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Is it time to move back into cash?

MojoMan

By MojoMan,
in The Tailgate

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Market direction  

35 members have voted

  1. 1. Is it time to move back into cash?

    • Yes...we're gonna get a major correction...Portugal and Greece are gonna default, commercial real estate is gonna crap, etc.
      11
    • No. I'm in it for the long haul and I beieve there is a lot of upside with a long horizon
      16
    • Puddy
      8

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Brentastic Huddler All-Pro

Brentastic

Posted
Posted
silver, gold and anything oil related

While I agree that gold is a good investment (if it's undervalued) because of it's rarity and perceived value, I don't think that strategy will get you anywhere. First of all, I believe gold is due for a major correction as well, to below it's 2008 lows. This may or may not happen - the probability of this forecast is lower than my stock market forecast. Either way, the other reason I don't think investing in gold makes sense - in the real world, you cannot buy things with gold. You can't go to the grocery store and by goods with gold bullions - so from a practical sense, it seems like a risky investment right now IF you believe the markets and financial structure could suffer dramatically. There will be many bank failures etc... but not all banks will fail and cash will still be the currency of the land. You may be able to sell your gold for cash - but what if things are so bad that everybody becomes savers? Nobody's going to want to buy gold in that environment, especially for those who's monies were in failed banks - they are going to want cash to purchase goods. The FDIC could fail too - which means cash in hand is the only 'safe' investment for the next 5 years or so.

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Avernus Huddler All-Pro

Avernus

Posted
Posted
While I agree that gold is a good investment (if it's undervalued) because of it's rarity and perceived value, I don't think that strategy will get you anywhere. First of all, I believe gold is due for a major correction as well, to below it's 2008 lows. This may or may not happen - the probability of this forecast is lower than my stock market forecast. Either way, the other reason I don't think investing in gold makes sense - in the real world, you cannot buy things with gold. You can't go to the grocery store and by goods with gold bullions - so from a practical sense, it seems like a risky investment right now IF you believe the markets and financial structure could suffer dramatically. There will be many bank failures etc... but not all banks will fail and cash will still be the currency of the land. You may be able to sell your gold for cash - but what if things are so bad that everybody becomes savers? Nobody's going to want to buy gold in that environment, especially for those who's monies were in failed banks - they are going to want cash to purchase goods. The FDIC could fail too - which means cash in hand is the only 'safe' investment for the next 5 years or so.

 

 

if you're sitting on cash....the same applies except for the fact that the value will go over time...

 

gold or silver (silver is the one that has been seriously manipulated - much more-so than gold) has a static value....it never changes, only the price changes but I am holding onto my purchasing power in the future...

 

silver has at least a dozen quality uses and is more scarce than gold out of what is currently on the surface...

 

if you're into cash, you might as well be into gold and silver if you want to protect purchasing power...

 

and this isn't in regards to the apocalypse or cataclysmic times up ahead....this is just preserving "purchasing power" over a 10 year span...

 

put it this way...

 

whatever would have cost you $20 in 1913, would cost you 40 bucks in 1920 - just 7 years later in the "slower times" the value of the dollar was cut in half...

 

by 1960, it ended up being cut in half once again at 59.80.....so it first took about 7 years for the dollar to cut in half, then in 40 years, it cut in half again. (note: it went up to $50 somewhere between 1950-1955)...

 

then, somewhere between 1970/1975, what would have cost you just $20 in 1913 was $100 or more - still, that isn't bad for a growing economy...this sort of inflation was good and the rate was still in favor of gold/silver - but of course we were on the gold standard for the majority of these timeframes...

 

that $20 still went forth in 80 and up with significant jumps downward in value....

 

1980 - $166

1985 - $217 (-$51)

1990 - $264 (-$47)

1995 - $307 (-$43)

2000 - $347 (-$40)

2005 - $394 (-$47)

2010 - $439 (-$45)

 

the average per year lost on that $20 from 1980-current is $45.50 - the median price would be $46....not to mention the direction gold has taken as well as silver....silver has consistently been over $14 an oz over the last 12 months....it's known volatility definitely has a low basement right now and it should reach over #35 per oz between now and 2014...if not sooner..

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Brentastic Huddler All-Pro

Brentastic

Posted
Posted
if you're sitting on cash....the same applies except for the fact that the value will go over time...

 

gold or silver (silver is the one that has been seriously manipulated - much more-so than gold) has a static value....it never changes, only the price changes but I am holding onto my purchasing power in the future...

 

silver has at least a dozen quality uses and is more scarce than gold out of what is currently on the surface...

 

if you're into cash, you might as well be into gold and silver if you want to protect purchasing power...

 

and this isn't in regards to the apocalypse or cataclysmic times up ahead....this is just preserving "purchasing power" over a 10 year span...

 

put it this way...

 

whatever would have cost you $20 in 1913, would cost you 40 bucks in 1920 - just 7 years later in the "slower times" the value of the dollar was cut in half...

 

by 1960, it ended up being cut in half once again at 59.80.....so it first took about 7 years for the dollar to cut in half, then in 40 years, it cut in half again. (note: it went up to $50 somewhere between 1950-1955)...

 

then, somewhere between 1970/1975, what would have cost you just $20 in 1913 was $100 or more - still, that isn't bad for a growing economy...this sort of inflation was good and the rate was still in favor of gold/silver - but of course we were on the gold standard for the majority of these timeframes...

 

that $20 still went forth in 80 and up with significant jumps downward in value....

 

1980 - $166

1985 - $217 (-$51)

1990 - $264 (-$47)

1995 - $307 (-$43)

2000 - $347 (-$40)

2005 - $394 (-$47)

2010 - $439 (-$45)

 

the average per year lost on that $20 from 1980-current is $45.50 - the median price would be $46....not to mention the direction gold has taken as well as silver....silver has consistently been over $14 an oz over the last 12 months....it's known volatility definitely has a low basement right now and it should reach over #35 per oz between now and 2014...if not sooner..

I see what you're saying and I agree with it. I guess, I was thinking more along the lines of all or none, one or the other. The best strategy is to have cash, gold and silver to maintain or increase purchasing in the future. I still feel like we have to get back to a gold standard or else we fail. It seems highly unlikely - we will probably deflate x amount of years from the dollar and then start from where we left off - expanding credit and inflating the dollar to fund government spending. But yeah, I think we're on the same page for the most part with slightly varying opinions - but the meat and potatoes are the same.

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Avernus Huddler All-Pro

Avernus

Posted
Posted
I see what you're saying and I agree with it. I guess, I was thinking more along the lines of all or none, one or the other. The best strategy is to have cash, gold and silver to maintain or increase purchasing in the future. I still feel like we have to get back to a gold standard or else we fail. It seems highly unlikely - we will probably deflate x amount of years from the dollar and then start from where we left off - expanding credit and inflating the dollar to fund government spending. But yeah, I think we're on the same page for the most part with slightly varying opinions - but the meat and potatoes are the same.

 

 

the thing is, I'm not exactly sure if I'm a fan of the gold standard...yet, I don't think our money should be backed by nothing...

 

maybe our currency can be backed by the real estate or land etc etc....it's not so far fetched to not use your land value as a country to determine your currency value...

 

but this allows for much more manipulation unless a strong leash were put on it...

 

I'm just trying to think outside of the box with what an alternative could be....

 

but my main goal with gold and silver was to hopefully never have to cash it out and just pass it along to the next generation...because it is something that has held value for thousands of years....

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Brentastic Huddler All-Pro

Brentastic

Posted
Posted
the thing is, I'm not exactly sure if I'm a fan of the gold standard...yet, I don't think our money should be backed by nothing...

 

maybe our currency can be backed by the real estate or land etc etc....it's not so far fetched to not use your land value as a country to determine your currency value...

 

but this allows for much more manipulation unless a strong leash were put on it...

 

I'm just trying to think outside of the box with what an alternative could be....

 

but my main goal with gold and silver was to hopefully never have to cash it out and just pass it along to the next generation...because it is something that has held value for thousands of years....

It doesn't have to be gold but it needs to be something tangible that's decided by the free market - not decided by a central bank where the only entity that gains is that bank and the government. Once gold became out-lawed as a form of currency is when we started sinking this massive ship of the US and it's all catching up to us now. This exponential credit expansion must deflate and it's already begun - I just hope as a country we learn from our mistakes and build a new foundation. I have little confidence that will happen though :wacko:

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MikesVikes Huddler All-Pro

MikesVikes

Posted
Posted
I'm thinking of pulling out a chunk as a loan for a down payment on a home and then dollar cost average it back in.

 

 

I think now is the time to get on the sidelines. The reason that I am putting a portion into cash is that the home buying credit has expired. I see a hugh drop in home sales. I said hugh.

 

Maybe CaP'N will keep the home buying market from crashing. :wacko:

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Jimmy Neutron Huddler

Jimmy Neutron

Posted
Posted
europe is starting to look pretty ugly and this rally was losing some steam. if youre not sure, sell half.

 

Yeah, I'm curious to know what kind of shape the other EU nations are in. With Greece in the crapper and Portugal not far behind, I'm worried there are more lined up on the horizon. I know Spain has been fighting off real problems for a while.

 

Can our resident expert weigh in... Calling Bre... er Weigie!!!

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Brentastic Huddler All-Pro

Brentastic

Posted
Posted

Ok, huddlers. Are you guys still questioning what I've been saying all along and what should be insanely obvious by now (that we are in the midst of a deflationary depression and a prolonged bear market)?

 

Take a step back from your CNBC and WSJ and just observe the global economy - mostly Europe and the US. It should be very clear that things are not looking good. If you're still long, you're playing with fire - the truth should be glaringly obvious to anyone who is remotely paying attention. Do yourselves a favor and cover your long positions and expand your cash reserves - do this for just the next 4 months and see where we're at then. When this bear market finally bottoms in 5 years, anyone who stayed long is going to wish they paid attention to the over-abundance of warning signs. Us huddlers are supposed to be the smart ones of the world - don't get fooled into staying long in this market. It's akin to drafting that 31 year old stud RB as your RB1 hoping for one last hoorah - probability is not on your side and there's better value to be had.

 

I know I've been talking about this for months and many of you hate me for it, but it's real and I know my forecast is right - DOW 5,000 is the best case scenario. In the last 70+ years, there is no worse time to be long the stock market. Trust me. This is a once-in-a-lifetime opportunity to stockpile cash and then gobble up all those stocks at clearance sale prices when they bottom in 5 years.

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Jackass Huddler

Jackass

Posted
Posted
Ok, huddlers. Are you guys still questioning what I've been saying all along and what should be insanely obvious by now (that we are in the midst of a deflationary depression and a prolonged bear market)?

 

Take a step back from your CNBC and WSJ and just observe the global economy - mostly Europe and the US. It should be very clear that things are not looking good. If you're still long, you're playing with fire - the truth should be glaringly obvious to anyone who is remotely paying attention. Do yourselves a favor and cover your long positions and expand your cash reserves - do this for just the next 4 months and see where we're at then. When this bear market finally bottoms in 5 years, anyone who stayed long is going to wish they paid attention to the over-abundance of warning signs. Us huddlers are supposed to be the smart ones of the world - don't get fooled into staying long in this market. It's akin to drafting that 31 year old stud RB as your RB1 hoping for one last hoorah - probability is not on your side and there's better value to be had.

 

I know I've been talking about this for months and many of you hate me for it, but it's real and I know my forecast is right - DOW 5,000 is the best case scenario. In the last 70+ years, there is no worse time to be long the stock market. Trust me. This is a once-in-a-lifetime opportunity to stockpile cash and then gobble up all those stocks at clearance sale prices when they bottom in 5 years.

 

Are you by chance a member of the church of scientology?

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