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  #1  
Old 02-28-2010, 01:59 PM
yotetrapper Female yotetrapper is offline
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Default My meager savings.....cash, or gold?

I am slowly (very slowing indeed, it seems) trying to save some money. Saving back money is rather a new concept for me. In my youth I was highly irrresponsible with money, and in more recent times any extra I had went to stocking up. Which is all well and good, but does little to help me accomplish my dream of owning some land in the future. So, I've started saving back 1/8 of each paycheck I get. As of right now, I have it in my safe at home.

My question is, with all this insane government spending, and printing money quicker than we can grow the trees to produce it, it will undeniably bring down the value of the USD. Right? How can it not?

Now, I know nothing about economics, really. So, from a very basic beginner standpoint, am I better off keeping my savings in cash, or buying gold?
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Old 02-28-2010, 03:33 PM
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sssara Female sssara is offline
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I know if your like most of us you can't afford things like gold. Maybe you could start with silver, buying coins before 1964. I want to try to do this when we have a little extra to do so. Problem is something always comes up to take that extra. lol
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Old 02-28-2010, 04:31 PM
yotetrapper Female yotetrapper is offline
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Well I don't think it would be that hard to save up to buy a 1oz bullion bar, I just don't know if 20 years from now that bar will be worth as much as the $1000 it took to buy it.....
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Old 02-28-2010, 04:47 PM
cinok Male cinok is offline
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What is your outlook? Are you trying to plan for the future or a collapse of the economy. We are still working on stocking up and taking care of things. I don't know enough about the money system to give real advise but what my thinking is unless you have a ton of money in the bank crash wouldn't hurt you. If you have tangible goods food and other supplies you could trade. Think about it if inflation really takes off that box of Mac and cheese might be worth 25 dollars instead of the 4 for dollar you bought it foe today.
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Old 02-28-2010, 06:31 PM
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momma_to_seven_chi Female momma_to_seven_chi is offline
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Originally Posted by yotetrapper View Post

Now, I know nothing about economics, really. So, from a very basic beginner standpoint, am I better off keeping my savings in cash, or buying gold?
I would say food, land, livestock after your mortgage is paid off.
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Old 02-28-2010, 09:40 PM
patience patience is offline
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Red face A Very Difficult Question

I wouldn't buy gold at this point. Not only are the prices of precious metals high, but the gold and silver markets are HIGHLY manipulated, by central banks and investment banks and governments. I have, however, bought some "junk silver coins" (pre-1964 US), as a hedge against outrageous inflation.

At the moment, the outlook is all deflationary (value of a US dollar is going up), but the wild card is the Federal Reserve Bank and the US Govt. They can, and very probably will, at some point, dilute the dollar's value at least enough to allow the US Govt to at least pay the interest on their debt. That means the value of the dollar will drop. They don't want to overdo that, since it would mean that the dollar price of imports, like oil, would shoot the moon, crashing what is left of the US economy. They are in a real box. Nobody knows how this will play out. Probably not even those in charge. The person who guesses right and bets accordingly will be very wealthy, indeed.

Confused? So is everyone else, about what to do with savings now. That is the $64 Trillion question (= US debt + SS + Medicare, etc.).

Our first moves were to switch our retirement savings from stock funds to money market funds back a couple years ago, right before the Dow went in the sewer. I'm no genius on this--I read the advice of daytraders on www.tickerforum.org/ for 6 months and made my own call about when to do it. Then, we went from MM to US Treasuries just before the MM funds went kaput. January,2009, we dumped the US Treasuries and took out our retirement funds in cash. Made money on all those trades, but now there is no obvious thing to do. WE WERE VERY LUCKY!

Without any safe investments in sight, we took the proceeds and bought the mortgage on our kids' property, so they wouldn't lose it, no matter what. Then, we put about 10% in the Junk silver coins, 10% into alternative energy for our place, and 10% into other preps and improvements at home. Wife and I signed up for SS and we are sweating bullets about whether there will be high inflation that will destroy us.

Nobody knows the answer to your question. Our moves were designed to preserve what we had, not to make more money. What cash we retained from our savings is in a couple bank accounts, against the possibility of a bank failure, under FDIC limits. We keep some cash in a safe against the possibility of a bank "holiday". What we are able to save is spread among the above places--banks, cash on hand, preps. We will continue to upgrade our property, as needed. No more silver or gold.

In your spot now, I'd say first to assure that you can EAT for an extended time. Then, pay down any debts. Don't go nuts buying guns. How many gunfights do you think you can survive, anyway? Lots of people made it through the last Depression renting a house. Families doubled up, living together. Lots of ideas we hold dear went out the window due to necessity, like a dwelling for each nuclear family. So, learn how to be poor before it is required. Out goes the cellphone, the cable TV, the expensive fast food, the expensive car and clothes purchases.

More on topic, your savings itself: Cash is not all that bad a position right now, and could get a lot better, compared to the risk of almost any paper investment. It's your call, based on what you believe we will see next--rising prices of goods, or falling prices. It mostly depends on what TPTB decide to do, inflate the dollar, or not be able to do that.

I wish there was a clear, concise path. Everyone is in the same boat now, being forced to speculate on the future with no conservative answer.

Last edited by patience; 02-28-2010 at 09:46 PM.
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Old 02-28-2010, 10:09 PM
yotetrapper Female yotetrapper is offline
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Thanks, Patience. We are debt free. I married my husband when he already had paid off this place. We dont currently have any debts. He has a savings, which took a hit in the market crash, but not as bad as it could of been, I guess.

What I was talking about was my own personal little stash that I want to build up slowly to one day in the future be able to buy a few acres of land with. I'm not talking about money we need to live, nor money we need to use to stock up on. We dont need any guns, we have plenty, but hubby still gets tempted now and then, and I really dont mind as guns tend to hold their value. I just meant my own little savings account of, shall we say, dream money.

I guess my concern was that I would save up this paper money, and then 10-20 years from now have it be about as valuable as confederate money was in the 1870s lol.

But, guess it's sounding as if money may be as safe or safer than gold would be....
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  #8  
Old 02-28-2010, 10:30 PM
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momma_to_seven_chi Female momma_to_seven_chi is offline
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But, guess it's sounding as if money may be as safe or safer than gold would be....
Gold is always safer than paper money. It's wealth versus mammon.
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Old 02-28-2010, 11:32 PM
patience patience is offline
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Yup, long term, paper money is toast, no doubt in my mind. But the games are being played everywhere now, with PM's also. Longer term than say, a few weeks or months, if you want a secure stash, I'd go for silver. It has been running at lower than the historical ratio to gold price for a long time now.

That's why I bought some coins last year, when silver was around $13/ounce. Since then, it has been up near $19 and back down near $15, currently it is $16.55 and going up again. Not for the faint of heart, if watching the price bounce bothers you.

But only some of those bounces are due to trading manipulations, IMHO. The most of it is, I think, the varying value of the dollar along with perceptions of how the US is faring.

Also, there is the "haircut" you take when you buy metals--meaning the profit margin for the dealer. They add a percentage to make money on every trade. The more often you buy and sell, the more money they make off you! So, I see it as a buy-and-hold thing, for the longer term.

If you decide to buy into metals, do so with the knowledge that you may have to wait a while to get an even break, or come out ahead. Be VERY careful where and when you buy coins or bullion. It is not like buying bread at the store. The field is full of conmen, crooks of all stripes, and a new way to skin you every day. At any given time, there can be as much as 30% variation in what you will have to pay to actually get coins in your hand. Lots of buyers out there, and few sellers of physical metals. So, the "spot price" you see is not what you will have to pay--that only refers to "paper", or contracts on metals, as I understand it. There is actually many times as many contracts to buy/sell metals as there is actual metal in existence!!

So, watch what coins sell for on eBAy and at the local coin shop for a while, before you dive into this. And be VERY careful who you deal with. It is a dangerous field.

Last edited by patience; 02-28-2010 at 11:52 PM.
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  #10  
Old 03-01-2010, 02:58 PM
TEX Female TEX is offline
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Quote:
Originally Posted by momma_to_seven_chi View Post
Gold is always safer than paper money. It's wealth versus mammon.

Yes, but if no one has food - it will be worth more than everything and gold will make a nice bright weight on your fishing line - I say food - it seems to be going up in price faster than gold (although I might be wrong)
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  #11  
Old 03-01-2010, 10:25 PM
patience patience is offline
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TEX,

That's why we sort of spread it around, among several things. Since we aren't planning to buy any land, or other big purchase, except maybe a better truck, or maybe some things for the kids. We are keeping an emergency stash of cash, which, if the dollar goes to hell in a basket, we will immediately turn into hard goods of several sorts. got the rest of the stuff, as best we can figure out what to get.

Saving for a big purchase is a real problem now. No matter what you do, saving is much more of a gamble than it has been in my lifetime.
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Old 03-02-2010, 08:39 AM
Oblio13 Oblio13 is offline
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You're right about the dollar eventually being devalued. There's no other way out of the mess we're in. Plenty of other countries have already been in the same situation, so what will happen is no mystery. Read up on Germany between the world wars, Argentina in the '70's and again right now, Zimbabwe, etc.

Gold would have been a great investment three years ago, but it's too late now.

Getting out of debt was an excellent first move.

Now I think that building up a cash reserve equal to about 3 months living expenses would be wise.

After that, things get murkier, but this is our plan:

We think land is a good investment. We recently bought some. HOWEVER, there are carrying expenses. There's only one place for governments to get money, and that's US. The town's tax revenues have shrunk with the poor economy, and they've responded by raising taxes. When we bought our 52 acres three years ago, the annual taxes were about $400. Now they're already over $2,000. We get pleasure, maple syrup and firewood from this land, but it's still a net loss unless and until we sell it.

Some commodities are a good investment. Commodities are goods for which there is a demand, like coffee, copper, petroleum, etc. What commodities can people like us buy and physically hold? Well, as someone above mentioned, food prices are increasing with no end in sight. We're putting away a lot of wheat, beans, flax seeds, and etc. You can search other threads and learn how to inexpensively store them for decades using PETE bottles and oxygen absorbers. You'll probably never resell them, but they're like an insurance policy that you can eat. They don't cost anything but some storage space to keep. At the very least, they can reduce your living expenses in the future. Just make sure you do a good job storing them, or all you'll do is make the mold, bugs and mice happy.

Speaking of reducing living expenses, we're increasing the amount of food we produce ourselves by improving our soil, enlarging our garden, planting more fruit trees, keeping a few hens, tapping more maple trees and improving our foraging skills. Latest project is building bee hives.

Lastly, if you want to play in the stock market, keep in mind that energy prices will continue to rise, and that a falling dollar will benefit export businesses.
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Old 03-03-2010, 08:59 AM
tomato204 Male tomato204 is offline
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Default land

I would say buy land. Any piece of land that you would want to live on or that looks like something you could trade in the future. If you can get it on a down payment/monthly at least you know the price won't go up.
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Old 03-03-2010, 11:27 AM
ScrubbieLady ScrubbieLady is offline
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I would say buy land. Any piece of land that you would want to live on or that looks like something you could trade in the future. If you can get it on a down payment/monthly at least you know the price won't go up.
I would say land also but look for something you can pay cash for. Voice of experience here. We bought land at a good price and a payment we can afford. Well, we could afford. 8 years into the mortgage hubby got laid off with 15 minutes notice and 2 weeks severance. That was 18 months ago. Our goal is to hang onto the house/land but it is getting harder and harder.
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Old 03-03-2010, 04:29 PM
patience patience is offline
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Right--something you know you can pay for. Some cash on hand is a real comfort in these uncertain days, too. I'd want to keep a cushion of money on hand, even if you have the price of land in your hand. There are property taxes to pay, too, and job security is a thing of the past now.

An 87 year old friend of mine lived through the "dirty thirties" as he calls it. His advice was to assure you could feed yourself and pay the taxes on your place, so you don't lose it. Looks like we're up against the Great Depression 2.0 now. Talk to those old folks. It's a real eye-opener.
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Old 03-04-2010, 06:40 PM
Anon001 Anon001 is offline
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I agree with the idea of land. But.... keep one thing in mind. Only buy land that is not overpriced and land that will appreciate. As others have said, keep enough cash to be able to pay taxes and insurance.

I owned cows before I bought this place and my calves made the payments, insurance, and taxes. Also, the calves paid it off in ten years. I hated having a mortgage and never will again.

My taxes for this 160 acres and my cabin are just under $500 per year. I have a new barn being built this month and according to the tax office, it will most likely increase my taxes by another $200 per year.

I bought this place in the early Spring of 1997. There were no improvements at all. No house,etc. I paid $98K for the place and without considering my little cabin, the land alone is now worth between $200K and $225K according to a realtor friend.

The point is to save cash for land, stay out of debt so that you can save more money faster. Get as much land as you can for cash but don't wipe out all your savings.

It will pay off in the long run.

Because of the cattle and having the land paid for, low taxes, etc... I was able to start working from home when I lost my job in March 2007. I don't make much net, but I have everything I need and most of what I want.

Paul
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Old 03-05-2010, 12:26 PM
yotetrapper Female yotetrapper is offline
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Because of the cattle and having the land paid for, low taxes, etc... I was able to start working from home when I lost my job in March 2007. I don't make much net, but I have everything I need and most of what I want.

Paul
Wonder how many people who work 40+ hours can say the same?
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Old 03-06-2010, 05:19 PM
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recoilless_57mm Male recoilless_57mm is offline
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I would not buy gold, silver or platnum at this time. They are all high. What everyone here is talking about in my opinion is where do you put your hard earned dollars so they don't evaporate when the SHTF. I am in the same situation. My brother and I discuss it constantly. We have come up with the following:

A percentage in hard metal. Preferably in silver or platnum. These two metals have an industrial base. They are less likely to be made illegal by the government like gold was in the 30's.

A percentage in a couple of blue chip stocks that show steady & stable growth.

Land is another hard asset that might be good to hold. The issue is that taxes could eat you up at some point.

Long term staples. Toilet paper, flour, sugar, lube oil for the car or truck. Basically anything that will be hard to get in the future or that will cost a significant amount more in the future. It is a plus to find an item that can be traded and yet beats the inflation at the same time. Guns and ammo were good ones at one point. With the anti-gunners & what have you out there at this moment it is hard to say they will have tradeable value.

One thing for sure, folks will want what you have if they didn't prepare for the eventual hard times ahead.

OT
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Old 03-06-2010, 10:56 PM
yotetrapper Female yotetrapper is offline
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Boy, I just can't imagine gun value going down. I feel it will stay steady. And if, God forbid, the gun grabbers should sometime in the future accomplish their mission, gun value will sky-rocket. If guns are outlawed, only outlaws will have guns, and most of the law-abiding citizens on this forum will most likely become outlaws.
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Old 03-07-2010, 01:06 AM
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Yotetrapper: I understand how you feel about the gun thing. I just try to see it from historys perspective. I to shall try to preserve my firearms, it may not be possible if we keep going left. This last election has given me great pause for the future of this country. Our freedom is fragile & our security is uncertain IMO.

This is a real SHIT storm we are about to go through in this country I feel. I to shall be term an outlaw!

OT
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Last edited by recoilless_57mm; 03-07-2010 at 01:10 AM. Reason: error
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