A home (and other tangible items) vs. gold

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davidm's picture
davidm
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A home (and other tangible items) vs. gold

What about the idea of purchasing a home (outright if possible) instead of gold. You can live in a house. You can't live in gold. You could grow food in the yard of a house? You can't grow food in gold.

Wouldn't the first things to buy be tangible things we could use? Say, a backup heat source like a wood stove and 2 or 3 years worth of wood? Or a well with a hand pump too? A generator and a storage tank full of gas? Some comic books and a few cases of vodka?

Then some gold?

Chris said in the crash course, I think, something about the idea that he could buy land with gold when the monetary system falls apart.  But is there a reason to wait? Will we want to flee the USA? If the US goes down, won't everyone come down too?

David 

  


Roundhouse's picture
Roundhouse
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Re: A home (and other tangible items) vs. gold

That turns out to be my exact plan, complete with alternate energy options (fuel tanks, solar, wood stove).  THEN I started buying some PM's which is the topic of several other threads.  For me, having a place to live had to be job one, I'm too old to "run for the hills with a tent".  Obtaining the land/home was priority one, making it more efficient and sustainable (gardens, fruit/nut trees etc) was job two.

Right up there with PM's is community and I might be inclined to put that ahead of PM's. The combined abilities of a group of people who care about each other and share common goals IS gold.

Oh, and I selected scotch over vodka but that's a personal preference.  Smile 

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Cloudfire
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Re: A home (and other tangible items) vs. gold
davidm wrote:

Wouldn't the first things to buy be tangible things we could use?

Welcome aboard, David . . . I think your reasoning is quite sound.  I view gold  as a store of value only after other necessities are met.  That having been said, make sure that your purchases are truly necessary, or of sure bartering value, rather than spending willy-nilly in an effort to convert soon-to-be-worthless paper money into goods. 

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starbucks2
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Re: A home (and other tangible items) vs. gold

While I do agree with the thinking here, as I have made it a priority to pay my home off and become debt free at the expense of my IRA, I also bought some p.m.'s.  When you consider the actual size of the precious metals market, and the price that you can buy for at this time, (I don't consider P.M."s an investment, more like insurance) all it will take is a major disruption of some sort, and people will look to the only thing that has ever been a safe haven for them, gold and silver, to try and retain some of the value of their assets.   At that time, I feel like whatever was available will be soaked up rapidly, and the prices could easily get out of reach for the average citizen in a hurry.  Even though bartering will go a long way toward getting us by, the need for something of value will still be needed, and gold and silver will fill that need.  The guy that sells dairy products may not need what you have, but he knows that he can take a dollars worth of silver over to the shoe guy and get his kids a pair of shoes, so P.M.'s will fill a need I believe.  So, the short of it, maybe you should at some level try to put enough P.M.'s away for what will come, while still working towards your other goals, it doesn't hurt to have every option you can get.          nICk

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Cloudfire
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Confirming the Purity of Gold
starbucks2 wrote:

The guy that sells dairy products may not need what you have, but he knows that he can take a dollars worth of silver over to the shoe guy and get his kids a pair of shoes, so P.M.'s will fill a need I believe.

This statement triggers a question that has been nagging at the back of my mind . . . Does anybody know whether there is a "quick-and-dirty" way to confirm the purity of gold or silver when it is not in the standard form, e.g. gold eagle?  (The Hollywood image of the prospector biting a nugget springs to mind).  While I know that starbucks is only presenting an extreme example to illustrate his point, I'm quite sure I could identify a "dollar's worth of gold" or silver, if it is not in coin form.  I understand, and have acted on, the need for silver coin.  But what happens when you get down to your larger gold bouillon pieces?  Will there be enough smaller denomination coins to maintain liquidity in a metals economy?

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Jarhett
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Re: A home (and other tangible items) vs. gold

1.  Gold does not cost you property taxes a house does

2.  Gold does not need repairs, a house does

3.  Gold is not a sinkhole for money, a house is (there are constantly things that need to be done/ $ in a house)

 

jlshen2000's picture
jlshen2000
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Re: A home (and other tangible items) vs. gold

Many believe that hyperinflation is coming with quantitative easing policy. If it does indeed come, paying off fixed rate mortgage now would be extremely foolish. Bernanke would like to inflate away our debt. Therefore, we should BORROW as much as possible now. I would then buy tangible assets, like PM ( especially silver), oil and coal/uranium, agriculture products, and related equities. Farmland could be good buy, too, but I am afraid of taxes.

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yoshhash
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Re: A home (and other tangible items) vs. gold
Jarhett wrote:

2. Gold does not need repairs, a house does

3. Gold is not a sinkhole for money, a house is (there are constantly things that need to be done/ $ in a house)

 

I don't think this is a sound argument. I suppose this is a relative point- you could say the same about anything with which you form a complex relationship- a vegetable garden, bicycles, (proprietorship) businesses, even spouses- yes they can drain your money, but the presumption is that you get good at cultivating that relationship- if you are willing to learn the basic skills, and once you get a handle on them, a good house (or business, bike, spouse... LOL!) should never be a "sinkhole" for money. Maintenance costs money but pays extremely high dividends.

No matter how good your relationship gets with your landlord, however, it is doubtful that he will ever waive the rent.

1440 minutes's picture
1440 minutes
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Re: A home (and other tangible items) vs. gold
jlshen2000 wrote:

Many believe that hyperinflation is coming with quantitative easing policy. If it does indeed come, paying off fixed rate mortgage now would be extremely foolish. Bernanke would like to inflate away our debt. Therefore, we should BORROW as much as possible now. I would then buy tangible assets, like PM ( especially silver), oil and coal/uranium, agriculture products, and related equities. Farmland could be good buy, too, but I am afraid of taxes.

In my profession, we are paid less than we were paid 15 years ago, and that's without factoring in inflation. So Bernanke can inflate all he wants. The flooded dollars won't come to certain parts of of the population. I am not convinced that I will reap the benefit of more dollars, so I feel strongly compelled to pay off my debts.

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jlshen2000
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Re: A home (and other tangible items) vs. gold

1440 minutes,

In my profession, we are paid less than we were paid 15 years ago, and that's without factoring in inflation. So Bernanke can inflate all he wants. The flooded dollars won't come to certain parts of of the population. I am not convinced that I will reap the benefit of more dollars, so I feel strongly compelled to pay off my debts.

Sorry to hear about your salary story.

The question is if hyperinflation is indeed coming. If yes, our salary would increase drastically, regardless of profession.

We can look this way: we borrow money at a rate of 5% yearly (fixed rate); in time of hyperinflation, we can get a CD with rate of 30% and up. Borrowing now would save us 30% (or whatever)-5%. A net gain of 25% and up, isn't it? Still, Question is if we get hyperinflation. I have read a lot on deflation and hyperinflation. I am not sure what happens.

davidm's picture
davidm
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Re: A home (and other tangible items) vs. gold

 Thanks to everyone for your replies. I've been very consumed these last couple of weeks thinking about all this. It's been life changing.

David

st's picture
st
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Re: A home (and other tangible items) vs. gold

I have similar questions with minor twist - don't have home yet - but should I buy whatever small house I can buy to take my money out of system given fdic is more or less broke (+ I personally can't consider I own it if someone else has a lien against it). Problem of course is housing prices are still very inflated so house will be worth much less whenever the remaining of the housing bubble bursts. So what to do?

Just coming back from cm's condensed 2-hr session of crash course - but still don't get why gold or silver is valuable (even knowing that over last 5000 yrs it has remained the fallback currency). What can one really do with gold? To use someone's comment on the thread - why would a vegetable seller swap vegetables for my gold - presumably so shoesmith can give him a shoe in exchange for that gold - does that chain never end. Can someone point me to something I can read that gives me a clear idea of why gold/silver? I know water is valuable as we need to drink to live, may be oil is valuable as we need energy, copper so I can create copper wires for electricity (or for vessels to cook food etc) - but why gold or silver?

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