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Definitely not a super liquid asset, but fairly liquid. If you're going to buy physical gold it is for long term preservation of capital, not for easy spending. If runaway inflation happens your $2000 of cash could be worth $1000 of stuff while the same amount of gold will still have $2000 of buying power
A good use case is inter-generational wealth transfer.
You know it almost seems like the ruling class is engineering these boom and bust Cycles on purpose with their Central Bank policies. How you can be so stupid as to create so much money out of thin air 1 year and then over tighten the next year it has to be pre-planned.
In any case what we face now is deflationary pressures from money supply shortages is what I personally think is a good thing because we need to rain in excess speculative Behavior that's been going on in this system for years. Hopefully we see lower Equity prices lower home prices and lower precious metals prices so those of us who are responsible and are holding liquid cash positions can put that money to work. Unfortunately this means a lot of the already rich people are going to just gobble up even more houses which is going to hurt the middle class but are ruling class won't do anything to stop that and those same highly liquid entities would buy the houses if they just pumped more liquidity into the system anyways.
The one common denominator with the speculators is they tend to be highly leveraged so if we can simply tighten and let all the speculators go bankrupt to me that is wonderful. Don't take on debt you can't service. Behave responsibly. How many average Americans took up 401K loans and home equity loans on this fake liquidity generated from excessive printing the last 3 years? Almost everybody I know has engaged in this. Idiots. Or smart. Because ultimately I believe they will print to infinity and monetize everything. Use this brief period of deflation to get hard assets and put your cash to work while you can. The sovereign debt crisis is close at hand.
At this point they're really damned if they do damned if they don't because they've kicked the can down the road for so many years. They're pretty much out of options and there's going to be pain no matter what they do.
Gold is appreciating way too slowly and poorly vs other assets. I've bought gold at 300-800 and that was almost 2 decades ago.
That's actually a pretty good return. You have roughly tripled your money , and the S&P 500 did not perform any better than that really over two decades. 2014 is where gold has done poorly, but apples to apples gold is a cash equivalent. Its not a business plan. Its far better than holding $USD especially in ZIRP conditions.
shipping , insurance , assay and what they pay up to sell back is a lot less .
meh .
i would never buy more than 1 ounce this way .
decades ago i took possession of quite a bit of gold eagles.
it cost a lot of money to sell because of all of the above and the assay to prove it’s not fake .
i own loads of gold but thru gld and iau
I feel like you're doing it all wrong. I've bought and sold gold and silver coins over the counter at coin and bullion shops in several states and never had to have anything assayed. Bars, especially large ones, CAN be another matter. Yes, you're not going to get the spot price because they need a profit margin, but gold and silver are quite liquid.
Owning gld and iau is fine, but you're kidding yourself if you think it serves the same function as having metal in hand, outside of the financial system.
shipping , insurance , assay and what they pay up to sell back is a lot less .
meh .
i would never buy more than 1 ounce this way .
decades ago i took possession of quite a bit of gold eagles.
it cost a lot of money to sell because of all of the above and the assay to prove it’s not fake .
i own loads of gold but thru gld and iau
Quote:
Originally Posted by MKTwet
Gold is appreciating way too slowly and poorly vs other assets. I've bought gold at 300-800 and that was almost 2 decades ago.
Physical gold is a good store of value but does not work well as "money". It is illiquid, does not generate yield and costs money to store it.
Fiat currency notes, on the other hand, although constantly depreciating, you can do a lot with it.
You can deposit "money" into a bank, take out loan fully backed by the balance of it, usually at favorable interest rate. Then, use the proceeds from the loan to lend it out as hard money loan to real estate investors with yield in the 10 to 16% range. You can then pledge that loan as collateral for something else productive. You get my drift here.
With so-called depreciating fiat notes, you can multiply your money many-fold, increasing your personal speed of money, and easily beating rate of inflation. There are literally unlimited ways you can do this, as long as you understand how money is "created" via credit.
Now that I think about it, there are gold bank where you can deposit your physical gold and take out asset-based loans against it, and participate in similar type of monetary game.
I feel like you're doing it all wrong. I've bought and sold gold and silver coins over the counter at coin and bullion shops in several states.
What kind of spread are you typically seeing between buy and sell prices at local stores? Online dealers are paying $20 to $40 over spot to buy random date 1 oz. Buffalos and Eagles. What does a physical store usually sell a 1oz Eagle for? How much will they pay to buy one from you?
i buy through etfs only …highly liquid …i would not take delivery …
Might be a good idea to only keep Gold in an IRA. The IRS considers Gold a collectible and is subject to a 28% tax on profit even if held for more than a year.
I only have one Gold coin at home. I keep the remaining Gold allocation in ETF's. I made the mistake of buying some gold etf's in my taxable account which I am trying to option my way out of. (selling covered calls) I can't seem to get any market makers to give me a fair premium for the options right now but I'll keep trying.
Might be a good idea to only keep Gold in an IRA. The IRS considers Gold a collectible and is subject to a 28% tax on profit even if held for more than a year.
I only have one Gold coin at home. I keep the remaining Gold allocation in ETF's. I made the mistake of buying some gold etf's in my taxable account which I am trying to option my way out of. (selling covered calls) I can't seem to get any market makers to give me a fair premium for the options right now but I'll keep trying.
i have so much carry over in my taxable account that eventually have to use from the closing of our LLC that it isn’t a problem .
i have about 3/4s of it in the ira and the rest in a taxable account
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