more likely that the outcome will be something in between. Anyway, all this probably makes the case for balance and diversification between cash, bonds, stocks, etc. even stronger.

Tim
__________________
timwalsh300 is offline   Reply With Quote
Old 11-24-2009, 10:00 PM   #64
Recycles dryer sheets
 
Join Date: Sep 2004
Posts: 174
Quote:
Originally Posted by ultimo View Post
There are so many uncertainties with regard to the future that it's difficult to know how to plan.

Even the worst case scenario in FIRECalc may not be bad enough to reflect what the future may hold.

U.S. dollar index is at new lows and heading lower. Interest rates held artificially low into the foreseeable future. Inflation and higher taxes almost certain.

I've had a large percentage of my savings in gold and gold funds since 2001, and the rest in foreign currencies. At that time it was easy to foresee what was going to happen economically. It's much more difficult now, the question being, how much worse will it get?

Hate to sound pessimistic, but I'm sure others have similar concerns. I'm skeptical of the various asset allocation models I've seen (e.g., X% stocks, Y% bonds). What happens if both go bad?

The strategy I'm considering is to cash in gold and gold funds, hold on to the cash, and then invest in bonds when interest rates inevitably rise. Didn't 30 year bonds hit 15% back in the late 70s or early 80s? At some point, especially when inflation kicks in, I'd expect interest rates would have to move up significantly.

All thoughts appreciated!

You're going to be sorely disappointed with cash. The US Consumer is important but nowhere near as important as they once were. China now has a middle class, India has a middle class, Brazil with a middle class, the real story is the global economy. Don't miss the forest for the trees. Inflation is dead and will be for many years. Wages makeup most of inflation and with the HUGE cheap labor pool in Asia and South America it will take years to utilize the capacity before wages can start to climb.

The story is global competition for the worlds resources. Get long this market, the train's leaving.
__________________
Berkshire_Bull is offline   Reply With Quote
Old 11-24-2009, 10:24 PM   #65
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: May 2004
Posts: 11,615
Quote:
Originally Posted by Berkshire_Bull View Post
Inflation is dead and will be for many years. Wages makeup most of inflation and with the HUGE cheap labor pool in Asia and South America it will take years to utilize the capacity before wages can start to climb.
There are many possible causes for inflation. High labor costs were the cause of the last big US inflation bout in the 1970s, and I agree that isn't going to happen again soon. But the more "normal" cause for inflation, historically, has been debasement of fiat currencies through introduction of excess money. When the US government owes huge amounts to many foreign entities, and the US government owns the printing presses, the conditions are ripe for a the government to create a lot of money. Inflation s great if you are the debtor. Add to this the paucity of means by which the government can legitimately raise real revenue (because slow overall economic growth isn't expanding the tax base and already high tax rates can't be increased further without killing the economy) and other govt spending requirements (ballooning social spending, continued high levels of military spending, etc) , and inflating the currency begins to look like the least bad option.

I wouldn't bet against high US inflation in the coming 5-10 years.
__________________
"Freedom begins when you tell Mrs. Grundy to go fly a kite." - R. Heinlein
samclem is offline   Reply With Quote
Old 11-24-2009, 11:20 PM   #66
Thinks s/he gets paid by the post
 
Join Date: Jan 2006
Posts: 1,012
Quote:
Originally Posted by ultimo View Post
I've had a large percentage of my savings in gold and gold funds since 2001,
a curiosity question, how do you own your gold? ETF, futures, FOREX, options, physical gold stored in a storage facility, or did you take physical delivery (if so was it bars, coins, jewelry, or something else)?
__________________
jdw_fire is offline   Reply With Quote
Old 11-25-2009, 02:09 AM   #67
Moderator Emeritus
 
Join Date: May 2007
Posts: 11,038
I sold my gold at a huge profit last year but I am hanging on to my 30 lbs of silver. It's my ticket out of Dodge is things get as dire as some of you predict...
__________________
FIREd is online now   Reply With Quote
Old 11-25-2009, 05:27 AM   #68
Recycles dryer sheets
 
Join Date: Nov 2009
Location: Albuquerque
Posts: 106
Quote:
a curiosity question, how do you own your gold? ETF, futures, FOREX, options, physical gold stored in a storage facility, or did you take physical delivery (if so was it bars, coins, jewelry, or something else)?
Unfortunately, I bought gold before ETFs were invented, so it's in coins and funds like BGEIX and FSAGX. My gold (and silver) coins are stored in a safe deposit box at my bank.
__________________
ultimo is offline   Reply With Quote
Old 11-25-2009, 06:07 AM   #69
Recycles dryer sheets
 
Join Date: Nov 2009
Location: Albuquerque
Posts: 106
Quote:
Inflation is dead and will be for many years. Wages makeup most of inflation and with the HUGE cheap labor pool in Asia and South America it will take years to utilize the capacity before wages can start to climb. The story is global competition for the worlds resources. Get long this market, the train's leaving.
I agree that inflation is dead for the next few years, which is why I'm willing to just park my money by the roadside somewhere. BUT I think inflation, if not hyperinflation, is a sure thing down the road. I want to organiize myself around that scenario.
__________________
ultimo is offline   Reply With Quote
Old 11-25-2009, 08:02 AM   #70
Administrator
W2R's Avatar
 
Join Date: Jan 2007
Location: New Orleans
Posts: 38,852
Quote:
Originally Posted by ultimo View Post
I agree that inflation is dead for the next few years, which is why I'm willing to just park my money by the roadside somewhere. BUT I think inflation, if not hyperinflation, is a sure thing down the road. I want to organiize myself around that scenario.
My crystal ball says... "The future is misty and obscured. Guess anything you like, but prepare with all possibilities in mind. Above all, read and study every word of William Bernstein's The Four Pillars of Investing."
Attached Images
File Type: jpg crystalballsml.jpg (14.1 KB, 170 views)
__________________
Already we are boldly launched upon the deep; but soon we shall be lost in its unshored, harbourless immensities.

- - H. Melville, 1851
W2R is offline   Reply With Quote
Old 11-25-2009, 02:09 PM   #71
Recycles dryer sheets
 
Join Date: Jul 2006
Posts: 214
Like i did not put it clear. my understanding, gold is something useless at normal evn unless something very bad happens. so when gold keeps up and up, it is telling use something, what's the thing, i wish i know,

but should be something big,


Quote:
Originally Posted by Zathras View Post
How do you interpret what the gold price is 'telling you' though?
Is it telling you that it is going to crash soon as it is at a decade long high (or multi year, or something of that sort)?
Or is it telling you that you should buy a bunch of it because it is still only at half of what it went for in the 70's (inflation adjusted)?
And no matter what it does, there will be people (I am NOT suggesting you are one of those) that will use whatever gold does to say "It was sooooo obvious"
__________________
semtex is offline   Reply With Quote
Old 11-25-2009, 02:22 PM   #72
Moderator Emeritus
 
Join Date: Oct 2007
Posts: 4,929
Um. Don't mind me, but when I see all the discussion of buying gold here, and among friends, family, and casual acquaintances, I can't help but think back to 1999 when these same people were all talking up hot stocks.

This, to me, is an indicator that a particular market is far closer to a top than a bottom. I'd rather buy the unpopular, oversold assets myself. (Currently trolling real estate markets...)
__________________
M Paquette is offline   Reply With Quote
Old 11-25-2009, 02:25 PM   #73
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
brewer12345's Avatar
 
Join Date: Mar 2003
Posts: 16,391
MP, are you looking at properties or securities? Resi, commercial, something else?
__________________
"There are three kinds of men. The one that learns by reading. The few who learn by observation. The rest have to pee on the electric fence for themselves."



- Will Rogers
brewer12345 is offline   Reply With Quote
Old 11-25-2009, 02:28 PM   #74
Recycles dryer sheets
 
Join Date: Jul 2006
Posts: 214
basically gold is the last resort, means people lost confidance to the whole financial system.

why not, jp debt is 200% gdp and neg saving rate and people are older and older. us is following up closely.
__________________
semtex is offline   Reply With Quote
Old 11-25-2009, 04:00 PM   #75
Moderator Emeritus
 
Join Date: Oct 2007
Posts: 4,929
Quote:
Originally Posted by brewer12345 View Post
MP, are you looking at properties or securities? Resi, commercial, something else?
Residential properties in higher end resort areas, particularly ones impacted by the recent economic fluctuation. It's amazing how overextended the 'well-off' can get.

The intent is to get something I can enjoy as a second/vacation home that will also do reasonably well over a 15-20 year holding period. Realistically, I don't expect to break even taking expenses into account, unless I run this particular as a rental. The 'imputed rent' and intangible benefits should be worthwhile for me, personally, though. This will be capped at not more than 10% of net worth.

There is a possibility of converting the property to my primary residence, if I buy in another state with certain tax advantages to me, so I'm also screening with suitability for a primary residence in mind, including access to shopping, medical care, airports, etc.

One target, Incline Village, NV, made #1 on Forbes "America's Most Troubled Luxury Neighborhoods" list.
In Pictures: America's Most Troubled Luxury Neighborhoods - 1. Incline Village-Crystal Bay, Nev. - Forbes.com

And there are plenty of troubled properties at a small fraction of the insane prices in that article in the town, probably two dozen with Walk Scores of 90 or better.
__________________
M Paquette is offline   Reply With Quote
Old 11-25-2009, 04:00 PM   #76
Recycles dryer sheets
 
Join Date: Jul 2006
Posts: 214
yes, jp has more chances to implode
__________________
semtex is offline   Reply With Quote
Old 11-25-2009, 07:23 PM   #77
Thinks s/he gets paid by the post
 
Join Date: Sep 2009
Location: Hong Kong
Posts: 1,572
As an aside, the local paper carried an article today claiming that a significant part of the run up in the price of gold was due to large producers like Barrick unwinding hedges. If so, the implication is that when the finish unwinding a sizeable part of the demand will fall away.

I have no idea whether this is correct or not.
__________________
Budgeting is a skill practised by people who are bad at politics.
traineeinvestor is offline   Reply With Quote
Old 11-25-2009, 07:29 PM   #78
Recycles dryer sheets
hguyw's Avatar
 
Join Date: Feb 2008
Posts: 106
Nixon was a Republican.
__________________
hguyw is offline   Reply With Quote
Old 11-25-2009, 07:43 PM   #79
Full time employment: Posting here.
 
Join Date: Oct 2009
Posts: 942
Quote:
Originally Posted by M Paquette View Post
Residential properties in higher end resort areas, particularly ones impacted by the recent economic fluctuation. It's amazing how overextended the 'well-off' can get.

The intent is to get something I can enjoy as a second/vacation home that will also do reasonably well over a 15-20 year holding period. Realistically, I don't expect to break even taking expenses into account, unless I run this particular as a rental. The 'imputed rent' and intangible benefits should be worthwhile for me, personally, though. This will be capped at not more than 10% of net worth.

There is a possibility of converting the property to my primary residence, if I buy in another state with certain tax advantages to me, so I'm also screening with suitability for a primary residence in mind, including access to shopping, medical care, airports, etc.

One target, Incline Village, NV, made #1 on Forbes "America's Most Troubled Luxury Neighborhoods" list.
In Pictures: America's Most Troubled Luxury Neighborhoods - 1. Incline Village-Crystal Bay, Nev. - Forbes.com

And there are plenty of troubled properties at a small fraction of the insane prices in that article in the town, probably two dozen with Walk Scores of 90 or better.
Haven't look at Incline Village in a long time. Still, I am surprised (even with declines in real estate markets) that anything in IV is priced reasonably. Interesting...
__________________
LARS is offline   Reply With Quote
Old 11-26-2009, 01:59 AM   #80
Recycles dryer sheets
 
Join Date: Nov 2009
Location: Albuquerque
Posts: 106
Quote:
Like i did not put it clear. my understanding, gold is something useless at normal evn unless something very bad happens. so when gold keeps up and up, it is telling use something, what's the thing, i wish i know,
It's basically telling us right now that central banks will go from being net sellers of gold to bet buyers.

Doesn't matter what happens with the rest of the gold market... that changes everything.
__________________

__________________
ultimo is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
The future... Bimmerbill Young Dreamers 9 06-26-2009 01:36 PM
I want to see the future Rich_by_the_Bay FIRE and Money 14 06-15-2007 05:41 PM
Nords is from the future... cute fuzzy bunny Other topics 10 02-20-2006 10:36 PM
Future headlines cj Other topics 6 12-21-2005 05:18 PM
Careers for the future Spanky Young Dreamers 24 11-21-2005 03:11 PM

 

 
All times are GMT -6. The time now is 03:18 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.