Buying Gold
I am pretty financially unsavvy, so this may be a pretty dumb question.
I hear a lot of people talking about buying gold (presumably to weather inflation and a potentially falling market and dollar), but I'm not really sure what "buying gold" means. I assume they don't have gold vaults in their basements and aren't stocking safety deposit boxes full of bullion and coins. So what does this really mean? Is it actually "gold futures", which I presume means speculation on gold price going up just as you would in the stock market? Or are they having the bank store their savings in gold instead of dollars?
I've also heard people talking about putting their money in foreign currency. I understand why, but not the how. Can you tell your bank to hold your savings in other currencies? Again, I assume people don't have safes full of drachmas in their houses.
I hear a lot of people talking about buying gold (presumably to weather inflation and a potentially falling market and dollar), but I'm not really sure what "buying gold" means. I assume they don't have gold vaults in their basements and aren't stocking safety deposit boxes full of bullion and coins. So what does this really mean? Is it actually "gold futures", which I presume means speculation on gold price going up just as you would in the stock market? Or are they having the bank store their savings in gold instead of dollars?
I've also heard people talking about putting their money in foreign currency. I understand why, but not the how. Can you tell your bank to hold your savings in other currencies? Again, I assume people don't have safes full of drachmas in their houses.
Comments
One way to invest in a foreign currency is to use the currency ETFs...
Check out FXF FXA FXB FXC FXS etc...
As for gold the options are to buy into a gold fund GLD or go down to the coin shop and scoop up some Krugerrands or what have you if you're expecting the whole financial machine to burn up at some point.
Not a good assumption. People do it. They just don't talk about it a lot.
From http://finance.yahoo.com/q?s=RPIBX
I understand that the statement in bold means that 80% or more of assets should be invested in non-dollar-denominated bonds. Is that correct?
You can also invest in gold related funds. These funds hold things like gold mining companies which track the price of gold pretty closely.
Having a 'small' amount of precious metals in your possession might be a good idea in the unlikely event of economic collapse. If paper money becomes worthless, a silver coin might be able to purchase a tank of gasoline or a week of food (note that silver provides a smaller unit of barting currency than gold). The gold fund you purchased in your brokerage account might be more difficult to access.
Any dealer will charge you some small amount over "spot" (market price). I've been told that nwtmint.com has a low over-spot charge on precious metals. Also they are local so you can pick it up in person. Just be sure to call first and make sure they have what you want on hand.
Tell them 'Alan' sent you for a free confused look.
http://golddealer.com/bullionpage.html has much better deals...compare the premiums.
Where to keep your uranium? Buy uranium coins and put it under the mattress.
http://www.ucresources.net/why_silver_gold/
Hypothetical: Is there any chain of events you could think of where society would no longer find gold or silver valuable?
In the short term, people might find food more valuable that gold.
Gold has held its value for a few thousand years. Honestly, I don't really understand why but its track record gives me confidence in its ability to continue hold value.
Maybe I should put some cheese and crackers in my bank deposit box next to my gold?
I think that's pretty easy to explain actually. It's hard to find much of it (sparse), and it's shiny (girls like it). Ergo, there is limited supply and near limitless demand. Imagine we found the motherload of gold, so much that using it just for jewelry and coins we still had excess, well it would finally be time for some people to live out that dream of having solid gold countertops, maybe pave the streets with it or some such extravagance.
Finally, once something has held its value for enough generations, the assumption is it will continue to hold said value. Look at housing. There was a time where copious amounts of clear land were required just to keep your family alive. A very long time actually. Now, you have no need for anything like that. You could live safely and happily in a sci-fi looking dome with 10,000 other people, so long as the walls were really thick. But it's ingrained in people that they are better off with some personal land, even if all they do with it is put old trucks with no wheels up on blocks. Gold's kind of like that. It has been currency for about as long as we've had currency, and so it's ingrained in people that it's a pretty good currency.
I don't get gold holding it's value during a worldwide depression. If it's just confined to the U.S., then I can see it as Europe, China, etc. might not want our currency, but would probably still want our gold.
Agreed, unless something really cataclysmic happens. Like if the USD experienced what happened in Argentina or Russia around the turn of the century. Which, just to be clear, I don't personally expect.
Copper jackets.
http://publishers.xy7.com/z/51888/CD8119/