Saturday, May 23, 2015

A Post for Fredd

Click the pictures for the source websites.

Check out the value of an ounce of gold from 1913 forward.  (1913 is the year of the Federal Reserve Act btw)
In 1913 it was 18.92, and in 2010 it was 1224.53 with a steady upwards progression through the years.  Gold has held its value.

Now check out the value of the US Dollar since 1913.  Starting at One Dollar, As of 2010 it was 15 cents and a fraction with steady downward progression through the years. The paper dollar has not held its value.

Fredd, don't tell me you refuse to yield to factual data.  Don't even tell me that. ;-)

I couldn't get the whole image from 1913, so click the picture below to view the entire chart.


  1. These are, of course, long term data. A famous economist once quipped 'the long term is irrelevant, because in the long term we're all dead.' They don't call it the dismal science for nothing. Given a choice of investing in gold in 1915, or holding paper money in 1915, and not being allowed to redeem your investment until 2010, which would you choose?

    Of course you would choose the gold, but this hypothetical is only the stuff for commercials. You are free to invest in as much gold as you want, Kid. Blow the whole farm on it, Go for it. Just do it. You know you want to. My only point is that gold is too dang volatile and there's not enough of the stuff to base an economy on.....short term and medium term.

    Where are your charts, you and Glenn Beck, that go back only 5 years? If you had listened to those guys (and you) and bet the farm on gold, you would have lost a third of your investment. Sound advice? Hardly.

    So, Kid. Go for it. Get rid of every dollar you are holding, dump them all into gold. And then in 3 years, when gold is trading at $900 an ounce, let me know how you feel about gold then. And don't tell me, 'just wait another 97 years, I'll show you!!'

    Charts, schmarts, Kid. Gold is just a medium of exchange, and has one thing that the dollar doesn't to hold its value: you can use gold for things, other than lining bird cages with it. It has utility as well as value. But there is just not enough of the stuff to base a world wide economy on it, as was the case in the good old days.

    Nice try, though.

    1. Ok Fredd, How about 1915 to 1951 ? or take any 40 yr time range beyond 1913.

      If you bought 3 years ago you'd be screwed at the moment, but then all the mutual funds quote a minimum time of 20 years to guarantee against a loss.

      My point wasn't basing an economy on it, it was making a profit that's all.

      Anyway I don't have 40 years and maybe not even 20 so it's all academic for me. I'm just responding the people who say there is no value in gold. There clearly is.

      Nice try though Fredd ;-)

  2. Kid: I get your point. I still hold gold through all of my various mutual funds, it's not like I have a gold phobia. My long position on gold would probably surprise you. Cherry picking performance charts and moving the start and stop lines can not really prove any point. Look at the chart of the Dow since its dog days of the Great Depression up until now? Makes investing $100 back then and holding it to now look 'sound as a dollar.'

    Nobody is saying gold is a bad investment. I just keep saying it's a commodity, no different than pork bellies. No different than oil. Gold, bacon, gasoline. Or Hillary's cattle investments. All have value other than just investments, unlike simply holding dollars in a money market account.

    I get it. I really do.

    1. We agree Fredd. Jeeeez I wouldn't have minded leaving the hildebeast out of it tho.

  3. I got a tiny bit of money in a chunk a few years ago and felt compelled to buy some GOLD but was talked out of it. I STILL feel it's CONCRETE, it's something that will always go up, no matter how down it might go..........
    And I see Fredd's point that it's just another commodity like pork bellies, too.............But maybe a bit less volatile because it's more concrete, in a way?
    Kid, what do you way? XX

  4. Well Z, in a way one could look at gold as something your Grandparents would have bought 100 years ago and put it away for you. There'd be value in that as opposed to putting paper money in a box, unless they had collector value. People have wanted it since they first found it. It will always have some value unless they find a mountain of it somewhere.

    Well I way 240 these days. Workin on it.
    xoxo :)

    1. I have gone on a nutri-bullet diet - fruits and veggies and lots garlic - and still eat lots of Chicken and Beef!
      I have dropped down from 240lb to 210lb.
      Looking to start exercising and (have some pull springs - don't want to use weights), want to drop to 180lb.

    2. TSWS, Same Here. 180 would be about perfect. I think muscle building is part of it tho. I do the weights.

    3. I couldn't help but think of worthless Civil War money and how many put that away and thought the worth might hold. Gold was sure better then.

      Oops! I meant WHAT DO YOU SAY!!! HAAAAAAAA!! I saw your reply and thought "WHAT?" Then I saw what I asked you. so funny

    4. Z, OR imagine your Grandparents put some GM stock away for you. Worth Zero when the financial thinamabob hit in 2008

  5. It looks to me as though you've forgotten to factor in the ravages of inflation.

    In the most rudimentary terms inflation mean the more dollars we have to pay for an item, the less those dollars are worth.

    For example my parents bought their first house in 1946 –– a modest, 1200 square foot colonial on a corner lot. They paid about 13K for it then. That very same house today is no larger than it was in sixty-nine years ago, yet to buy it today, you'd have to pay about 450K –– and the place is SIXTY-NINE YEARS OLDER than it was when Dad paid 13K for it.

    This does not mean the value of real estate has increased so much as the value of the dollar has decreased tremendously.

    The nineteen dollars you'd have had to pay for an ounce of gold in 1901 was just as hard to come by then as the twelve-hundred dollars you'd have to pony up today. Evidence? My grandfather was able to raise eight children on twenty dollars a week a century ago, and was able to save enough from that to purchase acreage in the suburbs and build a large two-family house on that property. The cost of both property and house did not exceed two-thousand dollars.

    As President Reagan wisely said, "Inflation is the cruelest tax of all." That is especially true when the rotten bastards who run the federal government refuse to allow us to index our capital gains for inflation when they force us to pay tax on them.

    The concept of "progress" is an illusion. We don't make progress, we only change -- and usually for the worse.

    Do we have figures for the days before Marxian-Fabian-Communist-Socialist-Progressive-Liberal-Statism grabbed control of the reins? I'd like to believe the value of currency –– and everything else –– was far more stable and less volatile then, but we need proof.

    Is proof available?

    1. Not sure where to come by proof on that score FT, but it would seem that the Federal Reserve has screwed up tremendously.

      Anyway, I agree. I'm saying if you put an ounce of gold in the matress in 1913 and pulled it out today, it's worth 1200, so you kept you money more or less. If you put a $20 bill in the matress, you would be shocked to find how little it would buy today versus 1913.

    2. There's that Fed Reserve demon; when the Constitution was Respected - The Dollar was printed with
      Gold and Silver Certificates [PAY BARER ON DEMAND].
      Walk into the Fed Reserve today and demand silver for some 5 Dollar Silver Certificates!
      You will find yourself outside the building in a hurry with laughing Big Guys, saying have a nice day-and don't try that again!

    3. today's dollar (since the Feds took over) is only good if some one is willing to except it for payment for services.
      Example: if I do a shade tree brake job on your car and you try and give me cash, I might say that I like you shark skin boots better. If, I have a real shop for the brake job and you give me cash, now I am stuck with paper with pretty green ink; and I hope the vender I owe will take it for payment. Or, try and push it off on the next pesky sales person.
      If, you pay with PLASTIC-----then it is only black ink on a Banks balance sheet.

    4. TS/WS. I agree. paper and plastic COULD be worthless tomorrow. Unlikely, but COULD be. That ounce of gold will alays be worth something however..

    5. we are getting it here----60 mph winds 2inch size hail, and flash flooding; 2 weeks ago 10 inch rain in three hrs.

    6. TS/WS, Fredd will Always take your cash ;-) Fwiw.

  6. Yea Fred.
    Who will stand up to the Feds/Bankers when they say you can no longer pay cash for your mortgage payment, or stash cash in your safety deposit box?
    CHASE BANK already has this Rule In Place.
    The Constitution Says Congress > HAS TO COIN MONEY!
    What NOW?