Posted: 7/5/2009 8:07:45 AM EDT
|
I'm starting a new job soon with a large payraise. I see no reason to change my standard of living and instead want to focus on saving. My concern is how to go about this. I am concerned that gold is artificially high and you can't trust bonds. I'm thinking of buying silver and maybe a little euro while pounding down my mortgage.
Thoughts? |
|
Quoted:
I'm starting a new job soon with a large payraise. I see no reason to change my standard of living and instead want to focus on saving. My concern is how to go about this. I am concerned that gold is artificially high and you can't trust bonds. I'm thinking of buying silver and maybe a little euro while pounding down my mortgage. Thoughts? Why Euros? Long term their economy is worse off than ours. |
|
Quoted:
Quoted:
I'm starting a new job soon with a large payraise. I see no reason to change my standard of living and instead want to focus on saving. My concern is how to go about this. I am concerned that gold is artificially high and you can't trust bonds. I'm thinking of buying silver and maybe a little euro while pounding down my mortgage. Thoughts? Why Euros? Long term their economy is worse off than ours. I was just thinking of diversifying away from dollars. |
|
I decided to keep buying metals, but at a very slow and relaxed way.
If I find what I beleive to be a good deal, I'll buy some if I don't have anything more pressing to get. It's starting to add up. I think keeping your standard of living the same, and knocking down debt is very wise of you. I don't buy metals as an investment. I consider the money I spend on metals to be gone forever. I do not plan on selling the metals I buy, as I consider them a life vest, not an investment. If I do part with them, we, or at least I, am in a very bad way. I consider metals as something that may, possibly be something advantageous to have in a crisis. For me, metals are not a plan "A", more like a plan "D". Good luck. |
|
I believe you are in the right track.I last purchased gold when it was $650 per OZ but I 'm still buying silver on dips like right now silver is down to $13 and change. Even as it hit $20 per OZ months ago I did not sell, it will be for my now 3month old boy's college fund or for SHTF insurance.
As far as the euro, I would chose the Swiss Franc better ... Why? well if I told you i'd have to kill you. Just silver and bullets you won't regret it! 223SAINT |
|
In my opinion, your train of thought is correct.
Stay away from the market. Do not buy bonds or T bills. Stay away from the dollar. Precious metals? Yes. Foreign investments? Probably. Contact Euro Pacific Capital. Also...buy any type of "stuff" you think you'll need. Food, tools, etc. Don't blow the cash, just buy what you think is important. |
|
Congrats on saving more and overpaying your mortgage!
Precious Metals: I don't think it is unreasonable for ~10% of your portfolio to be in PMs. I'm an advocate of taking delivery for two reasons: the first is peace of mind, and the second is that you'll actually feel good when prices fall, thus enabling you to buy even more at lower prices. I think the best plan is to simply buy and hold. If all goes well, you'll never sell an ounce, and just leave it for your kids to decide. Silver is a good place to start. Over the last 10 years, the Au/Ag ratio has been about 55 to 1, today it is near 70 to 1. This could mean that sivler is undervalued, or it could simply mean that gold is overvalued, as you mentioned. Over thousands of years, the ratio has been closer to 15 or 16 to 1, but I just don't see things being this favorable for silver in the future. [Going back to pre-1933: a silver dollar contained 0.77 oz of silver, or $1.30 per oz, whereas a $20 gold piece had 0.96 oz of gold, or $20.83 per oz; this put the Au/Ag ratio at 20.83/1.30, or 16 to 1.] Like I said, silver is a good place to start, but eventually, you are going to get to the point where the weight and volume starts becoming a little unmanagable.... gold will start to look a little better at this point. Is gold overpriced? That's hard to say. You can go into Google Finance and plot SLV vs GLD vs UUP [the latter is a US dollar index] to see if these prices are merely climbing in an inverse relationship to the dollar, or moving up on their own merit. I think if you do the plots, you might start to think that gold isn't overpriced at $930 an ounce. Look back eight years when gold was ~$300/oz and look at where our defecit was. Saddly, I think our defecit has created support for gold at ~$900/oz. Foreign Currencies: Never underestimate politicians' ability to screw things up and sink their currency. Whoever prints the least amount of money is going to win this game. Hard as it may be to believe, Europe might be worse off than us. When the markets tanked last October, everyone rushed to the dollar, and the dollar strengthened dramatically against the Euro and Pound. If the markets dive again, look to see something similar. If we hadn't launched off on all of this absurd spending, we could have undone years of currency erosion. Stock Market and Other Investments: Don't overlook the stock market. While paying down your mortgage is fantastic, you need to find the right balance between paying down debt and long term investing that may out-earn your mortgage interest. It used to be that you'd always ask yourself, "what happens if things get bad?" Today, you might want to ask yourself, "what happens if things get better?" Also, be in a position to purchase treasury bonds in about 3 or 4 years. One day, this debt is going to come back to bite us, and you can mail an "I told you so" to congress each time you purchase more of our debt at ridiculously high rates. |
|
I don't remember where I heard it but i googled "soros farmland" and this was the top one.
http://www.contrarianprofits.com/articles/rogers-soros-farmland-one-of-the-best-investments-of-our-time/17943 |
|
Quoted:
Quoted:
buffet and sorros are buying farm land. Source? Not calling BS but I'd like to see something on this. Don't know about Soros and Buffet, but check L:ew Rockwell.com and you will find a few articles where Jim Rogers (Soros former partner) talks about farmland. |
|
Forget the Euro; go for the Canadian Loonie (Canadian Dollar) investments.
You can either trade dollars for loonies or can invest directly in Canadian banks. The Canadian chartered banks are extremely well run, with very strict structure on loans and mortgages, therefore, very profitable. All five are traded at New York thru your regular brokers or online, and all are denominated in dollar, therefore no currency exchange is involved and you don't need to open a Canadian account. Precious Metals are also another solid investiment as a hedge against hyper inflation. |
|
Quoted:
Congrats on saving more and overpaying your mortgage! Precious Metals: I don't think it is unreasonable for ~10% of your portfolio to be in PMs. I'm an advocate of taking delivery for two reasons: the first is peace of mind, and the second is that you'll actually feel good when prices fall, thus enabling you to buy even more at lower prices. I think the best plan is to simply buy and hold. If all goes well, you'll never sell an ounce, and just leave it for your kids to decide. Silver is a good place to start. Over the last 10 years, the Au/Ag ratio has been about 55 to 1, today it is near 70 to 1. This could mean that sivler is undervalued, or it could simply mean that gold is overvalued, as you mentioned. Over thousands of years, the ratio has been closer to 15 or 16 to 1, but I just don't see things being this favorable for silver in the future. [Going back to pre-1933: a silver dollar contained 0.77 oz of silver, or $1.30 per oz, whereas a $20 gold piece had 0.96 oz of gold, or $20.83 per oz; this put the Au/Ag ratio at 20.83/1.30, or 16 to 1.] Like I said, silver is a good place to start, but eventually, you are going to get to the point where the weight and volume starts becoming a little unmanagable.... gold will start to look a little better at this point. Is gold overpriced? That's hard to say. You can go into Google Finance and plot SLV vs GLD vs UUP [the latter is a US dollar index] to see if these prices are merely climbing in an inverse relationship to the dollar, or moving up on their own merit. I think if you do the plots, you might start to think that gold isn't overpriced at $930 an ounce. Look back eight years when gold was ~$300/oz and look at where our defecit was. Saddly, I think our defecit has created support for gold at ~$900/oz. Foreign Currencies: Never underestimate politicians' ability to screw things up and sink their currency. Whoever prints the least amount of money is going to win this game. Hard as it may be to believe, Europe might be worse off than us. When the markets tanked last October, everyone rushed to the dollar, and the dollar strengthened dramatically against the Euro and Pound. If the markets dive again, look to see something similar. If we hadn't launched off on all of this absurd spending, we could have undone years of currency erosion. Stock Market and Other Investments: Don't overlook the stock market. While paying down your mortgage is fantastic, you need to find the right balance between paying down debt and long term investing that may out-earn your mortgage interest. It used to be that you'd always ask yourself, "what happens if things get bad?" Today, you might want to ask yourself, "what happens if things get better?" Also, be in a position to purchase treasury bonds in about 3 or 4 years. One day, this debt is going to come back to bite us, and you can mail an "I told you so" to congress each time you purchase more of our debt at ridiculously high rates. Some interesting observations and I largely agree with them. I didn't know that the long term Ag/Au ratio was around 16:1. I bet that this reflects the value of silver in Europe and Asia before the discovery of the "New World". Pre-Columbus, silver was indeed much more highly valued relative to gold, but as I understand it, the discovery of huge silver deposits in the western hemisphere permanently changed that situation. Gold largely reflects the gross deterioration in the value of the US dollar. It's a frightening thought, but gold probably isn't overvalued at $950. Although I'm getting more and more uneasy about purchasing at these levels. The thing is, I started seriously buying gold several years ago at $630 and I remember that I was convinced at the time that I had "missed the train", but I bought anyway. I'm glad I did. Don't underestimate a multi trillion dollar national debt + a (probably) permanent environment of very low economic growth (more probably, negative economic growth). This is a sure fire recipe for the destruction of what remains of the dollar. If this plays out logically, I would expect to see $5,000 gold. And one would have to be crazy to sell gold for dollars at that level. It would be the equivalent of selling gold for German marks at 1 million for the ounce in the Spring of 1923 only to see gold go to 87 trillion to the ounce that same Fall. My personal goal is to get out of the equity market in the least destructive manner I can. For my age, I'm over-invested in stocks and bonds. I could use a "Disinvestment Advisor" more than an Investment Advisor. And I wouldn't put my money in bonds or bond funds either. That's another bubble, as I see it. Without robust earnings, more and more companies will be hard pressed to pay their bond holders and we all just got a front row seat to an ugly preview of things to come for bondholders with the GM debacle. Forget about "favored creditor status". The entire rule book is being rewritten. I think we're entering a new age where it will be almost impossible for companies to function profitably. This means that all "essential" industries will end up being government run; as non-profit organizations. Obviously, this will not end well. |
|
Quoted:
Quoted:
Don't underestimate a multi trillion dollar national debt + a (probably) permanent environment of very low economic growth (more probably, negative economic growth). You see these things as signs of Inflation?? 
As Holmes said, "Once you eliminate the impossible, whatever remains, however improbable, must be the truth." As I see it. 1) We cannot repay the money we owe because we cannot earn our way out. 2) We can simply default. 3) We can print (hyperinflate) our way out the same as Weimar Germany did in order to get out from under the debt imposed by the Treaty of Versailles. Take your pick. |