War on Gold and the Financial Endgame

[MachineGhost]

[quote=http://www.thebigresetblog.com/index.php/the-book/]A system reset seems imminent. The world’s financial system will need to find a new anchor before the year 2020. Since the beginning of the credit crisis, the US realized the dollar will lose its role as the world’s reserve currency, and has been planning for a monetary reset. This reset will be designed to keep the US in the driver’s seat, allowing the new monetary system to include significant roles for other currencies such as the euro and China’s renminbi. Gold could well be re-introduced as one of the pillars of the new global financial system. By looking past the American ‘smokescreen’ surrounding gold and the dollar long ago, China and Russia have been accumulating massive amounts of gold reserves, positioning themselves for this more prominent monetary role for gold in the future. The reset will come as a shock to many. The Big Reset will help everyone who wants to be fully prepared.[/quote]

[Cortopassi]

MG, all:

I would like to believe I have been smart with the PP and the previous gold accumulation I have done.

But there's always the little question in the back of my mind -- when the system does reset, what is to prevent politicians from freaking out as in 2008, and trying everything to keep the status quo?  Like taxing gold outrageously, outlawing its use, forcing conversions, etc.

So many talk about storing gold outside the US.  I don't see how that helps.  When the system blows, any country you do have your gold stored in is likely to blow as well, and the same set of circumstances will exist.  So I'd rather have it in my hand, but I do worry if gold will be "allowed" to save those of us prudent enough to have had gold in our portfolio.

Am I being overly pessimistic here?

[Libertarian666]

MG, all:

I would like to believe I have been smart with the PP and the previous gold accumulation I have done.

But there's always the little question in the back of my mind -- when the system does reset, what is to prevent politicians from freaking out as in 2008, and trying everything to keep the status quo?  Like taxing gold outrageously, outlawing its use, forcing conversions, etc.

So many talk about storing gold outside the US.  I don't see how that helps.  When the system blows, any country you do have your gold stored in is likely to blow as well, and the same set of circumstances will exist.  So I'd rather have it in my hand, but I do worry if gold will be "allowed" to save those of us prudent enough to have had gold in our portfolio.

Am I being overly pessimistic here?

I think you are. There are countries that I don't think will blow up.

[Cortopassi]

I think you are. There are countries that I don't think will blow up.

I'd be interested in a short list of countries you believe would be least affected by a reset?

[Libertarian666]

I think you are. There are countries that I don't think will blow up.

I'd be interested in a short list of countries you believe would be least affected by a reset?

Switzerland is at the top of my list. Yes, it is in Europe, which is going to be a big mess, but they know how to deal with such things.
I think Uruguay will be okay also, as it is neutral ("the Switzerland of South America") and is likely to stay out of regional messes such as Argentina specializes in creating. Ecuador and Panama also seem fairly stable but their economies may be too closely connected to the US, partly because they both use the US dollar as their currency.
Probably some of the Far East countries will be okay too, but I don't know much about them.

[MachineGhost]

So many talk about storing gold outside the US.  I don't see how that helps.  When the system blows, any country you do have your gold stored in is likely to blow as well, and the same set of circumstances will exist.  So I'd rather have it in my hand, but I do worry if gold will be "allowed" to save those of us prudent enough to have had gold in our portfolio.

Am I being overly pessimistic here?

No, you're being realistic because the government can outlaw currency and gold if it needs to, so they don't really serve the purposes they once did for SHTF scenarios.  You just need to diversify out of gold a little bit into alternative SHTF "currencies", diamonds, stamps, junk silver, soap, tobacco, toilet paper, ammo, etc..  No need to go overboard on the latter stuff, but a percent is prudent.

Gold is only useful until the system goes into apocalyptic mode.  A reset is not apocalyptic.  Since gold isn't money anymore, you're forced to use exchangers that are in the system.  It's no different than E-gold or Bitcoins.  The weakest link is in the exchanging.

Switzerland is dead as a banking venue.  Singapore is the new Switzerland.  But it would be delusional to think with "Rome's" global reach that locals would not comply with legal requirements for all Americans to repatriate gold back to the motherland.  Just look at FATCA.

IMO, the best thing to do is own your own gold coins, hide them and shut up about it when the insane patients try to run the asylum.  In addition to all the other ways.  You can never diversify enough.

[craigr]

MG, all:

I would like to believe I have been smart with the PP and the previous gold accumulation I have done.

But there's always the little question in the back of my mind -- when the system does reset, what is to prevent politicians from freaking out as in 2008, and trying everything to keep the status quo?  Like taxing gold outrageously, outlawing its use, forcing conversions, etc.

So many talk about storing gold outside the US.  I don't see how that helps.  When the system blows, any country you do have your gold stored in is likely to blow as well, and the same set of circumstances will exist.  So I'd rather have it in my hand, but I do worry if gold will be "allowed" to save those of us prudent enough to have had gold in our portfolio.

Am I being overly pessimistic here?

The main reason for gold and international diversification is to give you options in case something very bad were going on where you live. It's not a panacea, but you'll be in a far better position to protect yourself if not all your money is in the banking/market where you reside.

By the time the govt. got around to actually forcing people to repatriate funds overseas for instance, most of the crisis would have resolved itself or at least been through the worst initial impacts. If they were truly going off the rails, at least you'd have financial means to take action (such as leaving with your family to somewhere safe).

[Stewardship]

Singapore is the new Switzerland.

This might be for another thread, but is Singapore really the new Switzerland?  I read that it has close ties to the US.

[MachineGhost]

Singapore is the new Switzerland.

This might be for another thread, but is Singapore really the new Switzerland?  I read that it has close ties to the US.

Who doesn't?  Do you want to store your gold in China?  Good luck with that.

[Stewardship]

Well that is good news for someone who wants to retire in the Philippines.  Singapore is just a hop, skip, and a jump away.  Check on your gold and renew your visa all in one day-trip. 

[Kevin K.]

Can't resist sharing this funny Q & A from Scott Burns' regular column in the Dallas Morning News:

Q: My husband is convinced there is going to be a total devaluation of the dollar. His solution is to turn a large portion of his 401(k) into a gold-backed vehicle. What would be the best way to do this? He doesn’t want a mutual fund that invests in gold, but rather the gold itself stored in some manner. He has been reading Peter Schiff online for his info. I am very concerned that this is not safe. Your comments would be much appreciated.

S.C., San Antonio


A: If you really get into the financial collapse thing, your husband should buy lead, not gold. The lead should be in the form of bullets, preferably of a large caliber. I am told that when these lead bullets are inserted into a good handgun, the lead can be turned into gold very quickly. This does not require converting a 401(k), or any other form of investment, into gold.

If you’re going to bet on gold, the best way to hold it is in the form of gold coins that you store in a secure place in your house because if there is a collapse, our financial institutions won’t be doing business as usual.

In the meantime, our first duty is to take part in the world “as is, where is.” That means participating in the system of saving and investing that we have, trying to make it better, and hoping that our collective wisdom exceeds our collective stupidity. Yes, it’s looking like it will be a really close call.

[MachineGhost]

Funny, but I don't think it helped the poor woman much.

[craigr]

Singapore is the new Switzerland.

This might be for another thread, but is Singapore really the new Switzerland?  I read that it has close ties to the US.

With the death of Singapore's founder recently, I think it could do some reversion to the mean if not managed correctly. The reason it was successful is because it was a well managed autocracy.

[MediumTex]

Can't resist sharing this funny Q & A from Scott Burns' regular column in the Dallas Morning News:

Scott Burns is a really good guy.  Going back almost 20 years, I would occasionally send him comments regarding his columns and he always came back with friendly and helpful replies.

Later on, he helped me get connected with the business page editors at the DMN and another personal finance columnist who occasionally quotes me on retirement plan issues in her column (I had contacted them about doing a guest column on retirement plan issues).

When the PP book came out, I sent a link to the book to Scott Burns and he replied that he would put it on his reading list and he congratulated me and Craig on getting the book published and gave me some helpful information about the financial publishing industry.

Overall, just a super cool dude.

[screwtape]

Q: My husband is convinced there is going to be a total devaluation of the dollar. His solution is to turn a large portion of his 401(k) into a gold-backed vehicle. What would be the best way to do this?

Personally, I am only about 25% convinced that this is true.

[bedraggled]

Since it is possible to outlaw a currency, force gold conversion or tax gold outrageously- any or all of the above, does anyone know how silver performed in the Great Depression?

Yes, this is heresy.  Silver may be considered a commodity but it can play a lesser roll as a store of wealth and probably won't be confiscated.  And, yes, if it is perceived as a commodity, then a position in gold could get clobbered but, again, it should not get confiscated.  And silver can be stored in the Perth Mint.  This just gets better as I type.

I just realized I can check SLV on the 10 year chart.  See you later.

[bedraggled]

OK.  SLV dropped from 20 to 10 in the 2008 unpleasantness, down 50%.  SLV is down 69% since the peak in 2011.

It looks like GLD saw 2008 give it a 30% whack, while GLD has eased 40% since the 2011 high.

A person can get hurt more holding silver but silver confiscated?

Or, as Craigr suggested that by the time they get around to foreign stored gold, things may calm a bit.  What then for owners of gold?

Is this thought on silver reasonable with a possibility of confiscation?

[bedraggled]

Since the notion of confiscation has reappeared on this forum, does one ponder that as an increasing possibility. 

Is this just an early Sunday morning thought?

Cheers, folks!

[MachineGhost]

Is this just an early Sunday morning thought?

Silver was defeated as money in 1896 despite all the liberal propaganda in favor of it (see The Wizard of Oz).  It's long been since an industrial metal with none of the virtures that gold has.  I think you'd do better to look at rare earth metals.

[bedraggled]

Thanks, MG,

Anyone else have a thought on silver.  I can clear some cubic footage in a closet here at home.

MG is not the only one with a pertinent thought.

I want to use the closet for shoes and the artificial Christmas tree but silver bars, if I gotta.

Thoughts, please.  Steer me away from this idea.

[Pointedstick]

As a VP play, why not? That 5-year price graph is looking pretty juicy.

[bedraggled]

A VP allocation sounds good but, as I said, I am courting HBPP heresy by contemplating silver in the 4x25 PP(with the implied downside volatility penalty) to avoid the confiscation possibility.  This is a bad idea but this isn't a perfect world.

Again, please, what happened to silver in the Great Depression?  Did it get pounded like other commodities?  Is the thought of keeping silver completely ridiculous or just partially so?

And is confiscation becoming a du jour item?

I have not forgotten what Craig said about offshore gold storage possibly permitting us to ride out the silliness.

[Pointedstick]

If they're confiscating gold, you don't want silver, you want to get out of the country. And you may need want to use your gold to do it.

[MachineGhost]

You can buy a bag of junk silver.  I've tried to have silver replace gold in the PP but it just doesn't work.

Year Silver Gold
1928 -1.03% 0.00%
1929 -15.42% 0.00%
1930 -32.38% 0.00%
1931 -7.88% 0.00%
1932 -16.45% 0.00%
1933 72.05% 56.36%
1934 24.49% 8.29%
1935 7.35% 0.00%
1936 -22.26% 0.00%
1937 -3.52% 0.00%
1938 -2.28% 0.00%
1939 -18.22% 0.00%
1940 -0.57% -1.43%
1941 0.86% 2.90%
1942 27.64% 0.00%
1943 0.00% 0.00%
1944 0.00% 2.11%
1945 58.04% 2.76%
1946 22.46% 2.68%
1947 -14.07% 12.42%
1948 -6.04% -2.33%
1949 4.71% -3.57%
1950 9.14% -0.62%
1951 10.00% -0.62%
1952 -5.34% -3.25%
1953 2.40% -8.27%
1954 0.00% -0.70%
1955 6.10% -0.28%
1956 0.99% 0.14%
1957 -1.75% 0.14%
1958 0.11% 0.00%
1959 1.67% 0.00%
1960 0.00% 3.55%
1961 13.02% -2.74%
1962 16.07% -0.42%
1963 7.84% -0.28%
1964 0.00% 0.28%
1965 0.00% 0.42%
1966 0.00% -0.28%
1967 59.32% 0.28%
1968 -5.49% 22.54%
1969 -8.01% -5.75%
1970 -8.82% -5.12%
1971 -15.31% 14.65%
1972 46.85% 43.14%
1973 60.32% 75.83%
1974 37.38% 66.15%

[HB Reader]

Can't resist sharing this funny Q & A from Scott Burns' regular column in the Dallas Morning News:

Scott Burns is a really good guy.  Going back almost 20 years, I would occasionally send him comments regarding his columns and he always came back with friendly and helpful replies.

Later on, he helped me get connected with the business page editors at the DMN and another personal finance columnist who occasionally quotes me on retirement plan issues in her column (I had contacted them about doing a guest column on retirement plan issues).

When the PP book came out, I sent a link to the book to Scott Burns and he replied that he would put it on his reading list and he congratulated me and Craig on getting the book published and gave me some helpful information about the financial publishing industry.

Overall, just a super cool dude.

Yeah, I've always really liked him.  I enjoyed his book with Kotlikoff, Spend 'til The End, in 2008.  I don't always totally agree with him, but he always seems to exude decency and common sense.  I'm really glad to see he is still kicking as I know he is getting up there in age.