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Thread: Why the rush to GOLD, and not holding out for Real Estate?

  1. #1

    Default Why the rush to GOLD, and not holding out for Real Estate?

    Hello --

    Ok. I am getting caught up in the gold rush mentality and searching like crazy.

    I located 5 kruggerans for $924 a piece
    I located 2+ 1oz Credit Suisse Bullions for 1100 a piece

    but then I got to thinking. Why not hold onto the paper (cash) and wait for the real estate to fall into obvlivion, then snatch a thing or two up.



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  3. #2

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    Are you expecting your dollars to hold their value until such point as real estate falls into oblivion?

  4. #3

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    Use gold to store your wealth if you are expecting a decline in the dollar. Real estate is still over-valued. When real estate prices come down, then you can sell the gold for more dollars, and use those dollars to buy real estate.
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  5. #4

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    I wouldn't buy Gold Eagles or Kruggerans--they're only 91.67% gold. You can get a 99.99% 24 karat pure gold coin for about $10 more like the American Buffalo or the Canada Maple Leaf coin. It's a lot more attractive, plus its value is not diluted by other metals.

    As far as real estate goes, everything is burning except Manhattan and a few patches here and there in America. It's going to drop a lot more, and there's really no use in speculating at this point. Use some of that cash (like $20) and buy Peter Schiff's book "Crash Proof". He's been right for the past decade, I see no reason not to listen to him now.

  6. #5

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    Quote Originally Posted by Jonathan Kovaciny View Post
    Are you expecting your dollars to hold their value until such point as real estate falls into oblivion?
    I see where you are going, but if that was true -- would we see house prices skyrocket? A house that was once 300K, would be selling for much more?

    So, even though the value of the dollar is down, wouldn't real estate also exhibit this?

    I don't have data on the great depression, but I would imagine that real estate was at an all time low.

  7. #6

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    Quote Originally Posted by Lord Xar View Post
    Hello --

    Ok. I am getting caught up in the gold rush mentality and searching like crazy.

    I located 5 kruggerans for $924 a piece
    I located 2+ 1oz Credit Suisse Bullions for 1100 a piece

    but then I got to thinking. Why not hold onto the paper (cash) and wait for the real estate to fall into obvlivion, then snatch a thing or two up.
    Don't buy gold just for buying gold's sake.

    Buy PMs to hedge and protect any substantial worth you might have (I don't know what that might be) against coming hyperinflation when your greenback dollars become worthless. (with the exception of paying off long term debt with future worthless dollars)

    Real estate is still too high and more important has no liquidity or portability.

    Can't "bug out" with 10 acres of land strapped to your back.

  8. #7

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    Quote Originally Posted by socialize_me View Post
    I wouldn't buy Gold Eagles or Kruggerans--they're only 91.67% gold. You can get a 99.99% 24 karat pure gold coin for about $10 more like the American Buffalo or the Canada Maple Leaf coin. It's a lot more attractive, plus its value is not diluted by other metals.
    The % is not important. The volume of gold is. Krugerands and Eagles both contain exactly one troy ounce of gold. Pure gold coins scratch and scar very easily unless handled with extreme care. This is why the coins are alloyed - to make them more durable.
    I compiled a "brief" history of events since October 2008 that are defining the global currency war and the role that gold is playing:

    Tin Foil Hats, Economic Reality and the Total Perspective Vortex

    Also, have you contacted your Congressional Rep and asked them co-sponsor Ron Paul's Rep. Paul Broun Jr.'s HR 1098 77: Free Competition in Currencies Act?

  9. #8

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    Quote Originally Posted by Lord Xar View Post
    I see where you are going, but if that was true -- would we see house prices skyrocket? A house that was once 300K, would be selling for much more?

    So, even though the value of the dollar is down, wouldn't real estate also exhibit this?

    I don't have data on the great depression, but I would imagine that real estate was at an all time low.
    The thing to remember about the housing market is that tons and tons of houses were built for people who absolutely couldn't afford their mortgages. So there's going to be an enormous amount of supply hitting the market along with no credit with which to buy it. Housing prices are going to fall, a lot.

  10. #9

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    Quote Originally Posted by Bern View Post
    The % is not important. The volume of gold is. Krugerands and Eagles both contain exactly one troy ounce of gold. Pure gold coins scratch and scar very easily unless handled with extreme care. This is why the coins are alloyed - to make them more durable.

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  11. #10

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    A common misconception is that American Gold Eagles have "less" gold because they are 91.67 pure. The 91.67 is the percent of gold that makes up the coin, not the percent of 1 ounce of gold. In other words, the American Gold Eagle starts out with a full ounce of gold and other metals are added for stability. So, the coin itself contains 1 full ounce of gold regardless.

    Quote Originally Posted by socialize_me View Post
    I wouldn't buy Gold Eagles or Kruggerans--they're only 91.67% gold. You can get a 99.99% 24 karat pure gold coin for about $10 more like the American Buffalo or the Canada Maple Leaf coin. It's a lot more attractive, plus its value is not diluted by other metals.

    As far as real estate goes, everything is burning except Manhattan and a few patches here and there in America. It's going to drop a lot more, and there's really no use in speculating at this point. Use some of that cash (like $20) and buy Peter Schiff's book "Crash Proof". He's been right for the past decade, I see no reason not to listen to him now.

  12. #11

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    Quote Originally Posted by Chase View Post
    The thing to remember about the housing market is that tons and tons of houses were built for people who absolutely couldn't afford their mortgages. So there's going to be an enormous amount of supply hitting the market along with no credit with which to buy it. Housing prices are going to fall, a lot.
    You said "no credit to buy" houses. Are you suggesting a deflationary period is possible?

    Can hyperinflation and contraction in credit be possible? I don't see why not but I'd love to hear more about it.

  13. #12

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    There's a reason why the American Buffalo 99.99% gold coin is sold out and production of it has been ceased, whereas the American Eagle 91.67% is widely available in many areas. There's a reason for this; investors prefer pure gold coins rather than alloys, and why would you blame them?? They're willing to pay a premium for a better product, and that means there's a much higher demand for its pureness, not of something that has been diluted with copper and a small amount of silver. Go look for some bullion bars online and tell me if you find one that's 90% gold and 10% copper. Not gonna happen, so why would you purchase a smaller denomination that doesn't satisfy the similar effect of a 10 oz or 100 oz gold bar??

    It's really like buying a car in many ways. Would you rather purchase a brand new pristine Ferrari, or one that's caked in mud? Granted you're still buying a Ferrari either way, but it's up to YOU to clean the damn thing and polish it up. It takes a lot more work to extract the gold from an alloy than just having the finished product up front.

  14. #13

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    Quote Originally Posted by TheAmistad View Post
    You said "no credit to buy" houses. Are you suggesting a deflationary period is possible?

    Can hyperinflation and contraction in credit be possible? I don't see why not but I'd love to hear more about it.
    I'm assuming you meant to say, "I can't see how?"

    Yes, sounds counter-intuitive I know.

    Hyperinflation will be caused by the rush out of US dollar backed bonds and other instruments as the realization sets in that the notes can never be repaid, coupled with the printing presses going full blast to try and pay for the 1.5 trillion dollar "bailout", O-bomb-a's socialized medicine and wars, just to name a few.

    This is a fiat currency blowout, which is something completely different than the "normal" inflation associated with excess liquidity fueled by credit dollars chasing too few goods and services.

    Apples and bowling balls, as I see it.

  15. #14

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    Quote Originally Posted by socialize_me View Post
    There's a reason why the American Buffalo 99.99% gold coin is sold out and production of it has been ceased, whereas the American Eagle 91.67% is widely available in many areas. There's a reason for this; investors prefer pure gold coins rather than alloys, and why would you blame them?? They're willing to pay a premium for a better product, and that means there's a much higher demand for its pureness, not of something that has been diluted with copper and a small amount of silver. Go look for some bullion bars online and tell me if you find one that's 90% gold and 10% copper. Not gonna happen, so why would you purchase a smaller denomination that doesn't satisfy the similar effect of a 10 oz or 100 oz gold bar??

    It's really like buying a car in many ways. Would you rather purchase a brand new pristine Ferrari, or one that's caked in mud? Granted you're still buying a Ferrari either way, but it's up to YOU to clean the damn thing and polish it up. It takes a lot more work to extract the gold from an alloy than just having the finished product up front.
    Perhaps:

    Moneychanger, nowhere in your recommendations do I see anything about pure gold coins like the Canadian Maple Leaf or Austrian Philharmonic. Why not?

    Gold is one of the softest and most ductile metals. Pure gold coins scratch and scar very easily unless handled with extreme care. Throughout history gold coins have generally been alloyed with copper or silver, hardening them to withstand circulation. Customers often unwittingly damage pure gold coins and therefore receive up to 5% less for them when they sell. In our opinion the purity of 24 karat gold confers no benefit and in fact often creates drawbacks.

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  16. #15

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    Quote Originally Posted by lucius View Post
    Perhaps:

    Moneychanger, nowhere in your recommendations do I see anything about pure gold coins like the Canadian Maple Leaf or Austrian Philharmonic. Why not?

    Gold is one of the softest and most ductile metals. Pure gold coins scratch and scar very easily unless handled with extreme care. Throughout history gold coins have generally been alloyed with copper or silver, hardening them to withstand circulation. Customers often unwittingly damage pure gold coins and therefore receive up to 5% less for them when they sell. In our opinion the purity of 24 karat gold confers no benefit and in fact often creates drawbacks.

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    Moneychanger knows his stuff
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  17. #16

    Default

    You can buy gold have it increase in price sell it when the housing market bottoms and have yourself a nicer house that will go up in value at some point.

    Quote Originally Posted by Lord Xar View Post
    Hello --

    Ok. I am getting caught up in the gold rush mentality and searching like crazy.

    I located 5 kruggerans for $924 a piece
    I located 2+ 1oz Credit Suisse Bullions for 1100 a piece

    but then I got to thinking. Why not hold onto the paper (cash) and wait for the real estate to fall into obvlivion, then snatch a thing or two up.
    http://www.ronpaulwarroom.com/

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  18. #17

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    Quote Originally Posted by dannno View Post
    Use gold to store your wealth if you are expecting a decline in the dollar. Real estate is still over-valued. When real estate prices come down, then you can sell the gold for more dollars, and use those dollars to buy real estate.
    Yeah the idea of buying gold or silver now, is to FIRST to secure whatever wealth you have. Profit is after the more important issue that is getting out of the dollar.

  19. #18

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    Quote Originally Posted by blocks View Post
    Yeah the idea of buying gold or silver now, is to FIRST to secure whatever wealth you have. Profit is after the more important issue that is getting out of the dollar.
    That's what I think. It's about preservation NOW. We can worry about profit later.

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  20. #19

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    Quote Originally Posted by Lord Xar View Post
    but then I got to thinking. Why not hold onto the paper (cash) and wait for the real estate to fall into obvlivion, then snatch a thing or two up.
    That is always what I was told by my parents to do, if the country ever went into another depression. Cash was king. However, we seem to be facing something different this time around, in that Bernanke seems bound and determined to try to inflate us out of a problem that was largely created by a loose monetary policy. Hyperinflation and price-fixing seem like real possibilities. If we just hang onto dollars, they will be worth very little and what once would buy a piece of property, then might only be able to buy a Coke.

  21. #20

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    Quote Originally Posted by LibertyEagle View Post
    That is always what I was told by my parents to do, if the country ever went into another depression. Cash was king.
    Like Schiff said today, the difference today is that we have no gold standard. So instead of deflation, inflation is the problem we will face.

  22. #21

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    Since I've never owned one iota of precious metals, I don't have a clue, but only know what I read from others. So have you guys ever heard this advice? Is this the "normal" advice that everybody already knows, or is this something different?

    "Gold Guy" says the only "safe" kind of gold to buy is:

    "antique numismatic coins with a rarity value specified at DOUBLE the bullion content... this is they KEY formula..."
    "Gold guy" also advises to:

    "...secure your financial assets in the proper form of gold coins, gold stocks and offshore Euro-denominated bonds."
    And Gold Guy's 2007 warning was/is,
    "Beware, as Exchange Controls are coming."
    I've read his mags and he says you have to "think" like the "elite" think in that they have their own trade shows and trade among themselves antique gold, and they will never outlaw their own stuff, so buy the type of gold they buy, etc.

    Another quote:

    ...coin dealers are under a strict Treasury regulation and must report your sales of some coins but not others. The rule is as follows: Coins with a premium above 15% do not have to be reported. In addition to the 1099 report, filed by the coin dealer, you have to declare any capital gains as well."
    And...
    "The existence of this rule, I believe, indicates an intent to outlaw the ownership of bullion coins altogether! However, the rule will not remain at 15% necessarily and could be changed to a higher percentage, which is unknown at this time. Obviously, you do not want to own any investment coins with a premium of 15% or less and better stay at the 25% or 30% level to be safe."
    "Gold Guy" feels that...
    "...complications for the government would clearly arise should numismatic collectibles be forcibly confiscated since the bullion coins' value can be determined by the London gold fix, but not so for collectibles. The price of the collectible coin may or may not be easily determined as numismatic valuables are routinely auctioned off at prices of not only tens of thousands of dollars, but hundreds of thousands of dollars per item. It is difficult to imagine just how this would all be sorted out by the bureaucracy to come up with a calculation of compensation that would relate to the market value."
    So he says stay in the "safe zone" and exchanging bullion coins not needed for emergencies (such as food or gasoline shortages, et al) for numismatic coins with higher premiums.

    Thanks. Been wanting to ask about this for awhile, and never got around to it. Now would be the time, if ever...
    Last edited by politicsNproverbs; 10-08-2008 at 06:40 AM.






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