Why are people buying Gold and Silver now?
latqueens asked:
Now that the economy is dropping and so is the dollar? I don’t understand that.
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Now that the economy is dropping and so is the dollar? I don’t understand that.
June 2nd, 2009 at 8:08 pm
When global economies are in a steep recession, the value of paper money goes down. Most paper currecies are not backed by anything other than the full faith of the government. So buying gold and silver (which have held a value for thousands of years) can be a way to leverage yourself against an impedning economic collapse. However, trading commodities like these can be very risky, and should only be done by people who fully understand how they work.
June 4th, 2009 at 12:36 am
all times safe heaven
June 7th, 2009 at 4:46 am
inflation expectation and the hope that the economy is bottoming out
June 10th, 2009 at 5:17 am
Partly because they believe it is a hedge against inflation, which it is. Unfortunately a huge amount of inflation has been factored into the current price of gold.
June 11th, 2009 at 6:50 pm
cuz ppl will be living in villages and paying with silver and gold soon..
good luck
stock up on canned foods water guns and ammo hahahah
June 14th, 2009 at 4:51 pm
Because many people are not very smart.
Paradoxically, people who wait for a sale to buy a car or a washing machine (or who stock up on a product they use all the time when the price goes down) tend to do EXACTLY the opposite with their investments, selling their stocks when the bottom falls out (instead of buying more), and buying gold & silver when they hit all time highs!
That’s why most people have less money than they would like to have…
June 16th, 2009 at 10:20 am
Gold and silver took a hit last year with the rebound in the dollar index from a low of 72 to a high of 90, silver worse than gold. But gold still managed to eek out the 8th straight year of gains and silver’s average price is still in its eighth straight year of gains.
Now that the dollar index is getting hit again, gold is nearing its all-time high set last March and silver is catching up faster of late.
Gold’s previous all-time high is $850 in 1980. The fact that it’s only $960 today shows you how effective Central Banks have kept the price suppressed with their sales of gold according to the Bretton Woods II agreement (I’m sure Switzerland is regretting that big time!).
Now that the selling by the Central Banks has ended, and coupled with the fact that China is now a big buyer of gold and silver (because they have to hedge their large U.S. dollar holdings of Treasury’s) the price of gold is primed to break out to uncharted territory. There’s much more debt backing the dollar today than in 1980. Government is doing nothing but adding more debt to debt rather than cutting back. This is detrimental to the health of the dollar.
I wrote a White Paper on gold that you might be interested in. You can download it for free here:
I was a financial adviser for over 20 years and am currently writing a book to expose the industry for the nonsense that most financial advisers espouse.
June 17th, 2009 at 10:11 pm
With the excessive deficit spending by the government, the underlying value of the currency is becoming devalued. Gold is an investment to which people tend to flock in infationary times. There are many parallels today to the late 1970’s and early 1980’s when gold ran up, then fell back, before running up to record levels. We have already seen a run up and fall back in the current cycle; we may be poised for an even bigger increase in gold in the next six months to one year. This site has a lot of great information on gold investing, and how to get started either buying gold directly, or getting into gold-related investments like mining stocks, etc.