Gold Stocks

[Proteas]

Let me preface this topic by stating that I have little to no experience debating economic issues.

Here lately when I turn on the news on CNN I'll see ads for Monex international selling Gold Stocks, stating that it is a good thing to invest in as it is (1) stable and (2) never gone down to zero in terms of overall value. These adds put forth the idea that in the event of an economic disaster, Gold will still be worth a fair amount ($920.15 an ounce U.S.).

In the event of an economic disaster -- I'm talking Great Depression style market crash -- how much financial staying power will stocks in gold actually be worth over any other piece of paper? Or as one of the local talking heads pointed out a few years back... in the event of a national disaster -- think Hurricane Katrina -- how much worth will an actual piece of gold bullion have over a loaf of bread or a bottle of water?

Just a thought, don't rake me over the coals for it.

[TheReno]

Well the idea is that if you invest in a one of the only stable stocks I.e gold that no matter what happens you will have a financial life line.

Gold is one of the few stocks that obeys the number one economic rule, supply and demand. When demand goes up, stocks go up. When supply goes down, stocks go up. When demand goes down and or supply goes up, stocks go down but never reach 0. So in a huge economic depression what will wind up happening is that demand will go down. . . at first. When the rich see that they are still rich, they will buy gold. Now with low demand gold mining stops and the supply is at a stand still, so the rich buy this up (if slowly) and cause supply to go down. Guess what, now gold stocks will be on the rise. And you may make a little bit more then you put in. Gold stocks are almost as good as a bank if not better. Its all about the timing, but if you have some disposible income and you dont feel like chucking out the window, get some stocks in gold.

[SteveGuzzi]

At 7/13/09 05:18 PM, Proteas wrote: In the event of an economic disaster -- I'm talking Great Depression style market crash -- how much financial staying power will stocks in gold actually be worth over any other piece of paper?

With all the "SELL YOUR GOLD FOR CASH!" advertisements I've been seeing on television, in newspaper circulars, on billboards and at bus stops...

I get the immediate feeling that it's wiser to invest in stocking gold than it is to invest in gold stocks. The tangible commodity itself will still retain it's value even if the pieces of paper representing ownership of the commodity lose all theirs.

That could be taken as a really naive and paranoid reaction, but still... something just doesn't sit right.

Or as one of the local talking heads pointed out a few years back... in the event of a national disaster -- think Hurricane Katrina -- how much worth will an actual piece of gold bullion have over a loaf of bread or a bottle of water?

Of course a piece of gold isn't nearly as valuable as food or water in the face of imminent starvation and dehydration... but yeah, it's still one of those things that will always be worth something to someone due to its universal trade-ability... unlike... I don't know... stocks, baseball cards, or fiat currency issued by a bankrupt nation...

[YuanYan]

At 7/13/09 06:17 PM, StephanosGnomon wrote:

With all the "SELL YOUR GOLD FOR CASH!" advertisements I've been seeing on television, in newspaper circulars, on billboards and at bus stops...

Is it just me, or have there been MORE of those commericals laterly? They've been around forever but it seems like these last few months, they're everywhere.

[SteveGuzzi]

At 7/13/09 08:56 PM, YuanYan wrote: Is it just me, or have there been MORE of those commericals laterly? They've been around forever but it seems like these last few months, they're everywhere.

It's not just you, it's exactly what I'm talking about. Two or three years ago (maybe less) you might see an advertisement like that once in a blue moon. Now they're EVERYWHERE, and all these companies (as more and more have been sprouting up) want you to do is throw your gold into a "secure" bag and mail it to them for cash. Without an appraisal from a qualified jeweler in-person, how can that sort of transaction ever be considered legit or trustworthy?

Anyway, I dunno, it seems really really fishy to me. Businesses are obviously out to make a profit, and if they're so enthusiastic about offering cash for gold then it must mean that the gold is where the true value is, not the cash.

[morefngdbs]

At 7/13/09 05:18 PM, Proteas wrote: Just a thought, don't rake me over the coals for it.

;;;
First off, you can't eat gold or silver or any bullion....well you could eat it but it isn't going to do you any good.
But gold or any 'Stock' is a PIECE OF PAPER !
You can't eat that either, so gold stocks are as usful as paper monety is...which means its worth nothing when speaking about Zimbabwean dollars now. What has happened to their money can happen to any money.
So if you want to buy gold or silver, palladium or platinum... Buy the damn metal & hold onto that, it will still have value when a fiat monetary system breaks down.

Always remember a stock certificate for say a hundred bucks or a hundred dollar bill is actually a 'promise to pay' it is very similar to a check in that sense. If you do not have the confidence of those who hold or use your 'currency' its value goes down & you lose. Same with a 'gold certificate', how do you know they actually hold actual bullion to back up your 'piece of paper' saying they do ?

The saying "it isn't worth the paper its printed on" comes from bad stocks & bonds. That has never happened to bullion. Sure its price has & does fluctuate...it has never been worth nothing, if the great depression & the latest world banking crisis has taught you nothing else it should be that an actual asset is worth more than a stock certificate .

[killxp]

At 7/13/09 09:04 PM, StephanosGnomon wrote:

At 7/13/09 08:56 PM, YuanYan wrote: Is it just me, or have there been MORE of those commericals laterly? They've been around forever but it seems like these last few months, they're everywhere.

It's not just you, it's exactly what I'm talking about. Two or three years ago (maybe less) you might see an advertisement like that once in a blue moon. Now they're EVERYWHERE, and all these companies (as more and more have been sprouting up) want you to do is throw your gold into a "secure" bag and mail it to them for cash. Without an appraisal from a qualified jeweler in-person, how can that sort of transaction ever be considered legit or trustworthy?

Anyway, I dunno, it seems really really fishy to me. Businesses are obviously out to make a profit, and if they're so enthusiastic about offering cash for gold then it must mean that the gold is where the true value is, not the cash.

Yeah, it is a huge scam. Basically there is the market value for gold. Normal pawn shops and such will pay you no more than 75% of this, ever. Most likely you are looking at 50% from these shops that everyone know is a rip off. Nowadays you could take a picture yourself and post it online at one of the many reputable online stores or even take it to a sellitonebay store and get closer to 80%+ for your money. The cash4gold companies that want you to securely mail in your stuff and they send you "cash" never make any promises on how much. There are two options. You can either get a direct deposit into your bank account for whatever they offer and you have no chance to get your stuff back or they will send you a check and if it is not to your likeing you must file for a refund within 3 days or your stuff is gone forever. I did some research and I haven't found one case of anyone being offered more than 20% the actual value in gold. For those that asked for a direct deposit, there stuff was gone forever. For those that asked for a refund, they instead got a notice saying something like, "OH WOW! We checked out your stuff again and its asked worth much more. You can get X more money this one time or go ahead and file for the refund again. This new amount they offer you is about 50% the actual value so even though pawn shops are a ripoff, you can get more money from them than from any of these other places.

At 7/14/09 01:06 PM, morefngdbs wrote:

At 7/13/09 05:18 PM, Proteas wrote: Just a thought, don't rake me over the coals for it.

;;;
First off, you can't eat gold or silver or any bullion....well you could eat it but it isn't going to do you any good.
But gold or any 'Stock' is a PIECE OF PAPER !
You can't eat that either, so gold stocks are as usful as paper monety is...which means its worth nothing when speaking about Zimbabwean dollars now. What has happened to their money can happen to any money.
So if you want to buy gold or silver, palladium or platinum... Buy the damn metal & hold onto that, it will still have value when a fiat monetary system breaks down.

Always remember a stock certificate for say a hundred bucks or a hundred dollar bill is actually a 'promise to pay' it is very similar to a check in that sense. If you do not have the confidence of those who hold or use your 'currency' its value goes down & you lose. Same with a 'gold certificate', how do you know they actually hold actual bullion to back up your 'piece of paper' saying they do ?

The saying "it isn't worth the paper its printed on" comes from bad stocks & bonds. That has never happened to bullion. Sure its price has & does fluctuate...it has never been worth nothing, if the great depression & the latest world banking crisis has taught you nothing else it should be that an actual asset is worth more than a stock certificate .

I think that the, "a stock is only a piece of paper" idea is understood already. Please correct me if I am wrong but it seems like the OP is asking specifically about the value of gold during disaster. Answer to this is well known. At first, price of gold, along with everything else will dip, but right after, GOLD SPECIFICALLY, will shoot up. I think the basic idea of what happens has already been discussed earlier...

Here it is:

At 7/13/09 06:04 PM, TheReno wrote: ... in a huge economic depression ... When the rich see that they are still rich, they will buy gold. Now with low demand gold mining stops and the supply is at a stand still, so the rich buy this up (if slowly) and cause supply to go down. Guess what, now gold stocks will be on the rise.

Yeah, I am sure there is a solid explanation out there, if you find it please post a link, but this helps for anyone who gets the basic ideas of supply and demand. Late.

[morefngdbs]

At 7/15/09 02:33 AM, killxp wrote:

At 7/14/09 01:06 PM, morefngdbs wrote: But gold or any 'Stock' is a PIECE OF PAPER !

I think that the, "a stock is only a piece of paper" idea is understood already. Please correct me if I am wrong but it seems like the OP is asking specifically about the value of gold during disaster. Answer to this is well known. At first, price of gold, along with everything else will dip, but right after, GOLD SPECIFICALLY, will shoot up. I think the basic idea of what happens has already been discussed earlier...

He was speaking of the rise in sales of 'gold certificates' which are not gold, they are pieces of paper.
WHy would you want to own a piece of paper telling you that you've got gold somewhere ?
Remember if you want to get actual gold bullion instead of your paper they will charge you even more money. Gold reserves are held in large blocks. these bricks of gold would have to be melted down & cast into smaller amounts for you to get your bullion.
I own gold coins as well as Silver coins & bars. Having actual metal in my possession allows you the convience of being in control of your assets.
It also allows you to hide your wealth. From the tax man at your death for example...your loved ones know where your stash is & the Government does not. That cannot be said about a stock certificate.

On the comments about selling scrap gold (jewelery etc) if you know the spot price of gold, that is what you should be paid. Less by about 10%. but just because your gold bracelet (for example ) weighs in at 65 grams, if it is a 14k gold piece only .5833 % gold. So you take 65 grams x .5833 = 37.9145 grams of gold.
Multiply the 37.9145 by the spot price of gold ( $29.89 US per gram today) = $1133.26 American dollars .
So your fair offer should be around $1000.00 .

As a coin collector , always remember while most coins are only worth their face value, coins made of precious metals are often worth more because of their bullion value. Even if it is an older coin made of a precious metal, that doesn't mean it has a higher value as a collectable coin. But a reputible dealer can help you with this. As in dealing with anything your unsure of ... getting a second or third opinion can really help you out.

[digitalboola]

because hoarding is the best way to get the economy moving again.

At 7/14/09 01:06 PM, morefngdbs wrote: So if you want to buy gold or silver, palladium or platinum... Buy the damn metal & hold onto that, it will still have value when a fiat monetary system breaks down.

this doesn't make sense. gold stocks entitle you to a certain amount of gold. actually hoarding the metal doesn't get you anywhere either. all you have is a bunch of valuable metal sitting there. and why are you criticizing our current system? although it's not perfect it doesn't have nearly all the problems a gold or silver standard does, namely chronic deflation due to demand from growth outpacing supply.

Same with a 'gold certificate', how do you know they actually hold actual bullion to back up your 'piece of paper' saying they do ?

and how do you know what you're getting is pure, real gold? it might not be. are you going to check it all? doubtful.

[morefngdbs]

At 7/15/09 08:21 AM, digitalboola wrote: and how do you know what you're getting is pure, real gold? it might not be. are you going to check it all? doubtful.

;;;
Because there are certain mints that are world renouned for their precious metal content being true .
1st on the list is the Canadian Mint. Refines & markets some of the finest gold & silver coins in the world.
They have 9999 pure & 99999 pure examples of their coins the standard for excellence is 999 pure & the Royal Canadian Mint exceeds that.
Secondly the US Mint, Austrailian Mint, British & Indian mints as well as South Africa & Austria all of these mints produce products that are exchangeable anywhere in the world without having to bother with assaying with fine silver & gold at 999 pure. THe Chinese panda coins from China are now widely recognized as well for their purity & weight.

So if you know what your doing...you don't have to "check it all" & for you info when buying older bars (sometimes called loafs) You can get a test kit yourself or go to a reputable dealer & have them test it. It is simple & isn't hard to learn.

Plus instead of having a piece of paper that can become useless, look at Bre X stocks on their so called Gold Holdings...not worth anything & people lost their investments. Why ?
If you had taken actual gold...you would have it instead of PAPER that PROMISES you gold.
A promise is nice... an actual gold coin is (IMO) much nicer.
Here's the latest one I bought last week.
1890 'S' marked Gold Sovereign . made in Australia & the 'S' stands for the Sydney Austrailian mint.
because of its condition (very fine 20) I was able to get it for the bullion price as opposed to a higher cost if it was a rare older gold coin.

[nehemiah135]

i've looked at this and they said that the dollar goes down a lot and gold goes up. well if you go back over this then you'll see that: if the dollar is going down then the value of everything is going to go up but however gold is probably a good idea because it is the most fluctuating material to own. also keep in mind: were are you going to sell too? i mean it's not like you can go on the street set up a stand and sell gold right there. and Ebay isn't the greatest place either. cash for gold, iv'e never tried it, but im pretty sure the payout is going to be little to none.

[TDwizBang]

something else to keep in mind... it has happend before in america that all the gold in the private sector was to be turned in, i can not remember the year... anyways if you want to know why the vault at fort knox was built thats the reason... now as far as gold itself, no you cant eat it but in an extended economic crises a money standard can and most likely will emerge. gold, silver and to a lesser extent precious gems and minerals have been past standards there is no reason they cant once again be seen as the change in your pocket. the best part is that the extra fish on your back will have a trade value again... so if you dont have gold in your hand you can always get it, or a couple potatoes to go with that fish

does anyone know who is running the cash for gold ads? i see it evil that someone will trade monopoly money for assets. if your hard up for food i bet an indipendant grocer would trade your old wedding ring or gold encrusted widget for store credit. and i bet you will get more from it than cash4gold. hell, at least some compassion.

[morefngdbs]

At 7/16/09 05:47 AM, nehemiah135 wrote: and Ebay isn't the greatest place either. cash for gold, iv'e never tried it, but im pretty sure the payout is going to be little to none.

;;;;
Not trying to be offensive, but you obviously haven't looked at e-bay much. Or you don't know what your looking at. In the last year the prices paid for Gold & Silver on e-bay are out of touch with prices I have found in other real space auctions & also out of touch with "Trends" (note; trends is a bi weekly insert in a National Coin news that takes the prices on metals & old coins sold all over North America by auction houses & reputable dealers & gives an educated estimate of value)
Silver rounds & bars are selling way over their spot price. Same thing with gold. A couple of years ago silver could be had at 5 to 10% over spot. Not so today. When the spot price for silver was in the upper $16.00 range,a couple of months ago, you couldn't get an ounce for anything under $20.00 & most e-bay & coin dealers wanted from $21 to $23 dollars .
Plus they were getting it. THe U.S. mint stopped issuing Silver Eagles in August or September & silver was hard to come by , Kitco was out of almost all bullion sizes, in gold & silver

[Ericho]

I recently got myself a full set of the state coins that were started way back in 1999. Does anyone know how much those things are worth speaking of selling things on eBay and the price of valuable items nowadays?

[morefngdbs]

At 7/15/09 08:21 AM, digitalboola wrote: because hoarding is the best way to get the economy moving again.

;;;
When I first read your reply & responded...for some reason I don't remember this line above .
I must have just skipped over it & now that I've noticed it it really made me laugh ! ! !

Please could you explain why , buying stocks & bonds, putting my money in the bank as well as the investment potfolio's is called by the Banking Industry & Government as " SAVINGS" or a number of different titles (reirement income, Education Plan etc) that mean the same thing as " SAVINGS " & seem to be perfectly acceptable, they WANT YOU TO DO IT !!! .
BUT
YES now BUT
When I put my money into gold & precious metals & put money in envelopes in my safe... I AM HOARDING IT !

The only difference I can see, is that the Banking & Governments idea toward savings puts your money under their control. Where they can manipulate the markets, possibly pay you some interest...possibly (probably) steal some if not all of you investment. Plus if you die the Government gets to take from 30% or more away as 'death taxes'
Where in my method I get no interest (except precious metals are becoming more valuable)
I can pass on 100 % of my assets to my family without the Government being any wiser.
The bank can't "use" my money to loan to others at high interest where as they only pay a pittence to me who has funds in their bank .

Savings , hoarding LMFAO...they are the same thing, with the exception that Government approves of the one where they can steal as much as they can !

[hongkongexpress]

There are still significant deposits in the Rockies. In BC particularly. Or Yukon from what I've been reading, Afganistan seems to be rich in minerals, as well China. (if that can believable from it's 1.6 Billion strong consumption force (Guangxi still has sizable depositis.) To think of all the sunken Spanish ships that were briming with Gold, or Yashimisa's gold, as well Gold bars of various states. It's mind blowing how much wealth is on this planet, yet people are still addicted and craving more.

not Just Gold, but any sorts of minerals, China is eager to begin "Opening the West", Manchuria has plenty of oil reserves. Alberta, right here... yet we still can't have enough?

[morefngdbs]

At 7/17/09 11:09 AM, Ericho wrote: I recently got myself a full set of the state coins that were started way back in 1999. Does anyone know how much those things are worth speaking of selling things on eBay and the price of valuable items nowadays?

Are you talking about the US State Quarters ?
The US state Quarter Program 1999-2008 produced 50 quarter dollar coins with special designs honoring each State.
I know that circulation coins were made at the Philidelphia & Denver mints with the proof coins being done in San Francisco.
Another thing that makes a huge difference in value is whether you have stadard legal tender coins of standard weight & composititon or if you have actual Silver coins.
For example the 1999P minted 373 + million coins minted, 1999D minted 401+million minted, 1999S 3,700,000 + minted & last but by far the most valuable are the 1999 S SILVER 804,565 minted.
In perfect mint state the silver Quarters are worth around $50.00 the circulation P & D mints are in perfect uncirculated mint state condition worth 40-50 cents. The proof coins 1999S are only a dollar or two at colonial acres coin shop .
Also if you want to have a full collection of these quarters, you need all 50 from the Denver mint (they have a small letter d by the back of George's neck) as well as the same quarter with a P, also an S. So that's 150 quarters in all .The of course there's the silver ones.
I haven't found any Silver ones in my simple Ebay search... for fun I'm going looking now.

[morefngdbs]

I just found a 1999 Silver quater being auctioned & it is at $76.22 for this perfect mint state silver coin.
There is another in a1999 Silver & PCGS holder at $26.00

[killxp]

At 7/22/09 02:09 PM, morefngdbs wrote:

At 7/17/09 11:09 AM, Ericho wrote: I recently got myself a full set of the state coins that were started way back in 1999. Does anyone know how much those things are worth speaking of selling things on eBay and the price of valuable items nowadays?

Are you talking about the US State Quarters ?
The US state Quarter Program 1999-2008 produced 50 quarter dollar coins with special designs honoring each State.

There was also one struck for Washington DC. It is less common but I have seen it. Also, US Mint has plans to put out a collection, similar to the US States and DC, of the US national parks. Just put in my two cents. Late.

[Tony-DarkGrave]

buy stocks of companies that deal with precious metals and PMCs and Credit companies.

[morefngdbs]

At 7/23/09 05:02 AM, killxp wrote: There was also one struck for Washington DC. It is less common but I have seen it. Also, US Mint has plans to put out a collection, similar to the US States and DC, of the US national parks. Just put in my two cents. Late.

;;;
Yeah 2009 they are the territories that have come out to add to the State Quarters. Wash DC, Puerto Rico ,Guam , US Virgin islands , Commonwealth of Northern Mariana Islands.
THere was a complete set of every State Quarter in every type (P,D,S & Silver) & it was missing only the territory 2009 quarters althought there are places in the collections pages for them on ebay yesterday for around $400.00 US.