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S&P 500 Then and Now

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Before long this will be really cheap:


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SWGB said:
Also I'm curious, if wealth can never be destroyed (which I seriously doubt), then much like energy it's a fixed amount and cannot be created either?
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You are correct with respect to the law of conservation of energy in that it ultimately cannot be created nor destroyed. However, for the purpose of our lifetime and until the world population starts to decline instead of rising against a fixed set of commodities, wealth will not decrease. It will only decrease once the supply can keep up with demand and that is a much larger supercycle that will not come into play until long after we are gone. In fact I doubt any of our grandkids will even live to see world population decline.

With regards to wealth, it is hard tangible assets. Oil, wheat, corn, cotton, coffee, gold, silver, copper, real estate, eventually potable water...etc. Currency is used as a means to acquire wealth, it is not wealth in and of itself. As demand for these resources grow exponentially, so does the value of this limited set of commodities.

This is why for the sake of our discussion I chose to say wealth can never be destroyed, because it wont in our lifetime. "Never" was too strong of a word you are correct. We just wont live to see supply outstrip demand.

As for everything ending tomorrow, I never said that. The de-leveraging process has been happening for years. They are slowly releasing the air in our collective bubble instead of popping it. This is great for society obviously and why banks are "too big too fail." Fail they will, but not overnight. I suspect from here on out the process will only speed up but should take 2-5 years.

I'm not saying to go out tomorrow and buy all the metal you can afford, because there will be dips and drops along the way. De-leveraging the world is tricky business. There will be better buying opportunities along the way. Just accumulate slowly, by buying a little today and creating a baseline cost for yourself. As the price decreases, if it does from this level, you can average down your total cost by buying a little more and wait. If it goes up, great. If not, consider it on sale. It is money after all. Just a different form than our generation is used to.

Bubbles are only created by mania. There is no gold buying mania yet, but there has been a lot of selling to Cash4Gold and the like. Those boys aren't buying because they think gold has topped I can assure you. A mania is what we saw here with RE in '05. Flipping lots for double profit before the ink had dried. If gold was in a mania I wouldn't have to defend my point of view. You'll know a gold and silver mania when everyone on the street knows its spot price and there is a line around the corner at the coin shop. That's when you sell, some.

This graph doesn't strike me as a bubble. As I said, wealth is being de-leveraged from the dollar and housing into commodities.

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You know the parable about how you cannot throw a frog into boiling water without him jumping out but you can boil one alive if the water is heated slowly. Well brother, I'm starting to prune and these bubbles are starting to bother me.
 
Buz Livingston said:
The FED is keeping rates low to stimulate demand for loans primarily for housing. There is a HUGE slug of inventory.

The FED's strategy helps the market but the stock market is a leading indicator.

We are coming out of a recession so markets rise.

Plus profits are rising for many companies...unfortunately companies have found out that fewer employees mean higher profits.
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can the market be a leading indicator sans retail investors? can the banks be compelled to clear bad assets and lend? can gdp growth happen with high unemployment?
 
TNJed said:
Hear it from Robert Kiyosaki author of Rich Dad, Poor Dad.


YouTube - Silver is the best hedge against inflation! | Robert Kiyosaki



And if you're having a hard time picturing actually owning PMs, here's a very nice collection. There are other videos on youtube. They are worthy of your time.

YouTube - Gold and Silver Private Treasury
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My crystal ball is in the shop for repairs but I do know the most dangerous words for investors are "it's different this time".

Kiyosaki is in the book selling business. If you want to buy his books, it's your money and you can give it away if you like.

Using commodities to diversify a portfolio has merit but gold is still trading below it's 1980 high and SPY is about three times higher.

If the world is coming to an end the best metal to own is lead. ;-)
 
I understand people wanting to own PM's for investment purposes and speculation of doomsday, but honestly owning coins that are valued high due to their collectible value is counter productive. If a gold coin is 1 oz of gold and is valued at $15,000.00 due to a collectors demand then you've still got 1 oz of gold if everything goes to sh!t.
 
SWGB said:
I understand people wanting to own PM's for investment purposes and speculation of doomsday, but honestly owning coins that are valued high due to their collectible value is counter productive. If a gold coin is 1 oz of gold and is valued at $15,000.00 due to a collectors demand then you've still got 1 oz of gold if everything goes to sh!t.
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...which is exactly why I've transfered my entire net worth into Limited Edition Collector Plates from the Bradford Exchange.
 
ata said:
Bud you and your clients returns are basically "stolen" from the american saver. the retiree who depended on cd's has been raped by madman helicpoter ben bernanke.
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Any retirement investment plan based on 100% CDs takes on a tremendous amount of reinvestment risk.

If rates fall, then you can not avoid lower income.

There are better ways to skin that cat.

For the record, my nickname is not Bud.
 
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