Well, What happened to all the GOLD HOARDERS ?

[brin]

You shoot both of them for trespassing, feed them to the hogs, bury the gold in a safe location and have eggs for dinner of course.

See Moss, I knew you were smarter than me....the 3 S's....Shoot , shovel and shut up LOL But you did forget the Chicken...we could keep it for eggs or shoot it and roast it...?

 

[Finnster]

This is, IMO, totally inaccurate. Don't you remember the hordes of pundits and "economists" claiming that the housing market could keep expanding forever? People were explicitly denying that it was a bubble. "This time it's different," they said. Schiff was roundly excoriated for his views. And let's also not forget that he didn't just say, "This is a bubble and it's going to pop," but he nailed the mechanisms of the failure as well.

I know there were a lot of pundits/pumpers saying that, but they are always full of it. There was also quite a bit of media coverage at the time of "The Housing Bubble?!?"

My father was also an investment banker at the time (not in one of the hotshot NYC firms) and they had plenty of trainings/presentations warning of the bubble. Problem was what was going to happen exactly and when.

I bought a townhome in Spring 2002, and put it up for sale 3 years later for greater than 60% more than I bought it for. I did nothing to it, the local demographics didn't change, no new businesses or big influx of high paying jobs. Nothing happened other than the whole market moved up everywhere. Prices hadn't changed for a decade previously.

I was relocating for a job, I knew the place I was buying was inflated too, but really had no choice other than to pay the market rates and buy high. Fortunately had a ton of new equity to put in as a cushion. This was 2005 in PA. So I bought a place more likely to be less over-inflated and hoped for the best. Sold it for a loss last year to move again, but the loss was less than the equity I gained off the first place. Win some, lose some. Not moving again if I can help it.

So I would say it was more a game of high stakes hot potato. Everyone (paying attention at least) knew some were going to burned, but no one wanted to quit either as there was too much money to be made playing.

Just looking at it from the fact salaries were not increasing, and ever more wacky loans were being invented to keep people being able to buy was a giant red flag it was messed up could not continue. Woe to those in 2005/2006 who bought big houses on 0 down, interest only, no doc balloon loans.

 

[MossRoad]

See Moss, I knew you were smarter than me....the 3 S's....Shoot , shovel and shut up LOL But you did forget the Chicken...we could keep it for eggs or shoot it and roast it...?

I believe I said you have eggs for dinner. You never spend the capitol investment.

Feed a man a fish, you feed him for a day.
Teach a man to fish and you won't see him for the whole weekend.

 

[brin]

I believe I said you have eggs for dinner. You never spend the capitol investment.

Feed a man a fish, you feed him for a day.
Teach a man to fish and you won't see him for the whole weekend.

OK - So we keep the Chicken...I just wanted to be sure...

 

[houstonscott]

The idea is to have some net wealth protection so when things return to normal you can eat beef, not chicken.


HS.

 

[Larry Caldwell]

Grumpy....What happens when 2 fellas show up at someone's door....society has collapsed , it is the abyss that all fear..and one has chickens and eggs to trade to the folks and the other has a coin or bar of gold...>? They are hungry and thirsty...:thumbsup:

Don't worry, if society collapses there won't be any such thing as unemployment. Nobody will want their gold, but they can work for their meals.

 

[joe t]

I'm just curious of how many dollars an ounce your gold will be worth once the economy collapses.

 

[KTurner]

I'm just curious of how many dollars an ounce your gold will be worth once the economy collapses.

The basic idea is that if the economy collapses, dollars will be worse than worthless and people will need some other type of currency to trade with. Say I have bread and need eggs, you have eggs and bread but need butter. You probably don't want my bread for your eggs as you already have plenty of bread and my bread will go bad soon. But if I had SomeCurrency, I could give you some amount of SomeCurrency which you could keep in your pocket while you looked for someone with butter. This only works if SomeCurrency is widely trusted and viewed as having some stable value. Sure there will be situations where I have what you need and you have what I need, so we can do a straight trade without worrying about currency. But currency sure makes things easier otherwise. Gold and Silver were used as SomeCurrency in the past so it's easy to see them being used again. Doesn't have to be gold or silver, it could be matches, ammo or rubies. Or all of the above.

The people making the trades at that time (ie, the market) will determine how many loafs of bread, or eggs, or lbs of bacon you can buy with an ounce of silver, gold or rubies. Nobody will care or talk about dollars at that point.

Or, if the economy collapses, we could just find ourselves trading in RMB.

 

[houstonscott]

Generally it's bought the same amount of goods and services no matter the paper currency or time in history. I think you will find in the end of all discussions there is only one currency, gold. Been that way, forever, not likely to change.


HS

 

[greasemonkeyok]

Generally it's bought the same amount of goods and services no matter the paper currency or time in history. I think you will find in the end of all discussions there is only one currency, gold. Been that way, forever, not likely to change.
HS

When was the last time you actually delivered gold in exchange for goods or services?

cur·ren·cy
/ˈkərənsē/
Noun
A system of money in general use in a particular country.
The fact or quality of being generally accepted or in use.

Gold is in the same category as Beannie Babies-worth what people think they are worth, otherwise useless.