Why are precious metals doing so well?

[Atash Hagmahani]

24 hour gold
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 Change    -4.70         -0.38%
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 Silver    19.85    +0.20
 Platinum    1551.00    +8.00
 Palladium    528.00    +6.00
 Rhodium    2,080.00    0.00

Gold is up 25+% for the year. Silver and Palladium are up handsomely, and Platinum is well off its relatively recent lows.

I think the answer has to do with simultaneous debasement of the currency AND debt repudiation.

Precious metals are "assets that are not someone else's liability", so they hedge default risk. And they are inherently hedges against monetary debasement.

[Mike]

Imagine one had $500k, how could it be deployed?

Real estate is generally falling in price.

The stock market is dishonest and highly priced.

Gold is cheaply counterfeited.

Silver is cheap and is being consumed.  Paper Silver is extremely risky for the same dishonesty that is pervasive in the stock market.  It is also bulky.

[offdalip]

Gold is cheaply counterfeited.

disagree


big bars maybe but easily detected

coins much more work than its worth

[opsec]

Somebody I know who buys and sells gold a lot says that coins are getting harder to find because demand for them is up amongst the yuppies and the public is waking up to the reality of the depression.

[darwinslair]

Real Estate, at least here, has not fallen in price much. It is homes that have fallen in price.  The going price per acre has been steadily rising.  If something is not paved over or have a home on a postage stamp sized piece of property, the values have been still rising.

Tom

[silverseeds]

  Last few times I checked, large parcels of land(20 plus acres) were at like 60 percent of what they were not terribly long ago, and for atleast 5-6 years I lived here before that.......

  small spots though, in the 5 acre range, are actually going up steadily.

[Atash Hagmahani]

Distinguish between "residential real estate" and "land", and between "land" and "farmland".

Farmland is what we are running out of fastest, and with rising food prices...

The problem with land in general is that it is a sitting duck for predatory real estate taxation. As long as real estate is a form of wealth, it attracts the attention of those who seize wealth. The problem is that land per se does not provide so much benefit as potential for production. Someone with the IQ and mindset of, say, Senator Patty "bringing home the bacon" Murray is incapable of realizing this. Killing geese that lay golden eggs.

[silverseeds]

Distinguish between "residential real estate" and "land", and between "land" and "farmland".

With the right knowledge, and in some cases breeding, hordes of land not considered farmland, can become so. by a general description of what is considered arable, there is only a very very small amount of arable land in new mexico. Pretty much all of it along the rio grande.

Taxes are ridiculously low here to by the way.....

[The Future]

Distinguish between "residential real estate" and "land", and between "land" and "farmland".

With the right knowledge, and in some cases breeding, hordes of land not considered farmland, can become so.

I think this helps to make Atash's point.  Even though you could generate farm level revenues and income, you will be taxed (generally) and corporation/residential level taxes which even in local terms, are often substantially different. 

I would love to own farm land where I live but, in an interesting twist, the handful of sellers - and I mean very very few - are actually pricing it as if it were for residential or even commercial zoning.  The banks still insist on using $1 million per acre to work out their risks/returns/collateral numbers for residential land.  Not house, just land.

A farm rents for about $1000 per acre per year - which might seem expensive from a US perspective but think: $1 million per acre vs. $1000 in rent per year.  Which would you rather have?

People are doing the damndest to get arable land rezoned.  A frind of mine has a half acre "back yard" that is arable land just sitting there.  (He actually had to get someone to harvest the potatoes after he bought the house).  Not it is grassed over and doing nothing.  Wait an while and try your luck at a rezone app.  If it goes through, bingo, you can develop a million dollar con-dough.

Trouble is, we can't digest concrete.

Arable land is shrinking here in dramatic percentages.  When I started my self sufficiency proof pf concept project, we have (don't laugh) 800 acres.  2 years later we have 735 acres.  4% loss per year of what is already a dire small amount (only 5% of the country).


I saw one 8 acre property for sale but the owners want jacked up residential prices - $4.8 million to be precise.  Good luck with selling that to anyone with sense.

[The Future]

Gold is cheaply counterfeited.

disagree


big bars maybe but easily detected

coins much more work than its worth

Soneone sent me this today:

Are Governments Counterfeiting Gold? Rusty Russian Coins
http://www.youtube.com/watch?v=TCg_3d3A5ZA

Breaking news: Here are the first up close HD [High Definition] pictures of the rusty Russian gold St George coins. Mike Maloney speaks with Ivan Zhivneskiy, a precious metals dealer from Russia, about the huge controversy surrounding these investment coins. As you are aware, gold does not rust!

[offdalip]

I have no idea what is in that link since it is a utube, and I generally don't click on those.

but I assume it is something to do with counterfeiting small coins.

if so, so what? counterfiet coins are very very easily detected. much easier than big bars.

maybe untrained people with no training would get scamed, but anybody with some expertise could tell
if they were real.

[The Future]

Watch the video.  If the contents are true, then institutional level corporations have failed to detect coins with some type of impurity in them until several years after the fact when they began to degrade.  It might be rust.  It seems someone is going through the trouble of minting gold coins of dubious quality - namely the Russian Govt. 

For my own education:

1. why do you say it is more trouble that it is worth? 
2. What are the techniques that would make the shown minted coins easily detected?

[opsec]

I think a common metal detector might be the ticket here. The less techlologically advanced the model the better. They detect iron and ferrous metals, but not gold or other non ferrous metals. That's my understanding anyways. If I'm right, that's a cheap and easy way to tell the difference.

[silverseeds]

I think this helps to make Atash's point.  Even though you could generate farm level revenues and income, you will be taxed (generally) and corporation/residential level taxes which even in local terms, are often substantially different. 

It doesnt make atashes point in my case. Even as residential, the taxes for land here are extremely low. If I had a larger parcel, zoned in line with the ranches, it would be much lower then that.

Keep in mind it will take either large amounts of outside materials, OR a few years time, to work the land into arable land. With the methods I am doing. But once it is into production, It will have paid for itself in its entirety in only a few years from that point. (im mangaing inputs here vastly different then your average farmer) I worked on a farm in ohio for many years, after 30 years with subsidies, he stilled owed millions on his 250 acres. he didnt refi except for 50 grand one time. the numbers are so insanely different, I might as well be in another country.

[offdalip]

ok future, I watch the vid. but I want the 5 minutes of my life back from having to watch the vid and the other 5 minutes back also that it took me to write this..... 

1. why do you say it is more trouble that it is worth?

b/c you would make them out of either tungsten or copper depending on how much you wanted to deceive the victims. Cu is easiest to do but also easiest to spot.
Obviously the st. petersburg coins were the Cu variant.

 2. What are the techniques that would make the shown minted coins easily detected?

METALLURGICAL
a. Au is the softest most ductile metal, it should flatten out like a pancake real easy if I hit it with a hammer
b. mohs hardness test, will reveal just by rubbing or scratching it if it is gold
c. ductility, see a., it will bend immediately in your hands
d. density, divide the weight by the volume to see if it corresponds
e. xrays, tungsten will bounce back xrays like crazy

CHEMICAL
a. is only attacked by one acid, put a drop of hydrochloric acid on it and heat, if Cu it will turn blue/green , gold will not be affected.
b. again put a drop of nitric acid on it, if Cu if will start giving off brown fumes and turn blue, gold will not be affected.
c. dissolve it in aqua regia, nitric and hydrochloric acids mixture, if it has any hint of blue , its got Cu.