Budget crisis V. The Dow

[OlJarhead]

Actually, NM has a good plan. It will work as long as there is a viable economy and if there is not one any longer...all the cash will be worthless anyway. So he's in a win/win position as long as  he has the time.

I'm 99% out of the market, 100% out of bonds and heavily invested in Gold & Silver.
I also have several tons of lead which I still think is the best investment going for the long haul.

Everything I own is paid for and I'm kinda enjoying the show.

High Speed Lead?  I'm invested in some of that too

[OlJarhead]

Actually, NM has a good plan. It will work as long as there is a viable economy and if there is not one any longer...all the cash will be worthless anyway. So he's in a win/win position as long as  he has the time.

I'm 99% out of the market, 100% out of bonds and heavily invested in Gold & Silver.
I also have several tons of lead which I still think is the best investment going for the long haul.

Everything I own is paid for and I'm kinda enjoying the show.

I seem to recall Anthony 'can't keep from taking pictures of my' Wiener claiming that Gold was a bubble at $1000/oz and that you would never get your money out of investing in Gold if you bought any back that.....

Of course I also remember being told Gold was a 'Bubble' at $900/oz and that it would NEVER break $1000 an oz....and then there are the folks who claimed it wasn't a sound investment at $500/oz because it was over priced....

Funny, but at $1800/oz I'm thinking they were all full of it, didn't know squat and should not be listened to...but then what do I know?

Now, if only I'd listened back when gold was $500/oz and invested a little....dammit!  Ahh well, I'll have to settle with watching it go up, the dollar down and hoping that sanity returns some day soon.

[peternap]

Gold is a risky investment. Much of what I have and darn near all the silver, goes back to the 80's. It's taken that long for it to really move.
I did buy a fair amount of coin silver in the last few years as well as every piece of estate and flea market gold I could find.

I didn't pay anywhere close to spot at the time so no mater what, I have a profit.

It will go down sooner or later. Deciding where to sell and finding a buyer other than bottom feeders, is the trick.

[archimedes]

No one can say for sure where the top of the gold market is for sure.  But when that bubble does pop,  and it will (it always does),  look out below.

That move will be fast and furious.  Think the Hindenberg.    Oh,  the humanity!

[OlJarhead]

No one can say for sure where the top of the gold market is for sure.  But when that bubble does pop,  and it will (it always does),  look out below.

That move will be fast and furious.  Think the Hindenberg.    Oh,  the humanity!

Perhaps, but then if you think 'Wiemar' then perhaps you'd be closer to what I think.

And I think the problem with 'bubble's is that the money with which you buy the object (s) that is considered a bubble must survive.  Thus, to believe that Gold is a bubble you must also believe that the US Dollar (FRN) will survive.  I may well, but then it may not.

Lastly, anyone who looks at gold prices and inflation knows that it could reach $6600/oz and not be as high as it was (inflation adjusted) ini the 1979/80 'bubble'.

Personally?  I think the FRN is done and there is no Gold bubble but then I don't have an investment in the issue so don't count I guess.

[OlJarhead]

http://www.realclearpolitics.com/video/2011/08/10/ron_paul_gold_is_not_a_bubble.html
I think Ron Paul is probably closer to reality then most these days.

[Native_NM]

http://www.fool.com/school/buyandhold/buyandhold04.htm

[zion-diy]

Never understood any of the gold or dollar debates. If you have good growing land and a fresh water supply, it seems like that would be the drivers seat.
I used to joke that the rich man was the one with all the chickens. doesn't seem all that far fetched anymore.
I know, if I had a good food and water source, no amount of paper or heavy shiney metal would make me part with it.

[h0rizon]

Speaking of buffet...

http://finance.fortune.cnn.com/2011/08/11/warren-buffett-buy-stocks/

When buffet speaks, I tend to listen.  Granted he is not always right, but for a guy in the business of making money betting on other companies, I think he knows a thing or two.

I believe it was buffet who said something along the lines of "The first thing a man should, before buying a single share of stock, is to buy a house".  Could not be truer today.

Now my 2 cents on this gold issue; regardless of what you invest in, investing in only one or two things is very risky.  Precious metals is only one segment of the overall economy, and as with any individual segment, there is risk of collapse.  Remember housing?  Diversification is the key, even if everything is on a downward slide.  And if everything goes to sh*t, it won't really make a difference either way (as previously noted).

[rick91351]

Never understood any of the gold or dollar debates. If you have good growing land and a fresh water supply, it seems like that would be the drivers seat.
I used to joke that the rich man was the one with all the chickens. doesn't seem all that far fetched anymore.
I know, if I had a good food and water source, no amount of paper or heavy shiney metal would make me part with it.

I am on the same page with you there.  You can always trade food for goods.  Cool clean water is the kindest thing you can do for a thirsty weary person.    

[OlJarhead]

Speaking of buffet...

http://finance.fortune.cnn.com/2011/08/11/warren-buffett-buy-stocks/

When buffet speaks, I tend to listen.  Granted he is not always right, but for a guy in the business of making money betting on other companies, I think he knows a thing or two.

I believe it was buffet who said something along the lines of "The first thing a man should, before buying a single share of stock, is to buy a house".  Could not be truer today.

Now my 2 cents on this gold issue; regardless of what you invest in, investing in only one or two things is very risky.  Precious metals is only one segment of the overall economy, and as with any individual segment, there is risk of collapse.  Remember housing?  Diversification is the key, even if everything is on a downward slide.  And if everything goes to sh*t, it won't really make a difference either way (as previously noted).

I'm not an investor in stocks or bonds so should preface my response with that -- but I agree here completely.

I believe, after losing my 401k in the Williams bankruptcy because it was all in Williams stock, that if you are going to invest it should start with these things:

1.  Pay off your credit bills.
2.  Invest in a home and/or land (they aint making any more land)
3.  Diversify
4.  Don't count on the Government to feed you in retirement -- plan to do it yourself.

I currently don't have a 401k (refuse to do it right now as long as there is uncertainty as to whether or not DC will take it) but took my last out of mutuals etc right before the last big crash and moved it into money markets.  When I was laid off I cashed it in and put it into my other retirement plan:  my property (often called the farm or homestead).

I figure that since I own the land outright and the cabin I could retire there and raise livestock and grow veggies for my retirement if that's all I can manage.

[h0rizon]

I figure that since I own the land outright and the cabin I could retire there and raise livestock and grow veggies for my retirement if that's all I can manage. Wink

We're definitely on the same page

they aint making any more land

Well, that's not entirely true.  They are selling plots of land on the moon, afterall; going for about $20/acre.  Not a bad deal.  Too bad the commute sucks.  But hey maybe they'll start selling plots of land on Mars too, once they get that frozen water thing figured out.  At least there I might be able to plant my raspberry bushes 

[Native_NM]

I'm not an investor in stocks or bonds so should preface my response with that -- but I agree here completely.

I believe, after losing my 401k in the Williams bankruptcy because it was all in Williams stock, that if you are going to invest it should start with these things:

1.  Pay off your credit bills.
2.  Invest in a home and/or land (they aint making any more land)
3.  Diversify
4.  Don't count on the Government to feed you in retirement -- plan to do it yourself.

I currently don't have a 401k (refuse to do it right now as long as there is uncertainty as to whether or not DC will take it) but took my last out of mutuals etc right before the last big crash and moved it into money markets.  When I was laid off I cashed it in and put it into my other retirement plan:  my property (often called the farm or homestead).

I figure that since I own the land outright and the cabin I could retire there and raise livestock and grow veggies for my retirement if that's all I can manage.

Years ago when COBOL was still a language (Think mainframe era), I took a class in programming in business school.  I still remember some syntax:

If No_debt
   If own_home
     If diversified
       If 3 months_already_saved_in_bank
           Perform 401k_plan
Else
   Pay too_much_taxes.

Seriously,

If you are employed and have an adequate emergency fund and are serious about saving money, there is not a better return than a 401(k) plan.  If you are risk averse, just put the money in the MM fund.  You will get no real interest, but its as safe as the cash in the bank.  The possibility of the government seizing 401(k) plans is pretty low. 

Think about this rate of return scenario:

A family guy earning $75,000 wants to save 15% of his income.  He's afraid of the stock market, so he just saves post-tax cash at the local bank.  He puts $11,250 in the bank over the year, and at today's interest rates accrues $22.50 for the year.  Rate of return on cashflow basis:  0.20%  <<less than 1% at current rates.

The same guy enrolls in his company 401(k).  The match is $1500 (2% national average).  In addition, he defers $1,687.50 in taxes at the 15% marginal rate.  Rate of return on cashflow basis:  28.33%!  ($1500 + $1688) / $11,250.  If you ignore the tax affect, its still a 13.33% ROI. 

His money is in his 401(k) in a MM fund that is as safe as cash in the bank.

[Windpower]

Max Keiser talks with Jim Willie from 7/30/2010

http://www.youtube.com/watch?v=YUxZRJxNrMI&feature=player_embedded