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canada selling off there Gold , whats happened ?


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The Canadian economy is resource based, namely oil. With the decline in the price of oil, Canadian government revenues have fallen off significantly. To the point that the country is verging on recession. Hence the gold sell off in order to generate revenues.

Here's an article on job losses in the Canadian energy sector...

http://calgaryherald.com/business/energy/ewart-oil-industry-expects-more-job-cuts-in-2016

Here's an article on Canada verging on recession....

http://money.cnn.com/2015/08/04/news/economy/canada-on-verge-of-recession-oil/

Rob

Edited by canadiangold
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Selling off your monies only backing is DUMB as now freefall is in order. Man alive this ol'world is in some deep kaka... :nutty: to depend on oil,prices in the toilet, in a world that's weaning itself off the oil teat it's akin to suicide...John :old:

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Guest Bedrock_Bob

Buy low, sell high. It only makes sense. Gold will be worth crap when countries begin to fail. With oil going south it makes good sense to base economies on real value, production and healthy industry. What good is gold when it is basic resources that will be in demand? No one is going to give you a dollar for a lump of gold when dollars are scarce. Neither are they going to give you a slice of bread or an ear of corn when people are hungry.

Those Mexican tokens are what our future looks like. When money is scarce it has always been that way. There is no way that we can base an economy on extractive industry when we have none. When no one has money and people are hungry they are not about to give you a meal for a lump of gold and neither will the government be in the market for it.

I sold all of mine for $1504 per ounce and turned around and doubled that selling guns and 22 long rifle ammo. If anyone here can turn an ounce of gold into $3000 at any point in their lives I would like to hear about it. Money is not backed with gold, rather gold is backed with MONEY. Hoarding a pound of gold in a closet is not security and the Canadian government knows it just like every other government and every other gold investor.

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Bob ... I like your analogy ... have thought for awhile that gold was backed by paper money and over valued. That is not saying I don't like still searching for it ... but I do sell it soon after I get it. Caveat to others ... no matter where you are invested consider being a contrarian ... meaning if the stock market gurus are saying buy buy buy then it is time to sell! I play in options market and have recently been doing well with PUT (sell) Options. Not going into a school here on how to do it ... but it is easy ... just a different way to win. Most people can see doing CALL (buy) options because it is the same direction as the stock market most are used to. Try something different ... we are in a different market! Just my opinion of course ... you are welcome to yours.

Mike F

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Gold and the paper dollar have had an inverse relationship since gold has been allowed to trade freely when Nixon closed the gold window in 1971. When the dollar goes down gold goes up. (The dollar always goes down in the long run)

post-23810-0-74425100-1457105388_thumb.p

Pundits who declare otherwise have without exception been called on their shorts and had to pay up (lose money).

Sell/buy it doesn't matter but predicting the world will fall out of love with gold because dollars are worth less is a bet no one has ever won.

This chart shows what happens when the gold/dollar ratio has been controlled by law. That last big drop in the dollar value compared to gold is when gold was allowed to trade freely again in 1971.

post-23810-0-88336700-1457105814_thumb.p

This chart shows what happened to gold the last time the dollar tanked and interest rates went over 20% in the late 1970's. During the end of this cycle if you were traveling overseas no one wanted your American dollars, checks, cashier checks or travelers checks. The dollar value was falling so fast the merchant could not get their bank to convert the dollars to local currency.

post-23810-0-01224000-1457107779_thumb.g

When the value of the dollar falls the Treasury department has to raise rates on Treasury bonds and bills to get foreigners to keep financing the dollar. The dollar hasn't been backed by gold since 1971, the dollar is backed by faith in Treasury bond interest payments. When you are inside a country that is experiencing a fall in the value of their currency it is seen as inflation (rising prices).

When the dollar last tanked and sent gold soaring in price in the late 1970's the Treasury had no choice but to raise the interest rate offered on treasury bonds (yield). Without the incentive of big yields on Treasuries the dollar would have disappeared from trade like the currencies of Argentina in 2000 and Zimbabwe in 2009.

Credit card and revolving debt interest went as high as 36% during this time. With a weak dollar and high interest rates there was a business, housing and manufacturing crash. Here's a chart of the big rise in interest rates during that period.

post-23810-0-81156300-1457109077_thumb.j

For those with the foresight to turn their dollars into gold and silver before the crash there were huge profits that more than offset the loss of purchasing power of the dollar.

You could bet against this multi thousand year trend of gold/paper or you could hope that the value of the dollar will rise again in relation to gold but that would be betting against the "house".

My daddy told me never to bet against the house.

Edited by clay
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Guest Bedrock_Bob

That works fine with trading gold Clay. It has no bearing on physical gold and how the individual (not governments) create wealth with it.

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That works fine with trading gold Clay. It has no bearing on physical gold and how the individual (not governments) create wealth with it.

And yet that is exactly how I retired in 1980 - by selling physical gold and silver at approximately 8 to 40 times what I paid (paper dollars) for it. My daddy made even more than I did from his pile of physical gold and silver.

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Guest Bedrock_Bob

And yet that is exactly how I retired in 1980 - by selling physical gold and silver at approximately 8 to 40 times what I paid (paper dollars) for it. My daddy made even more than I did from his pile of physical gold and silver.

Exactly. You had to sell it. Saving it until March 4, 2016 would have gained you nothing. See how that works?

You turned that gold into dollars and hopefully, invested in something else besides gold and made even more money!

Guys buying gold today have very little to gain. Guys that found or bought gold years ago can only gain if they sell it. And the strategy that you might hoard it until the United States collapses and then you will be a wealthy man is (in my opinion) foolish. If the U.S. collapses economically or socially your gold will be worth nothing.

Edited by Bedrock_Bob
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Exactly. You had to sell it. Saving it until March 4, 2016 would have gained you nothing. See how that works?

You turned that gold into dollars and hopefully, invested in something else besides gold and made even more money!

Guys buying gold today have very little to gain. Guys that found or bought gold years ago can only gain if they sell it. And the strategy that you might hoard it until the United States collapses and then you will be a wealthy man is (in my opinion) foolish. If the U.S. collapses economically or socially your gold will be worth nothing.

If I sold the same gold today my "profit" on the gold would have been even higher than in 1980 when I sold at nearly $800 an ounce of physical.

The time value of money changes that equation but in dollar terms I would have made more profit holding the gold even now.

I have in the past paid rent, purchased food and paid for car repairs with gold. You could call that "selling gold" only if you agree that paying your bills with paper is "selling dollars".

Gold and silver are fungible today, they will be more fungible should the dollar collapse. Things are always worth more than no things as you already pointed out. Gold is a rare physical thing, if it's rarer than corn or car repairs it trades as money.

Would it be wise to trade your dollars for gold? I can't tell you what will happen in the future. Obviously the house (market) is making it's bet that gold might be the coming thing. Ask me again in 1976 and I could probably answer that question in the affirmative. :D

Edited by clay
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Guest Bedrock_Bob

Your argument is circular Clay. You are going to have to turn that gold into some sort of currency to realize its value. Sure some guys will trade goods and services for a little gold, but that is not what we are talking about here. You have to sell it to realize its value. And that is exactly why Canada (as well as almost every other government) is not backing dollars with gold and is not holding gold as an investment. Because it is not growing nor does it have the potential to grow nearly as fast as other investments.

It is all about wealth. A guy with ten pounds of gold in his closet is the poorest man in the trailer park. A guy that sells that gold for dollars is suddenly solvent. He can invest those dollars into something even more lucrative than gold and make some more of that dirty old worthless money. And whether or not we would like to admit it, it is DOLLARS that we need to pay our bills and gain wealth. If the dollar is suddenly worthless so will be the gold. Because if the dollar is suddenly worthless there will be no buyers for that gold, everyone will be poor! Sure a government can divest themselves of their gold but the individual will have one hell of a time turning physical gold into beans and bread much less wealth.

If we are headed for economic crisis my advice is to sell now while you can. If we are headed for economic growth then my advice is to sell now because gold is high and it will not increase half as much as other things will in the near future. I know for a fact that I can make a hell of a lot more money on other investments than I can on gold, and the cash in hand is much better in these times than a gold bar in the closet. Evidently the Canadian government realizes that too.

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I put all my money into Spam and Everclear futures :200:

Hoarding booze is a good way to go. If their is a collapse it has many uses.

And they ain't that many 'shiners left who know how to make good ol' North Alambama Hoouch.

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It is all about wealth. A guy with ten pounds of gold in his closet is the poorest man in the trailer park. A guy that sells that gold for dollars is suddenly solvent. He can invest those dollars into something even more lucrative than gold and make some more of that dirty old worthless money. And whether or not we would like to admit it, it is DOLLARS that we need to pay our bills and gain wealth. If the dollar is suddenly worthless so will be the gold. Because if the dollar is suddenly worthless there will be no buyers for that gold, everyone will be poor! Sure a government can divest themselves of their gold but the individual will have one hell of a time turning physical gold into beans and bread much less wealth.

I've often pondered this in a much more abstract sense, but I think you put it into words much better.

Lets say you were the first guy to discover those 100 tons of gold bars hidden in Victorio Peak. Heard that treasure legend before?

You get all those bars home and they're sitting in your living room. Are you instantly a rich man? No, I don't think so. You have to sell the gold first for money to be a rich man. The only rich men are the ones with lots of cash. You would think having 100 tons of gold would instantly make you a wealthy man but it doesn't mean anything. That's why gold has never really made the world go around. It's rare and beautiful but even in antiquity most economies were based upon silver. Gold is just a luxury item reserved for jewelry and other things people who are already wealthy would like to spend some of their extra money on.

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Your argument is circular Clay. You are going to have to turn that gold into some sort of currency to realize its value.

I have no argument Bob. I stated that gold's value has always been inverse to the dollars value. I demonstrated that with historical facts.

IF I were to sell gold for currency I still would be no "richer" by the standard you are using. Paper money in the safe is worth no more than gold in the safe. The gold won't rot or burn but the paper might. The paper will lose value sitting in that safe at virtually exactly the same rate the gold will gain value. Neither will make you "rich" by the standard you've set until they are exchanged for something you need or want.

A car made of gold is almost exactly as worthless as a car made of paper money. You can't eat paper money or gold nor can you drive them but you can eat corn or make fuel from it. Savings or currency both need to be exchanged for something else before they have a direct value in your day to day life. It doesn't matter whether you are talking gold or paper dollars.

If all you own is lots of corn you will be looking for someone to exchange some of your corn to for other things you need. The fact that the medium of that exchange is denominated in dollars where you live is just an historical coincidence. The medium of exchange could just as easily be sea shells, string or gold. As long as the medium is agreed on the medium is treated as "money".

Neither gold or paper dollars are things we "need" unless we have a need to store excess value for the future. As I've already demonstrated with verifiable facts gold is a much better medium for savings than paper dollars. Paper dollars lose value over time always. When dollars were silver and gold there was no misunderstanding of these concepts nor did a dollar lose value over time.

Silver is the most common and successful currency in history as Tortuga pointed out. It has several advantages over paper, gold, seashells or string. As a medium of exchange it is the most successful. The one problem with silver is when you need to store a LOT of savings. The stuff is heavy and can present a problem with transportation. One man can not physically carry $100,000 of silver. One man can easily carry $100,000 of gold. Gold is better for bulk savings and payment than silver.

It's good to have you back Bob. You write real good even when you are wrong. Thanks for the thoughtful discourse. :D

Edited by clay
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That's one good thing about Gold, Especially Dug Gold. It has NO Taxable Value until converted to the Dollar. Gold Changing hands has NO taxable value. If you don't tell anyone about it. Other wise the IRS will try and get you for the Transaction Value in Dollars of what every they deem the value in Dollars is of what ever you Received in the Transaction. . Emmmm What Ever they see fit. Any gold sold only has a Taxable value as regular Income.

I would short cut the Ever clear thinking. I would buy Sugar, Yeast and cleaning supplies. Ever Clear can be used for Fun, Medical, Engine Parts Cleaner, Rocket Fuel (The V2 was Powered by the stuff. Every 5000GL shipped by rail only had 500GL Got to location by time it got there. ) And run your truck. ..Ever spill some on your coffee table ? Takes off Varnish too.

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Guest Bedrock_Bob

I've often pondered this in a much more abstract sense, but I think you put it into words much better.

Lets say you were the first guy to discover those 100 tons of gold bars hidden in Victorio Peak. Heard that treasure legend before?

You get all those bars home and they're sitting in your living room. Are you instantly a rich man? No, I don't think so. You have to sell the gold first for money to be a rich man. The only rich men are the ones with lots of cash. You would think having 100 tons of gold would instantly make you a wealthy man but it doesn't mean anything. That's why gold has never really made the world go around. It's rare and beautiful but even in antiquity most economies were based upon silver. Gold is just a luxury item reserved for jewelry and other things people who are already wealthy would like to spend some of their extra money on.

I live just a few miles form Victorio Peak. I have been there many times and was there on Terry Delonas's dig for a few days. Funny you should mention it...

You can't spend gold. It is only an investment and nowhere near the best investment. If I had a pile of gold like that I would absolutely sell it. Those bars would be impossible to pay your bills, buy a home or start a business with unless you turned them into funds of some sort.

If you like it and can afford to have your money tied up in a lump sitting in the safe it is fine. If you know of an investment that will grow faster than gold it is best to sell. Gold is nowhere near a safe investment, especially after it went so high (just my opinion stated as fact). I know selling my gold was the very best thing that I could have done because it gave me the grubstake to make more. If I would have waited five years and sold my gold today it would be worth less money and I would have missed the opportunity to make a lot more money. So just hanging on to that gold for 30 years is not always the best strategy.

Clay is right that gold sitting in the safe is better than money sitting in the safe. It certainly decays slower. But money working for you is better than gold sitting in the safe any day.

.

Edited by Bedrock_Bob
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Ok, now here is one for you guys... If one person has all the gold, and another all the cash, and you own a gun with one bullet, :)

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Guest Bedrock_Bob

Ok, now here is one for you guys... If one person has all the gold, and another all the cash, and you own a gun with one bullet, :)

I would go elk hunting.

Edited by Bedrock_Bob
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That's like the guy that won 5 million on the lottery. he was broke in a year. When he was asked what he did with all that money, he said: I spent most on wiskey and women, the rest I spent foolishly. Grubstake

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