Peter Schiff: China, Russia buying gold because 'they can read the writing on the wall'

[American123]

That can be said of anything.

Gold has the advantage of liquidity. In a pinch it can be sold quickly and easily at market value. Try that with a 5 gallon bucket of rice.

Depends on how hungry people are

 

[Cavedweller]

Depends on how hungry people are

I meant during "normal" times.

 

[BSG 75]

Gold likely has been perceived as valuable because it is not entirely easy to obtain. Same could be said for 'precious stones' when at the end of the day they're just rocks, and only as valuable as how others perceive them.

Not really regarding precious stones. If you have time may I suggest you watch this video

If you don't have time to or aren't interested in watching the video the specifications for money can be summed up below



Gems or precious stones don't meet the fungible and uniform requirements of money. Diamonds for example have too many variations in weight, cut, color, and clarity to be fungible and uniform. You would have to be a diamond expert to figure what each one is worth. Whereas gold bullion coins and bars as sold today are extremely uniform and fungible, as well as meeting all of the other specifications for money.

Hence, gold in and of itself has no value, but because others choose to value it, it has value. Just like shiny rings at the jewelry store, some people pay tens of thousands of dollars, they're just rocks and metal.

If you are talking about practical value as something you can eat or use for clothing, that's correct. But it has tremendous value fulfilling the role of money as a means of exchange and storehouse of value, something that people have found gold to be valuable for for thousands of years. And it can be exchanged for something to eat or for clothing.

I'm not trying to bash on folks who are really happy with their gold supply, I simply have never perceived it as valuable beyond what others may be willing to exchange for it, but at that point, I'd be stockpiling something in the hopes that someone else would desire that gold more than what I would desire from them, at that point, it would make more sense to put my effort into procuring what I want originally, rather than something I don't want in the hopes of exchanging it.

You seem to be considering only the most extreme "SHTF" post-apocalyptic scenario of a complete breakdown of civilization as the only possible scenario, where people are living as our ancestors did tens of thousands of years ago and bartering for everything. That's not what I'm talking about and that's not as likely a scenario as what I am talking about. It's more likely that we will have a huge financial crisis, the worst in history. Imagine the Great Depression but 10 times worse. People weren't living with no civilization in the 1930s. They still had government and stores and hospitals and restaurants and movie theaters, etc. But times were very hard, and they will probably be harder after the next big financial crisis. Or even after a smaller financial crisis. If you get sick are you going to go to the local hospital and try to barter some ammo to have your appendix removed? You can walk around trying to barter for everything but most people in the aftermath of a financial crisis are going to want the efficiency and convenience of money, rather than dragging around everything they own so they can barter.

And after the disaster caused by trusting in paper fiat currency, people are going to want to use real money.

 

[ma96782]

"Good Delivery Bars"

I'll leave this here:

Aloha, Mark

PS....don't forget about the fake coins and smaller bars too

 

[BSG 75]

"Good Delivery Bars"

I'll leave this here:

That's one reason I think coins are better than bars, but you have to watch out for fraud there too.

Only buy from reputable dealers.

 

[Dungannon]

It's more likely that we will have a huge financial crisis, the worst in history. Imagine the Great Depression but 10 times worse. People weren't living with no civilization in the 1930s. They still had government and stores and hospitals and restaurants and movie theaters, etc. But times were very hard, and they will probably be harder after the next big financial crisis. Or even after a smaller financial crisis.

Was there a lot of gold trading during the great depression?

My parents [age 5 in 1929] and grandparents described hunger has the pervasive motivator. They lived on half-acre lots and everything but the house and driveway was a garden. Children were born at home, and some died. Both grandfathers were handy and when they weren't working a wage job were doing odd jobs for food or other commodities. My in-laws both grew up on large farms, so food was a little less of an anxiety but they still traded for seed and machinery parts, and traded labor with other neighbors where special skills were involved. All the older kids in all those families dropped out of school and either helped on the farm or got odd jobs. My dad was the 7th of 9 kids and the first to finish high school.

Til the day they died, all of them were still squirreling things away. While all were religious savers of money in later life, judging by what they left at death, it is clear they were quite obsessed with saving primarily the things they perceived as practical for daily living, and maintaining what they already had. My dad was the only one that kept stuff that I thought was crap [old milk jugs, cardboard boxes, etc.], but all of them had an unbelievable amount of toilet paper, cleaning supplies, rags, tools, parts, canning supplies, pencils, paper, jackets, work gloves, etc. It took us a long time to give that stuff away to family and friends. Fortunately they all died a few years apart.

 

[American123]

Not really regarding precious stones. If you have time may I suggest you watch this video

If you don't have time to or aren't interested in watching the video the specifications for money can be summed up below

View attachment 616216

Gems or precious stones don't meet the fungible and uniform requirements of money. Diamonds for example have too many variations in weight, cut, color, and clarity to be fungible and uniform. You would have to be a diamond expert to figure what each one is worth. Whereas gold bullion coins and bars as sold today are extremely uniform and fungible, as well as meeting all of the other specifications for money.

View attachment 616227


View attachment 616228




If you are talking about practical value as something you can eat or use for clothing, that's correct. But it has tremendous value fulfilling the role of money as a means of exchange and storehouse of value, something that people have found gold to be valuable for for thousands of years. And it can be exchanged for something to eat or for clothing.



You seem to be considering only the most extreme "SHTF" post-apocalyptic scenario of a complete breakdown of civilization as the only possible scenario, where people are living as our ancestors did tens of thousands of years ago and bartering for everything. That's not what I'm talking about and that's not as likely a scenario as what I am talking about. It's more likely that we will have a huge financial crisis, the worst in history. Imagine the Great Depression but 10 times worse. People weren't living with no civilization in the 1930s. They still had government and stores and hospitals and restaurants and movie theaters, etc. But times were very hard, and they will probably be harder after the next big financial crisis. Or even after a smaller financial crisis. If you get sick are you going to go to the local hospital and try to barter some ammo to have your appendix removed? You can walk around trying to barter for everything but most people in the aftermath of a financial crisis are going to want the efficiency and convenience of money, rather than dragging around everything they own so they can barter.

And after the disaster caused by trusting in paper fiat currency, people are going to want to use real money.

In an attempt to respond, if only in part, to a lengthy reply. It would appear that even in our nations most challenging financial times, even when society still functioned, but at significant financial hardship, the necessities of food, water and shelter prevailed beyond any other commodities of exchange. Getting back to the point, just like paper money has no value to a man freezing to death in the mountains except for a burnable material, gold has no value in seemingly any scenario but one where society continues to function. Do I think that gold can be a great investment when done well to store wealth, or turn a profit, sure, but only so far as society continues to function and if society is still functioning relatively well, it would appear the need for a non fiat currency is moot.

What this makes me think about where gold could excel is in a scenario like Venezuela. Their paper money can't buy anything anymore, if someone had gold, could that help them? Possibly, but only if the person they were trying to exchange it with cared about the gold, they seem to be having a bigger problem getting enough food, let alone trading food for gold. Yet society and some form of government still seems to exist there in some capacity, at least enough to provide dictatorial rule. Now if someone who was there had sufficient gold to "buy there way" to another country where they could exchange gold for better arrangements, makes sense, but the nature of it all seems highly problematic.

Long story short, everyone do what you want with your money, gold, food stores, whatever, because it doesn't seem that there is a surefire way to completely avoid all the potential difficulties that could arise, but regardless, the basic hierarchy of survival needs will always be there.

 

[WoodsPlinker]

I'm more of a silver bug, but a little diversity never hurt. Mostly because silver just seems like it's harder to refine and as a result less places produce it. Also the industry really seems to use it.

I'm hoping a few big producers of silver have issues then I can sell and retire.

My best investments to date are the metals crafted into firearms. Especially the one I got from Russia.

Although the 401k isn't doing bad.

And I have to admit I'm obsessed with shiny metal things... Brass gets me high.

 

[Oohrah]

Troubling news in the world of finance: Peter Schiff: China, Russia buying gold because 'they can read the writing on the wall'.

When did the average Chinese suddenly have the money to buy gold? Most of those I know don't, and once converted, how would you use it as tender for anything? Get 10 dollars worth of gas and have a $100 gold coin...your change is ????

 

[Camelfilter]

When did the average Chinese suddenly have the money to buy gold? Most of those I know don't, and once converted, how would you use it as tender for anything? Get 10 dollars worth of gas and have a $100 gold coin...your change is ????

Ugh.

To use anything amidst a collapse it would be barter of some form.

One wheel barrow full of bank "notes", or a bushel of apples, or perhaps this silver coin for 5 gallons of fuel...

Not sure why you'd be out looking for fuel in the first place. You should either have what you need all-ready, or know exactly from whom to get it fairly.

Perhaps you'd be far from home when whatever happened...and now your bank account, credit cards & cash are value less?

Always try to keep an eye on financials, as runaways happen pretty fast, however not normally instantly. Which if caught early, would allow the savvy to convert soon to be valueless cash to durable goods.

 

[BSG 75]

Was there a lot of gold trading during the great depression?

The US was on the gold standard in the early years of the Great Depression. Paper currency wasn't just fiat currency, it was a claim check that could be redeemed for real money - gold or silver coins- at any time. So people used paper money backed by gold or silver coins, and 90% silver coins, unlike the fiat paper currency and (worthless) cupro-nickel coins we use today.




Back then the dollar was literally "as good as gold" (or silver).

On April 5, 1933 President FD Roosevelt signed Executive Order 6102, taking the US off of the gold standard, banning private ownership of gold, and ordering citizens to surrender their gold bullion, gold coins, and gold certificates to the Federal Reserve , in exchange for paper currency.

... increasing the amount of gold held by the Federal Reserve would in turn increase its power to inflate the money supply. Facing similar pressures, Britain had dropped the gold standard in 1931, and Roosevelt had taken note.

On April 5, 1933, Roosevelt ordered all gold coins and gold certificates in denominations of more than $100 turned in for other money. It required all persons to deliver all gold coin, gold bullion and gold certificates owned by them to the Federal Reserve by May 1 for the set price of $20.67 per ounce. By May 10, the government had taken in $300 million of gold coin and $470 million of gold certificates. Two months later, a joint resolution of Congress abrogated the gold clauses in many public and private obligations that required the debtor to repay the creditor in gold dollars of the same weight and fineness as those borrowed. In 1934, the government price of gold was increased to $35 per ounce, effectively increasing the gold on the Federal Reserve's balance sheets by 69 percent. This increase in assets allowed the Federal Reserve to further inflate the money supply.

FDR takes United States off gold standard | June 5, 1933 | HISTORY

The United States goes off the gold standard, a monetary system in which currency is backed by gold, when Congress enacted a joint resolution nullifying the right of creditors to demand payment in gold.

www.history.com

The 1944 Bretton Woods agreement created a quasi gold standard with foreign currencies in a fixed relationship to the US dollar and the US dollar fixed at $35 per ounce of gold. In 1971 President Nixon cut the last tie of the dollar to gold that existed under Bretton Woods when he ended convertibility of the dollar to gold for foreign banks.

In 1974 President Ford signed legislation that restored the ability of Americans to own gold bullion.

 

[Oohrah]

I'm more of a silver bug, but a little diversity never hurt. Mostly because silver just seems like it's harder to refine and as a result less places produce it. Also the industry really seems to use it.

I'm hoping a few big producers of silver have issues then I can sell and retire.

My best investments to date are the metals crafted into firearms. Especially the one I got from Russia.

Although the 401k isn't doing bad.

And I have to admit I'm obsessed with shiny metal things... Brass gets me high.

I was able to hoard some silver but not enough to live on. A few silver dollars and pre 64s mixed stuff. Gold??? some dental gold, jewelry, I figure bullets to those I know would surpass any metals! Firearms to select few? Food will be needed so it isn't part of any deals! I remember the Hunt brothers getting caught hoarding silver. Also Ted Binnion killed by girl friend and another friend had dump truck loads of silver taken out of hidden underground storage after they murdered him in Pahrump, Nevada. Maybe it went to his sister Becky who owns the Golden Nugget in Reno? Yep agree Silver is more affordable if you can find it? I know I saw a man's silver/Galenia mine in that area that was very rich. Don't know what it assayed at as lead and silver look much the same. That was in the early 70s, I'm sure the owner is long dead, and I have no recall of it's location other than southeast of where he lived. Where they found gold, and it played out, next step was a search silver followed. Many times found around the same areas and a second boom occurred. Yes, I too got two of those crafted ones. A Norinco that was new when shortly after Clinton stopped imports of firearms and ammo from that country, and a Russian that was one of the first ones that was surplus but in excellent condition. Not the banged up ones that are finding their way into the market now. They have at least tripled in value, and because of the condition likely higher than that.

 

[Oohrah]

The US was on the gold standard in the early years of the Great Depression. Paper currency wasn't just fiat currency, it was a claim check that could be redeemed for real money - gold or silver coins- at any time. So people used paper money backed by gold or silver coins, and 90% silver coins, unlike the fiat paper currency and (worthless) cupro-nickel coins we use today.

View attachment 616265
View attachment 616266

On April 5, 1933 President FD Roosevelt signed Executive Order 6102, taking the US off of the gold standard, banning private ownership of gold, and ordering citizens to surrender their gold bullion, gold coins, and gold certificates to the government, in exchange for paper currency.



In 1974 President Ford signed legislation that restored the ability of Americans to own gold bullion.

I have a couple of dollar bills that are silver certificates!

 

[NW Backpacker]

No matter what you think of Peter Schiff, you'll probably like his 2006 Mortgage Bankers speech - he predicts the 2008 real estate collapse:

 

[MaxwellEdison]

90% or more of US citizens never think about a financial crisis of major proportions. They go along all their lives thinking of paper money as the only money. They have no personal history to teach them any differently. 40% of them don't have $500 cash to tide them over during a personal emergency, so why would they worry about gold or any other long term consideration? Owning precious metals is like an insurance policy. Any reasonable person who owns it hopes to never have to use it. They do hope that they or their heirs can get money back out of it if need be under whatever circumstances. Here I'm referring to private owners of PM, not traders or speculators who buy and sell regularly.

This is 100% correct.

I have 8% of my retirement assets in precious metals. I will be extremely happy if during my lifetime, my precious metals simply retain or even lose a little bit of their value. I don't own these metals as an "investment". They are owned solely as an insurance policy, to prevent me from starving in the event of a financial catastrophe.

In 1980, the U.S. had about $1 trillion in debt. Just eight years later, by 1988, that number went to almost $4 trillion. In other words, it took the U.S. 200 years to acquire $1 trillion in debt, but just eight years of Reaganomics to quadruple that amount. It was in the 1980's that American said, "F*ck it, let's just throw a massive party and deal with the hangover later."

And now in 2019 we're up to $22 trillion in debt. This is absolutely unchartered territory. And if/when this currency and debt bubble pops, it could present a financial nightmare scenario the likes of which history has never seen. The American experiment started going haywire in the 1980's and never looked back. We'll pay the price for it someday, too. Might not be tomorrow, or next year, or even in my lifetime. But a day of financial reckoning WILL come. And when it does, having some precious metals tucked away won't have proven to be the worst idea in the world.

One doesn't need to be a conspiracy theorist or other fruitcake to believe this, either. It's all mathematics. You can't keep printing money out of thin air and think there will never be any consequences to that. The world simply doesn't work that way, and never has. Just like I keep a few months worth of food and water stored (along with some guns and ammo, of course), I keep some precious metals just to ensure that if the worst does happen, I'm not one of the 98% of people who never saw it coming.

 

[Neostratos]

Great thread!

I've studied this stuff for years and can now say with confidence that I poorly grasp any of it. But after listening to lots of smarter people, I do recognize the gravity of the Moment we're in. Wherever there is risk of great danger, there is also great opportunity.

Without a doubt, the world is poised for a 'Currency Reset'. The laws have been quietly put in place and the wealthy have protected themselves leaving the public to bear the cost. Greece was a trial run. It has started. Gold rising despite suppression is a visible sign, as is the hyperinflation we're experiencing at the supermarket.

The Fed chairman recently suggested the currency reset will not come without worldwide discord. Think WW2 when the Dollar replaced the British Sterling Pound as world currency. He's referring to even more and greater wars, worldwide recession, and a depression in the US; widespread poverty, increased crime, worsening infrastructure, etc. -- In truth, the ugly creature that is the Western empire is having a harder time bullying and stealing from the people of other countries and so is now devouring its' own. But I digress . . .

But unless the psychopaths go too far, it's not going to be a Mad Max world forever. Certainly the ones running the show don't think so. They're buying gold, rare collectibles, Cheetohs, etc.

So be prepared for the worst and hope for the best. Here's what we can prepare for: Food, water, shelter, security, community, barter-ability, wealth-preservation.

What's the message here? Kudos to those here at NWF who have learned to defend themselves and provide security. But those who ignore 'the day after', and do not pay attention to wealth-preservation may find themselves impoverished. That's what gold and silver are about. If you don't understand (cuz I don't really myself), then you might study further on your own time, (as I do) between football games of course! I like Lynette Zang on Youtube.

Hey, the reason I don't bring up the need to buy gold, silver and cheetohs for wealth-preservation during these tough times is that NOBODY HAS ANY MONEY LEFT!

 

[Burt Gummer]

I have some G/S. Bought a little around 2004 or so. Silver was around 14 to ... what about 18 now? But yeah, not really an investment per se. I agree it is easy to sell - everyone knows what the price is at some point in time which is nice. I would say .22LR ammo would be a much better small-exchange item. Compare 2004 to now and I missed that boat -- I miss many boats.

The basic truth of G/S is that is it is not really supply and demand. Because of the wonderful bankers and their paper certs printed out of thin air - much like Fiat currencies - Gold and Silver has always been strictly manipulated. If I knew that back in the day I probably would have passed. Of course if there is ever an event that would cause people to demand physical PMs for their certs --- well they are SOL - and the price would be astronomical. Low odds. Banksters have been doing their thing for a very long time. Just like when they got their fingers into Bitcoin via Wall St futures. Again, cert manipulations.

Now if you go buy some ammo, or a box of nails, or a shovel --- a 'thing' - no one is printing on a piece of paper the words "1000 shovels IOU' and what you can' get for your REAL shovel is not manipulated by some greedy Morgan banker

 

[Neostratos]

When did the average Chinese suddenly have the money to buy gold? Most of those I know don't, and once converted, how would you use it as tender for anything? Get 10 dollars worth of gas and have a $100 gold coin...your change is ????

Actually it is the Chinese and Russian governments buying gold that Peter Schiff speaks of, I think. However, the Chinese do encourage their public to buy gold as well. It has to be kept in the government banks which is handy if they decide to confiscate.

Our media doesn't mention it but China has raised their population from poverty and there is a very large and growing middle class of people able to afford commodities, real estate, cars, vacations etc. Our country misrepresents China's success because the West has robbed and largely eliminated its' middle class.

Gold is kept for buying large things like cars, homes and business. It's a lot of wealth in a small package but as you say, not easily divisable. Silver is used more for smaller purchases and for barterability. You can buy $100 worth of junk silver. It's value is rising and in an emergency it is excellent for barter as everyone can recognize it as (90%) silver.

 

[PerryLane]

Troubling news in the world of finance: Peter Schiff: China, Russia buying gold because 'they can read the writing on the wall'.

Just opinion and NOT financial advice.

Historically putting 5% to 10% of your annual investments into physical precious metals has proven safe & profitable.
Look at it as insurance.

When buying pay attention to the buy/sell price spread and avoid high premiums over spot metal value.
Watch the silver to gold ratio when choosing which to buy.
The current (Sept. 2019) 80 to 1 ratio means the same money buys about 80 ounces of silver or 1 ounce of gold.
Over the last 10 years this is in the best price range for silver in terms of gold.
kitco.com has good charts for tracking past prices.

Many preppers like US 90% silver coins, called 'Junk Silver', and they are the safest least expensive place to start.
If you can afford an ounce of gold or equivalent value of silver every year after a few years the odds are you will come out ahead.
DO YOUR HOMEWORK! There are good sources to study this on-line and knowledge is the best investment you ever make.

None of this is meant for anyone that is trading to make a quick profit or coin collectors pursuing their own quests.
Trading & collecting can profitable and fun for those that understand the risks and rewards.
It was not my intent to offer opinions on those topics.

I suggest getting both buy AND sell prices from dealers you consider doing business with.
Most reputable dealers will quote both. Many other dealers will not and those may not be the best choice.

I hope this is useful as a starting point for those unfamiliar with precious metals.
Folks more knowledgeable on the topic are encouraged to offer their insights.

 

[CountryGent]

@PerryLane, agreed. We keep about, give or take, 10% of our liquid assets in investment grade gold and silver.